House of Commons Hansard Debates for 26 May 1989

The Parliamentary Under-Secretary of State for Health (Mr. Roger Freeman) : I congratulate the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on his success in the ballot and pay tribute to his intitiative in the past in this area and to his sustained interest in this subject, which we all respect. Although I am a relative newcomer as a Health Minister, I have focused my mind on this subject recently thanks to the hon. Gentleman drawing my attention to it in a meeting that I had with him and other colleagues. It is an important subject and I assure him that I take it seriously, following through the commitments and promises made by my predecessor and other Government colleagues.

Although there has been no automatic right of access to manually stored medical records, the Department has always recognised that it is good practice for health professionals to be as open and informative with their patients as possible.

I fully accept that what we are talking about in this debate are manually stored records and not those on computers, which are already subject to the Data Protection Act 1984, and, indeed, medical reports which are subject to the legislation to which the hon. Gentleman referred. I would draw a distinction, as I am sure he would, between medical reports and medical records, by the very nature of the way in which they are prepared. Medical reports are specifically written for external consumption and are entirely different from the kind of medical records about which we are talking, which are very often hand-written and not put on computers. One of the regrets is that in the area of primary care we have not made

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perhaps the advance that we should have made in providing computer assistance to general practitioners--both the hardware and the software--to store data about patients.

I can confirm that the Department of Health will be taking an initiative in this area to accelerate the wider use of personal computers by general practitioners. Only about 50 per cent. of doctors have access to computers, which I believe can play a valuable role not in storing the complete medical records of patients, but in storing key data--for example, for call and recall systems for screening, for providing a profile that might be useful in setting indicative budgets, and for managing their practices.

While supporting a policy of openness, the Government have not inclined towards the need to legislate to provide access to medical records. Apart from the need to protect those patients who might be susceptible to harm from the information itself, the procedures to provide a statutory right of access, combined with appropriate safeguards to ensure that information about third parties is fully protected, would be complex.

The hon. Member for Roxburgh and Berwickshire was a little illogical. He welcomed the new draft code of practice, which we are putting out to consultation and which we hope will be adopted and operational from the end of the year, but he also argued that it would not work and that we should move to a statutory system. I believe, because we need the co-operation of doctors, that it would be better to move to a system of voluntary practice and to see how that works. I accept that there may be problems and that the House will return to the problem of individual cases of access. The Government do not rule out legislation for all time. However, we are firmly saying that we want the co-operation of the medical profession and that the best way to proceed at present is by way of a voluntary code.

In recognising those impediments to statutory provision for patients' access to medical records, the Government also acknowledge the view of those representing the interests of patients, including many Members of this House and in another place, that the current arrangements fall short of public aspirations and even greater openness must be achieved, on a voluntary basis if possible. As I have said, many representations have been made that, if that does not work, it must be achieved ultimately by statute. However, we should first try the voluntary code.

Hon. Members may remember that during the passage of the Access to Personal Files Act in 1987, there was not insignificant pressure to include medical records within the provisions of the Act. My right hon. and learned Friend the Member for Ribble Valley (Mr. Waddington), then Minister of State for the Home Department, was able to give a clear undertaking that Health Ministers would enter a dialogue with the profession. At the Committee stage of the Access to Personal Files Bill, he stated :

"If more openness is what hon. Members on both sides of the Committee want, they should know that they are pushing at an open door. The Government and the profession are in favour. Therefore, I am willing to give an undertaking today on behalf of my colleagues with responsibilities for health that they will enter into talks at an early stage with a view to

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achieving substantive and timely progress in opening up medical records further on a non-statutory basis."--[ Official Report, Standing Committee C, 1 April 1987 ; c. 60.]

I believe that the Department has honoured that undertaking, and has sought the agreement of the medical profession to a statement and code of practice concerning access by patients to their medical records. In the course of discussion, representatives of the profession recognised the need to encourage the profession in good communication with patients. Nevertheless, they conveyed serious reservations about a code giving patients the right to see their records and the dangers if patients were to rely on their own interpretation of doctors' notes rather than on the professional advice of their medical practitioners.

These anxieties were discussed with the profession's

representatives in March 1988 by my right hon. Friend the Chancellor of the Duchy of Lancaster and Minister of Trade and Industry, then Minister of State for Health, and my hon. Friend the Member for Derbyshire, South (Mrs. Currie), then Parliamentary Under-Secretary of State for Health. My hon. Friends noted the points made by the profession and advised that its proposals for giving more information without conceding access to the records would be unlikely to satisfy public expectations or parliamentary demands. The Department of Health then accepted the profession's suggestion that discussions should continue further.

