Commons Sitting of 14 January 1998

Preamble
The House met at half-past Nine o'clock
PRAYERS
[MADAM SPEAKER in the Chair]

Agriculture (Wales)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jamieson.]
9.34 am
Mr. Dafydd Wigley: May I wish you a happy new year, Madam Speaker. This is my first opportunity to do so. I thank you for this opportunity to discuss agriculture in Wales so soon after the Christmas break. It was soon after coming back in the autumn that we felt it necessary to raise the subject in the House, and you were kind enough then to accord a debate to my hon. Friend the Member for Ceredigion (Mr. Dafis). It is a reflection of the continuing crisis in Welsh agriculture that we once again have to return to the subject.
We departed for the Christmas break to the sound of the ministerial statement on Monday 22 December. We return with its echoes still ringing. The concern of farmers in Wales remains equally acute. I represent a largely rural constituency, where the traditional family farm is the backbone not only of the agricultural industry but of rural life in general. The collapse of the family farm would lead to a collapse of the fabric of rural Wales and cause not only economic problems but environmental and social problems.
The industry in my constituency is mainly livestock. Much of it is on hill or marginal land. Much is subsistence farming with relatively low incomes. It has been said that 40 per cent. of eligible families in agriculture receive family credit in my constituency. That is a reflection of the level of income of farmers and their families. I can personally testify that the present crisis is the worst in agriculture in my 24 years in the House. It is the worst in living memory for many people. The figures for 1997 that have been estimated by the National Farmers Union show that there has been a 47 per cent. reduction in farm incomes in 1997 in real terms. That reflects the size of the problem.
The crisis is all the more acute because so many sectors seem to have been hit simultaneously. In previous difficult periods, some farmers were able to move from one sector to another—perhaps dairy to beef, or beef to sheep. Today, there is no scope for such action. All the sectors are in acute depression. To make things even worse, several factors have come into play together, as if conspiring to hit farmers when they are down. They include the direct and knock-on effects of the BSE crisis, the continuing ban on beef exports and the grossly over-valued pound, which brings in cheaper imports, makes it more difficult to export and adversely affects the parity of the pound against the green pound. The price of
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milk to farmers has fallen by more than 20 per cent. in the past year, and the loss of compensatory and support measures has also hit farmers. There have been increases in several, if not all, input costs, and costs have been imposed by the Government on farmers and continue to escalate. On top of all that, this Christmas, many farmers, especially in my constituency—this is especially true of dairy farmers—have been hit by electricity failures which prevented them from operating milking machines and keeping milk at the required low temperatures. I shall refer to each of those areas of difficulty in turn.
The beef export ban must be lifted. Welsh beef is as safe as any produced anywhere in Europe. It is safer than much that is imported from other countries. Cattle prices in Wales in November 1997 were down 27 per cent. compared to November 1995. I have a graphic example from a farmer in my constituency, Mr. Harri Parry of Glanllynnau, Chwilog near Pwllheli, who came to see me in my surgery last Wednesday. I have his permission to quote his case. He farms 182 acres of lowland just outside Pwllheli and is mainly involved in finishing cattle; he has some sheep as well. He has given me examples of the prices that he has paid and what he has received for his finished product. For example, a steer bought in November 1996 for £245—after the BSE crisis had started—was sold in December 1997 for £304. During that period, Mr. Parry had to meet the cost of feedstuffs at £80, transport costs of £18 and interest on the capital cost of the animal at £25. In other words, if one takes all those costs into account, he made a loss of £64 on that animal. That loss was made even before he had paid anything towards the rent on his farm or towards his labour.
That example is a reflection of the problems that face many farmers. My constituent told me that, two years ago, he just about broke even. Last year, he made a net loss of £15,000, and this year he expects things to be as bad, if not worse. He survives because his wife is a teacher and they take in some visitors during the summer. His case reflects the size of the problem that faces farmers, and quite frankly the Government's package of aid announced in December will not help that farmer by one penny.
The BSE crisis has been a major shadow behind the difficulties encountered by farmers in the past 21 months. I should be grateful if the Minister could tell us about the progress that has been made so far in Brussels, and possibly the progress that may be made today to lift the ban on beef exports from Northern Ireland. I should be grateful to know the possible effects that that may have on progress towards lifting the ban in Wales and elsewhere.
It is also important to consider the impact of beef imports from the European Union. Between January and August 1997, they increased by 63 per cent. compared with the same period in 1996. Resentment is felt in the agricultural fraternity and elsewhere that imports of beef of doubtful quality are coming to this country from other parts of the world. It is also important to consider the policy that is followed by public sector purchasers of meat in Wales, such as schools and hospitals. I urge them to purchase home-produced products rather than imports.
Mr. David Hanson: I am sure that the right hon. Gentleman will welcome the news that I have received today that the Glan Clwyd hospital trust,

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which serves my constituency, has announced that it will buy only British beef this year. It is trying to secure such products in future years.
Mr. Wigley: I welcome that statement from the trust. I heard a similar statement from Ysbyty Gwynedd acute hospital trust when I visited it last week. We need to exert pressure on public service purchasers to buy British beef.
It is outrageous that the Ministry of Defence, which plays its war games over the land of the Welsh farmers, should buy its meat from overseas. That matter caused controversy just yesterday, and I know that it has resulted in incidents in the constituency of my hon. Friend the Member for Ceredigion.
There is a strong feeling that the pound is over-valued and that has had a hard-hitting effect on other sectors as well as agriculture. I believe that over-valuation is a direct result of interest rates that are set too high. Again, that hits farmers with capital borrowings. Farmers are suffering in all directions not only because of what they have to pay for their loans to facilitate their work, but because the high value of the pound also hits exports and encourages imports. The Government should change their economic policy to reduce the parity of the pound, which would help the manufacturers of food products to export as well as improve the position of the green pound parity.
In the meantime, we must try to obtain the maximum benefit possible from the compensation available from the European Union. There is a fund of £980 million of aid on offer over a three-year period; half of that money is payable from the EU whether or not the United Kingdom contribution has been paid.
Mr. Richard Livsey: Does the right hon. Gentleman agree that it is also ironic that British taxpayers have paid out for some of that compensation in their contributions to other countries in the EU? Does he agree that meat exports from the EU are having a hard-hitting effect on Welsh farmers because British taxpayers are subsidising European producers to undercut our domestic market?
Mr. Wigley: Yes, that is absolutely incredible. All other eligible EU member states have taken advantage of that benefit package, which, as the hon. Gentleman has rightly said, is partly funded by United Kingdom taxpayers. The message from Welsh farmers to the Government about that EU fund is, "Go for it." That possibility should have been stressed far more strongly in the measures announced in the December package.
The dairy sector is also facing a crisis as a result of the reduction of about 5p per litre in the price paid to many dairy farmers compared with the price paid in the best time last year. No other industry could absorb a cut of such magnitude. The price of some animal feed may have dropped by between 1 and 2 per cent., but other component costs such as transport have increased.
Farmers will be driven from milk production unless there is some change in policy. Young people are just not prepared to enter an industry where long hours, sometimes anti-social ones, are required if the rewards are not guaranteed. They would have to be on the farm constantly, day-in, day-out, week-in, week-out because of
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their obligations towards their dairy herds. They are not willing to enter such an industry when the rewards are so low—they may just break even.
Mr. Lembit Öpik: Does the right hon. Gentleman agree that it is a source of great concern that the dairy industry, which should be the natural point of entry into farming, is now becoming difficult to join? That is putting off potential young farmers who are failing to come into agriculture. That is causing a crisis because of the aging farming population and the lack of entrants to it.
Mr. Wigley: Yes. It means a loss of continuity on family farms. The lack of young farmers also poses an implicit threat to manufacturing organisations that depend on the products of our dairy farms. The manufacturer of cheese in my constituency depends on the milk produced by the local dairy sector. If that sector is undermined there will be a knock-on effect on the manufacturing sector.
The benefits provided by the aid schemes designed to help beef farmers have been drastically reduced. That is partly due to the six revaluations of the green pound in the past 18 months. The benefits of the over-30-months scheme have also been severely eroded by the Government's decision to place a 560 kg weight limit for compensation. Those two factors have reduced the compensation available on an average animal of 600 kg from £513 in June 1996 to just £311 in November 1997—a loss of more than £200 per animal. Again, that has hit the farming community hard.
Let us consider the additional burdens that the Government have specifically and deliberately placed on our farmers. The subsidy on rendering will be phased out and will end on 1 February. That will place an additional £47 million cost on cattle farmers and an additional £25 million cost on sheep farmers. The Government are also placing a duty on the farming industry to absorb the costs of the Meat Hygiene Service with regard to specified risk materials. That will be equivalent to an additional cost burden of £16 million on the cattle sector and £24 million on the sheep sector. In addition, the charges incurred under the cattle movement service—the passport scheme—will place an additional £20 million cost on the cattle sector. The double tagging regulations will place a £3 million burden on the cattle sector. Taken together, those costs account for additional annual costs of £86 million on the cattle sector, which is equivalent to £38 per head of cattle, and £50 million on the sheep sector, which is equivalent to £3 per head of sheep.
In other words, the entirety of the £85 million help for farming announced by the Minister of Agriculture, Fisheries and Food on 22 December has been more than recouped by the Government through higher charges. What a vicious, cynical and double-dealing betrayal of the farmers of Wales—the Government are getting back every penny that they said they were giving to help farmers. No wonder our farmers are angry and no wonder we heard last night of demands at Cross Hands for a change in Government policy. Farmers have every right to be angry: they were landed in a predicament by the failures of the previous Government, and they have had their plight first ignored and then appallingly treated by the present Government. Later today, farmers will be watching closely to see who will bear the costs of the new

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food safety scheme. Certainly, the general costs should be borne by the general taxpayer, instead of additional costs landing on the beleaguered farmers.
The sheep sector has been hit by the high pound. The exporting of lamb has been one of the big success stories of the Welsh economy in recent years, but that is now jeopardised. Any failure of the export markets leads to a flooding of animals on to the home markets, which drives prices down. This month, lambs are selling at 94p per kilogram, compared to 132p per kilogram 12 months ago. Only yesterday, our former colleague in the House, Lord Geraint, who has great personal detailed knowledge of these matters, told me that, very recently, he bought hoggets for £9.14 each—half the price he would have paid 12 months ago. As a man from Ceredigion, no doubt he saw a bargain when one was put before him, but his experience reflects the problems facing those who are selling and the difficulties in the sheep sector. Those issues must be given attention.
In summary, we want to secure the immediate lifting of the beef export ban and we want an end to the weight limits in the over-30-months scheme. We want the Government to absorb the costs of passport charges and of the Meat and Hygiene Service, which is in the interests of both the general public and farmers. We want the Government to give more aid by bidding for the entirety of the £980 million available from Europe to compensate for the green pound. We want more details to be made available about the December package, so that we know exactly how it is to work.
We want lower interest rates, which will bring down the parity of the pound. We want the Government to bear the costs of the traceability scheme in Wales, as they do in Northern Ireland. We want the Government to give adequate funding for an all-Wales agri-environmental scheme and avoid unnecessary bureaucracy in such schemes.
We also want the Welsh Office to speed up payments for which farmers are eligible—there have been quite inexcusable delays in making payments in recent months, which is adding to the cash flow problems facing many farmers. We want the Government to encourage supermarkets to label clearly the countries of origin of the meat products they sell and to support home-grown food. In any reform of the common agricultural policy, we want to ensure that small family farms are safeguarded through having an upper limit on subsidies—in other words, we want modulation policies to be introduced.
The crisis is of direct concern to me, to my colleagues and to my constituents. Had my grandfather, an upland hill farmer in Montgomeryshire, not died when my father was only five years old, I—or a version of me—might well have been one of the beleaguered farmers in Wales today. I know from family, friends and constituents that unless the crisis is sorted out fast, the whole fabric of rural Wales will be destroyed. The clock is ticking and we are at the eleventh hour. The Minister and his colleagues must respond more positively, more generously and more urgently. I hope that today he can give some hopeful news to the farmers of Wales and that the rural parts of Wales will be able to look forward to better prospects than they have faced recently.
9.53 am
Mr. Huw Edwards: I thank you, Madam Speaker, for granting this Adjournment debate. I congratulate the right hon. Member for Caernarfon
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(Mr. Wigley) on his well-crafted speech. I shall, first, outline the situation in Welsh agriculture as it affects farmers in Monmouthshire; secondly, consider the short-term measures that were recently announced; and, thirdly, examine the need for long-term strategic measures to ensure a more successful future for agriculture in Monmouthshire and the rest of Wales.
In recent weeks, we have seen peaceful demonstrations by farmers in Abergavenny and Monmouth. I support my constituents in undertaking those demonstrations, as I have supported demonstrations by those concerned about the crisis in education, the national health service and the mining community. We also saw a mass lobby of the House by farmers from Wales and I was pleased to be able to share a platform with the right hon. Member for Caernarfon and the hon. Members for Brecon and Radnorshire (Mr. Livsey), for Ynys Mon (Mr. Jones) and for Ribble Valley (Mr. Evans)—
Mr. Elfyn Llwyd indicated assent.
Mr. Öpik indicated
assent.
Mr. Edwards: and, of course, with the hon. Members for Meirionnydd Nant Conwy (Mr. Llwyd) and for Montgomeryshire (Mr. Öpik) and all other hon. Members who contributed to that event. That shows that, when there is a national crisis, it is important that we do not indulge in futile political point scoring.
I also pay tribute to the representatives of the main farming unions in Wales for the way in which they have briefed Members of Parliament, for their determined campaign on behalf of their members and for the evidence they submitted to the Select Committee on Welsh Affairs, whose brief inquiry into the crisis in Welsh agriculture is still going on. Like other hon. Members here today, I am honoured to be a member of that Select Committee.
The thousands of Welsh farmers who lobbied Parliament demonstrated their concern about the serious crisis in Welsh agriculture, which will have an impact on the Welsh economy in general and in my constituency. More recently, I addressed a mass meeting in Abergavenny of more than 300 farmers, who asked a wide range of questions, which I have sent to my hon. Friend the Minister. They ask whether consideration could be given again to supporting farmers for the end product, although I doubt whether that is likely to happen; and they want further assurances about the labelling of meat.
As the right hon. Member for Caernarfon said, there is considerable concern about payments overdue from September, October and November, and concern that equivalent payments from the Ministry of Agriculture, Fisheries and Food in England have been made, whereas those from the agriculture division of the Welsh Office have not.
Mr. Livsey: I addressed a meeting in Brecon of about 350 farmers. We took a poll of the number of people who had not received suckler cow payments and found that 54 farmers at that meeting had not been paid.
Mr. Edwards: I am grateful for that comment. I asked that question of the 300 farmers I met, and a high

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proportion had not received payments due from last September. That is a matter to which my hon. Friend the Minister should give his attention.
It is important to recognise that although the beef sector has been especially hard hit by the crisis, other sectors of agriculture, including the sheep, dairy and arable sectors, are also affected. I have had meetings in my constituency with the National Farmers Union and the Farmers Union of Wales and with large groups of farmers. I have encouraged farmers to write letters and I am grateful for the briefing material I have received. The evidence is clear and has already been outlined by the right hon. Member for Caernarfon: farm incomes have declined by 47 per cent., and the NFU estimates that they are set to fall by a further 45 per cent. this year compared with 1996.
Many farmers have written to me setting out the facts. According to one farmer, cattle that he offered for sale in Monmouth were priced at £350—a deficit of £170 per beast compared to pre-March 1996 prices. Another farmer from Croesyceiliog sums up the situation, saying:
"This industry is in dire straits. Countless farmers will be bankrupt—the knock on effect to the industry and the rural community is awesome. Please do something before it is too late."
It is my duty to convey that message on behalf of my constituents. At the Abergavenny meeting, one farmer comically announced that, paradoxically, his herd would be worth far more if it had BSE than it is currently worth BSE free. That is a perverse situation and we must seriously address those problems.
The key issues involved in the crisis have already been highlighted: the effect of the high pound making beef imported from European Union and non-EU countries cheaper; the substandard quality of some imported beef, especially beef over 30 months and cow beef; and higher standards being employed in Britain than in other countries. It is amazing that, although countries such as Botswana, Mauritius, Namibia, Paraguay, Poland, South Africa, Swaziland, Uruguay and Zimbabwe may operate far less stringent controls, their meat is imported into this country, while beef produced to high standards here cannot be exported.
If British consumers knew that beef over 30 months old was being imported from those countries they would rightly be outraged. Farmers are right to point out that while the highest standards apply in Britain to eliminate BSE, there is no assurance that countries such as Namibia, Swaziland and Botswana are free of BSE. The matter needs urgent consideration.
How can consumers know what they are buying when there is such inadequate labelling? Surely it is time for the country of origin to be advertised so that the consumer can make an informed choice. As I said to my right hon. Friend the Minister of Agriculture, Fisheries and Food recently, if it is possible for the consumer to know the country of origin of every bottle of wine that they buy, why can they not know the country of origin of every joint of meat that they buy?
I should like to highlight a local supermarket in my constituency, Waitrose in Monmouth, which clearly states that all its fresh beef is British. Unfortunately, the same cannot be said about its lamb, which seems to come predominantly from New Zealand. There is concern among farmers in my area that, apparently, lamb over the
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age of six months is now regarded as mutton, which affects the purchasing policy of supermarkets such as Waitrose. I should like more clarification on the matter and I hope that we shall seek it from the supermarkets.
I commend some of the statements that my right hon. Friend the Minister of Agriculture, Fisheries and Food has made recently. I commend his unilateral decision on certain beef imports that are not up to British standards. I also commend the £12 million package for Welsh farmers which he announced in his statement in December. That was rather more than I had feared it might be, but not as much as I had hoped for. I welcome the support for the suckler cow sector, which will benefit farmers in my constituency. I also welcome the hill livestock compensatory allowance payments, although they will have less effect in my constituency which is largely lowland. To its credit, Monmouthshire county council has announced that only British beef will be used in its schools and other establishments. It has provided a standard which other public bodies should at least follow.
There is a need for both a short-term and a long-term strategy to restore confidence in the beef market. I hope that Ministers will re-examine the further availability of agri-monetary compensation from the EU. Other countries draw on that fund and it will be important that British farmers are also able to claim their entitlement. We have been asked whether Ministers can review the over-30-months scheme and the weight limit which has been imposed. We have also urged Ministers to look seriously at the issue of labelling.
In addition to a short-term strategy, there must be a long-term strategy, which the industry has lacked. The Government are undertaking a strategic defence review; surely it would be possible to have a strategic agricultural review. It is vital that agriculture has a long-term business plan with a clear role for the Government. There must be clear, long-term agricultural objectives for the Government and the Welsh Office. Clearly, the Welsh Assembly will have implications for the future planning of agriculture.
We need clear, reliable data for long-term planning. We need reform of the common agricultural policy so that it distributes resources more equitably and supports the vital environmental role provided by farmers. I commend the agri-environmental scheme that we have in Wales. It will have to be developed further, and I hope that farmers in Monmouthshire will be able to take advantage of it and see that, in future, that is how they will play their vital role in maintaining the outstanding environment in Monmouthshire and Wales.
We need to consider the assessment of the impact of the negotiations on the general agreement on tariffs and trade. There should also be an assessment of EU developments on the single currency and its impact on farming.
I was impressed by a statement from the president of the National Farmers Union, Sir David Naish, which set out long-term objectives for the industry. Those objectives include producing the bulk of Britain's food supplies and creating an internationally competitive industry in Europe and the world that contributes to the maintenance of the countryside and landscape, plays a full part in Britain's rural economy and provides safe food through responsible and sustainable methods. I understand that my right hon. Friend the Minister is making a statement this

