[speaker001:] There are no proposals either in er draught directive form or before this house on that matter as far as I know and certainly er if that were to be the proposal it would be objected to strenuously on this side of the house. Article eight B two provides that citizens of the union shall have the right to vote and to stand as candidates in elections to the European parliament. At present there are considerable disparities between the way in which the right to vote and the right to stand as a candidate are treated in various member states. On the right to vote for example, the U K grants this right to all U K citizens who've been out of the country for less than twenty years, while Germany extends voting rights to all German nationals residing in another member country of the council of Europe and those who've lived in non-member country for... less than ten years. Certain member states, Denmark, The Netherlands and Portugal grant such voting rights only to those expatriate nationals who are living in another E C member state. There are also differences between the states on the ability to stand as a candidate... and the measure that we are debating this evening will ensure that in respective elections to the European parliament... there is a greater degree of harmonisation. gentleman came to this house it seemed to be that he challenged the establishment and many of us welcomes that view it seemed to give a breath of fresh air, but now it seems to me that he's become entirely institutionalised, can he explain that to the house? Absolutely, I plead guilty, erm... the honourable member is er... certainly found me out there. I'm totally institutionalised and no doubt erm you'll see the truth of that if and when, if and when the Jocklyn report comes before this house.... These proposals also include additional checks on nationality to prevent multiple candidature and voting. Community voters... living outside their home country are required to meet the same qualifying rules of residence as any other national within that state. That is a reasonable principle that we support. Regulation four is right to create an offence of standing as a candidate in more than one member state at the same election. It is also right that there should be in new rule eight five, a declaration on the part of prospective E C candidates that contains details of nationality, address and last constituency in the home member state and evidence that the individual is not standing as a candidate in another member state. We also support the element of flexibility within the arrangements whereby community citizens have the option of whether to vote... in their country of residence or in the home country via a postal ballot. So while there is much to support er we do none the less Mr Deputy Speaker, need to draw attention to the Conservatives half heartedness in one particular area and that is registration and the registration of voters. We note the transitional arrangements that apply to the U K should enable the electoral registers to include as many E C citizens as possible. Regulation eight authorises electoral registration officers to register relevant citizens of the union as European parliamentary electors... and regulation nine requires the officer to publish a register of relevant citizens of the union entitled to vote. However... delay has meant that the ordinary electoral register is already published so regulation eighteen substitutes publication date of May the ninth for the European community citizens register. Hence applications must be in... by nine weeks time, nine weeks hence at the very least. In order words by April the twenty second. I give way gladly to the minister. you understand that the honourable gentleman wants to establish that the government has been extraordinarily dilatory, that er there is a massive delay, there is problem for... electoral registration officers because... that the regulations, the regulations depend upon a directive. The directive... was agreed and promulgated in December ninety three. We have been two months in producing this very complicated set of regulations. I don't think that's slow, I think that's moving with very considerable speed. Here, here. Er... indeed the directive was promulgated as the minister said but I don't think it was a bolt out of the blue, it was of course something that we around for some considerable time before that and of course that excuse hardly applies... to the delay in establishing the European parliamentary constituency committees, er as the minister er will know very well, it was merely a matter of seven weeks, er the excuse being that had they had another seven weeks... they could have had the public inquiry stage, the reality of course was that there was plenty of time to do this in good time and in good order and without the confusion that exists now er around the candidatures and the boundaries of the existing European boundaries.... On the question of registration of electors, clearly it is very important that if we now have less than nine weeks from this evening for those possibly four hundred thousand people to seek registration then the it is essential that the minister and the department er... engage in a serious advertising campaign to ensure that people can exercise the rights that are due to them and I would like the minister perhaps in his later remarks, to expand on what, if any, measure the government intends to take to publicise the fact of E C voting rights to those four hundred thousand or so... er European citizens of voting age resident in this country. Needless to say er Mr Deputy Speaker, other European countries are taking the job more seriously. There's a advertisement er for example in a recent issue of the Guardian, if my er Dutch was erm... a little better I'd quote it into the record but erm... I'm afraid it's, it doesn't make very much sense to me at the moment. But nonetheless the literal translation I understand is that people who are Dutch citizens in this country should contact the er ambassador at thirty eight Hyde Park Gate and seek the relevant forms in order to register for the election and vote in the U K and I hope our friends er in... in the Binnenhoff have taken that a little more seriously than appears to have been the case in in the Home Office. Similar exercises have been undertaken by other er governments... and there's a tremendous contrast with the way those governments have actually sought to do this, with our own government, erm no publicity whatsoever has appeared yet and again I offer the minister the chance to tell us at some later point, what the government is prepared to do to exert itself on this matter and... to tell us indeed whether it wants people to register... erm it isn't particularly clear whether in fact this is part of er some idea that the government has that people shouldn't register and I think that the minister needs to be very clear about this so that people get the message outside, because nine and a half million people didn't vote, even in the last general election. So could I therefore ask the minister to, on another matter, to ensure that later in his remarks would he agree to the proposal that the right to a postal vote should be highly publicised in this country, perhaps by putting the... R P F nine A form in the newspapers well before the closing date of May the twentieth. Not least because of our course many people will be away... er during the Summer on their holidays and some indeed may well be... involved in the D-day celebrations. It's self evident Mr Deputy Speaker that this government is utterly unconcerned to carry out an obligation to which is bound by a treaty, freely entered into and the minister must answer the question of how he squares this inactivity with regulation nine three which obliges registration officers to take reasonable steps to obtain information about who should be eligible to appear on the electoral role. The government should declare a willingness this evening to put some energy or resources into maximising electoral turn out among E C voters. The importance of ensuring a high turnout amongst E C nationals surely warrants something more than the complacency and drift that has come to characterise this government's whole policy towards the European community. Tonight... Mr Deputy Speaker, the Conservatives have gone through the motions. Law and treaty demand that boundaries be withdrawn er be redrawn and E C citizens given the vote. These orders fulfil that bear minimum and it will be left to others to do that job well. Here, here.
[speaker002:] Mr Michael Spicer.
[Spicer:] Mr Deputy Speaker I have to confess to you it is a matter of some indifference to me as to how many M E Ps were elect elect to the... European parliament, er if eighty one is to be the new magic number well so be it. Though I suppose one has to make a passing... one has to make a passing er reference to the... information which has come out in the other house erm and be publicised this weekend in the press but er... er at one million almost one million a slug, M E Ps don't come cheap, er I suppose one however would want to make allowances for the fact that they have three parliamentary buildings, that they have to go on trips and that er... they have to pay er er I suppose... German rates for their bureaucracy so there clearly are... exceptional factors and indeed I wouldn't want to make too much of that. What I really want to ask before the house, very, very briefly indeed is the... question of er what are they going to do when they get there and er thus look at the question of the cost effectiveness, well... I see it.
[speaker002:] Order... in this very short debate it might be advantageous if I would just draw to the attention of the house this scope of the debate... the scope of the debate, debate should be confirmed to the desir desirability of the proposed boundary for European parliamentary constituencies and by introducing the changes to the franchise and qualifications of representatives for European parliament elections in the manner specified. If honourable members would in fact stick to the... debate in that particular way and in fact er er it would be of great advantage of the house... it is a short debate er and... and going off the the main scope of the debate in fact leaves less time for other people to speak. Mr Michael Spicer.
[Spicer:] Of course I accept that ruling entirely Mr Deputy Speaker but the point I was trying to make, I am going to give the speech very briefly indeed I do assure you, is that if you're trying to assess the numbers er and the correctness of the numbers that are being er er going to vote for and indeed the boundaries associated with those numbers, it's a perfectly I would have thought, fair question to ask oneself as they go off... er from us as to what they are going off in to... er and I I do assure you Mr Deputy Speake, I don't plan to speak more than two minutes, two to three minutes on this matter, I do hope that you will allow me just to... make a very brief point on this. Because otherwise it's almost impos.
[speaker002:] Order, I am not in, I am not allowing anything outside the scope of the debate Mr Michael Spicer.
[Spicer:] Can I ask you then Mr Deputy Speaker, on a point of order as to whether or not it's... in order for us to discuss the cost effectiveness of er of a member of the European parliament and the a and the costs associated.
[speaker001:] .
[speaker002:] The simple answer to that is no, it is not in order. Mr Michael Spicer.
[Spicer:] If we're not allowed to discuss the costs er associated with er electing a greater number of M E Ps to the er European parliament er and the boundaries associated with it, I have nothing further to say.
[speaker001:] Very good [LAUGHTER]
[speaker002:] Mr Matthew Taylor.
[speaker001:] [LAUGHTER]
[Taylor:] The er... the er it has to be said on this side I suspect that the brevity of that speech was quite welcome, only because er I think er a number of us weren't altogether sure how how much time we would, we would get in this er debate after the front bench speaks, speeches. But the... I want to make essentially er two points, one relating... er to the overall boundary review and one relating... er an argument relating to my own area. If the proposals for electoral reform across the European union had occurred, this debate would not be taking place, boundaries would not be... the relevant issue and a common electoral system would mean that the citizens of the European community could be properly represented as a whole. I believe it's not acceptable in any democratic institution to have one area... er represented in an unfair and undemocratic way, in a way that distorts er the er parliament er itself and under article one three eight, paragraph three of the E C treaty a common electoral system is a requirement. It's.
[speaker002:] Point of order Mr Bernard Jenkins.
[Jenkins:] Erm in view of your last ruling er Mr Deputy Speaker, is it in order to discuss different voting systems, are we not discussing those eligible to vote and the parliamentary constituencies?
[speaker002:] The honourable gentleman of the chair. Mr Matthew Taylor.
