In the House...
Speeches and parliamentary questions in the House of Commons
24/10/00 Hatfield Derailment
We recently met Mr. Gerald Corbett, who suggested that one way forward could be a private partnership between the industry and the Government. Has my right hon. Friend considered whether that is a possibility? While not necessarily renationalising the industry, it would at least put it partly under Government control.
Mr. Prescott: My hon. Friend makes several important points about the way in which public assets were sold off at a disgraceful rate. That concern has been looked at by the National Audit Office and various Select Committees. That sell off meant an awful lot of money for a few people. The irony for myself and for those who opposed Railtrack was that the greater our determination to get the then Government to drop their privatisation proposal--it was at the time of the 1992 election--the more it was said that we were forcing down the price, and that as a consequence when we were elected the price shot up and many people made an awful lot of money. In fact, our argument was that the then Government waited to sell British Telecom until after the election, so they could have done the same with Railtrack--but so be it; that is a matter of history.
With regard to whether we should hold shares in Railtrack or use a public-private partnership, as my hon. Friend may know we still hold a million shares in Railtrack, or about 0.2 per cent. of it. The Opposition always thought that we would use the Strategic Rail Authority to renationalise the rail industry by buying shares. There is a difficult balance between the Government owning shares in Railtrack and accepting responsibility without any control. Such matters are constantly being put to me, and my mind is not totally closed to all those issues.
Do my right hon. Friend's announcements today mean that the problems that I have described will be solved, in my constituency and elsewhere?
Mr. Straw: I must advise my hon. Friend not to take at face value suggestions by the officers of any public authority that the only reason for their failure to perform at a certain level is the lack of resources. He ought to compare the relative performance of his police district with that of other, similar, forces. The detailed statistics show that otherwise similar areas perform very differently. I do not think that Durham's police problems are worse than those in my own constituency of Blackburn. However, excellent policing in my constituency--where resources are lower than in most areas--and good partnership work with the Blackburn and Darwen district council has meant that virtually every category of crime has fallen. The force in my area makes full use of the powers available.
On youth justice, the Government are now giving the Youth Justice Board an annual budget of £230 million, including £190 million for the juvenile secure estate. The previous Administration did not properly organise the juvenile secure estate and did not implement powers to allow magistrates to remand into secure custody the so-called bail bandits--people who are arrested one day, charged the next, taken into court the next and then let out on bail. This Government have given the courts clear powers to remand young criminals directly into secure custody. Since June, the Youth Justice Board has had the power, duty and money to ensure that those places are available--in Durham as elsewhere.
The Prime Minister: There really is nothing to hide, as one can see from the detail that is published today. A decision was taken about this at a very early stage. There has always been this question, because other expenditure is subject to scrutiny by the National Audit Office and the PAC. However, it was considered that the expenditure most closely associated with Her Majesty should be treated differently. I do not think that that is unreasonable, particularly in light of the fact that more detail has been given here today than has been provided before, and it breaks down literally every item of expenditure.
Because the vast bulk of the expenditure is on salaries, there is not a great deal to investigate other than seeing the salary levels. We have put the salary bands in the report so that people can see exactly how many people are employed, and how many are employed in each band. I am second to none in my enthusiasm for the work of the PAC, but I think that it will find that there are bigger issues to look into.
The Prime Minister: The right hon. and noble Lord Jopling, currently a substitute member is to become a full representative replacing the noble Viscount Montgomery of Alamein. The noble Earl of Northesk is to become a substitute member of the delegation.
Yvette Cooper: Personal genetic information held in confidence, as with other confidential information, is protected by law. Health professionals also have ethical duties imposed by their regulatory bodies and the majority of National Health Service staff have equivalent contractual obligations. The Human Genetics Commission has indicated that it will be examining the protection of genetic data as a priority in its work programme.
Mr. Wills: There has not been any transfer of executive agencies, non-departmental public bodies or local public spending bodies for which the Department is responsible to, or from, the Northern Region since 1992. Similarly, there are no plans for any transfer.