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afternoon announcing the establishment of a Food Standards Agency. The measure is long overdue and I am sure that it will be commended. I look forward to hearing that statement.
Farmers devote a lifetime to producing food for our people. They deserve a secure future, but can have one only if there is a clear, long-term strategy for the industry. I have focused on the crisis facing agriculture in Monmouthshire, but it is a matter of concern, not just to the farmers but to all those involved with the rural economy.
The decline in incomes in farming will have a multiplier effect which will have a serious impact on a wide range of farming-related industries, including feed suppliers, farm machinery suppliers, rural retailers and the banks. I shall be meeting ancillary farm workers on Saturday to discuss the concerns that they have as a result of the crisis.
The loss of those industries and skills would have a catastrophic effect in my constituency and throughout Wales. I urge the Government to respond effectively and immediately to the crisis facing agriculture. If they do not, the impact on agriculture, the rural economy and the environment will be devastating.
10.5 am
Mr. Lembit Öpik: If I were a farmer now, I would be asking, "What have I had done to deserve this?" What crime has agriculture committed that has caused it to be punished so intensely and persistently as to drive individuals out of the business? What other industry would be expected to deal with such deflation in its income at a time when the certainty of its products being sold within the domestic market cannot be assured?
The beef crisis is not of the industry's own making. Government policy led to BSE, yet farmers are increasingly expected to pick up the tab. The export problems are exacerbated by the amazing and depressing fact that while, in the past, sheep prices often compensated for a decline in beef prices, at present, both prices are depressed in an unrealistic and unsustainable way.
We have already heard talk about the overdue payments. It is simply not acceptable at a time when all farmers are expected to bear the burden of the increasing costs to expect them to wait for what meagre subsidy they have been promised. For example, the persistent expectation that meat hygiene costs must be borne by the producers puts an unacceptable burden on producers who have tried hard to protect their industry.
Mr. Livsey: Will my hon. Friend also note the impact of charges on butchers who have abattoirs on their premises? There are two in my constituency, Mr. Eddie Thomas and Mr. Brian George, who are being charged £98 per day and £15.74 per hour. They are paying inspectors £200 a day when the farmers themselves are earning only £10,000 a year, if that—owing to the current prices, they are now on much lower incomes. Does my hon. Friend agree that something has to be done or those small butchers will go out of business?
Mr. Öpik: My hon. Friend makes a good point and it serves to highlight the fact that we are discussing not
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simply the depression of incomes but the survival of those small butchers and small abattoirs. Mr. Hamer, an abattoir owner in my constituency, told me:
"Due to the strength of the pound we cannot export effectively … Therefore the only way this charge … can go is back down the line to the producer. Now given that the producer's returns are so very low, this further £3.50 is going to cause considerable damage to the rural economy and obviously to this industry".
With such onslaughts, it is amazing that the rural economies of Britain—in England, Scotland and Wales—can survive.
In addition, there is uncertainty, with no clear guidance as to the extent and nature of the common agricultural policy reforms. Perhaps most depressing, as the right hon. Member for Caernarfon (Mr. Wigley) said, is the amount of foreign imports that are coming into this country and undermining the one market—the domestic market—on which British producers should be able to depend.
Before Christmas, I visited a hospital where the staff were upset by the fact that they were obliged to serve Argentine beef, New Zealand lamb, French chicken and Danish pork to their patients. It is ironic that, although we can now safely claim that British produce is the safest in the world, our hospital patients and the customers of other public outlets are served imports of more dubious quality.
The consequences, in addition to the general decline of UK agriculture, are obvious: the disintegration of the smallholding structure that serves to prop up rural life in mid-Wales as we know it; the stress on family farms; and the fact that many children on family farms are seriously considering leaving the agricultural world altogether to find a safer and more profitable existence in some other walk of life.
The Government may have forgotten that farmers are not simply breadwinners but guardians of the countryside. The countryside that so many city folk love to visit is protected and nurtured by people who are trying hard to make a living in the process of looking after that countryside.
One consequence that has not been mentioned is rural stress. Rural stress and stress-related illness are at record highs in the countryside; suicides among farmers are at an alarming level. Some statistics suggest that farmers are more at risk for suicide than any other professional group in the United Kingdom.
It is fairly obvious what action we must take. First, it would greatly reassure farmers if they received from the Government not just words of sympathy but real financial support. It is merely a tactical excuse to say that BSE has cost too much. The farmers know that it is expensive, but they depend on the Government to provide serious economic support to ensure that we weather this crisis without the wholesale collapse of the networks that provide for rural life in mid-Wales and throughout the UK.
Secondly, as the right hon. Member for Caernarfon said, we need to be told clearly when we may expect a comprehensive lifting of the export ban. I agree that Northern Ireland is in an excellent position to act as a precedent for a phased lifting of the ban. There is no logical reason why Ulster beef should not be allowed into the European market, and there is no logical reason why that lifting should not form part of a phased lifting of the ban throughout the UK.

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Thirdly, as the hon. Member for Monmouth (Mr. Edwards) lucidly argued, we must end the nonsense of unclear labelling. When a consumer picks up a package of meat, he or she must be able to tell from the label exactly where the beef, lamb or whatever was reared as well as packaged.
Fourthly, we must provide hope to family farms and smallholdings. That requires financial expenditure, but—equally important—it requires a clear strategic statement by the Government so that people on those farms, many of whom are being snowed under by bills that they cannot afford to pay, have some understanding of where the Government intend to lead them.
Mr. Hanson: The hon. Gentleman twice mentioned financial support. How much financial support, on both counts, would he provide if he were the Government today?
Mr. Öpik: I believe that the points on financial support have been clearly made by the right hon. Member for Caernarfon, but I emphasise that the important point is a strategic commitment to support the countryside. I shall not start throwing statistics around in a cat and mouse game, because I believe—and I hope that the hon. Gentleman will agree—that this issue transcends party politics. We must provide the people of the countryside with the assurance that we really have a Government who want to create one nation of the countryside and the cities, rather than two nations where the interests of the countryside play second fiddle to those of the city.
I make a heartfelt request that the Government really listen to the advice of those who live and work in the countryside when they represent our interests in Europe. In fairness, there is evidence that the Minister of Agriculture, Fisheries and Food is fighting his corner in trying to lift the export ban, but—as many of us have said and will continue to say—money is available that has not been accessed to try to support economically those who have suffered so much as a result of BSE and the strong pound.
The crisis in agriculture is not the farmers' doing. It is a crisis of the countryside, caused simply by the failure of Governments. I do not specifically blame the current Government, but I would point the finger at the previous Government, who failed to act in a way that preserved the economic sustainability of many farms on which we depend for our rural prosperity.
All farmers ask for is a level playing field. All they want is the knowledge that the Government will back them in their efforts to preserve the country life that has been so important for very many generations.
As a final plea, I ask the Minister for reassurance that there is an opportunity for open dialogue between the Farmers Union of Wales, the National Farmers Union in Wales and the Government, and that the Government are willing to listen to creative solutions and creative ideas from those who have made it their life's business to look after the countryside. With such dialogue, there may be a glimmer of hope that we can make genuine progress in a partnership that will secure the interests of those farmers in dire financial crisis in the short term, and the interests of the countryside that we all love in the long term, in Wales and throughout the United Kingdom.
10.16 am
Mr. Chris Ruane: I congratulate the right hon. Member for Caernarfon (Mr. Wigley) on securing this important debate, on a subject which will affect thousands of people in Wales.
The crisis in Welsh farming has a knock-on effect not only in the farming community but throughout the rural community and in many related industries. Before Christmas, I met a delegation of about eight workers involved in the ancillary industries, such as feedstuffs, farm machinery, ironmongery and fencing, and in the abattoir and processing industries. I saw the desperation in their eyes and heard the desperation in their voices. They are in crisis; they need help. They should get help from all quarters—from the Government, from the supermarkets and from the general public. We each have a role to play.
After the meeting in December, I promised to write to the UnderSecretary of State for Wales, my hon. Friend the Member for Bridgend (Mr. Griffiths), and the Minister of Agriculture, Fisheries and Food, pleading the case for the wider Welsh farming industry. I promised to write to all the national supermarkets in the United Kingdom—seven or eight of them—and I have had some encouraging responses from some, such as Kwik Save and Iceland. Kwik Save and Iceland are both based in Wales; in fact, Iceland was started by Albert Gubay in my home town of Rhyl. Both those supermarket chains have promised to act positively to help the Welsh farming community.
I also received an encouraging response from Tesco, which is aware of the crisis and has said that it will send one of its top executives to north Wales to listen to the problem. I hope that the right hon. Member for Caernarfon will join me on that visit, and perhaps we can get a delegation of Welsh farmers and the Welsh farming community there to plead our case. We should hold up those positive responses from some supermarket chains as an example to the others, and ask them how they intend to act. Most supermarkets wrote back to say that they were aware of the crisis and were doing this or that—but that is not enough: more can be done.
We need also to look at innovative ways of promoting Welsh farm produce. I ask the Minister to consider the American phenomenon known as farmers markets. They started in California because the farming community there was in crisis. The supermarkets were using their strong position to minimise farmers' profits. So the farming unions asked the supermarkets whether, for one or two days a week, they could use their grounds to sell their produce direct to the consumer, thereby cutting out the middle man. It was a great success, and it has since spread across the whole of America. The idea is going from strength to strength, and we could learn from that. I believe that there is only one pilot project of this type in the whole UK, in Bath. I urge the Minister to establish a pilot scheme for farmers markets in Wales.
The Government have thus far played an important role, and I shall continue to pressurise Ministers to plead the case for Welsh farmers. Some county councils are playing their part, but more pressure needs to be brought to bear to ensure that councils and LEAs buy Welsh meat. Some hospitals are playing their part, too. My hon. Friend the Member for Delyn (Mr. Hanson) has recounted how Ysbyty Glan Clwyd in my constituency has ordered the purchasing group for the whole of north Wales to buy Welsh or British meat.

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Welsh Members of Parliament must continue to bring pressure to bear to ensure that Welsh farmers and the wider farming community survive this crisis. Without that, the farming industry will collapse, and that will bring devastation to rural communities throughout the length and breadth of Wales.
10.21 am
Mr. Ieuan Wyn Jones: I am indeed privileged to be called to speak in a debate on agriculture in Wales. I know that the Minister is well experienced in these matters—this will be the third time since the Government came to office that he has responded to agriculture debates initiated by my party. I thank him for the courtesy he showed my colleagues when we visited him before the announcement was made; I thank him for listening to our concerns.
Farmers in my constituency were disappointed with the compensation package, in the sense that it did not compensate specialist beef producers who finish beef—in other words, farmers who bought their store cattle in the spring and summer and finished them in the autumn and winter. They are the ones who bore the brunt of plummeting market prices. They have not received a penny piece from the compensation package. Perhaps the Minister will recognise these fanners' concerns and see what can be done for them.
The Minister is fully aware of the strength of feeling in Wales, so, rather than repeating points that have been made by my hon. Friends on both sides of the House, I should like to make three or four different points today.
First, I want to emphasise the depth of the crisis resulting from plummeting prices. I want to cite figures given me by the Morgan Evans market in Gaerwen. On 28 November last year, the average price for bullocks was 83.3p a kilo, and for heifers, 83.6p. The prices in mid-November 1996 had been 94.3p and 91p respectively; and in November 1995, 114.49p and 107p. That clearly shows, as my right hon. Friend the Member for Caernarfon (Mr. Wigley) said, a reduction of way over 20 per cent. in two years. There has in addition been a large drop in the price of lamb, from 130p to about 90p—a fall of 40p a kilo. It is the twin effect of the price falls in the beef and lamb sectors which has caused this awful crisis.
Wales is primarily a livestock-producing country, so the impact has been severe. The remarks of the Minister of Agriculture, Fisheries and Food at the Oxford conference, therefore, could not have come at a worse time. He said that he wanted support for the industry to decline even further. There are times to say these things, times when these matters need discussing, but raising them when the crisis is at its deepest was probably not particularly sensitive.
The introduction of new regulations on the exporting of sheep carcases on 1 January has caused immense concern to abattoirs and others involved in the export market. The Minister is well aware that when the industry was consulted about how the regulations should be introduced, certain exporters made the point that if the spinal cord had to be removed from the animal before export, that would cause difficulties with the retailers in France, who wanted the whole carcase. I do not see why the spinal cord cannot be removed in the country where the carcase is received. That should not be a problem, because France operates the same regulations.
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So provided the spinal cord is removed in an EU-licensed abattoir or other approved establishment, I cannot see any difficulty.
One abattoir in my constituency has laid off 25 people simply because the French refused to accept split carcases. Will the Minister look into that? We need only a small change in the regulations to allow EU-approved abattoirs or cutting plants instead of UK-approved ones.
The Government have introduced a voluntary beef-labelling scheme. Farmers are concerned about the way beef is labelled in supermarkets. It is often labelled "United Kingdom packed", whereas in fact the beef has been imported. The EU is to introduce a scheme in 2000, and the Government have decided on a voluntary scheme until then—but that could let many supermarkets and other retailers off the hook. There will be no statutory obligation to inform consumers properly. If there were a statutory obligation to label beef with its country of origin everyone would know where they stood and consumers would be satisfied that they were buying properly labelled meat.
Farmers are also worried that the labelling scheme will apply only to fresh and frozen meat and to minced beef, and not to meat products. As the Minister well knows, the difficulty often arises not with fresh meat but with added value meat products which are now bought in vast quantities by consumers. I should like the beef labelling scheme for the UK to be compulsory, not voluntary.
As for the purchasing policy of public bodies, the Minister will recall that the first debate to which he responded as a Minister was on that very subject. I realise of course that it is not up to individual stations such as RAF Valley; what matters is the central purchasing policy of the Ministry.
If the Government are serious about acknowledging the depth of the crisis in the industry in the UK, they can do something positive about it. They can ask the Ministry of Defence to change its purchasing policy. The MOD buys vast quantities of beef—it is a big contract. The Minister acknowledged the point in the earlier debate and promised to raise it with his colleagues in the MOD. Can he tell us what progress has been made?
The Minister is well aware of the issues. I hope that he will recognise the depth of feeling throughout the House, and I ask the Government to respond appropriately.
10.29 am
Mr. Elfyn Llwyd: I congratulate my right hon. Friend the Member for Caernarfon (Mr. Wigley) on once again securing parliamentary time to discuss this important matter. I shall be brief, as I know that others wish to speak.
It may be obvious, but I shall restate the fact that the agriculture industry is not a marginal industry. Together with the food industry, it represents some 8 per cent. of the United Kingdom's gross domestic product and 8 per cent. of employment. That is a significant contribution.
The announcement on 22 December was a step in the right direction; it would be churlish to say otherwise. However, huge losses have been suffered by the industry and a great deal needs to be done. Hon. Members on both sides of the House have made important contributions today and offered valuable suggestions, to which I hope the Minister will respond in due course.

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The question of a retirement package for farmers needs to be looked at again. That is a long-term view shared by our party and others, and we should be working on it.
On the immediate question of the agri-monetary compensation to which such eloquent reference was made, it is a fact that sterling has appreciated by 20 per cent. against the ecu and 30 per cent. against the deutschmark. Therefore, the sum that comes to Welsh farmers is far less than it appears. The value of the output in 1997 fell by a substantial amount because of the appreciation in sterling, creating a huge disparity.
As we know, compensation is available from the European Commission. I cannot for the life of me understand why some of the £980 million is not being applied for. It is being provided in all other eligible member states, and I reiterate the call for the matter to be reconsidered.
As a result of the strength of the pound during 1997, the Government have benefited from an underspend in the sheep annual premium scheme of about £190 million, together with an additional saving of £222 million in the over-30-months scheme.
Greater efforts must be made to lift the export ban. I understand that there is to be a statement on that today, and I hope that it will be the first of many such statements.
As my right hon. Friend said, there has been a weight limit in the over-30-months scheme, which has been unfair, and compensation has been capped, to put it mildly. That is unjustified and unwarranted. I urge the Government to review the scheme and the weight limit, and to ensure that proper compensation—for compensation it is—is paid to those who need it.
On imports of beef, a number of factors are coming together to create the very low returns being experienced by beef producers. Clearly, the strength of the pound is one reason, and the effect of price imports is a major contributory factor. As a result, imports of beef into the UK are considerably up on 1996 levels.
My party believes that it is essential for the Government to ensure that all agricultural produce imported into the UK conforms with the strict conditions relating to farm assurance, welfare concerns, traceability and processing safeguards. We have in Wales and throughout the UK an agriculture industry that is second to none. The same standards should be applied to all imported meat.
The hon. Member for Vale of Clwyd (Mr. Ruane) made some telling points about supermarket chains. I agree whole-heartedly with what he said, and I urge the Minister again to reconsider the promotion of Welsh meat. That important avenue should be pursued more energetically as a means of bolstering the internal market. It could be done quickly and effectively if sufficient investment and effort were committed.
I refer to the hon. Gentleman's remarks about the purchasing policy of some local authorities. I am pleased that purchasing groups within local authorities are beginning to recognise that the matter needs to be addressed. I congratulate my own authority, Gwynedd, on having stuck rigidly for some time to a home meat policy. That should be emulated throughout Wales and beyond. It is an important step forward.
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I share the concern of hon. Members on both sides of the House at the dramatic fall in income of Welsh farmers. I share the concern, which could easily be allayed, at the delays in processing payments by the Welsh Office Agriculture Department. It is unacceptable that farmers in my constituency have been waiting since August for substantial payments. There is no possible excuse. We have had written responses about some computer or other. It is the same computer that works in England and in Scotland. Payments are made there on the due date, but not in Wales.
In fairness to the Minister, when I saw him before Christmas he took the matter up and I know that he will do his best, but he is fighting a system down at the Welsh Office that needs kicking. I hope that he will get the strength in his foot to do so, and I will assist him if necessary. That is not to say that I am a bovver boy, but action is needed.
This has been an important debate, with useful contributions from both sides of the House. We all unite in calling on the Government to address the crisis urgently. We went part of the way before the Christmas break; let us please look again and do what we can to ensure the strength and well-being of an extremely important industry.
The hon. Member for Montgomeryshire (Mr.
Öpik) referred to rural stress. I was pleased to deliver a paper on the subject recently at Gregynog in his constituency. The Welsh Office and the Ministry of Agriculture, Fisheries and Food have it within their power to alleviate the great problem of rural stress, at least in part. I urge the Minister, for I know that he is sincere, to redouble his efforts to put matters right.
10.37 am
Mr. Cynog Dafis: It is important to emphasise that the present crisis in farming is temporary and intense, arising from BSE and the export ban, and the strength of sterling. The Government have shown themselves slow to respond—indeed, in the autumn they intended not to respond at all. Their response now has been inadequate.
The Ministry of Agriculture, Fisheries and Food is on the record as arguing that it would be wrong to maintain people in farming who should not be there. The retirement scheme has been proposed in that context, to take people out of farming and reduce the numbers in farming in Wales. The proposal has been linked with the issue of environmental sustainability, and I have two comments on that.
First, environmental sustainability requires not fewer people in agriculture, but more. Fewer people in agriculture will lead to environmental loss, not environmental gain. People are needed to maintain and restore hedges, to create natural habitats and to maintain biodiversity. Moreover, cattle as well as sheep are needed on the uplands to promote environmental gain. If we lose people from farming in significant numbers, the countryside will fall into neglect and decay, and we will all be impoverished, including town dwellers who want to visit and walk in a living countryside, not in a decaying countryside.
Secondly, if the Minister wants to see an example of unsustainable agriculture, he should look in the direction not of cattle and sheep producers but of the intensive