[Taylor:] Er... I th I think if the honourable member pays attention he will appreciate that the boundaries are the nub of the issue in terms of er electoral systems and the... common electoral system to which this country is a signatory in agreeing that that should be where we are... er headed, is a principle which I believe that this er commission should have been asked to address, it should have been what was happening er at this time in the history of the European parliament, should have happened long ago but sadly it's a principle which both Labour and Conservative governments in the past have preferred to ignore... frankly for their own electoral benefit. Whatever arguments are being used to block the introduction of a fair electoral system... in U K Westminster elections can surely not follow the blocking reform... er of our electoral procedure for Europe. The... proposals... demanding a common fair electoral system have been passed by the European parliament. The proposals rest on the table of the council of ministers and it's common knowledge that this government er has er shown the greatest reluctance to see any movement er forward. I believe it's a necessary reform, it's a pity that the government have not taken the opportunity of change in the number of seats... to bring some measure of proportionality to the British European elections. Even if the government did not wish to take this opportunity for a full reform to a fair voting system, the extra six seats offered the chance of creating a more proportional system by creating a so called additional member top up to ensure under represented views gained their rightful place in Europe. We could have created a fairer system without incidentally, the problems that have been referred to in earlier debates of trying to redraw boundaries at such short notice er before the European elections. The problems of candidates getting a place and all the rest of it. However... given that even this partial form has been rejected, hats cannot, in the broad sense, be expected therefore to support these proposals. But I also want to address a narrower point in greater detail in relation to my own county of Cornwall. I don't know it may be that I'll be the only member er that talks in terms of a specific Euro seat er in any detail but it does matter in our area and we have a long history of arguing that case. The European parliamentary elections act of nineteen seventy eight states that the electorate of any European parliamentary constituency in Great Britain should be as near to the electoral quota as is reasonably practicable, having regard where appropriate to special... geographical considerations. The relative importance given to the second half of this statement is crucial to the argument for a Cornish seat. There's strong evidence that Cornwall fulfils the requirements of those special geographic considerations. The committee proposals for a Cornwall and West Plymouth European parliamentary constituency provoked an enormous response opposing the link with Plymouth er as it has done on each occasion that the constituency's been reviewed. The late David Penhaligon... argued for a separate constituency in nineteen seventy eight and I argued the case in select committee in nineteen eighty eight and the most important fact about these responses is the sheer weight of numbers from democratically elected bodies in Cornwall. Those include the county council... all six Cornish district councils, the Cornwall association of town and parish councils and forty eight individual Cornish town and parish councils. Councils run by all groupings and more importantly on the whole er by none at all er through independent councillors at parish level and they have responded with that united voice, declaring their support for a separate Cornish constituency and it might er bear remarking as I think members on all sides of this house are aware, getting that kind of agreement between councils at different tiers and in different areas of the county is pretty remarkable in itself. The responses are all the more impressive when you consider the short period for consultation on the proposals. The case for a Cornish constituency has also been supported by the business community and leading academics. Peter Fitzgerald, one of the largest manufacturing employers in the county and chairman of the Cornwall economic forum, has emphasised the importance to local business of Cornwall having its own M E P. The institute of Cornish studies, the University of Exeter, even Cambridge University... made strong cases er for a separate Cornwall constituency and many individuals of course took their views up er personally er to the commission. Now I should explain why I believe that Cornwall is a special case and why so many local people argued in these terms. There are five grounds. First er the precedent that exists for concessions on the electoral quota, the separate cultural identity, the special geographic situation, the economic needs of Cornwall and finally the concerns of Plymouth itself. Firstly the criteria for the mean electorate size for a European parliamentary constituency has previously been used as a justification for ignoring the case for Cornwall, yet concessions have been made in other areas establishing such constituencies that do not meet the size requirement an that's because it is accepted that European parliamentary constituencies should be created along the lines of natural communities, communities... of identity and communities of interest. Cornwall has a very strong identity as a separate community and the present arrangement which links Cornwall with West Plymouth, I believe benefits neither area. Although the English review is being conducted independently from the rest of the U K it's relevant to examine the overall picture. Northern Ireland returns a representative for every three hundred and eight four thousand electors. Even on the mainland there are marked variations. For the proposed West Wales seat I understand the electorate is only about four hundred thousand. The fi just in fact just exactly four hundred thousand. The figure for the Highlands and Islands is an electorate of just three hundred and ten thousand. In other words Cornwall's electorate, three hundred and seventy two thousand, is actually more than the Highlands and the Islands and virtually the same as for Northern Ireland seats and for the West Wales seat. If you look in other parts of Europe... Luxembourg and the Republic of Ireland for example, the figures are as low as thirty six thousand and a hundred and sixty one thousand electors per member er respectively so the precise sizes of the constituencies is not the most material er issue in this case. The European parliament has a wide range of electorate per member and the electoral quota would not be extraordinary were Cornwall to get its own seat. It is... i i... I I we have a... wide range of changes that would flow out from that so you couldn't just take a change to Cornwall which would then create an oversized Devon seat, I quite accept that and we've argued from the first that this would have to be part of the review as a whole. You couldn't take Cornwall simply... alone. It is expected moreover that Cornwall with a rapidly growing population, one of the most grow rapidly growing in the country will not in any case remain much under quota er for very long. It is estimated indeed that the population will grow to the level of five hundred thousand... relatively rapidly. So given that the electoral quota argument is not final, contrary to er what the commission implies and what seems to have been the brief given to the commission, the, we come on to the other points. Cornwall has in a separate identity with its own history, traditions, custom and language. Attributes for it er firmly rooted in a Celtic past that frankly bears more relation to Wales and Scotland than it does... er to the past er in Devon. There would have been objections if areas of Scotland or Wales had been linked with parts of England for convenience er of this review, but it seems Cornwall once again as a distinct and separate identity, continues to be ignored. The European union recognises that special regard must be taken... er in respect of areas with strong regional identities. Indeed the European parliamentary resolution is specific on that point and I believe the boundary commission has failed to take the opportunity to exercise that requirement. Thirdly... it's disappointing that the committee have ignored the well defined geographical boundary of Cornwall, along the river Tamar. It is still a very substantial physical and psychological barrier between Plymouth and Cornwall. Tamar bridge is the only road vehicle crossing for... twenty three miles from Rainhead northward to Gunnislake Bridge and Cornwall is almost as island, with natural boundaries fixed by the coastline and the river Tamar. It's effectively isolated from the rest of the country and it's often forgotten in conversation when people say well I was at Bristol, in your part of the world er at the weekend. It's actually forgotten of course that Bristol is ne nearer London er than it is er to Cornwall. Indeed for some... the distance between their home and Plymouth is longer than the journey from London to Bristol. My fourth point is probably the single most important reason why Cornwall should be treated as a special case... and it's not an emotional reason. It's the failure er to address the economic geography of the county. Plymouth and Cornwall has totally different economic identities and European entanglement between them, I believe is mutually economically detrimental. The economy of Cornwall is still heavily reliant on traditional industries such as fishing, farming, tourism and mining for its income. Plymouth on the other hand... relies mainly on the fact that it's a m urban conurbation with a growing and diversified industrial and commercial base. The two economies distinctive and incompatible needs have been recognised in a development that has occurred since the committee met. Europe's regional economic development programme has been designated objective to status to Plymouth. This is targeted as areas fighting industrial decline. Cornwall on the other hand, has been a, has got the appropriate objective status aimed at developing rural areas, that demonstrates the difference between the two. I'm not opposed to links when they're relevant, I've in fact argued and encouraged them and defended them where they've taken place and I believe that they were important but I don't believe in them taking place where they're irrelevant... and er where they er are unhelpful. Cornwall has one of the worst black spots in the country for unemployment, poverty and further economic difficulties, has one of the lowest gross domestic products in Europe. The central statistical office er show regional G T P figures for Cornwall in nineteen ninety one that put Cornwall so badly off er that our G D P is in fact just er seventy three percent of the national average, whilst Devon's figures are eighty seven percent and I might add in terms of the different progress of the two, in nineteen eighty nine... Cornwall's G D P was seventy five point six percent so it's actually fallen back whereas Plymouth's was eighty five point five percent and... you've actually seen it grow. So we've actually been moving in opposite directions er in the er in the two areas. The economic performance of the two are divergent, they have a different set of problems and the linking of part of Plymouth with Cornwall creates a wholly artificial unit unrelated to geographical, social or economic reality. Indeed the creation of a split in the city of Plymouth itself, makes that divide even more stark because it's even more clearly not in the interests of Plymouth, as Plymouth city council... have been keen er to point out. The Plymouth interest, that final point, is I believe as clear as Cornwall's and the natural links in South Devon would provide the basis for a seat in which it could be... better represented. Cornwall needs a voice of its own, to argue its case for regional funding, to improve infrastructure, to reduce unemployment and to encourage industry. Funds need to be directed at improving Cornish roads, communications and rail links. The Liberal Democrats are opposed to the basis of this review at national level we believe an opportunity has been missed or perhaps I should say ducked... for the common, fair electoral system for which this country is supposedly a signatory. But if the chance for a fair electoral system is lost at least we should have played to what strength there is in a single member system and properly recognised the individual communities of the U K. That chance has been missed without review and on that grounds I don't believe this review should go through.
[speaker002:] Richard Shepherd.
[Shepherd:] Thank you sir erm... in that the government and the opposition front bench want to move this measure erm... fulfilling their commitments to the Maastricht treaty, I accept the methodology and the precedent that the government cites, I think that's appropriate, erm I just wanted to very briefly say that this is of course a vote no longer like the generality of the population voting for the membership of a golf club in which we have... varying degrees of er interest. We are now trying to affirm citizenship through the vote and therefore... the nature in which we distribute these seats and the affirmation that we give through the vote will not relate in fact to any of the sentiments I believe as pronounced by the opposition front bench. Both the Liberal Democrats spokesman and the opposition front bench... ally themselves to an out of reach of er lunacy that is not shared by the generality of the population outside. I understand sir that at the last erm election European matters only thirty one percent of the population could find their ways to voting stations. That may be of course because they were denied the Liberal Democrats panacea for everything namely erm proportional representation. There is profound and deep argument of course that that is no more representative or true of democracy than a single member constituency. It is a legitimate debate and of course the parroting of it as the only way forward is inappropriate to serious people trying to discuss that. One understands the route as to why the erm Liberal Democrats wish to pursue that. One cannot understand the route why that's so that the Labour party wishes erm to advantage that. But what I am saying in context, no this has a deal to do with the co boundaries, as you know erm the honourable member well knows, the essence of this this is wholly inappropriate in terms of erm trying to latest citizenship through an arrangement of six additional boundaries into a erm union and a political state and I think that that is the profound objection that this side of the house has expressed over a long period of time now, is a reflection of the public mood in the country in respect of this election and the way the boundaries er are are erm apportioned and all I say in conclusion is... that this is an evidence further of the irrelevance of this house in reflecting and attesting to public opinion outside.