Mr. Rooker: The Headquarters and some central financial/ accounting functions of the Child Support Agency were transferred to Newcastle upon Tyne in May 1997.
The Occupational Pensions Board, based at Newcastle, was dissolved in March 1997 and the Occupational Pensions Regulatory Authority (OPRA) established in Brighton. Responsibility for the Pensions Scheme Registry was transferred to OPRA but remains sited in Newcastle.
"Northern Region" is defined as the area covering the Government offices for the North-East and Cumbria.
Dr. Howells: None of the Department's executive agencies or non-departmental public bodies has relocated since 1992 either to or from the area covered by the North East and North West Government Offices. There are no current plans for such relocations.
Miss Melanie Johnson: The table lists the average 2-week repo rate, 10 year UK gilt rate, and the average mortgage interest rate in each year to May since 1992.
|2-week repo rate||10-year gilt rate||Building society average mortgage rate|
|Year ending May|
(14) 10-year gilt estimates for May 2000 year provided by Bloomberg (average of year till May 2022). Average mortgage rate includes data up till March 2000.
ONS. Repo rate data provided by the Bank of England.
ONS. Repo rate data provided by the Bank of England.
Ms Beverley Hughes: The executive agencies and non-departmental public bodies which fall within the Department's remit, are listed. The only local public spending bodies which fall within the Department's remit are registered social landlords (RSLs). There are approximately 2,100 RSLs, which are registered with the Housing Corporation. These are listed in the Housing Corporation's "Directory of Registered Social Landlords 2000", a copy of which is in the House Library. No executive agencies or non-departmental public bodies have been transferred from the Northern Region since 1992 or plan to be transferred in the next 12 months. Information on local public spending bodies could be obtained only at disproportionate cost.
The information requested on contractors is not held centrally and could be obtained only at disproportionate cost.
Driving Standards Agency
Driver Vehicle Licensing Agency
Maritime and Coastguard Agency
Queen Elizabeth II Conference Centre
Rent Officers Service Agency
Vehicle Certification Agency
Non-departmental Public Bodies
Audit Commission for Local Authorities in England and Wales
Docklands Light Railway
English Nature (Nature Conservancy Council for England)
English Partnerships (Urban Regeneration Agency and Commission for the New Towns)
General Lighthouse Authorities:
Northern Lighthouse Board
Trinity House Lighthouse Board
Health and Safety Commission
Health and Safety Executive
Housing Action Trusts:
Castle Vale (Birmingham)
Joint Nature Conservation Committee
Local Government Commission for England
London Pensions Fund Authority
London Regional Passengers' Committee
National Forest Company
Regional Development Agencies:
East Midlands (East Midlands Development Agency)
Eastern (East of England Development Agency)
North East (One North East)
North West (North West Development Agency)
South East (South East England Development Agency)
South West (South West of England Regional Development Agency)
West Midlands (Advantage West Midlands)
Yorkshire and Humber (Yorkshire Forward)
Rural Development Commission
Traffic Director for London.
Mr. Nicholls: Will the hon. Gentleman give way?
Mr. Steinberg: In a minute. The cages are not even big enough for the animals to turn round. That is absolutely disgusting, and it is one reason why I firmly support the ban.
Mr. Nicholls rose--
Mr. Gray rose--
Mr. Steinberg: I give way to the hon. Member from--
Mr. Gray: From where?
Mr. Steinberg: From Teignbridge.
Mr. Nicholls: The hon. Gentleman makes his point about the cruelty caused to animals, well knowing that current legislation could deal with that in any event. Will he comment on the Parliamentary Secretary's remark that the moral distinction between eating meat and wearing fur is that only a minority wear fur? Does the hon. Gentleman accept that analysis?
Mr. Steinberg: Yes, absolutely. I make no apologies for saying that I find the practice of farming and producing animals purely for cosmetic value to be distasteful and disgusting. I agree with my hon. Friend the Minister, but my view is clear as well.
