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Column 643shall not discuss them again. In any event, I do not have time to do so. On economic, social, environmental and regional policies, for example, there are considerable differences that will no doubt be aired again, and possibly again and again, in coming weeks. In the spirit of consensus, I conclude by saying that, as we have all taken part in the debate, we presumably feel united in recognising the importance of Europe. Let us hope that we shall be able to raise public interest in these matters during the forthcoming European election campaign. After all, we are talking about matters that are extremely important for the development and future well-being of our country.
Mr. Heathcoat-Amory : The debate has revealed a number of rather predictable differences in the House but agreement that the events of the past 12 months have been especially important for Europe. The effect of those events will be long lasting. Four of them stand out : the entry into force of the Maastricht treaty, the successful conclusion of the Uruguay round at GATT, the enlargement negotiations, and a new resolve on the part of the European Union to tackle the underlying causes of unemployment and the loss of competitiveness. All four of those issues have been referred to extensively during the debate.
I, too, welcome the new hon. Member for Rotherham (Mr. MacShane). He impressed us all with his confidence when making his speech. He pleased us as well with his well-phrased tributes both to his predecessor and to the leader of his party, whose sudden death last week so shocked us all.
I am sorry that in the remaining minutes of the debate I shall probably not be able to answer all the questions asked and respond to all the points raised, especially by the right hon. Member for Strangford (Mr. Taylor), who had a long list of questions, and by the hon. Member for Caernarfon (Mr. Wigley), who made several points about Wales. As for the Committee of the Regions, I can give the hon. Member for Caernarfon the assurance that those councillors who lost their seats in the recent election will continue to serve out their term. That was made clear when they were appointed to the committee. I think that it would be wrong so soon into the new term for them to be discharged.
If the economy has not dominated the debate, it has certainly been referred to by many hon. Members. The economies of all member states will face a new challenge when the new world trade liberalisation package comes into effect. The point was well made by the right hon. Member for Llanelli (Mr. Davies), who rightly said that, whether we like it or not, we are facing a global trading environment and we must prepare ourselves for it. The fact that 20 million people are out of work in the European Union is a warning that something is wrong with the European employment model. The United Kingdom is the only major country where unemployment is below 10 per cent. Over the past 20 years it is striking that similar growth rates in the United States and Europe have delivered over four times as many jobs in the United States as in Europe. That stark fact is telling us something. That is why we as a Government have taken such a prominent part in the debate on growth, competitiveness and employment. That is why we were the first country to submit a document
Column 644setting out an analysis of the problem and our views on what should be done about it. It is all too easy to diagnose a problem ; what is difficult is to prescribe solutions. We are certain that we must not shrink from taking necessary measures to correct what has gone wrong in the European labour market.
That means, at least in part, a move to greater deregulation and the promotion of labour market flexibility. It also means that we must look carefully at social costs and their effect on employment. That has nothing whatever to do with creating a sweatshop economy either in this country or in Europe. That is a scare that we can do without. The Conservative party wants a highly trained, adaptable, well-paid work force, but we know that social protection must be earned.
We believe in investment, in good training and high productivity, but employment is not just about high technology and big firms. It is about what happens to and in small firms and partnerships employing two or three workers, often part time. It is beyond dispute that excessive regulations and high non-wage labour costs have a direct effect on those firms' ability to employ people. That is why we are adamant about preserving and protecting our opt-out from the social chapter. That point was well made by my hon. Friend the Member for Gillingham (Mr. Couchman). That is why, at our insistence, the member states of the Union and the Commission are now studying urgently the relationship between regulations and employment.
We are committed to action. If it can be shown that overregulation is one of the causes of European unemployment, we must insist that something is done about it. If we do not get it right--if we do not get more jobs for each unit of economic growth--not only will the political ambitions of the Union be seen to be increasingly hollow, but the social consequences in member states may be extremely serious.
Questions were asked about the agreement on qualified majority voting reached during the enlargement negotiations. I am somewhat surprised that Opposition Members should be so open in saying that they would not even have tried to stand up for British interests. Of course the result was a compromise--that is often true in negotiations--but the fact that it is so unpopular with a number of other member states and with the Commission shows that we did safeguard our main concerns.