[speaker001:] Well Mr er Deputy Speaker I er... don't wish to er follow the honourable member of one of my er neighbours but I actually think it's really part of... grown up politics to ensure that the political opinion of a nation is adequately represented in the forums of that nation whether it be in this place or in the European er parliament and to that extent I make no bones about it that erm I wish that we were debating a different electoral system and Mr Deputy Speaker going back to the minister's introduction... erm it is a fact, I didn't wish to intervene because I didn't, it's a short debate and I didn't want to take up... er extra time, but it is a fact is it not that... our electoral system unique across Europe... means that our deadline as opposed to what the French are going to do is different to all the other member states. See all the other member states of er European er community Mr Deputy Speaker,... use proportional representation either on national lists or on large regional lists. It is very easy... if you like the day before literally as the minister said, the day before for them to make their change as to where the cut off point comes. It doesn't affect the value of anybody's vote in those countries at all. That cannot be the case... in a single member constituency arrangement. It will have to be for us at least twenty one days, that's the absolute rock bottom minimum I would have thought therefore the French I suspect have us over a barrel and we would have to cough up for the... enormous expenditure of an extra building at Strasbourg which is not needed erm as I understand it er that er view I savoured... I don't erm have the details of that. But Mr Deputy Speaker I sincerely hope these are the last erm... boundary changes we have to debate. I mean it has been referred to that we might have to do them again, I sincerely hope we don't have to go through this process again. In fact I suspect on June the ninth even the wipe out of the Conservative party in the European elections may make even those members that side think... that in order to say their own skins in the future... they will actually have to start to think about a fairer electoral system and indeed there will be a unified system on the way... forced by Europe on this house... if we do not take it upon ourselves to do so and it will be our own fault that we've shirked our responsibilities in my view to actually take it on board. As my honourable friend said from the front bench, the Labour party is absolutely firmly committed now both by the voices of the leadership and the votes and the resolutions at our party conference that we are in favour of a proportional representation system for the European parliament and I hope... that when the elections come... Mr Deputy Speaker, and people will be arguing about why they're voting for Europe on June the ninth in one boundary as opposed to another and why they've got erm... erm different rules for this election of course as indeed for the last European election because the registration will be different, allowing all kinds of erm... how can I put it foreigners in inverted commas, to vote in our elections in this country because it is the European elections that we will actually put the point across that er for the future there will be different arrangements made indeed. The second point I want to er make Mr Deputy Speaker... wholly relating to this erm... er clutch of er orders of which er eighteen plus the er the schedule which the minister didn't have time to go through in great detail, is the thrust of why I put the amendment down... erm in fact that this order should not be er erm... approved indeed until the citizens of Gibraltar have been... and able to be represented in the European parliament. Now I know that's not selected and I don't make any... complaint about that erm far from it er I would not complain ever against the chair but I did introduce erm... well I don't and I wouldn't but I erm introduced the erm first reading of a bill on this matter yesterday. M Mr Deputy Speaker, you will have seen if you read these er... orders in front of us today running to at least er I reckon about ten thousand words, but by and large, all and sundry are going to be bote, er going to be out of vote on June the ninth, citizens of the European union and the minister has actually said on one or two occasions, all citizens of the union, well it is not true... that all citizens of the union will be able to vote on er June the ninth. I'll grantcha... if you're a citizen of the union living in South America, the West Indies or the Pacific and you happen to be a member of the French... colonies, you'll have a vote in the European parliament in the elections. But if you happen to be a citizen of the union... a citizen of the European union, a member of the only mainland European colony... belonging to this country namely Gibraltar, you don't have a vote. Now I don't think that's right, fair or democratic and if we've shied away from it for years handling this issue and now we're in the position where this house has total responsibility... for the thirty thousand citizens in total of Gibralt it's not the electorate, the total population, thirty thousand and we continued to deny them vote yet they are citizens of the European union under our own legislation and accepted as such by the European parliament and it is wholly wrong Mr Deputy Speaker that the boundaries that we're discussing in this bill were not drawn so that and it could easily have been done,... that we could have incorporated the twenty odd thousand European union citizens of Gibraltar who do wish to be part of Spain and won't be for fifty years or more until it's been a democracy that long, but to give them the right to vote. To give them the right to vote by absorbing them into one of the English constituencies and it could have easily been done. I accept completely what the honourable member for erm Truro... Truro actually said in his speech just er that he just made, absolutely right that the cultural and the geographical identity of people matters so far as the European parliament is concerned and in respect of our responsibility, the responsibility of this house to citizens of Gibraltar. It's wrong, Mr Deputy Speaker, if they're living in this country erm on a semi-permanent basis and happen to have been here last October they'll have a vote... so will any everybody else who's a citizen of the European union, so will peers of the realm who happen to be living... elsewhere whether they're in this country or outside this country under these regulations and previous regulations, have a vote in the European elections and I think it's wholly wrong that erm... citizens of other European countries... namely France because that's the one and it's... remarkable is it not that France is the one that's gonna be the cause of this whole edifice collapsing if we don't submit to their extra demands but citizens of France... who are citizens living in their colonies, as I've said in South America, the West Indies and the Pacific, will have a vote in the European elections on June the ninth and yet we have got citizens for whom we are responsible for in this house, we cannot shirk it onto anyone else, we deny them the responsibility and I think it's about time the house addressed this matter.
[speaker002:] Mr Teddy Taylor.
[Taylor:] Mr Deputy Speaker. I just wanted to say three brief things about the boundaries, before doing so I think I may have to declare... a personal interest. I have to tell the house I have in fact... put my name forward to be considered... as a candidate to stand... to stand for Conservative party in the new constituency of South Essex. It's just possible Mr Deputy Speaker, it's just possible I may not be selected for all kinds of reasons but if I was selected it might at least give the people of that lovely part of the world the chance of having... the referendum they never had over Maastricht because of the shameful way in which the Labour party was not willing to allow the people to have their say on that vital issue. The three issues I want to put forward to the minister are, number one... does this matter?... My honourable friend the member for has rightly said that only thirty one percent of the people bother to vote and so why be bothering with new things at all. In logic we would say to ourselves... because the Germans are getting more seats, because East Germany is being added to the union, why on earth should Britain get more as well and it seems very difficult to explain why we should have extra seats at all. The other factor we should also bear in mind is the great majority of the people are not only not interested, they're basically hostile the whole business... and I think that members may not have really noticed if they looked at the European newspaper, the highest ever figure, fifty three percent of all the people of Britain are now totally and completely opposed to the whole business of the E C, they don't think it's a good idea. So why should we have new boundaries.... There is of course a special interest in South Essex where the people are concerned that while the government wanted to give... aid to South Essex because of its unemployment, this was unfortunately stopped by commissioner Mr and also of course by commissioner Mr Milan solely on their decisions and this is a fact that all the papers... assisted area status was put forward by the government for South Essex. It was also of course, we were put forward for objective two, this was turned down by these two commissioners simply because they sliced off two percent of the application. So there is a special interest of course in South Essex. But the viewpoint I would like to ask the minister, it's a very important one is, can you give us any more assurance... about whether this is actually going to happen? Has he been in touch with the French government? It's very important indeed that people for example in Southend on Sea... should know where they're going. If this new regulation comes through they'll be part of a new seat but if in fact they don't have this regulation come into effect they'll belong to another s and when you've had in fact in Southend say... the lowest recorded percentage voting of any constituency in England at the last Euro elections I think it's terrible important we should in fact explain to people whether this is likely to happen. I think that people are getting very concerned indeed over how the French government are basically disrupting so many worthwhile things for silly reasons. We had the G A T talks held up for a lengthy period simply because the French wanted even more cash for agriculture... and of course they got it and it's rather silly when we're spending two hundred and fifty million pounds a week on dumping and destroying food. We agreed to give more money to the French for agriculture. But in the case of these boundaries. Of course certainly.
[speaker001:] On that very point sir I'm grateful to the honourable member for giving way but would he not agree with me that actually the failure of G A T at the end was that by which Caribbean bananas failed to be protected. Mr Deputy Speaker I I wouldn't be in order to go into this but I don't agree at all, as the honourable gentleman's well aware, that filthy protectionism of the C A P forces up prices of food for the average family in Britain by twenty eight pounds a week.
[speaker002:] I must insist we get back to the boundaries, I've repeatedly had to do so this afternoon I would have thought it that the message would have got over to me honourable members before now. Sir Teddy Taylor.
[Taylor:] Absolutely right Mr Deputy Speaker and I just wish that members wouldn't raise these irrelevant points. What I do say to the honourable gentleman is... his argument is rubbish, bad for the third world, bad for the people of Europe and outside Mr Deputy Speaker I'd be glad to give him his answer although quite rightly to say I can't give it here. But this particular case Mr Deputy Speaker what we want to know from the minister is... on these new boundaries what do we actually have to do? My understanding is that the European parliament has got so many buildings now including a great new building at... Brussels built at huge cost, enormous cost and a new building they want to build at Strasbourg. They're now paying rentals of twenty four million pounds a year. Now quite frankly Mr Deputy Speaker, if we want these new constituencies, including South Essex, it seems we're going to have to say to the French they can have lots and lots of money to build lots and lots of new buildings for this rather ridiculous parliament and quite honestly Mr Deputy Speaker, members tonight in voting on the new boundaries will really have to decide what we want to do. Are we simply to chuck out these extra six constituencies and say no to the French, we're not going to agree to extra silly expenditure or are we in fact going to cave in as we've done so often. I think members should bear in mind the costs of caving in to French blackmail. We did it over G A T at great expense to the people of this country and of Europe, great damage to the third world. It seems if we agree to these new constituents coming through, we'll only do it by having additional buildings which are utterly wasteful and quite honestly Mr Deputy Speaker, I think you'll your constituents a very distressed indeed about the waste, the fraud and the mismanagement of the E C, of course Sir.