I can assure the House that, in continuing the discussions, we were and are mindful that positive progress must be made. For that reason, in my contribution to the debate on the Access to Personal Files (Social Services) Regulations 1989 on 7 February this year, I advised the House that discussions on a voluntary code of practice on access to medical records were proceeding and that, although agreement had not yet then been reached, substantive progress had been made. As the hon. Gentleman knows-- he intervened in that debate--I gave an assurance that, if progress could not be made in negotiations at the official level, I would personally intervene. That intervention was not necessary, because, I am glad to say, with the willing co-operation of the medical profession, we produced a draft code, and it has been placed in the Library of the House.

I announced also the Department's proposals to consult over a three-month period with interested parties. It is important that, having accepted the principle of access to patients' manual records, such access should not be confined solely to medical records compiled by doctors, but should encompass records compiled by other health professionals about their patients. We are talking about more than general practitioners. The code of practice will therefore refer to manual health records, and consultation will be extended to representative bodies of health professionals other than doctors. The hon. Gentleman has probably seen in the annex to the draft code a list of the health professionals as defined. It includes registered medical practitioners, registered dentists, registered opticians, registered pharmaceutical chemists, registered nurses, midwives, health visitors and so on. I am sure that the hon. Gentleman and the whole House would welcome that.

The draft code of practice is a commendable compromise between what I believe most hon. Members would like to be achieved in removing obstacles to patients having access to information recorded about them and the

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legitimate concerns by some of the medical profession's representatives for the implications of such a code for patient care.

I will now deal with the hon. Gentleman's four specific questions about the code of practice. It is a relatively brief document, which is out for consultation at the moment. The principle behind it is that it is the health professional's duty to inform patients about their condition.

Mr. Kirkwood : Of course.

Mr. Freeman : The hon. Gentleman says, "Of course." That will happen in most cases. It is a sensible way in which to proceed. The hon. Gentleman is concerned about the minority of cases in which that does not happen.

The code provides also that health professionals may judge that, normally, the most helpful way of informing patients about their condition and treatment and meeting their expectations is by full discussion. Health professionals may consider it necessary to show patients the information that is recorded about them. The hon. Gentleman and I would hope that that will happen in appropriate circumstances. However, the code states that those who remain dissatisfied must be allowed to see information recorded about them. The hon. Gentleman's first question was about why that is prospective and not retrospective. General practitioners' manual records will be voluminous, extensive, make references to third parties, and may make unflattering remarks about a patients' lifestyle and whether advice has been taken. It is fair and sensible to operate the code of practice prospectively from the date on which it comes into force, which I hope to be by the end of the year. Then, the medical profession, whose co-operation we need on this subject, will be on proper notice that the information that they record at each consultation, after each diagnosis and after each hospital visit will be open to inspection. I believe that that is the fair, practical and proper way to proceed.

If the patient asks for access to his records his request must be in writing. The hon. Member for Roxburgh and Berwickshire asked why there was not wider right of access not just to episodes in the patient's clinical history, but to information relating to a number of years. He wanted to know why a patient could not go to his doctor and say, "I want to see my medical records for the years when I lived in place X, spanning years Y and those covering a specific series of ailments from which I suffered". We require the co-operation of the medical profession and, therefore, we must put ourselves in the position of the GP. He is a busy man and under the new GP contract--

Mr. Kirkwood : He will be even busier.

Mr. Freeman : No, he will not be even busier. That will not be the result of the new contract that we have negotiated or the changes that will be introduced in two years' time as a result of the White Paper.

We appreciate that doctors seek to do their best for their patients in terms of health promotion and care. They

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are, and always have been, busy people. Therefore, I believe that it is reasonable and sensible that patients' requests for access to their records should be specific and should be in writing. Doctors, their secretaries and the practice managers do not have the time to search through a whole range of material to provide a precis or a photocopy of it. Initially requests should be episodic and specific--they should relate to a particular ailment at a particular time.

I am sure that the hon. Gentleman will accept that computer records are specific and they are normally presented in a clear chronological, sometimes abbreviated, format. It is much easier to gain access to computer data than manual records which might not be organised in a coherent or even a legible manner.

A health professional responding to a request for access may, at his or her discretion, let patients see what was recorded about them prior to the code of conduct coming into operation. That is permissive.

