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Chester Street Holdings

2. Mr. Tony Worthington (Clydebank and Milngavie): What discussions she has had with the Chancellor of the Exchequer on the collapse of Chester Street Holdings and its implications for sufferers from asbestos-related diseases in Scotland; and if she will make a statement. [155170]

The Secretary of State for Scotland (Mrs. Helen Liddell): I am well aware of the difficulties relating to Chester Street. I have had discussions with my right hon. Friend the Chancellor, and also with my right hon. Friend the Chief Secretary to the Treasury. We well understand the concerns of those who are suffering from asbestos- related diseases, and we are working very hard across government and with the insurance industry to alleviate those concerns as far as we possibly can.

Mr. Worthington: I thank my right hon. Friend for her active involvement. Her record on pensions mis-selling gives great credibility to her efforts.

As my right hon. Friend knows, I believe that our first duty is to the sick and dying: they must be paid full compensation, and not lose out because of Chester Street. Is it not appalling, however, that Mr. Robert Hardy, chief executive of both Iron Trades and Chester Street, should have sold Iron Trades to QBE for less than its book price, then joined it as chief executive and taken £1 million out of his various firms? Is that not disgraceful, and does it not demonstrate that we need a full independent inquiry into this sorry matter?

Mrs. Liddell: I congratulate my hon. Friend on the campaign that he has waged on behalf of sufferers from asbestos-related diseases for so many years. The last thing anyone needed was the scandal of the collapse of Chester Street, and I share his anxiety about some of the activities that went on.

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The provisional liquidator is examining the state of Chester Street. It will be for the provisional liquidator, in the first instance, to investigate what went on in Chester Street. If he turns up anything that gives rise to further inquiries, the Government will not hesitate to pursue them.

Mrs. Ray Michie (Argyll and Bute): I commend the efforts of the hon. Member for Clydebank and Milngavie (Mr. Worthington) to sort out the appalling situation involving Chester Street.

May I draw the Secretary of State's attention to a recent letter from a constituent? She is a widow living alone, whose husband died in 1997 from an asbestos-related disease. Her claim has still not been dealt with. Will the Secretary of State ensure to the best of her ability that any necessary inquiry or investigation will not delay or stand in the way of those who have suffered and should be receiving compensation?

Mrs. Liddell: The hon. Lady is right. We all have a great desire to find out what happened in relation to Chester Street and who was responsible for it happening, but we must have a twin-track approach. We must not only find out what happened, but protect the sufferers.

I am very concerned that the provisional liquidator has been able to find only 5p in the pound to meet the claims; I find that very disturbing. I am also concerned about people whose cases relate to before 1972 because they are not covered by any of the existing schemes. We are working hard across government to find routes to assist those people. It is not an easy matter. I have spoken to senior people in the insurance industry, too. They are as appalled as we are at what has happened. We will not rest until we find a way forward. It will not be easy, but the hon. Lady has my commitment that we will do everything possible to help her constituent and others who are affected.

John Robertson (Glasgow, Anniesland): I congratulate my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) on his excellent work following the Chester Street collapse. My hon. Friends the Members for Dumbarton (Mr. McFall) and for Greenock and Inverclyde (Dr. Godman) and I were impressed by his speech at the rally on Saturday. He did an excellent job for the people. Sufferers in Anniesland would like to thank him personally for that. What steps are the Government taking to ensure that the insurance industry meets its responsibilities in respect of pre-1972 claimants?

Mrs. Liddell: Some of the issues involved relate to whether individuals are covered by any other insurance company. Where an individual was with an employer who was insured only through Chester Street, there is a significant difficulty. If, however, the individual's employer was insured with another company as well as Chester Street, the other company will meet the liability.

I know my hon. Friend's constituency. Many of his constituents will have worked for British Shipbuilders. That company will acknowledge all liability in relation to victims of asbestosis, but all of us recognise that not everyone is covered. We must find out the full information and find the best way in which to help them.

