House of Commons Hansard Debates for 23 Nov 1994

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facilities that industry requires. The petty carping about the amounts spent by embassies on entertaining should stop. In 30 years' connection with the foreign service, I have never yet met an ambassador who wanted to entertain for the sake of it. All ambassadors entertain to support some national cause; the last thing they want to do is indulge in private entertaining for its own sake. They are only too glad to get a night off. Such carping does us no good, and does infinite harm among people who understand such things. We must support that Foreign Office policy.

We will be able to discuss Europe on Monday. We have already had a typical outburst tonight in which an attempt was immediately made to falsify the figures. The Chancellor has already cleared up the amount that goes to Europe.

Mr. Marlow: Will my right hon. Friend give way?

Sir Edward Heath: No, I am sorry.

Mr. Marlow: What was the falsification?

Sir Edward Heath: My hon. Friend can read Hansard tomorrow. We are hypocritical, and that is what infuriates our fellow members of the union. We damn extravagance and waste, but those partners then read the British press and see that the Government put £40 million into a private hospital which has gone bankrupt, so the £40 million has been lost.

Mr. Gallie: Will my right hon. Friend give way?

Sir Edward Heath: No, I am sorry. We can discuss the European Union on Monday, and after that we can discuss the Budget. I conclude by congratulating the Chancellor. He has been very steady. I hope that he will remain firm, because that is how he will best produce the results for us.

6.9 pm

Mr. John Cummings (Easington): I am pleased to have caught your eye, Mr. Deputy Speaker, in order to make a brief contribution to this afternoon's debate on the Gracious Speech.

I am also pleased to follow the right hon. Member for Old Bexley and Sidcup (Sir E. Heath). During the miners strikes of 1972 and 1974, which we fought bitterly, I never imagined in my wildest dreams that I would face the right hon. Gentleman across this Chamber. The battles of 1972 and 1974 were fought honourably and the miners gained tremendous benefits, one of which was a free pit helmet and free pit boots for the first time in our lives. I shall discuss that later when I deal with my local economy.

Much has been said this afternoon about the global, European and national economies, but to the people whom I represent the most important is the economy in the district of Easington. Since 1979, we have lost about 15,000 jobs and 10 collieries have closed. We have seen the demise of the coal mines and of the Peterlee and Easington coal mines development corporation, the only development agency in the area with direct access to central Government funds to build and manage huge industrial estates. It succeeded in attracting some 9,000

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jobs into the area. Unfortunately, the Government, in their so-called wisdom, decided to abolish the corporation six years ago. In the past 18 months, Ministers have proposed the establishment of 235 acres of enterprise zone within Easington district. During that period, we have seen the closure of collieries at Easington, Dawdon, Vane Tempest, Seaham, Murton and South Hetton, but no decision has been made about the enterprise zone. I appeal to the Minister to make a determination immediately. Our superb east Durham task force, the county council, the district council and East Durham development agency have fine teams of men committed to regenerating and strengthening the local economy.

Vane Tempest colliery closed in 1992. A report prepared by the Coalfield Communities campaign, an all-party organisation, stated: "The survey carried out at Vane Tempest shows that 52 per cent. of the men are still out of work over a year after the closure was announced. Only 28 per cent. are in paid employment or have set up in business for themselves. Moreover, the majority of those men who are now working have experienced a drop in their earnings, often a very substantial one. Only a handful of the men who left Vane Tempest have found better paid work outside the mining industry. But more than 90 per cent. of former miners are worse off. The picture is not therefore a rosy one for the local economy around Vane Tempest." A "substantial drop" in wages means a drop of between £50 and £75 a week. That alone is having dire consequences on local trade, shopping centres and shops not just in Seaham, the location of Vane Tempest, but throughout the Easington area.

