Mr. Michael Meacher (Oldham, West) ( by private notice ) asked the Secretary of State for Transport to make a statement on security in the channel tunnel.
The Secretary of State for Transport (Dr. Brian Mawhinney): Allegations were published yesterday that on certain specified days security arrangements for the Eurostar and Eurotunnel trains were inadequate. When those allegations were brought to my attention at the beginning of the weekend, I immediately called for urgent reports from the two companies.
The Channel Tunnel (Security) Order 1994 requires the operators of the tunnel and of the trains that go through it to carry out counter-terrorist security measures. Similar measures are applied in France and Belgium as agreed between our three Governments. The operators are responsible for ensuring that the security measures are applied properly. Here, my Department's inspectors give instructions, offer advice and make both announced and unannounced inspections. The Government's requirements have not changed since the tunnel was opened. The House will not expect me to detail the requirements. Suffice to say that security measures are closely tailored to the threat, as assessed by the Government's security advisers. Among other measures, all traffic in the tunnel, passenger and freight, is liable to be searched. There is not and never has been a requirement for all passengers or vehicles to be searched. On the other hand, permitting a passenger to get off a train prior to arrival at his destination and leaving behind an unattended bag is a potentially serious matter, and could be a breach of security requirements. Like other right hon. and hon. Members, I take security issues seriously. I will decide what further action needs to be taken in light of the reports that I have commissioned and any further security advice that I receive.
"John Taylor also sought reassurance that the security of channel tunnel services would be comparable with arrangements at airports, and I was happy to give him that assurance".
Is the right hon. Gentleman aware of that correspondence and will he confirm that that commitment is very far from being met? Even if that requirement were excessive, will he not accept that, given the symbolic significance of the channel tunnel, there is a balance to be struck between ensuring speed of throughput and non-intrusiveness of checks on the one hand and a reasonably high level of security on the other, and the Observer revelations yesterday suggest that that balance is being struck at too low a level of security?
How are the right hon. Gentleman's assurances today about security in the channel tunnel consistent with random checks which show that most cars are not even subject to the most cursory search, most foot passengers' baggage is not scanned electronically, and only a few lorries have been required to pass through the enhanced X-ray scanner? Is it not a breach of procedure-- the Minister seemed to agree that it was--that passengers were permitted to leave the Eurostar train without any
Column 686checks being made of their baggage? In light of what he said, what action is he taking to ensure that that does not happen again? Since the ultimate responsibility for ensuring the implementation of agreed security procedures in the channel tunnel rests with the Department of Transport security division, will the Minister say how many inspections of the tunnel operators' procedures that division has carried out so far? When was the last inspection and to what extent did it reveal any deficiencies?
In addition to the risk of terrorist bombing, will the Minister also inform the House whether evacuation procedures have been fully tested and practised in the event of a breakdown or fire in the tunnel, taking into account fully loaded trains and a throughput at peak capacity of a train in the tunnel every three minutes--which means that there could be up to seven trains in the tunnel at any one time? Have evacuation procedures been properly tested under those conditions, including the requirement for following trains to reverse out of the tunnel? If so, will the right hon. Gentleman publish the results?
There can be no absolute guarantee of passenger or vehicle safety, but does the Secretary of State accept that the laxity in procedures that has been exposed is not acceptable, and can and must be tightened without significant intrusiveness or loss of speed of transmission?
Dr. Mawhinney: I am aware that my right hon. Friend the then Minister for Public Transport wrote to members of the Committee, referring to his remarks to the House. I noted with interest that the hon. Member for Oldham, West (Mr. Meacher) gave only a partial quotation over the weekend, as did the Observer . My right hon. Friend told the right hon. Member for Strangford (Mr. Taylor): "security at the tunnel will be comparable to that of airlines and at airports, commensurate with the threat."--[ Official Report , 16 February 1994; Vol. 237, c. 982.]
Those words were left out of the quotations that filled the airways and the hon. Gentleman's comments over the weekend.
I agree with the hon. Gentleman that a balance must be struck, and not in a way that deliberately or in a focused manner seeks to underestimate the importance of security. He and I are as one on that. However, I will not prejudge--and the hon. Gentleman will understand why--the reports that I have sought. Given my personal background, I take security issues particularly seriously. I will study carefully the reports that I urgently commissioned, and if I judge that further action should be taken, I will not hesitate to take that action.