[speaker001:] I'm most grateful to the honourable gentleman er of course these buildings are all related to the orders were discussing in order that M E Ps can be elected in the first place and is it not interesting to note that if agreement can't be reached as indeed is the position of the moment er in u what is called the European union over where actually the parliament is going to sit. One would have thought the agreement could be reached easily on that matter. What on earth is the possibility of reaching agreement on much more substantial matters? A aren't we supposed to believe this European union is won, that it's all unanimous on the rest of it, there doesn't seem to be much evidence of that, even when it comes to where... the M E Ps should actually sit. How right you are Mr Deputy Speaker, of course I couldn't go into this because it's out of order but on the other hand I would simply say to the honourable gentleman if he looks at the basic policies, the basic flaw of the E C is it can't solve problems and all these new M E Ps we're thinking of sending over... I think we should bear in mind the problem, they're going over to something... where problems can't be solved. The ideal example of course the C A P, we've had reform after reform but nothing happens. The final point Mr Deputy Speaker and of course the honourable gentleman knows this is absolutely right, expenditure at an all time high, mountains at an all time high and also of course the gap between consumer prices and world prices the highest ever recorded. As the Secretary of State for foreign affairs said to me, twenty eight pounds a week extra per family, including the honourable gentleman's constituents.
[speaker002:] really it's er testing my patience now I'm afraid. I must insist the honour honourable gentleman and interventions too... should be in accordance with the with the debate and wi o o on the boundaries, so Teddy Taylor.
[Taylor:] Mr Deputy Speaker how right you are Mr Deputy Speaker, I've been trying very hard methodically to stick these regulations, unfortunately when you get members ask you direct questions... if one doesn't get any kind of answer it gives the impression you're ignoring them. What I can say to the honourable gentleman who I know always attends these European debates with great regularity, I'll be only too glad to speak to him outside as well as the honourable gentleman to try and clarify these matters. The final point I want to make Mr Deputy Speaker which I think is very, very important indeed, bearing in mind that fact that so few people bothered to vote in these is... is there any possibility that before these regulations come into effect... we can have at the same time, a little pamphlet put out saying exactly what these additional M E Ps and the existing ones actually can do. I think quite honestly in the progress of democracy, people sometimes gain the impression that the European parliament can do things it can't do. I know a lot of people who study it carefully take the view if it closed down tomorrow nobody would notice apart from the taxi drivers in Strasbourg. But the kind of things people write about now will say... can we do anything about the export of live cattle? The answer's no. Can we stop the Euro plug? Of course not it's going through majority vote in the European council. So therefore Mr Deputy Speaker in conclusion, what I'd say to the minister is, number one do we really need this order at all? because why should we have extra seats just because Germany are getting more. Secondly are we going to cave in to French blackmail again and what will it cost us, and thirdly if we're going to have even more people going to Strasbourg or to Brussels or to anywhere else, isn't it about time we tried to save the people of Britain who are getting more and more worried and concerned and perplexed about E C, particularly in places like Harrow where they take a special interest in public affairs. What they want to know is what are they actually going to do? Would it make any difference if there wasn't a European parliament at all?
[speaker002:] Sir Geoffrey Holn.
[Holn:] Thank you Mr Deputy Speaker. I'm delighted to once again have the opportunity of following the honourable member for Southend in a debate about European matters. I wish him well in his er efforts to become a candidate in the forthcoming European elections. I'm also looking forward to seeing a copy of the election manifesto on which he fights... those elections and er er how it will be possible for the Conservative party to er put forward a manifesto that he is comfortable with and also a manifest that the honourable member for say Old Bexley and Sidcup is similarly comfortable with but er no doubt that's a matter for the Conservative party. The great advantage of having a fixed date er for these European elections on the ninth of June, a date that's been well known for a considerable time now, should be the certainty for the electorate, that they know not only the date of that election but the geographical boundary er of the constituency in which they live er the candidates that they can choose from and of course in relation to European elections, the number of er members of the European parliament that there will be representing the United Kingdom. But even if we agree this order tonight... none of those issues will actually be clearly resolved... er, there is a temptation and I regret that the honourable member for Southend succumbed to this, there's a temptation to blem blame the French and the French government for this present state of uncertainty. Er, but that assertion needs to be examined just a little more closely because the British government are not without blame in relation to this matter, er... the issues er affecting these forthcoming elections should have been resolved at the Edinburgh summit during the presidency of the British government. They should have been resolved in December nineteen ninety two because it was decided at that summit that there would be eighteen extra seats for er the then er united Germany. That there would be an extra six seats for France, Italy and the United Kingdom. But in addition the British government went along with the er demand by the French government that they should recognise Strasbourg as a meeting place for the European parliament in perpetuity. The British government agreed to that and it's that matter that now causes the present difficulties and uncertainties. John Major came back from the Edinburgh summit and he told this house that he was entirely happy with the his negotiation. That he was entirely happy with the results of that summit. But in so doing the Prime Minister overlooked two crucial aspects of what was decided at that summit. Firstly he overlooked the fact that the European parliament had consistently voted for Brussels as a meeting place. That the European parliament in fact led by Conservative members of the European parliament very often on this issue... had argued strongly that Brussels should be a single meeting place for the European parliament. There are members of the European parliament who s s support Strasbourg as a meeting place clearly, but the majority do not, the majority want to meet in a single city... and in so doing the majority have accepted that there should be a new European parliament building in Brussels and that European parliament building now operates. It operates however on a very limited basis in the course of nineteen ninety four it's likely that there will only be eight half day meetings of the full European parliament in Brussels. So the second factor that the Prime Minister overlooked is that the existing chamber in Strasbourg is simply not large enough to accommodate the... extra numbers of Euro MPs who will be elected to the European parliament, not so much as a result of the Edinburgh agreement, but in fact as a result of the... er enlargement that is in prospect. Again something that the... government have strongly supported. Now, given that the government's support of the idea of Strasbourg as being a permanent place of meeting for the European parliament. It's proper that we should be asking in the context of these proposals for... boundary changes, affected as they are by the decision of the er... first of all the French national assembly and now the French government to... make life difficult for the other member states as far as the... ratification of these proposals are concerned, it's right that we should be asking what is the position of the British government in relation to these matters. I I asked the er the minister earlier about this question and I appreciate his difficulties being a home office minister rather than a foreign office minister and I quite understand his reluctance to er... stray too far from his departmental portfolio but the reality is that the British government agreed that the European parliament should continue to meet in Strasbourg but we've heard nothing from the minister as to where the money should come from er in order to make that commitment a reality because I'm sure that every member opposite would say that the uncertainty about the present boundaries is not the er responsibility of the British government, that it's a matter for the French government to sort out which boundaries er will be in place in the United Kingdom by June the ninth, the date of the European elections, but the reality is that the British government have gone along with the arrangement for having Strasbourg recognised as a er seat for the European parliament. But they've gone along with it without recognising that there will be a cost and members opposite have consistently criticised the European parliament for having a number of buildings from which to operate. They're right to criticise the European parliament for that. That's no making of the European parliament, the European parliament will be delighted to hold its meetings in the new building in Brussels. Er but the truth of the matter is that the British government would not.
[speaker002:] interesting but when are we gonna hear something about the boundaries. Mr Geoffrey Holn.
[Holn:] I I'm grateful Mr Deputy Speaker and I I will certainly er stay in order but... the British electorate coming up to June the ninth and the European er elections will not know even if we pass these particular proposals tonight er in which constituencies they will be voting and if I may give an illustration as the honourable member for Truro did er er as far as his European constituency is concerned er the European constituency of Derbyshire Ashfield will d be divided into three different directions as the result of this particular order in council if we pass it tonight. There will be a a a series of new constituencies created across the East Midlands. The electorate will expect to know who the candidates are... in those er er particular constituencies. Indeed the political parties preparing for those elections are in the process of selecting the candidates... er there will in fact be an extra constituency in the East Midlands as a result of this particular order in council er and indeed the political parties at some stage will have to select new candidates for the six extra seats across the united kingdom. That process is under way and the processes of political parties in choosing candidates are an important part of our democratic process. If that is the case that each of the political parties, as I assume is the case for... er the Conservative party, I know it to be the case of the Labour party I assume the same is true for the Liberal Democrats and other parties represented in this house, that they undertake the very considerable organisational er er process of selecting candidates only to find a few weeks before June the ninth, that as a result of the difficulties that I've described as far as the French government attitude towards these elections is concerned, that er in fact we have to revert to the existing arrangements and that we cannot have these new er... boundaries in place. That will cause astonishing confusion to the electorate. It will something which... the government will seek er to blame on the French and therefore Mr Deputy Speaker I do think it important that the record is set straight er as far as the French government are concerned. The British government er not only went along with this agreement at the time of the Edinburgh summit, they positively endorsed this arrangement er as being something that they er strongly supported and urged upon other member states in the European community er and that I think is a relevant matter with respect er Mr Deputy Speaker, I I appreciate that er there are other issues relating to these er er constituencies that are of... greater concern perhaps to er honourable and right honourable members but this question of... who actually is to pay for any new building in the European parliament is something that I believe the government cannot avoid. I appreciate the minister's difficulty representing the Home Office with no... specific responsibility for these matters as far as er er Europe is concerned er but nevertheless this is a matter that does affect the electorate and one that I think the house should take er notice of. I'm grateful Mr Deputy Speaker.
[speaker002:] Morgan.
[Morgan:] Thank you Mr Deputy Speaker. Erm I'm er rising to take the opportunity to sum up the debate er for those of us on this side of the house and to say that on this side of the house we do... welcome these orders actually coming through, delayed though they are and er besmirched though they are by the usual examples of government incompetence in failing to send them to the scrutiny committee in the proper manner to allow the usual processes to take place but wi that's par for the course these days. I want to welcome obviously particularly er the order relating to Wales because it confers on Wales er one additional seat, giving us... five altogether because of the rise in the Welsh population over the last ten years and that er although Wales was under represented under the previous erm... er... you know distribution of seats which gave us only four... we will be slightly over represented when we have five because you simply can't have four and a half seats, it's got to be one or the other but since the Welsh population is continuing to rise very rapidly then it is likely that that will be put right. I mean the Welsh population in percentage terms is now rising more rapidly than that of England and therefore by the year two thousand and one when the next review would take place er we er will certainly fully occupy if you like, that fifth seat in terms of the average size because Welsh Euro constituencies were during the past ten years, very slightly larger on average than those in England and so er... we are moving from under representation to slight over representation for a temporary period er simply because er you know Wales is regarded as indivisible for this purpose and that's why we welcomed this debate. I give way... briefly to the honourable member.
