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    <title>Sitting of 17 March 1997</title>
    <dateCreated>Mon, 17 Mar 1997 00:00:00 +0000</dateCreated>
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    <outline id='3196762' text="&lt;i&gt;The House met at half-past Two o'clock&lt;/i&gt;" title='Preamble' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/preamble'></outline>
    <outline id='3196763' text='[MADAM SPEAKER &lt;i&gt;in the Chair&lt;/i&gt;]' title='PRAYERS' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/prayers'></outline>
    <outline id='3196806' text='Oral Answers to Questions'>
      <outline id='3196817' text='WALES'>
        <outline id='3196820' text='Lady Olga Maitland: To ask the Secretary of State for Wales if he will make a statement on current trends in the level of unemployment in Wales. [18861]&lt;br/&gt;Mr. John Marshall: To ask the Secretary of State for Wales if he will make a statement about unemployment in Wales. [18836]&lt;br/&gt;The Secretary of State for Wales (Mr. William Hague): Unemployment is falling fast in Wales. It has fallen by 9,200 in the past three months.&lt;br/&gt;Lady Olga Maitland: I thank my right hon. Friend for his reply. I extend my hearty congratulations on his recent engagement. I know that we all wish him the very best for the future. His announcement coincides with the excellent unemployment figures. Is he aware that, at 7 per cent., unemployment in Wales is far lower than unemployment in the European countries, such as France, Germany and Italy, and in Spain, where it is 22 per cent? That is because those countries have been saddled with the social chapter and the minimum wage. Does my right hon. Friend agree that the people of Wales would be cruelly cheated if this country should ever support a Labour Government, who would cost them their jobs and their livelihoods?&lt;br/&gt;Mr. Hague: I am grateful to my hon. Friend: she is correct about unemployment in Wales. The Government have brought new jobs to Wales in record numbers in recent years. Week after week, there have been new announcements of additional employment. This weekend, Optical Fibres&amp;#x2014;an extremely high-technology company based in north Wales&amp;#x2014;announced that it has a thriving order book and that it expects its output to quadruple by 2001, and announced 200 new jobs in north Wales. Hon. Members on both sides of the House will no doubt welcome that announcement, but only Conservative Members are prepared to pursue the policies that will keep such announcements coming.&lt;br/&gt;Mr. John Marshall: Will my right hon. Friend join me, as a regular visitor to Welsh questions, in welcoming the hon. Member for Stratford-on-Avon (Mr. Howarth) to his first Welsh Question Time? Does my right&#x000A;&lt;col&gt;608&lt;/col&gt;&#x000A;hon. Friend agree that the improvement in the Welsh economy is due to the fact that we have modern industrial relations and low corporate taxes and have not signed the social chapter? Does he also agree that a party that is in hock to the trade unions would destroy our industrial relations, and that a party whose Chief Whip says that it wants to refine the tax system would soon deal with corporate taxes too?&lt;br/&gt;Mr. Hague: My hon. Friend is right. The Opposition want to pursue, in Wales and in the rest of the United Kingdom, policies that have thrown millions of people out of work in continental Europe. Unemployment in Wales has fallen by more than 9,000 in the past three months, while unemployment in Germany and France has reached post-war highs. The Opposition propose that other countries should decide our social and labour rules and regulations.&lt;lb/&gt;&#x000A;It would be churlish of me not to welcome the hon. Member for Stratford-on-Avon (Mr. Howarth) to Welsh questions&amp;#x2014;although heaven knows what the people of Newport, East will think that they are being asked to vote for in the election, or which party the hon. Gentleman will end up in by the end of the next Parliament. Nevertheless, I hope that he will join me in welcoming a 19 per cent. fall in unemployment last year in the constituency that he seeks to represent.&lt;br/&gt;Mr. Alan Howarth: I assure the right hon. Gentleman that the people of Newport will vote for a Labour Government because they know that a Labour Government will give steady and reliable support to higher and further education. Does he accept that it is crucial to the employment prospects of the people of Newport and to the success of inward investment in Wales that we should have full-hearted support for education? Does he share my grave concern at the closure of the engineering course at the university of Wales institute in Newport?&lt;br/&gt;Mr. Hague: The hon. Gentleman is right: education is extremely important to future job creation in Wales. I hope that he will join me in welcoming a newspaper headline of two weeks ago which said that south-east Wales will be the best place in the United Kingdom to get a job for several years to come&amp;#x2014;perhaps it sent him off in that direction. It is important to invest in education and training. That is why much of the assistance that we are giving to the LG project, which will benefit the Newport area, is in the form of help with training. We shall continue such support.&lt;br/&gt;Mr. Ron Davies: I also extend my welcome to my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) on his first attendance at Question Time on Welsh affairs, and offer him my congratulations on winning the nomination for his new constituency of Newport, East. I am sure that it will be the last for a long time while sitting on the Opposition Benches.&lt;lb/&gt;&#x000A;Any fall in unemployment is obviously to be welcomed, but why does not the Secretary of State present the more rounded picture of the Welsh economy? Will he confirm that we now have 200,000 fewer people in Wales in employment than we did when the present Prime Minister took office? As the low pay unit showed last Friday, in addition to Wales having the highest proportion&#x000A;&lt;image src="S6CV0292P0I0312"/&gt;&#x000A;&lt;col&gt;609&lt;/col&gt;&#x000A;of full-timers earning less than that represented by the European decency threshold, the pay gap between Wales and the rest of the United Kingdom is widening.&lt;lb/&gt;&#x000A;Now that the election is upon us, the choice for the people is clear. The Labour party offers hope for the future with plans for the young and long-term unemployed, improvements to training and education, the establishment of the university for industry, investment incentives and infrastructure investment, along with welfare-to-work programmes, partnership with the private sector and a revitalised Welsh Development Agency.&lt;lb/&gt;&#x000A;How proud is the Secretary of State that, after 18 years in office, all that his Government have to offer is a divided party, a weak leader and excuses for past failures?&lt;br/&gt;Mr. Hague: The hon. Gentleman says that any fall in unemployment is obviously welcome. That has become a routine comment for Opposition Members because a fall in unemployment has become routine. It would not be a routine thing if we were to follow the Labour party&apos;s policies. Adoption of the social chapter and a minimum wage would price tens of thousands out of their jobs along with hundreds of thousands throughout the rest of the United Kingdom.&lt;lb/&gt;&#x000A;The hon. Member for Caerphilly (Mr. Davies) asked whether I am proud of what we have done in Wales. I am proud of what we have done in building a stronger economy, investing in infrastructure and delivering the best prospects in the lifetime of my generation in Wales and in the rest of the United Kingdom. The Welsh economy needs the hon. Gentleman presiding over it as it needs a hole in the head.&lt;br/&gt;Sir Wyn Roberts: I, too, extend my felicitations to my right hon. Friend on his engagement.&lt;lb/&gt;&#x000A;Is not one of the reasons for the favourable disparity between the 7 per cent. unemployment rate in Wales and the 12.5 per cent. in Germany, with 12.4 per cent. in France, the fact that we have cut public expenditure as a proportion of gross domestic product? Is it not becoming clear that, were the Labour Opposition to return to government, that policy would be abandoned, causing a devastating rise in unemployment in the longer term?&lt;br/&gt;Mr. Hague: I thank my right hon. Friend for his personal remarks. As I do not have any briefing on those, I do not think that it falls within my ministerial responsibilities more fully to respond. My right hon. Friend has asked what must be the last question that he will be asking at Welsh Question Time during a long career in the House. I am sure that the entire House would wish to pay tribute to him and to the work that he has done for Wales and his constituents over so many years.&lt;lb/&gt;&#x000A;My right hon. Friend is right about expenditure, and he is right about the Labour party&apos;s policies. Labour says that it would not spend any more money in Wales over the next two years than that which is set out in our plans. It says also that it wants to give more money to local authorities and to the Welsh Development Agency. At the same time, it will have to finance a Welsh Assembly. The people know that that does not add up. The Labour party will be rumbled.' title='Unemployment' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/unemployment'></outline>
        <outline id='3196827' text="Mr. Touhig: To ask the Secretary of State for Wales when he last met the board of Cardiff Bay development corporation. [18828]&lt;br/&gt;The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones): My right hon. Friend and I have regular meetings with the chairman and my right hon. Friend last met the board in May 1996.&lt;br/&gt;Mr. Touhig: Is the Minister aware of the remarks made by his right hon. Friend the Member for Wokingham (Mr. Redwood), who recently described quangos as being logo manufacturers and gatherers of knighthoods? I cannot think in what context that comment would apply in Cardiff bay. Does the Minister agree with the Secretary of State that decisions are best taken by people elected to office and not by people appointed to quangos who meet in secret behind closed doors?&lt;br/&gt;Mr. Jones: From his time in the Welsh Office and since, I know that my right hon. Friend the Member for Wokingham (Mr. Redwood) and I share similar approaches towards quangos. I find the hon. Gentleman's remarks somewhat odd as he is a Johnny-come-lately into Welsh politics who has been saddled with trying to breathe life into the corpse of a Welsh Assembly. He is the proponent of the arch quango.&lt;br/&gt;Sir Irvine Patnick: Does my hon. Friend agree that all development corporations have brought investment and work into their areas? Is not the Cardiff Bay development corporation an example of the good things that the Conservatives have done, despite opposition from the Labour party?&lt;br/&gt;Mr. Jones: My hon. Friend is right; he points to the reality of the situation. We have lame acceptances from Labour Members that any fall in unemployment is welcome. We get equally lame acceptances of any new announcement. The Cardiff bay redevelopment is confidently expected to generate 29,000 jobs in the capital city of Wales and throughout south Wales. Who were the stoutest opponents of the scheme? They were Welsh Members sitting on the Labour Front Bench." title='Cardiff Bay Development Corporation' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/cardiff-bay-development-corporation'></outline>
        <outline id='3196830' text='Mr. Fabricant: To ask the Secretary of State for Wales what action has recently been taken to raise the level of manufacturing skills in Wales. [18830]&lt;br/&gt;The Parliamentary Under-Secretary of State for Wales (Mr. Jonathan Evans): A great deal of action is being taken. That includes provision for a further 4,800 young people to start modern apprenticeships in 1997&amp;#x2013;98; increased funding for adult technician training; and initiatives to meet the need for skills in the electronics and semi-conductor sectors.&lt;br/&gt;Mr. Fabricant: We take for granted falls in unemployment and we are beginning to take for granted the fact that Wales is becoming the silicon valley of Europe. Will my hon. Friend pay tribute to liquid manufacturers, such as Ty Nant, the water manufacturers&#x000A;&lt;image src="S6CV0292P0I0313"/&gt;&#x000A;&lt;col&gt;611&lt;/col&gt;&#x000A;in Lampeter? Will he also pay tribute to Swy y Mor, the Welsh whisky manufacturer, whose product is available throughout the known world? What would be the effect on those manufacturers of the imposition of European employment law?&lt;br/&gt;Mr. Evans: I happily respond to my hon. Friend&apos;s invitation in relation to the Welsh whisky company because it is based in my constituency. I have noted my hon. Friend&apos;s welcome for the great success of Ty Nant water. A number of water companies within the Principality have managed to develop a high international profile. My hon. Friend is right to say that that does not just happen, as Labour Members believe. It is the product of investment in the skills of the people who work in those businesses. The difference between us and Labour Members is that we understand that, whereas they do not.&lt;br/&gt;Mr. Roy Hughes: Is not the true answer to the question that little has been done to raise manufacturing skills in Wales? Is that not the reason why the average wage in Wales is the lowest in the United Kingdom, with some workers getting as little as &amp;#x00A3;1.61 an hour? Is not the low pay unit report a fitting epitaph for this Government? On 1 May, the people of Wales and of Great Britain as a whole will say that enough is enough.&lt;br/&gt;Mr. Evans: I preface my remarks by saying that I anticipate that that question will be one of the last contributions made by the hon. Gentleman. Whatever political differences there have been between us, he well knows that I very much respect him. I find it rather strange, however, to see him sitting with the hon. Member for Stratford-on-Avon (Mr. Howarth) and the hon. Member for Newport, West (Mr. Flynn). What an incongruous threesome they make. The hon. Member for Newport, East (Mr. Hughes) used to understand that introducing a minimum wage was a way in which to destroy jobs. It is rather sad that he is singing a different tune now.&lt;br/&gt;Mr. Ian Bruce: Would my hon. Friend care to speculate on the effect on jobs in Wales, particularly in the telecommunications industry, were BT to lose &amp;#x00A3;2 billion or &amp;#x00A3;3 billion in a windfall tax and the money that supports those jobs were transferred to make-work schemes and training schemes that have no jobs at the end of them?&lt;br/&gt;Mr. Evans: My hon. Friend is absolutely right. That is why the Labour party says so little about the implications of the windfall tax. Many people who work for the privatised utilities in Wales have good cause to take on board the points raised by my hon. Friend and, furthermore, the effect on jobs of the introduction of the social chapter&amp;#x2014;a matter that has been raised not only by my hon. Friends. I had the opportunity of visiting one of our biggest mid-Wales businesses and the first point raised with me expressed concern about Labour&apos;s policy in that respect.&lt;br/&gt;Mr. Wigley: If this is indeed the hon. Gentleman&apos;s last Welsh Question Time, may we wish him well in his future incarnation? May I press him on the point that the most relevant investment in manufacturing industry is often in higher and further education, which provide the necessary&#x000A;&lt;col&gt;612&lt;/col&gt;&#x000A;skills. In that context, is the Minister happy, after receiving representations from the university of Wales and other colleges concerning the reduction in the funding available for education and research? Is he aware that we shall lose considerable input into the Welsh economy unless the shortfall is found? The Secretary of State says that the money is not available for higher education because it has gone into LG, but surely we need to find money for both if we are to invest in the future.&lt;br/&gt;Mr. Evans: There has been a significant expansion over the years in investment in higher and further education in Wales, as the hon. Gentleman is aware. His point relates to this year&apos;s provision in respect of further education, which has increased to some &amp;#x00A3;162.5 million. Against the background of some of the representations from the sector, last year there was clear recognition that the settlement for Wales was higher than that for England.&lt;br/&gt;Mr. Win Griffiths: The Minister gives a rather belated example of conversion to sensible policies on training when it was a Conservative Government who slaughtered apprenticeship schemes in the 1980s. While we welcome his new conversion to modern apprenticeships and the additional money provided for technicians this year, is it not true that there have been cuts in the budgets of the further and higher education funding councils and in the overall employment and training budget? Manufacturers throughout south Wales remain concerned about the shortage of training skills and the Government&apos;s own target for training and skills is still woefully behind what is really needed. Will it not be a real blessing when, in May this year, we have a Government who will truly concentrate on improving skills and education in Wales?&lt;br/&gt;Mr. Evans: All that I would say to the hon. Gentleman is that the Council of Welsh Training and Enterprise Councils recently published an action plan for manufacturing. The hon. Gentleman tells us that he has read it, so perhaps he will have read the response from a range of agencies&amp;#x2014;the Welsh Development Agency, the Development Board for Rural Wales, the Further Education Funding Council for Wales and the Confederation of British Industry&amp;#x2014;and from their paymasters, the Trades Union Congress. They all welcomed the approach in that document and I urge Opposition Members to do so as well.' title='Manufacturing Skills' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/manufacturing-skills'></outline>