As to the hon. Gentleman's point about evacuation, certificates to run trains through the tunnel require safety checks of the sort to which he referred. I hope that he finds that reassuring.
I want to end on a common note in responding to the hon. Gentleman's questions. I was pleased that he recognised that there can never be an absolute guarantee of safety--but together we share the view that all appropriate steps should be taken, for the sake of not only safety but public confidence.
Column 687matters? Is he aware that I have had several opportunities to study the operation of the channel tunnel, the most recent being yesterday? Does my right hon. Friend agree that anyone who approaches security issues is wise to do so with discretion and balance--two qualities in short supply at the Observer , and of which the hon. Member for Oldham, West (Mr. Meacher) is devoid?
Dr. Mawhinney: I agree with my hon. Friend that he and I, and others, have special reason to take security matters seriously and that his experiences, like mine, are not lightly forgotten. I come to the issue against that background. If the newspaper in question had been concerned about security issues, one might have thought that it would raise them with the appropriate people--the operators--in a framework that gave them an opportunity to respond adequately and appropriately to the allegations. But that might not have created such a good newspaper story.
Having said that, I recognise the seriousness of the issues and of the allegations made. They must and will be investigated. If I believe that further action must be taken, I will ensure that the operators take it.
Mr. Paul Tyler (North Cornwall): The whole House will recognise that we cannot prejudge the reports that the Secretary of State has asked for. I hope that he will accept that from the Liberal Democrat party at least.
We also welcome the right hon. Gentleman's most important remark this afternoon--that he accepts full ministerial responsibility. He has shown as much by making this statement.
Is the right hon. Gentleman aware that there is widespread concern about the mechanisms--who is watching the watchdogs? The Minister takes responsibility, but what is there to ensure that those who are responsible for surveillance, evacuation and emergency procedures are themselves under the surveillance of the Minister, or at least under his authority? If no such system is in place, the Minister must be aware that incidents of this sort will continue and will constantly be referred back to the House and to his desk at the Department.
Dr. Mawhinney: I am grateful for what the hon. Gentleman said about not prejudging the issue: I agree with him. If he was saying that security measures must be related to the threat, including the vulnerability of the system, I also agree with him on that important point.
I said in my answer to the private notice question that my Department's inspectors, independently of the operators, give security instructions, offer advice and make announced and unannounced inspections of the system. I hope that the hon. Gentleman will find some encouragement in that.
Mr. Roger Gale (Thanet, North): Will my right hon. Friend ensure that the synthetic outrage generated by this stunt is not allowed to obscure the genuine and long-standing concern of some of us about the training of channel tunnel staff and the co-ordination of the emergency services that work with the tunnel operators? My right hon. Friend will know that the recent bi-national exercise left a number of unanswered questions; one would hope that, as a result of the lessons learned, action will have been taken.
Column 688Will my right hon. Friend seek to ensure that a further bi-national exercise is held, so that we can establish whether the lessons of bi-nat 6 have been learned, and so that we can test the security services?
Dr. Mawhinney: As my hon. Friend will appreciate, I am not going to refer to security arrangements in any form from the Dispatch Box. I was grateful to the hon. Member for Oldham, West for his recognition of that. I certainly agree with my hon. Friend that all appropriate steps need to be taken and that they are likely to include training, which is an important and legitimate aspect of security arrangements. I should have thought that the whole House would be as keen as I am to ensure that public confidence in the system, which is high, remains high--and justifiably so.
Mr. Bruce George (Walsall, South): I am delighted that the Minister has not responded to attempts to politicise this issue, because it is not-- it should not be--remotely a party political one. The channel tunnel is the No. 1 terrorist target in the world. It would not take a major terrorist organisation to destroy it; that could be done by a tiny organisation with access to relatively unsophisticated technology.
Will the right hon. Gentleman review the idea that security must be tailored to the threat? Although that seems a smart phrase to use, and although security can be upped or lowered at the margins, the threat from a tiny organisation can be such that no amount of manipulating the response to it will result in preparedness for someone trying a long shot from 60 yards.
I am sure that the right hon. Gentleman will recognise that my point is valid. I ask him not to be beguiled by security analysts who describe the threat as greater or lesser. When the threat is thought to be low is the very time when some organisation can try it on, possibly with disastrous consequences.