Mr. Gray: Will the hon. Gentleman give way?
Mr. Steinberg: No. I shall continue for a little longer and then I will let the hon. Gentleman intervene.
Mr. Morley: Will my hon. Friend give way?
Mr. Steinberg: Yes, certainly.
Mr. Morley: I am grateful. I am sure that my hon. Friend would not want the hon. Member for Teignbridge (Mr. Nicholls) to misrepresent my remarks. I did not say that the difference between meat and fur was that one was a minority interest and the other was not. Food production is an essential part of our society, but the production of fur in this country is non-essential, because there are many other options.
Mr. Steinberg: I am delighted that my hon. Friend has made the point clear for the Hansard record. As I have said, my view is clear as well. If an animal is produced purely for cosmetic value, that is a disgraceful industry that should be stopped. Fur farming is not a huge industry in this country. We are all well aware that there are about only 13 farms breeding mink. The animal is not indigenous to the UK, and it needs an environment that is difficult to replicate in the caged conditions of a fur farm. Mink were brought here only for the purposes of the fur trade. Poor husbandry led to inevitable escapes into the countryside, and most hon. Members know that mink cause considerable damage and havoc when let loose.
Concern about the poor standards on mink farms led to mink-keeping regulations being passed by Parliament. Those led to an improvement over the years, but by the 1950s and 1960s the United Kingdom had an established population of feral mink. Such was the Ministry's concern that during the 1960s it financed an attempt to obliterate mink from the countryside. However, numbers had grown so large that the campaign had to be abandoned.
In more modern times, mink escapes have been due to inadequate husbandry and to the actions of various animal rights groups. Their concern about the conditions in which animals are kept and about their ultimate fate is undoubtedly well meaning, but the impact of releases has been devastating in the areas upon which they have been inflicted.
Mink may be here to stay in the UK, and the legacy that fur farming will leave in the countryside will need managing for some time. Ironically, some research shows that mink numbers are being reduced in areas where otter numbers are increasing and otters are reclaiming their natural aquatic environment. The irony is that otter numbers have risen in part because of a ban on their being hunted by dogs. That method has also been used to control mink numbers, but in a rather unsatisfactory way, because of the damage caused to sensitive riverbank environments. It is an argument for another day, but it is worth noting that mink have been better controlled by a ban on hunting with dogs than they were by the other legislation.
It is the semi-aquatic environment needed by mink that is so difficult to provide on a mink farm. Indeed, there is no attempt to provide it. We have all had the opportunity to see footage of the conditions in which mink have been kept in this country. They have been inadequately housed and there have been poor welfare standards. There are signs of cage madness in their behaviour, and even cannibalism. It is not a pretty sight, and it is unacceptable.
I expected Conservative Members to ask, "Have you been to a mink farm?" The answer is that I have not. However, no one can deny that the conditions that we have seen on film are wrong. Nor can the fairly recent convictions for cruelty on fur farms be disputed.
My hon. Friend the Member for Brigg and Goole (Mr. Cawsey), who chairs the parliamentary group on animal welfare, is in hospital, but he hopes to come to the House tonight for the vote. He debated the point on Radio 5 with a fur farmer. I remember him asking for the opportunity to visit the farm. He was told by the fur farmer that he could come by all means, but only if adequate prior notice of his visit was given. That tells us much about fur farms in the United Kingdom.
Some hon. Members will undoubtedly argue that if the problem is one of standards, we should pass legislation to deal with it. I cannot agree. I do not believe that adequate standards for creatures such as mink will ever be in place in fur farms.
Mr. Julian Brazier (Canterbury): Does not the hon. Gentleman see an inconsistency between admitting that legislation on fur farms is already in place and has led to convictions in some cases, and supporting a Government who allow the free import of meat from many parts of the world, including other parts of Europe, where animal welfare standards are abysmal?