The hon. Gentleman is right to say that access may be modified by witholding such part or parts of information as would, in the judgment of the health professional responding to a request, be likely to cause serious risk of harm to the physical or mental health of the patient or another person. The hon. Gentleman asked why we specify "risk of harm" as opposed to simply "harm". I am grateful to the hon. Gentleman for drawing my attention to that. When I read the draft code of practice I did not appreciate the difference between its language and precise legislative language. During the consultation procedure I shall inquire as to whether any significance is implied by the langage used. I am not aware of any significant difference, but the hon. Gentleman's remarks are on the record and they will serve as part of the process of consultation.

Access should also be modified by withholding such part or parts of the information as would identify another individual, other than a health professional acting in that capacity. I did not catch all the hon. Gentleman's remarks, but I assume that the hon. Gentleman was concerned about that modification. The exclusion clause is designed to protect another individual, a third party, other than a health professional, to whom reference might be made. It might be a member of the family, an employee or an employer. It is sensible that a patient demanding in writing access to information about a particular episode in his care, should not have the right to obtain information written by his or her doctor about another individual. That is sensible, equitable and fair.

Initial reaction to the draft code indicated a broad level of contentment with the proposals from some non-medical and patient interest groups. However, some have also registered reservations, like those which have been raised today. We intend the consultation exercise to be meaningful and my officials will consider most carefully any comments that are received. The medical profession will be advised directly about the outcome of the consultation exercise which I hope will be completed shortly and enable the code to be introduced before the end of this calendar year.

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Eastbourne Water Company

1 pm

Mr. Ian Gow (Eastbourne) : The Eastbourne Water Company is one of the 29 statutory companies which provide fresh water to almost a quarter of the people in England and Wales. One hundred and thirty years ago, when Eastbourne Water was incorporated by Act of Parliament, it had 5,000 customers. Today, the company serves nearly 220,000 domestic customers as well as industry for the whole of my constituency and for parts of the constituencies of my hon. Friends the Members for Wealden (Sir G. Johnson Smith), for Lewes (Mr. Rathbone), and for Bexhill and Battle (Mr. Wardle). They have authorised me to say that I speak for them as for myself this afternoon.

In January this year, the Eastbourne Water Company increased its charges by 19.5 per cent. In February it was taken over by a French company called SAUR. In April, now French-owned, it put up its charges by a further 15.8 per cent. amounting to an increase over 15 months of 38.4 per cent. Quite rightly, those increases have caused dismay to my hon. Friends, to me and to our constituents. That was the second highest increase in the kingdom. Only the West Kent company, with a 42 per cent. increase, has a more shameful record. West Kent, like Eastbourne, has recently been acquired by SAUR. In his statement of 27 February 1989 published in the annual report of the Eastbourne Water Company, the then chairman said : "At least half of the January increase of 19.5 per cent. could be attributed to the Government's policy of privatisation."

On 3 May, my three hon. Friends and I had a meeting with some of the directors of the company. The meeting took place in a Committee Room. It would have been a fascinating experience for you, Madam Deputy Speaker, had you been able to join us. We listened with disbelief as the managing director of the company told us in the presence of one of the newly appointed French directors that no other member of the board agreed with the chairman's statement or with the chairman's refusal to accept the invitation from my hon. and learned Friend the Minister for Water and Planning to meet him in London. It was clear to me and my hon. Friends that the board, in their failure to stand up to the chairman, was composed of mice rather than men. It was clear that the prospective privatisation of the water industry, bearing in mind in particular that the Eastbourne Water Company was already in the private sector, could have had nothing to do with the increase in the charges announced with effect from 1 January. My hon. and learned Friend the Minister wrote to me on 15 March stating :

"The increase he is proposing"--

the increase of 19.5 per cent.--

"cannot be justified by privatisation or anything to do with it." I am pleased to say that the new chairman, in a letter to the Minister dated 15 May, a copy of which he was kind enough to send to me, has offered to meet my hon. and learned Friend. I welcome that warmly. What I do not welcome is the decision of my hon. Friend the Under-Secretary of State for Corporate Affairs not to refer

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these price increases to the Monopolies and Mergers Commission. I wrote to my noble Friend Lord Young on 6 April. On 19 April he replied :

"You requested that the matter of the water charges increases should be referred to the Monopolies and Mergers Commission. Your request has received the most serious consideration but we do not propose to make such a reference. I understand the concern of your constituents, faced with a price rise of this order."

My noble Friend continued :

"The new pricing re gime for the water industry introduced in the Water Bill does provide for the regulation of price increases. While these prohibitions will not have any retrospective effect, I understand that appropriate adjustments will be made to the price ceiling set initially by the Secretary of State where the price for this year cannot be justified."