[speaker001:] I'm grateful to the honourable member and listening very carefully to this argument. Obviously the integrity of Wales is very important to him otherwise he would p p presumably be prepared to accept that part of England could have gone with one of the new seats. Would he care to address the fact that because these orders are being taken separately for Wales and England it is not possible to make the quota applicable in the same way in the same... parts of the United Kingdom. Wales is being given a quite different quota... to England and because Cornwall is being included in England for this purpose we are being unfairly treated by Wales' being generously treated. Would the honourable member care to... comment on that inequality?
[Morgan:] I I obviously Cornwall is a special case which we obviously as our Celtic cousins it is the only non-Anglo Saxon county in England and as a result we feel a very, very strong... erm er almost a kind of Uncle erm Nephew relationship to Cornwall, whereas the Cornish are certainly not Welsh but they're certainly not Anglo Saxon English either. We have a great deal of sympathy er but whereas I don't think some of the ideas that have been floated tonight for a Cornwall and Gibraltar... West seat er or erm any kind of link up between Cornwall and any tail end of a Welsh seat we don't think is practical and I think he's gotta solve this problem er within the confines of Cornwall being regarded as part of England if not Anglo Saxon. That's not a problem that I can actually deal with er but Wales certainly er you know takes the sort of interest in Europe that we have seen from most of the Conservative speakers er in trying to sum up this debate you have to refer to them er of not being able to show, there's a definite sort of anti European theme coming through from most of the speakers from the back benches who've chosen to take part in this debate tonight from the other side and it's difficulty to avoid summing up the debate without some reference to the points that they have made which is in complete contrast to the attitude that we have erm in Wales er towards Europe and that we are.
[speaker001:] Poor practices at the bank which the auditors were aware of for years, a crashing indictment er of the auditors. It did, if you look at that report er th th that the curry curry gold or whatever, curry report erm... i i i it shows that B C C I actually provided loads of financial benefits to some of the auditors... er these benefits included loans to two Price Waterhouse partnerships in the Caribbean er in addition it said there were serious questions concerning the acceptance of payment and possibly housing from B C C I and its affiliates by Price Waterhouse partners er the in Grand Caymans er and possible acceptance of sexual favours. The report is more interesting than by the member for South East Derbyshire... er [LAUGHTER] not that there's [] much sex in it but if er er i it's more interesting er sexual favours... provided by B C C I officials to certain persons affiliated er with... the firm. Now... this is an appalling situation, er th the B C C I's books were certified by the auditors as a true and fair record from December nineteenth er December thirty first nineteen er eighty seven forward a and that meant that people had confidence in B C C I, here we're told that the auditors are giving it er a certificate of a a true and fair record er encouraging therefore people to in t to to invest and yet prior to nineteen eighty nine Price Waterhouse knew of gross irregularities er in B C C I's handling of loads, particularly the load to C C A H which was the holding company for First American er bank shares. All this was known to the auditors, they didn't spill the beans. Now why have we not had an inquiry which will bring out what happened in the case of B C C I so we can base proper and effective regulation er on that er in i in in in in inquiry. The government feels it can rely on er auditors to protect the interests of share holders and the creditors and the other stake holders but... I have to tell the minister that that reliance which is now er strengthened by the regulations b by the er the order today has always proved er inadequate in the er in in the past er because poor auditing practices always get covered up, there's no way for anybody to know how bad or how good er the audit is as long as a company... er survives and we haven't developed in this country, the proper institutional framework to regulate auditors er effectively and to actually make them er er accountable. Now and er... I have to point out to minister this side of the house er actually proposed much stronger provisions on er detection of fraud er in at the... the building societies act and the financial services act... er in in... er er er of eighty six... er we have these orders er brought in far too late because the government is continuing to place reliance on an industry and a framework which has a history er of of failure. They can't beat the auditors on effective replacement for... regulation. In the United States quite rightly, state inspectors visit and monitor banks er and that's the only effective way we're going to know what's er w what's going on. There should be such a requirement in Britain, instead of just relying that we are about these orders... er on the... o o on the... er auditors er them... that that that the the themselves.... Er... er [sigh]... er I mentioned er in an earlier interjection the fact that Price Waterhouse in this country er wouldn't give evidence and didn't provide information to Price Waterhouse partners er... er i i in the United States er er the government I think, can only er deal with this by some effective regulation er of auditing er and by some er er effective er independent regulate. There needs to be er a banking commission to take these functions away from a Bank of England performed so poorly er and was shown to have done by the er b by the Bingham report. My own preference is for er... er er er a securities next change commission, an independent commission as in the United States with a banking commission underneath it er an accountancy er commission underneath it, but an effective framework of independent regulators to whom... the auditors can report er when they er wh wh when they found... the they find fraud. My honourable friend from the front benches made the point about the gaps... in er these regulations, they don't cover Lloyds, they don't cover pension schemes, pension funds... they don't cover banks which are domiciled er in the... er in in the United States but er we also have the point which I made in the... interjection to the minister that unless there's a duty to detect fraud er er as well as report it, it's really doubtful if the auditors can perform... er the function. We pointed out them from this side of the house er the local... government's finance act does impose both duties. Now the audit industry was in favour of that at the time because it saw itself as able to get its fingers into local authority audit so they were prepared to accept that they could do it then, it's only now... er [LAUGHTER] when it's proposed [] on what's been their traditional prerogatives, they er er they audit of banks and private sector er er companies that they balk at the proposition and say ooh it's horrendous we can't do it. Well... I have to tell the minister that the firms are advertising for detection services all the time, K P M G... Peter Marwick... advertising this, they will er investigate financial frauds and rectify and recover from them... that requires specialised accounting skills, K P M G forensic accounting offers... experience in the techniques of fraudsters and the procedures er they may have followed. Awareness of the indicators, the possible irregularities, the resources needed for a fast and accurate investigation, experience of the quality of evidence required to support a successful case and the expertise to assembly and present that evidence. We can assist in tracing funds and unravelling the most complex international cases. They can provide all that for a fee... why can't they provide it as a compulsory necessary part er of the service, [LAUGHTER] it wouldn't be [] more expensive the minister claimed, if you do a proper audit it can't be more expensive. Proper audit er is the... effective way er to detect fraud and that needs to be at the... at the er the re requirement er er that we impose er on... and I, as I pointed out er... at the moment the auditors themselves are not being effectively er regulated. Lord Justice er Bingham did say... that the relationship between the client, the auditor and the supervisor er is an issue of policy which is more appropriate for decision by parliament... than the accounting profession and yet er we're still subjecting that to control er by the auditing practices board, not a statutory body er er and it's already told us that it's going to impose passive requirement on auditors er in this very difficult area. Now passive requirements on auditors are just not adequate for the detection of fraud. The draught standard they've put forward states... the duty to make a report direct to a regulator does not impose upon auditors a duty to carry out specific work, no specific work, don't do anything... just go along. That's ludicrous, unless you do the work... you can't make the report. No auditing practices in addition to those carried out in the normal case of auditing the financial statements are carried out. Auditors are not responsible for reporting... on irregulated entities overall compliance with rules with which it is required to comply, that's unlike local government, nor are they required to conduct there work in such a way that there is reasonable certainty that they will discover breaches. [LAUGHTER] They're not... actually required er to go out [] er looking for things, just sit there... be passive er a and it'll all come pouring in, that seems to be the er the. Fraud doesn't work that way, you don't get the fraudsters rushing in and saying here's the evidence Mr auditor, get me. It's all well concealed and unless the auditor has an obligation to actually hunt this down, the kind of white hunter er er of the British economy er [LAUGHTER] then [] er it won't be detected and the passive approach to audit such as the er audit practices board is recommending is simply a recipe for further disasters er and further audit failures. Couple of final points... er Madam Deputy Speaker, er the government should surely have clarified responsibility of auditors. Who are they actually responsible to? To whom do they owe a duty of care? It's no good just saying you can report fraud er to er t t to the regulator, they should also be responsible to the shareholders, the stake holders, everybody involved... er in er er er a company er and in fact er they aren't... they have really responsibility to no one except the directors er... who appoint them, the company share holders are given very little information, the choice of auditors er is firmly in the director's director's hands, the depositors, the consumers, the employees er have no say er in the appointment of er auditors and more important the recent legal cases for instance and the Al Saudi Bank er er and Berg... er sons er and company also... decided that er auditors don't owe a duty of care er to individual shareholders, potential investors, the current or potential creditors er even though that information is supposed to be there to help markets understand what is happening to that committee and the government showed no indication that it wants to reverse these judgements, it should reverse them, there should be specific responsibilities attached to... er auditors to give them a duty of care... er so that we get the information er and... er spend more widely and the share holders and the stake holders know what's going on er er er as well as er... the bank... or the financial... er institution er itself. Now [LAUGHTER] my honourable friend has already quoted er the presence the,o of the department of trade in this er... er pointing out in er... his book er where there's a will there's a corpse er... er that er there shouldn't be a conflict of interest because accountancy firms shouldn't do other work. That should be a paramount objective er in financial institutions because D T I inquiries have indicated er that the work is less adequate er when er they're relying er on... when a man is checking his own figures or those of a colleague, that was er... er in... at the roadships erm re report. There's a who er er a whole series of other reports, Bernhope and Fauder for instance, critical of er audit reports er report in in that context and I have to say to the minister er that none of the auditors criticised by D T I reports over the years have actually be disbarred from er from practice. Now what kind of a sanction is that er to make the auditors actually do the job properly. We need an effective independent regulator, not the mafia regulating mafia and saying it's quite understandable boy, we'll let you off this time which is what happens now er with the Institute of Chartered Accountants er as a recognised supervisory body er in this er in this particular field. We have to have... er an effective control er and discipline er of auditors. The Secretary of State er told me... er that the has been no occasion where criticism from a companies auditors by... my department's inspectors in reports published since June nineteen seventy nine... has led to an audit partner being excluded from membership of a professional accountancy... body, er and no auditor criticised in D T I inspector's reports has been debarred from auditing as a result of information... er in that report. So... bearing in mind the government itself has never iss er initiated any criminal action against auditors criticised in D T I reports, there are no effective sanctions. Now for all those reasons madame speaker, this... these orders er er today are inadequate, too little, too late, we can't vote against them, much as the... the member who preceded me seemed inclined to vote against them and I wish that he had the g er the guts of 'is cu the courage of his convictions er he should vote against them, er we on this side are far more responsible... er than that because to vote against them er might be an indication that we're as much in frau in favour of fraud as members on the other side of the house, er we're not in favour of fraud, we welcome any progress to detection of fraud, even progress that we asked for... five... eight years ago when the relevant legislation was passed. For that reason we have to welcome er the er th th the orders, but they're just not good enough. Here, here.
