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We all hope that the Union will enlarge on 1 January next year to include Austria, Sweden, Finland and, we hope, Norway, although the referendum this evening may point otherwise. We do not yet know. Again, we think that it is wrong to anticipate the extra resources that would be brought in by the new member states. If and when some or all the states join on time, amended budgets will be required. The hon. Member for Durham, North-West (Ms Armstrong), who leads for the Opposition, raised the issue of agricultural expenditure. The Government are certain that the agricultural guideline must not be exceeded. To remind the House, it is a feature of the existing budgetary arrangement that expenditure on agriculture cannot rise by more than 74 per cent. of the growth in Community gross national product. Therefore, the proportion of the budget contributed to agriculture falls through time. That is a very effective discipline. Naturally, some member states and some interest groups within member states would like that guideline to be exceeded. When the 1994 budget was discussed, there was evidence that the guideline was being breached. However, I am happy to report to the House that it is likely that there will be an underspend on agriculture in the current year.

I am aware of comments made in this debate and the earlier one about agriculture and common agricultural policy reform in general. I can only repeat that no Government have worked harder or more consistently for sensible reform of the CAP than the present one. The MacSharry reforms, which were agreed in 1992, will gradually reduce the level of producer prices. That will bring relief to consumers throughout the European Union. The reforms will also reduce the problem of surpluses and gradually narrow the gap between Community agricultural prices and world prices. Indeed, the gap has already narrowed substantially for commodities such as wheat.

Ms Armstrong: I wonder if the Minister will help us by explaining why, when the Council agreed to spend to the guaranteed level in agriculture, the Parliament felt that it was possible to budget for an underspend lower than the level to which he referred, but the Council said no and wanted spending to go right up to the level?

Mr. Heathcoat-Amory: As I have explained, the position of the Government is that agricultural budgetary expenditure should be set at the guideline. A great many interest groups, particularly in other member states, believe that that is an almost ferocious discipline which is likely to be exceeded. We say that expenditure must be accommodated within revenue and that revenue cannot accommodate all expenditure.

It is perfectly true--I think that this is the point to which the hon. Member for Durham, North-West alludes--that the European Parliament consistently tries to bring down agricultural expenditure, over which it does not have final control, not, I am afraid, to save money for the taxpayers of the European Union, but to spend any money saved from the budget on its own projects on the non-obligatory side of the EC budget-- items such as internal expenditure, aid, research and development and other categories.

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Other hon. Members mentioned fraud. I do not need to repeat how seriously the Government take that issue and the more general one of the need for financial discipline and an end to the all too prevalent financial mismanagement of some sectors of the budget.

That is achieved only in part by spending more money on anti-fraud activities. The right response to a problem is not always spending money on it. It would be best to build better preventive measures against fraud into the structures of the Community--clearer legislation, more transparent regulations and pre-expenditure checks. We have already ensured that the new regulations governing structural and cohesion fund expenditure contain requirements for value for money and better monitoring and scrutiny.

In answer to the question whether the United Kingdom takes up money available for anti-fraud activities, yes we do, but not simply because the money is available. We do so only where we believe that there is demonstrably added value. It would not be sensible to take already well- trained customs officials off duty simply to put them through a Euro- training course because the money is available, especially as that might take money that could be better spent in some of the other member states, where larger amounts of fraud have been discovered.

The hon. Member for Great Grimsby (Mr. Mitchell) mentioned milk quotas and the court case that Britain launched against the Commission over its proposed relief for Italy and Spain because of over-production of milk in earlier years. Only the British Government launched that case. Others may talk about budgetary discipline, but the British Government act. We were alone in launching that case and I am glad to remind the House--my right hon. and learned Friend the Chancellor of the Exchequer has already argued this strongly today--that the case was settled on our terms. The Governments of Italy, Spain and, to a lesser extent, Greece will have to pay back a £2.5 billion fine.

The hon. Member for Great Grimsby also mentioned the abatement. It is true that we take extremely seriously any threat to the British abatement, which has clawed back about £16 billion since it was negotiated by Lady Thatcher at Fontainebleau. Although the Labour party may have huffed and puffed before then about the need for an abatement, when Labour was last in office it did not get back one penny piece by way of rebate from the European Community. It took the advent of a Conservative Government in 1979 to start getting rebates. That was regularised at Fontainebleau in 1984. Others may talk about rebates; we delivered one.