To regenerate the economy we must quickly get to grips with disposing and reclaiming the hundreds of acres attached to redundant colliery sites. Some 263,000 tonnes of coal have been stocked on a site in Easington. They are surrounded by several hundred former colliery houses that are in a deplorable condition. The miners were prepared to live with coal heaps on their doorsteps so long as the mine was providing work and reasonable wages to allow them to live a reasonable existence. Now, however, the mines have gone but the coal stocks and deplorable colliery housing are still there. Unless we are prepared to tackle the problem of decaying housing, coal heaps and a decaying local economy, I fail to see how we can attract investment into the area.

The area has many qualities. We have a fine, skilled work force, who may require retraining to prepare for modern industry. We have good means of communication, such as the east-coast railway, a dual carriageway and international airports to the north and south of my constituency. But unless we are prepared to tackle decay from within, I doubt whether we shall attract investment.

I question the value of jobs that are coming into the area. For example, the terms of engagement for temporary workers--packers with a minimum pay of £1 an hour--employed by ABC Contract Services Ltd of 5, Great Queen Street, London, which has a plant in Newcastle and is now acting as a third party providing labour for modern industrial units in Peterlee, say:

"Unless specifically agreed to the contrary, The Temporary Worker is not entitled to payment from the Employment Business or its clients for time not spent on Assignment whether in respect of holidays, illness or absence for any other reason."

In 1994, those are the terms and conditions for workers in sophisticated industries located in Peterlee. Former mine workers, who have given a lifetime's work to the industry

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and the country, must expect a minimum wage of £1 an hour. Conservative Members cannot manage on £31,000 a year with a clutch of directorships thrown into the bargain and react vehemently against Labour Members who want a minimum wage of £4.05. We now have an example of a minimum wage of £1 an hour, and it is not unique. We must consider the morale of a work force that has always had the dignity of real jobs earning real wages in a real industry. That matter must be dealt with if we are to have a buoyant economy in the north-east.

I recently read a report in the press, which may have been leaked by Ministers, that the Government intend to examine the old workmen's compensation legislation of 1948. I shall read a letter from a gentleman who, in 1946, when he was 14 years old, lost a leg at Vane Tempest colliery. It says:

"My . . . colleagues took a pithead collection and raised six pound five shillings and sevenpence"--

there were no large sums before the workmen's compensation legislation.

"I never at any time received a lump sum from the coal owners or British Coal insurance. You may recall (or have been told) men would lose life and limb and receive nothing prior to the National Insurance Act . . . I make no claim to a lump sum nor do I wish to do so. I have no axe to grind but never the less I do feel that the `Old cases workmens compensation' are a forgotten cause."

He is not alone in being a forgotten cause: 5,000 people in the Easington constituency are dealing with Peterlee and Seaham officers in relation to workmen's compensation. I am sure that the figure can be multiplied many times over throughout the country.

If the Minister wants a buoyant, mobile, motivated, skilled work force, the correct ingredients must be present to enable them to respond positively. Ministers should not seriously contemplate removing any aspect of the workmen's compensation legislation. The ordinary operative will find it beyond his means to prosecute a case in a civil court. I therefore ask Ministers to consider that very carefully.

In conclusion, I have enjoyed making a brief contribution to the debate on the Loyal Address--perhaps not very gracious to the people whom I represent --but perhaps I shall have another bite of the cherry when the Chancellor presents his Budget next week.

6.21 pm

Mr. Anthony Steen (South Hams): Having witnessed the amazing footwork of the Chancellor and enjoyed the tour de force of the former Prime Minister, my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath), it is embarrassing to have to make a speech, but I shall not sit down. I shall make one or two observations about the Loyal Address.

The Loyal Address makes it clear that the Government believe that the economy is strengthened by privatisation and that they want to increase competition. I was confused, therefore, about why they confined competition and privatisation to the gas industry, rather than finishing the job in the aviation industry.

There are three legs to the aviation industry--airlines, airports and airspace. The Government privatised British Airways and got the best out of it, after which they privatised the airports and got the best out of them. They failed to privatise the Navigation Air Traffic Control Service to obtain the best from airspace management.