Mr. Steinberg: I entirely agree with the hon. Gentleman. I only wish that the Government had the power to prevent such meat from coming into the country. We do not have that power, but we do have the power to prevent mink farming. That is within our jurisdiction. If the hon. Gentleman wants to introduce a private Member's Bill to stop the imports that he describes, I shall support him vigorously.
Mink farmers have had the entire 20th century to meet the standards, and have not done so. That answers the hon. Gentleman's point. Under existing legislation, convictions for cruelty still take place. Clearly, that legislation has not worked.
Mr. Gray: I am grateful to the hon. Gentleman for giving way. It is a tragedy that many people in Britain are cruel to their pet dogs. Plainly, the legislation to prevent cruelty to pet dogs is not working. Would the hon. Gentleman argue that we should ban the keeping of pet dogs, because some people are cruel to them?
Mr. Steinberg: I would certainly ban some people from keeping pet dogs. Again, if the hon. Gentleman wants to do something about that, I shall support him. I entirely agree that there are many people in this country who are irresponsible and should not be allowed anywhere near a dog, let alone be allowed to keep one.
Every chance has been given to stop cruelty to mink, without success. The end product is by no means a necessity. It is not a by-product of a farm that is producing food or fulfilling any useful need. I cannot support the continuance of what might be described as vanity farming, considering all that the animals go through so that what some people consider a superior item of clothing can be produced.
Over the years, there have been many campaigns on the issue, with many memorable slogans. Perhaps the one that most people remember is that fur coats are worn by beautiful animals and ugly people--a powerful statement, but perhaps a little unfair. It should say ugly, naive and uninformed people, but the general point is strong.
As for compensation, I have heard the argument that there should be none, as fur farmers have exploited the animals for long enough and made enough money out of it not to be compensated. However, I do not accept that. If the ban is successful, there is a legitimate need to compensate those who will lose their livelihood as a result of the legislation. All fur farmers are entitled to compensation, but it will not be automatic. The Bill should make it automatic.
I understand that some kennel owners wanted compensation after the introduction of the passports for pets scheme, but were unsuccessful on the grounds that that was only part of their business. For some fur farmers, that is their entire business. Compensation will help them to get out of the industry or to diversify into some other form of farming or trade.
For many people in this country, fur farming is an awful, unnecessary trade. However, those who undertake it are currently entitled to do so by law. They should therefore be reimbursed accordingly. I understand that even the Fur Breeders Association want the law sooner rather than later, because the current uncertainty makes life hard for those who are left in the business.
I hope that hon. Members will support the Bill. It is said that the extent to which a country is civilised can by judged by its treatment of animals. In many ways, we should be ashamed of ourselves. Let us consider my part of the country. The Royal Society for the Prevention of Cruelty to Animals recently conducted a survey, which found that some people in the North-East of England treated animals disgracefully. I wish that we could stop all cruelty.
Tonight we have a duty to show an example and make it clear that animal cruelty cannot be condoned in any form, regardless of where it takes place. I am confident that hon. Members will support the Bill vigorously, and that it will not be long before we are back again to abolish another obscenity--fox hunting. We are a civilised country; I presume we are a civilised House. Let us prove that by walking through the Lobby together tonight and ending the awful, unnecessary trade of fur farming.
Mr. Steinberg: The hon. Member for Teignbridge (Mr. Nicholls) compared the pretentious wearing of fur coats with the wearing of Armani suits by Labour party poseurs. Can the Minister tell us how many Armanis it takes to make a suit, and how are they killed?
Mr. Morley: My hon. Friend makes a good point, although I have never heard of an Armani being skinned to make a suit.
Ms Stuart: Of the bodies listed at (a)(i) (executive agencies), National Health Service Estates relocated its headquarters from London to Leeds in April 1993; it also has staff at the regional office headquarters in Durham and has an office in Newcastle, opened in April 2000.
Of the bodies listed at (a)(ii) (non-Departmental public bodies), the Family Health Services Appeal Authority has been located in Harrogate since it was established in 1995.