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industrialised systems that produce much of the pig and poultry meat that is so popular. Such systems convert grain to meat in conditions that are very dubious in terms both of animal welfare and of environmental impact. It is astonishing that the output of that production is advocated as being representative of healthy eating.
The awful thing about the present situation is that the most sustainable systems with first-rate animal welfare standards that produce meat from grass in mature animals are being undermined. It is high time that consumer choice was informed with an understanding of those issues. We must project those realities in order to encourage the consumption of healthy meat.
We should bear in mind the fact that BSE and the strength of sterling are temporary phenomena. We all agree that the agricultural policy should be reformed fundamentally—and it must go well beyond what is in Agenda 2000—but it would be wrong to pull the plug on farming when the industry is facing its worst crisis in living memory. The extra money that has been provided will do no more than meet the extra costs imposed on farmers.
If the Government intend to introduce the early retirement scheme, I appeal to them to link it with a scheme for new entrants, as occurs in other EU countries. Those two measures must combine to enable us to begin the process of reconstructing rather than reducing the number of people in agriculture.
By and large, the Minister did not make many enlightened comments at the Oxford farming conference. However, I was pleased to see reports of his remarks vis-a-vis CAP reform that he would consider modulation proposals that could be controlled by member states. He seems to have shifted from his previous blanket opposition to that measure. I hope that the Minister is listening to voices other than those of the NFU in England and the Country Landowners Association. He must heed also the voices of the Farmers Union of Wales, the Sustainable Agriculture, Farming and the Environment Alliance, and the Family Farmers Association.
As to modulation, it would be sensible to link agricultural support with labour units. That would assist the family farm and encourage employment. The policy would be in keeping with the fundamental principle of sustainable development: resource productivity is every bit as important as labour productivity. That will be an increasing policy trend generally, and we could start in the area of agriculture in the near future. If the United Kingdom Government were to take the lead in advocating policy change along those lines, it would be welcomed by the public at large and certainly welcomed in Wales where the family farm, which is largely owner occupied, remains the bedrock of our rural communities.
10.42 am
Mr. Nigel Evans: I congratulate the right hon. Member for Caernarfon (Mr. Wigley) on gaining this debate. I have tried several times to secure a debate on this issue that examined the whole of the United Kingdom. As the right hon. Gentleman said, this crisis affects all farming and all aspects of farming in the United Kingdom—from dairy and beef farming to arable, poultry and sheep farming. The crisis has spread down a long chain, affecting suppliers to the industry: suppliers of capital goods, including buildings and machinery, and even feed merchants are suffering.
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Farm incomes have dropped dramatically—some estimates put the fall at more than 50 per cent. The Government's figures are also alarming, and that has an enormous knock-on effect. Farming is in need of life support and the meaningful existence of the rural economy depends on the industry being given the intensive care that it deserves and needs. As farmers have less to spend, incomes in local areas, local shops and other rural businesses that are dependent on farming suffer. Those incomes will drop also. This is an urgent and dire emergency and, by their inaction, the Government are fast becoming an undertaker to an essential industry that does much more than provide food for our nation.
We have seen farmers in Wales and in other parts of the country moved uncharacteristically to demonstrate at ports, outside supermarkets and in fields around the United Kingdom where our armed forces usually conduct manoeuvres. Farmers want to know whether the Government understand the industry. A farmer in the Ribble Valley wrote recently to a Welsh Labour Member of Parliament about hunting, and received a reply that was more than she had bargained for. I shall not mention the name of the Member of Parliament concerned as I have not written to him, but I hope that the letter is a one-off. It begins:
"I have many farms in my constituency and I am familiar with the problems and advantages that farmers have. Your address sounds as though a large amount of public money is spent providing roads and other facilities to you."
The hon. Member then goes on to address the hunting issue. What an arrogant and totally unnecessary introduction to a letter that displays abundant uncaring prejudice. The letter concludes:
"Time makes it impossible for me to take up your kind invitation to visit your farm. But I will spend a day at the Welsh Agricultural show next week where I expect to meet many farmers."
My constituent should consider herself lucky with that response. Farmers who live in the constituencies of Labour Members should be aware that, if they want sympathy from their Members of Parliament, they had better ensure that their addresses ooze poverty.
The reality for many farmers is that, despite the level of wealth or prosperity their farm addresses may suggest, the evidence will show an industry facing bankruptcy. Some farmers are in daily contact with their banks. That has led the National Farmers Union to initiate an unprecedented campaign. These are unprecedented times, and a petition will be presented shortly to the Prime Minister at 10 Downing street on behalf of the NFU.
The BSE crisis was an appalling body blow to farming initially, and the previous Government responded with a package that gave security and, importantly, time. However, that time is now running out. A recent Welsh NFU press release stated:
"The rescue package"—
for the BSE crisis—
"put in place during 1996 helped considerably".
We all know how difficult it has been for hill farmers recently. According to a recent NFU survey, that has led to more than 55 per cent. of farmers deciding that hill farming is not an attractive career option.
An impressive farming lobby came to Parliament before Christmas. We held three sittings in the Grand Committee Room off Westminster hall, and we still did

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not see all the farmers present. NFU chiefs told us that if the Government's package was not sufficient to help Welsh farmers, they would be back. That package was announced, and the NFU will return on 20 January. We have rehearsed the problems facing the industry so many times that it is fast becoming a mantra. What is the use of repeating those problems if the Government refuse to provide any meaningful help? Will the Minister tell the House today that the industry is receiving enough assistance? Will he say that he has nothing to add to what has been said already, and that that is that? Will the Minister's words be a death sentence for thousands of farmers who will go bust—in effect, will the Government nail down the coffin lid on the industry?
Several hon. Members have mentioned problems with the compensation package and the green pound revaluation. There have been five interest rate rises since 1 May, and further increases are threatened. That has led to the revaluation of the green pound, the sucking in of imports and the depression of domestic prices. The Government must tell farmers why they refuse to apply for money to help the industry out of this problem.
The £85 million aid package for beef farmers, which was announced just before Christmas, is simply not adequate. It is a one-off payment which is insufficient to counter the lifetime charges and costs that the industry has heaped on it—including hygiene costs, renderers' charges, double tagging, traceability imperatives and measures necessary to assure suppliers and consumers. Those measures are adding to farmers' costs, while prices for the end product are falling through the floor. If the farming industry dies, many other industries will fail as well. As a result, communities will die. It is estimated that every direct farming job generates five others—the chilling reality is that the reverse must also be true.
Lifting the beef ban, which is now 21 months old, would assist the industry greatly. The news today that the Commission will ask for a partial lifting of the ban in Northern Ireland is a step forward. However, before the cheering starts, we must recognise that the Commission is only one hurdle and that many others must be cleared over many months before we see light at the end of the tunnel. The issue of specialised herds with traceability throughout the rest of the United Kingdom must also be addressed.
United Kingdom farmers want to see parity among farmers throughout Europe. The same standards should apply so that United Kingdom consumers know that the quality of the meat that they consume is assured, and that imported meat is of the same high standards as United Kingdom meat. Meat labelling must be examined. As the hon. Member for Monmouth (Mr. Edwards) said, if consumers have information about where their wine comes from, what is the problem with clear labelling of meat? That must be logical. The conning of the public by using fancy words—for example, regarding British minced beef or British beef which has been minced—must stop. There are many forms of misleading labelling. Supermarkets must listen to the plea that is made on behalf of farmers in terms of labelling and the price at which the product is sold in supermarkets. Farmers are receiving lower prices, and that fact should be reflected in supermarket prices.
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Another area of grave concern is the over-30-months scheme. In March 1996, before the BSE crisis, the average price reported by the Meat and Livestock Commission for a grade 1 cull cow was 95.3p per kilo live weight. That made an 800 kg cull cow worth about £760. Following successive revaluations, cuts imposed by the Government and the introduction of a maximum weight limit of 560 kg, the value of the same animal is now only £311, a loss in value of about £450. Farmers are selling their meat at a loss, and that cannot continue.
I do not understand why the Government cannot take the simple step of lifting the imposition of the maximum weight limit in terms of the compensation that is payable under the over-30-months scheme. A realistic valuation must be placed on the animal.
The beef-on-the-bone announcement, which was made just before Christmas was a disgrace. The Government's handling of the matter was completely over the top. There was no consultation with the industry, and that was quite wrong. Many consumers are asking to be able to buy beef on the bone because they have made a judgment about the risks of catching anything from eating such meat. We must listen to those consumers.
The problems that have been aired during the debate are hitting every part of the farming industry. I shall not repeat what other hon. Members have said, but they have drawn attention to the problems facing the dairy and sheep industries, where prices have collapsed. Imports are increasing and depressing domestic prices, and farmers cannot export their goods. The crisis is hitting everyone.
As has been said, farmers are the custodians of the countryside. If they go, the impact will be felt by everyone. The rural economy is under threat. The Minister has come to the Dispatch Box three times so far to respond to concerns similar to those that have been expressed today that have been raised by Members throughout Wales. We have heard the words before, and farmers will be listening for something that will help them to deal with the problems that they are now facing. Let us not just have words now, Minister; please may we have action?
10.52 am
The Parliamentary Under-Secretary of State for Wales (Mr. Win Griffiths): I, too, congratulate the right hon. Member for Caernarfon (Mr. Wigley) on his success in the ballot and on taking the opportunity to raise matters of current concern to all rural communities in Wales.
We had a constructive debate in November last year when the hon. Member for Ceredigion (Mr. Dafis) introduced a debate on the issues that we are discussing this morning. Since then, my right hon. Friend the Secretary of State and I have met representatives of farming communities on a number of occasions. My right hon. Friend the Minister of Agriculture, Fisheries and Food made a statement to the House on 22 December last year in which he announced that, subject to consultation with the European Commission, the Government proposed to provide additional support to agriculture amounting to about £85 million.
Perhaps I should say at the outset that in the eight minutes that are available to me it will be impossible to cover every point that has been raised in the debate. Therefore, I undertake to write to hon. Members. The Hansard record will be scoured and I shall ensure that I respond to everyone who has contributed to the debate.

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In the United Kingdom as a whole, agriculture represents 2 per cent. of the economy. I recognise that in Wales the figures are different. For example, agriculture represents about 3.4 per cent. of the economy in Gwynedd and 7.5 per cent. in Dyfed and Powys. Agriculture is very important and we are acutely aware of its importance to Welsh communities. It is not only an economic matter, because social and cultural matters are also involved.
Planned expenditure on agriculture in Wales this year is about £260 million. That shows the Government's support for the rural economy, and reflects a major contribution by the taxpayer.
Reference has been made to all the problems and to all the changes on the world scene, which mean that agriculture will have to adapt to meet the demands of the 21st century. We want to tackle the challenges. Reforms will come within the European Union. Market trends will have an impact on the industry. We know that markets are becoming more open to competition from the rest of the world. By and large, our beef, lamb and milk products are sold within the EU at much higher prices than those on world markets. Our market position in the world as a whole is weak and vulnerable. We must tackle the problems of overproduction. We must recognise that consumers are increasingly concerned about health issues, and that concern goes beyond the food that they eat. Consumers are concerned about the welfare of animals and the way in which herbicides and other chemicals are used in the growing of crops. These important environmental issues and long-term trends will not go away.
Against that background, we are looking to fundamental reform of the agricultural policy, but we recognise that that will not happen overnight. As a former Member of the European Parliament, I am acutely aware that the wheels involved grind extremely slowly. There is, however, a clear direction that we must follow. We shall do everything possible to encourage Welsh agriculture to begin to adapt now to ensure that our communities meet the challenges that face them.
My right hon. Friend the Secretary of State and I believe that there is tremendous potential in Welsh agriculture for driving up the prosperity of our rural areas. It may not be a very good time to say this when we are on the verge of a serious crisis, but the chairman of the National Farmers Union in Wales, Mr. John Lloyd Jones, argued in his new year message that the way to keep Welsh farming successful in the 21st century was by producing the best. I whole-heartedly agree with that view. In the Welsh Office, we want to work with farmers to ensure that the best is produced. We want to see Welsh farmers and food processors producing more well-branded premium products that can command premium prices, which will mean a greater value-added element in the food supply chain in Wales. We look to being able to
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meet consumer concerns. There are potential opportunities in terms of farm-assured and organic productions in Wales and we believe that Wales is ideally suited to take that course.
Today, a White Paper will be published on the Food Standards Agency by my right hon. Friend the Minister of Agriculture, Fisheries and Food. The FSA is an independent agency, which will be protecting the public. I believe that it will meet the public's expectations, restore confidence in our food markets and be of benefit to the industry.
In Wales, we want to ensure that we fully take part in the process that I have just set out and, therefore, our commitments remain strong. I understand the difficulties that the industry is facing at present, especially the beef sector. The additional money—it is additional—will go to many farmers in Wales and it will help to make a difference, even if it covers only some of the extra costs that Welsh farmers have to face.
Mr. Wigley: Given that the Minister acknowledged a moment ago that the industry is on the verge of a crisis and given that he has just acknowledged that the December money may go to cover only part of the additional costs placed on it by the Government, will the Government be prepared to look again at how much money will be given to the farmers of Wales and elsewhere to ensure that if the crisis really develops, there will be more resources to help them?
Mr. Griffiths: We are hoping obviously that the indications that we have made will help Welsh farming get out of the crisis. There are a number of issues relating to payments, and payments are now coming through. There were problems because the audit system in the Community changed this year and all the computer programs had to be rewritten. Our systems are not the same as those in England and Scotland. However, we are working to reconfigure completely the way in which our payment system works so that in future we will not have these problems.
We are doing all that we can to support Welsh food promotion, about which there has been much publicity recently, and have agreed additional funding to get it through this year. That requires approval from Brussels, because state aids are involved, but we are working on that. We have a number of projects to promote Welsh food. I assure all hon. Members that we are working hard on all these issues. We hope that the lifting of the Northern Ireland beef ban will go through. It has to go to the Community's veterinary committee first and the Council—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. We must move on to the next debate.

Fuel Poverty and Energy Efficiency
11 am
Mr. David Chaytor: I am very pleased to be able to open this debate today. It is particularly appropriate that it is taking place this morning, as this afternoon my hon. Friend the Member for Plymouth, Sutton (Mrs. Gilroy) will present her Warm Homes and Energy Conservation (Fifteen Year Programme) Bill—an important Bill—which sets a national strategy to deal with fuel poverty.
It is particularly important that the debate is taking place this week, in the middle of January, as it is the peak period for the annual winter cull of elderly people in this country. The excess winter mortality rate—the additional number of elderly people who die each year, and will continue to die each year—is a scandal that has to be addressed. It is a mark of a civilised society that we do something about it.
I remind hon. Members of the figures. In the past five years, there has been an increase of almost 100 per cent. in the number of people dying unnecessarily in the winter months. In 1992–93, an additional 26,300 people died. In 1996–97, an additional 48,600 people died. Most of these deaths could be avoided. Ninety two per cent. of excess winter deaths are among pensioners. To those who say that this is to be expected, that it is quite normal, that it happens in other countries, I should point out that Britain, has one of the worst records of winter deaths caused by fuel poverty. In Britain, the excess mortality rate is 31 per cent. In countries whose climates are more severe than ours—Sweden, Norway, the Scandinavian countries—the figures range from 10 to 14 per cent. In Britain, we lose more than twice as many of our elderly people in the winter months as countries with climates that are harsher and more severe.
I should also point out that in Britain the figures for different districts in the country show that the greatest excess winter mortality rates occur in the midlands. The figures for last year show that the districts with the worst record—the top 20 districts for excess winter mortality—include places such as Northamptonshire, Derbyshire, Shropshire, Rutland, Cannock Chase, north Dorset, north Kesteven and Staffordshire Moorlands. We have excess winter mortality rates of up to 58 per cent., and these are places that do not have particularly severe climates. The excess winter deaths are due entirely to fuel poverty.
Fuel poverty is the inability to afford adequate warmth in the home because of the energy inefficiency of that home. We know that elderly people need more warmth, that they take less exercise and tend to spend more time sitting, that they tend to have poorer housing, more energy inefficient housing, and that they tend to be on low incomes. We now know that almost one in three homes in Britain suffers from energy inefficiency—almost 8 million homes. Fuel poverty affects about 15 million people. Of the 8 million homes, almost two thirds—just over 60 per cent.—are in the public sector, so there are enormous savings to be made by having a national programme to address fuel poverty. In my constituency, every year more than 100 people die in the winter months because of this problem.
I shall now talk about the very welcome initiatives that the new Government have taken to tackle the issue. I think that every hon. Member will welcome the announcement,
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made in the pre-Budget statement in the autumn, of the additional £20 per household to assist with the cost of fuel in the winter, or £50 for households on income support. Hon. Members will welcome the reduction in fuel bills as a result of the cut in VAT, the abolition of the gas levy, and the release of capital receipts so that local authorities can once again start to invest in social housing, the renewal of housing and the construction of new housing.
Hon. Members will also welcome the reduction in VAT on energy-saving equipment, which has put an end to one of the strangest anomalies in our taxation system. We welcome the establishment, as part of the new deal, of the environmental task force. I am sure that all hon. Members hope that many local authorities and others will take the opportunity to get young people off welfare and into work by launching imaginative environmental task force projects based on energy efficiency schemes. We welcome the continuation of the basic system of cold weather payments.
The previous Government made some achievements in this field. We welcome the fact that they established the Energy Saving Trust in 1993, and passed the Home Energy Conservation Act 1995. An enormous amount of good work is done across the country by local authorities, which have been submitting imaginative schemes under the bidding process of the Home Energy Conservation Act. Good work has been done through the home energy efficiency scheme for low-income households, grant aided by the Department of Environment, Transport and the Regions. A multiplicity of schemes are promoted by the Energy Saving Trust, including the replacement of old fridges; incentives for condensing boilers; the pensioners' energy plan, and many other schemes. An enormous amount of campaigning and promotional work has been done by a wide range of voluntary agencies.
However, it is increasingly obvious that we need greater co-ordination of that work and a more comprehensive, less fragmented approach. We need a national strategy and national targets. We have seen the fragmentation of the current approach and reductions in the budgets of organisations charged with improving energy efficiency. The Energy Saving Trust's budget has reduced from £25 million to £19 million, and will be cut further next year to £14 million. Local authorities have also had continuous budget cuts over the past few years, and, with the adherence of the new Government to the previous Government's spending limits, will face further cuts next year. Energy efficiency schemes are not always high profile, and are sometimes seen as soft options by local authorities, which think that they can make reductions in their budget without too much public reaction.
In the competitive bidding process for so much of this money, success very much depends on the enthusiasm of individuals or on the fairly arbitrary process of competitive bidding. The current system does not guarantee that resources are allocated where they are most needed. That is why we need a national strategy. That is why I commend to the House the Warm Homes and Energy Conservation (Fifteen Year Programme) Bill to be presented this afternoon. It calls for a programme designed to install a comprehensive package of energy efficiency measures in 500,000 homes for each of the next 15 years. Fuel poverty can be defeated if the political will exists, and an attack on fuel poverty will bring enormous savings to the public purse in the long run. It will require investment, but it will produce benefits in the long term.