Dr. Mawhinney: I am grateful for what the hon. Gentleman said about not making this into a partisan issue--although he will understand that, just occasionally, the temptation is large. [Interruption.] I am glad to note that he does not belong to the same luddite tendency as the hon. Member for Bolsover (Mr. Skinner) appears to belong to.
A security assessment is not just a beguiling figment of the imagination, but having said that, I understand the point that the hon. Gentleman is making.
Several hon. Members rose --
Mr. Robert Key (Salisbury): Will my right hon. Friend confirm that, when the reports are forthcoming, he will not publish them? Does he agree that the British public have the safest transport systems in the world when it comes to security? They can have total confidence in the
Column 689system. In particular, they can have confidence in this case in the Department's own inspectors, in the Kent constabulary and in the Gendarmerie Nationale.
Ms Glenda Jackson (Hampstead and Highgate): As my constituents have suffered from a number of bomb outrages, will the Secretary of State, in the new review of channel tunnel security, include consideration of possible terrorist outrages at the St. Pancras terminal?
Mr. Jacques Arnold (Gravesham): Has not the gleeful scaremongering in this case got something to do with the gleeful mudslinging in the case of Ebbsfleet station, in as much as it puts in jeopardy the future jobs of people in Kent? If there are instances, as there appear to be, of lapses in security, is not the proper response to take it privately to the competent authorities, all the way up to the Secretary of State if necessary?
Mr. Thomas McAvoy (Glasgow, Rutherglen): I am sure that the Secretary of State will accept that the issue concerns more than just the south-east of England. It concerns, of course, the other regions of England, Wales, Scotland and Northern Ireland. Bearing in minding that fact, does he accept that his resentment at the coverage that the Observer has given to the issue reflects the image of a departmental team caught on the hop? Does not the disarray of Transport Ministers show that the public are paying the price of the merry-go-round in Transport Ministers that exists under the Government? Does that not reflect his state of unreadiness?
Dr. Mawhinney: First, let me make it clear that I have no resentment about the Observer running whatever articles it wishes to run--be they true, false or somewhere in between. Secondly, there is no state of unreadiness. Thirdly, I have explained to the House exactly who is responsible and the various layers of responsibility. Fourthly, if action needs to be taken, it will be, and in a way which I hope will reassure the hon. Gentleman of the competence and readiness of this team to pursue its due responsibilities not only up to the next election but beyond.
Mr. Nick Hawkins (Blackpool, South): Will my right hon. Friend confirm that, far from the picture painted by the hon. Member for Glasgow, Rutherglen (Mr. McAvoy), his Department looked at the most sophisticated scientific
Column 690techniques of non-invasive automated cargo inspection as far back as the beginning of 1991 and that programmes were undertaken to test that technology? Without giving the House the details of that technology, because it is a matter of security, will he confirm that the most sophisticated measures were looked at and will continue to be examined by his Department, especially the security officials within it?
Dr. Mawhinney: For reasons that I explained earlier, I will not be drawn into discussing security measures, but my hon. Friend is right to bolster public confidence in the arrangements that are in place.
Mr. Tony Worthington (Clydebank and Milngavie): There was a strange omission in the Secretary of State's response today. He said that his own inspectorate has powers to inspect and see what has been happening. On what occasions has it inspected? That was asked earlier by my hon. Friend the Member for Oldham, West (Mr. Meacher), and there was no response. Was it satisfied with its inspection? If not, did it report that to the Minister? What action was taken?
Mr. Andrew Mackinlay (Thurrock): Is it not a fact that no inspectors have been appointed under the auspices of the Channel Tunnel Safety Authority, and that the inspectors referred to by the Secretary of State are mere civil servants--although, no doubt, senior bods? They have no statutory basis. When will the Government clarify the respective responsibilities of the French authorities, the British Health and Safety Executive and the Channel Tunnel Safety Authority? When will proper inspectors be appointed, and who precisely are the inspectors referred to by the Secretary of State?
Dr. Mawhinney: The House will have noted the hon. Gentleman's contempt for civil servants, security advisers and inspectors. I must tell him that that contempt is restricted to him. As for co-operation between national Governments and national security authorities, it is very good.