Ms Stuart: (a) (i) The Department sponsors the following executive agencies:
(a) (ii) The Department sponsors the following non-Departmental public bodies (NDPBs):
(a) (iii) Local public spending bodies within the Department's remit
There are currently 99 Health Authorities, 364 NHS Trusts, and 17 Primary Care Trusts operational in England.
(b) The contractors employed by the Department
The information could be provided only at disproportionate cost.
(c) NHS bodies On 1 April 1996 the Northern and Yorkshire Regional Health Authority became the Northern and Yorkshire Regional Office of the National Health Service Executive, Department of Health. At the same time its offices were relocated from Newcastle and Harrogate to a single site in Durham City.
Mr. Denham: The latest information about numbers of consultants in North East England is shown in the table.
Overall, there is no sign of a national shortage of consultants, and where there are problems, these are in certain specialties or in particular geographical areas. Numbers continue to rise steadily and difficulties in filling vacancies are not widespread.
At national level we aim to ensure that there are enough doctors in training for there to be sufficient becoming fully trained specialists to meet the future needs of the National Health Service. At local level, it is for NHS trusts and health authorities, who are accountable for the services they provide, to determine the number, grade and mix of staff they require, in the light of local circumstances, in order to provide quality services to patients.
On 6 April I announced plans to train 393 extra hospital specialists. Added to the specialist doctors already in training, there should be an additional 13,000 fully trained hospital specialists in the National Health Service by 2006-07. The additional places will take forward our plans to increase capacity in the NHS, so that patients have easier access to faster, fairer and more convenient services.
|At 30 September||Headcount|
Mr. Denham: The Department recruitment, retention and vacancies survey showed 530 medical and dental whole-time equivalent vacancies (excluding training grades) in the hospital and community health services sector in England that had lasted three months or more.
There has only been one recruitment and vacancy survey carried out and there is no historic information available.
The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): I am afraid that I cannot give my hon. Friend the information that he seeks at the moment, but I shall certainly draw his remarks to the attention of my right hon. Friend the Secretary of State for Social Security. I hope that the information can speedily be provided to him and his constituents. I fear that the person whom his constituent contacted has something to learn about taking a customer-friendly approach.
Mr. Hutton: The information available is in the table.
|Type of accommodation||(11)1994-95||1995-96||1996-97||(12)1998||(13)1999|
|General nursing homes||(14)--||(14)--||(14)--||94||92|
|Mental nursing homes||(14)--||(14)--||(14)--||28||26|
|Private hospitals and clinics||(14)--||(14)--||(14)--||1||0|
(11) Information for 1994-95, 1995-96 and 1996-97 relate to the period 1 October to 31 March.
(12) Information for 1998 and 1999 relates to 31 March.
(13) Information for 1999 is provisional.
(14) Not available.
Mr. Boateng: As of 29 March 2000, 18,938 offenders have been placed on the Home Detention Curfew scheme. The Prison Service has been notified of 190 offenders who have been charged with an offence committed while subject to the scheme. A breakdown of the types of offences committed is shown in the table. This breakdown has been prepared from information supplied by police forces and drawn from the police national computer. Further analysis of re-offending by those subject to the Home Detention Curfew scheme, including procedures for notification of further charges to the Prison Service by the police, is currently under way as part of a long-term evaluation of the scheme.
|Burglary, theft and theft from shops (including taking without consent/taking and driving away)||67|
|Driving and Traffic Offences||19|
|Breach of the peace (including Drunk and Disorderly)||14|
|Handling Stolen Goods/Deception||10|
|Possession of an offensive weapon||3|
|Breach of court injunction or Restraining Order||3|
Ms Stuart: Details about the performance of all National Health Service ambulance trusts are contained in the Department of Health Statistical Bulletin Ambulance Services, England 1998-99, copies of which are available in the Library.