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This is not only a question of social justice and environmental sustainability; it is a question of common sense and sound economics. That is because it is bad economics to allow so much of our housing stock to be so energy-inefficient. The important Energy Efficiency Bill, promoted by my hon. Friend the Member for South Swindon (Ms Drown), seeks to ensure that all homes are given an energy efficiency rating, and that that rating is clearly publicised in all transactions relating to them.
Fuel poverty is bad economics, because we cannot afford the cost to the national health service of so many people becoming ill each winter when that can be avoided. I am thinking particularly of respiratory illnesses such as bronchitis and asthma, and of heart problems. The latest reliable estimates put the cost of fuel poverty to the NHS at £1 billion.
Fuel poverty is bad economics, because we cannot afford to keep so many people unemployed when so many jobs can be created through energy efficiency programmes. The national programme called for in the Warm Homes and Energy Conservation (Fifteen Year Programme) Bill would create more than 25,000 jobs, which would save the Treasury £245 million a year over those 15 years. I can think of no more valuable way of getting people off welfare and into work.
Fuel poverty is bad economics, because we cannot afford the enormous costs of wasting so much energy, or the excessive costs of maintaining homes that are energy-inefficient. There is a saving of £90 million a year to be made from ensuring that homes are energy-efficient. As 60 per cent. of the homes targeted are in public ownership, that will bring a direct saving to the Exchequer. The Energy Saving Trust has estimated that the average household fuel bill could fall by £250 a year with appropriate energy-saving measures.
Fuel poverty is bad for the environment, because the waste of energy works against our objective of a 20 per cent. cut in carbon dioxide emissions. The 15-year programme outlined in the warm homes Bill, targeting 500,000 homes a year, could contribute between 3 and 4 per cent. of the total reductions that must be made if we are to meet our target under the Kyoto agreement.
I commend the study produced in October by the Energy Saving Trust, which argues in favour of a 13-year programme leading to the year 2010. The trust says:
"This paper shows that domestic energy efficiency, if funding is available to build the market, could achieve savings of 4 per cent. against 1990 emission levels … In turn this would mean an 18 per cent. reduction in domestic energy use and a 14 per cent. reduction in domestic carbon dioxide emissions … We also estimate that over 20,000 jobs could be created by increasing the energy efficiency market to this extent. This increase will not happen on its own and will require an increase of public funding to pump prime and market energy efficiency. Our initial estimates are that such programme costs would be around £600 million above existing programme costs, spread over the next thirteen years. This would mean an increase in public funding for these measures from around £100 million today to around £170 million … Therefore we conclude that the public funding required, whether from a levy on energy use or directly from the Government, would be equivalent to less than 2 per cent. of that currently spent by the domestic sector on fuel".
Given that we have had a 10 per cent. levy to support the nuclear power industry in recent years, surely a 2 per cent. levy is not outrageous.
Finally, fuel poverty is simply bad for human beings. It is entirely wrong that we should sit back and allow so many elderly people to dread the winter, wondering
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whether it will be their last. It is entirely wrong that so many people of all ages who are in low-income families should shiver and suffer throughout the winter when that can be avoided. The real point is that—no matter how generous Governments are in providing extra financial assistance to help with fuel bills—if heat is escaping through the roof, windows or doors, the money is being poured down the drain.
It is important to remember the facts about household spending on fuel among different socio-economic groups. The latest figures from the House of Commons Library tell us that the average spend on domestic fuel in all households is 4.2 per cent. of income. In the poorest 20 per cent. of households, it is 12 per cent.—a staggering 300 per cent. increase. In the richest 20 per cent. of households, it is 2.5 per cent. That means that the very poorest families spend proportionately nearly five times more on domestic fuel than the very wealthiest.
Financial assistance from the Government is most welcome, but it is not tackling the root cause of the problem. I cannot be the only Member of Parliament to question whether the £485 million spent on cutting VAT on fuel from 8.5 to 5 per cent. would not have been better invested in targeting energy efficiency measures on the homes of the poorest people. That tax cut was enormously popular, but in time it may come to be seen as a triumph of political symbolism over sensible social and environmental policy.
I want to raise a related issue concerning the pricing structure for domestic fuel. Sadly, that is no longer within the Government's direct control, but it is a matter for the regulators. The system of standing charges for fuel impacts greatly on pensioners and other low-income households. It is one of the most iniquitous and regressive forms of taxation. In a typical pensioners' electricity bill, the standing charge can be more than 30 per cent. of the cost of the fuel consumed; in a typical gas bill, it can be more than 15 per cent. of the cost of the fuel. Consequently, pensioners and other low-income households whose consumption of fuel is low are paying more per unit of fuel than more affluent higher-volume consumers.
A fair system would operate in exactly the opposite way, with low-volume consumers paying less per unit and with higher charges being introduced at higher levels of consumption to encourage conservation. I hope that my hon. Friend the Minister will discuss the issue with our hon. Friend the Minister for Science, Energy and Industry. There is an urgent need for it to be raised with the regulators.
I hope that my hon. Friend will comment on some of the matters that I have raised, especially the fragmentation of existing programmes and policies for energy conservation, and will tell us what proposals she has to introduce greater co-ordination. I hope that she will comment on next year's proposed budget cuts for the Energy Saving Trust and how they will impact on the Government's objectives, and on the planned reductions in local authority expenditure for 1998–99 and how they will impact on local authority energy conservation measures. I hope that she will tell us whether she has had, or intends to have, discussions with the Minister for Science, Energy and Industry about the pricing structure for domestic fuel. Will she also comment on the relative

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merits—in policy terms—of cash benefits to compensate for high heating bills, and investment in long-term energy efficiency programmes?
I do not expect my hon. Friend to say whether the Government intend to introduce an affluence test for middle-class families who benefit from the cut in VAT, but I should be grateful if she would comment on the whole question of the long-term comprehensive national programme that we need so desperately to end fuel poverty and improve energy efficiency—along the lines of the Bill to be presented this afternoon, or the suggestions in the Energy Saving Trust's October 1997 study.
We can end fuel poverty if we choose. To do so would save money for the national health service by improving people's health, and it would save lives. It would save money in benefit payments by moving people from welfare to work, and by cutting the costs of housing maintenance. It would make a significant contribution to our national targets for greenhouse gas reductions. A 15-year programme, as outlined in the Bill, will produce a net saving to the Treasury. There will be initial costs in the early years of the programme; but, if we can find—without enormous difficulty—several hundred million pounds for a plastic tent to celebrate the millennium, can we not find a few hundred million pounds to celebrate the end of fuel poverty by the year 2000?
If we can find, without difficulty, £1 billion to maintain our weapons of mass destruction, can we not also find additional money to end fuel poverty in Britain? It is not unreasonable for us to seek the small amount of pump-priming money needed to abolish fuel poverty for good, so as dramatically to transform the qualify of life for several million people.
11.19 am
Mr. Matthew Taylor: I congratulate the hon. Member for Bury, North (Mr. Chaytor) on securing this debate and, more important on his excellent comments. I shall follow his comments rather more closely than I had expected during the early part of his speech, because I share his concern about the Government's attempt to deal with this problem by helping people to pay to waste fuel, rather than by helping them to save fuel, keep their home warm and thus cut their bills, cut pollution and solve fuel poverty in the long term.
Fuel poverty is not like general poverty: being fuel poor means being unable to afford to keep warm at home not because people are short of money, but because the fuel they buy is largely wasted. Warmth leaks out through doors, windows and the roof when it need not do so.
Fuel poverty is the result of a vicious circle that traps low-income families in cold homes. Despite being poor enough to be living in a home without proper insulation and with a decrepit heating system, vulnerable families and pensioners have to shell out on large heating bills just to stay warm enough to remain healthy. They often fail to keep warm enough, despite paying large bills, because so much fuel energy is wasted. The more their money is eaten up by that waste, the more difficult it becomes to pay their fuel, food and other bills, let alone to pay for their homes to be insulated.
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As the fuel poor try to put up with the cold and damp, even more CO2 emissions are pumped out of power stations that fuel homes where energy is wasted, so everyone suffers increased pollution. That position is worsened by several of the policies that have been designed to help people to pay excessive bills rather than insulate to cut waste, to cut bills and to keep the home warm. Meanwhile, the taxpayer shells out on a national health service that treats hundreds of thousands of people who would not be ill but for the lack of a few simple measures to improve the energy efficiency of their homes.
The energy report of the 1991 English house condition survey is a testament to years of ad hoc Government action to tackle fuel poverty. Almost 6 million homes are completely inefficient in the way they consume energy. Vast numbers of people live in inadequately insulated and heated homes. Unsurprisingly, those having to live in such conditions are more often than not the most vulnerable in society: the very old and the very young. The state that the housing stock has been allowed to get into is inexcusable.
The energy report included a comparative study of fuel poverty in Europe. It found that fuel poverty is virtually non-existent in much of western Europe, where the quality of the housing stock is much higher. Indeed, the figures are better in many of the former eastern bloc countries. In an advanced industrial society such as ours, it cannot be right that so many people lack the basic necessity of a warm home to live in, whereas other countries do not allow that problem to arise.
Evidence shows the effect that cold, damp homes have on occupants' health. Once again, Britain is put to shame when we compare the numbers of those suffering from cold-related illnesses in this country with those in other countries. Every year, Britain experiences a phenomenon known as "excess" winter deaths. Thousands of people are bereaved every winter because of a massive seasonal increase in deaths. Official Government statistics show an extra 60,000 deaths on average each winter, and many more people spend time in hospital.
"Excess" is a rather odd, bureaucratic word: it really describes unnecessary winter deaths. Such a phenomenon is not experienced, certainly not on the same scale, in other countries that have similar or even colder climates. In Britain, for every 1 deg Centigrade drop in temperature, an extra 8,000 deaths occur. In countries such as Sweden and Norway, which can have terrible winters, no extra deaths occur.
Our elderly relatives are not our only worry. The extra pollution caused by this wasted burning of energy contributes to global warming, which is gradually making the world uninhabitable for our grandchildren.
The reality of the impact of cold homes on the elderly and vulnerable is best illustrated, not by those grand, national figures, but by local figures from the Office for National Statistics. In my county of Cornwall last winter, 414 people died unnecessarily—excess deaths, as the Government statistics put it. In Devon, the figure was 984 last year. We must remember that each and every unnecessary death causes unnecessary grief to friends and relatives. The complex causes of fuel poverty do not lend themselves to ad hoc or half-hearted solutions. What is missing from action to improve the energy efficiency of Britain's homes is an integrated, national approach on anything like a sufficient scale. Although many welcome

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small steps are being taken—by local authorities and at national level through home energy efficiency schemes and the Energy Saving Trust—they do not add up to enough. Some statistics suggest that the quality of the housing stock is falling rather than improving, because of inadequate investment in many homes, not least in the public sector where local authority spending has been badly cut.
The work of the Energy Saving Trust is an excellent example of the positive action that must be taken, but on a much larger scale. When the trust was established, the previous Government expected that it would have hundreds of millions of pounds to work with, generated by the levy on power companies. That was approved by the Treasury and by Conservative Ministers, but blocked by the gas regulator, Clare Spottiswoode. The Energy Saving Trust ended up with little more than the Government's grant: an utterly inadequate £25 million. The Conservative Government betrayed those whom they had promised to help by doing nothing to overturn the regulator's action.
Despite the lack of funds, the Energy Saving Trust has managed to introduce many innovative schemes. It has built on the Home Energy Conservation Act 1995, which was secured by my colleague and friend, Baroness Maddock, the former, excellent Member of Parliament for Christchurch. It has helped local authorities to improve the quality of their housing stock. Ordinary people are also receiving help: they get free advice on how to reduce their fuel bills from the energy efficiency advice centres set up by the trust.
The sad fact is that such projects are no substitute for a whole-hearted, properly funded, Government-backed energy efficiency programme on a sufficient scale to deal with the millions of fuel-poor homes, not just a few thousand.
Labour promised such a national home energy efficiency programme when in opposition, but the idea has now been blocked, apparently by the Treasury. However, that has become even more necessary as the Energy Saving Trust's funding has fallen rapidly: it is £19 million this year, and if Tory spending plans are adhered to as proposed, under the new Labour Government funding will fall to a mere £14 million. I understand that a final decision on this matter is expected next week. The trust is not certain what the final figure will be, so I hope that the Minister will have some good news for us today.
The new deal for young unemployed is not the answer either. We are told that they will have the option of work on environmental schemes, with energy insulation being the top priority. I welcome that. However, there are no new funds for the materials required, which suggests that existing funds will be diverted. If so, few, if any, extra homes will be insulated, and existing jobs in the young companies that have been established to undertake work under the home energy efficiency schemes will be lost. The Minister must explain how the materials will be funded on a scale large enough to make a real impact.
Money is always hard for Ministers to find, but the financial position should be put in context. Right now, the vast majority of pensioner couples and lone parents live in dangerously cold homes—cold enough to make them and their children ill—because they cannot afford enough heat. Families must daily choose between food and
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warmth, while money leaks out of their poorly insulated homes. They waste the little money that they have, while the NHS spends an estimated £1 billion every year treating people who get ill in their cold, damp homes.
It is not just a question of the Government giving more money: that is the least of it. The scale of the problem goes beyond what any Government could provide. The average home in England is only half as energy efficient as the Government think is satisfactory, so there is a huge backlog of work if we are to achieve the standards of other countries. One in 10 low-income homes has no loft insulation, a third are still without adequate hot-water tank insulation and nearly 70 per cent. have no draught proofing. I could go on, but the point is made.
A vast amount remains to be done to give less-well-off people warm homes and a chance to use less power to better effect. The majority of homes in Britain could do with extra work, and a sensible way must be found to meet the large cost of that. The previous Conservative Administration found a solution—a levy on the energy companies—which was cleared by the Treasury. However, it was never put into practice. The regulator's block on such a levy must be overturned, by legislation if necessary. There would be overwhelming support in the House for such action.
The companies that make large profits from heating our homes and, incidentally, polluting our environment must be required to put far more of their profits back into the community through the funding of energy efficiency schemes. At a time of falling energy prices and high profits, there is no reason for that to lead to higher bills next year for anybody. Through insulation, the fuel poor would gain lower bills and warmer homes.
In addition to the levy, the free market should be harnessed to encourage energy conservation, not energy sales. A commitment to invest in energy efficiency should be secured before any energy supply company receives a trading licence under the new competition rules. The companies should be able to set up longer-term contracts with customers only if they have installed energy-saving equipment in customers' homes. The power company would get the profit from supplying a customer for a fixed period, which is not guaranteed in the new free market, and the consumer would get lower bills and a warmer home. The Government would not have to pay for that: it is harnessing the power of the free market, and the incentive would be the supply of energy saving to gain customers and not just selling ever more energy to people who cannot afford it in homes that waste it.
There must be a reversal of the absurdity under which there is less tax on using energy than on conserving it. If the Government want to attack fuel poverty, they should reduce VAT on all energy-saving materials to 5 per cent. which is the same rate as on energy so that it is not more, expensive to save energy than to waste it. The Chancellor took a welcome, but, as was evident from the figures, rather tiny step in the right direction in his Budget by doing that for energy-saving materials that are used in Government projects. The same incentive must be given to every householder and business. Labour Members, including the Chancellor, voted with us two years ago to achieve that policy.
I hope that the Government will support the Energy Efficiency Bill that was presented by my hon. Friend the Member for Torridge and West Devon (Mr. Burnett).