[Betty:] Mr John Greenway.
[speaker001:] Er well Madam Deputy Speaker I think erm... that the last half an hour shown that er the quality of debate in this house... er remains extremely high and that even when you have an issue which on the face of it looks to be as dry as dust... er that er there are some honourable members who will pick an argument er when perhaps er on the face of it there ought not to be much of an argument er I can't erm I can't say that erm I agreed with much of what erm the honourable member for Great Grimsby said... er he seemed to imply... er quite early on his er speech that most of the City of London er was collapsing in a sea of sleaze and er... er other other goings on which are extremely... er to be regretted but erm I think we ought to er remind him... er that erm, you know, all all of these four orders er followed the Bingham inquiry into er what happened at B C C I which was not a British bank, was an international bank based erm overseas and I think I'm right in saying this and I'm sure my... honourable friend the minister will confirm when he winds up... er this is the first er such difficulty er that we've experienced for a great length of time. Er, now... the the point I really want to refer to is erm just what role an auditor ought to play er in the er insurance and financial service industry in looking at particular firms, erm... I have several interests which the honourable member for Edinburgh central knows about, er the one that I think is relevant er to tonight is that I am an elected member of the insurance brokers registration council and the way that erm... the way that we regulate insurance brokers erm is laid down by statute but it does actually demonstrate the advantage, the benefit... of erm of having a statutory requirement for audit and for er a proper oversight of what then... follows in terms of the way that the regulator reacts to what the auditor... may say. The purpose of... of these four orders, which I must say I greatly welcome, it is one of the, the most beneficial things to come out of the B C C I er disaster er and er i if I can say in in effectively in answer to to everything the honourable gentleman for Great Grimsby said and he and I have debated on many occasions, if fact usually on the television not on the floor of the house, but er... an an an an because of it for not quite so long either, er but erm th the point I would make to his is that really what he was saying was th that what went wrong with B C C I is that Price Waterhouse knew there was fraud and didn't say so and that wha what Lord Justice Bingham pointed out was that there is a clear conflict of interest between the interest of the client who they work for and the public interest and that what needed, what was needed was some amendment to the banking act to clarify that and that is precisely what... er this order actually does and you can't really er Madam Deputy Speaker, expect anyone to really seriously criticise the government when in actual fact not only have they... come up with the regulation to deal with that but they've also gone further and said we will apply this to financial services and to building societies and to insurance companies as well, just to be absolutely sure. Now I would be the first to admit that I I'm not a judge as accountant, I'm an insurance broker er and erm I don't understand er and I'm not aware of all of the rules and regulations that affect accountants er and affect the way audits are carried out,b but I must say... I was a bit surprised t to hear during the debate, er that that was really what the problem was, the problem with B C C I was this conflict of interest, that fraud was known and it was not declared er and er I think that these er... these regulations should now make that considerably er more clear. The point I I simply wanted to to make which is why I I sat through the debate, erm is the honourable member for Edinburgh Central er in his er speech er which I I must say I did expect, called for stronger regulations, er we had the argument the other week about whether there should be statutory regulations or whether we should make er the er self regulation system that we have with financial services industries work. Erm, I take the view that we ought to try and make the existing arrangements work and we are fast approaching a very key point er in that process erm I understand that on Thursday, er securities and investments board, the board will consider... the er P I A, proposed P I A prospectus and that er within a week or so we shall all be able to to read it and to look at it... erm and the key point, which really is... arises out of what we're discussing tonight, the key point is what regulatory framework should the P I A place on intermediaries and on er life assurance companies, pension funds, financial advisors generally er in order to ensure that the public interest is protected and that if there are potential frauds erm such as the Levitt case... er that we talked about earlier and I think the honourable member in... sort of by implication in terms of er community service, er punishments that he referred to, er had also that in mind, er just what should we do to ensure that if there is malpractice and fraud, it's picked up very, very quickly. Certainly this... order on financial services, helps because it makes absolutely clear that if an auditor sees malpractice and potential fraud he has an obligation and a duty to report it straight away to the regul regulator, but that will help the process. But there will as I my honourable friend knows, there will be quite an argument when we see the prospectus and I haven't had the priv the privilege of seeing it erm although I've had the opportunity to discuss... er its contents with th with the er chairman of the P I A er er and the Chief Executive.... Er it is important I think, that we don't er have too many regulations, that's why I have some sympathy for what my honourable friend, the member for South Hamms, was saying, that we don't er regulate to the point where firms just go out of business and give up, that it's too expensive and it's too burdensome. But that we get a balance right between the amount of regulations an and the cost of it but that it is in a sense, effective and and the plea I would make to my honourable friend when he considers this P I A prospectus and what should be done and wh to what extent the government feels it should support it, is that what we actually want is not a specific requirement that says you've got to have this much, that much capital erm and so on, but that there is... a function, there is a regular audit trail, there is a a regular, annual look at the figures, the accounts of all these intermediaries, er and firms where the difficulty has been... er in the past. Because I I I've said this to him before on on the floor of the house, that is what we are required to do... in the insurance brokers registration council for all insurance broking firms, that is what parliament required in the insurance brokers registration act and it is not an onerous requirement on firms, it is not excessively expensive... so it would meet I believe, any cost compliance test er that erm the er... the D T I might wish to... to insist be carried out. What it does is it means that there is a proper look each year... at the finances of each individual firm... er and er if there are things which are wrong, they are reported straight away and that really I think is the lesser of all of this with B C C I, er that er where things... are not all they should be that they are dealt with and they are reported quickly and these orders,... Madam Deputy Speaker, go a long way to helping to ensure that and for that reason I believe the house should warmly welcome them.
[Betty:] Mr Anthony Nelson.
[speaker002:] Madam deputy speaker.... This has been a curiously old fashioned debate in some ways with... one hou side of the house calling for more regulation and the other side of the house calling for less regulation and my honourable mem, my honourable friend the member for South Hamms er did say eloquently again this evening. I can say to my honourable friend, the member for Rydale who takes such a close interest and is so... well informed... er on these matters, er I'm very grateful to him for the welcome he's given for the... orders here, he's absolutely right to say that we have gone beyond... er what restrictive called for by Bingham, we have extended it to other sectors in the financial... we welcomed the honourable gentleman from Edinburgh Central that these er orders are in some way... timid, they are what was called for by the treasury... select committee, they are what was proposed er by Bingham and we have er introduced them er here tonight. I say to my honourable friend as far as the P I A's concerned he will have an early opportunity er to consider... er the prospectus on that which is indeed being published er and I take very seriously the point he makes about adequate monitoring procedures and the need for an audit trail. I think that is a central criterion to attach the effectiveness of... self regulating organisations if the the methodical nature of their monitoring er a and the way that that is done and I hope all concerned will consider these matters carefully. My honourable friend the member for... er South Hamms, Madam Deputy Speaker, er gave I thought a a an amusing but perceptive speech about the growth of deregulation, indeed some were saying that deregulation... er is in fact the fastest growing part of bureaucracy... in Whitehall and there have been calls to deregulate the deregulators er, he is of course quite right that Parkinson's theory... can extend in this area and one can find that deregulation acquires a life and momentum erm of its own. But the underlying purpose, that of reducing unnecessary bureaucracy, stripping away the red tape which hinders enterprise and good... er governance in this country, is something that the government is... very committed to and we intend to promulgate that doctrine throughout all the areas and that of course is being taken forward in legislation. As far as er the honourable gentleman for Edinburgh Central is concerned, he said there was a case for a... wider inquiry into the auditing o of companies, well that is not something specifically called for er by Bingham although I... acknowledge that a case can be made for that but I think we want to be extremely careful before extending that... in the way that he and the honourable member for Great Grimsby proposed... beyond the direct er responsibility to the members or the owners of the company. It must be right for auditors to audit and for regulators to regulate and I do not think that it helps the argument for there to be an overlap in responsibilities and in some way, as I say, to turn auditors into... snoopers and narks er er and make more supine one's er regulators. So I I I don't think that there's a case for er widening the er widened inquiry into the auditing of companies. He said there was a case for extending the duty of care of auditors beyond members but this... again was something that Bingham didn't necessary find... er necessary as a result of his inquiry into B C C I. He asked about what material significance meant. That of course is very much set out in the guidelines of the... er sta er statement on auditing er standards. He asked about Lloyds, he is quite right that that is not covered er by these orders but it is the case that it is a condition of the appointment of ordered, er of auditors... into syndicates er that they shall report, they have a duty er to report er where these situations arise. Er, Mr Deputy Speaker I don't have time to deal with the other points but if I've missed anything in particular I will write to honourable members concerned. Can I just finally say that the whole import of the orders is to ensure that they look at the criteria of authorisation, they are concerned with the authorisation of firms which take public deposits and investments and when that is brought into question, when there is evidence to suggest that those criteria are not being adequately med it must be right to impose a non costly duty on the auditors to bring that about, that is what these orders do tonight, I think they're an extremely welcome addition to the stable of measures of regulation and they will improve materially depositor protection. Motion number four the question is the motion on the order paper, say aye.
[speaker001:] Aye.
[speaker002:] no. I think the ayes have it, the ayes have it. The leader of the house will put amendments five to seven... informally. Question is the motions on the order papers, say Aye.
[speaker001:] Aye
[speaker002:] no, I think the ayes have it, the ayes have it. We then move to motion number eight... Mr secretary Redwood to move it.