Ms Hewitt: The total number of small and medium enterprises in the North East is 39,600 and this represents 3 per cent. of the equivalent figure for the UK.
Mr. Blunkett: My announcement today ensures that things do not get worse, rather than that they will immediately get better--I am a great believer in being honest about these things. However, our announcement in November, at the Association of Colleges annual conference--which the Under-Secretary of State for Education and Employment, my hon. Friend the Member for Croydon, North (Mr. Wicks) made, as I was in the House for the Queen's Speech debate--outlined an extra 10 per cent. next year for further education. That is the beginning of a process of catching up--so that we are levelling up, not levelling down, and so that we narrow and then eliminate the gap between student funding in different parts of the sector.
Yesterday, I was in Welwyn Hatfield, and I saw real co-operation and collaboration in action between the FE college and the area's three sixth forms. They were collaborating in ensuring not merely that they rationalised and reinforced each other's work, but that students shared their courses between the different institutions. I want, through the Learning and Skills Council, to accelerate the programme of tertiary education, so that parity of both funding and quality is available to people regardless of where they live and where they are learning.
Mrs. Beckett: I am grateful to my hon. Friend for raising what is a matter of great concern and interest, particularly in coalfield areas. I believe that the Minister for Energy and Competitiveness in Europe, my right hon. Friend the Member for Airdrie and Shotts (Mrs. Liddell), is looking into the matter, and has undertaken to discuss it with the trustees and to report back. Until those discussions have taken place, I do not anticipate being able in the near future to find time in the House for such a debate, but I remind him of the existence of Westminster Hall, where he might find that those concerns can be well aired.
Mr. Timms: It is estimated that around £183 million is lost annually to the Exchequer through non-payment of vehicle excise duty. The loss of revenue through non-payment of MOT test certificates is estimated to be around £870,000.
To help tackle this evasion, DVLA continues to be proactive in improving enforcement regimes and last year recovered £80 million through penalties and fines.
The non-payment of vehicle insurance represents costs to insurance companies. Figures are not available on the costs to the Exchequer, though these costs are likely to be negligible.
The burden of any losses resulting from non payment of TV licence fees fall with the BBC.
Jacqui Smith: The Government believe it is very important that children should be able to have healthy and enjoyable school meals. We have consulted widely on the introduction of minimum nutritional standards for school lunches, and we are currently considering representations on our draft Regulations and guidance. Schools and local education authorities will be under a duty to comply with the Regulations, to be laid this year, which will set out the new standards. My right hon. Friend the Secretary of State will investigate any complaints that the standards are not being met and could issue a direction to ensure compliance with the statutory duties.
Jane Kennedy: I refer my hon. Friend to the written answer I gave my hon. Friend the Member for Coventry, South (Mr. Cunningham) on 6 December 1999, Official Report, column 398W.
Mr. Jim Cunningham: To ask the Parliamentary Secretary, Lord Chancellor's Department what plans he has to seek to amend the law to provide unmarried fathers with the same right of parental responsibility as married fathers; and if he will make a statement. 
Jane Kennedy: The Government intend to introduce an amendment to the Children Act 1989 that unmarried fathers who sign their child's birth certificate jointly with the mother will acquire parental responsibility without further formality. This provision will be introduced when parliamentary time allows.
Janet Anderson: The estimated cost of providing free television licences to all households including a pensioner would be nearly £700 million a year, while the cost of free television licences for all pensioner-only households would be approximately £490 million a year.
Mr. David Davis: My entire speech probably did not make up for the hon. Gentleman's overruns this year.
Mr. Steinberg: We shall not continue the argument. I pay tribute to the National Audit Office, without which the PAC could not survive. Indeed, we would not exist without it; it does an excellent job.