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NATS has a turnover of £500,000 million a year, employs 5,500 people and has spent £350 million on its new traffic control centre in Hampshire.

Although NATS was not ready for privatisation in the 1980s, when it had out -of-date organisation and was riddled with restrictive practices, today, thanks to the charismatic chairmanship of Christopher Chattaway and its director general, it is ready to benefit from the involvement of the private sector. We shall be able to give more incentives to staff, achieve better productivity from them and manage airspace more efficiently to absorb the capacity that will inevitably increase as new terminals are built.

Too often, nationalised industries become a haven for mediocre management who are protected from the disciplines of the marketplace, whereas in the private sector the ethos is one of achievement. If shareholders are not happy, the management goes. By delaying the privatisation of NATS, which is not mentioned in the Gracious Speech, the Government are holding back the full potential of our airline industry, which is one of the most successful in Europe. By keeping one facet in the public sector, they will reduce available airspace and, as a result, slow opportunities for expansion.

The crucial lubricant for the airline industry is the privatisation of NATS. In turn, money for additional investment will not be forthcoming because NATS is still in the public sector and is confined by Treasury rules on the public sector borrowing requirement.

You may ask, Mr. Deputy Speaker, about the relevance of that to the country. It has serious economic consequences. Heathrow is the hub airport of the world; the importance of allowing it to develop and expand is all too evident. However, because of our tortuous planning processes, the fifth terminal will not be on stream for a decade or more to handle the ever- growing traffic, which instead will be diverted to Schipol in Holland or Charles de Gaulle in France. Holland and France have recognised the significance of airports to economic regeneration, because airports attract not simply more tourists but highly important imports and exports of cargo. No wonder France and Holland have special arrangements for planning inquiries and funding arrangements for airports.

Britain will maintain its share of international air transport only by ensuring that minority pressure groups, who often have little interest in the economic regeneration of an area or the nation, are not given too much influence to them to disrupt and delay the planning process. Although environmental damage and noise nuisance are important, they should not be allowed to become buzz words for extended delay and procrastination.

I think that we all accept that there is a physical limit to the size of airports such as Heathrow. No one wants to build a third runway in Harlington or Staines but, in exchange for a commitment not to go beyond the present boundaries, the planning process must be relaxed so that new terminals can be built faster and use can be made of the increasing number of slots and movements that new technology will make possible. Let us not forget that the airlines have already made great investments in quieter aeroplanes, but, just as railway stations are noisy places and living near motorways is not peaceful, we must accept some noise footprint around the perimeter fences of airports. Often, people who buy homes near airports work at them too.

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Why are the Government, who are committed to competition, committed to privatisation and committed to freeing up the market, not privatising the public utility, NATS?

I have identified three culprits. First, no doubt British Airways had something to do with it. It has done a complete U-turn from backing the idea to absolute disapproval, probably because it foresees new slots arising from deregulation reducing its dominance and increasing the competition. No doubt it is especially mindful that, on routes where British Midland Airways has a foothold and has competed, prices have tumbled by as much as 25 per cent. I must declare an interest as I have been involved in British Midland for the past 12 years.

Routes from Glasgow, Edinburgh and London are among the cheapest air miles in the world. We all know that, where there is competition, prices come down; where there is no competition other than from other state European airlines, one will find that fares remain unnecessarily and uncomfortably high. Competition reduces air fares. By not privatising NATS, air fares are kept up because independent airlines cannot get the slots to compete with the main carriers. In addition to British Airways not wanting to loosen the slots, the air vice marshals are opposed.

Dr. John Marek (Wrexham): Will the hon. Gentleman give way?

Mr. Steen: I shall give way in a minute.

The air vice marshals of the Royal Air Force are involved in the management of NATS. They say that the Royal Air Force should not be prejudiced as its slots would be at risk. The RAF has 5 per cent. of this country's airspace. Surely some arrangements could be found to accommodate the air marshals.

