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7.15 pm

All businesses operate within a framework of legislation. In the case of the gun industry, the framework is stricter and more specific than in many other industries. It regulates what types of guns and ammunition can be bought and sold and who may buy and sell them. It is right that there is a strong framework to control the market in a product which is, potentially, extremely dangerous. Moreover, that framework of regulation has existed since the 1920s, and everyone who works in the firearms industry operates within it.

Major changes have been made in that regulatory environment on a number of occasions in recent history, and the changes have had a massive impact both on the shooting industry and on those who use guns for leisure purposes. In 1920, firearms controls were introduced for the first time; in 1934, fully automatic weapons were prohibited; in 1962, airguns and shotguns were made subject to restriction for the first time; in 1988, semi-automatic and self-loading rifles were prohibited; and in 1992 disguised firearms were prohibited. There have been many other minor changes which have affected the operations of gun dealers and gun clubs. All those changes were introduced to improve public safety, and some of them will have affected some businesses more than others. However, no one who works in the firearms industry can be unaware of the significance of regulatory controls on that industry.

It is one of the overriding duties of a Government to protect the safety of the public. The decisions that the Government have had to take on this extremely difficult and vexed matter were not different in principle from many other decisions that Governments are occasionally bound to take which may cause damage to the prospects of the industries associated with them. There have been many occasions on which the Government have felt it necessary to ban a particular product or to restrict access to it.

A recent example was the Government's decision in 1989 to ban the chewing tobacco product called "Skoal Bandits", which had begun to be marketed in this country. It was considered to be so potentially damaging to health that the Government banned it. The company concerned suffered a considerable loss, and it even challenged the Government in the courts. No compensation was paid, and the courts supported the Government on that decision.

Over the years, in the interests of public safety, many regulations have been introduced in the transport industry. Those measures have imposed very substantial additional costs on the haulage industry and have no doubt put some hauliers out of business. One sympathises with people who had to suffer those consequences, but no compensation was paid.

Occasionally various medicines or other chemical products, such as insecticides, have to be banned when information comes to light about their side effects. Major

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changes in regulations are occasionally made in order to control pollution. The Government have never paid compensation in those circumstances.

To provide an even more controversial example, only three weeks ago the House debated the cattle head de-boning industry, which has effectively been destroyed by the ban introduced in March this year on sales of head meat from cows. The ban was introduced because of the risk posed by head meat in relation to BSE. The Government were bound to act to preserve public safety and no compensation has been paid for the losses suffered by cattle head deboners.

The Government have a fundamental obligation to protect public safety. It would be a very significant inhibiting factor if, on every occasion that a decision had to be made, the Government were obliged to pay compensation for the business losses that resulted. My right hon. and hon. Friends are well aware that Government compensation means other taxpayers being required to pay for the business losses of those affected by the aftermath of Dunblane. Much as I regret the difficulties that gun clubs and firearms dealers are facing, I do not believe that it is right to ask for such compensation.

Sir Patrick Cormack: What is the logic of compensating the renderers but not compensating others? What is the logic of not compensating the gun maker, who will be driven out of business--all his assets, his house and everything else will go--but readily agreeing that it is entirely proper to compensate owners?

Mr. Howard: I have sought to explain why we do not think it right to compensate gun makers. Renderers were paid compensation to preserve a vital link in the food industry chain. The industry could not have survived if the renderers had all gone out of business. That is why a decision was taken to pay them compensation.

Mr. Budgen: Will my right hon. and learned Friend give way?

Mr. Howard: I hope that my hon. Friend will forgive me. I have only five minutes more because it is right that I should give my hon. Friend the Member for Weston-super-Mare, who moved the new clause, time to reply. I also want to deal with some of the other points that have been raised in the debate.

Amendment No. 66 would provide a form of independent financial arbitration on the valuation for compensation to be paid for those items for which we are intending to pay compensation. That important matter was raised by several right hon. and hon. Members and I should like to explain how we intend to approach the issue of compensation.

I intend to draw up a list of approximate values for different makes of gun, which I shall discuss with the British Shooting Sports Council. Gun owners will have a choice. They will be able to accept a flat-rate payment, or a value based on the list drawn up with the British Shooting Sports Council. If gun owners challenge our valuations of guns that they claim have special features making them more valuable than the norm, they will be able to provide their own valuations and the Government

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will seek an independent valuation when agreement with a gun owner cannot be reached. A similar approach will be taken on accessories.

Those arrangements will be included in the scheme that the Government will make for compensation. Amendment 13 would make that scheme subject to parliamentary oversight. I am content that that should be done. I am happy to give a commitment that there will be access to independent valuations and that the details of the compensation scheme will be subject to parliamentary approval. We shall table an amendment to achieve that effect in another place. On that basis, I invite the hon. Members who have tabled amendments Nos. 66 and 13 not to press them.

Before I sit down, I should like to say a word about the amendments tabled in my name. Amendment No. 73 to clause 11 provides for compensation to be paid to owners who surrender expanding ammunition, which clause 25 will make it unlawful for them to possess. I hope that the hon. Member for East Londonderry (Mr. Ross) will forgive me if I do not go through a complicated explanation now. His concern that ammunition might be excluded from the compensation arrangements was misplaced. A proper analysis of the amendments shows that ammunition will be compensated for.

Subsection 2(a), to be introduced by amendment No. 73, clarifies the qualifying period for the possession of surrendered prohibited firearms and ammunition with the phrase:

"on or immediately before 16th October".

That is the answer to the first of the questions asked by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown), who rightly pointed out that, if the valuation date was after my announcement, the market would be false and compensation would not be given at market value, as we intend. That is the practice that we followed in the 1988 scheme. The amendment makes it clear that the qualifying period must be in the days, or perhaps the week, before the date of my statement. The current wording of clause 11 is ambiguous and the amendment is an improvement.

Subsection (3), to be introduced by amendment No. 73, provides that a surrender and compensation scheme for guns and expanding ammunition can specify a period after which new claims for compensation will not be entertained, making different arrangements for different categories of claimant. The scheme for dealers, for example, may differ from that for individuals.

Amendments Nos. 75 to 79 are to schedule 1, which deals with the transitional arrangements for .22 pistols, which have to be kept in secure gun clubs. The amendments give the Home Secretary power to make payments on an ex gratia basis to owners of such guns--that is .22 calibre guns, not the guns that we are declaring unlawful--who hand them to the police and who are unable or unwilling to find a licensed gun club in which to keep them. Although such individuals are not being deprived of their property in the full legal sense, we accept that the provisions for .22 handguns will make it very difficult for some .22 shooters to continue to shoot on the same basis as before. We therefore accept that it is right that they should receive payments for their guns at market value. The arrangements to be made under the scheme will achieve that.

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My right hon. Friend the Member for Worthing(Sir T. Higgins) drew my attention to the important issue of timing. I entirely understand and accept his point. I assure him and those who are similarly concerned that we shall take their considerations carefully into account when drawing up the scheme to deal with timing.

I believe that the Government amendments go a considerable way--although not, I regret to have to concede, all the way--to meeting the legitimate worries expressed by my right hon. and hon. Friends. In doing so, we have significantly increased the level of compensation to be paid to individual certificate holders and to firearms dealers.

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