In answer to the hon. Member for Great Grimsby, 1999 is a significant date only because the existing new own resources decision, which the House debated earlier, runs from 1992 to 1999. At that point, there will be an entire renegotiation of the own resources decision, just as there was at Edinburgh in 1992.

Mr. Campbell-Savours: Is not the reality of the abatement that because of its existence, Britain effectively has a back seat in dealing credibly with the fraud in the European Community? Although we want and need the money, is not the truth that if we did not have the abatement our whole attitude to European finances would be very different? We would be very much in the front

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lines, and we may well have driven through much-needed reforms and made the Community a far more credible place than it is today.

Mr. Heathcoat-Amory: I need no such incentive to pursue the matters of fraud and mismanagement. Even with the British abatement, we are substantial net contributors to the European budget, as the House well knows.

The hon. Gentleman makes one good point, which is that the fact of a member state becoming a net contributor has a dramatic effect on its attitude to the European budget. That is why a very important feature of the recent own resources decision, which was debated earlier today, is that we are now being joined as net contributors by many other member states. Of course, Germany is by far and away the largest net contributor, and the gap between Germany and other member states will widen in the remaining years of this century. But in addition to the UK, the French are now very substantial regular net contributors. In terms of contributions per head of population, we have been overtaken by the Netherlands, and when Sweden and Austria join, they, too, will be contributing more per head than we are. Italy is a most interesting case. It is now a net contributor and that has had a startling effect on the attitude of Italian Ministers regarding the whole question of financial discipline and the need for it in the Council of Ministers. We are now being joined by many other member states which share our preoccupations with the need for financial restraint and for a crackdown on fraud.

The final point that I must make to the hon. Member for Great Grimsby is that although all the matters will be renegotiated in 1999 just as they were in 1992, we cannot have the British abatement removed from us except by unanimity. Just as this Bill, which sets the new own resources figure for 1992 to 1999, was brought before the House by primary legislation, so it will be that in 1999 another Bill will be brought before the House. Effectively, it is not only the Government who have a veto over any change to the British abatement, but the House of Commons. I hope that the hon. Gentleman will be reassured by that.

Finally, I turn to the advent of other member states and whether they will upset or alter the budget for 1995. I can confirm to the House that the figures in the explanatory memorandum are based on a Community of 12. If, as we hope, the Community enlarges next year, additional resources will be available. During discussions on the European Union (Accessions) Bill, I stated that there would be a net benefit to the UK from the resources brought into the Community by those states, and I remember mentioning a figure of some £300 million. The figures that we have at the moment are the most pessimistic available. If enlargement takes place, they could marginally improve.

Question put and agreed to.


That this House takes note of European Community Documents Nos. COM(94)400, the Preliminary Draft General Budget of the European Communities for 1995; 8782/94, the Draft General Budget of the European Communities for 1995; the proposals contained in the unnumbered document: European Parliament Minutes for the Sitting of 27th October 1994 relating to the Draft General Budget for the European Union for the Financial Year 1995; the unnumbered Explanatory Memorandum submitted by HM Treasury on 23rd November, relating to the Council's decisions on the European

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Parliament's proposed amendments and modifications to the Draft General Budget for 1995; and European Community Document No. 9943/94, relating to the adjustment of the Financial Perspective with a view to enlargement; and supports the Government's efforts to maintain budget discipline.


Order for Second Reading read.

Motion made, and Question put forthwith pursuant to Standing Order E (Scottish Grand Committee (Bills in relation to their principle)),

That the Bill be referred to the Scottish Grand Committee.--[ Mr. Burns. ]

Question agreed to.


Motion made, and Question put forthwith pursuant to Standing Order H(1) (Scottish Grand Committee (sittings)),

That the Scottish Grand Committee shall meet:

1. in Edinburgh on Monday 5th December at half-past Ten o'clock, proceedings being interrupted at Two o'clock;

2. on Tuesday 13th December at half-past Ten o'clock to consider a substantive motion for the adjournment of the Committee; and 3. in Glasgow on Monday 19th December at half-past Ten o'clock to consider a substantive motion for the adjournment of the Committee.--[ Mr. Burns. ]

Question agreed to.