I pause there to ask the Under-Secretary, my hon. Friend the Member for Lewisham, East (Mr. Moynihan) whether he can reassure my three hon. Friends, me and our constituents that if, when my right hon. Friend reviews the charges that the Eastbourne Water Company will seek to levy with effect from 1 April 1990, he considers that the charges for this year are unreasonable he will require the Eastbourne Water Company to abate the charges for the next financial year. That is what was said by my hon. Friend the Under-Secretary of State for Corporate Affairs. I want to receive an identical assurance from my hon. Friend the Member for Lewisham, East who is to reply to the debate.

Another aspect of my concern is the decision of my right hon. Friend, announced on 11 January, that there could be a reference to the Monopolies and Mergers Commission only if the assets of a privately owned water company exceeded £30 million. I have before me the Official Report for 11 January. In answer to a question from me, my right hon. Friend the Secretary of State for the Environment said that

"at present three water companies are controlled by non-British companies." --[ Official Report, 11 January 1989 ; Vol. 144, c. 847.] Since 11 January the position has changed dramatically. There are now 12, or perhaps even more water companies that are controlled by non-British companies. I hope that my hon. Friend will be able to tell us how many are controlled by those companies. In answer to a question by my right hon. Friend the Member for Tonbridge and Malling (Sir J. Stanley) on 10 April my hon. and learned Friend the Minister for Water and Planning told the House that 12 of the statutory companies--that is getting on for half--were owned at that date by the French.

My right hon. Friend should reduce the figure of £30 million to £20 million. The asset value of the Eastbourne Water Company is approximately £20 million. It should have been possible for my right hon. Friend to refer to the Monopolies and Mergers Commission the proposed takeover of that company by the French company SAUR, which now owns four of our statutory water companies--Eastbourne, Mid Southern, Mid Sussex and West Kent ; West Kent being the company which had the largest increase in the whole of the United Kingdom, and Eastbourne being the company which had the second largest increase in the whole of the United Kingdom.

One aspect of the takeover has caused me concern. I have sent the Minister a copy of page 36 of the offer document that was sent out before acquisition of the Eastbourne Water Company by SAUR. There we read :

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"Eastbourne Water employees' share club was established in 1987 to facilitate the acquisition of ordinary stock by Eastbourne's employees."

I want to make it absolutely clear that I am strongly in favour of extending the opportunities for home ownership. I believe deeply in the concept of worker shareholders. I approve of the policy whereby those who are employed by the Eastbourne Water Company or by other companies within and without my constituency, have an opportunity to become shareholders. I have always believed that, and I believe it strongly today.

What worries me is that, at the time of the takeover, there was an acquisition not by those whom one might think were employees but by the then managing director who is presently the chairman, of the company. I wrote on 17 May to the chairman, Mr. Hoskins, and this is the question I put to him :

"Am I correct in concluding from page 36 of the recommended offer that in March and April last year you bought for £8,000 ordinary stock from the Eastbourne Water employees' share club and that subsequently you sold that ordinary stock for £240,000?"

I sent copies of the letter to my hon. and learned Friend the Minister for Water and Planning and to my noble Friend the Secretary of State for Trade and Industry, with both of whom I have been in correspondence about the Eastbourne Water Company for many months.

Mr. Charles Wardle (Bexhill and Battle) : I am grateful to my hon. Friend for giving way. He has already referred to me and our hon. Friends the Members for Wealden (Sir G. Johnson Smith) and for Lewes (Mr. Rathbone), and we wholeheartedly support his vigorous representations on behalf of Eastbourne Water's customers. Does my hon. Friend agree that it is reprehensible that, at the meeting on 3 May here in the Palace of Westminster, the managing director of Eastbourne Water told us that he was unable to contain this year's price increases, that he had been unable to persuade the late chairman to meet our hon. and learned Friend the Minister for Water and Planning that he had been unable to prevent the late chairman from writing a chairman's statement for the annual report which was highly critical of Government policy and that he was unable to declare to us that he had bought and sold shares within a very short period of time? What are his customers to make of that? They have been saddled with a price increase of 38.4 per cent. I believe that they will discover that the new chairman, until recently the managing director, has dealt quickly in and out of the shares at a very considerable profit. Presumably he has no faith in the new controlling shareholders because he decided not to stay for the ride with his equity investment. What are customers to make of that?

Mr. Gow : The questions posed by my hon. Friend will be asked by some of the customers of Eastbourne Water Company.