The hon. Member for Gateshead, East (Ms Quin) asked about the legality of the agreement. It is legally binding in the Council of Ministers and it obliges the chairman to take any necessary initiative to achieve a decision on the basis of no more than 23 votes against.
Mr. Heathcoat-Amory : All matters are justiciable in the European Court of Justice ultimately. What is clear about this decision of the Council is that it is binding on members of the Council of Ministers. The hon. Lady need not just take that from me, because Dr. Kinkel, the German Foreign Minister, said immediately after the agreement was reached :
"Germany itself will regard the Decision as binding on the Council and has no doubt that all other member states of the Union will also fully respect the procedures foreseen."
The agreement is an interim one and will remain in place
Column 645until something different is agreed at the next IGC. We also achieved an agreement that the IGC will address the issue of voting strength and the voting thresholds in the Council of Ministers. The hon. Member for Gateshead, East also asked whether the agreement could be invoked by a single member state. I gave the answer to that question in European Standing Committee B last week, but for the benefit of the House, let me repeat it. Yes, it can. The question of who triggers it does not arise, because there is a clear obligation on the presidency to seek the necessary agreement wherever the necessary minority votes becomes clear.
Like several other hon. Members, the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) mentioned the national veto. He said that he wanted "greater co-operation"--those were his words--in defence and foreign policy. We can all agree with that and there is strong support on the Conservative Benches, notably from my hon. Friend the Member for Stamford and Spalding (Mr. Davies), for making a success of the intergovernmental pillars of the union, especially in foreign and security affairs.
However, the hon. Member for Ross, Cromarty and Skye said that his party would give up the national veto. He could hardly say otherwise, because spokesmen from his party are on record as saying that. He tried to water it down by saying that we should seek allies so that we should never find ourselves in a minority of one. He also said that the qualified majority voting compromise that we had reached should be of assistance in that, and I am grateful for his support. However, in the hard world of international diplomacy, essential interests have to be protected against any eventuality. It may be impossible to find allies for our cause on some issues. I know that the Liberal Democrats are the innocents abroad, but Conservative Members know that there are aspects in which vital national interests are at stake, and in which the requirements of unanimity must apply.
Mr. Charles Kennedy : I am grateful to the Minister for giving way, and I do not think that he deliberately seeks to misrepresent what I said. He will be aware that I was not describing Liberal Democrat policy. I was making a statement of fact, in terms of the way in which the institutions of the European Union operate, that there would be four additional hurdles involving the Parliament and various other institutions and considerations, before we ever reach the stage at which a proposal coming forward would leave Britain isolated. Is he denying any of those four factual hurdles ?
Mr. Heathcoat-Amory : I said that the hon. Gentleman had tried to water it down. He has now invented some procedural hurdles which, he says, will prevent us ever being in the position of having to invoke the national veto. I was arguing that there are eventualities that we must foresee. It is not always possible to find allies to support essential national interests--and we are speaking here not simply of foreign affairs and defence but of taxation, immigration policy and changes to the treaty in future.
I therefore envisage a situation in which it may be necessary for Britain to invoke a veto and I am pointing
Column 646out, for the benefit of the House and the wider public, that the Liberal Democrats have willingly abandoned that national veto, although the hon. Member for Ross, Cromarty and Skye is in good company.
I can help the right hon. Member for Bethnal Green and Stepney (Mr. Shore), who said that he had not heard of the European socialist manifesto. I can enlighten him because, for accuracy, I have brought a copy to the House. I can confirm one surprise. It is called, "The Socialist Manifesto"-- surprising, because the Labour party excised the word "socialist" from its last general election manifesto, but it is in the European one. The second fact about it is that the Labour party, the party of which the right hon. Gentleman is a member, is formally signed up to what is in it. All Labour candidates for membership of the European Parliament are fully and explicitly committed to what is in it.
On the subject of the way in which decisions are taken, I remind the House of the following quote :
"We want majority voting in the Council to be the rule." That means not only that the Labour party is dissatisfied with the present arrangements and wants to go further, but that the rule must be majority voting. The hon. Member for Gateshead, East tried to retreat from that by saying that the Labour party manifesto would make it clear that Labour will retain the national veto. Either the Labour party is saying different things in different documents or it is in a muddle and is trying to reconcile a commitment to phase out the veto with a commitment to retain it.