Finally, a chorus of voices uses the deregulation buzzword "safety" and believes that things are safe only when they are in the public sector. British Airways is a privatised airline that is very safe and has a good track record. Those responsible for safety at airports are even more vigilant following privatisation. The fact that something is privatised does not mean that it is less safe.

We all know the benefits to this country's economy of privatisation and competition. We all know how consumers have benefited. The Government need to free the third leg of the aviation tripos and allow the airline industry to be liberated.

6.30 pm

Mr. Jim Cunningham (Coventry, South-East): I was interested in the remarks of the hon. Member for South Hams (Mr. Steen). I do not know whether he has lived near an airport, but there is an airport in my constituency. One of the biggest problems with all airports is noise. The hon. Gentleman did not touch on that subject.

I also understand that the Secretary of State for Transport has promised to introduce legislation that could go a long way towards controlling noise. I should be interested to know when he will stop procrastinating and bring the legislation before the House so that we can debate it. The control of airport noise does not necessarily mean threatening competition. The bulk of the noise comes from old piston engine aircraft. The hon. Member

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for South Hams should take a good look at airports before he says that we should let private enterprise rip and should not worry about anyone who is kept awake all night by noise. The Secretary of State has not even provided grants outside London so that people can insulate their homes from aircraft noise. I thought that the hon. Member for South Hams would make an issue of that, but he chose to talk about something else. His fifth problem in relation to airports is the hon. Member for Coventry, South-East--me.

Listening to the Queen's Speech, I wondered whether perhaps, instead of increasing Ministers' salaries, they should be cut. This year's Queen's Speech and many others have been about Ministers taking less and less responsibility for their actions and those taken on their behalf. Today, if I ask a Minister a question about an outside quango, he or she refers me to a quango. The quango has to answer, not the Minister, but the Minister proposed the legislation in the first place--a sorry state of affairs. Perhaps we do not need so many Secretaries of State and Ministers, and could save the taxpayer some money by reducing the number.

I was disappointed that, in his speech, the Chancellor only touched on the general agreement on tariffs and trade and Pacific rim countries. I take GATT seriously, as I do the fact that, as a country, we must be involved in the Pacific rim trading area. We have not received much information from the Government about those two specific subjects.

In relation to those two issues, I am concerned that it is not clear how the American Senate and Congress will react. There have been many signals about GATT and the Pacific rim agreements from the Republicans and it seems that they may well start to hold up the agreements. One must wonder exactly what that would mean for Britain's trading position in those areas. It is vital for the Government to give us more answers to the questions on that subject and to monitor the position closely.

Another element of the Queen's Speech that gave me cause for concern was the hint that public expenditure was to be cut. The Government may think that that is wonderful, but I do not. Will local government once again be used as whipping boy? Will the Government knock local government about? They can certainly cut local government expenditure by deducting grants to it. If the Government do that this year, more and more services will be affected. I have no doubt that the Government will say that they have not yet prepared the Budget, so we shall have to wait and see what happens when it is announced. Over the years, the Government have subtly cut local government expenditure. They have cut about £300 million, one way or another, from Coventry city council over the past 15 or 16 years. There was not much on that subject in the Queen's Speech--only a small hint of what might happen. When we try to push for more information, we are told that we had better wait until the Budget, when all will be revealed. That will be interesting.

Last Monday, colleagues and I presented a petition with a quarter of a million signatures to No. 10 Downing street. Many people from the Coventry region signed that petition, which referred to the public's revulsion at increases in VAT on fuel. I am sure that if Conservative Members have taken soundings in their constituency associations or surgeries, they will know that the public want the second phase of VAT dropped, as they did the first.

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Over the weekend, Conservative Members were saying in the press that the Government's financial objectives had been achieved and they should perhaps consider dropping the second phase of VAT. I hope that those Conservative Members will use their influence with the Chancellor to persuade him to drop the second phase. There is no justification for it--the Chancellor keeps saying how well he is doing in balancing the budget and how wonderfully the economy is doing under his stewardship.