        <outline id='3196836' text='Mr. Ieuan Wyn Jones: To ask the Secretary of State for Wales what representations he has received about appointment to quangos in Wales during 1996. [18831]&lt;br/&gt;Mr. Hague: My Department has received several representations.&lt;br/&gt;Mr. Jones: Does the Secretary of State acknowledge that one of the most miserable and disreputable aspects of the Conservative Government in the past 18 years has been the way in which they have appointed their friends to run quangos in Wales? What could be more damaging to the cause of democracy than for Members of Parliament rejected by the electorate to be appointed to run the health service and represent the interests of consumers in Wales? With one or two notable exceptions,&#x000A;&lt;image src="S6CV0292P0I0314"/&gt;&#x000A;&lt;col&gt;613&lt;/col&gt;&#x000A;does he not realise that all he and his friends have done is further the cause of the Conservative party in Wales? We deserve a far better system of government and we shall vote for it on 1 May.&lt;br/&gt;Mr. Hague: After the question by the hon. Member for Caerphilly (Mr. Davies) earlier, I thought that it was impossible to hear more rubbish in one question time. However, we have now heard more from the hon. Member for Ynys M&amp;#x00F4;n (Mr. Jones) who says that we have filled boards with political friends of the Conservative party. Lord Elis-Thomas does a good job for the Welsh Language Board and he was appointed by the Conservative Government. I have recently appointed to the WDA board Councillor Noel Crowley of Neath and Port Talbot, who is a leading member of the Labour party in Wales. There is also George Wright, who is a leading representative of the trade unions in Wales. Those people sit on those bodies because we select people for them on merit&amp;#x2014;and that is how it should be.&lt;br/&gt;Mr. Hanson: Will the Secretary of State confirm that the recent group of people that he appointed to monitor appointments to quangos were themselves appointed without any advertisements being placed&amp;#x2014;on his say-so only? Is it satisfactory to have a quango monitoring appointments to quangos? Would it not be far better to have an elected assembly monitoring the performance of quangos?&lt;br/&gt;Mr. Hague: What we have under the new arrangements is an independent element in the selection of people for public office. If the hon. Gentleman or anybody else suggests people for those lists, they would of course be considered. The idea that better appointments would be made because there was a room full of people in an assembly arguing about it, and claiming a fat expense account for doing so, is absolutely ludicrous.&lt;br/&gt;Mr. Bernard Jenkin: I invite my right hon. Friend to reflect on the irony that many Opposition Members who campaigned vigorously against quangos want to hand their country over to the ultimate quango&amp;#x2014;the European Commission in Brussels.&lt;br/&gt;Mr. Hague: My hon. Friend raises an important issue. It is the Labour party&apos;s policy to sign away&amp;#x2014;no doubt it would do it at the Amsterdam summit if it had the chance&amp;#x2014;and get rid of the British veto on social policy, regional policy, industrial policy and environmental policy. That is not a policy that will win the support of the British people.' title='Quangos' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/quangos'></outline>
        <outline id='3196842' text="Mr. Hain: To ask the Secretary of State for Wales what recent assessment he has made of job insecurity in Wales. [18832]&lt;br/&gt;Mr. Jonathan Evans: In spring 1996, according to the labour force survey, 8.3 per cent. of Welsh employees were in temporary employment.&lt;br/&gt;Mr. Hain: Has the Minister had any discussions with Lucas Industries Ltd. over the closure of its Neath factory and the transfer of 170 jobs to Poland? Why does he keep&#x000A;&lt;col&gt;614&lt;/col&gt;&#x000A;denying that job insecurity in Wales is rife, when the number of temporary workers has increased since the last election by more than a quarter, and in his own backyard in the Welsh Office, it has increased by a half? He will soon understand a great deal more about job insecurity when the voters of Wales sack all the Conservative Members on 1 May.&lt;br/&gt;Mr. Evans: The hon. Gentleman would do better not to prejudge the outcome of the election. As he is interested in international comparisons, let me point out that the number of people who are engaged in temporary employment is higher in France, Germany and Spain than in Wales. Furthermore, if he is concerned about the exportation of jobs, it is rather odd that he should be spending his time arguing in favour of a national minimum wage and the social chapter, which will destroy jobs in Wales.&lt;br/&gt;Dr. Spink: Will my hon. Friend confirm that job insecurity is a function of unemployment&amp;#x2014;the higher the unemployment, the more insecure people feel about their jobs? The policies that lead to higher unemployment are those that the socialists would introduce, such as the minimum wage and the social chapter; policies that would see the expansion of the Welsh Assembly, which would deter inward investment to Wales, destroy Welsh jobs and increase job insecurity.&lt;br/&gt;Mr. Evans: My hon. Friend is absolutely right. Every week, we hear of new inward investment projects in Wales and of jobs going to the Principality. The United Kingdom stands at the top of the tree of performance in Europe in attracting new inward investment, and Wales is taking more than its proportional share of that. Wales has been pursuing that success under a Conservative Government&amp;#x2014;success that would come to an end if there were to be a change on 1 May.&lt;br/&gt;Mr. Rowlands: The Secretary of State said a few minutes ago that he was proud of the employment record under his Government. Is he proud of the fact that 40 per cent. of men aged between 50 and 64 are economically inactive? That is the highest percentage of any region or nation in the United Kingdom. Is he proud of the fact that, despite many representations, he and his predecessor have done nothing about one of the most serious social and economic problems that has faced our communities?&lt;br/&gt;Mr. Evans: The Secretary of State and I are proud of all of the efforts that are being made to attract new job opportunities to Wales and, especially, to the hon. Gentleman's constituency. Significant investment has been made in the road network and in new job opportunities in his constituency. His constituents would not have had those opportunities under a Labour Government.&lt;br/&gt;Mr. Garnier: Would not one of the best ways to increase job insecurity in Wales be to introduce some of the working practices of mainland Europe? For example, is my hon. Friend aware that it is illegal to work more than 80 hours a year overtime in Spain; it is illegal to work any overtime at all in Luxembourg without informing the authorities; and it is illegal to work overtime in Belgium without the express permission of the authorities? Are not those the policies of the European social model that is warmly advocated by the Labour party?&lt;br/&gt;Mr. Evans: That is why industrialists and those who are running businesses in Wales have expressed their concerns to us about the proposal to sign the social chapter. The Labour party advocates an idea that would destroy jobs in Wales. We must not, and we will not, go down that route.&lt;br/&gt;Mr. Morgan: Does the Secretary of State agree that he could reduce job insecurity in Wales by approving the Eurofreight terminal at Wentlloog between Cardiff and Newport? Unconscionable delays have been caused by his inability to make a decision, and thousands of jobs have been destroyed. Before the Secretary of State leaves Wales in his private plane to join the Tory leadership contest, will he undertake today to announce the decision on the Eurofreight terminal before the end of this Parliament? His uncertainty on the issue makes Prince Hamlet of Denmark look like General Stormin' Norman Schwarzkopf.&lt;br/&gt;Mr. Evans: It is my understanding that the Secretary of State is awaiting a report from the Welsh Development Agency on that matter. &lt;i&gt;[Interruption.]&lt;/i&gt; I recall that the hon. Member for Cardiff, West (Mr. Morgan), who is making such a noise from a sedentary position, said some months ago that it was the most important decision to be made in south Wales. He made that statement two weeks before the Secretary of State announced the biggest inward investment project in Europe by LG. That shows how in touch the hon. Gentleman is." title='Job Insecurity' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/job-insecurity'></outline>
        <outline id='3196849' text='Mr. Dafis: To ask the Secretary of State for Wales if he will make a statement about funding for district general hospitals within the Dyfed Powys health authority area. [18833]&lt;br/&gt;Mr. Gwilym Jones: For 1997&amp;#x2013;98, we have announced a cash increase of &amp;#x00A3;6 million for Dyfed Powys health authority.&lt;br/&gt;Mr. Dafis: The Secretary of State has recognised already the need to reconsider funding for health care in Dyfed Powys to take account of rurality. He must know also that some trusts in the area are heading for significant deficits this time next year, because of the present funding arrangements. Does he accept that that will lead to serious problems for some district general hospitals, especially Bronglais hospital, which serves a wide area? To prevent that immediate crisis from developing, additional funding is urgent and necessary. Will the Secretary of State commit himself or his successor to provide that additional funding?&lt;br/&gt;Mr. Jones: I have already announced additional funding for Dyfed Powys health authority of &amp;#x00A3;6 million. I have the strangest sense of d&amp;#x00E9;j&amp;#x00E0; vu, because the first time that the hon. Gentleman raised the matter in the Chamber he started the scaremongering about Bronglais general hospital. Now that the scare over the community hospitals, which was so wickedly whipped up by certain people&amp;#x2014;not those on the Conservative Benches&amp;#x2014;has been resolved, scares are being raised about the general hospitals. That is a contemptible way to approach health care in west Wales.&lt;br/&gt;Mr. Ainger: Given his answer to the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis), has the&#x000A;&lt;col&gt;616&lt;/col&gt;&#x000A;Minister read the report produced by Dyfed Powys health authority, entitled "Effective Care and Healthy People", in which it offers three options to cope with the financial crisis? The first is to close all community hospitals in the area; the second is to close two out of four of the district general hospitals; and the third is to close some of the community hospitals and cut some of the district general hospitals. Opposition Members are not scaremongering: the health authorities are telling the truth, but the Welsh Office refuses to listen.&lt;br/&gt;Mr. Jones: The new Dyfed Powys health authority, which has inherited an overspending tendency, is conducting a review. My right hon. Friend the Secretary of State stated his regard for community hospitals during the Welsh affairs debate on 27 February, and added that he wanted them to continue their role. When he considers any proposals, he will have strong regard for local views about local health needs, and will not adopt the scaremongering approach advocated by the Opposition.&lt;br/&gt;Mr. Alex Carlile: Will the Minister give a clear undertaking that there is no risk of closing any of the valuable community hospitals in Powys?&lt;br/&gt;Mr. Jones: There is no need to say any more because my right hon. Friend the Secretary of State made the position clear on 27 February. I say simply to the hon. and learned Gentleman&amp;#x2014;before he flits off to pursue his more prosperous legal practices&amp;#x2014;that neither my right hon. Friend nor I is in the business of closing necessary hospitals anywhere in Wales. We are certainly not in the business of cutting the NHS. We are committed to expanding it&amp;#x2014;a commitment that the Labour party markedly refuses to match.&lt;br/&gt;Mr. Ron Davies: Is it not disgraceful that the Under-Secretary seeks to avoid responsibility for this serious matter by claiming that the health authority has "inherited" the relevant responsibilities? I remind him that he created the health authorities and appointed the people to run them. They are directly his creation. Is it not clear that something is fundamentally wrong with the funding of Dyfed Powys health authority? I make it clear that the Labour party supports the campaign now being waged to conduct a fundamental review of the funding formula. Is not the Under-Secretary&apos;s opposition to the closure of community hospitals by the health authority both hypocritical and dishonest, as he is directly and personally responsible for that funding crisis? In addition, all his words this afternoon have not changed the fact that that crisis remains. Is that not typical of the Government, who practise deception and evasion and advocate the fraudulent making of policies today which they have no intention of honouring tomorrow? Is it any wonder that they have lost the trust of the people?&lt;br/&gt;Mr. Jones: The hon. Gentleman clearly is not aware of the circumstances. I have moved to assist Dyfed Powys health authority by extending one loan and providing another, and I am ready to assist it with transitional cash flow. It is the hon. Gentleman who is clearly ducking, as he will not make a promise&amp;#x2014;perhaps because he knows that he cannot honour it&amp;#x2014;to match our commitment to continue the real increases in spending for the health service each and every year in the next Parliament.' title='District General Hospitals (Dyfed Powys)' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/district-general-hospitals-dyfed-powys'></outline>