[Spicer:] Mr Deputy Speaker I beg to move that the local government finance report Wales nineteen ninety four to ninety five... House of Commons paper number one six eight, which was laid before this house on the thirty first of January, be approved. This report sets out my decisions on the local government revenue settlement for nineteen ninety four five. I understand it will be convenient to discuss at the same time the next motion on the order paper... that the local government finance amendment report Wales nineteen ninety three, ninety four, House of er in i in in in in inquiry. The government feels this house on the thirty, thirty first of January... be approved. This latter one puts right a mistake in the description of the basis... for distributing the distributable amount for ninety three four which was approved by the house on the eighth of February nineteen ninety three. I can assure the house that the amendment in this document does not affect the money authorities should received. Mr Deputy Speaker, I announced my provisional settlement proposals to the house on the thirtieth of November last. I have given careful consideration to the representations I have received on the level of settlement and the views that the local authority associations in coming to my final decisions. I believe that my provisional proposals remain appropriate. I propose to set... total standard spending for nineteen ninety four, ninety five at two thousand seven hundred and four point eight million pounds. This includes the sum of eighty six million for care in the community, it is an increase of four point two percent or over one hundred million pounds extra cash compared with nineteen ninety three, ninety four.
[speaker001:] I thank the Secretary of State for giving way, he he did say that erm... er the figures in these report were... in a sense provisional at the end of last year, erm but that he feels... erm, with the passing of time, nothing has happened to change his view. Would he tell us then... what he believes the impact of the... er pay settlements... will have on the spending he's allowed local authorities because it seems to me there must either be a cut in staff... er and a cut in services if they're gonna keep within the the money that he made available... at the time when he wasn't aware of these settlements.
[Spicer:] Mr Deputy Speaker I I'm grateful to the honourable gentleman for posing the central question and I hope in the course of my remarks I will... satisfy the house, if not all Labour members, that the settlement proposals are at is all to the good and delivered by councils throughout Wales and that they offer enough money er to avoid sacking essential staff, certainly the offer enough money to avoid sacking any teacher... who is needed in the classroom. I don't want to see that happen, I trust members of the house don't wish to see it happen. It is up to local authorities, but I believe the extra grant, the extra spending permission, means that a good quality education can be delivered to children in Wales er without it in any way being jeopardised by these proposals and I would illustrate later on in my speech that local government does have considerable flexibility... to spend wisely and well and it has resources at its disposal to do a good job. I give way.
[speaker001:] Secretary of State for giving way, but when he made his proni provisional announcement on the er on the total S S A for Wales, was he aware... that the er the various er salary review bodies would be bringing in a er a recommendation which was almost twice the current rate of inflation?
[Spicer:] Mr Deputy Speaker, no I did not know the exact amount of the recommendation but I of course assumed there was likely to be some... pay increase and I have made an increase in grant which I am just about to explain to the house which will go some way to meet the requirements of local authorities and there are other... assets and resources they have er which I will illustrate later on in my speech. I propose to provide two thousand four hundred and nineteen point two million pounds in central government support towards this spending, an increase of three point three percent on nineteen ninety three, ninety four. So honourable members opposite will see that that is a good rate of increase compared with the current rate of inflation. The support package will comprise seventeen hundred and forty point one million pounds in revenue support grant. Four hundred and sixty four million in distributable, non-domestic rates and two hundred and fifteen point one million pounds in other revenue grants. Over eighty nine pounds in every one hundred pounds of Welsh local authority expenditure on revenue account will be funded by central government support. This generous level means that Welsh council tax payers benefit from substantially lowered levels of tax than their English counterparts. Welsh tax payers should continue to benefit from relatively low levels of tax next year, assuming sensible budgeting decisions. The revenue settlement is matched by the substantial local government capital settlement for ninety four five which I announced on the thirtieth of November. This totals five hundred and three million pounds in capital grants and crediting approvals, a four percent increase on nineteen ninety three, ninety four. It means welcome permissions to improve capital stock in housing, education and other crucial local government service areas. The Welsh non-domestic rate poundage or the business rate, for nineteen ninety four, ninety five, will increase by one point eight percent in line with inflation to forty four point eight pence. This modest increase, coupled with transitional arrangements announced in the budget, will be of considerable benefit to business. About twenty thousand business rate payers who face the largest increases following the nineteen ninety revaluation, will benefit by five point three million pounds from the transitional changes. This Mr Deputy Speaker, is a decent settlement for local government in Wales. It gives local authorities an additional one hundred million pounds to spend when the low level of inflation is helping them keep down the cost of providing their services. The eighty six million pounds I am providing for care in the community is an increase of almost fifty million pounds on nineteen build on the introduction of the service in ninety three, ninety four year. Since the nineteen ninety to ninety one settlement, revenue resources for local authorities have increased by almost five hundred and thirty million pounds or twenty seven percent.... My provisional settlement proposals were met by some criticisms that they could lead to substantial increases in council tax levels, increases as high as fifteen percent were suggested. Most local authorities have yet to set their budgets but I am glad to report to the house the press reports indicate a far more modest level of increase. Clwyd county council and Cardiff city council are reported to be proposing a reduction in their council taxes. South Glamorgan county council and the Vale of Glamorgan borough council are reported to be planning increases limited to three percent or below. Mr Deputy Speaker it shows it can be done and I hope others will look after the interests of their tax payers as well.... On December the fourteenth I announced my provisional capping criteria. I will give careful consideration to local authority budgets and make my capping decisions in the light of all the information available to me when I've received it. I should like i if I may Mr Deputy Speaker, to commend Welsh billing authorities for their better than expected performance in collecting the council tax. They estimate an overall surplus on collection funds, of seventeen point six million as at the thirty first of March nineteen ninety four. This translates... into an average eighteen pounds reduction in council tax for a band E dwelling which could be passed on to council tax payers in their ninety four, ninety five bills or of course allows them more flexibility in their general financial planning. Local councillors have considerable flexibility in their budgeting. Sums of money I am describing tonight are large, revenue and capital spending combined, of over three thousand million pounds is many times the amount spent by quangos in Wales outside the health service and the grant represents a large share of my total budget for Wales and I hope members opposite are not suggesting I should cut spending on health, that is a vital service which I thought they supported as well. Flexibility is increased by the payment of rate support grant and distributable non-domestic rates as a block grant. It is then for local authorities to decide how to spend the money their given in line with their priorities and their local needs. Council can raise income through fees and charges, they have balances which they can choose to spend or retain,... they have assets which they can use for their service provision or they can sell to raise capital. They have large administrations which they should always be looking to make more effective and in an area like education, there are surplus faces to be removed, energy to be used more efficiently and services to be contracted out if this can provide better value for local tax payers.
[speaker001:] I apologise for interrupting him. I wonder, he's no doubt aware of the quite serious problems facing the South Wales police and the funding of the local authorities of the police. Is there any hope that he as Secretary of State along with the Home Office minister, might get round a table with South Wales police to sort the problems out because on the ground the seriousness is about the growing... problems of crime and law and in fact the lack of in fact, policeman on the beat. So I hope he will be able to accept this... offer or request on behalf of many, many constituents of mine and I'm sure of others too.
[Spicer:] Mr Deputy Speaker I'm just about to come on the... South Wales police but I will answer the point... directly, er I and my honourable friend the parliamentary secretary are always willing to discuss with local government, matters relating to local government finance and we have done so over the months leading up to this settlement and my honourable and right honourable friends in the Home Office are always willing to discuss matters on the police er where they are important and warrant a ministerial meeting and that again has happened recently with the Home Office min minister discussing this very issue. The last thing I want to see is local authorities skimping on the police. The budget problems of the South Wales police have been much in the news. Recently published audit commission profiles show that the South Wales police expenditure per head of population is above average for comparable forces and more police are on duty than for similar forces. I trust that local authorities and the police authorities will make sensible decisions about future services. I think most of the issues that have been raised tonight already, are ones for the police authority and I hope they will get on with their job. Where necessary police stations should be kept open and enough policemen should be made available for beat duties and for detection work, I give way.
[speaker001:] Wherever blame might lie as regards the situation with the South Wales constabulary... at the present time, surely it would be madness to merge Gwent police force with the South Wales police force at this unfortunate time because Gwent has a very, very good record and we want it to stay like that.
[Spicer:] Er Mr Deputy Speaker I I will make sure that the Home Office sees the transcript of this debate and I have... noted the report the honour the matter the honourable gentleman has raised. Mr Deputy Speaker... the last thing also that I wish to see is local authorities.
[speaker001:] I'm most grateful to my right honourable friend er for giving way. Would he not agree er that the fact that erm... the Home Office plan to give... allow for seven million pounds extra er for the police budget in W in Wales whereas in actual fact local government has chosen er to to give only two point two million er through the police budget er is a disgrace and reflects very badly on the running of the police authority and on the chairmanship of that committee. Mr Deputy Speaker my honourable friend is right that the allocation of budgets is a matter for the local authority and that is a matter for public debate er in the council chamber. Thank you. of state therefore explain why in England it's prof possible to get a straight answer from the Secretary of State with the figures of the S S A for the last five years, for this year and for next year and it's not possible to get that for Wales either from the Home Secretary or from the honourable gentl right honourable gentleman.
[Spicer:] Mr Deputy Speaker, as the honourable members knows, our S S A calculations are on... slightly different basis from England as we set out in this report and we do believe that local authorities should have the maximum flexibility to make their own decisions and it is therefore a matter for local debate. Whether they value their police service enough or not and whether it needs more money or not to do a good job or whether the authorities should take a look at how it is being run. But Mr Deputy Speaker I.
[speaker001:] I I take it that honourable gentle right honourable gentleman is making an implicit criticism of his colleague the Secretary of State of the environment... er, er and the Home Secretary who has responsibility can produce figures for England. He cannot produce them for Wales, why is that? It's surely because the right honourable gentleman is not providing the money to Welsh local authorities. Here, here.
[Spicer:] Mr Deputy Speaker,tha that was a fatuous point. I've already answered the underlying question, I do believe that they should have the maximum discretion and then they should be answerable for their decisions to their local electors who want a good police service and want a good education service and there is money there for them to do it... if that is their wish. For the last thing I wish to see... alongside skimping on the police is local authorities reducing the number of teachers where they are needed to teach pupils. Because I am delighted to report that education standards in Wales have been rising over the last few years following the introduction of the national curriculum and our other reforms. But as I said in a speech recently, we have a lot further to go, more progress to make and that is very much at the top of my agenda of, the agenda of my right honourable friend the education minister. Local authorities in Wales have reduced the level of rent arrears by over ten percent between nineteen ninety, ninety one and ninety two ninety three but there is more progress to be made. Since nineteen eighty seven the number of vacant local authority dwellings has also fallen and these are the cuts I do want, cuts in the number of empty houses, cuts in the rent arrears, cuts in the tax arrears so that the money is there to spend on the services... that people want. I am pleased to report that care in the community has in general, been successfully introduced. It is a good example of a major service being given to local government so that local rather than national democracy can determine the details of its future and how it flies in the face of the criticisms of the party opposite, that we're always taking important things away from local government. Here is one of the fastest growing services in the public sector over the decade to come and we've entrusted local government with it. I give way.