My city has a major industrial base, which has been eroded. Coventry has two large aircraft factories--in fact, it has one and a half, as one has been run down. When I talk to people involved in the aircraft industry, it becomes clear that their concern is that money and Government assistance for research and development are not forthcoming. We do not need to talk about the aircraft industry alone but can consider the broad spectrum of British manufacturing, including the car and electronics industries and other technologies. One of the biggest cost factors, apart from labour, is research and development. I was disappointed that that subject was not mentioned. It is interesting that the richest people in our country pay only 8 per cent. of total VAT, whereas the poorest pay about 20 per cent. So the rich do very well and are well protected and, once again, the poor are penalised.

I am sure that many hon. Members would agree that pensioners who have taken out private pension schemes--there are about 6 million pensioners--have every right to be worried. The proposals at which the Government have been hinting notwithstanding, pensioners are still concerned about the lack of accountability for such schemes, which have not delivered what was promised in the late 1980s when these people left the state earnings-related pension scheme to join private pension schemes. There have been too many scandals and it is about time the Government did something to end them.

I note that the Government have been using underhand methods when it comes to the so-called assistance for poorer families and pensioners who have to pay the increased VAT. That help is taken into account in DSS calculations of their grant eligibility. In that way, the Government give with one hand and take away with the other. When hon. Members supported the legislation that set up the Child Support Agency, they intended to go after absent parents who never paid a penny for their children. I shall not rehearse the arguments against the CSA tonight. Suffice it to say that all the fears that were expressed about it have now come home to roost. The Government publish figures to show how successful the agency is, but once again it is the innocent people who honoured their court commitments to their families who have discovered that they will be the ones to be penalised.

As a matter of urgency, the Government's proposals to change the operation and formulae of the CSA should be brought to the House, and parliamentary time must be found to debate the issue. It is no good condoning press leaks stating that the Cabinet have been discussing this or that idea for the CSA. Why do not the Government show a little heart and introduce legislation as soon as possible to stop the misery that they are inflicting on first and second families alike?

The Queen's Speech also failed to mention the problem of homelessness and how to deal with it. The Government seem to be hinting that they will do something to control

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drugs, but many young people in Coventry in shelters such as Norton house, run by the Cyrenians, now rely on charities to raise large subscriptions because the Government have steadily reduced their grants in recent years. While the problem has multiplied, grants to deal with it have been reduced.

I have only skimmed over the surface of some of the omissions from the Queen's Speech. The Government may claim to want a steady ship and no more controversy: "Let's see how the economy develops." That may be the Government's view, but while they await events, events may overtake them. They must realise that, by their inaction and failure to put matters right, they are inflicting more and more hardship on the most vulnerable people. They must reconsider their so-called steady course and introduce some humanitarian legislation, just for a change, based not on greed but on human need.

6.43 pm

Sir Ivan Lawrence (Burton): I do not want to enter into a lengthy argument with the hon. Member for Coventry, South-East (Mr. Cunningham) because I have the honour of serving with him on the Home Affairs Select Committee. Politically speaking, he is decidedly an improvement on his predecessor. I should point out, though, that the VAT compensation scheme does protect pensioners and poorer households, to the extent of £2.5 billion. Added to that are other benefits, such as cold weather payments and energy efficiency schemes, to say nothing of granny bonds, and so on; thus are the Government protecting people who would otherwise have to pay more VAT on fuel. I should have liked to tell the hon. Member for Easington (Mr. Cummings)--he is not here now--that, much as I was moved by his speech, I hope that he will not mind my observing that if the president of his union, the National Union of Mineworkers, had not led the miners into a long and crippling strike, demand for coal would not have transferred to gas and the six collieries around Easington about which he was worried might still be open today.