        <outline id='3196853' text='Mr. Flynn: To ask the Secretary of State for Wales if he will establish how many jobs have been relocated from Wales to countries that have the minimum wage in each of the past five years. [18834]&lt;br/&gt;Mr. Hague: There are no data readily available to perform such an analysis.&lt;br/&gt;Mr. Flynn: Is not Newport doubly fortunate, as it can look forward to the LG semi-conductor jobs and to being represented in the future, as in the past, by splendid Members of Parliament? Is it not extraordinary that the Government can count the number of incoming jobs and announce the figures again and again, but cannot say how many jobs have left this country to relocate in countries with both the minimum wage and the social chapter? Is it not extraordinary that when LG is up and running, it will be competing for semi-conductor jobs that used to be based in Newport but are now located in France and Germany? Why does a country such as Britain, which has won 74 Nobel prizes for science, have to buy scientific jobs from a country that has never won such a prize?&lt;br/&gt;Mr. Hague: We all commend the hon. Gentleman on his becoming modesty in describing himself as a splendid Member of Parliament. I certainly hope that Newport will be represented by two splendid Members in the coming Parliament, but not necessarily the current ones. The hon. Gentleman should not presume about the outcome of elections.&lt;lb/&gt;&#x000A;If Labour Members are so in favour of the minimum wage, why cannot they say at what level they would set it? It is because it would be either so low as to be utterly irrelevant or so high that it would price people out of work. They will have to own up to that in the coming weeks.&lt;br/&gt;Mr. Llew Smith: Is the Secretary of State aware that in Blaenau Gwent we have some of the lowest wages in the United Kingdom? Would he be willing to work for &amp;#x00A3;2 or &amp;#x00A3;3 an hour? What advice would he give to families who have to bring up children on that kind of money?&lt;br/&gt;Mr. Hague: The hon. Gentleman must recognise that wages cannot be raised by Government diktat. Wages and living standards are raised by having an enterprise economy, by the promotion of employment and by businesses doing well and having to compete to employ people. That is happening increasingly in many parts of Wales. We have already made south-east Wales the best place in Britain to get a job, and I want that to be the case in the whole of Wales. That will deliver rising living standards all round.&lt;br/&gt;Sir Wyn Roberts: Is it not a fact that the company referred to by the hon. Member for Newport, West (Mr. Flynn) is a French nationalised company, Thomson SLG? Is it therefore surprising that it should behave in such an extraordinary way?&lt;br/&gt;Mr. Hague: My right hon. Friend has a point&amp;#x2014;apart from having asked another question after I had paid tribute to him on his previous question. He could also have mentioned the fact that unemployment in France&#x000A;&lt;col&gt;618&lt;/col&gt;&#x000A;stands at 12.5 per cent. and has risen in the past year, whereas unemployment in Wales is about 8 per cent.&amp;#x2014;depending on which definition one uses&amp;#x2014;and has fallen dramatically in the past year.' title='Relocation (Minimum Wage)' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/relocation-minimum-wage'></outline>
        <outline id='3196857' text='Mr. Richards: To ask the Secretary of State for Wales what action has been taken to encourage more inward investment in Wales outside the eastern M4 and A55 corridors. [18835]&lt;br/&gt;Mr. Hague: I have recently set the Welsh Development Agency new and more demanding targets to encourage more inward investment outside the eastern M4 and A55 corridors. I have also asked it to give more assistance to companies locating in those areas than to equivalent projects elsewhere.&lt;br/&gt;Mr. Richards: May I congratulate my right hon. Friend on his announcement of new targets for investment outside the M4 and A55 corridors and in rural Wales? What measures does he propose to enhance the quality of life throughout rural Wales following the publication of the rural White Paper last year?&lt;br/&gt;Mr. Hague: I thank my hon. Friend for his welcome for the new targets that have been set for the Welsh Development Agency. The rural White Paper published last year demonstrated the importance that we attach to the future of rural areas of Wales. I shall today publish the 1997 review of the White Paper, which is an important step in the process of building a prosperous countryside and a healthy environment for rural Wales. That will include such matters as a further round of the schools technology initiative, broadening the coverage of the rural transport innovation grant, a new native woodland challenge scheme and new advice on encouraging village shops and other services in rural areas.&lt;br/&gt;Mr. Alan Williams: Does the Secretary of State recall the constructive meeting that he had with a deputation of south-west Wales Members two months ago? Does he remember that we made it clear that we in no way regret that so much industrial development is going to south-east Wales but that we are living in the shadow of Cardiff and Newport and fear for the fact that little or no development is occurring beyond Bridgend? Does he remember giving us certain assurances in relation to his use of discretionary power? What action has he taken in the intervening two months to implement that agreement?&lt;br/&gt;Mr. Hague: Yes, I well remember the meeting with the right hon. Gentleman and his colleagues. As he said&amp;#x2014;I hope that other hon. Members were listening&amp;#x2014;a great deal of industrial development has taken place in south-east Wales. It is time to ensure that that success is spread right across Wales, including to the areas that the right hon. Gentleman has represented. That is why I have set the Welsh Development Agency a new target of 50 per cent. of the new investment and jobs that it attracts to Wales in the coming financial year being outside the eastern M4 and A55 corridors. That is a major increase in the targets for those areas. I have also asked the agency&#x000A;&lt;image src="S6CV0292P0I0317"/&gt;&#x000A;&lt;col&gt;619&lt;/col&gt;&#x000A;to pay more for projects going to the areas that have not yet been the principal beneficiaries of inward investment than for equivalent projects elsewhere.&lt;br/&gt;Mr. Llwyd: I have heard the Secretary of State congratulating himself so many times this afternoon that it is rather disturbing&amp;#x2014;one wonders whether he is serious about all this. I welcome his difference of emphasis on investment and job creation outside the M4 corridor and north-east Wales. May I ask him a serious question? What is he doing about youth unemployment? Does he know, for example, that north Wales has pockets of youth unemployment as high as 33 per cent? What on earth is being done to tackle that extreme problem?&lt;br/&gt;Mr. Hague: What I am doing about youth unemployment in Wales is to bring more jobs to Wales than we have seen in modern times. That has an impact on youth unemployment as well as on unemployment generally. Of course, it is important to ensure that the benefits of that are shared throughout Wales. To tackle youth unemployment, in the coming year I am also increasing by &amp;#x00A3;12 million&amp;#x2014;nearly doubling it&amp;#x2014;the budget for modern apprenticeships in Wales, so that young people will have the skills to take up those jobs.' title='Inward Investment' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/inward-investment'></outline>
      </outline>
      <outline id='3196916' text='ATTORNEY-GENERAL'>
        <outline id='3196922' text="Mr. Sweeney: To ask the Attorney-General what steps he is taking to reduce delays in dealing with young offenders. [18851]&lt;br/&gt;The Attorney-General (Sir Nicholas Lyell): The Crown Prosecution Service has well-established teams of specialist prosecutors to handle youth cases, which are working closely with the other agencies to develop methods of speeding up those cases. Those include the introduction of pilot schemes for lawyers in police stations, which enable police officers to obtain immediate advice on the charging of youth offenders.&lt;br/&gt;Mr. Sweeney: Will my right hon. and learned Friend take on board the fact that there is widespread concern in the Vale of Glamorgan about young offenders who commit fresh offences while waiting to be dealt with by the courts? Those offenders also tend to forget why they are in court if there is any significant delay. Does he agree that the CPS and all the other agencies involved in the criminal justice system have an important role to play in avoiding unnecessary adjournments and speeding up justice?&lt;br/&gt;The Attorney-General: My hon. Friend has great practical knowledge of both prosecution and defence and he will know from that how important it is to bring offenders promptly before the courts before they continue a spree of offending. The CPS, the Home Office and others are working together closely to tackle the issue.&lt;br/&gt;Mr. Alex Carlile: Does the Attorney-General agree that it is not just the problem of delay that is creating difficulties with youth crime, but the system itself? Does he agree that there is scope for considering, for example,&#x000A;&lt;col&gt;620&lt;/col&gt;&#x000A;the introduction of an equivalent to the Scottish children's panel system, which has proved much more effective than youth courts in preventing young people from committing additional crimes? Does he not think that we should now take a root-and-branch look at the way in which youth crime is dealt with and not merely tinker with issues such as delay?&lt;br/&gt;The Attorney-General: I agree to the extent that there are a number of ways in which one can approach youth crime. The police and the CPS are already making strides with interesting initiatives, one of which I saw last Thursday in Aylesbury. There is a broad spectrum of possibilities and the problem can be tackled in many effective ways, not only through the courts.&lt;br/&gt;s Mr. Ian Bruce: Does my right hon. and learned Friend agree that the Home Office and his Department are working vigorously to try to speed up the prosecution of young offenders, but that we are being delayed by Opposition Members, who talk tough on crime and promptly delay the passage of some of our crime laws? Is it not absolutely clear that the only way in which we will tackle the problem properly is to have another five years of Conservative government?&lt;br/&gt;The Attorney-General: My hon. Friend puts his finger on the curious and muddled policy of the Opposition, which will be tested carefully over the next six weeks and about which they can think further in opposition over the next five years, after which they may come up with something better. My hon. Friend and I realise that there is a small hard core of young offenders who need to be dealt with rapidly and effectively and on whom the Government are targeting their efforts.&lt;br/&gt;Mr. John Morris: Will the Attorney-General take account of the fact that while youth crime has risen by 35 per cent. in the past decade, the number of young offenders dealt with by the courts has fallen by the same proportion? Reducing delay is important, especially for persistent young offenders, but it is only part of the problem. What consideration has he given to the criticism of youth justice by the Audit Commission and others? Does he not consider it extraordinary that there were no proposals to reform youth courts in the recent Government consultative paper? What are his views, given his remit and drawing on his experience, on responsibility for the Crown Prosecution Service?&lt;br/&gt;The Attorney-General: The right hon. and learned Gentleman is not wholly correct. Several proposals put forward recently by my right hon. and learned Friend the Home Secretary have particular application to youth courts, as well as to courts generally. However, there are also specialist aspects that deserve further attention, which they will receive. The right hon. and learned Gentleman must remember that the problem with youth crime is the comparatively small number of multiple offenders&amp;#x2014;also a symptom of adult crime&amp;#x2014;who must be brought rapidly before the courts and, if necessary, put out of circulation with swift custodial penalties." title='Young Offenders' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/young-offenders'></outline>
        <outline id='3196936' text='Mr. Winnick: To ask the Attorney-General what discussions he has had with the Director of Public Prosecutions regarding the murder of Stephen Lawrence. [18853]&lt;br/&gt;The Solicitor-General (Sir Derek Spencer): My right hon. and learned Friend and I meet the Director of Public Prosecutions frequently to discuss matters of departmental interest, and I have been kept informed about the case.&lt;br/&gt;Mr. Winnick: Is this not a case where, so far, evil has triumphed over justice? Is it not a matter of deep regret that no one has yet been brought to justice for a racially motivated crime of murder that was committed nearly four years ago, despite the fact that a newspaper has named the people whom it considers responsible for that terrible crime? What will the authorities do to try to ensure that those who put Stephen Lawrence to death will at long last be brought to justice?&lt;br/&gt;The Solicitor-General: The hon. Gentleman is quite right that it is a great injustice that those responsible for the killing have not been brought to justice. However, he might like to bear in mind the words of Mr. Justice Curtis, who heard evidence on the voir dire at the Old Bailey from a person who said that he had witnessed the killing. Having heard the only witness on whom the private prosecution relied, the judge said:&#x000A;&lt;quote&gt;"Where recognition or identification is concerned, he simply does not know in ordinary parlance whether he is on his head or his heels."&lt;/quote&gt;&#x000A;In directing that the evidence should not go to the jury&amp;#x2014;and I commend these words to the House&amp;#x2014;the judge added:&#x000A;&lt;quote&gt;"To do so would amount to an injustice. Adding one injustice to another does not cure the first injustice done to the Lawrence family."&lt;/quote&gt;&lt;br/&gt;Mr. Nicholls: Does my hon. and learned Friend agree that it does not impugn the sincerity of the hon. Member for Walsall, North (Mr. Winnick) to remind him that if the qualification to the right to silence had been in operation when the murder occurred, the outcome might have been very different? Perhaps he would remind the House, and the public at large, that Labour voted against that reform.&lt;br/&gt;The Solicitor-General: As my hon. Friend said, Conservative Members do not find it easy to forget that, in contradistinction to Opposition Members. He knows from his discussions with people who practise in the courts that the modification of the right to silence that we introduced in the teeth of protest and opposition from the Labour party is bringing great benefits. People answer questions more freely in the police station, and they go into the witness box in court.&lt;br/&gt;Mr. MacShane: Will the Solicitor-General join me in congratulating the &lt;i&gt;Daily Mail&lt;/i&gt; on ensuring that the issue does not escape the public gaze? Will he also join me in praising the Prime Minister on the remarkable rebuke that he gave last week at Prime Minister&apos;s Question Time to the hon. Member for Wolverhampton, South-West (Mr. Budgen), who tried to make race an issue? Will he&#x000A;&lt;col&gt;622&lt;/col&gt;&#x000A;condemn the Conservative Members of Parliament in the west midlands who are meeting in a conspiracy to seek, once again, to make race an election issue in British politics&amp;#x2014;something that British people of all colours will utterly reject?&lt;br/&gt;Madam Speaker: The hon. Gentleman&apos;s question is well away from the substantive question.&lt;br/&gt;The Solicitor-General: As a former Member of Parliament for Leicester, South, which had about 19,000 Asian constituents, I do not need lessons on the importance of race and the vileness of racial crimes from the hon. Gentleman or any of his hon. Friends. We have been in the vanguard in tightening up the law to ensure that a wider range of incidents involving racial misconduct are treated as criminal offences. As for the &lt;i&gt;Daily Mail&lt;/i&gt;, we live in a free society with a free press. The hon. Gentleman might not be quite so supportive of that paper&apos;s actions if evidence comes to light relating to those against whom charges were dismissed in the magistrates court and a prosecution is brought against them. I say that because, unfortunately, the likelihood of an abuse-of-process argument succeeding on the grounds of prejudice has been increased by such publicity.' title='Stephen Lawrence' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/stephen-lawrence'></outline>