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It will place a duty on all building societies and banks to provide, as part of their standard surveys, information on the energy efficiency of the home. That will help buyers to choose a new home in which energy is not wasted, or alert them to ways to improve their new home to cut heating bills and, I hope, press for a cut in the price of the home to enable them to make that investment. It will be a direct encouragement to sellers and builders to improve the energy efficiency of every home so that they are not selling homes that will be expensive to heat in the long term. I understand that the Council of Mortgage Lenders does not oppose the Bill. I hope that the Minister will say that she supports it.
As the hon. Member for Bury, North said, Ministers have to look beyond the next election. Energy efficiency requires investment now for a great but perhaps not immediate financial gain for the Government. Year after year, money is wasted on cold weather payments which are not even adequate because they do not take account of the wind chill factor. That money leaks out of homes which become more and more dilapidated every year. Funding now for proper insulation could remove the need for hefty Government payments for years to come and would include savings on the NHS bill through a reduction in thousands of extra winter patients every year. It would make many of the poorest in our society better off and warmer every winter. Greater energy efficiency will not only leave our grandchildren with a stock of warmer homes for their future, but avoid the legacy of global warming that is caused by COemissions and the catastrophic climate change that that will bring.
11.33 am
Mr. David Drew: I congratulate my hon. Friend the Member for Bury, North (Mr. Chaytor) on obtaining the debate. I shall concentrate on fuel poverty as it affects pensioners and I shall do that mainly because for the past decade I have been a committee member of Care and Repair England in Stroud. I declare that as an interest which has given me an insight into the problems affecting pensioners in particular.
We all know why pensioners are especially vulnerable to fuel poverty. They are among the poorest in our community and there is a great disparity between the incomes of rich and poor pensioners. In addition, many pensioners spend hours at home while other people are at work or engaged in other activities, and they tend to live in the oldest properties, which are most deficient in energy efficiency. Last but not least, pensioners tend to suffer more from illness and mortality. According to Department of Health statistics, hypothermia deaths alone account for almost 500 people a year. Of course that is directly related to energy efficiency.
According to the last census in 1991, more than 2,500 pensioner households in my constituency did not have central heating, and that is a microcosm of the country. Many pensioners are on low incomes and experience fuel poverty. Some 1.7 million pensioner households depend on income support and even on the lower measurement of the Neighbourhood Energy Action's affordable wealth campaign, about 1.3 million pensioners are in need of energy efficiency support.
I welcome the Chancellor's proposal in his green Budget for extra help with the cost of heating all pensioner households and to target additional help on
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pensioners on income support. However, many pensioners choose not to take up income support; that is a problem in its own right. My hon. Friend the Member for Bury, North graphically explained many other measures that the Government have presented. I suggest a small change to income support regulations that would help to reduce fuel poverty for pensioners.
The previous Government amended the income support regulations in October 1995. Before that, regulations entitled people who were eligible for income support to receive assistance with the interest on a bank or building society loan that had been taken out, among other things, to install central heating. That enabled many older people to purchase modern energy-efficient heating systems. Many of them installed central heating for the first time or replaced antiquated or inefficient systems. The benefits included lower running costs for the householder, a reduction in condensation, which is damaging to the condition of a house, a reduction in cold-related illnesses and, of course, a reduction in CO2emissions, which damage the environment.
From October 1995, the Conservative Government restricted income support assistance for interest on loans; only those for repairs to existing heating systems are now eligible. That means that many older people must continue to rely on older heating systems that are inefficient and expensive to run. I ask the Minister to consider, in liaison with the Treasury, reinstating the installation of new energy efficient heating systems as an eligible item under income support regulations.
The economic and health-related benefits of energy efficient heating systems are well documented. For those who live in fuel poverty, the initial capital investment that is required can be prohibitive. Because their existing heating systems are inefficient and costly to run, they cannot afford to save or to borrow sufficient money to meet the cost of installing a new efficient heating system. The Conservative Government's Department of the Environment energy efficiency best practice programme guide No. 171 suggests that the cost of moving to an energy-efficient heating system can be recouped within five years. The call on the public purse to enable older people who live in fuel poverty to improve their heating systems would be relatively small—in some cases not much greater than the £50 a year payment to pensioners on income support. The great advantage of that Government subsidy is that it would reduce older people's future fuel bills rather than assist with the high running costs of old, inefficient heating systems. The estimated cost of running an old central heating system with poor controls is about £1,000 a year. Installing a condensing boiler and good heating controls would lead to a saving of 20 per cent., or £200, a year. The cost of installing a new central heating system in a traditional mid-terraced house would be about £1,600.
If the interest on a loan for that amount was eligible for income support housing costs, at the current standard rate of interest used in income support, the cost to the public purse would be about £2.30 per week for about four years, a total Government subsidy of less than £500. That would be a prudent use of a relatively small amount of Government expenditure, which would have substantial long-term benefits for the fuel poor and for the environment.

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Those changes could be linked to a reinvigoration of the home energy efficiency schemes—HEES—which were mentioned by previous speakers. Unfortunately, the previous Government restricted HEES work to pensioners on benefit and to larger-scale operations, which has had a deleterious effect in my constituency. As the hon. Member for Truro and St. Austell (Mr. Taylor) said, it is important to integrate energy efficiency with other measures.
I want to deal with a second area, in which I have some expertise—the work of home improvement agencies. As I said at the beginning of my speech, I have a long association with Care and Repair England. The Department of the Environment, Transport and the Regions already supports a growing network of home improvement agencies, such as Stroud Care and Repair in my constituency. Those not-for-profit agencies have developed great expertise in assisting, in particular, older people living in poor quality housing to improve their living environment. They are also able to offer considerable advice on the best way to insulate and carry out repairs to their housing.
Home improvement agencies—usually called Care and Repair or Staying Put—are now recognised by all major political parties as having developed a sound track record in providing personal support and practical assistance to older people and, within that group, disabled people who live in poor or unsuitable housing. Their work incorporates a wide range of repairs and adaptations, ranging from a handrail to extensive renovations. Obviously, I want to concentrate on fuel poverty, where the clear aim of Care and Repair's strategy is to keep people in their own homes for as long as possible, and heating those homes to keep people warm is a major part of that strategy.
Inevitably, these matters link with community care—and housing is the missing limb of community care. My right hon. Friend the Secretary of State for Health frequently refers to a Berlin wall between health and social services. We must not forget housing as part of the community care programme, as people go back to their homes.
Not only have home improvement agencies developed the necessary technical knowledge and skills, they have developed the financial expertise to bring in funds from a wide range of sources, including charitable funds, insurance, the national lottery, the utility companies and equity released from the home. Many agencies are also working actively with local authorities on the implementation of the Home Energy Conservation Act 1995.
The national body for home improvement agencies, Care and Repair England, is working with other parties on maximising the use of equity release, in particular for older people in energy-inefficient housing. That will involve partnership working between home improvement agencies, local authorities and building societies and will bring in private finance to complement the use of public funds available through local authority housing grants and home energy efficiency scheme grants. Care and Repair England has also developed a particular expertise—again, in partnership with commercial and voluntary sector bodies, as well as with the Government—in addressing the problems of energy inefficiency in poor housing. It is currently planning research to improve and refine work in that area.
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I suggest to my hon. Friend the Minister not only that a change to the income support regulations be considered, but that thought be given to strengthening the mechanisms for delivering help to older people through home improvement agencies. My hon. Friend the Minister for Local Government and Housing recently gave a strong endorsement to home improvement agencies through the allocation of an additional £750,000. She also announced a review of the funding mechanism.
In the context of this debate about fuel poverty, I draw my hon. Friend the Minister's attention to the capacity of home improvement agencies to make a useful contribution, both technically and financially, to combating fuel poverty and energy inefficiency and to express the hope that any changes to the funding system will preserve and, indeed, strengthen their ability to bring to this area of work a strong voluntary sector contribution and an expertise in accessing non-Government finance.
In the context of a home improvement agency service that can deliver the service and maximise the use of equity release, the proposed change to the income support regulations will assist such organisations to improve the living conditions of thousands of older people who are living in fuel poverty at the threshold of the 21st century.
The task is surely to link such vital organisations to a truly comprehensive programme of energy efficiency to reduce fuel poverty, pulling in the voluntary sector to work with landlords, local and central government, fuel industry regulators and, indeed, individual householders, to show that we have the political will, as well as the economic, social and environmental understanding, to grasp this important nettle.
11.45 am
Mr. Andrew Robathan: I shall be relatively brief and I shall concentrate on energy efficiency. I suspect that there is little disagreement about the substance of this important debate, initiated by the hon. Member for Bury, North (Mr. Chaytor); indeed, I found little to disagree with in his remarks.
I want to explore the part that the Government can play in encouraging good practice, especially through building regulations and by encouraging good design. This applies to new building as well as to refurbishment, on which the debate has concentrated up to now. As the hon. Member for Stroud (Mr. Drew) will know only too well—he initiated a debate on the issue—there are plans to build 4.4 million new housing units by 2025. That presents an enormous opportunity, although many of us are greatly concerned about where they will be built. By using the building regulations that will be applied to the new houses, tremendous progress could be made towards ensuring that there is no fuel poverty among future generations.
I understand that carbon emissions from domestic energy usage account for about one quarter of the total carbon emissions into the atmosphere. That is of concern to all hon. Members and no one doubts that emissions must be reduced. The question is how to do it. I live in a lovely part of Leicestershire where builders, such as the excellent David Wilson Homes, construct marvellous new, detached houses throughout the countryside. That is one of the problems. Why have we all been conditioned to want to live in detached houses, when terraced houses—as anyone who lives in one knows—are much warmer

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because they have only two outside walls rather than four? This is a serious point. There is nothing wrong with living in a terraced house. After all, extremely rich people want to live in terraced houses in Belgravia—[Laughter.]Hon. Members are grinning, but it is an important point. We are encouraged to live in detached houses, when, for reasons of crime as well as fuel efficiency, living in terraces is much more efficient. We should consider that.
It is difficult for Governments to order builders to build terraced houses, but it is ludicrous for estate agents to say that everybody wants to live in detached houses. We are told we want to live in detached houses. I am not keen on regulation in the matter, but I want the argument to move on so that people want to live in fuel-efficient terraced houses. That is easily said, but more difficult to achieve—but the Government could play a constructive role through building regulations.
The building regulations were last altered in 1993 or 1994. The complaint at the time was that all that was being initiated was a requirement that they be in line with good current practice. We should be looking beyond that—the hon. Member for Bury, North alluded to this—towards, for example, every window in any new building, although not in refurbishments, having to be double glazed. Every house should produce the minimum emissions possible, as is the case in Scandinavia. That could be achieved in new buildings at relatively low cost. We should examine that matter very carefully.
If the building regulations are improved, we shall be able to do an enormous amount to old housing units by properly insulating them, rather than simply bringing them up to a mediocre standard. I have just refurbished a house in London and I insisted to the architect that every hot water pipe should be lagged. Unfortunately, that was not done—and it still has not been done—because the cost of ripping out and relagging all the pipes is enormous. The house is thin and not particularly big, but an enormous amount of hot water is wasted every time the hot water tap on the top floor is used. Taking measures to reduce such waste could bring great savings to many people—to poor people and to rich people, and I do not count myself as being rich. People from all social strata could save a lot of money by not having to run the tap for five minutes before they get hot water. They could realise substantial savings not only for themselves but for the environment.
Much has been said today about fuel poverty. We should never underestimate the type of fuel poverty described by the hon. Member for Bury, North. When I lived in Fulham, my next door neighbour was in her late 80s. Although she lied about her age, one could surmise it by the fact that she had worked in a munitions factory in the first world war. One December, she died from the after-effects of a pneumonia that she contracted in the grotty little flat that she rented. Next door to my house, she sat huddled around a gas stove, always worried about the cost of running it. If my house next door could be warm, why could not hers? I am sure that the House appreciates the horror of fuel poverty.
Another aspect of the matter is the fact that many people—although not the elderly living in rotten accommodation—expect houses to be too warm. Far too often we wander round in our shirtsleeves, although it is the middle of winter; instead of putting on a jersey on
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cold days, we turn up the heating. Last year, an article in the Leicester Mercury described a man who complained that the council had not repaired his boiler during last winter's cold snap. He was photographed in his house, however, sitting in a vest. Although that is only an anecdote, it demonstrates that we should, to help the environment, perhaps consider turning down our heating a bit more. Such action will not affect fuel poverty, but it should be considered.
Paradoxically, reducing energy costs is not good for energy conservation or for the environment. The hon. Member for Bury, North mentioned VAT on fuel. It was disingenuous of those who campaigned for reducing VAT on fuel not to mention the fact that that VAT discouraged fuel consumption. Moreover, increased efficiency in fuel production and in the privatised utilities has resulted in falling prices for gas and electricity.
The Government have a part to play in developing building regulations, and in moving well beyond best practice to the very best practice possible at reasonable cost. I hope that Ministers will consider doing so. I hope also that the House will play its part in encouraging builders and house buyers—which we are all likely to be—to favour efficient terraced houses over the "des res" detached houses that are being built across the country.
11.53 am
Mr. Malcolm Chisholm: I congratulate my hon. Friend the Member for Bury, North (Mr. Chaytor) on securing this debate on a subject that is clearly of enormous social and environmental importance. As several other hon. Members wish to speak, I shall be very brief and simply put a Scottish slant on the issue.
Home energy efficiency is very topical in Scotland. The latest house condition survey was issued only a couple of months ago and it showed that the mean national home energy rating of homes in Scotland was 4.1, whereas the rating for new properties must be 7, so 93 per cent. of Scottish homes are wasting energy. Moreover, 25 per cent. of all dwellings in Scotland were judged by surveyors to suffer from problems of dampness or condensation; residents judged that the percentage was even higher.
Houses should be energy efficient for three very important reasons. First, energy inefficiency means that houses are expensive to heat. Secondly, energy inefficiency means that houses can become damp, with an effect on health. Thirdly, it means wasting fuel, with increased CO2emissions. If all Scotland's homes were brought up to today's energy efficiency standards, CO2emissions would be reduced annually by 47 per cent., which is crucial in achieving the Government's objective of reducing CO2, emissions by 20 per cent. by 2010.
As my hon. Friend the Member for Bury, North mentioned, energy inefficiency causes excess winter deaths. There is another way of considering those deaths. In the United Kingdom, the gap between winter and summer deaths is 31 per cent., whereas it is 14 per cent. in Sweden and 10 per cent. in Norway. It goes without saying that those countries are much colder.
A recent study in Glasgow found that asthmatics are three times as likely to have dampness in their homes as the control group and that people who suffer from severe

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asthma are in the dampest homes. I was therefore very interested to learn that the Cornwall and Isles of Scilly health authority recently gave money to district councils to provide insulation in damp homes. That was a very interesting precedent in public health policy and I hope that it will be built upon.
Energy inefficiency affects costs. Currently, average householders in Scotland spend a third more than necessary on fuel bills and, of course, the poorest suffer the most. As my hon. Friend the Member for Bury, North again mentioned, the poorest households spend proportionately three times as much on fuel as the average household. A recent study in Granton Medway, in my constituency, indicated that householders there were spending between 10 and 15 per cent. of their income on fuel. However, I am glad to say that, since that work was done, the campaign they waged brought improvements to their homes.
Lone parent families are mentioned in the Scottish house condition survey in the context of a substantially higher incidence of dampness and or condensation. Those families will have even less to spend on heating if lone parents take up work in April and then lose their job. I do not make apologies for repeating that point, because it breaks my heart to see my Government simultaneously damaging their own credibility and lone parents. I shall go on challenging the Government unceasingly until, like an errant teenager, they see the error of their ways.
That appalling policy of my Government is particularly sad, because it overshadows the many exceptional achievements of their first eight months, some of which were mentioned by my hon. Friend the Member for Bury, North. VAT on fuel has been reduced to 5 per cent. VAT on the installation of energy-saving materials under current grant schemes has been reduced to 5 per cent. More than 10 million payments will soon be made to more than 7 million pensioner households. There has been action to ensure that all pensioners receive the income support to which they are entitled. There has been action, too, of course, on the minimum wage and on welfare into work.
In the Scottish context specifically, we have ensured that the welfare-to-work initiative will have as one of its priorities environmental task force work on home insulation. In Scotland, for next year, we have put £5 million of housing money into the environmental task force, so that there will be additional money for materials. It is important to make the point that comparatively small sums can make a big difference in work on energy efficiency.
I should like to say more about what is happening in Scotland but, because my hon. Friend the Member for Plymouth, Sutton (Mrs. Gilroy)—who will be presenting her Warm Homes and Energy Conservation (Fifteen Year Programme) Bill later today—wishes to speak, I shall draw my remarks to a close now.
11.58 am
Mr. Cynog Dafis: Thank you, Mr. Deputy Speaker, for calling me to speak for the second time today. I congratulate the hon. Member for Bury, North (Mr. Chaytor) on raising this matter and on making a first-rate speech. Energy efficiency—with development of renewable resources and efficient production of energy from conventional sources, such as combined heat and power—is an essential component in a wider sustainable energy policy.
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As chairman of the parliamentary group on renewable and sustainable energy, I am aware both of the tremendous developing consensus in favour of putting sustainable energy policy at the heart of Government consideration and of the compelling case for doing so. That case is well understood by the Minister, who I understand is sympathetic to that view.
Energy efficiency has been debated repeatedly since I first entered the House in 1992 and the overwhelming case for taking it seriously has been well established. It offers gains in respect of the environment, health and quality of life. There are environmental gains in manufacturing and installation and economic gains as a result of reduced costs. Real, sustainable development of energy efficiency is clearly at the heart of Government policy, but the cuts to the budget of the Energy Saving Trust tend to belie that. The Government will have to reverse those cuts if they are to be taken seriously.
Much has been achieved in recent years, but it has been by dint of constant and intense pressure from various lobby organisations and through the work of voluntary organisations such as Neighbourhood Energy Action and the Association for the Conservation of Energy. It was no small task to get the Home Energy Conservation Act 1995 on to the statute book. It took at least three years after I introduced a similar Bill that was blocked by the previous Government. Progress has been made through constant pressure and attrition, and it is still far too piecemeal and insufficient. It is not commensurate with the scale of the challenge or the opportunity to take the matter seriously.
Energy conservation needs to be built into economic and employment policy and social and environmental policy in a structured way over a set period of time. We need a coherent process and a substantial programme and that is what the Warm Homes and Energy Conservation (Fifteen Year Programme) Bill is all about. I am certain that it is the right way ahead. The Bill would contribute to Government policy, it is eminently compatible with the themes that the Government have established and I strongly support it.
12.1 pm
Mr. Harry Barnes: In introducing the debate, my hon. Friend the Member for Bury, North (Mr. Chaytor) said that Derbyshire is one area that suffers particularly from fuel poverty. Although I accept what my hon. Friend said about national programmes and the need for co-ordination, I should like to refer to local initiatives in Derbyshire and Nottinghamshire that are attempting to tackle fuel poverty.
In 1996, the Nottinghamshire and Derbyshire local authorities formed an energy partnership to offer local residents advice on energy saving. North East Derbyshire district council obtained a grant for those arrangements and now runs a mobile service. Local authorities also employ advice officers. It is an important initiative, but it is limited by the fact that it is an advice service.
More funding is required to deploy energy-saving methods in order to tackle fuel poverty among many needy people. The local authorities in Nottinghamshire and Derbyshire attempted to do that under a programme known as the home energy conservation action bid. They sought to set up an energy service company, supplying