Mr. Etherington rose --

Sir Ivan Lawrence: I was directing my observation to the hon. Member for Easington. If the hon. Gentleman would like to intervene on another topic later, I shall certainly take his intervention. I came into the Chamber because there were rumours of a rare sighting of the hon. Member for Dunfermline, East (Mr. Brown) in the Lobby. I hurried in to hear so great an intellectual expounding his post-neoclassical symbiotic relationship endogenous growth theory. I was sadly disappointed. Apparently, his speech about Labour's economic policy and Labour's pledges is to be made outside the House. It is perhaps not too cynical of me to suppose that the reason for that is known as Brown's law, which the hon. Gentleman expounded for the first time on the "Today" programme 10 months ago. When challenged about an absurd pledge, he answered:

"Unless you can quote me chapter and verse about commitments made in the House of Commons, then they were not made."

So we shall no doubt hear all sorts of commitments in tomorrow's economic speech, but they were actually not made because the hon. Gentleman did not make them in the House.

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I hope that the Chair will allow me to deal with that part of the Gracious Speech which declares:

"My Government will play an active part in tackling drug misuse, drug trafficking and organised crime at home and abroad." Drugs and organised crime have become so serious in some countries that they pose a threat to economic stability as well as to democracy and political stability.

Most people in Britain today are rightly worried about law and order and are finding it a little difficult to accept the truth: we are at last beginning to reduce crime. I think it particularly alarming that most people who feel so strongly about crime do not have the faintest idea of the extent or potential of the organised crime that is coming to us across national boundaries. As George Staples, head of the Serious Fraud Office, told an international symposium on organised crime held in Cambridge in September, three of the fraud cases in his office at the moment exceed by several hundred million pounds each the entire proceeds of burglary in England and Wales in one year.

Most fraud is simply never investigated and its perpetrators are never caught, let alone brought to trial and convicted. Millions of pounds can be moved out of one country's jurisdiction to another's in the twinkling of an eye along the electronic highway, without any police force being aware of how, where, why or when it happened--until long after anything can be done about it. Many international banks have investigators running around like headless chickens, yet they are keeping quiet about what is happening lest confidence in those banks be diminished. It is clear, therefore, that we face a very serious problem.

It is not just the computer and modern technology that are to blame. International barriers have broken down in other ways. There is easy international travel, burgeoning international trade, and the disintegration of the communist-centred world. That results in vulnerable, confused systems in small new countries which seek a fast track to economic success, stability and recognition. There is a growth in gangs which exploit the vulnerability of confused systems in which there has been a breakdown of law and order. We do not know how many of the 2,000 banks which, I am told, have been set up in Russia are properly supervised and controlled.

We can add to that the spread of the drugs culture which, through money laundering, is responsible for much international economic crime. It is almost impossible to be too cataclysmic in one's assessment of the potential for international crime.

Massive drug addiction is causing terrible human suffering, but we must also consider the financial aspect of such a drug culture. In Bolivia, the total profit from the illicit sale of 56,000 tonnes of coca products is $750 million a year. Peru produces 60 to 75 per cent. of the world's entire supply of cocaine, which yields $1,000 million a year. Colombia, the world's main processor of cocaine, yields profits of $300 million. In those countries, most of the total exports and gross domestic product are drug related. A third of the best agricultural land is owned by drug barons, who have private armies, form their own political parties and use terror gangs to intimidate politicians, security forces and judges, and operate by bribery and murder.

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By the time the drugs are processed and distributed, the world value of the cocaine trade alone is put at several hundred thousand million US dollars. That is as much as the entire gross national product of countries as big as the United Kingdom. With that money, land is bought and developed, factories are bought or constructed and businesses, including banks, are set up to process and launder the money. It is invested in legitimate businesses where it grows to become a significant part of national economies.

I have not so far mentioned the organised crime in the countries of transit such as Argentina, Brazil, Chile, Ecuador, Paraguay and Venezuela where processing takes place and drug consumption grows and destroys young lives. I have not mentioned the United States, where 5 million people use cocaine and crack, or the Caribbean. Some 80 per cent. of the heroin seized in Britain comes from south-east Asia--the golden triangle of Burma, Laos and Thailand, or from the golden crescent of Afghanistan, Pakistan and Iran.