        <outline id='3196943' text="Mr. John Marshall: To ask the Attorney-General if he will make a statement about the use of information technology in the Serious Fraud Office. [18856]&lt;br/&gt;The Solicitor-General: The Serious Fraud Office makes significant use of information technology, both to support its investigations and to present complex material at court.&lt;br/&gt;Mr. Marshall: I welcome the publication today of figures recording the fourth annual reduction in crime&amp;#x2014;an historic first for this country&amp;#x2014;and congratulate Mrs. Wright on her appointment as head of the SFO. But will my hon. and learned Friend look at Mrs. Wright's comments on the sophistication of juries? Does he not believe that we should revisit the views of the Roskill report and decide that serious fraud is too serious a matter to be considered by unsophisticated jurors?&lt;br/&gt;The Solicitor-General: My hon. Friend is quite right about the crime figures. It is a great pity that we have not had more support from the Labour party for our campaign on law and order in the past five years&amp;#x2014;perhaps we shall hear a little more from it in the next few weeks. I am sure that my hon. Friend will want to join me in congratulating Mrs. Wright on her appointment as the new director. She is experienced in prosecuting and regulation, and I am sure that the House will wish her well. As for my hon. Friend's last point about jury trials, as he knows the Government are considering alternatives to jury trial in serious and complex fraud cases." title='Information Technology (Serious Fraud Office)' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/information-technology-serious-fraud'></outline>
        <outline id='3196950' text='Mr. Tony Banks: To ask the Attorney-General what measures the Serious Fraud Office has recently taken to reduce fraud. [18857]&lt;br/&gt;The Attorney-General: The Serious Fraud Office continues to enhance its ability to investigate and detect, and thus deter, serious and complex fraud, including by the ever more sophisticated use of information technology, both to marshal and analyse documentation and to present cases to the jury.&lt;br/&gt;Mr. Banks: How can anyone take seriously a Government who talk about restricting and dealing with serious fraud yet who allowed Asil Nadir to escape from this country? We are still waiting to know what they are going to do to get him back. He gave &amp;#x00A3;400,000 of stolen money to the Conservative party. What about Mr. Octav Botnar, who gave stolen money to the Conservative party? When can we expect to see that money returned? And what about the Greek fascist, Mr. Latsis? How can the Attorney-General talk about serious fraud when all his party is a fraud; the Conservative party is funded by fascists and crooks.&lt;br/&gt;The Attorney-General: The hon. Gentleman is, once again, more interested in ranting than in facts. First, he might remember that the SFO stands ready to prosecute Mr. Asil Nadir as soon as he returns to this country from Northern Cyprus, with which we have no extradition&#x000A;&lt;col&gt;624&lt;/col&gt;&#x000A;treaty, and his duty is to return as soon as possible. Secondly, the hon. Gentleman might remember that, during its eight and a half years of existence, the SFO has prosecuted almost 160 very large frauds. It has achieved the conviction of more than 62 per cent. of all defendants, but&amp;#x2014;even more important&amp;#x2014;in more than 75 per cent. of cases it has obtained the conviction of at least one person and, when only one person has been convicted, that has almost always been the chief architect of the fraud.&lt;br/&gt;Sir Ivan Lawrence: Does my right hon. and learned Friend agree that the participation of ordinary members of the public in the criminal justice system through sitting on juries&amp;#x2014;even on juries in fraud trials&amp;#x2014;is one of the reasons why the criminal justice system can reassure people about its fairness, and is also the surest protection of the liberty of the individual?&lt;br/&gt;The Attorney-General: The importance of the jury system has motivated and governed the actions of the Government for more than 18 years. In some recent cases it has proved difficult adequately to prosecute the full ambit of fraud against an individual, which is why the Government have indicated that they will look again at that issue. However, my hon. and learned Friend raises an important point, of which we shall not lose sight.' title='Fraud' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/fraud'></outline>
      </outline>
    </outline>
    <outline id='3196959' text='3.30 pm&lt;br/&gt;The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): With permission, Madam Speaker, I should like to make a short business statement.&lt;lb/&gt;&#x000A;In the light of the announcement made earlier today by my right hon. Friend the Prime Minister, the business for the rest of this week will be rearranged. The House will also wish to know that Parliament will be prorogued on Friday 21 March.&lt;lb/&gt;&#x000A;I shall be tabling a motion later today, which will be set down for the commencement of business tomorrow. That will enable the House to conclude the remainder of its business in an orderly manner, which I trust will be for the convenience of the whole House.&lt;lb/&gt;&#x000A;Following discussions through the usual channels, which are already under way, I shall make a business statement later today setting out the detailed business for the remainder of the week.&lt;br/&gt;Mrs. Ann Taylor: I thank the Leader of the House for that statement&amp;#x2014;it is good to have my predictions from last Thursday&apos;s business questions confirmed as being correct. We are, of course, co-operating through the usual channels to deal with outstanding business as effectively as possible and we look forward to receiving further details from the right hon. Gentleman later.&lt;lb/&gt;&#x000A;In the meantime, will the right hon. Gentleman confirm that Question Time will operate as usual up to and including Thursday this week? So that Members of Parliament are as fully in the picture as possible at this stage, will he confirm that, when the House prorogues on Friday 21 March, it will not meet again and that Dissolution will be through proclamation?&lt;lb/&gt;&#x000A;Finally, needless to say, Labour Members are very glad that the campaign has come for real at last.&lt;br/&gt;Mr. Newton: The hon. Lady will recall that I refrained from announcing any recess dates last Thursday and, indeed, from commenting on her predictions or speculation, which I would not then have been in a position to confirm. I can confirm that it would be my&#x000A;&lt;col&gt;626&lt;/col&gt;&#x000A;expectation that questions will proceed as normal. Those are probably the only points in her remarks on which I need to comment.&lt;br/&gt;Sir David Steel: Will the Leader of the House confirm that his announcement has two effects: first, that some 28 Bills will have to be either passed through the House in the next few days or dropped altogether, which hardly seems to be the best way of concluding legislation; and, secondly, that, coupled with the press statement from No. 10 Downing street, he has announced the longest election campaign in this century, with three weeks of phoney war before Dissolution and three weeks of real campaigning afterwards? Should he not come to the Dispatch Box and apologise to the House on behalf of the Government for being, in the words of Charles II, such&#x000A;&lt;quote&gt;"an unconscionable time dying"?&lt;/quote&gt;&lt;br/&gt;Mr. Newton: I see no reason whatever to apologise to the House, either on my own behalf or on that of my right hon. Friend the Prime Minister. It remains to be seen how phoney the war will be. I can assure the right hon. Gentleman that my party will be fighting vigorously throughout the period in question.&lt;lb/&gt;&#x000A;As for the Bills on which proceedings have not been completed, I can of course confirm that there are a significant number of them. Precisely how they will be dealt with is what is under consideration via the usual channels and will be the subject of the business statement that I hope to make later today.&lt;br/&gt;Sir James Molyneaux: Will the Leader of the House prevail on the usual channels to ensure that the Northern Ireland business set down for Wednesday will not entirely disappear? I assure him that we shall do all in our power to facilitate an easy passage for those vital matters.&lt;br/&gt;Mr. Newton: I am grateful to the right hon. Gentleman. I shall certainly try to reciprocate by being as helpful as I can.&lt;br/&gt;Several hon. Members&lt;i&gt;rose&lt;/i&gt;&amp;#x2014;&lt;br/&gt;Madam Speaker: Order. Questions have been put to the Leader of the House about his statement, and he has been good enough to say that he will come to the House later today with a substantive statement. This one is very narrow, telling us what many of us already know&amp;#x2014;but I thank hon. Members for coming in to hear it anyway. Meanwhile, we look forward to hearing from the Leader of the House again later this afternoon.' title='Business of the House' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/business-of-the-house'></outline>
    <outline id='3196986' text='Orders of the Day'>
      <outline id='3197004' text='&lt;i&gt;Considered in Committee&lt;/i&gt;.&lt;br/&gt;[SIR GEOFFREY LOFTHOUSE &lt;i&gt;in the Chair&lt;/i&gt;]&lt;br/&gt;&lt;i&gt;Clause 1 ordered to stand part of the Bill&lt;/i&gt;.' title='Building Societies Bill' type='link' url='http://hansard.millbanksystems.comhttp://hansard.millbanksystems.com/commons/1997/mar/17/building-societies-bill'></outline>
      <outline id='3197004' text='Building Societies Bill'>
        <outline id='3197005' text='Clause 2'>
          <outline id='3197009' text='3.36 pm&lt;br/&gt;Mr. Peter L. Pike: I beg to move amendment No. 1, in page 2, line 20, after second &apos;member&apos;, insert&#x000A;&lt;quote&gt;&apos;of two years&apos; standing or more.&apos;.&lt;/quote&gt;&lt;br/&gt;The First Deputy Chairman of Ways and Means (Sir Geoffrey Lofthouse): With this, it will be convenient to discuss amendment No. 2, in page 2, line 21, after &apos;member&apos;, insert&#x000A;&lt;quote&gt;&apos;of two years&apos; standing or more.&apos;.&lt;/quote&gt;&lt;br/&gt;Mr. Pike: In view of the announcement made a few moments ago by the Leader of the House, it must be doubtful that the Bill can now make progress. It has not yet been to the other House, and it would be extremely unusual to force through a Bill at this stage and to gain the approval of the other place in such a short time&amp;#x2014;before proroguing on Friday of this week.&lt;lb/&gt;&#x000A;In last week&apos;s Second Reading debate, I mentioned that the Bill was defective, which is why I tabled the amendments, which would require two years&apos; membership before anyone could share in any windfall payments that accrued to the members of a building society as a result of its conversion to plc or bank status.&lt;lb/&gt;&#x000A;I recognise that the amendments are not necessarily the best way of achieving that; indeed, I am sure that the Minister will say that they are defective. The Minister was challenged last week about whether the Bill would be able to make progress. I know that she has been committed to it in good faith from the outset, although there has been some doubt about the Government&apos;s commitment. I know that the Minister has done all that she can to ensure that the Bill makes progress. I also know that she shared the disappointment of many when it did not feature in the Queen&apos;s Speech last autumn.&lt;lb/&gt;&#x000A;The amendments would stop people deliberately joining societies with only one view in mind: to qualify for payments in the way that I have described. That is not what conversion is about.&lt;lb/&gt;&#x000A;People are entitled to hold differing views as to whether conversion is good or bad. People know that I very much want mutuality to continue. The assets and the value of a society have been built by generations of its investors and borrowing members, over 100 years or so, and on conversion what has been built up on a mutual basis is handed out to those who happen to have become new members. It is wrong for people to choose to become a member only to qualify for a handout on the society&apos;s conversion.&lt;lb/&gt;&#x000A;&lt;col&gt;628&lt;/col&gt;&#x000A;I am sure that the Minister is aware that the amendments are defective. I had hoped that the Government would table an amendment, or that a Labour Front Bencher would see to it, because I know that my hon. Friend the Member for North Warwickshire (Mr. O&apos;Brien) agrees with the principle behind what I am arguing for. However, we all realise that, if we want the Bill to complete its passage, we might have to do some compromising. I now have grave doubts on whether it is feasible or possible for the Bill to be passed, as it has not even gone to the other place, but we shall have to note what the usual channels do and the contents of the business statement. We have no alternative now but to debate the Bill, in the hope that it makes progress.&lt;lb/&gt;&#x000A;I echo what the Nationwide building society said in a letter to several hon. Members last week. It supports the two-year concept, but if that cannot be included in the Bill, it would prefer the Bill to pass rather than to fall because of a flaw. That is also the view of the Building Societies Association.&lt;lb/&gt;&#x000A;If the Bill is to complete its passage, we must compromise and accept that the amendments will not be passed because of the difficulties that they would encounter&amp;#x2014;I presume that the other place would argue more about this. There would be no progress if there were great issues of debate on this matter and on the other matter of contention, the five-year issue, which we shall debate later. Those were the two main issues. The Government have also tabled some drafting amendments.&lt;lb/&gt;&#x000A;Although I strongly believe that such a move would be in the best interests of the Bill and of the building society movement, if we are told that, without the amendments, the Bill stands a better chance of progressing and receiving Royal Assent before Parliament dissolves, I shall be prepared not to press my amendments to the vote.&lt;br/&gt;Mr. John Butterfill: I support the hon. Member for Burnley (Mr. Pike). As you will be aware, Sir Geoffrey, I raised this issue on Second Reading and I have a great deal of sympathy for the sentiments that he expressed.&lt;lb/&gt;&#x000A;We have all found unedifying the spectacle of carpetbaggers moving small sums round the country, from building society to building society, in the hope of making a quick profit on demutualisation, and I believe that there is broad agreement across the Committee that it would be desirable to do something effective to prevent that happening. I, too, appreciate that there are problems in achieving that object, but it seems wrong that short-term speculators can put their money into a building society, build up a head of steam in speculation about how it might be taken over and bring pressure to bear for a takeover to take place, in the expectation that they will make a pile of cash.