My concern is that it was from a club, whose purpose was to offer opportunities for employees to become shareholders, that in March and April last year the then managing director bought the shares--£8,000 worth nominal of ordinary stock for which he paid £8,000--which he sold for £240,000 well under a year later.

Should there have been an opportunity for other employees to acquire shares? That is a matter about which I have already written to my hon. Friend the Minister. I

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have already read out to the House part of my letter dated 17 May and I want to read the reply dated 23 May, from the present chairman. It says :

"The figures in the offer document you quoted and your conclusions therefrom are correct."

I asked for a copy of the trust deed which set up the club, but no copy has been forthcoming. The chairman wrote to me saying : "The share club was set up at short notice."

We are told in the offer document that it was set up in 1987. He went on to say that it was set up

"along the lines of an existing club in another water company. I am informed that the declaration of trust was still at the stage of a draft prepared by counsel for the trustees at the time the bid was made."

If the club was set up in 1987 and the bid was made in 1989, it took a long time to draft the document.

The letter went on :

"The next meeting of the trustees is expected to be an annual general meeting at which it is most likely a resolution will be proposed to wind up the club."

I have asked for a copy of the rules of the club and when I receive them, I shall send them to my hon. Friend the Minister.

When I arrived at the Department of the Environment in June 1985 I did not realise that, in addition to being the Minister responsible for housing, I would also be responsible for water. Since that time--I spent nearly two and a half years in my hon. Friend the Minister's office--I have retained a deep and concerned interest in the well-being of the water industry. Over the 15 years in which I have had the privilege to represent Eastbourne I have had a happy relationship with Eastbourne Water Company. It is a matter of deep regret that since January this year the trust that I used to have in the company has been eroded.

1.18 pm

The Parliamentary Under-Secretary of State for the Environment (Mr. Colin Moynihan) : It is with some trepidation that I rise to respondto my hon. Friend the Member for Eastbourne (Mr. Gow) for today he is sporting his MCC tie. He has bowled a consistently difficult and tight line to my right hon. and hon. Friends in the Department of Trade and Industry as well as my Department. I congratulate him and the England team on their winning streak. I shall try to keep the Government's wicket standing to the best of my ability.

My hon. Friend the Member for Eastbourne has dwelt in some detail on the increase in the charges imposed this year by Eastbourne Water Company and the circumstances of the takeover of that company. I shall discuss the increase in charges imposed this year by water companies in general and Eastbourne in particular. My hon. Friend asked whether the two price increases by the company earlier this year--20 per cent. from 1 January 1989 and a further 15.8 per cent. from 1 April--should have been referred to the Monopolies and Mergers Commission. Two forms of reference can be made in such cases : first, a reference under section 11 of the Competition Act 1980 but that covers efficiency, not prices ; and, secondly a reference under section 51 of the Fair Trading Act 1973, which normally takes much time. Any recommendation would not have been retrospective and could not have been implemented before the operation of price control under the Water Bill. We did not rule out the possibility of reference to the Monopolies and Mergers Commission,

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but we believed that it was in everyone's interests for the issue to be sorted out as quickly as possible, and we sought to do so by voluntary means.

I should explain why Eastbourne Water Company was granted powers in December 1988 to fix a rate poundage for a three-month period, with the effect that consumers had two charge increases within a short time. As one of the 29 private water companies, Eastbourne is subject to statutory controls on many of its financial limits, which include controls on the amount of capital that it may hold, its rates of dividend and interest and the amount that it can put in reserves. They constitute an indirect control on charge increases because income that is surplus to the authorised limits must be used to reduce charges. At present, there is no direct control on the level of charges. The restrictions meant that Eastbourne could not move to a charging year beginning on 1 April without first obtaining the consent of my right hon. Friend the Secretary of State for the Environment.

There were sound reasons in favour of such a move, including the desirability of bringing the company's charging year into line with the majority of companies under the new regime of direct controls on charges. The Secretary of State gave his consent last December for the company to levy a three-month rate for this purpose. It raised a three-month rate from January 1989 and a 12-month rate from April. Due to the nature of the current controls, the maximum amount that the company could raise for the 15-month period from January 1989 to March 1990 was fixed. The company was unable, therefore, to raise additional money from customers by setting two rates for the period. On 5 February, the Water Companies Association announced in a press release that its members were likely to raise their charges by 30 per cent. or more. In some quarters, increases as high as 50 per cent. or more were anticipated. My hon. and learned Friend the Minister for Water and Planning wrote on 7 February to each water company chairman, inviting those proposing increases of more than 10 per cent. to see him and to make the relevant financal information available to his consultants, Deloitte Haskins and Sells. Most of the chairmen responded to that invitation. As my hon. Friend the Member for Eastbourne has made clear, Eastbourne's chairman's response was different from that of the other chairmen.