I shall strike a slightly less partisan note in welcoming the support of the hon. Member for Gateshead, East for enlargement. Hon. Members on both sides of the House support enlargement and welcome the prospect of the four new EFTA states joining the European Union early next year.
Both the hon. Gentleman and the hon. Member for Ross, Cromarty and Skye suggested that the debate about qualified majority voting had endangered enlargement. That is not the case. A number of detailed agricultural drafting points, including the drawing up of the treaty, continued for some time after the qualified majority voting issue had been settled and the European Parliament still had time to scrutinise the treaty and give its assent, by a large majority, earlier this month.
Mr. Heathcoat-Amory : That is exactly the sort of issue that we shall discuss in 1996. What we are deciding today and what we have negotiated over the past few months is how to make a success of the current round of enlargement.
Enlargement confirms our vision of the European Union as an outward- looking, diverse and dynamic organisation based, as my right hon. Friend the Member for Guildford (Mr. Howell) said, on the primacy of the nation state. This round of enlargement is also a door to further enlargement to the east. The hon. Member for Durham, North (Mr. Radice) will agree that those will not be easy issues.
Column 647Matters for 1996 include not only institutional change but structural funds and the future of the common agricultural policy. The EFTA states that are applying to join felt that their membership of a free trade zone--the European economic area--was insufficient. Those who want the European Union to be simply a free trade area must face the fact that the experience of those countries led them to believe that their interests were better served within the European Union. They wanted not just to be part of a free trade area but to influence the rules and trade policy of the organisation. They did not wish simply to be spectators from without.
My right hon. Friend the Member for Horsham (Sir P. Hordern) made the good point that the right of British Airways to start an air service between Orly and London airports depends on enforcing trade rules of which we are part. Were we to leave the European Union and become offshore participants, we could not enforce those free trade rules of which we are the beneficiaries.
As for 1996, we cannot look into the future this evening, but we know that the Europe of today is in flux. The end of the cold war has freed the bonds of Europe and the security organisations of the west are still adapting to that change. We have not had an opportunity this evening to discuss the Western European Union or NATO, but those organisations are adapting to the new security outlook in Europe. The Maastricht debate, both here and on the continent, showed that the high water mark of a centralised federalism has passed and the tide has now turned.
The freeing up of world trade, referred to frequently in this debate, poses another challenge to the European Union. It shows again the folly of rigid centralism and too much intervention. The number of unemployed in Europe forces us to look at market structures just as hard as we have looked at political structures.
The prospect of four new member states coming in next year forces us to look at, and to focus attention on, the sort of Europe that we are creating. The prospect of enlarging further to the east raises other questions, not just about the east. The small states of Cyprus and Malta have applied to join. Although we cannot foresee the institutional changes that may be required, we know that the possible accession of so-called micro-states raises questions again about how many Commissioners there should be, and how many votes there should be in the Council of Ministers and how they should be organised. We clearly believe on this side of the House that, if we have the confidence and the determination to play a full part in this European Union, we can build a Union in which this House and this country can feel at home.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question put forthwith, pursuant to Standing Order No. 102 (9) (European Standing Committees).
That this House takes note of European Community Document No. 7909/92, the Court of Auditors Special Report No. 3/92 concerning the environment ; welcomes its recommendations as to how the Commission and Member States can pursue Community environmental policy more effectively, with better management and monitoring of the instruments used to put
Column 648environmental policy into effect ; and endorses the Report's call for the objectives of the Structural Funds to be pursued and achieved in compliance with Community environment policy.-- [Mr. Andrew Mitchell.]
Question agreed to.
Motion made, and Question put forthwith, pursuant to Standing Order No. 102(9) (European Standing Committees).
That this House takes note of the Presidency Report on the results of negotiations on the accession of Austria, Finland, Norway and Sweden to the European Union ; warmly welcomes the successful conclusion of negotiations with these countries ; and looks forward to their accession to the European Union on 1stJanuary 1995.-- [Mr. Andrew Mitchell.]
Question agreed to.