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energy-saving goods such as low-cost cavity wall insulation, that would work with the electricity and gas companies to provide cheaper fuel. It was planned that the company's profits, with additional money to be raised from the private finance initiative, the national lottery or European funding, would help to tackle many of the problems that need to be addressed.
Although most local authorities in Nottinghamshire and Derbyshire have been working together on the project for a considerable time, they now realise that they have entered a legal minefield and have had to withdraw the service. I should like my hon. Friend the Minister to examine the information that the local authorities have sent to her office. A change in the law is required to make it easier for such initiatives to be established; they would fit in with the wider concerns that my hon. Friend the Member for Bury, North raised.
12.5 pm
Mrs. Linda Gilroy: I congratulate my hon. Friend the Member for Bury, North (Mr. Chaytor) on initiating the debate.
The Warm Homes and Energy Conservation (Fifteen Year Programme) Bill, which I shall present this afternoon, has been mentioned. It would require the Secretary of State to draw up and facilitate the carrying out over a period of 15 years a programme of action to provide at least 500,000 households each year with a comprehensive package of home insulation and other energy efficiency improvements. More than 200 hon. Members have expressed their support for the Bill and eight national organisations are working with me and support it. They are Friends of the Earth, the Association for the Conservation of Energy, the Child Poverty Action Group, Church Action on Poverty, Help the Aged, the National Housing Federation and Neighbourhood Energy Action. I pay tribute to all those organisations which have long track records in arguing for and taking practical steps to end fuel poverty.
Much has been achieved. Neighbourhood Energy Action is working to insulate 400,000 homes this year. Estimates suggest that as many as 8 million homes are still in need of energy-saving measures, which could reduce their heating bills and allow their occupants to afford the warmth that they need.
As we know, the home energy efficiency scheme is currently under review. One of its present limitations is that it does not reach to the private rented sector. By giving the Secretary of State responsibility for a programme of measures and ensuring that funding is available, we can ensure that the Government take an effective long-term view of this and other problems. By dealing with at least 500,000 homes over 15 years, we should eliminate fuel poverty in 8 million homes and end the misery of cold winters for as many as 15 million people and thereby dramatically reduce the United Kingdom's shameful winter death record.
The cost of the programme has been estimated as £1.25 billion. We believe that the Government already pick up a bill of about £1 billion through funding energy efficiency programmes or financial payment programmes such as VAT compensation and cold weather payments.
By introducing a requirement for a long-term approach, my Bill would ensure that maximum value for money is obtained from such expenditure in lowering fuel bills in a
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way that is permanent and sustainable. I hope that my Bill will focus discussion with the Government on finding new ways of funding that work more effectively. My hon. Friend the Member for Stroud (Mr. Drew) mentioned the home improvement agencies and equity release. Exploring the possibility of ethical bonds is another possible source to add to the funding that is currently available.
I hope, too, that the forthcoming consultative paper on utility regulation will include some proposals to help engage fuel companies to address the challenge of funding such measures. The hon. Member for Ceredigion (Mr. Dafis) mentioned the cut to the Energy Saving Trust; I hope that its budget will be restored.
I congratulate my hon. Friend the Member for Bury, North on initiating the debate and appreciate his support and that of other hon. Members for my Bill.
12.9 pm
Mr. Colin Breed: I should like to concentrate on the regulation aspect of the issue. Although a number of issues need to be considered in tackling fuel poverty, the way in which regulation operates is clearly important. Regulation needs to be focused much more on being consumer friendly than on protecting the financial security of the privatised utilities.
The eradication of fuel poverty requires the measures that have already been discussed this morning, but regulation must be part of the process. Consumer choice is often more like supplier choice. Suppliers choose which are the best customers to supply with the best schemes. The advances in technology that allow companies to identify the customers that they really want have marginalised other customers and promoted the very fuel poverty that we are trying to eradicate.
The unit cost differentials between those able to pay their bill by direct debit and those who must use prepayment meters must be eradicated if we are to move against fuel poverty.
Regulation tends to increase the cost of fuel in more remote and rural areas, where wages are often lower, by imposing almost mandatory transmission costs which operate against the best interests of those in remote and rural areas. They have to pay more for the transmission of the very fuel and energy that they require. Regulation is part of the solution. I hope that the Minister will consider it in conjunction with those matters that have already been mentioned this morning.
12.10 pm
Mr. Christopher Chope: I shall remember this excellent debate for the description by the hon. Member for Bury, North (Mr. Chaytor) of his Government's £485 million Exchequer grant to reduce VAT on fuel from 8 to 5 per cent: a triumph of political symbolism over sensible environmental policy.
Mr. Chaytor: May I clarify that? I said that in years to come it might be seen that way.
Mr. Chope: I am glad that I gave the hon. Gentleman the opportunity to clarify matters for his Whips. I shall also recall this debate for another brave and sincere speech from the hon. Member for Edinburgh, North and

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Leith (Mr. Chisholm) and for an incisive and thought-provoking speech from my hon. Friend the Member for Blaby (Mr. Robathan).
We have had a host of statistics about increases in so-called excess winter mortality. We need to be a little wary of some of the statistics. How is it that fuel poverty is worse when there has been a 26 per cent. fall in the price of gas in real terms since 1987? There have been five consecutive years of reductions in electricity prices. There has been a dramatic reduction in the number of disconnections due to debt. In 1987, some 60,000 gas disconnections took place. In 1996, the figure was down to fewer than 9,000. In 1987, there were 100,000 electricity disconnections. There were fewer than 1,000 in 1996. Those are dramatic falls.
The improvements have been accompanied by the impact of the previous Government's home energy efficiency scheme grant which, since 1991, has helped 2.3 million vulnerable households. There have been undoubted and substantial improvements, yet it is said that fuel poverty is getting worse. I question whether we are exaggerating the problem. In saying that, I recognise that it is a serious problem and that more needs to be done. Indeed, that was the policy of the previous Government.
An article in today's The Times gives an example of how we can all improve the energy efficiency of our homes. It is about the advantages of condensing boilers. It says that the Energy Efficiency Trust estimates that
"householders waste some £278 a year by not taking energy-saving measures, of which the boiler is the largest factor. It reckons that if everyone installed condensing boilers the nation would prevent £750 million (11 per cent.) of energy wastage.
The condensing boiler uses less fuel, and due to its technically advanced burners it produces fewer gases that contribute to global warming than a standard boiler … A condensing boiler costs only £250–£300 more than a standard model and the Energy Efficiency Trust offers a £200 cashback to anyone who installs one before the end of February 1998."
In so far as we can use the House to try to educate people about the opportunities that are available, I hope that an increasing number of people will take advantage of condensing boilers. At present, only 2 per cent. of all boilers are condensing boilers. If we got that number up significantly, it would help energy efficiency and deal with the problem of global warming.
Much of the debate has been about costs. What are the Government doing about applying risk assessment criteria in deciding their investment priorities? In the previous debate, the Government claimed credit for spending an extra £85 million of taxpayers' money to compensate beef farmers for the consequences of the Government's crazy decision to ban beef on the bone, which destroyed the market by curtailing consumer choice. That is costing an unnecessary £85 million. The beef farmers are saying that the costs to them are far in excess of that sum and that £85 million compensation is not enough.
On any objective risk assessment, which the Government should apply to decide whether investment should be made in order to save lives, more lives can be saved by investing in fuel efficiency measures than can be saved by banning beef on the bone and compensating farmers for the consequences of it. To take a small example, the Energy Saving Trust's grant is to be cut next year from £19 million to £13.5 million—a cut of £4.5 million. The Government are hiding behind inherited spending plans. There are no inherited spending
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plans in relation to beef compensation. The Government seem ready to spend an extra £85 million on beef compensation at the same time as approving a cut of £4.5 million to the trust. I submit that the Government have got their political priorities wrong.
The principle that should apply to householders is waste not, want not. If householders do not waste energy, they will be able to save money. Similarly, if the Government did not waste so much money on unnecessary measures such as banning beef on the bone, they would have more money to invest in improving energy efficiency in our homes.
12.17 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Angela Eagle): I shall pass on to my right hon. Friend the Minister of Agriculture, Fisheries and Food the fact that the Opposition do not agree with compensating farmers. I might also tip off the National Farmers Union and see what it has to say.
Mr. Chope: The Minister traduces what I said. The cut in the Energy Saving Trust budget is a direct consequence of the crazy decision of the Government to ban beef on the bone, against the wishes of consumers. Now they are having to pick up the financial consequences. If they had not banned beef on the bone, they would not have had to compensate beef farmers.
Angela Eagle: I am sure that we could have a long and interesting debate on BSE, Mr. Deputy Speaker, but I am not sure that you would rule me in order, given the title of this debate.
I want to talk about the extremely important subject that has been raised by my hon. Friend the Member for Bury, North (Mr. Chaytor). I have enjoyed the thought-provoking and wide-ranging debate on the important subject of fuel poverty and energy efficiency and the way in which they fit together. The quality of the debate has demonstrated the complexity of the subject. There are things that we can do by making focused small policies involving small amounts of money that make a difference, but at the back of our mind is the enormous backlog of problems with the housing stock. We have to integrate policies across government in order to tackle the problem coherently both at overall level and at the level of individual schemes. The debate has drawn attention to that.
I am grateful for all of the speeches that have made, which have been thought provoking, thoughtful and worth while, even down to that from the hon. Member for Blaby (Mr. Robathan), who attempted to impose terraced houses on the entire population. A terraced house in Bloomsbury or wherever he mentioned may be slightly different from one in Bury, North: perhaps my hon. Friend will tell me whether that is so.
Mr. Robathan: I used to live in a terraced house in Fulham, which I suspect mirrored those found in Bury, North and elsewhere.
Angela Eagle: I would be amazed if that were the case.
This has been a wide-ranging debate and there is not much time to deal with all the important issues that have been raised. I hope that I can at least inform the House about how the Government are beginning to deal with them.
Fuel poverty means the inability to heat a home adequately without spending a disproportionate amount of household income on it. Despite the scepticism of the hon. Member for Christchurch (Mr. Chope), we know that fuel poverty is widespread. We might argue about the figures, but the English house condition survey clearly confirms the extremely low standards of energy efficiency in the housing stock and the very slow rate of improvement. That provides evidence of the ineffectiveness of the previous Administration's energy efficiency policies. They had no overall strategy and I agree with those hon. Members who have described it as fragmented.
We know that 38 per cent. of the housing stock has less than satisfactory heating provision. Nearly 3 million dwellings are particularly inefficient, having energy ratings below 20 points. More than quarter of a million homes in the private rented sector, which are occupied by single pensioners, are appallingly expensive to heat, with an average energy rating of only 11 points.
It is deeply worrying that a high proportion of the poorest quality homes are occupied by people who are likely to be especially vulnerable to the effects of cold. Almost two fifths of all pensioners, who are particularly at risk from cold, need to spend more than 15 per cent. of their net income to achieve a basic standard of heating. More than three times as many single pensioners living in privately rented stock need to spend 15 per cent. or more of income on heating than do single pensioners living in the social rented sector. We must take the differences between housing sectors into account when dealing with fuel poverty.
As my hon. Friend the Member for Bury, North said, there is considerable evidence to link cold homes and poor health. The Government, at least, explicitly recognise that. It is significant that national health service expenditure rises by 2 per cent. in the coldest months of the year. I am not suggesting that that is all due to poorly heated housing, but we must acknowledge its effect on making people more vulnerable to other illnesses. It may increase people's chance of falling victim to illness and having to go to hospital.
Although very few people die from hypothermia, the death rate rises in winter, resulting in many thousands of"excess"winter deaths—a phrase already criticised by hon. Members—each year. As hon. Members have also said, the scale of that seasonal increase is not experienced in other countries. We must examine why this country more than any other—even those with colder climates—suffers that increase.
Vulnerable households need support if they are not to be left with impossibly difficult decisions that have a direct impact on health. The previous Administration had no coherent strategy to address the problems of cold, damp homes and ill health. We will do much better, because we recognise the links between poverty, housing quality, energy efficiency standards and health—and we take them seriously.
Health concerns us all and we have placed it at the heart of Government policies. Our manifesto promised to set goals to improve the overall health of the nation and
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recognised the possible effects of poor housing, poverty, unemployment and a polluted environment. Our Green Paper "Our Healthier Nation" will be published soon. We recognise that the problem of fuel poverty can be tackled only as a result of a cross-departmental strategy.
We will take an integrated approach across government to tackle fuel poverty and energy efficiency. We have to produce coherent policies that go to the heart of the problem. We are starting from first principles and I have set up an inter-departmental working group to investigate the extent of fuel poverty. Perhaps its findings will overcome some of the scepticism felt by the hon. Member for Christchurch. It will examine all existing programmes to see whether we can achieve better value and greater integration. There must be an informed national debate on the cross-cutting policy themes that have emerged in the debate and which I am convinced will also emerge from the review.
My hon. Friend the Member for Stroud (Mr. Drew) made a thoughtful speech. I assure him that I shall ask the working group to consider the policy provisions that he suggested on home improvement agencies and changes to income support as a means of dealing with some of existing problems. He will appreciate that I shall pass on his acute observations without prejudice to the result of that group's findings.
As many of my hon. Friends have said, we have not been idle since May. We have not waited for the results of reviews before giving initial help to those least able to help themselves. We have reduced the rate of VAT on fuel to 5 per cent. That was an important step because we know that poorer households spend a greater proportion of their income on heating their homes than do others. Let it not be forgotten that it was the Conservative party that introduced that levy on warmth, which most affected people on low incomes living in poor housing.
The Chancellor's statement on 25 November produced more good news for the fuel poor: this winter and the next, all pensioner households will receive a £20 payment to help with winter heating costs. The worst off—the almost one in four who receive income support—will get £50.
Mr. Chope: Can the hon. Lady guarantee that the £20 per pensioner household not on income support will be with those households before the winter is over?
Angela Eagle: My Department is not directly responsible for administering that payment, but it is the Chancellor's intention that that money should be provided and I am sure that the Government will do their best to do so.
As many hon. Members have already suggested, the utilities and regulators have a key role to play. Part of the legacy of the previous Government is that those companies and individuals essentially act alone as a result of statutory independence. That makes it very difficult for us to integrate policy across different sectors. My hon. Friend the Member for Bury, North asked about gas and electricity supply standing charges paid by people on low incomes. We are in the middle of a review of utility regulation that is considering whether such regulation

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should have an explicit dimension based on fairness and social considerations. We plan to publish its findings in a Green Paper in the spring.
Mr. Matthew Taylor: The block on the levy for the Energy Saving Trust is key to undermining financial investment in energy saving. Will the Minister consider that problem?
Angela Eagle: It is being studied carefully, but a legacy of the system of regulation that we inherited from the previous Government is the gas regulator's power simply to say no. That is what she did and no amount of ministerial urging can make her change her mind.
The home energy efficiency scheme is the largest specific energy efficiency programme in the current portfolio designed to tackle fuel poverty. The scheme aims to help the most vulnerable by paying for energy efficiency measures in their homes. In that way, we will achieve two objectives: we will improve their home environment and contribute to our need to reduce CO2emissions to meet our international obligations. This year and next, the annual allocation is more than £75 million, and I have set a target for this year of 400,000 grants, each achieving, on average, an improvement of five points in the energy rating of the claimant's home.
The reduction in the cost of the materials for that work, which the Chancellor announced in the Budget in November, is welcome because it will enable us to help an extra 40,000 homes. Given that that scheme is targeted at the poorest households, that opportunity is especially pleasing.
My hon. Friend the Member for Plymouth, Sutton (Mrs. Gilroy) was wrong when she said that the home energy efficiency scheme does not reach to the private rented sector. It does, but, unfortunately, a review of the scheme that I initiated on my appointment has made it clear that the scheme as it currently operates does not reach the private rented sector as often as we would like it to. I do not want to pre-empt the outcome of that review, but there are indications that the scheme is not as well targeted on the fuel poor as it might be: it essentially offers a first aid service to a potentially large customer group and sometimes misses its targets.
I welcome today's debate. We need a continuing debate about these serious subjects and the House has made an extremely good start. I assume that we shall continue to make progress through private Members' Bills and Adjournment debates and I look forward to the debate continuing in a constructive way.

Ships (Passenger Registration)
12.29 pm
Mr. Roger Gale: I am grateful for the opportunity to raise on the Floor of the House the European Commission's proposal for a Council directive on the registration of persons sailing on board passenger ships. The matter is of considerable importance to my constituents, to the people of Kent and to the travelling public throughout the European Union.
When I first applied for a debate, my main concern was for those of my constituents who work on the passenger ferries and those using the ferries sailing from Ramsgate. In the interim, the Holyman passenger service has been transferred from Ramsgate to Dover, but it would wrong to think that the matters I wish to address do not also affect the freight shipping services still sailing from Ramsgate—they do and they will.
I should make it plain that, although I regard the issue as being of considerable importance to Kent and as a national issue, I shall inevitably refer frequently to the port of Dover. As a courtesy, I wish to put on record the convention that short Adjournment debates such as this involve the participation of one Member of Parliament and one Minister. I do not know whether the hon. Member for Dover (Mr. Prosser) shares my views, but I would not wish his constituents to think that the fact that he is not speaking in the debate means that he does not have an interest.
The proposal for a directive on the registration of passengers sailing on board ferries requires that all passengers be registered on an inventory by name, age, sex and, if relevant, disability. The proposed directive will apply to all passenger vessels on journeys of more than 20 miles; that figure was originally 30 miles, but the proposals have been amended to ensure that they catch all cross-channel short sea crossings. Curiously, the directive excludes one of the busier European passenger ferry routes—that between Denmark and Sweden—and the channel tunnel; I shall return to the significance of that fact later.
The proposed directive appears to be a European Commission knee-jerk reaction to the Estonia disaster, based on the "We'd better be seen to be doing something" principle. The preamble explains:
"The obligations of the Community in this context are the improvement of safety in maritime transport as foreseen in article 84(2) of the Treaty."
Great reliance is placed on the safety of life at sea convention, which introduces the principle of passenger registration in a specific regulation. The SOLAS regulation was intended to apply to
"all passenger ships on international voyages".
I repeat, international voyages, not short sea crossing ferries within the European Union.
To be fair to the Commission—I must be fair—it has acted on a request from the Council of Ministers to present a proposal for the mandatory requirement on the registration of passengers aboard roll-on/roll-off ferries. That request was indeed made in the light of the aftermath of the Estonia disaster, when considerable difficulty was experienced with the identification of passengers and the consequent settlement of insurance claims.