My hon. and learned Friend was able to report the results of the discussions that he held to the House on 14 March in a written reply to my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel). At that time, the average increase in all water company charges was estimated to be about 22 per cent. A later estimate of 23 per cent., based on more complete information, was given in a letter to my hon. Friend. I should emphasise that both figures related to the generality of water company charges, not those faced by domestic consumers paying on a rateable value basis-- commonly called the water rate. The latter figures are being collated and will be reported to the House in due course.

My hon. and learned Friend the Minister for Water and Planning has, on several occasions, made clear his anxiety about the scale of increases. He was able to report to the House on 14 March that, as a result of his discussions with chairmen, the average increase in charges had been

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reduced by 5 per cent., which is equivalent to £16 million in water charges. His consultants' investigations were carried out with the full and voluntary co-operation of each company. Not all the companies accepted the report that the consultants made to the Department of the Environment. Water companies are independent statutory companies and, provided the charges that they propose are within their vires, the final decision lies with the board of each company. My hon. and learned Friend is unable to agree or disagree with companies' charges under the present legislation.

The Water Bill provides for a price control to be set, in the first instance by my right hon. Friend the Secretary of State and subsequently by the Director General of Water Services. In setting that control, account must be taken of the spending needs of each appointed undertaker, whether they are statutory water companies or successor companies to the water authorities, which we intend to privatise later this year. Those spending needs over the next 10 years or so are the subject of a far more detailed scrutiny than the exercise earlier this year, to which I have referred.

Each undertaker is required to submit detailed financial projections, supported by engineering studies, to show what is needed to enable undertakers to meet the standards of service that the law requires and the companies expect. I said, "what is needed"--the price control will take account only of what an efficient company needs to spend and will incorporate targets for efficiency savings which will take account of differences in achievements.

With regard to Eastbourne's charges, the company co-operated in the review of this year's increases and in providing information on its future spending needs to enable the price control to be set. However, the late chairman of that company fiercely maintained his independence under the existing statutes and declined all offers to meet my hon. and learned Friend the Minister for Water and Planning to discuss the increases. I regret that, but I must remind the House that he was perfectly within his rights so to do.

As to the consultants' report, the company has informed its consumers that Deloitte, Haskins and Sells has agreed that the operating costs in its budgets were reasonable. Without going into the detail of that report, which must remain confidential to the company and the Government, I can say only that the company's statement is correct. That does not mean that every aspect of this year's increase by Eastbourne, or by any other company, was fully justified. I can reassure the House, as my hon. and learned Friend has already done, that before the price control is set, a much more searching financial and engineering scrutiny will be carried out. That work began several months ago and has yet to be completed, whereas the investigation into this year's increases was undertaken in days. Every undertaker will be examined with equal vigour, irrespective of the size of this year's increases.

To respond specifically to the first of the questions put by my hon. Friend the Member for Eastbourne, if, when setting K with effect from 1 April 1990 my right hon. Friend the Secretary of State considers charges for this year to be unreasonably high--for example, for the reasons outlined by my hon. Friend--charges could be abated. That is certainly a possibility and an important consideration for my right hon. Friend. To be precise,

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Eastbourne's charges in 1990 will not necessarily be lower if its current charges are too high, but the K charges ceiling would be lower in that circumstance.

The possibility of insider dealing in relation to the securities of the Eastbourne water company was brought to the attention of my right hon. Friend some time ago. The information then available was not considered to be sufficient on which to base a decision whether to investigate under section 177 of the Financial Services Act 1986. Accordingly, as is the practice in such circumstances, officials asked the stock exchange to make some preliminary inquiries. I assure my hon. Friends the Members for Eastbourne and for Bexhill and Battle (Mr. Wardle) that such matters are treated seriously, but I cannot undertake to reveal whether any further investigation is being or is to be made. That is because, in the interests of efficiency and justice, our policy is that investigations of possible insider dealing should normally be kept confidential. However, I believe, on hearing my hon. Friends' contributions, that it is important that their contributions to the debate on this specific point are brought to the attention of my right hon. Friend the Secretary of State for Trade and Industry, and I will ensure that that is done.