Mr. Nigel Spearing (Newham, South) : On a point of order, Madam Speaker. In respect of motion No. 3, you may be aware that, coming under the Standing Order, the matter of treaty accession was discussed upstairs in Standing Committee B last Tuesday. However, you and the House may not know that the Select Committee on EC legislation unanimously recommended to the Leader of the House that the important matter of enlargement be debated on the Floor of the House. The Government did not agree to that.
You may also be aware that, in matters of statutory instruments, there is often "tagging" about observations from such Committees. Is there any Standing Order preventing such "tagging" informing the House of consequences or actions such as those that I have described ?
Madam Speaker : There is no such Standing Order that would prohibit such a note on the Order Paper. The authorities of the House consider submissions for an informative note of that kind when they are made on behalf of Ministers, whose business this is. The hon. Gentleman may like to pursue his ideas with the Leader of the House.
They wish to declare that
"the Child Support Act and the administration thereof is deemed to be grossly unfair in respect to Absent Parents'."
The petition was presented to me today by seven people who had walked from the city of Nottingham to Westminster to draw attention to their plight.
The petition therefore requests the House of Commons immediately to review the system concentrating on the following points, which I shall summarise. The group is asking for some flexibility in the system which is presently in force and, more importantly, for some appeal mechanism so that people who feel that they have been treated unfairly can ensure that there is someone to listen to their justified complaint.
To lie upon the Table.
Motion made, and Question proposed,
That this House do now adjourn.-- [Mr. Andrew Mitchell.]
Mrs. Llin Golding (Newcastle-under-Lyme) : How contemptible and disgraceful it is of the Government to have so dishonoured those service men and women who lost their lives in two world wars in defence of our freedom by denying the Commonwealth War Graves Commission the money it needs to maintain memorial cemeteries and records, records which enable people to trace the resting place of service men and women whose memory they cherish. I know from so many people what comfort they have received from visiting the graves and memorials and finding them so carefully tended. The Government have not only dishonoured our dead ; they are guilty of insulting the families, friends and those who served alongside them.
I am a member of the Commonwealth War Graves Commission. I have watched with dismay the disgraceful penny-pinching activities of the Government at first hand. The Commonwealth War Graves Commission was established by royal charter during the first world war to honour and remember those who gave their lives in defence of freedom. It includes representatives from Australia, Britain, Canada, India, New Zealand and South Africa. It is funded by each of those countries by grant in aid in proportion to the number of their graves. The major contribution, of course--77.81 per cent.- -comes from Britain. A cut in funding by Britain is automatically followed by a cut from the other countries.
The commission maintains war graves and memorials in 145 countries, with 23,097 cemeteries and burial places for the 1,694,947 service men and women who gave their lives in defence of our freedom in two world wars.
Before 1988, the grant in aid was made by Her Majesty's Treasury. In that year, responsibility was passed to the Ministry of Defence. At the time, because the commissioners were concerned that their budget might be subject to defence cuts, an assurance was given that it was a purely technical matter and that the British contribution would not be subject to arbitrary cuts. Sadly, those assurances have proved worthless.
In October, Moray Stewart, the second permanent under-secretary at the Ministry of Defence, wrote to the vice-chairman of the commission drawing attention to the enormous pressure that was bearing down on public expenditure generally and the Ministry of Defence in particular for next year. Those of us on the commission were shocked when he continued by informing us that he was sure that, in the circumstances, we would agree that it was simply not realistic to assume that the United Kingdom contribution to the Commonwealth War Graves Commission could be shielded entirely from that pressure. After mentioning the so-called underspend, which I shall return to later, he added that he might well have to seek to limit the United Kingdom share of the commission's budget for next year to the order of £20 million. He understood that that would be some £1 million to £2 million below the level which the commission's staff were currently seeking. A reduction of that sort would be in line with that which was made last year.
At the finance committee meeting on 27 October, the MOD representative reported that the MOD was looking for a funding requirement of 10 per cent. less than what
Column 650was requested by the commission. On 13 December, the dreaded Moray Stewart wrote to say that he had no alternative but to seek a reduction of £1.2 million for next year. When the commission met on 15 December, Moray Stewart reported that, although the commission had reduced its requirements by £650,000--he should have said £630,000--it was still necessary for him to seek further reductions. He suggested that the increase in the working balance could be deferred, there could be a further £100,000 cut in staff and further savings of about £500,000 made in other areas to be left to the discretion of the commission's staff.