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Scotland Act

3. Mr. Michael Fallon (Sevenoaks): What representations she has received from the First Minister concerning borrowings under section 66 of the Scotland Act 1998. [155171]

The Minister of State, Scotland Office (Mr. George Foulkes): My right hon. Friend the Secretary of State has received no representations from the First Minister concerning borrowings under section 66 of the Scotland Act 1998.

Mr. Fallon: If the rest of the public sector in Scotland were to follow the example of teachers in receiving higher pay awards than their counterparts in England, beyond the tolerance of the Barnett formula, would the Minister expect that difference to be financed by the use of tax-raising powers before any recourse to borrowing?

Mr. Foulkes: The question is a pretence because it is nothing to do with section 66, which relates to meeting a temporary excess of sums paid out of the Scottish Consolidated Fund or providing a working balance for the fund, and which is repaid. A lot of nonsense is spoken about teachers' salaries north and south of the border, not least by the hon. Gentleman. Let me give some facts. New Scottish teachers appointed at the beginning of the 2001-02 school year will start at a salary of £16,005. Newly qualified teachers in England and Wales start at £17,001. Experienced teachers in Scotland at the top of the main scale will be paid £25,644 from April 2001 and in England and Wales the sum will be £24,965. There is a different structure. There are swings and roundabouts. The hon. Gentleman has never been in favour of devolution. He is now trying to undermine it. He will not succeed.

Mr. David Marshall (Glasgow, Shettleston): Does the Minister agree that the Barnett formula is a transparent, fair and stable way of financing Scotland that has served both the United Kingdom and Scotland well for almost three decades? Does he further agree that those who seek its scrapping do so not in the best interests of Scotland, but in the hope of stirring up trouble between the UK Government and the Scottish Executive? Will he therefore confirm that the Government have no plans to scrap the Barnett formula?

Mr. Foulkes: My hon. Friend is absolutely right. I could not have said it better myself. The Barnett formula is transparent, fair and stable. It allows the Scottish Parliament to decide its own priorities within a finite budget. That is the important thing. Opposition Members in different parties are mischievous and are working together in a common cause to try to undermine devolution. As I have said, they will not succeed. The Barnett formula is working successfully and we have no plans to change it.

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The Advocate-General was asked--

Devolution Issues

24. Mr. Eric Joyce (Falkirk, West): If she will make a statement on her role in devolution issue cases to be heard before the Privy Council. [155194]

The Advocate-General for Scotland (Dr. Lynda Clark): My role in cases in which I intervene is to present arguments from the perspective of the United Kingdom Government. The Judicial Committee of the Privy Council is the highest domestic court for devolution issue cases. Such cases may raise issues involving human rights, European law or legal aspects of the devolution settlement under the Scotland Act 1998 that are of importance to the whole United Kingdom.

Mr. Joyce: I am often asked by my constituents as I go round my constituency whether it is necessary for the Advocate-General to appear before the Privy Council, and, if so, whether that takes up much of her time. What should I tell them?

The Advocate-General: I am delighted that my hon. Friend's constituents take such an interest in my interventions. Personal appearance by the Advocate- General in cases in the Privy Council is not a legal requirement under the 1998 Act, but it is certainly useful, and, I hope, helpful to the court, to have a responsible Law Officer available to present legal arguments in that new and developing sphere of law. It does take a lot of time. As some of my hon. Friends will know, a great deal of preparation time is required for legal research, and there are both conferences and days in court. I have therefore limited my personal appearances to cases that are more complex or involve interesting or novel points. However, if any of my hon. Friend's constituents wish to speak to me personally about the matter, I would be delighted to do so.

Mrs. Eleanor Laing (Epping Forest): Could the hon. and learned Lady give the House some indication of the annual cost to the taxpayer of investigating and resolving devolution issues both in the Privy Council and in other places?

The Advocate-General: The cost of the Advocate- General's appearances are subsumed in the general budget, and we have not done a case-by-case analysis. However, I assure the hon. Lady that it is probably cheaper to have me appearing as Advocate-General than it would be to instruct me as counsel.

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