&lt;lb/&gt;&#x000A;Many of those people have no interest in the community in which, very often, the building society originated. Many have no interest in the building society or in the well-being of other depositors or of borrowers. They are motivated purely by greed, and if it were possible to have a mechanism that prevented such speculation, that would be good.&lt;lb/&gt;&#x000A;My hon. Friend the Minister has examined that in some detail and is of the view that there is no way by which speculation can effectively be prevented, except that&#x000A;&lt;image src="S6CV0292P0I0322"/&gt;&#x000A;&lt;col&gt;629&lt;/col&gt;&#x000A;building societies can make rules as to how depositors may be treated: for example, that they may not immediately acquire rights, and that they may be required to make a larger deposit than usual. However, such rules are unsatisfactory, especially the requirement that investors make a larger deposit, because that would rule out the small depositor, for whom building societies were first set up.&lt;lb/&gt;&#x000A;It is extremely important that there remains a savings vehicle that is appropriate to small investors&amp;#x2014;where small investors do not carry a lot of risk; where no huge costs are involved when they invest their money and save; and where they can receive an excellent and personal service. Raising the threshold is not the answer to that. Nor would the problem be solved if the building society changed its rules, because no society would be protected from an aggressive, hostile bid by a predator offering shares to building society members and thereby overcoming all the other mechanisms that can be put in place to prevent speculation.&lt;lb/&gt;&#x000A;3.45 pm&lt;lb/&gt;&#x000A;I very much share the views of the hon. Member for Burnley and want the Bill to succeed, as does the Building Societies Association. If there were a mechanism by which we could prevent speculators from engaging in their nefarious activities, I should be the first to support it.&lt;br/&gt;Mrs. Diana Maddock: I have much sympathy with the views expressed by the hon. Members for Burnley (Mr. Pike) and for Bournemouth, West (Mr. Butterfill). Many of us who spoke on Second Reading are concerned about small depositors, the local nature of building societies and the important place that they have in local communities. When societies move to plc status, we have seen people with no particular interest in the society, which has built up its assets over a number of years, rush in, desperate to get money. It is its long-standing members who have provided those assets.&lt;lb/&gt;&#x000A;I have sympathy with the amendments but fear that, as the hon. Member for Burnley said, they do not do exactly what we should all like. I am particularly concerned that if they were passed, some members would be excluded from some of the rights of membership, for example, taking part in annual general meetings, voting for directors, nominating candidates to stand as directors, and so on.&lt;br/&gt;Mr. Pike: I assure the hon. Lady that that is one reason why I would not wish to press the amendments to a vote; I recognise that they would, as she rightly says, bar people from doing many of the things that we would like them to do.&lt;br/&gt;Mrs. Maddock: I think that we all agree that, up against the time scale of a general election, and however much we would like to get this right, we shall barely be able to get the Bill on the statute book. Although I agree with the principles behind the amendments, we are not in a position to get them right today. Therefore, I cannot support the amendments as drafted.&lt;br/&gt;Mr. Peter Bottomley: I declare a mild interest, in that a building society in which I am involved is converting and I expect to make a minor gain.&lt;br/&gt;Mr. Tim Smith: How much?&lt;br/&gt;Mr. Bottomley: It depends on the price of the shares.&lt;lb/&gt;&#x000A;We should be aware that if the Bill survives the discussions between the usual channels and becomes an Act by the end of this Parliament, it will have to have gone through another place as well. If there is merit in the arguments and if those who advise my hon. Friend the Minister, whom we welcome to the Front Bench for the debate, are able to take a more positive way forward, that would be greatly welcomed.&lt;lb/&gt;&#x000A;There is general agreement that something might be done, although there is not yet agreement on what should or could be done. We should be aware that the amendments are being discussed in the context of the possible raid on the Co-operative Wholesale Society and the co-operative retail societies. The issues that have been developed and the pressures of the people who want to carry out what might appear to be a smash-and-grab operation are worthy of discussion. It should not be a party political issue, and I am glad that this debate has not been conducted in those terms. It may be a good start to the prospective general election campaign.&lt;lb/&gt;&#x000A;We should realise that of the societies that are converting, some will survive as banks and general retailers of financial services, and possibly as wholesalers as well, and some will be taken over. People know that. We must avoid pressures that would not allow people the choice of keeping the mutual building societies going. That is what is behind these amendments and other possible amendments.&lt;lb/&gt;&#x000A;Twenty years ago, the insurance companies came under pressure for many of them to drop their mutual status. Fortunately, some did not drop their mutual status. Companies such as Equitable Life and Norwich Union, which is now converting, and others over the past 20 years have helped to protect the customers of insurance services and to give them a broader choice. They were willing to look to the long-term interest and to go in for long-term investments, rather than always going in for short-term performance.&lt;lb/&gt;&#x000A;Without criticising those that have been receiving attention in the business pages and sometimes the front page of newspapers because of enormous bonuses, I think that the building society movement and the mutual insurance companies in the United Kingdom, including those in Scotland, have done a great deal of good. They have enabled ordinary people to do ordinary things, and they have achieved extraordinary results in terms of building up wealth and home ownership. I believe that their future will not be exactly the same as the present. It is more likely to take in the other end of the life cycle. Many of the elderly, who may be asset rich but housing poor, deserve ways of turning a capital asset into an income and a secure home in good condition, but that is not a subject to be pursued in the debate on the amendments.&lt;lb/&gt;&#x000A;Many societies have converted, and more will. We should recognise that the people whom I perhaps exaggeratedly described as smash-and-grab merchants are taking from the pockets and purses of the long-term savers&#x000A;&lt;image src="S6CV0292P0I0323"/&gt;&#x000A;&lt;col&gt;631&lt;/col&gt;&#x000A;and investors. There will always be a degree of rough justice, because many people who have saved with the building societies&amp;#x2014;for every borrower, there are between six and 10 genuine savers and investors&amp;#x2014;have had current accounts, and have been excluded anyway by the terms of conversion. They are willing to accept that, but those who have been long-term investors may not want to share what would become theirs on a conversion with people who have come in for the sole purpose of putting in a relatively small sum, to get a pretty large return from it.&lt;lb/&gt;&#x000A;There could be large sums swilling around the financial system. It is destabilising if a building society suddenly gets a great rush of money that it cannot use, and it is destabilising if those who joined become organised and start applying pressure through votes at members&apos; meetings to change the nature of the society, when most of the existing members do not want that.&lt;br/&gt;Mr. Butterfill: It has been suggested that one reason why we should not tolerate the amendments is that they would prevent people from voting at annual general meetings. Does my hon. Friend agree that that might not be a bad thing, if people were attending only to vote for demutualisation, to line their pockets?&lt;br/&gt;Mr. Bottomley: I remember one of our colleagues saying after the elections in what was then Southern Rhodesia that one cannot always predict the result of a vote. We should be careful about saying that people should be allowed to vote only if they vote the way that we want. Developments that have taken place in this country over the past few centuries have resulted in people being allowed to make their own mistakes. I hope that in building society votes and in general elections, they will not do so.&lt;lb/&gt;&#x000A;In summary, we face a dilemma. It is generally agreed that the principle behind the amendments is sensible&amp;#x2014;although we do not know whether they will achieve precisely the desired objectives. On the presumption that the Bill could become an Act in the next two or three days, I ask my hon. Friend the Minister to consider whether there is some way of fulfilling the purpose of the amendments. If there is not, I suspect that we shall have to do what many in the building society movement have done and say that this Bill is better than none at all.&lt;br/&gt;Mr. Austin Mitchell: I support wholeheartedly the comments of the hon. Member for Eltham (Mr. Bottomley). I apologise for not being here to move the amendment, but I did not expect that the business statement would be so short and that our investment in timetabling next week would disappear. It was a little like "The War of the Worlds", when people climbed the platform of the spacecraft and found that the invader from Mars was dead and that everything had vanished. I was similarly amazed today.&lt;lb/&gt;&#x000A;If we were considering the legislation in the normal manner, I would press the amendments to a vote and seek a statement of principle. It is an important principle, and an important defence of the mutual principle for building societies. However, we are not in a normal situation. I wish I knew exactly what situation we were in&amp;#x2014;perhaps the Minister will tell us. I hope that we are not wasting time this afternoon finalising legislation that cannot pass through the House of Lords because of the&#x000A;&lt;col&gt;632&lt;/col&gt;&#x000A;way in which the Government have junked their timetable, in their desperate desire to suppress my proposed hairdressing Bill that was due to be considered next week. Obviously, the Government dared not meet the challenge posed by my Bill and the defeat that they would almost certainly suffer, so they have scuttled business and cut and run.&lt;lb/&gt;&#x000A;If the Minister cannot assure us that the legislation will pass through the House of Lords&amp;#x2014;it has not yet passed through the House of Commons&amp;#x2014;we are legislating in a messy manner. We do not know whether our actions will have any effect. We must discuss the Bill because it provides a chance to make necessary changes within the building society movement. It is a comprehensive measure, so we should try to make it as good as possible. I resent being told, "Drop this," or "Don&apos;t vote on that," or "Let this go," simply in order to ensure that the Bill is passed. It will be a long time before an incoming Government can consider the legislation again. We should not be in that situation in a dying Parliament. That is my dilemma, and I hope that you are as upset as I am, Sir Geoffrey.&lt;lb/&gt;&#x000A;I now move to the substance of the amendments, which are quite simple and straightforward. They seek to erect a defence of the mutual principle. Too many people have learnt their ethics from the privatisation procedures in this country and there has developed a species of what I would call the monetary ram raider. Such people rush to put money in building society accounts on the advice of columnists in the financial pages of newspapers, who urge, "Put your money in the Snurple building society, because it is going to demutualise and you will have a big gain." That causes a rush of new members and of new money. It also creates a brute voting force in favour of demutualisation, which may not be in the interests&amp;#x2014;I think that it is certainly not in the interests&amp;#x2014;of the long-term members of the society. The new members wish to get a quick result because, as I said last week, their ethics are the same as those of Wilfred Pickles and the Halifax building society: "Give us the money, Barney." It does not matter about principle or the abdication of 100 years of toil, sweat and endeavour.&lt;lb/&gt;&#x000A;The amendments seek to erect a barrier against such activities. It is right that building societies should have that barrier, because they are driven to all sorts of expediencies in an effort to maintain continuity and to control the rush of new members. Some have said that people may open new accounts only if they invest a minimum of &amp;#x00A3;1,000. Other societies have tried to devise their own rules governing the voting rights of new members. The amendments take care of both issues: the time scale beyond which people may vote on the affairs of the building society, and beyond which they may benefit from the redistributions that they may have joined the building society specifically to receive.&lt;lb/&gt;&#x000A;It is a matter of basic principle. I hope that the Minister will come to the Dispatch Box and tell us that, because of our courtesy, charm and consideration, she will not force further debate and will accept the principle behind the amendments before the legislation goes to another place.&lt;br/&gt;4 pm&lt;br/&gt;Mr. Mike O&apos;Brien: Discussions on the progress of the Bill may well be taking place as we speak. There will be a further business statement later&#x000A;&lt;image src="S6CV0292P0I0324"/&gt;&#x000A;&lt;col&gt;633&lt;/col&gt;&#x000A;in the day. My hon. Friend the Member for Great Grimsby (Mr. Mitchell) need not be too despondent. There is reason for hope yet. We, the Opposition, are actively supporting the Bill. I retain the hope that it will become law.&lt;lb/&gt;&#x000A;I declare an interest before speaking to the amendments. I have an account with one of the converting building societies. I would not be surprised if it were the one not too far from the hon. Member for Eltham (Mr. Bottomley). It is, in fact, the Woolwich.&lt;lb/&gt;&#x000A;As my hon. Friend the Member for Burnley (Mr. Pike) said, there are strong arguments for a two-year rule. During consideration of what became the Building Societies Act 1986, the Government were strongly in favour of a two-year rule. Why have the Government changed their mind on that ground given the strong arguments that were advanced by Lord Brabazon of Tara in another place in July 1986? He said:&#x000A;&lt;quote&gt;"It is important that the conversion provisions work to prevent speculative flows between societies on rumours of an impending conversion. I gather that is what happened in America in certain situations, and that is what we seek to avoid happening in this sort of situation."&lt;/quote&gt;&#x000A;He added:&#x000A;&lt;quote&gt;"It is clearly important that"&lt;/quote&gt;&#x000A;there should be some legislation in relation to transfers of societies. He explained:&#x000A;&lt;quote&gt;"Otherwise, for example, a society could tempt investors into it in order to vote in favour of a conversion with the promise of an immediate cash bonus; or just such speculative flows as I just mentioned might be started if it seemed a society might transfer to an existing company."