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In a letter dated 7 May 1997, Commissioner Kinnock tells me that
"the purposes of the Directive are the enhancement of safety and of the possibilities of rescue of passengers and crew, and the improvement of procedures to deal with the aftermath of an accident."
Yet the head of the Commission's maritime safety unit, Roberto Salvarani, is reported to have told port officials recently that
"there is no significant safety reason"
for the directive. It would seem that Mr. Salvarani's appraisal of the situation is more realistic than that of Commissioner Kinnock. Michael Krayenbrink, Dover harbour board's general manager, ferries, says that
"the registration of passenger names will not help prevent accidents (nor save lives in any search and rescue), but only deal with their aftermath".
Let us think logically. Anyone who has any dealings with search and rescue—as one who has worked in the Ministry of Defence and represents a constituency which played host to a search and rescue base, I have such experience—knows that helicopter and lifeboat services need numbers, not names, ages and genders, to facilitate a rescue. In the cold and the dark and the wind and the water, one does not shout, "Are you Smith, Miss, aged 18?" One yanks the body out of the water and moves on to the next one. Rescuers save everyone they can find and keep going until the total head count is reached. Ferries already carry such a count: that figure is kept on shore and also given to each captain before departure.
Names, ages and gender may be of interest to an insurance company after a disaster, but even here there is a difficulty. In copious correspondence with Commissioner Kinnock, I have endeavoured to establish how the personal information will be verified, because people are occasionally reluctant to give their real name when they are not compelled to do so. I am not suggesting that hundreds of Michael Mice will necessarily head for EuroDisney, but it would be naive to believe that a considerable number of Mr. and Mrs. Smiths do not and will not continue to head off for weekends in Paris. Mr. Kinnock's response to my inquiries, in a letter dated 3 October 1997, states:
"On the issue of a possible re-introduction of border controls, I can only repeat that the responsibility of checking the information requested in the Directive has been left to the Member States."
In other words, under European open frontiers there is no way of checking the details. The inventory may not only not help to save life, but confuse and hinder the settlement of insurance claims through inaccuracy.
I shall now address to the manner in which the directive appears to have been devised and its likely effects. The entire concept was generated in the emotional aftermath of the Estonia and the Herald of Free Enterprise disasters. Some constituents of mine who were on board the Herald of Free Enterprise lost husbands and others lost relatives. I do not know whether Commissioner Kinnock has had to deal with the grieving families of those bereaved in a ferry disaster, but I have, and I yield to nobody in my personal concern—if only in memory of those who died on the night the Herald went down—for the continual improvement in standards of safety at sea.
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However, the directive appears to have been produced in a rush, without any serious attention being given to the problems it would create. It is tokenism of the worst sort.
Commissioner Kinnock is on record as saying on 20 November 1997 that:
"I consider that sufficient positive opinions have already been gathered by my services from governments and ferry operators on the practicability of registering passengers on the Dover-Calais route. The advanced state of available telematics systems makes it possible to comply with such a requirement at reasonable costs".
Whom did his services consult before the proposals for the directive were drafted? Apparently, they did not consult the Calais chamber of commerce, which plays such a vital role in the running of that port; nor did they consult the cross-channel ferry operators Sea France or P and 0 European Ferries; and they did not consult Dover harbour board. Had they done their homework properly, they might have discovered the impracticalities of the bureaucratic nightmare that I fear they are about to create.
The ferry companies and the port authorities have done their homework and have concluded that the proposed scheme is unworkable if significant delays are not to be caused for both passenger and freight traffic. Indeed, the effect on the nation's freight could be disastrous. Freight lorries could not load even on to freight-only ferries if the approaches to the port were choked with cars and coaches. More than 50 per cent. of Britain's exports by volume cross the straits of Dover. Any damage done to that traffic will be damage felt by us all.
The ferries are essential to enable British industry to compete with our international rivals. The Road Haulage Association has told me this morning that it is
"very concerned about the very considerable commercial damage that will be done to the road haulage industry by the directive, particularly in the light of the merger of P and 0 and Stena."
I believe that that view is shared by officials from the Department of the Environment, Transport and the Regions who have also taken the trouble to make a thorough study of the subject.
In a letter sent to me yesterday, Michael Krayenbrink of the Dover harbour board reminded me of the following figures:
"In 1997 over 21 million passengers used the port of Dover with, at peak periods, vehicles checking in at the rate of 750 per hour. Any requirement to collect data on these will impose delays on the Port's operations, with knock-on effects on ferry companies using our facilities. This"—
he rightly adds—
"goes against the Commission's twin aims of facilitating transport within the Union and encouraging intermodal transport".
The inevitable increased costs will be passed on to passengers and freight hauliers, thus pushing up ticket prices and adding to the burden faced by ferry companies, already bracing themselves for the loss of traffic and revenue that is likely to result from the abolition of the duty-free trade. Mr. Krayenbrink's observations are as applicable, on a smaller scale, to Ramsgate and the other Kent channel ports as they are to Dover.
I have viewed the facilities available at both Dover and Calais. There is no doubt in my mind that at any peak time neither port is designed to collect the sort of information that will be required by the proposed directive without causing inordinate delay and car and lorry jams stretching back to the A2 or the Paris motorway.

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Currently, the final check-in time is 20 minutes before the departure for each ferry. That allows time to load ships and for the completion of document formalities, freight and tourist manifests and loading lists. At present, the time taken to check tickets and passports is 45 seconds for a car and three passengers, five minutes for a coach and 40 passengers, three minutes for a freight lorry and its driver and 30 seconds for a foot passenger. The projected additional time for registration under the proposed directive is three minutes and 45 seconds for a car and three passengers instead of 45 seconds, 40 minutes for a bus and 40 passengers instead of five minutes, four minutes for a freight lorry and its driver instead of three minutes, and one minute and 30 seconds for each foot passenger instead of just 30 seconds.
How much earlier before departure will travellers have to arrive to enable the ports to comply with the terms of the proposed directive? Where will the additional traffic that is generated park?
Jonathan Sloggett of the Dover harbour board has said that there is no more shore space available for ferry companies at that port, and Guy Flamengt of the Calais chamber of commerce has stressed that the expensive new port of Calais approach road system, which was built with the help of European funding, was created to cut queues and to speed the boarding process. It was specifically designed not to have to handle large volumes of queuing traffic.
The thrust of the single market is to speed communications and end border delays within the Community, but the proposed directive introduces a new set of complex border delays. Commissioner Kinnock and his team appear to have conducted no proper research into the practicalities, but prefer to shelter behind the alleged availability of telematics to solve the problems. What telematics? I invite Commissioner Kinnock to stand in a check-in booth at Calais and try to record, by any means, the names, genders and ages of a Eurolines' coachful of visitors picked up from Poland and across Europe at various stops en route to Calais. It is not just Polish names that British and French officials find difficult to read and spell.
As someone who, for about a dozen years, has been pressing for fully machine-readable identity cards and passports, I am aware that there is no uniform system operating in the European Union, never mind the countries of the former Soviet Union and beyond. Even the different departements of France use differing systems. The idea that a machine-readable swipe card will make everything swift, accurate and easy is unreal. Even if the telematics did exist, even if every passenger carried a swipe card, even if all the cars were harmonised, even if every passenger was fit and well and could jump out of a coach quickly and even if it took each passenger only 10 seconds to use a swipe card, the cumulative effect would add hours to boarding times, with a consequent knock-on effect on turnround times and on passenger and freight costs.
The reliance on the use of telematics is jargon. I do not believe that it is at present practicable and I believe that the Commission also knows that, but declines to admit it. The process will interfere dreadfully, possibly terminally, with the turn-up-and-go system that is essential to the ferries' survival in competition with the channel tunnel shuttle.
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That brings me to the issue of competition. Let me assume for a brief and incredible moment that the Commission's entire thesis is correct and the provisions of the directive will save life. Why do not the same provisions apply to the channel tunnel in which there was a near-fatal and certainly horrific fire not long ago? Why should ferry passengers be subjected to inordinate bureaucracy and delay while those using the potentially just as hazardous tunnel are allowed to travel on the shuttle without even a head count being taken?
The Commission claims that the directive ensures harmonisation in the interests of fair competition, but that is nonsense. It will have just the opposite effect. The directive's effect on the short sea crossings of the channel from Dover and Ramsgate, which is seeking to attract new operators following the loss of Holyman, will be disastrous to fair competition.
The direct competitor of the ferries is the shuttle. Unlike the ferries, the shuttle does not at present even count passengers. The Commission should at the very least have dealt with the ferries and the shuttle simultaneously. Unless the measure is applied equally and simultaneously to ferry and tunnel traffic, the Commission will have placed the channel ferries at such a grave disadvantage that they may become no longer commercially viable.
To date, the Commission has only, in the words of the director general of DG7, Robert Coleman,
"given a commitment to the European Parliament that the case for `undersea' rail tunnels would be looked at further."
In a letter to me dated 19 November 1997, Mr. Coleman said:
"While I understand your arguments that a level playing field is needed for competition between cross-channel ferries and `le Shuttle' I do not believe that it necessarily follows that users of the tunnel should, therefore, also have to comply with registration procedures as those only apply to ferries".
It is all right to fry and to be unidentified and unnumbered in a future tunnel fire, but it is not all right to be simply recorded, as at present, on the manifest of a ferry. If there is any logic in the proposal, of course it "necessarily follows" that the same regulations should apply to all cross-channel traffic.
The total traffic on the short sea routes in now more than the tunnel can handle on its own; loss of the ferries would pose a considerable threat to British exporters. Another closure of the tunnel, for any reason, would, under those circumstances, bring cross-channel freight and passenger traffic to a halt.
If I believed that the directive—which is promoted by Commissioner Kinnock and, astonishingly, has the support of East Kent's Member of the European Parliament, Mark Watts, as rapporteur of the Transport Committee—would contribute to the saving of even one life, I would support it. But I do not. I believe that it is ill-researched, unworkable, unnecessarily bureaucratic and fails every European test of a proportionate response to a perceived need.
I emphatically do not regard this as a party-political issue. I believe that the Department of the Environment, Transport and the Regions' own officials have serious reservations about the directive. I have good reason to believe that their colleagues in France share those growing doubts.

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The Minister for Transport in London has a reputation for being fair minded and, without wishing to embarrass her, for being a thinking Minister. I urge her to take another long, hard look at the proposals. If she shares any of my concerns about the future viability of the ferries, about their importance to our transport infrastructure and about the need for fair competition between the sea routes and the tunnel, will she please seek to ensure that the United Kingdom's presidency is used to secure, at the very least, parity of treatment between the ferries and the tunnel?
Will the Minister demand that parity is achieved before the commencement date of any such directive—even if it means pushing the current year 2000 start date back by however long it takes? Will she please insist that a proper study of the likely effects of the proposed directive is conducted by the Commission and that all interested parties are, even at this late stage, properly consulted? Will she explore the possibilities, within the present proposals, for a derogation to exempt entirely the short sea crossings of the channel from the proposed directive under the terms of new paragraph 4 of article 9? If at all possible, will she endeavour to have this ill-conceived proposal for a directive consigned to oblivion?
12.49 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Glenda Jackson): I congratulate the hon. Member for North Thanet (Mr. Gale) on obtaining this debate on an issue of great importance. It is regrettable that so few hon. Members have been in the Chamber to hear the arguments that he advanced.
The hon. Member made it abundantly clear that, in his thinking, the appropriate directive has no virtue as regards safety. He is right when he says that the proposed directive originated in a unanimous resolution of the European Transport Council on 22 December 1994, on the safety of roll on/roll off passenger ferries. Member states, in agreeing the resolution, invited the European Commission—in the light of the tragic loss of the ro-ro passenger ferry Estonia—to submit a proposal for recording accurately the number and names of passengers and crew on board certain vessels. The then United Kingdom Government signed up to the resolution, so obviously the principle of registration was acceptable.
The proposed directive contains several requirements for passenger shipping in the European Union. On every passenger ship voyage of more than 20 miles from the point of departure, the shipping company must, as the hon. Member said, record the name of every person on board—including the crew—their gender and an indication of age category: adult, child or infant. The proposed directive also requires the recording of information, when volunteered by a passenger, concerning the need for special care or assistance in emergency situations; and that information must be passed to a shore-based representative of the company within 30 minutes after the passenger ship's departure.
The proposed directive requires all persons—including the crew—on board any passenger ship departing from a European port to be counted before the ship departs, and requires that number of persons on board to be
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communicated to both the master of the ship and a shore-based representative of the company. The master is specifically responsible under the directive for ensuring that the number of persons on board does not exceed the number that the ship is permitted to carry.
The proposed directive also requires the ferry company to ensure that the information required by the directive is readily available at all times for transmission to the designated authority—in the United Kingdom's case, that is the Coastguard agency—for search and rescue purposes in the event of an emergency or accident.
Although I well understood—because the hon. Member presented it so cogently—his argument regarding the effect and some of the implications of the measure, I believe that it is not the case that the package that it represents lacks justification in terms of safety improvements. Reinforcing traditional duties to keep passenger totals within certificate limits benefits safety; formalising arrangements for information sought from people with disabilities benefits safety; requiring those data in respect of each voyage to be recorded ashore as well as on board ship benefits safety.
During working group discussions in Brussels, my Department questioned—as the hon. Gentleman did today—the practicality of some of the requirements. The concern was to probe the rationale for detailed requirements and procedures because of their effect on British shipping routes and ports, and their relationship to the original resolution. As a result of those suggestions, the proposed directive was materially simplified.
At the European Transport Council in June 1997, the Government judged that the safety aspects of the directive as a whole outweighed reservations. We were able to gain a later implementation date for the recording of passenger details than had been originally proposed. Like many of the concerns that the hon. Gentleman expressed, our concerns were essentially practical and did not relate to the principle of the measure, which the Transport Council had already accepted in 1994.
I shall now deal with the extent to which passenger registration will apply to services affecting the United Kingdom. It is important to remember that no journey of less than 20 miles is affected by the requirement to record passenger information. However, the requirement applies to both domestic and international voyages within the European Union of more than 20 miles so, as the hon. Gentleman said, it would apply to voyages between Dover and Calais or between Ramsgate and the continent. That was of particular concern to the hon. Gentleman.
There is, however, scope in the proposed directive for member states to issue exemptions from the requirements to record passenger information, but not from the duty to count. There is also scope to request the European Commission to derogate certain services from the requirement to record passenger information. However, the scope for exemptions or derogations is limited in each case to services that meet clearly defined criteria set out in the measure. For example, exemptions by member states may be granted only to services operating exclusively in protected sea areas. The definition of a protected sea area within the directive is:
"a sea area sheltered from open sea effects, where a ship is at no time more than 6 miles from a place of refuge, where shipwrecked persons can land, and in which the proximity of search and rescue facilities is ensured."

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Having set out the background and contents of the measure, I turn to implementation issues. We have held several informal discussions with representatives of the shipping and ports industry affected by the directive. One important subject examined with them has been the extent of possible exemption or derogation for both domestic and international journeys. Cases for derogation of international voyages between member states must be made—I am sure that the hon. Gentleman will would accept that this is reasonable—jointly by the member states concerned, and they will be decided by the European Community collectively.
Exemptions may be given by member states, but they need to inform the European Commission. If the Commission considers that a service should not have been granted an exemption, it can require the member state to amend or withdraw its decision. The overall aim of these provisions is consistency throughout the Union. I point out to the hon. Gentleman that British citizens often travel on ferries of other than British origin; we believe that this is a means of increasing safety throughout the European Union for all its citizens.
We have not yet completed our analysis, but are well advanced with it, so it may be helpful if I set out our provisional conclusions. As I said, many domestic services will not be affected by the requirement to record passenger details because their voyages are of less than 20 miles. We believe that others will meet the criteria for being granted an exemption by the United Kingdom.
When the directive has been formally adopted, thereby bringing into force the exemption procedure, we shall ask ferry companies to apply to us for formal exemption. In principle, passenger services in protected sea areas can be expected to be exempted. We are also considering whether there is a case for seeking derogation for further
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domestic services and hence for making a submission to the European Commission for those services that we believe meet the criteria laid down in the directive.
One relevant criterion is the state of the sea to be expected on the service. The directive allows member states to apply for derogations only for services in an area where the annual probability of the significant wave heights exceeding 2m is less than 10 per cent. As for international journeys, our provisional view is that virtually all of them will be affected by the requirement to record passenger details, and that operators should plan on that basis.
There are no cases that might be exempted by the United Kingdom alone, because the member state for the other terminal of the service also must agree.
From the outset, the European Commission was particularly anxious to ensure that voyages across the English channel, and especially the Dover strait, should be included in the requirement to record passenger information. The Commission argued that precisely that sort of service should be subject to the requirement because of its relative frequency, in the Commission's yiew, across a particularly busy shipping route. The hon. Gentleman, in his well-reasoned argument, made clear his concerns on that issue, so I shall deal separately with the question of seeking a derogation for services across the Dover strait.
Any such case must be supported jointly by the United Kingdom and France. France has supported and continues to support the Commission's desire for the requirement to be applied to companies on the Dover strait. If we did receive a proposal from the French Government, we would of course consider with them the strength of the argument; and if we considered the case strong enough we would support its submission to the European Commission—
Mr. Deputy Speaker (Mr. Michael J. Martin): Order.

Cannabis
1 pm
Mr. Austin Mitchell: I am grateful for the opportunity to draw attention in this short debate to a change that drastically needs making—allowing the prescription of cannabis for certain specified medical conditions. This is not part of any general argument about the decriminalisation of cannabis—it is a unique subject, although it has a bearing on that argument. To allow cannabis to be made available on prescription would effectively make the law more rational and enforceable in respect of other uses.
Today, I am discussing the case for moving cannabis from schedule 1 to schedule 2 of the Misuse of Drugs Regulations 1985. It will still be illegal, but if it is moved to schedule 2, research into it can be carried out; and it will be available on prescription to named patients.
It is quite illogical not to allow cannabis to be provided in this fashion. Indeed, until 1971 it was available on prescription, but it was then moved from schedule 2 to schedule 1, which comprises drugs with no therapeutic value. Strangely, heroin, cocaine and two synthetic cannabinoids have been left in schedule 2. If the Minister sees any logic in that, I hope that he will explain what it is.
I cannot see why Home Office licences are required for research into cannabis but not for research into heroin. Ever since 1971, the move to schedule 1 has been used as an excuse for doing nothing about cannabis as a form of treatment. In effect, there has been a total block on research.
Most research is done by the drug companies because it is so expensive, but what drug company will put money into research into an illegal substance that cannot be used for prescription? Who then will do the research, when applications to do it are shuffled around, as they are now, between the Department of Health and the Home Office? Licences are incredibly difficult to obtain, and the Home Office in particular seems to drag its feet.
Who will develop a standardised product of the type we need, if such research is not possible? We need research to discover which part of the complex chemistry of cannabis can be used for therapeutic purposes, but that research is just not being done. We need research into ways of taking cannabis for treatment purposes. I understand that it used to be available in tincture form. The Dutch have developed preparations of cannabis that can be taken orally or by inhaler. I am not asking that people suffering from medical conditions be allowed to smoke cannabis, but we need research into a form of it that will dissociate treatment by the drug from its leisure uses.
All this work is being held up by the decision in 1971 to shift cannabis to schedule 1. Meanwhile, the situation has been changing rapidly, invalidating the 1971 decision in the process. First, word has spread among the thousands of multiple sclerosis sufferers that cannabis is of value in treating their condition. They have found relief from pain, greater bladder control, and more control of spasms. The Alliance for Cannabis Therapy, which was formed to campaign on the issue and which has done a magnificent job, has received more than 3,000 letters from MS sufferers describing the value of cannabis in their treatment. But they have been driven into illegality by their need for this treatment.
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I should like to quote some of the moving letters that have been received—I wish that the Minister would go through them. Here is one written in 1996:
"I have dreadful spasms in my legs and can take pills like diazepam without any effect. Half a cigarette a day doctored with cannabis stops the spasms within 10 minutes. I have to pay £30 for a piece as long as my little finger and half the thickness. I find it very difficult because I only have my pension and mobility allowance."
Here is another letter:
"I have a 36 year old son who developed MS when he was 18 years old. He has now got to the stage where he is wheelchair-bound and totally dependent on my husband and I for everything. He also has to sit with his legs elevated to waist height all the time because of pain in his legs. The doctors have tried everything they can think of but nothing works. They have now told us there is nothing they can do for our son. About a year ago, after much deliberation, my son decided to try cannabis and it worked. We told the doctors and they did not object to him using it, but because the pain is so bad he needs quite a lot, and this in itself causes quite a problem."
The next letter is dated January 1997:
"We heard about cannabis through talking to others at respite centres he went to, and as most of our friends who would and did get this for us willingly refused to take away money, we decided to go it alone, so to speak",
and use cannabis. That shows the sort of problems that are caused. I hope that the Minister will not condone the idea of people suffering from this disease being forced into the illegal market to find a form of treatment that helps them. The situation is truly appalling.
The law is being brought into disrepute. A recent headline in The Daily Telegraph read: "MS sufferer who turned to cannabis escapes jail". These people are not professional drug dealers: they are amateurs, and hence clumsy in their approaches. They find themselves threatened with prosecution, and although the police do not always press for prosecution, realising the humanitarian circumstances, and although the courts may hand down lenient sentences, the fact remains that people are being forced into illegality. The longer that that goes on, the more the law will be brought into disrepute.
The case for what I am saying is overwhelming. Does the Minister truly want people to find themselves in this position?
The second change since 1971 has been the growth of public support for the availability of cannabis on prescription for MS sufferers. All the polls show that. In California and Arizona, recent plebiscites have sanctioned the prescription of cannabis for certain specified conditions. In Italy, too, it is available on prescription—or rather, people can now grow their own if cannabis is prescribed for them by a doctor.
The last stage in the process of change finds expression in the BMA report issued at the end of last year on the therapeutic uses of cannabis, showing conclusively that it does have therapeutic value. That proves that the move from schedule 2 to schedule 1, denoting a drug of no therapeutic value, was wrong.
All that has changed since the 1971 decision. I emphasise that I am speaking about natural cannabis, not cannabinoids. The research we need is into the properties of natural cannabis, as the BMA report says. The BMA has no objection to research on cannabinoids—all the research has been on cannabinoids—but we need research on natural cannabis.