Mr. Bryan Davies (Oldham, Central and Royton): Has there not been legitimate concern that Eurostar's marketing strategy has downplayed the special nature of this form of transport? Has that not led to insufficient emphasis on the need to arrive on time, and hence to very rushed security measures before people board the train? Travellers have been unsure whether they are boarding a train with the same security arrangements as an aircraft, or an ordinary, conventional train. Even Members of Parliament have fallen foul of the arrangements.
Dr. Mawhinney: I do not accept that for a moment. Coincidentally, the other day someone told me that they were concerned about the amount of time for which it was apparently necessary to be present before the train's departure, precisely because of the various security arrangements that had to be made before boarding was possible.
Mr. John Sykes (Scarborough): On a point of order, Madam Speaker. On Thursday, before Business Questions, I made an intemperate allegation relating to Opposition Members and the Register of Members' Interests. With your permission, Madam Speaker, I wish to withdraw the remark, which was made in the heat of the moment. I apologise to you and the House for any offence that I may have caused.
Considered in Committee [Progress, 25th January]
in the Chair ]
That the order in which the remaining proceedings in Committee of the whole House on the Finance Bill are to be taken shall be Clause 52, Schedule 11, Clause 15, Schedule 4.--[ Mr. Kirkhope. ]
`(2) Schedule 11 shall come into effect only if the Government has presented a report to Parliament before the passing of this Act on certain aspects of the Schedule specified in subsection (3) below. (3) The Government shall report to Parliament on--
(a) the likely effects of the provisions of Schedule 11 to this Act on the costs of administering personal pension schemes; (b) an assessment of the risks to members of personal pension schemes of decisions taken as a result of the provisions of Schedule 11; and
(c) considerations raised by the extension of the provisions of Schedule 11 to retirement benefit schemes and retirement annuity contracts.'.
The subject of pensions may not often be the stuff of political cut and thrust--and, indeed, there is widespread agreement on the principle of this part of the Bill--but we have a number of questions and anxieties.
While welcoming the principle underlying clause 52--the introduction of more flexibility in the purchase of annuities--the amendment raises concerns that have been expressed inside and outside the House about both the cost of the scheme and who will meet it, and the whole question of risk. I refer to the risk of deferment, and also to that involved in any arrangements made by those wishing to secure greater flexibility than would be available in, for example, an occupational pension scheme. The amendment also deals with certain other considerations. Its purpose is to probe the Government on their intentions, mindful as we are that what Ministers say in the House can be relied on by those outside. I hope that I shall be able to persuade Ministers to make one or two helpful explanations. As I have said, we welcome the flexibility introduced by clause 52, which will enable people to defer purchasing their annuities at any time between the ages of 50 and 75--a flexibility heralded by the White Paper that the Government published in June last year. We welcome that, but a number of problems remain.
While the flexibility for personal pension schemes is welcome in that it will enable people to defer purchasing an annuity if they think that circumstances justify such deferment, there are two particular concerns that need to
Column 693be addressed. The first is obvious, and it is that people must be warned that there is no guarantee that rates will necessarily get better. Although there is flexibility and many people will be tempted to think that things can only get better, experience should tell them that that is not necessarily the case.
I shall return to that because, clearly, the warnings given to people who buy pensions or who transfer from occupational schemes to private schemes have exercised Parliament and people outside for some time. If the Government or the industry propose to publicise the provision, it is important for people to be warned that deferring purchase does not necessarily guarantee better returns.
The second matter concerning us is the cost of the scheme. I notice that the Government--as they do now with nearly all measures--published a compliance cost assessment which is available on request from the Treasury. It makes interesting reading, because it looks at the costs of introducing the measure and in particular at the businesses that might be affected and states that it would not affect small business. But that depends on how one defines costs, because many financial advisers, who for the most part constitute small businesses, will incur additional costs for the advice and the preparation of papers that need to be given to prospective purchasers of policies. The Committee will be aware that, under the new disclosure regime it is necessary to give far more information to prospective purchasers of pensions and that will give rise to costs for small businesses. Therefore, I am surprised that the Government can assert in their compliance cost assessment that small businesses will not be affected.