&amp;#x2014;[&lt;i&gt;Official Report, House of Lords&lt;/i&gt;, 10 July 1986; Vol. 478, c. 539.]&lt;/quote&gt;&#x000A;Those were the reasons why the Government, at that stage, were strongly in favour of a two-year provision whereby those who were members of building societies would not receive benefits unless they had been members for two years.&lt;lb/&gt;&#x000A;The Labour party has said that it sees strong arguments for that. We have, however, discussed the issue of the two-year provision at some length with various mutuals. On balance, the Building Societies Association and other mutuals, although they would prefer a two-year clause, are concerned that nothing should be done to jeopardise the Bill. In the present circumstances it is important that we should press on with the Bill.&lt;lb/&gt;&#x000A;I have been persuaded that the BSA wants to see the Bill through Parliament as a priority. It regards the measure as essential. It has asked that Labour takes no steps that might jeopardise the Bill by way of introducing a substantial amendment. I have listened carefully to those representations and have decided to accept them.&lt;lb/&gt;&#x000A;We want to see the Bill become law as soon as possible. It is right, however, that Parliament should be able to express its views, especially on a two-year clause. Before I ask the Minister some questions about such a provision, I acknowledge that my hon. Friend the Member for Burnley (Mr. Pike) has agreed to withdraw the amendment. At the same time, my hon. Friend the Member for Grimsby has strong concerns. It is right, therefore, briefly to mention technical deficiencies.&lt;lb/&gt;&#x000A;I am concerned that the amendment would not achieve the end that my hon. Friend the Member for Burnley seeks. The intention appears to be to ensure that only&#x000A;&lt;col&gt;634&lt;/col&gt;&#x000A;those who have been members for two years on completion would benefit. That is not precisely the effect of the amendment. It is unsatisfactory, therefore, from a drafting point of view. The amendment states, in effect, that someone can be a member of a society only if he has been a member for two years. Presumably the aim is to deny benefit, but the amendment appears to deny membership itself. Furthermore, the phrase "two years&apos; standing" is rather vague. It presumably means two years from opening an account, but it does not say that. On drafting grounds alone, the amendment is questionable.&lt;br/&gt;Mrs. Gwyneth Dunwoody: It is odd to me&amp;#x2014;I have been here only a short time&amp;#x2014;to hear hon. Friends on the Front Bench talking about drafting. I should have thought that as we are the Opposition, we would be concerned about the principle. I have listened with great care to my hon. Friend the Member for North Warwickshire (Mr. O&apos;Brien) saying that we must not accept any substantive change because we would otherwise lose the Bill. I ask him to think seriously about what he is saying. Is he saying that even though there may be substantial difficulties with the legislation, we would prefer it to go ahead?&lt;br/&gt;Mr. O&apos;Brien: We are saying that the Bill is essential to safeguard the future of mutuals. It may be desirable to have a two-year provision; that is a point that hon. Members are quite properly discussing and I intend to return to the principle in a moment. We have, however, to bear reality in mind in view of the announcement made today.&lt;lb/&gt;&#x000A;My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) will know that as a result of that announcement, there is enormous pressure on the timetable. As we want the Bill to go through, maximum agreement is needed between Opposition Front-Bench Members and Ministers. I hope that the Bill also has the support of the House as a whole. Getting the Bill through is our objective, which has an effect on the way in which we are dealing with the two-year provision and later amendments.&lt;br/&gt;Mr. Austin Mitchell: We are in a negotiating situation. In those circumstances, it seems rather misguided to give away our hand before we are told the Government&apos;s position. The Minister may accept the two-year principle; there is still time for her to do that. Whatever deficiencies the best drafting brains in the House of Commons&amp;#x2014;I refer to the Clerks and not to me&amp;#x2014;have left in the amendment, the principle is important. If we accepted the amendment this afternoon, the Bill would not be delayed seriously unless the Government chose to make an issue of it and to dredge up their troops, thus wasting the time of the House. We should not think that we have a weak hand.&lt;br/&gt;Mr. O&apos;Brien: My hon. Friend&apos;s views will be taken on board by those of us who are dealing with the Bill. We want the Bill to go through, however, and the sooner the better for the sake of the mutuals and building societies as a whole.&lt;lb/&gt;&#x000A;I now turn to the issue of principle. In 1986, the Government supported a two-year rule. It was the bad drafting of the 1986 Act, however, with which we are now dealing, that meant that during the Halifax merger with the Leeds, the decision was made that the normal&#x000A;&lt;image src="S6CV0292P0I0325"/&gt;&#x000A;&lt;col&gt;635&lt;/col&gt;&#x000A;two-year qualifying rule could be circumvented if the distribution was made in shares and structured in a certain way.&lt;lb/&gt;&#x000A;It is clear that in 1986, Ministers intended that a two-year rule should be effective, but legal judgments in the early conversions and takeovers widened the interpretation of the statute to allow changes of status based on offering pay-outs to members on a scale and in a manner that were not intended in the 1986 legislation. That has encouraged mere speculators&amp;#x2014;so-called carpetbaggers&amp;#x2014;to open many accounts.&lt;lb/&gt;&#x000A;The building societies&apos; response has been to raise the threshold for new accounts, but that has prejudiced, as has been mentioned by the hon. Member for Bournemouth, West (Mr. Butterfill), the interests of many low-income people who want to open an account for a non-speculative, bona fide reason. Do the Government consider that speculation desirable? Will they now explain why they have changed their mind and oppose a two-year clause? Do they intend to allow the queues of speculators and the high thresholds to remain? Do they consider that building societies&apos; assets that were built up over generations belong to the members who have an interest in the long-term future of those building societies? At the moment, they are often expended to those who have little claim to building societies&apos; assets. Do the Government find that satisfactory?&lt;lb/&gt;&#x000A;In other cases, the Government have accepted qualified membership, for example in terms of calling emergency general meetings and, in clause 37, for obtaining particular information. Why was that justified, yet the Government have changed their mind and now say that qualified membership under a two-year rule is no longer right in respect of benefits?&lt;lb/&gt;&#x000A;Speculation is still an enormously serious issue. The head of corporate relations at the Birmingham Midshires building society wrote to me recently as follows:&#x000A;&lt;quote&gt;"We opened some 80,000 speculator accounts in 1996 and, year-to-date since January, we are opening three times normal levels per week compared to the pre-speculation days of 20 months ago. In addition, to counter those who think it has peaked, it is worth noting that around &amp;#x00A3;145 billion of savers&apos; cash has been locked up with the converters for the past two years or so. This will now become unlocked, creating a new wave of speculators given that distribution plans have now been unveiled by the converting societies."&lt;/quote&gt;&#x000A;There is clearly an issue for the Minister to address.&lt;br/&gt;Mr. Douglas French: Is the hon. Gentleman aware that some building societies, such as the Portman, have found it possible to deal with speculators not by raising the minimum deposits on their account, but by welcoming anyone who wishes to open an account on the basis that the society is firmly committed to mutuality and no speculation will yield any benefit to the speculator?&lt;br/&gt;Mr. O&apos;Brien: I am aware that a number of building societies are using sometimes ingenious ways of addressing the issue, but the hon. Gentleman makes the point that it is clearly a matter of concern to many building societies, including the Portman. We need to know the Government&apos;s view.&lt;lb/&gt;&#x000A;The only real explanation for the absence of the two-year clause that the Minister has offered so far is that building societies themselves can devise a scheme to&#x000A;&lt;col&gt;636&lt;/col&gt;&#x000A;ensure that investors obtain no benefit from conversion. That is possible in theory. However, a conversion or takeover scheme that is influenced by a hostile predator might mean that the society would be unable to enforce such a restriction. A society is not in a position to deter speculative inflows by its own two-year clause, as those contemplating a speculative bet would simply reason that the building society would be unable to uphold the rule when confronted by a hostile bid.&lt;lb/&gt;&#x000A;The Minister also deployed the argument that those expecting a bonus in future should be on the same footing as those who have received a bonus in the past. If defective legislation were passed, as it was in the 1986 Act, and if Parliament&apos;s will and intention in the 1986 Act are frustrated because of inadequate drafting, are the Government saying that there should be no attempt to alter the Bill because someone has benefited by frustrating Parliament&apos;s will in the past?&lt;lb/&gt;&#x000A;Neither of the arguments deployed so far seems to hold a great deal of weight. However, in her reply to the debate the Minister may supply us with other arguments that address the issue. Obviously, we are anxious for the Bill to become law and we do not want to frustrate its course, but we also want to be sure, as hon. Members have a duty and a responsibility to do, that we discuss the issues fully and ultimately make good law.&lt;br/&gt;Mr. Tim Smith: I have considerable sympathy with what the hon. Member for Great Grimsby (Mr. Mitchell) had to say about the amendment. First, I agree that it is not a satisfactory way in which to legislate. The Bill comprises 47 clauses and nine schedules, all of which are being taken on the Floor of the House and will not receive the detailed consideration that they deserve and would have received in Standing Committee. I understand that the Bill was subject to very wide consultation with interests outside the House, which is obviously welcome, but it is not some substitute for parliamentary consideration. It is right that we should put forward the views of our constituents&amp;#x2014;many of whom will be members of building societies&amp;#x2014;on the Bill&apos;s detailed provisions. I do not really understand why the hon. Member for North Warwickshire (Mr. O&apos;Brien), who spoke from the Opposition Front Bench, is in such a hurry to get the Bill through.&lt;lb/&gt;&#x000A;It seems that the Bill is designed to protect mutual building societies, which is good. It is clearly in the public&apos;s interest that many such societies should continue because they will offer a better deal to depositors and lenders than commercial banks will ever be able to offer.&lt;br/&gt;Mr. Butterfill: My hon. Friend is suggesting that the Bill is designed to protect mutual building societies, but sadly, as we have just heard, it fails to do precisely that. It allows them to do rather more than they have been previously permitted to do under the Building Societies Acts 1962 and 1986, but it does not protect them in any realistic way apart from making them a little more financially viable and a more attractive target.&lt;br/&gt;Mr. Smith: That was what I meant when I used the word "protect". It is because such building societies will have greater commercial freedom that they may be less tempted to go down the public limited company route. I recognise my hon. Friend&apos;s point. Against that we must balance the apparent proposal to drop the two-year rule&#x000A;&lt;image src="S6CV0292P0I0326"/&gt;&#x000A;&lt;col&gt;637&lt;/col&gt;&#x000A;that Parliament clearly wanted to impose in 1986&amp;#x2014;even though it turns out that, as the legislation was defective, the rule did not work properly. What is the balance of arguments concerning such matters and mutuality?&lt;lb/&gt;&#x000A;What worries me is very simple. It is understandable that, when a substantial financial carrot is placed in front of people, they should take it and consume it immediately. I am, however, concerned about the long term. Will people who want to borrow money for house purchase get a better deal in the long term if mutual building societies wither and die? Surely it is very much in the interest of the consumer that there should be as diverse provision as possible. I hope that the Bill will encourage societies to retain their mutual status. The question is: what is the benefit of that compared with the damage that may be done if we do not keep the two-year rule?&lt;br/&gt;4.15 pm&lt;br/&gt;The Economic Secretary to the Treasury (Mrs. Angela Knight): I have considerable sympathy with many of the points that have been raised. I know that all hon. Members present have a real concern about mutual building societies, which I share.&lt;lb/&gt;&#x000A;The hon. Member for Burnley (Mr. Pike) mentioned two points in opening the debate on this amendment. He was concerned about the Bill&apos;s further progress. I can confirm that the issue of what happens after we have finished our proceedings today is being discussed at this moment. I sincerely hope that the decisions that are reached elsewhere will result in the Bill becoming law because the mutual building societies want that. His second procedural point was whether it was conceivable that such a Bill could go through very quickly. All stages of the Friendly Societies Act 1992 went through on the nod. There is therefore a precedent&amp;#x2014;one that we are not trying to emulate since we shall be giving good consideration to the Bill&amp;#x2014;of such a Bill going through very quickly due to announcements such as the one made today.&lt;lb/&gt;&#x000A;My hon. Friend the Member for Eltham (Mr. Bottomley) and the hon. Member for North Warwickshire (Mr. O&apos;Brien) both said that they were members of a building society. I am not sure whether I am or not. When my right hon. Friend the Prime Minister gave me my present job, I was told that one of its requirements was that I am not allowed to touch anything financial whatever. Such affairs are dealt with by a power of attorney. I pay the bill, but have no knowledge about what is happening&amp;#x2014;and will not have until I no longer hold the job. The important point is that many people, including hon. Members, are involved in a building society in some way. The northern savings ethic means that many people who live in the midlands and the north are involved in building societies.&lt;br/&gt;Mr. Butterfill: I represent a southern seat&amp;#x2014;one cannot get much further south than Bournemouth&amp;#x2014;so I must contradict my hon. Friend. Saving is equally prevalent in the south, and there are more building society branches in Bournemouth than almost anywhere else. We are also honoured to have the headquarters of the Portman building society in the area.&lt;br/&gt;Mrs. Knight: I had no intention of excluding Bournemouth from the proceedings, and I am grateful to my hon. Friend for those points.&lt;lb/&gt;&#x000A;The debate has two components. First, there is a technical aspect and, secondly, there is the general concern behind the amendments. I will explain the technical aspects and then deal with the other matters. I understand the concerns that have been raised, especially about speculation, and the belief that the restoration of the two-year rule could deter speculation.