There are millions of opium and heroin addicts. There are 2 million heroin and 1 million opium addicts in India. Pakistan has 1 million heroin addicts and there are 2 million in Iran. Other centres are in China and Hong Kong. Then there is the herbal cannabis of west Africa and Jamaica and the cannabis resin of Lebanon and Morocco. Millions of addicts and billions of dollars are being created by drug trafficking operators who are looking for financial systems to infiltrate, Governments to buy and economies to undermine. It has been authoritatively estimated that at least five countries are known to be under the control of their crime syndicates, and that others in eastern Europe and elsewhere are becoming sitting targets for future attack. Some of that activity is bound to come our way. Already, we are told that 50 to 60 per cent. of all crime in the United Kingdom is drug related. Some people even want to legalise cannabis, and that would lead to more young people getting the drug habit. As Governments control supply and demand rises, even more gangsters will reap the rewards of drug trafficking. It is a relief to us all that the Government have set their face against any move to legalise drugs.

Although drugs are certainly the largest field of activity of organised crime in the United Kingdom, there are many others: the dealing in and supplying of firearms, the theft of cars and lorries, the smuggling of illegal immigrants, forgery and counterfeiting of currency, the pirating of goods, the theft and disposal of works of art, illegal gambling, prostitution, extortion, blackmail, protection rackets, benefit fraud, computer fraud, credit card fraud, fraud against the European Union budget, bootlegging, tax evasion and violence in support of those activities and terrorism. Whatever else we know of those crimes in Britain, we know that by their very nature they will be substantially under-reported.

The Select Committee on Home Affairs is looking into organised crime, and public evidence to the Committee has shown that the nature of organised crime in the United Kingdom has changed. There is no longer a British "Mr. Big"; nor are there large gangs of domestic organised criminals. Now our gangsters are the tentacles of international organisations.

Much of the United Kingdom's serious crime is based on overseas cultural or ethnic groups such as the mafia and the Jamaican and Caribbean yardies who distribute

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drugs, employ violence and set themselves up as role models for the young. The Chinese and Vietnamese triads are involved in drugs, fraud, extortion and intimidation. There are the Colombians, and I have been told that there are about 40,000 illegal Colombian immigrants in Britain, most of whom are connected in some way with the drugs trade. There are Japanese, Turkish and Kurdish gangs and middle east terror gangs. Only last week the Jewish community was warned by the police to take extra care, even though a middle east peace settlement is in the making.

Now there are eastern European gangs. The national criminal intelligence service told the Home Affairs Committee that up to 40 per cent. of Russia's GDP may be controlled by organised crime. Mr. Giacomelli, the director of the United Nations drugs commission, told us that law was breaking down in Russia and that countries around it were threatened. That has spread to Germany, and we were told that there are already about 200 money laundering cases with Russian connections. An estate agent has said that a significant number of houses and prime sites in London are bought using Russian money. Much of that international activity is facilitated by our still tolerant immigration laws and, of course, by the 20,000 to 40,000 refugee asylum seekers who come to this country every year or who seek asylum when their studentship expires.

How are we to control crime? We educate, or we should, those who are most susceptible to infiltration or attack. It was heartening to see in today's issue of The Daily Telegraph an article about an education committee that invited an ex-junkie to tell sixth formers about the terrifying consequences of taking drugs. We can prevent crime by stimulating awareness, vigilance and close monitoring. We must develop our means of gaining intelligence about drug activities through international co- operation and perhaps by changing the law to allow greater access to tax records.

We target organisations and individuals who are known to be at criminal work. We bring offenders to trial where there is sufficient evidence, convict them, if we are lucky, and deprive them of their assets. We should impose deterrent sentences as well, because depriving such people of their assets is not enough to deter them. They will just try again.