Looking generally at the compliance costs, I note that the Revenue admits that the setting-up costs of the new scheme will be about £1.15 billion. That is a substantial cost and, of course, it will have to be met by the public. The Government do not propose to meet it, and I do not suggest for a minute that they should because, clearly, the industry must meet the costs itself. However, at the end of the day any cost incurred by the industry will be passed on to the public, and that is bound to affect people's decisions. I shall shortly return to the whole question of the regulatory regime that goes side by side with this in assessing risks and costs. It is important at the outset to flag up the fact that there will be a significant cost. I understand that an annual recurring cost of more than £500,000 is expected to be incurred. I mention that because an article in today's edition of the Financial Times makes disturbing reading. It suggests that more than 20 per cent. of pension policies are halted within the first year and, plainly, cost will be one reason for that halting. After that period, termination rates are also high.
It is very much in the interests of individuals and in the interests of any Government to ensure that people make provision for themselves alongside public provision. If we are to encourage people to do that we must be mindful of the costs that will be imposed on them and of the warnings given to people who decide to buy certain policies.
As I have said, disclosure will clearly flag up to people what they are paying for, at least if disclosure works properly, but it could have a knock-on effect in terms of reduced sales, which have already taken a knock over the past year because of loss of confidence in the regulatory
Column 694regime. I understand that some people in the industry think that sales may have gone down by about 10 per cent. over the past year because of that loss of confidence.
The main point on which I would like to draw Ministers is the thinking behind the decision apparently--I emphasise apparently--not to extend the flexibility to other pension schemes. The clause affects private pensions and we have no objection to that, but it would be helpful to get a clear statement of policy from Ministers about the Government's intentions. The Financial Secretary to the Treasury made a statement through a press release, but, of course, that has no legal force whatever. Many members of the public and people who work in the industry would like to know the Government's view on extending flexibility to occupational schemes and AVCs. In one view, they might be excluded because of Inland Revenue practice. I think that they might be excluded more because of practice than because of the law. A number of categories are not included. Retirement annuity contracts were the forerunners of personal pensions and were largely superseded in 1988. They are apparently not affected. In a Treasury press release issued on 4 January, the Financial Secretary said that those people would benefit because
"they all had the option to transfer funds into a personal pension on the open market."
Indeed they have that option, but, if one considers the recent history of pension transfers, one might have thought that Ministers would have thought long and hard about casually saying to people who have retirement annuity contracts, "Don't worry. Just transfer." Transfer incurs costs and may be inappropriate in a number of cases, depending on individual circumstances. To suggest, as the Financial Secretary apparently did, that no difficulty was involved, but that people should simply transfer to a private personal pension was not necessarily the appropriate advice to give. It would be helpful if either the Financial Secretary or the Minister of State, who appears to be poised to answer for the Government, would comment on that matter.
Ministers should bear it in mind that it is only a year since the Securities and Investments Board discovered that up to 2 million pensions might have been inappropriately sold to people, who were wrongly persuaded to opt out of occupational schemes and to transfer to personal pension schemes. The Government should be wary of, as a matter of policy, encouraging people to opt out of an occupational scheme, or of any other scheme, and to transfer to a private pension, if they do not need to do so.
I am not saying that we should discourage people from taking out private pensions, which is appropriate for a number of people. The Government seem to accept that a need for flexibility exists in relation to occupational pensions, but the House should pass no measure that forces people to opt out and to transfer to a private pension, when they would not otherwise do so.
Mr. Nigel Forman (Carshalton and Wallington): I am seeking to follow the hon. Gentleman's argument closely, and I have some sympathy with it. To refine his point further, will he clarify that he is talking about the unwisdom of persuading people to transfer to personal
Column 695pensions from occupational pensions when they are, shall we say, aged over 45 or 50? Is not he making a blanket statement about people of all ages in their working career?
Mr. Darling: For many people, it is entirely appropriate to have a private pension--it depends on what they do, their age and their likely work pattern. Unlike in the past, many people will not reasonably expect to be in the same employment from the age of 20 to the age of 60 or 65, when the receive their gold watch. The Labour party has never said that the purchase of a private pension--never mind transfer--is a bad thing. That can be good and appropriate. No doubt exists, however, that, in the past few years, a number of people have been wrongly advised to come out of occupational schemes and to go into private schemes, not because it was good for them, but because it was good for the salesman and insurance companies. That is the point that has exercised people in the past year.