The Secretary of State has been as harsh and unfeeling. On 21 February, he told Sir Joseph Gilbert that, compared to the cuts that everybody else was taking, the £700,000 proposed was very modest, and it was difficult to believe that it could not be absorbed. That, then, is the truth of the matter--a cut of £700,000 from the British Government. When the automatic change in contributions from the other Commonwealth countries is taken into account, the figure becomes £900,000--a cut of £900,000 over and above the reduction already made by the commission.
What a mean, shabby, vicious act on the part of the Secretary of State. We have a defence budget of about £23 billion, yet the Minister cannot find all the £20,738,675--less than 0.1 per cent. of the total defence budget--that the commission has requested to care for the memory of those who died so that we might live. Those brave men and women gave their lives and would expect us to treat them with honour. What would they have thought if they had known that their sacrifice was to be repaid by that miserable, nasty, pernicious cut of £700,000 in the British grant in aid to the Commonwealth War Graves Commission ?
What is the Secretary of State's tawdry defence ? In a written reply to me on 3 May, the Minister of State for the Armed Forces stated :
"The commission has confirmed that it has no plans to cut any projects or commitments as a result."--[ Official Report , 3 May 1994 ; Vol. 242, c. 475 .]
Additionally, the Secretary of State, during the debate on the Army on 4 May, and responding to fears expressed about the commission's cut in funding, stated that he had been given
"a categorical assurance that there would be no effect whatever on the maintenance work or on the projects that the commission wishes to implement."--[ Official Report , 4 May 1994 ; Vol. 242, c. 787.] Let us put the record straight. The commission has been treated extremely shabbily by the Government. It has been felt by the commissioners--again, the Minister will know this--that the attitude of the Government has been, "This is what you will get, and if you do not like it, tough." The commission felt that it had little alternative but to accept the reduction in financial provision, but registered its strong disapproval of what had happened.
Although the commissioners accepted the level of funding allocated, they feared that the reduction exposed them to the possibility that, as the year progressed, some projects might be put at risk. They do not at this stage plan to make any specific cuts to their programme, but they have expressed grave concern about their ability to discharge their unchanging duties effectively if similar reductions are imposed in future.
The Minister must know that the vice-chairman of the commission put it very clearly to the Secretary of State that reductions on the scale proposed would put at serious risk
Column 651the ability of the commission to perform its charter duties. Those cuts can threaten many matters, including staffing standards ; irrigation programmes ; provision of adequate depots ; deferrals in structural maintenance--for example, the Menin gate ceiling needs repairing ; horticultural supplies and equipment ; and new and replacement vehicles.
I expect tonight that the Minister will merely regurgitate the bogus arguments produced by his so-called civil servant, Moray Stewart, some of which have been included in an amendment tabled by a group of compliant Tory Members of Parliament to my early-day motion 1152.
In defence of the indefensible, the Government and their lapdogs say that contributions to the budget have increased by 50 per cent. in cash terms over the past five years. Given the sacrifice of those service men and women, if those contributions had been in real terms, they would not have been out of place. Remember, they gave their lives. But the truth is that the budget has not been increased in real terms by 50 per cent., and the Minister knows that very well. If the Minister has allowed Moray Stewart to write it into his speech, he should take his pencil and cross it out now. That would be the honest thing to do, because a fall in the value of sterling added approximately 20 per cent. to costs in this period and the increase in inflation--32.3 per cent. in Britain alone--has accounted for the rest. The civil servants know that, and it may even be understood by Ministers, but they still try to throw a smokescreen over the truth. Perhaps at last they are becoming ashamed of what they have done. Another red herring that is bound to be dragged out is that a substantial surplus of £1,700,000 was carried forward from the previous year and that, because of that, no hardship will be incurred. That has been answered by the commission over and over again. When will Ministers understand that, as 65 per cent. of all transactions are incurred outside the UK in foreign currency, the commission has to be prepared to cope with fluctuations in exchange rates, wage rates and health and safety requirements ?
