INSIDE PARLIAMENT : Lilley's block on Spanish practices `saves £30m'

Benefit-tourism crackdown `a success' qMajor agrees pay bonanzas `distasteful'

Peter Lilley returned to a favourite theme yesterday, telling the Commons that his drive against the Diegos and Frederics of benefit tourism was saving some £30m a year.

"We stopped this abuse just in time," the Secretary of State for Social Security said as he opened the annual debate on benefit upratings. Foreign magazines had begun publishing accounts on how open the British system was to abuse by EU nationals.

He quoted from Tribuna, a Spanish magazine, describing a holiday in Britain on benefit as "a brilliant way to travel. You arrive in London one fine day, sign up at an employment office and, suddenly, money and rebates fall at your feet on a regular basis."

In an echo of his "crooks' tour" speech to the 1993 Tory party conference, Mr Lilley said Time Out magazine had set out to debunk the idea, but found Diego, 26, from Barcelona, who had shared a flat with four other Spaniards, all of them on income support.

Then there was Frederic, a 28-year-old who came to Britain to learn English, getting £44 income support and £47.50 housing benefit per week while also collecting French benefits. In ridiculing Labour's initial claim that the residence test was "anti-European", Mr Lilley said most EU countries had similar limits and would not dream of being so generous to British visitors.

In the first six months of the test - introduced on 1 August 1994 - some 6,000 Continentals had sought income support and been found to be not habitually resident in Britain. "Total savings from the test are running at £30m a year - even ignoring any deterrent effect that the announcement may have had."

With today's crucial debate on the European Union looming, a more openly sceptical Tory - Teresa Gorman - tackled John Major over Spanish access to British fishing grounds.

Mrs Gorman, MP for Billericay, is one of the Tory rebels whose voting will be watched tonight to gauge the prospect of their regaining the party whip. Recently she joined fishermen in Lowestoft to support their protest against the EU deal on Spanish boats.

"Unless the Prime Minister has even half a mind to pull Britain out of Europe," Mrs Gorman said, "can he explain to the House, and more particularly to the fishermen of Britain, how else they are to recover their Dover soles?"

Mr Major said British fishermen would be excluded from many markets and many parts of the seas were it not for the Common Fisheries Policy.

The Prime Minister startled the House during exchanges with Tony Blair by condemning as "distasteful" the huge pay rises and perks of privatised utility executives. Moreover, he indicated a readiness to consider legislation to help stop excesses.

The Labour leader has repeatedly pressed Mr Major on the issue, contrasting the many thousands of pounds going to people like Cedric Brown, the chief executive of British Gas, to the lot of ordinary families.

Yesterday, in the wake of a report that six electricity grid directors are to get share options worth up to £6m, Mr Blair tried again: "Does the Prime Minister share the anger at the latest multi-million pay package awarded to the heads of privatised utilities, this time the National Grid, and will he not act to stop these abuses?"

Mr Major replied: "Yes, I do find these payments as distasteful as Mr Blair, and I dare say many other people as well. Where they cannot be justified I do believe they bring the system into disrepute. I believe directors have a duty to consider that and I hope they will." Noting that the CBI-appointed Greenbury committee is examining directors' remuneration, he said that while their recommendations would be addressed to companies and their shareholders, "I will be ready to consider any proposals that may require legislative back-up". Mr Major said a wide number of issues had to be addressed - how best to promote open disclosure of the remuneration of directors so shareholders had the full facts, and how to ensure bonuses and share options were firmly based on company performance and not provided simply as windfall gains.

In a closing shot, Mr Blair said: "Until the Prime Minister acts to stop these abuses, he will be seen as a willing partner in a public scandal where monopoly millionaires and paying themselves Monopoly money." But, with justification, Mr Major replied that people might suspect Mr Blair had prepared that before he listened to the earlier answers.

A backbench Bill to reduce the number of parliamentary seats was rejected by 162 votes to 53. An anti-devolution measure, it was introduced by Spencer Batiste, Tory MP for Elmet, who said the average constituency in England had 69,534 electors, in Northern Ireland 67,145, Wales 58,383 and Scotland 54,741.

A quota of 69,000 for a seat would cut the number of MPs from 651 to 629, a drop in Scotland from 72 to 56 and 38 to 32 in Wales. Devolution for Scotland and Wales would have seen their numbers further reduced. This "downside" was inherent in the concept of devolution, Mr Batiste said.

"There isn't a sustainable half-way house between a unitary United Kingdom and full independence. Those who don't like the destination should not start off down the slippery slope."