&lt;lb/&gt;&#x000A;The amendments would restrict all the long-established rights of membership, as well as the new rights that the Bill will introduce, to those who had been savers and borrowers for two years or more. One effect of that would be to rule out share distributions to anyone who is not a two-year saver, effectively reviving the two-year rule. However, the amendments would go further and, potentially, would damage the building societies&apos; constitutions. All savers are full members with an equal right to a say in the running of their society by voting. The amendment would introduce a category of savers who have no membership rights, but elsewhere in the Bill we try to ensure that members will not be disfranchised. All of us have, no doubt, received letters from constituents who have deposit accounts that they thought made them full members of the society. The amendments would increase that anomaly substantially.&lt;lb/&gt;&#x000A;The link between saving and membership is crucial for mutual societies. Therefore, narrowing the membership would vest control in a privileged subset of longer-established savers and would deny millions of people an equal say, even if only for a set period. Those people, for right and genuine reasons, are members of their society.&lt;lb/&gt;&#x000A;It may help if I give some specific examples. The amendments, as they are drawn, would result in the eligibility to nominate a director being vested in individuals who have been with the society for more than four years. At the moment, people have to have been members for two years. The amendments would also mean that an individual would have to be a member for four years to propose and circulate resolutions at an annual general meeting. That provision would also apply to a special general meeting on members&apos; requisition. The amendments would deny rights to members who, for right and proper reasons, are members of their society.&lt;br/&gt;Mr. Tim Smith: Is my hon. Friend saying that there are already two classes of saver, in the case of certain resolutions, such as electing directors and calling special general meetings? If there is already a distinction, why cannot we build on it?&lt;br/&gt;Mrs. Knight: The distinction is that, in many instances, it is up to the society itself to choose, and I believe that it should be up to a society to make as many decisions as possible relating to its own business. One such decision is a society choosing to convert to a bank, as it sees that its future would be better as a plc than as a mutual society. How the society effects that change&amp;#x2014;especially as far as distribution is concerned&amp;#x2014;is not something that government should dictate.&lt;br/&gt;Mr. Butterfill: I remind my hon. Friend of a point that time constraints prevented her from answering during the Second Reading debate. We all accept what she has outlined, but how could a mutual society protect itself against a hostile takeover in which shares were used as the consideration? Until she can answer that question, many of us will not be satisfied.&lt;br/&gt;Mrs. Knight: I remind my hon. Friend that the only people who can put a resolution to members for a takeover or a conversion are the directors, and they can prevent or propose such a change in status. If he waits a moment, I will return to that point. It is very important to address the other aspect of the debate, which is the spirit behind the amendments. I am sure that we all agree that we do not like speculation and we do not feel that speculators should somehow be able to force a society to take a decision that is not in its best interests.&lt;lb/&gt;&#x000A;We have all read stories in the newspapers, which are correct, in which societies have said that they are suffering from speculation. One aspect of the matter is that people reading an article stating that a society might convert has resulted in speculation. In any event, under normal circumstances a considerable number of new accounts will be opened annually both by savers and by borrowers. About 10 per cent. of all new savings accounts are turned over in an average year. If that is the average, it means that, over a four-year period, something like a third of all savers with a society would be new savers. That is not as a result of speculation, but of natural turnover. Therefore, considerable changes are taking place as part of the normal business of societies.&lt;lb/&gt;&#x000A;Undoubtedly, there will be an influx of new accounts once the converting societies have converted. The hon. Member for Great Grimsby (Mr. Mitchell) said on Second Reading&amp;#x2014;with complete honesty&amp;#x2014;that once he received whatever his windfall might be from his converting society, he would take his money and open an account with a mutual down the road. Good for him&amp;#x2014;that is his choice, and I suspect that it will be the choice of a considerable number of members of those societies. That will result in an increased number of accounts being opened with mutual societies.&lt;br/&gt;Mr. Austin Mitchell: I do not wish to promote further the names of the societies being punished and rewarded in this fashion, but I shall be taking my money from the Halifax&amp;#x2014;as soon as I get the distribution&amp;#x2014;to the Bradford and Bingley because it is to stay a mutual. I shall be doing that to support the mutual principle. The amendment deals with money that is washing around and undermining the mutual principle by being put into a society to grab a quick profit.&lt;br/&gt;Mrs. Knight: My point was that there has been a considerable increase in the number of people opening accounts with mutual societies because their sentiments coincide exactly with those of the hon. Gentleman. The articles referred to earlier show that the mutual sector is performing well for its members, in terms of both savings and mortgages. The key point is that not all the new accounts that are being opened are speculators&apos; accounts: a significant number are genuine accounts opened by genuine people for genuine reasons. I do not want those people to be disfranchised because of a small group of speculators. We need to deal with that small group.&lt;lb/&gt;&#x000A;&lt;col&gt;640&lt;/col&gt;&#x000A;There has been much concern, especially about disabled people but also about the wider issue of underlying beneficiaries who have been disfranchised as a consequence of the current conversion process. The private Member&apos;s Bill promoted by my hon. Friend the Member for Gloucester (Mr. French) has rectified that problem, and I do not want to accept amendments, or even the sentiment behind amendments, which would result in the exclusion of many more people, because exclusion of a particular group has been a real problem.&lt;lb/&gt;&#x000A;4.30 pm&lt;lb/&gt;&#x000A;It would be extremely difficult if we changed the two-year rule so that no member of less than two years&apos; standing could receive anything if a society converted. At the moment many people receive something, so if we intervened the Government of the day would be inundated with requests for a change back to the situation that existed when the Halifax, the Woolwich, the Alliance and Leicester and the Northern Rock converted.&lt;lb/&gt;&#x000A;The two-year rule exists as a result of court cases brought by the societies. Whatever our views might be on that, to change back would build up a huge pressure for the future.&lt;br/&gt;Mr. Butterfill: I must take issue with my hon. Friend on that point. If we were to make the amendment, which I support, future investors would know full well when they made their investment that they would not be entitled to windfall profits from a takeover or demutualisation unless they had been members for two years. They would understand that, and they would of course be entitled to receive interest on their money in the normal way. If they understand that clearly when they make their investment, I do not see what the problem is.&lt;br/&gt;Mrs. Knight: It has been noticeable in the past 18 months or two years that people simply do not understand what their status is with a mutual building society and what the various accounts are. I agree that more people have that knowledge today than 18 months or two years ago, but that is certainly not true of everyone: indeed, I would suggest that more than half do not know. If my hon. Friend saw my mailbag he would realise that there is huge concern among many people who feel that the system has done them down and want the Government to change the rules.&lt;lb/&gt;&#x000A;I believe that we can withstand that pressure at the moment, because although there have been anomalies&amp;#x2014;my hon. Friend the Member for Gloucester sorted out another anomaly in an earlier Bill&amp;#x2014;the consequence, not far down the road, of making the changes in the substance behind the opening remarks of the hon. Member for Burnley would be that a greater number of people would feel discriminated against by the change in the rules and would blame the Government. Whoever the Government of the day might be, the pressure to change the law back would, I suspect, not be resistible.&lt;br/&gt;Mr. William O&apos;Brien: I support the two-year rule. Is it not a fact that when the Halifax building society decided to become a public limited company, it took on new investors and borrowers on the understanding that they would be associate members? They were notified at the very beginning that they would&#x000A;&lt;image src="S6CV0292P0I0328"/&gt;&#x000A;&lt;col&gt;641&lt;/col&gt;&#x000A;not qualify for the share-out, whenever it came, because of the two-year rule. The parliamentary all-party group on building societies has been advised by the chief executive of the Halifax building society that no one who has not been a member for two years will receive any bonus. It would appear that it works and it could work if the spirit were there for it to do so.&lt;br/&gt;Mrs. Knight: The hon. Gentleman has given us a good example of how a building society, when left to its own devices, can use existing law to ensure that it gets an equitable result for its members. I am concerned to leave building societies the ability to do just that&amp;#x2014;to make their own decisions as they see fit&amp;#x2014;and for their members to have the opportunity to vote accordingly.&lt;lb/&gt;&#x000A;The object of the amendment is to try to help with speculation and carpet bagging&amp;#x2014;things with which none of us has any sympathy. At present and under the Bill, only the board of a society can put a conversion or takeover proposal to members for approval. The board also has a fiduciary duty to consider the long-term interests of present and future members of the society. No outside company faced with a board&apos;s rejection can put a proposal direct to members, as happens with a public limited company.&lt;lb/&gt;&#x000A;Forcing conversion, or takeover, on a board that opposed it would take a long time. If an initiative came from outside a society, the sequence of events would work as follows. A predator would have to make an offer, which was either confidential or non-confidential, to the building society board, which would consider it. We will presume that it decided that the offer was not in the interests of the society or its members. Under the terms of the Bill, the society would disclose that a non-confidential offer was made and say by whom in time for the next annual general meeting.&lt;lb/&gt;&#x000A;The board is not required to pass on any other information and may take the opportunity to set out why it considers that the proposed takeover is not in the best interests of the society. The bidder could, for example, use the media to make the terms of its offer known to members. It would be a predator and as such would need to persuade enough members to requisition a special general meeting to consider a resolution calling on the board to pursue the proposal. The resolution could not force the directors to put a transfer proposal to a vote. If the members were persistent, they could also seek to nominate a new board of directors who were in favour of the takeover&amp;#x2014;the new directors would have to meet the fitness and properness requirements of the Building Societies Commission. They could be elected only at an annual general meeting and would need the support of the majority of the other members who voted to achieve that. Directors retire and offer themselves for re-election on a three-yearly basis. As one can see from that list, therefore, it would be a long-winded process for a predator&amp;#x2014;the initiative coming from outside the society&amp;#x2014;to try to shift a board of directors to make it put such a proposal to the rest of the society&apos;s members. It is difficult to say how long the process would take, but on any reasoned assessment, it would take more than two years.&lt;lb/&gt;&#x000A;&lt;col&gt;642&lt;/col&gt;&#x000A;The alternative involves the initiative coming from members. In some respects, this matter has caused the most concern. It is perceived as the Trojan horse of speculators who have joined the society and who want to persuade the society&apos;s board of directors to get it to convert. The sequence of events would be as follows. First, there would need to be sufficient members to requisition a special general meeting. The members could not table a transfer resolution. The motion at the special general meeting could do no more than recommend that the board considers options for conversion or takeover. The board would have ample opportunity to tell the wider membership precisely what it thought of such activists. The board&apos;s consideration would have to be undertaken with regard to its fiduciary duties to members, including potential future members. It could easily conclude that conversion was unwise or that an offer was inadequate. If members did not accept that, they would have to replace the board and negotiate the last two hurdles that I described earlier. Again, it is a long process.&lt;lb/&gt;&#x000A;It beggars belief that a board would sit back and do nothing. While all this was happening, the board would be telling members about the advantages of remaining mutual. Some mutual building societies, I am glad to say, are doing just that in advance, to ensure that their members are well aware that mutual status has considerable benefits for them.&lt;br/&gt;Mr. Butterfill: Does my hon. Friend accept that some mergers and takeovers that have nominally taken place on an agreed basis have in fact been the result of considerable pressure by one society on another? Does she not realise that these things are a little more subtle than she suggests?&lt;br/&gt;Mrs. Knight: Yes, I am aware of that. That is one reason why the Bill is in its current form. It ensures that building societies, while remaining mutual, can offer more services and so become more competitive in the mutual sector, thereby making them stronger. That will help them to flourish. Secondly, it makes changes relating to other aspects so that converted building societies, about which the mutuals are concerned, cannot become predators on the mutual sector in the way that many people have feared. Undoubtedly, the ability to compete is one key to ensuring that the mutual sector flourishes, as we all want.&lt;lb/&gt;&#x000A;The hon. Member for North Warwickshire (Mr. O&apos;Brien) asked whether speculation was advisable; the answer is no. Why have the Government changed their mind since 1986? The world has changed since 1986, and I have explained what is behind our thinking; we cannot turn back the clock on the two-year rule. He asked whether societies belonged to members; of course they do. He suggested that there might be many more speculators after societies have converted. I honestly do not think that there will be more speculators; there will be more account openers looking for a mutual home for their savings. Many mutual societies are making that attractive and targeting that sector to ensure that such people become members.