As the commission operates in 145 countries, many factors outside its control can affect its planned programme. Therefore, it is essential that the commission retains the provision whereby it is allowed to carry forward funds and projects from one year to another. Of the £1.7 million, £1.1 million was identified before the budget was presented in December. Therefore, that sum was already taken into account in the funding sought from the member Governments for 1994-95, and their requirement was reduced by that amount. After the budget was agreed in December, a further £600,000 was identified, but £500, 000 of that was committed to work which was being carried forward from 1993-94 into 1994-95.
The Minister is prepared to resort to any dodge, any manipulation of figures, to try to cover up what the Government have done. For example, when the Minister replied to my written question on 3 May he added the recoverable VAT figure to the grant-in-aid figure even though it had already been taken into account in the request for funding, as had also the amount of money available for carry forward.
The Government can juggle the figures as much as they like, but people will still recognise them for what they are--Ministers caught in a shameful act who will do anything, whether honourable or not, to escape from justified blame.
Column 652Let them make no mistake about this : people outside the House firmly believe that what the Government are doing is dishonourable. The people of this country know that they owe those who died a tremendous debt, and the last thing that they can stomach is the penny- pinching attitude of the Ministry of Defence towards the memorials and cemeteries cared for by the Commonwealth War Graves Commission. They and I want to see the Secretary of State for Defence showing some courage and admitting that he has acted badly. On D-day, he--unlike most of us--will have the power to do something tangible to honour those who sacrificed their lives for us. He should use that power to undo the great harm that he has done. The Secretary of State should agree immediately, as part of the D -day commemoration, to restore the £700,000 withheld from the Commonwealth War Graves Commission and allow us all to escape from the shame that he has brought on our country.
The Minister of State for the Armed Forces (Mr. Jeremy Hanley) : It is conventional to congratulate an hon. Member on securing an Adjournment debate, and I pay tribute to the hon. Member for Newcastle-under-Lyme (Mrs. Golding) for her remarkable persistence in pursuing the subject--and so she should. As she mentioned, she is a member of the Commonwealth War Graves Commission. The hon. Lady has raised a range of parliamentary questions in recent days, and she referred to some of them this evening ; she has also tabled the early-day motion that she mentioned and secured this debate. One reason why I find the hon. Lady's persistence so remarkable is that, as a commissioner of the Commonwealth War Graves Commission, she should be well placed to answer many of her own questions. Perhaps she should not have taken this opportunity to try to exploit a situation. Frankly, I think that she went way over the top in her language and accusations. I regret that, especially from the hon. Lady.
I am, however, grateful for this opportunity to set the record straight on the British Government's funding contribution to the commission in the current financial year. I hope that anybody taking sound bites of this debate will not do so without taking the balancing truth. Of course we respect the sacrifice of those who died for us. Of course we respect the misery of those who loved and lost them.
I will begin with a little history of the commission. In 1917, the Commonwealth War Graves Commission--then known as the Imperial War Graves Commission--was established by royal charter. It marks and maintains the graves of members of the armed forces of the Commonwealth who died as a result of action in the two world wars, maintains memorials to all those whose graves are unknown, and keeps records and registers.
This very House played a vital part in the establishment of the principles for which the commission is renowned--that the dead be individually commemorated by name, either on the headstone on the grave or by an inscription on a memorial ; that headstones and memorials be permanent ; that headstones be uniform ; and that there should be no differences on account of rank, race or creed. A great and moving debate on those principles took place in 1920. Burdett-Coutts, then Member of Parliament
Column 653for Westminster, argued for them with-- Gallery correspondents noted--a rare passion. He described how, after the Passchendaele offensive, an officer had shown the commission's proposals to those in his unit. The officer recalled that
"the uniformity of design was what appealed most strongly to all. That the fellowship of the war should be perpetuated in death . . . was the unanimous and emphatic desire of everyone, officer and man." Coutts painted two scenes :
"On the one hand, a cemetery, we will say, of 50 graves with half-a-dozen of these special monuments standing up conspicuous among the rest . . . On the other hand, there is the picture that portrays all alike--great and lowly, peer and peasant, rich and poor, learned and ignorant, raised to one supreme level in death by common sacrifice for a common cause. I cannot doubt which of those two pictures you will choose."
Not all agreed. Some advocated that those who had the means should be able to repatriate the remains of their kin or erect memorials and headstones of their own choosing to them in situ. It was, fittingly, Winston Churchill who closed the debate, with a ringing appeal for the principles of the commission's work.