On the merger policy and Eastbourne, it is often remarked, and is certainly not disputed by the Government, that the supply of water and sewerage services is a local monopoly and that the incentives of product competition, which usually work to improve efficiency and standards of service to the customer, cannot apply to privatised water companies.

Under our proposals in the Water Bill it will be for the Director-General of Water Services to monitor and protect the standard of services to customers and to ensure that essential infrastructure is maintained, and, bearing in mind the relative performance of companies in the industry to make periodic reviews of the K settings. If the director-general is to have a proper spread of comparative competition, there clearly needs to be an adequate number of independently owned and managed companies in the industry. Our special mergers policy is designed to safeguard that comparative competition. The £30 million asset test applies in existing merger legislation and, applied to the water industry, I am confident that it will ensure that there is an adequate number of companies for comparison. There is no merit in protecting every single company so that the entire structure is preserved like a prehistoric mammoth trapped in ice. That would simply remove the incentive to better management performance that private sector disciplines, including the possibility of takeover, will bring.

I hope that in a very brief response I have managed to cover some of the points raised by my hon. Friends. I am most grateful to them for bringing these issues to the attention of the House.

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African Elephants

1.30 pm

Mr. Tony Banks (Newham, North-West) : The Under-Secretary of State for the Environment, who is just approaching the Dispatch Box, is making quite a name for herself. I have just returned from having another look at the Roman baths at Huggin hill about which she was able to make a halfway decent announcement. The Roman baths are to be preserved, but unfortunately we will not have access to them. She has also done some good work in regard to the Rose theatre. While she is catching her breath, I should tell her that I have a few other campaigns that she might care to join me in pursuing--the preservation of county hall, the restoration of city-wide local government in London--if she sticks with me I shall make her famous.

Today, the Minister has the chance to cover herself in more glory by taking the political initiative to help to save the African elephant by imposing an immediate ban on all raw and worked ivory being imported into the United Kingdom. The plight of the African elephant is one of impending catastrophe. I have been campaigning on the matter for the past five years, and during that time perhaps as many as 500,000 elephants have been slaughtered in Africa. I am grateful for the recent upsurge of public and political concern, and I should like to place on record the thanks of the entire House to the television companies, newspapers and organisations which have helped to generate the great tide of feeling which is sweeping across Europe in defence of those beautiful and gentle creatures, the elephants. The Worldwide Fund for Nature recently announced that it received about 20,000 letters and calls in one week in support of a ban and in protest against the slaughter of elephants.

The centre of the problem is the massacre of those beautiful creatures for their ivory. The truly criminal element is the illegal slaughter, but the legal culling is little better. In 1970 it was estimated that there were about 2.3 million elephants in Africa. In 1979 the number had dropped to about 1.3 million--the figures are very approximate. Today it is estimated that about 750,000 elephants remain in Africa, but a reply I received recently from the Minister for Overseas Development suggested that some estimates are as low as between 300,000 and 400,000. No one knows the exact number, but it is certain that the elephant is under threat. At the present rate of slaughter, which is running at an estimated 80,000 to 100,000 a year, by the year 2000 the African elephant will be all but extinct. The methods used by poachers to obtain ivory turns even the strongest stomach. They use machine guns, rockets, mortars and poison to kill the animals and then they use chainsaws to cut off their heads. Sometimes elephants are mortally wounded but not yet dead. When I was in Washington recently, the international organisation Monitor told me about an incident that took place 11 years ago which is typical of what happened in the past. Thousands of elephants died in just one area of Zaire in 1978 after being poisoned. The mass killing took place in a vast forest west of Kisengani, in north- east Zaire. While the death toll was staggering for the elephants, it was

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virtually complete for all other animals over hundreds of square miles. The mass poisoning occurred in April and May of 1978. According to a source in Kisengani, corrupt Government officials diverted 20 metric tons of pesticide that was to have been used for spraying the coffee plantations in the province. The highly toxic poison was delivered to gangs of poachers who went into the thick forests where large numbers of elephants still roamed. The pesticide was poured into the waterholes in the marshy areas where the elephants come to drink. Within days thousands of elephants were poisoned. It took up to a week for them to die. The sickened beasts staggered through the forest in agony. The poachers eager to get the ivory first frequently hastened death by running up to the weakened elephants from the rear and disembowelling them with machetes. Witnesses say that hundreds of tusks poured into the town of Ngazi, which is at the end of the road from Kisengani. Each week during the poisoning massacre this was happening. Many of the tusks were just eight inches long, indicating that baby elephants died in large numbers. Nobody knows how many elephants died in those two months because many, if not most, probably died deep in the forest and were never found. That still goes on, but there are fewer elephants to persecute in such a way.