[speaker001:] I'm very grateful, I'm very grateful to the Secretary of State.... Could he just make sure though... that in his plans by defining community care and by by that I mean social care as opposed to health care, in a certain way. What he might be doing is to actually seek to increase the proportion of our very vulnerable population into the means testing category and that what he's got to watch is that he doesn't end up in a position... whereby defining health care in one way and social care very carefully. Health care will then be denied its proper role and that is clearly seen in the discharge of elderly people into the community and a point he knows well because he's heard it from me before, without the necessary disabled facilities being in place for those elderly people and it is his department that decided to put the disabled facilities grant in the basic credit allowance to compete against over local authority priorities in that section. Why doesn't he put it back into the special credit allowance?
[Spicer:] Mr Deputy Speaker, members opposite speak with forked tongues. They first of all say they want local government to be more responsible, to be more trusted, to have more freedom, I then give them that freedom and then they complain that I'm not telling local government what to do and I don't intend to lay down every detail of what they should do. I, like the honourable member, happen to believe the point he's made is right, that this should be a high priority, the money is there for local government to do it, I've explicitly recognised the needs of the disabled in my settlement for next year by increasing it substantially and I hope local government will respond and do the decent thing. I want to see elderly people looked after well and if they can be looked after at home all well and good but of course they need the facilities. I give.
[speaker001:] I I'm very grateful to the Secretary of State, erm is he aware that... increasingly over this winter there have been examples of... homes for the elderly and particularly nursing homes in the private sector... without casting a valued judgement on the role of the private sector, er homes that are finding difficulty in the filling the beds because of policy that is being pursued in care in the community. Does he realise that some of these homes er are perhaps have only half their beds full which means that there are vulnerable people there, uncertain as to whether their home, their only home is going to remain er in existence. Can he give some assurances that there will be coherent planning to make sure that there are no vulnerable people er affected in this way, in the transition over to care in the community?
[Spicer:] Mr Deputy Speaker that's exactly what the authorities are asked to make sure about and of course they must have sensible plans so that there are always beds and facilities for those who need them, but in a way it's a success of care in the community that that more elderly people are being looked after in their own homes and so we've arrested the very rapid growth in permanent residential places which was occurring before the policy was introduced... er, as we now see, despite some gloomy forewarning, local authorities have in general managed well in the first year of their responsibilities, they've examined thousands of cases and many people have been helped to make decisions about their own futures. Many are able to continue living as they wish in their own homes. This has meant a fall in the demand for residential care which had been increasing rapidly in previous years and it is the duty of the relevant authorities to plan future provision er so that everything will work smoothly for those most in need. I trust local authorities will respond positively to this settlement. I believe in good local government. I believe that councils have an important role to play. I am disturbed if I learn of cases of alleges impropriety or irregularity in their financial performance or in their accounting. I trust all parties in this house will unite, not only in believing in local government but in agreeing that local government should set and maintain the highest possible standards of conduct... when spending the very substantial sums of money parliament votes to it. This settlement Mr Deputy Speaker, is a large settlement. It is a good settlement in an area of low inflation. It gives local government in Wales the money it needs to provide high quality services and to get on with the job. It need not lead to high tax increases, nor to the redundancy of crucial workers. Well run councils will flourish as a result of this settlement and I offer them every encouragement to do so. Mr Deputy Speaker I commend it to the house.
[Betty:] Question is the motion on the order paper, Mr Ron Davies.
[speaker001:] Here, here.
[Taylor:] Thank you very much Mr Deputy Speaker. I think we've seen a a new model Secretary of State this evening. He er came to the despatch box and he talked about... conciliation. He said that he had taken into account the views of local authorities put to him since he met them last year, he might have taken in to account of course, we didn't accept any of the er... er observations. He commended er local authorities, he commended Labour controlled local authorities... for their collection rate of the... council tax and for... their collection rate of rents. He actually praised the value of democratic local government and he compared that... with his own quango state.... It really is er a new model Secretary of State although the fact of the matter is Mr Deputy Speaker, that er... his reality of course is quite different from his and the reality is that this is... a poor settlement for local government in Wales and it's been roundly condemned, not least by the county councils, who is the largest... employers in Wales will have to face the... considerable burden imposed on them by the government's acceptance of the public sector er review body recommendations but without the additional cash to meet those awards and what this settlement er does represent Mr Deputy Speaker is a further step along the road that we've been travelling since nineteen seventy nine. The financing of local government is er again circumscribed, local government's ability to respond to the needs of the community it serves as it and its electors deem appropriate is being curtailed yet again and of course local government is losing its independence to central government and this centralising tendency which this settlement further represents is one of the most pernicious and corrosive characteristics of the modern Conservative party. It won't be lost on anyone concerned with the application of this settlement... that despite the Secretary of State's earlier remarks as the democratically controlled public sector, represented by local government, faces further cuts. The undemocratic sector represented by the one hundred and eleven Welsh quangos... has seen budget increases. In the case of the major bodies the D B R W, the W G A and the C B D C of over eight percent. I don't think either, given the succession of scandals and the aura of sleaze hanging over the Secretary of State's quango sector... that anyone would deny that in terms of value for money and financial probity, direct democratic control is a far better watchdog than the financial control systems of the Welsh office.
[speaker001:] Here, here.
[Taylor:] The total standard spending... of two thousand seven hundred and five million pounds is one hundred and five million pounds above the settlement for the current financial year. The Secretary of State has argued that this is nearly a four percent increase. In the stricter sense it is nearly a four percent increase... but that statistic itself is absolutely meaningless. In the current financial year... budgets... what authorities would have spend in delivering services, not what the Welsh office consider they should spend, were two thousand six hundred and eighty eight million pounds and against that... the next years settlement which we're debating tonight, represents only a point six percent increase. Even that is not itself a true reflection of reality. The current settlement, as the Secretary of State indicated, includes provision for community care... to the tune of eight six million pounds. That itself is some forty million pounds below the association of Welsh counties assessment of what is actually needed to meet the needs of the community and it is in any event not available for general spending. So if that figure is removed from the spending total the current increase is only two point three percent above the settlement for nineteen ninety three, ninety four... and being twenty eight million pounds, or one percent, below... the current years budgets actually represents a four percent real terms reduction... and that is a measure of the cuts which the government this year wishes to force on local government. Under any circumstances this would be difficult enough but this year Welsh local government has to suffer the commu the cumulative burden of previous years cuts. It also has to struggle with the social and economic consequences of the recession vested on the country by central government and of course it is expected this year to meet the costs of what is an unwanted and will be a costly and unsatisfactory reorganisation of local government. Predictably, while the government with one hand is distorting their expenditure and creating unnecessary expense, it is with the other reducing the discretion available to councils to raise their own resources. The capping limits, unfair and arbitrary as they are, are again imposing a straight jacket. All Welsh counties for instance are limited to increasing their budgets of one point seven... on point seven five percent over nineteen ninety three, ninety four... are as the cities of Cardiff and Swansea and the borough of Newport... and it is this cap of one point seven percent as my honourable friend for Cardiff South and Penarth has pointed out, which is at the route of the funding problems of the South Wales police authority area. At the same time... yes I I'll happily give way to the honourable gentleman.
[speaker001:] Specific point of the South Wales police authority's difficulties, would he not say that at least they're partly due to the police authority believing that it was going to be er underspending in the current year and being out in its calculations by about two million pounds, wouldn't you think that that was at least a factor?
[Taylor:] Well I I think that the honourable gentleman really must accept that er... coming from a party which is er in office in er in the Welsh office and has er... two hundred million, two hundred and eight million pounds I think unaccounted for last year, it really ill becomes him... er to lecture, to lecture anybody. The fact of the matter is that er... the fact of the matter is that there has been... er a c cumulative problem of er of expenditure in the South Wales police authority area stemming back to nineteen eighty eight and they have faced an under funding of thirty eight million pounds since that time. They've had er enormous difficulties and er the honourable gentleman will er know that the... South Wales police authority committee, its officers and its Chief Constable have er visited parliament er to put their case to members representing the South Wales police authority area and indeed to er Earl Ferrers the minister er responsible for the police and they certainly haven't had any er criticism made of them by his own government and if er he believes that there is a criticism I would suggest that he takes... a leaf out of the book of his er, his right honourable friend the Secretary of State and refers the matter so that it can be properly audited and er I think the honourable gentleman knows that when that is done he will see that there is no blame attached whatsoever to the members or the officers of the police authority. But I will give way if he wants to develop his point further.
[speaker001:] Is the honourable gentleman unaware that the district auditor... has in fact indicated that there is a total lack of accountability or any sort of proper financial control in the police authority. Is he as the shadow spokesman for Wales, unaware of that?
[Taylor:] The er the honourable gentleman might well have seen a copy of the er... the provisional report which has been prepared but that provisional report is er the same basis as the report er which was presented to er Westminster city council er and then we weren't talking er a difficulty of er two million pounds created, created as a direct result of government under funding of the police authority there,... we were talking about the expropriation of millions of pounds to line the pockets and to further the political interests of his party and I did notice the honourable gentleman er... vociferous in his condemnation of Westminster city council or any of the other tory controlled city councils. But of course, of course is if there is any evidence whatsoever er of financial mismanagement in the police authority it is a matter which has to be properly investigated. It has to be the subject of a proper report er by the er audit commission, but the district auditor and if they find that there has been er... er wrong doing, if they find that there has been any er wilful neglect or if they find there has been any er unacceptable er maladministration then I will certainly join with the er the Secretary of State in condemning that. But I of course have the advantage of being one who condemns that degree of maladministration whether it applies in the democratic sector or in the quango sector and unfortunately, unfortunately despite all the corruption, I I'll give way to the honourable gentleman if I could just er finish the point I'm making, unfortunately despite all the corruption and all the mismanagement and all the fraud for which the Secretary of State is personally responsible as Secretary of State.