Those principles won the day and have given us the commission's characteristic cemeteries of lawn and trees, with rows of headstones in narrow, planted borders. It is hardly surprising that the subject of the commemoration of our dead of two world wars remains charged with emotion. Let me say at this stage, for the avoidance of any doubt--even that which may be occasionally maliciously engendered--that for more than 70 years and another world war on, the British Government remain as committed as ever to funding the magnificent work of the Commonwealth War Graves Commission, which now extends to graves and memorials in 145 countries, covering well over 1.5 million individual commemorations.
I turn now to the funding arrangements for the commission, which is, after all, the principal reason for the debate. Funding is, in the main, provided by member nations--Australia, Canada, India, New Zealand and South Africa-- in addition to the United Kingdom. It is based on the respective number of war dead, so the United Kingdom pays almost 80 per cent. of those national contributions. I believe that that arrangement is totally fair and has stood well the test of time. I can confirm--again, for the avoidance of any doubt--that the British Government have no wish to change the formula.
The United Kingdom's contribution is made in the form of a grant in aid which, since 1988, has been funded from the defence budget. Previously, the grant was made directly from the Treasury. Over the past five years, to the end of the financial year 1993-94, the commission's total budget, and therefore the United Kingdom's percentage contribution to that budget, has- -as the hon. Lady said--increased in cash terms by 50 per cent., from £20 million to £30 million.
I stress the words "in cash terms", as the hon. Lady did. She, however, then tried to confuse the issue by using the phrase "real terms". I do not say "real terms" ; I suggest that there is no prima facie case of persistent and chronic underfunding, even if we take foreign exchange rates or inflation into account.
The Ministry of Defence is, of course, accountable to Parliament for the determination and payment of the grant in aid, for the conditions attaching to that aid, for
Column 654maintaining the commission's observance of those conditions and for the steps taken to satisfy itself that the commission's system of financial management and control is sufficient to safeguard public funds. In that connection, it may be appropriate to mention--I know that the hon. Lady has done so elsewhere--the review of the commission conducted by the MOD's management services organisation--its team of internal consultants--in 1993.
The terms of reference for the review were drawn up in consultation with the commission. The review is a regular affair undertaken about once every five years, and is fully provided for in the financial memorandum agreed between the Department and the commission which governs the payment of the grant in aid. The review team interviewed staff from the commission and spoke to commissioners, including those from contributing nations or their representatives. The team discussed its findings, as they emerged, with representatives of the nations, whom they found very supportive.
Not surprisingly, the team's report concluded that the operational aspects of the commission's work were extremely well run. Cemeteries are maintained efficiently and effectively, and efficiencies have been achieved through improved technology and working practices. In dealing with the commission's head office, however, the report drew attention to--among other matters-- the scope for greater use of office technology, more efficient working practices, less hierarchical staffing procedures and a financial programming system that would be more responsive to the requirements of the commission. The recommendations concerning financial planning drew on the best of current management thinking, and, I am sure, could not be considered unreasonable or radical.
The commissioners themselves have a duty to be satisfied that the commission's management systems and administration are efficient and robust enough to ensure that the funds provided by member Governments are used to good effect. The review was certainly acknowledged by most commissioners-- especially those from contributing member Governments--to have been very useful in providing the necessary reassurance that the commission's operational activities are carried out in a way that gives value for money.
The hon. Lady's main concern was the commission's funding in the current financial year. The financial memorandum agreed between the commission and the MOD states that each year the commission will provide draft estimates for the forthcoming year, in sufficient detail to ensure that the commission is managing its resources efficiently, effectively and economically.
In considering grant in aid for 1994-95, the MOD had to take into account-- among other things--the record of the commission's administration in the spending of funds that had been allocated to it year on year. It also had to examine the grant in aid arrangements, and ensure that they allowed for funds not spent in one year to be carried forward to the next. In recent years, there has been a tendency for the surplus carried forward at the end of each year to be larger than that predicted at an earlier point in the year, when the following year's contribution must be finalised. Of course that must be taken into account. Let me give an example : when the budget for 1994-95 was first considered, a surplus carry forward of some £900,000 at the end of 1993-94 was predicted ; that has since almost doubled.