Ordered ,

That Mr. Peter Ainsworth be discharged from the Environment Committee and Mr. Michael Stephen be added to the Committee.--[ Sir Fergus Montgomery, on behalf of the Committee of Selection .]


Ordered ,

That Mr. Richard Spring be discharged from the Northern Ireland Affairs Committee and Mr. Tim Smith be added to the Committee.--[ Sir Fergus Montgomery, on behalf of the Committee of Selection .]


Ordered ,

That Mr. Jonathan Evans be discharged from the Health Committee and Mr. Robert Key be added to the Committee.--[ Sir Fergus Montgomery, on behalf of the Committee of Selection .]


Ordered ,

That Mr. Jonathan Evans be discharged from the Welsh Affairs Committee and Sir Wyn Roberts be added to the Committee.--[ Sir Fergus Montgomery, on behalf of the Committee of Selection .]


Ordered ,

That Mr. Eric Clarke be discharged from the Scottish Affairs Committee and Mr. David Marshall be added to the Committee.--[ Sir Fergus Montgomery, on behalf of the Committee of Selection .]


Ordered ,

That Mr. A J Beith be discharged from the Treasury and Civil Service Committee and Mr. Malcolm Bruce be added to the Committee.--[ Sir Fergus Montgomery, on behalf of the Committee of Selection .]

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Ordered ,

That Mr. Malcolm Bruce be discharged from the Trade and Industry Committee and Mr. Nick Harvey be added to the Committee.--[ Sir Fergus Montgomery, on behalf of the Committee of Selection .]


VAT (Domestic Fuel)

11.34 pm

Mr. Alan Simpson (Nottingham, South): I wish to present a petition from a further 450 of my constituents, in addition to the 2,200 signatures that I have already submitted, and to add to the 300,000 signatures that have been collected nationally in opposition to the increase of VAT on domestic fuel and power.

The petition reads:

The Petition of the constituents of Nottingham, South declares that the decision to increase VAT on domestic fuel and power from 8 per cent. to 17.5 per cent. in April 1995 breaks election promises and is unfair, hitting those who can least afford it.

The petitioners therefore request that the House of Commons pass legislation to stop the increase on VAT on domestic fuel and power going ahead.

To lie upon the Table .

Mr. William O'Brien (Normanton): I wish to present a petition on behalf of my constituents, in addition to a number of petitions that have been submitted recently and the many cards that have been received condemning the Government's proposal to increase VAT on domestic fuel.

The petition states:

The Petition of citizens of the United Kingdom declares that the Government's decision to increase VAT on domestic fuel from 8 per cent. to 17.5 per cent. in 1995 will place a heavy financial burden on Pensioners and others on low incomes which they will find hard to meet.

The Petitioners therefore request that the House of Commons vote down the proposed increase.

And the Petitioners, as in duty bound, will ever pray. The petition was collected by my constituent, Mr. G.A. Mawson. To lie upon the Table .

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Burnley Health Care Trust

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Willetts.]

11.36 pm

Mr. Peter L. Pike (Burnley): I want to refer to the problems experienced in the Burnley national health service trust. That trust serves not only Burnley but Pendle and parts of the borough of Rossendale.

In the past few months, major problems have arisen in the trust. It is clear that those problems will become all too common in other trusts because they have been caused by the NHS reforms forced through by the Government. Because of the introduction of the concepts of market forces and the purchaser-provider role to the health service and the fact that the NHS is now judged according to financial criteria as opposed to the quality of service offered and various statistics--all too often the wrong ones-- what has happened to the Burnley health care trust will be repeated in many other trusts. I want to make it clear that the problems experienced by the trust have nothing to do with its staff, who, despite those problems, have got on with their work and provided a first-class service to the people served by that trust. In September, I was an in-patient at the hospital, so I can speak from experience about the standard of service offered and the dedication of the trust staff.

The call for a debate on the problems of the trust has not only come from me and my hon. Friends the Members for Pendle (Mr. Prentice) and for Rossendale and Darwen (Ms Anderson), but has been loudly echoed by the people served by that trust. They believe that the problems encountered need to debated in the House, because they want answers to many of the questions that we have been asking on their behalf for some time. Indeed, on the day that it was announced that I had been fortunate enough to secure this Adjournment debate, 18 November, the Burnley Express and News said:

"At last, we might get some answers to the questions surrounding the current shenanigans at Burnley Health Care Trust.