I have been a member of the PAC for just over a year. It has been one of the most enjoyable experiences that I have had since coming to Westminster 12 years ago. Whitehall needs to be kept on its toes, and the PAC does that. One of the most incredible aspects of interrogation in the PAC is the complacency that some senior civil servants demonstrate. I sometimes despair when billions of pounds have been wasted and senior civil servants remain complacent about it. Perhaps they object to being questioned by, in my case, a minor Back Bencher. The PAC thus has a vital role to play. The Committee is well controlled by the right hon. Member for Haltemprice and Howden. He is a fair man who does a good job, although I am convinced that he gives me less time than anybody else.
It is the Committee's strict convention to be non-political. That convention is well respected, although it has been difficult to be non-political in the past year--I have been brought into line on several occasions. However, I suspect that it will become easier to be non-political as time goes on and we consider reports from this Government rather than those of the previous Administration.
Today presents an opportunity for a more open debate, which is welcome. This afternoon, we can express opinions that we cannot present in Committee because of the convention that I mentioned. I shall not philosophise like my right hon. Friend the Member for Swansea, West (Mr. Williams) and the right hon. Member for Haltemprice and Howden did; I shall be a little more blunt.
I believed that we could discuss approximately 40 reports today, and the right hon. Member for Haltemprice and Howden said that the number was indeed 40. However, I want to concentrate on the two reports that I found the most interesting and, politically, the most controversial. I want to discuss the reports on the two privatisations--of British Energy and Railtrack--that the previous Government undertook. I believe that the previous Government proceeded with them purely for reasons of dogma. My argument this afternoon will clearly demonstrate that.
Let us consider British Energy. The PAC's report examined whether the Department of Trade and Industry took reasonable steps to minimise taxpayers' financial exposure to nuclear liabilities, and whether it maximised the proceeds obtained from shares. Not long after I first entered the House in 1989, the then Prime Minister made it clear that she would not touch the privatisation of British Energy with a bargepole. Yet in 1995, the previous Government went ahead with the sale. Initially, the sale of shares was a flop, and many remained unsold--indeed, only 88.5 per cent. were sold. The sale raised approximately £1.26 billion at a time when British Energy owed the Treasury £600 million. A simple sum shows the amount of money that the sale of shares raised. The remaining shares were sold later--not by design, but because they could not be sold initially. That extra sale raised £198 million. The total raised was due to good luck rather than good management.
The eight most modern nuclear power stations were sold while the older stations were retained in the public sector. The older nuclear power stations are nearing the end of their useful lives and will soon need to be decommissioned. The sale ultimately raised approximately £1.5 billion, yet it was hoped that it would raise £3.7 billion. So the loss to the taxpayer was enormous; one does not have to be a mathematician to work it out.
The original construction of Sizewell B, one of the power stations that was sold, cost approximately £3 billion. I would have expected the privatisation to raise at least the original capital costs of the eight power stations that were sold. Yet the sale fell well short of the cost of one power station. To make matters a darn sight worse, the Treasury had expected to receive from the nuclear industry approximately £560 million in 1996-97 and £1.12 billion in 1997-98. Yet after privatisation, the industry cost the taxpayer £950 million over the same period. That is not a good deal.
After privatisation, the nuclear industry changed from an income-generating industry into a revenue drain. It now costs the taxpayer more to run the nuclear industry in the form of British Nuclear Fuels plc because it no longer controls profit-making modern stations. To make matters worse, the taxpayer will have to pay for decommissioning the older magnox power stations without the benefit of any revenue from the modern stations. Again, that is not a good deal for the taxpayer. The decommissioning will cost approximately £8 billion. Even worse, the privatised industry will be expected to make a contribution of only £16 million towards paying for long-term liabilities of nearly £15 billion. Clearly, that privatisation was an absolute failure that caused a huge loss to the taxpayer.
The PAC concluded that the nature of nuclear liabilities caused inevitable uncertainties, especially in the long term, about British Energy's ability to finance them and that, therefore, the Government should monitor carefully the company's on-going ability to meet its liabilities without recourse to the taxpayer. The Committee also concluded that the taxpayer was still open to financial liability for British Energy's nuclear power stations. Those financial liabilities arise from several causes.