&lt;lb/&gt;&#x000A;We have achieved a compromise that ensures that both societies and their members are treated fairly. On technical grounds, I ask the Committee to reject the amendments. However, I also ask it to reject the spirit behind them, not because I believe that it is wrong but because the proposed changes could bring with them much more hardship to many more people and not deal with speculation, about which we are all concerned and which we do not want to continue.&lt;br/&gt;4.45 pm&lt;br/&gt;Mr. Austin Mitchell: I confess disappointment with the Minister&apos;s reply. That it was so long suggests the depth of her difficulties. So long a reply at this stage of a Bill that, we are told, has to be rushed through, shows a defensive attitude. She never took up the basic issue of whether we want such a defence against speculation. Is it right or wrong? She went through a series of quibbles and excuses for not doing anything but as a Minister in control of drafting and, she told us, in control of the procedures of the House, she has the power to do something if she wants.&lt;lb/&gt;&#x000A;It is disappointing that she has not accepted the view of both Government and Opposition Members. I am disappointed with the positions of both Front-Bench teams but especially with her position because she has the power to enact the principle of the amendments. We have been reduced to Back Benchers, who are deeply interested in the building society movement and especially in the principle of mutuality, being against Front Benchers.&lt;lb/&gt;&#x000A;The Minister told us that the Bill will become law. I am a little doubtful about whether she can guarantee that, but that means that it is all the more important that we should perfect it and make it the best Bill that we can in the time available. It would be simple to introduce the provision, perhaps better written or better defined to get rid of all the quibbles that she raised. It would be a better Bill. If there is time, we should do it.&lt;br/&gt;Mr. Peter Bottomley: I thank the hon. Member for the ghastly tie for giving way. While I basically support the principle of his amendment, my hon. Friend the Minister pointed out that in practice, it would be two years or more before ram raiders could get through. If we are talking about protection for two years, the practical point may be as important as the principle. We need to get a balance between fairness to small savers&amp;#x2014;and for that matter to not so small savers&amp;#x2014;and ensure that large numbers of small savers cannot join to try to do what most existing mutual members do not want. I am not sure that we have found a way forward. The Minister&apos;s comments are relevant, though the principle is also important.&lt;br/&gt;Mr. Mitchell: The signals were clear. The Minister rightly said that there is normally a churning, a turnover, of people taking money in and out of building societies. However, when there is a flood of new applications, it is possible to discern what is going on and realise that the flood is part of a speculative bubble that has to be pricked. If the will is there, it is possible to define a basic principle and to make it operate practically. The Minister was making excuses for not doing it rather than mounting a defence against the principle that I advanced.&lt;lb/&gt;&#x000A;If there were a two-year rule, it would be an incentive for people to keep money in societies for longer, rather than for churning it in the way that the Minister described. I wish that she had accepted the principle and said, "While the hon. Members for Burnley and for Great Grimsby are most accommodating and amiable, they are not the best draftsmen in the House. It is inadequate, but my draftsmen will produce a tailor-made amendment to achieve what they want and which can go in even at this late stage." It could have been done. The building societies, Back Benchers and opinion outside want it, but we cannot have it because of the rush.&lt;lb/&gt;&#x000A;&lt;col&gt;644&lt;/col&gt;&#x000A;That puts me and my hon. Friend the Member for Burnley (Mr. Pike) in a dilemma because, being new Labour, we are honest, moderate chaps and we do not want to make a disturbance or put difficulties in anyone&apos;s way; we are amiable&amp;#x2014;that is the essence of our breed. We want to be accommodating, but there is an issue of principle.&lt;lb/&gt;&#x000A;We have been placed under duress by our Front Bench. If my hon. Friend the Member for North Warwickshire (Mr. O&apos;Brien) had taken a firmer line he could have coerced concessions from the Government, which would have put the Minister in an embarrassing situation, so that she might well have had to give way to us. That is what we should have done: if someone is negotiating, he plays his hand strongly, he is not diffident and does not say, "That won&apos;t work; we can&apos;t do that." Instead, we should say, "Go for it and you&apos;ll often get it." I hope that that can become the slogan of new Labour in power, but it has not worked in this case. If we had coerced the Minister, we might have got more than we did. I am sorry, but I feel that that puts us under duress.&lt;lb/&gt;&#x000A;The proposed provision is right in principle; Back Benchers and building societies want it, but we cannot have it because the Prime Minister has opted for felo de se as a system of Government. Owing to the Prime Minister&apos;s suicidal inclinations and the junking of so much of the legislative timetable because of his terror and his inability to face up to the defeat that my hairdressing Bill next week would inflict on the Government, we are now being asked to rush through the Building Societies Bill in an unacceptable way. I regret that. The Bill would be better if it contained the two-year provision. It would have been better if we had insisted on that&amp;#x2014;I am sorry that we did not, and there is still time to do so. Under such duress I would have no alternative but to give in.&lt;br/&gt;Mrs. Maddock: Would the Minister clarify the position a little? She has given many practical reasons why it would be difficult to accept the amendments to introduce the two-year rule. Will she tell us the view of the Building Societies Association when she discussed the matter with it? Although that society is anxious for the Bill to become an Act, it is concerned about the two-year rule and I wonder if she could give us some information.&lt;br/&gt;Mr. William O&apos;Brien: I want to firm up a point that I made in an intervention about the Halifax building society and its acceptance of the principle of the two-year rule. As the Minister said, that is an indication of how the principle should be left as a matter for the building societies. We are discussing legislation and we have an opportunity to firm up the principle set by those in the business&amp;#x2014;building societies, the Building Societies Association&amp;#x2014;and Members of Parliament. My hon. Friend the Member for Great Grimsby (Mr. Mitchell) has outlined the case without forcing a Division, which is commendable of both him and my hon. Friend the Member for Burnley (Mr. Pike).&lt;lb/&gt;&#x000A;We should not waste this opportunity to try to build something into the legislation that will give the assurance that we seek and underline the principle as set out by those in the business. Before we reject outright the amendments, we should look for a compromise whereby&#x000A;&lt;image src="S6CV0292P0I0330"/&gt;&#x000A;&lt;col&gt;645&lt;/col&gt;&#x000A;we can underline the principle. If one were to question hon. Members who have listened to and participated in the debate, more of them would say that the Bill should include provisions to firm up the two-year rule than would reject that proposal. Therefore, the Minister should reconsider the matter to see whether a compromise can be reached that will satisfy all parties.&lt;br/&gt;Mr. Peter Bottomley: I wish to pick up on one point made by my hon. Friend the Member for Bournemouth, West (Mr. Butterfill): the difference between the Halifax building society and most of the others. If the Halifax decided that it did not want to recommend conversion or use its ability to change its procedures to stop the two-year rule, there would be few businesses big enough to make a hostile bid for it. In practice, we would have to rely on the directors putting forward a proposal. That would not be the case with middle-sized and smaller societies.&lt;lb/&gt;&#x000A;It would be interesting to hear from my hon. Friend the Minister or from a future Parliament whether we need to help to protect diversity. Existing building society members should have their interests protected: there are many more building society lenders and investors than either borrowers or speculators. Can we have a diversity of financial institutions? We would not have had anything like the same level of home ownership, individual wealth accumulation or ability to move house if the mutual principle, the forefathers of the building society movement and the co-operative societies in insurance, retail and wholesaling had not existed. The question of how to protect the opportunity for diversity is important.&lt;br/&gt;Mrs. Angela Knight: I am in something of a dilemma. The hon. Member for Great Grimsby (Mr. Mitchell) accused me of speaking for too long when I tried to answer everyone&apos;s points; I have now been asked to speak again, so I am not sure what to do. I found the hon. Gentleman&apos;s contribution entertaining, not least because he professed himself to be new Labour. Here we are on the first day of a different order&amp;#x2014;my right hon. Friend the Prime Minister having made his statement&amp;#x2014;and all of a sudden, Labour Back Benchers do not want to be led by their Front Benchers. I am not sure which of the two&amp;#x2014;the hon. Member for Great Grimsby, the Back Bencher, or the hon. Member for North Warwickshire (Mr. O&apos;Brien), the Front Bencher&amp;#x2014;had something vibrate in his pocket indicating a message from Mandelson Towers, but there is clearly a big difference opening up between them.&lt;lb/&gt;&#x000A;The hon. Member for Christchurch (Mrs. Maddock) asked me about the views of the Building Societies Association. I can assure her that I have had many negotiations, not just with the Building Societies Association, but with individual building societies. It is obviously important that their views are known on this subject and on a wide variety of other matters relating to the Bill. The Bill exists because the mutual sector wanted it, not because the Government have decided to introduce it.&lt;br/&gt;Mrs. Maddock: The Minister told us of the practical details. Did the building societies agree with the Minister?&lt;br/&gt;Mrs. Knight: If the hon. Lady would hold her horses, I was coming to that point. The latest communication from the Building Societies Association states that&#x000A;&lt;quote&gt;"the Association&apos;s overriding priority is for the Bill to be enacted as soon as possible The Association is more than content for the Bill to go forward unamended (other than in respect of amendments making technical and drafting corrections)"&amp;#x2014;&lt;/quote&gt;&#x000A;the three amendments to clause 10. Describing amendments Nos. 1 and 2 to clause 2, the association states:&#x000A;&lt;quote&gt;"These amendments appear to be defective."&lt;/quote&gt;&#x000A;That probably gives at least half the answer. The other half of the answer is that building societies are in two minds over the issue because they believe that changing the two-year rule could be beneficial, but they also accept that there would be a problem if it were changed because they recognise that their sector is a moving one. They recognise that the future is not likely to be the same as the past, which is true of every part of life. They recognise that there would be significant difficulties should such a change be made.&lt;lb/&gt;&#x000A;There is therefore no easy answer to this question. If we make changes&amp;#x2014;either exactly as set out in the amendments or in the spirit of the amendments&amp;#x2014;a future conversion by or takeover of a society where that society was willing for those events to take place could lead to several million people finding themselves unable to receive anything as a consequence of those events. We can easily imagine the huge problems that would arise from that.&lt;lb/&gt;&#x000A;A further aspect is that it must be for societies to choose their future, as it is for any other industry or financial institution. It is not for Government to dictate; it is for Government to enable societies to make the future that they want for themselves. The thrust behind the legislation is to move from the existing prescriptive legal framework to one that is permissive&amp;#x2014;not to dictate, but to enable societies to achieve the future they want.&lt;lb/&gt;&#x000A;5 pm&lt;lb/&gt;&#x000A;My hon. Friend the Member for Eltham (Mr. Bottomley) mentioned the Halifax procedures. He is correct in saying that, in its conversion, the Halifax has taken longer than any of the other converting societies, not least because it has undertaken two takeovers en route. The result is that no one in the position that we have just discussed will find themselves disadvantaged because they are short-time members. The question behind his comments was that the Halifax is a big society, but what happens to smaller societies? A big society, like any big company, can weather storms and, indeed, changes rather better than smaller organisations. My answer is that, in mutual societies, the only people who can put a proposal to members are the board. Therefore, unlike companies with other structures, mutual societies have the ability of the board to make decisions on what is or is not put to members.&lt;lb/&gt;&#x000A;Although I have not mentioned specifically the points made by the hon. Member for Normanton (Mr. O&apos;Brien), I believe that I have answered them and the other points raised. I repeat that it would cause more problems to the future of the movement to make the changes proposed in the amendments or to make changes in accordance with the sentiments behind the amendments than to leave the arrangements as they stand.&lt;br/&gt;Mr. Pike: I thank the Minister for her comments at the start of her first speech in the debate. I welcome her&#x000A;&lt;image src="S6CV0292P0I0331"/&gt;&#x000A;&lt;col&gt;647&lt;/col&gt;&#x000A;indication that she is hopeful about the outcome of negotiations to enable the Bill to make progress. I am not quite as confident as she is&amp;#x2014;that does not mean that I disbelieve what she says, but she is more optimistic than I am. Both she and I and all those who support the concept of mutuality will be disappointed if the Bill fails to go through. However, I hope that she is right and I am wrong and that the Bill completes all its stages before the end of the week.&lt;lb/&gt;&#x000A;I should have declared an interest in that I am a member of the Halifax. I shall receive the smallest amount possible, both as a shareholder and as a borrower. I did not, however, choose to be a member of the Halifax&amp;#x2014;I was a member of the Leeds, but was forced to become a member of the Halifax as a result of the takeover.&lt;br/&gt;Mr. Austin Mitchell: A detainee.&lt;br/&gt;Mr. Pike: Exactly. We choose which institution to be customers of, but sometimes choices are made for us that we would not make ourselves.&lt;lb/&gt;&#x000A;The Minister was correct in saying that the reason why the Halifax has taken longer to convert than other societies is the takeovers, especially that of the Leeds. It was first announced in November 1994&amp;#x2014;which is therefore the first of the three qualifying dates to be a borrower or an investor&amp;#x2014;and the first stage was the takeover of the Leeds. That was followed by the massive task of marrying the two sets of records; there were overlapping memberships and several other problems to be ironed out before the records were in a fit state to enable the society to proceed to the next stage of the co