By securing a parliamentary debate on the management of the trust, there's just a chance that the people of this borough will get some answers.

We don't want to know for political gain. We don't want to score political points. We just feel we have a right to know what's been paid out and for what reason?

The central characters are not beyond reproach--they are accountable to us all and we have a democratic right to be given the facts, figures and reasons behind this whole sorry saga." In the same newspaper, the chairman of the East Lancashire health authority was quoted as saying, at a meeting held that week, that "there was an urgent need for a new style of management at Burnley with the emphasis on co-operation not confrontation."

The Minister must have seen the many headlines and quotations of the papers in the past few weeks, and I shall refer to a few of them. One was in the Lancashire Evening Telegraph of Tuesday 25 October:

"Scapegoat: `Health chairman asked me to resign to save his own neck.'

The chairman and chief executive of the troubled Burnley Health Care Trust each called for the other's resignation today in an astonishing bust-up."

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On 4 November, the Burnley Express and News said:

"Consultants at Burnley General Hospital yesterday welcomed the resignation of their colleague Dr Sam Pickens as medical director--but said they hadn't won a victory."

That is under the heading:

"Medical director quits board job."

As recently as Friday 25 November, the Lancashire Evening Telegraph said:

"Health boss No 3 resigns. Pay-out probe urged as Chairman Rawson follows Aikman and Pickens."

That type of thing has been going on for many weeks and we need the answers to those questions.

On 15 September, I heard on Radio Lancashire that Mr. Ian Mahady had been made redundant. Radio Lancashire telephoned me for an interview about that, and I said that I had no information, other than what I had heard on the radio. However, I said that I was very anxious about what I had heard on the radio, because Mr. Mahady had been given three hours' notice to clear his desk and leave the hospital, after which he might not enter the hospital again. Whether he should have been made redundant or not, that was an appalling way to behave towards Mr. Mahady. I know that he is pursuing his appeal, and that he had the right of appeal. That appeal is being dealt with, and the British Medical Association is representing him in that respect. Nevertheless, that behaviour shows the false way in which those matters have been handled.

The BMA issued a statement on 15 September, saying:

"This is the first compulsory consultant redundancy in the North West Region to take place directly as a result of the internal market, and the British Medical Association, which is representing Mr. Mahady, is very concerned at the implications for consultants in future.

The BMA will be appealing against the decision on the grounds of failure on the part of the Trust--which admits to having no procedures to deal with staff redundancies".

I find it incredible that a trust employing such a large number of people has no procedure to deal with such matters.

On 19 September, 21 consultants sent a letter to the chairman of the health care trust, Mr. Rawson, which said:

"We can find no justification for the removal of Mr. Mahady at such short notice and cannot see any reason why he should not have been allowed to continue with the care of his patients for the three months of his `notice', irrespective of any arguments regarding the redundancy."

That is the type of argument that many constituents have raised with me and my two hon. Friends who are here for the debate. On 27 September, I attended a public meeting of the Burnley, Pendle and Rossendale community health council, at Rawtenstall, and during that meeting I mentioned the situation there. I spoke to the chairman and the chief executive of the trust, who were present at the meeting. I was given a copy of a press statement, which said that, earlier that day, two leading consultants, a Mr. Robert Atlay and Dr. David Warrell, had been appointed by the trust to inquire into the situation at the unit, and that that had been with the approval of the North West regional health authority.

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I made it clear that, in my opinion, we needed an independent inquiry. Any body that acts in a way that is criticised is certainly incapable of appointing another body to conduct an inquiry into its actions.

I then wrote to the Secretary of State, asking her to appoint an independent inquiry to look at

"the way in which this has been handled by the Trust . . . the functioning and working of that unit and . . . the way in which all staffing matters are dealt with at Burnley General Hospital." In a reply dated 18 October, the Minister who will reply tonight stated that this was an

"entirely local matter between the Trust and one of its employees."

He wrote to me again on 27 October, saying that Mr. Mahady was "exercising his right of appeal".