During all that, we co-operate with all the international agencies using all the international conventions--with the United Nations drugs control programme, the G7 financial action task force, the chemical action task force and the European Union ad hoc working group on organised crime. We co -operate with Interpol, Trevi, CELAD, MAG--and with Europol, when it comes about--and with individual countries sharing our problems. All that is good, necessary and likely to prove helpful.

The one blot on the horizon of effective international co-operation and national control, the one positive obstacle to our campaign to control international crime, would seem to most of us here in Britain to be the proposed dismantling of formal border controls in accordance with the Single European Act. That Act, as everyone knows, amends the European Community treaty on measures to establish a internal market.

On the face of it, anyone from a European Union country can come to the United Kingdom without check, bringing goods without check, providing services without check and using capital without check. Anyone who has

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managed to get into a European Union country from outside Europe and become a citizen can also do those things.

On the face of it, the Single European Act drives a coach and horses through all the necessary preventive controls on potential economic crime coming into Britain. The consequences to us are too horrific to contemplate. Already, we have reduced customs checks on persons and goods travelling between member states and entering the United Kingdom, hence the blue channel at our international ports of entry.

We have to ask whether and to what extent this concession to the aquis communautaire is making crime prevention potentially more difficult for us. In his evidence to the Select Committee, Mr. Neil Dickens, the national co- ordinator of the Regional Crime Squad, thought that it had, and that international criminals from outside the European Union--never mind those within it--had only to enter the European Union at its weakest part to move freely around as they wish.

Of course the Government has retained some important defences and I welcome that. We do not concede that the Single European Act requires any reduction in immigration controls. We argue sensibly that we retain the right to require inspection of the status of all persons entering the country, whether or not they are from another member state. As we have the right to control entry by non-EC nationals, we must be able to see whether they are genuine EC nationals by inspecting them.

We also argue that the qualifying words of article 7a--that the free movement of persons, etcetera, should be in accordance with the provisions of the treaty--mean that the other treaty articles allow us to exclude persons or restrict the export or import of goods where public order, safety or security are threatened.

There is also a general declaration attached to the Single European Act which gives member states the right to take such measures as they consider necessary for the purpose of controlling immigration from third countries, combating terrorism, crime, the traffic in drugs and illicit trading in works of art and antiques. We retain the discretion to apply such measures as we consider appropriate. Having said all that, it is clear that a majority of our European Union partners take a literal interpretation of article 7a and want nothing less than the complete abolition of internal border controls, although they are prepared to allow some compensating measures. The European Parliament has started formal legal action against the European Commission over its failure to ensure that we dismantle all our border controls, although that case is unlikely to be heard until the latter part of next year, and I understand that we are intervening to put our case.

I am sure that the British Government are quite determined to defend our frontier controls. That is because, unlike the rest of the European Union, we are a island, we do not have continuous borders with other countries and our borders are themselves a control. I hope that the Government will continue to hold out against such intervention in our protection because I am sure that that would be consistent with the wishes of the people whom we represent. That is why we have not signed the Schengen convention. We believe that border controls are

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more effective than any internal checks, even if we had compulsory identity cards, which we do not. The Government must not weaken in that resolve.

Regardless of the argument about border controls, even closer co-operation, particularly with our European partners under the third pillar of Maastricht, title VI, which the Home Affairs Select Committee monitors, is absolutely vital if we are to continue to contain the international crime wave which otherwise will come to us.

I know only that if the threat of organised international crime is anything like that which I have supposed it to be in the course of my remarks, it is absolutely vital that we do not erode any of our powers to keep out criminals, illegal immigrants, drug traffickers and terrorists and that we ensure that the external frontiers convention, on which we are working with our European Union partners, is an effective weapon to protect our borders.

Our free society is under sustained attack. We must not be defeated by technology or by unacceptable laws that bind us and are imposed on us by others. I, for one, do not accept that crime is the necessary price we pay for a free society and I hope that everyone in the House and the Government agrees.

7.6 pm

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