First, British Energy has a fixed-price contract for fuel reprocessing with British Nuclear Fuels plc, which is still publicly owned. Secondly, there is currently no technology for the disposal of nuclear waste in the United Kingdom. Thirdly, there is a residual risk that, in the long term, neither the trust fund that was set up, nor British Energy, will be able to finance the full cost of nuclear decommissioning. For those reasons, it is my view that that sale should never have gone ahead--there are too many doubts regarding an industry that must, at all times, have safety as its paramount consideration.
When the Department of Transport privatised Railtrack in 1996, it sold all the shares at one time, for £3.90 each, through a stock market flotation that raised about £1.9 billion. About two years later, when the NAO wrote its report, those shares had risen in value to £16 each. The report clearly states that one of the aims of the sale was to get a good deal for the taxpayer. Although that was a simple aim and £1.9 billion was raised, Railtrack was worth £8 billion two years later. Quite contrary to the stated aim, the deal was dreadful: the British taxpayer and the Treasury lost a fortune and the company was sold off for about £6 billion less than it was worth. That money could have gone into Treasury coffers to be used in health or education or to build hospitals. Quite obviously, the policy was to sell at all costs.
The situation was made worse because, as a result of previous privatisations, the Department should have known what to expect. It was clear that selling shares in stages had produced substantial increased proceeds: the price rose over time and became higher than that achieved when all the shares were sold at the initial issue price. Two examples come to mind: the sales of National Power and PowerGen by the Department of Energy. The shares were sold in two stages and, as a consequence, the overall proceeds from the two sales were £2.3 billion higher than they would have been if 100 per cent. of the shares had been sold initially.
At the time, the Department of Energy set out its reason for adopting the phased sale strategy in great detail and circulated the information widely throughout Departments so that its experience could be of benefit during future privatisations. Did the Ministry of Transport take any notice of the information that was given it? No. The information and advice that the Department of Energy had passed on to all Departments were ignored and the Ministry of Transport lost billions of pounds for the taxpayer. In my view, that is a scandal. However, when the PAC questioned the chief accounting officer on those issues, the response was quite complacent. It did not even seem to have been accepted that what had happened was anywhere near a scandal.
The NAO report states that a 100 per cent. sale was decided on because of the Treasury's concern about the impact of a partial sale on the confidence of investors in the light of the approaching general election. If that was the case, it is clear to me that the policy was to sell at all costs. Political dogma, if I dare say that again, overrode the financial consequences of the privatisation. What can only be described as an astronomical increase in share values over the past few years has occurred simply because Railtrack was completely undervalued. It certainly has not improved because of its track record.
Mr. David Davis: Ouch!
Mr. Steinberg: It is also claimed that, because Railtrack was sold in such a hurry, the interim regulation scheme was also overgenerous and excessively costly to the taxpayer. As a consequence, total rail subsidies have doubled compared with the aid received by British Rail, which originally ran the system. To quote from the NAO report, the value of shares also increased because the market realised that Railtrack could
"secure significant efficiencies on operating costs, particularly infrastructure maintenance expenditure and investment".In other words, Railtrack was highly valued because people knew that it would make cuts. We have seen what happens when such cuts are made. The taxpayer was ripped off by the sale of Railtrack and the traveller now receives a declining service from it. I do not want to go into its record, but it is clear to everybody that there is a great deal of worry in respect of safety on the railways, basically because of lack of investment.
Ms Armstrong: I am well aware of the problem. I suspect that the small schools in my constituency are even smaller than those in my hon. Friend's, and it is certainly true that some schools in the north Pennines have very small pupil populations.
I have discussed the matter with my right hon. Friend the Secretary of State, and with my right hon. Friend the Minister for School Standards. She has already announced additional help for small schools, but is also keeping the matter under review. We want to ensure that all pupils, regardless of the size of their schools, get the opportunities that they need and deserve.
Reproduced with the permission of the Controller of HMSO