I accept that, and do not wish to become involved in any specific appeal; but the Minister also said:

"Individual Trusts are, of course, responsible for making their own staffing arrangements, having due regard to employment legislation and ensuring that the health needs of their local community are met in the best possible way."

On 7 October, the trust issued another statement saying that it had "every confidence" in Dr. Pickens, and that it was

"a credit to him that over the past year he has been fulfilling the dual role of Consultant Physician with a full clinical workload and that of Medical Director."

On 12 October, at their request, I met the chairman and chief executive-- Mr. Rawson and Mrs. Aikman--privately. At that meeting, I was assured that Mrs. Aikman had the full backing of both the chairman and the board; they were confident that, at any appeal or tribunal resulting from Mr. Mahady's redundancy or dismissal, their position would be supported. Yet on 24 October, Mr. Rawson asked Mrs. Aikman to resign. The following day she asked him to resign. At the end of the week, she resigned.

At that meeting, Mr. Rawson gave me a copy of a letter that he had sent to one of my constituents, who has written to me about the same issue. The letter said:

"These reports have not altogether reflected the full facts of the situation and have led to considerable concern within the local community. With this in mind I have invited two . . . independent clinicians to review the circumstances and facilitate a resolution to the situation. I intend to make both public and to act on their recommendations".

When will the report of that inquiry be available? Will the recommendations still be implemented when it is finally published? I must tell the Minister that the overwhelming view--my view, that of my constituents and that of my hon. Friends the Members for Pendle and for Rossendale and Darwen--is that the matter will not be resolved until an independent inquiry takes place. What has been done so far has not resolved the position at all. On 1 November I wrote to the Secretary of State again, asking for such an inquiry and forwarding a petition with 7,000 signatures calling for Mr. Mahady's reinstatement. I wrote:

"The Trust is clearly in crisis and you have the responsibility and power to act and you should do so now in the interests of the N.H.S. and patient care."

I wrote to the Secretary of State again on 4 November, saying: "It now appears Mrs. Aikman has been paid over £250,000 to go on condition of silence."

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We have a right to know what that payment was.

It was also rumoured that, if Dr. Sam Pickens had left as both consultant and medical director, he would have asked for £1 million. I know that he did not get that in the end, because he continued as a consultant. If no payment was made to him, we have a right to know. In a letter dated 10 November, the Minister said:

"The responsibility for any settlement lies ultimately with the Trust chairman who is personally accountable for a termination payment to the chief executive."

If the chairman, who resigned last Friday, is found to have paid out a sum in excess of what he should have done, who will meet that amount? The cash payment has been made and it has implications for the pension and other matters. We have a right to know that. On 1 November, I wrote to Mr. Rawson to ask how much the chief executive had been paid to go and on what terms. I said that the public had a right to know. I asked him why, when we met on 12 October, he said that it was clear that she had the full backing of the board. If that is so, what changed? Was what I was told on 12 October true?

On Friday of last week, Mr. Rawson finally went. An acting chief executive is now in place. Up until today, an acting chairman was in place but there is no medical director. Today, the Minister announced the appointment of a new chairman--Dr. James Archer. Obviously, I hope that he is able to overcome the problems. He said that his role was to end uncertainty and to heal any remaining wounds. I hope that he succeeds in that objective, which will be a hard task. People want answers to the questions that I have put.

Yet again, there has been a change in the chief executive. A few weeks ago, after the chief executive Mrs. Aikman went, Mr. David Meakin, a financial officer, was appointed to fill her position in an acting capacity. This morning, David Chew was appointed. He is an employee not of the trust but of East Lancashire health authority. It is strange that he has been switched from one job to another. It is known that Mr. David Meakin was strongly opposed to any merger with the Blackburn, Hyndburn and Ribble Valley Health Care NHS trust. Mr. Chew, however, has been heavily involved in planning for federation. I, the press and the public are opposed to any merger or federation. I hope that the Minister will assure us that Mr. Chew's appointment does not mean that there is to be a merger between Burnley Health Care NHS trust and the Blackburn, Hyndburn and Ribble Valley trust, which is what the press is saying. That will not be acceptable. We must ensure that there is a lot of consultation before any federation takes place.

I hope that the Minister will respond to those points and assure us that problems will not be allowed to arise. I know that my hon. Friend the Member for Pendle wants to say a few words on these important matters.

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