I am making a general point. The Financial Secretary said that the way out of the difficulty, and the way to achieve flexibility, was for people in occupational schemes to transfer to private schemes. The Government should not force people to opt out to achieve flexibility if, through certain measures in the House or a change in Inland Revenue practice, they could achieve the same flexibility by staying where they are. Transfer should not be forced on people.
Mr. Dennis Skinner (Bolsover): I agree with my hon. Friend. In the past few years, the Government and people acting on their behalf have obviously sent a signal to many workers, such as those in the mining industry, that it would be a splendid idea to opt out of the National Coal Board and British Coal pension, with the result that there are more than 100,000 casualties in the coalfields--people with redundancy money and the pensions entitlement. The net result is that there are people in every constituency in the coalfield areas who have been kidded on by salesmen acting on the signal sent by the Government. Many are now trying to fight in the courts to re-establish their entitlement to a pension although, of course, they are unable to get legal aid because the Government have chopped that, too.
Mr. Darling: My hon. Friend makes a good point. We all remember the television advertisements depicting a man in a straitjacket being freed by the change in the law in the late 1980s, a change for which the current Secretary of State for Social Security and another Minister--now the Prime Minister--had prime responsibility. We are all aware of the difficulties subsequently caused by the mis-selling of pensions. My point is that we should not bring about another situation in which people are forced to transfer to get the flexibility that we welcome in respect of private pensions. It is on that point in particular that I want Ministers to tell the House what the Government believe the law to be and what they believe to be the Inland Revenue's practice.
As I said, we should not as a matter of principle force people to opt out. It is bad enough that people are wrongly persuaded to do so for all sorts of extraneous reasons--because of the way in which the commission system works, or because salesmen are under pressure to sell policies in order to keep their jobs and earn enough to
Column 696feed their families, which I regard as a fundamental structural defect in the industry--but the House should not do the same.
Mr. Forman: Once again I must ask the hon. Gentleman to clarify the point. I think that he is using language rather loosely. He talks about people being forced to transfer. Clearly, we all deplore the mis-selling of pensions that has happened, but nothing in the Bill requires such a transfer to be made; there are simply advantages held out for those who make such a move.
Mr. Darling: The hon. Gentleman is also guilty of being a bit vague. No one is suggesting that there is anything in the Bill to force someone to transfer, but clearly, if there is flexibility with a personal pension and inflexibility with an occupational pension, although people are not forced to transfer in the sense that no one is holding a gun to their heads, they may be "forced" to get the necessary flexibility. If the Government are committed to flexibility--a principle that we support--I should have thought that it should be universally applied to all pensions, unless there are good reasons why not. If there are good reasons why it should not be universally applied, we shall no doubt hear them, but, as things stand at the moment, the Bill provides flexibility for private pensions.
If he was quoted correctly--as the words appear in a Treasury press release, I have no reason to believe that they are incorrect--the Financial Secretary said that those who had retirement annuity contracts would benefit because they had the option to transfer. That means that they would have to transfer to get that option. Exactly the same thing applies to occupational pension schemes.
The press release also reports the Financial Secretary as saying: "it is not clear that any legislative changes are needed. The purchase of an annuity is very often a part of the structure of these schemes, but the Inland Revenue are prepared to consider any ideas that scheme sponsors may have for introducing more flexibility in this area."
It is my understanding that no legal change is necessary--I am sure that Ministers will tell me if my understanding is wrong--but the Financial Secretary concedes in the statement that, as a matter of practice rather than as a matter of law, the Inland Revenue can influence whether the flexibility that we are talking about can be transferred to an occupational scheme. He said that the Inland Revenue was now prepared to
"consider any ideas that scheme sponsors may have for introducing more flexibility".
It would be helpful if the Minister of State could tell us what rules and principles the Inland Revenue is proposing to apply when sponsors of schemes come forward. It would be interesting for those in occupational schemes and those who sponsor such schemes. It is not clear from anything that Ministers have said, by way of press release or, indeed, by any other means, what the Government think will be changed in occupational schemes. Given that, judging from the reaction, there is general agreement that flexibility is good as a matter of principle, provided that people are warned that there is no guarantee of more money at the end of the day, it must apply to all schemes.
The Minister says that the Revenue is prepared to consider any ideas. It would be very helpful if we could find out the principles that Ministers are prepared to