There are corrupt Governments and officials in Africa who have made millions out of the illegal ivory trade. African wars are in part, still being financed by the trade in elephant ivory, rhinoceros horns and other endangered species. Terrorist organisations, such as UNITA in Angola and RENAMO in Mozambique, are openly slaughtering elephants and processing the ivory through South Africa, Swaziland and other African countries. Dr. Jonas Savimbi, the leader of UNITA presented to President P. W. Botha an exact replica of an AK47 assault rifle, intricately carved in ivory--how obscene, but how typical since so many elephants had been killed by UNITA terrorists using AK47 rifles.

I welcome the Government's announcement of their intention to go for a ban on new ivory, first at the EC Environment Ministers meeting on 8 June in Luxembourg, and in October at the meeting of the convention on international trade in endangered species CITES, the so-called regulatory body on trade in ivory. However, that may be too little too late.

The laxity in applying existing CITES regulations to new ivory makes such a ban, if we are able to achieve it, close to unenforceable. Even if we achieve an agreement at CITES in October, the ban will not come into force until mid-January 1990. Dealers will stockpile, and at the present rate of slaughter another 40,000 to 50, 000 elephants will die and there will be an enormous upsurge in poaching. We need a ban on all ivory, and we need it now. The Government are wonderfully placed to give a lead to the world because Britain is crucial to the ivory trade. First, we are a major staging post in world ivory trade, including that which is traded illegally. The Department of the Environment, in consultation with CITES, has given retrospective clearance to ivory arriving in this country without valid documentation. There are cargoes at Heathrow and Gatwick airports which I claim on good

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authority began as illegal ivory. I am not satisfied that the Minister is being given the best and most impartial advice by CITES or her own departmental officials. I shall return to that theme on another occasion.

The Minister says that her Department checks on all ivory, but much of the so-called legal ivory starts off as illegal ivory. It is laundered through corrupt African Governments and officials. The way in which statistics on ivory are kept in this country is wholly unsatisfactory. I have just received a reply from the Department of Trade and Industry. I asked how much raw ivory, by weight and value, had gone through this country since 1979. The DTI's answer was : "In 1988, imports of raw ivory were recorded as 12.1 metric tonnes. Information prior to 1988 is not available."

However, when I asked the DTI what was happening in Hong Kong, it was able to give me a run of figures back to 1984. How come I can get figures about what goes on in Hong Kong, but not about the trade in ivory in this country? Something must be done about that. The figures which have emerged from Hong Kong show that Hong Kong has been importing raw ivory from a range of countries. I shall not give them all, but I notice that Somalia and the Ivory Coast are included. Yet in the reply to another question I also noticed that Somalia and the Ivory Coast appear among the 19 African countries where the EEC considers that the elephant population is incapable of sustaining commercial exploitation. How come? If we are told by the EEC that those countries do not have elephant populations sufficient to sustain trade in ivory, how come Hong Kong, for which we are responsible, is still accepting ivory into its shores?

The position of Hong Kong is absolutely crucial in all this because Hong Kong deals in more ivory than probably any other country, with perhaps between 50 and 75 per cent. of world trade. Indeed, 95 per cent. of the ivory entering Hong Kong is raw and comes from Japan, China, Taiwan and India among other places. If the ivory is carved, it goes to Japan, the United States of America and the EEC countries. Therefore, Hong Kong, with which we have close links, is very much at the centre. Belgian and French dealers are active in Hong Kong and a lot of ivory now comes from Francophone Africa, which is emerging as a major supplier. We in this country and therefore in this House have jurisdiction over Hong Kong until 1997. We must close down the ivory trade in Hong Kong.

One of the great obstacles that the Minister will face in attempting to secure an appendix I listing of the African elephant by CITES in October will be if any of the major trading countries enters a reservation. I want an assurance from the Minister that the United Kingdom will not on behalf of Hong Kong, enter a reservation. If we can get Hong Kong into line, we might just get the Japanese to follow suit. On this occasion, words fail me when I try to describe the Japanese role not only in the ivory trade but also in relation to whales. That country is venal. The British public should boycott Japanese goods until the Japanese stop decimating the world's animal resources in their typically wasteful and selfish manner. I repeat my demands about the African elephants on behalf of all hon. Members and a growing tide of public opinion in this country and around the world. First, we should have a total and immediate ban on all trade in raw

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