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I cannot see why we do not have more research to develop a purified, standardised form. I hope that the Government will facilitate that research instead of inhibiting it, as they do at present. Each attempt to have cannabis made available on prescription is met with the argument that we need more research. It is a circular argument, because the Government do not allow the research that would provide the information.
I have taken two delegations of senior doctors—delegations so high-powered that I wondered why I was on them—to the Department of Health. The first occasion was in 1994, when we got a warm reception and indications that change was in the air. That vanished as the election approached and the usual fear about drugs and the panic that the subject produces took over. The second occasion was in December, when the reception that we got was more hostile and less supportive than in 1994 or before.
I believe that the mentality of the war on drugs produces such change in official thinking. I am not expressing an opinion on the war on drugs. It is partly a civil war waged by one section of society on another—on young people—but that is not my argument today. We cannot wage the war on drugs against the sick, including sufferers from multiple sclerosis. Parliament and public opinion would not put up with it. The police do not want it.
All the senior members of the police with whom I have discussed the matter think that cannabis could and should be made available on prescription, because that would remove that difficulty from the enforcement of the law. I hope that the Minister will ask our new drugs tsar, Keith Hellawell—a man for whom I have great respect, particularly for his Yorkshire common sense—what he thinks about whether cannabis should be available on prescription.
It is irrational to deal with the matter as we do. I am disappointed by the reaction to the delegation that I took last December. I want the Minister to recognise reality, and I want us to stop bringing the law into disrepute. I want us to help the vulnerable and to stop the run-around of arguing for more research when research is not possible.
I have great respect for the Minister, both in his previous legal incarnation and in his present health incarnation. He is a rational, highly intelligent Minister. I know, unfortunately, that will not get up in a couple of minutes and say, "My God, Mitchell, you are right." If he is, I am happy to give way, but I somehow think that that is not the way of Adjournment debates, unless they have been reviewed as another aspect of that review of everything that we have embarked on under the Labour Government. New Labour, new approach—it would be very welcome.
I am afraid, however, that we will get a defensive reply. I imagine that it might go on about consultations and further consultations, especially with the BMA. Such consultations have been going on for years, with no result and no action. We might get a reply about caution. Caution, and even fear and panic, have been the dominant tone since 1971.
If the reply highlights the need for further research, I point out that that research is not being done and is very difficult in the present circumstances. I would want licences for laboratory experiments and clinical
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experiments, and such licences may not be available unless cannabis is moved from schedule 1 to schedule 2. I hope that we will not be given the run-around on that. I fear that we shall hear more remarks about the war on drugs, but I should point out to the Minister that that muddies the issue, because it makes that war a war on the vulnerable.
Most such argument is not intellectually sustainable. It is irrational. If the Minister must deploy such arguments, he has obviously been told by superiors in the Government that, in the words of "Beyond the Fringe" at this stage in the war we need a futile gesture, and to go outside and make it. I hope that, while the Minister makes defensive noises, he grasps the essence of the issue. We need rational thought, and I want the process of rational thought to begin with a new Government taking a new look at a situation that has been deadlocked for far too long, with consequent suffering and illegality for the most vulnerable.
I hope that the Minister will initiate a process of thinking—a short one—by Ministers, officials, the Department, the Home Office and the drugs tsar, so that we end up with a more rational approach to the issue and move natural cannabis from schedule 1 to schedule 2 to make it available on a named patient basis for purposes of treatment. We cannot go on as we are. It is illogical, messy and disastrous for the war on drugs and for those who turn to cannabis for treatment. Let us take them off the front line and put them in a field treatment station, well away from the front line of the war on drugs. Please, let us have some rationality on the issue.
1.16 pm
The Parliamentary Under-Secretary of State for Health (Mr. Paul Boateng): My hon. Friend the Member for Great Grimsby (Mr. Mitchell) brings to the debate a passionate commitment and considerable knowledge of his subject. For that, the House is grateful. The subject provokes strong views on both sides. The issues surrounding the prescription of cannabis are complex and not capable of easy or rapid resolution, as I know my hon. Friend will recognise.
The issues are of obvious importance to our society, as we grapple with the problem of the abuse of drugs, and as we seek to alleviate suffering and distress, not least for groups of people, some of whom my hon. Friend mentioned, for whom medical science does not always have a great deal to offer. We are, of course, sympathetic to their concerns and their plight.
My remarks are not meant to be defensive. They are meant to be a statement of profound principle. We should not accept a lesser standard of evidence in the case of cannabis because of the pressures, to which my hon. Friend has contributed—properly, as he sees it—on behalf of people who are convinced of its therapeutic value. Society requires us to determine the matter on the basis of the evidence. That position is endorsed by the Multiple Sclerosis Society, which considers that, in common with all other drugs for that lifelong disease, rigorous scientific trials are needed before licensing. The Government have profound sympathy for that position.
It is true that cannabis could be prescribed until 1973. It was rarely used and, when it was, it was used mainly for its sedative qualities. Advice at the time from the World Health Organisation was that cannabis was no

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more effective than any other available drug in treating the conditions for which it was used, so its use was stopped. That was not a panic response, but the result of a World Health Organisation initiative.
During the past quarter of a century, there have been considerable changes in the way in which we view prescription drugs. I am sure that all hon. Members will agree that we now adopt a much more rigorous attitude to drug safety and effectiveness—it is right that we should do so. That means that all drugs that are currently available on prescription have undergone a stringent review of their safety, efficacy and quality.
The Government believe that the case has not yet been proven for the therapeutic use of cannabis. Until a strong, sound, research-based case is made, it is not possible for cannabis or any of its constituents to be prescribed for use by people suffering from multiple sclerosis or any other condition. To allow any substance—not just cannabis—to be prescribed without adequate proof of its effectiveness and safety would be a highly irresponsible and retrograde step. It is not one which the Government are prepared to take.
The good-quality research evidence needed to make the case for the use of cannabis is not currently available. The British Medical Association recognised that fact in its recent publication "Therapeutic uses of cannabis". Much of the existing research evidence on the use of cannabis is flawed, and is recognised as such. The studies examined by the BMA in its extensive piece of research—for which we owe it a debt of gratitude—were methodologically unsound and all too frequently involved very small numbers of subjects. Therefore, no firm conclusions could be reached.
In fact, the BMA report recognises that cannabis is not the risk-free option that many people suppose. That is particularly true if it is smoked. Cannabis smoke contains all the toxic elements of tobacco smoke, apart from nicotine. We must take account of the potential risks associated with short and long-term use of cannabis in reaching any decisions about its therapeutic use. Short-term risks include impairment of concentration and manual dexterity and short-term memory loss.
In the long term, people who smoke cannabis—I recognise the distinction that my hon. Friend made between smoking cannabis and taking it in various other ways—are more likely to develop respiratory diseases such as bronchitis and lung cancer. Nor is the eating of cannabis free from danger. Cannabis taken orally has a much slower absorption rate, which can vary greatly from person to person. That means that people can be affected for longer than they think, experiencing problems with their motor skills and concentration long after they believed that the effects had ceased.
Given the nature of those risks, the BMA has concluded that cannabis is unsuitable for therapeutic use and that future research should concentrate on exploring the properties of cannabinoids, which are the unique constituents of cannabis. Cannabinoids are known to latch on to receptors in various sites in the brain. At present, we do not fully understand which cannabinoid attaches to
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what receptor in the brain and what happens when that occurs. We cannot be certain that all the effects are beneficial until we have the results of further research.
Dr. Peter Brand: Will the Minister give way?
Mr. Boateng: No, not at the moment. The Government do not wish to stand in the way of sound research in this area—especially research into the identification of cannabinoids and the exploration of their use as a medicine. Department of Health officials, led by the chief medical officer, will meet BMA representatives to talk about those issues.
My hon. Friend has said that there are those who contend that the misuse of drugs legislation makes research difficult and that cannabis should therefore be rescheduled under the Misuse of Drugs Regulations 1985 from schedule 1 to schedule 2. It will come as no surprise to my hon. Friend to learn that the Government do not accept that contention. In fact, the Home Office has granted licences to 22 research initiatives involving cannabis, 19 of which are still in force. Three are concerned directly with medical research involving patients. No applications have been rejected in the recent past, and I know that the relevant Home Office officials are happy to give advice to researchers, drug companies and other interested parties, as is the Medicines Control Agency.
In fact, the Home Office has already met one of the members of the delegation organised by the Alliance for Cannabis Therapeutics, which I was glad to receive and which included my hon. Friends the Members for Great Grimsby and for Pendle (Mr. Prentice). I am sorry if the delegation was disappointed by its reception—my hon. Friend could not have expected me to roll over and have my tummy tickled. That is not the way of the world. As a result of that meeting, a member of the delegation has at least had the opportunity to meet Home Office officials to examine the way forward.
There is no reason why it is not possible to undertake sensible size clinical trials within the current legislation. If there is sufficient demand for them, that is what will happen. However, we must ensure that we proceed on the basis of scientific evidence, recognising the proper role of the Home Office and the Medicines Control Agency in this area. A stringent review of safety, efficacy and quality is vital if we are to proceed.
Mr. Paul Flynn: Will the Minister give way?
Mr. Boateng: I shall give way to my hon. Friend, knowing of his involvement in this area and of the very useful debate on this subject that he initiated in 1995.
Mr. Flynn: Sadly, today's answer is exactly the same as that which I received in 1995. Will the Minister explain why he will not agree with my hon. Friend the Member for Great Grimsby (Mr. Mitchell) that cannabis should be returned to its original schedule where the relevant research is far more likely to take place? It was moved only because it was deemed to have no therapeutic value. However, the British Medical Association says that cannabis has therapeutic value, as does the Medical

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Research Council, which wrote to me two years ago saying that it did not believe further research was necessary because the therapeutic value of cannabis had been proved.
Mr. Boateng: This time my hon. Friend at least has the comfort of hearing the same answer from his side. We are not able or prepared to turn back the clock. We wholly support a philosophy and an approach to the development of all treatments that is based on sound clinical research evidence.
Dr. Brand rose—
Mr. Boateng: I do not intend to give way to the hon. Gentleman.
When that evidence exists, we have the basis for moving forward; until it exists, it is not possible to do so.
I hope that the discussions currently taking place between the Department of Health, the BMA and the Home Office—which resulted from the initiative displayed by my hon. Friend in leading a delegation to the Department in December—will lead to the discovery of sound empirical evidence upon which it will be possible to proceed.
We are not prepared to accept lesser standards in relation to cannabis for the relief of suffering than would be applied to any other drug. That is the duty that we have to patients. It is the duty that we have to those who are suffering and it is the duty that we have to society. It is a duty from which we do not intend to flinch.
My hon. Friend knows that my door is always open to him to ensure that he is satisfied that these matters are being properly explored, but I must tell him that we are unable to accede to the proposition that he has—
Mr. Deputy Speaker (Mr. Michael J. Martin): Order. We must now move on to the next debate.

National Hunt Racing
1.30 pm
Mr. Laurence Robertson: I am privileged to be introducing an Adjournment debate on the national hunt racing industry. Basically, I want to do three things. First, I wish to draw attention to the importance of the racing industry to the country and to my constituency. Secondly, I wish to highlight some of the problems that, in particular, national hunt racing faces. Thirdly, I wish to suggest one or two ways forward in which the Government might help.
First, I declare an interest. The Cheltenham race course is in my constituency and I am a member of that course, although I am sure that membership of it costs more money than it brings in. I declare also a passion for racing, especially national hunt racing. Most people in this country and many others throughout the world are stirred by the excitement of the grand national and the Cheltenham gold cup, and by many other races that we stage in Britain.
Two million people attended race meetings last year to enjoy the spectacle of racing. It is the third most popular sport in the country. Racing is a large industry, with a turnover of £600 million a year; the turnover is more than £5 billion a year if betting is included in the calculations. The industry's assets total more than £2 billion and it is responsible for £90 million-worth of exports a year. It also contributes £600 million a year to the Exchequer, which is a subject to which I shall return shortly.
The industry generates jobs for more than 100,000 people. It is responsible for providing jobs for one in every eight agricultural workers. There are 500 racing training yards in Britain and 50 race courses, of which 44 stage national hunt racing. At present, more than 12,000 horses are in training.
In my constituency alone, Cheltenham race course has a turnover of £10 million a year. That does not include the massive revenue that is generated in hotels, guest houses, pubs and restaurants by the 173,000 people who attend the three-day national hunt festival in March each year.
It might be asked, if the industry is doing so well, why introduce an Adjournment debate on it? Sadly, racing—especially the national hunt side—has its problems. No one is suggesting that these problems point to a terminal decline, but I want to bring the problems to the Government's attention because, largely, they are caused by the way in which successive Governments have regulated the industry.
The House will be aware that only yesterday Lord Wakeham resigned as chairman of the British Horseracing Board, and that that body has been discussing this morning a financial plan which has been compiled to address the problems of the racing industry generally.
What are the problems facing the industry? They are, of course, financial. The prize money won by guiding a horse to victory in the grand national or the Cheltenham gold cup is well worth having. However, the prize money received by winning a race at Fontwell or Newton Abbot, for example, can be as low as £1,300, out of which the winning owner would have to pay a percentage to the trainer and the jockey as well as his own travelling expenses for that day.

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When we consider that, on average, it costs £10,000 a year to have a national hunt horse in training, it does not require a degree in mathematics to work out that involvement in racing costs most owners dearly. On average, owners in Britain recover only 24 per cent. of their costs each season. That compares with 47 per cent. in the United States, 49 per cent. in France, 61 per cent. in South Africa and 90 per cent. in Japan. Of the nine major racing nations, British owners come eighth in the league, with only owners in Ireland being worse off. It is no coincidence that Ireland is the only other country to have a major national hunt programme.
The poor return to owners has a knock-on effect. It means that fewer horses are in training than would otherwise be the case. Given the low prize money, 32 per cent. of races attract fewer than eight runners. That, in turn, means that fewer bets are placed on those races, because each-way betting is not an option. As a result, less money is collected in taxation by the Government. More important, less money is collected by the Horserace Betting Levy Board to return to racing. If less money is returned to racing, prize money will remain low. At that point, the circle begins again.
It is crucial to the industry that smaller courses thrive. The analogy that I would draw is that the Football League would not survive if it contained only the big clubs, such as Manchester United and Liverpool. Those clubs depend on the smaller clubs, such as Doncaster Rovers or Brentford, to supply players. Many players start from such clubs. The same goes for racing: most horses, trainers and owners start from what might be called the feeder tracks before progressing, if they ever do, to Cheltenham and Aintree.
It is vital that attention is given to the problems that are faced by the smaller race courses to enable them to increase the prize money on offer, thereby protecting the fundamental base of the industry.
Why is the prize money so low? The answer is that not enough money comes into racing from the most obvious source of revenue, the betting industry. The punters cannot be blamed for that because they, cheerfully or otherwise, contribute about £1 billion a year to the bookies in lost bets. The bookies survive on a profit margin of less than 3 per cent. The problem is the low percentage of betting turnover that finds its way back into racing.
For every bet placed, the punter pays tax at 9 per cent. Of the total bet—the bet plus the tax—the money is distributed as follows: 78 per cent. is returned to the punter as winnings, which is average by international standards, and overheads of 14 per cent. are retained by the betting industry, whereas the international level is about half that amount. The percentage is high in Britain because of the regulated nature of such betting. The 14 per cent. for overheads includes profits for bookmakers of only 2.35 per cent. compared with an international spread of between 4 and 8 per cent.
The betting duty taken by the Government is 6.75 per cent., which leaves only 1.19 per cent. of the total bet to go back into racing. That is the crux of the problem. That percentage compares with 8 per cent. in France, 9 per cent. in the United States and 15 per cent. in Germany. It is no wonder that prize money is so low in Britain.
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The ratio of how much the Government take to how much racing receives is 6:1 in Britain. In France it is 1.8:1 and in Germany it is 0.05:1. These ratios clearly demonstrate that the Government are taking too high a percentage of the tax paid by the punter when compared to the amount that racing receives from the tax.
The Minister will be aware that the tax percentage taken by the Government of 6.75 per cent. is not particularly high by international standards and is at about the middle of the range. Nevertheless, government is racing's problem in this country in a number of ways. Although some foreign Governments might charge a comparable rate of tax, the overheads of the racing industry abroad are lower than in this country. The reason is the over-regulation of much of the industry.
For example, race courses in this country are restricted in the activities that they can pursue. Betting on horse races can take place only in licensed betting shops. All this regulation adds to the cost of running the betting industry, which is why overheads are so high.
I have dealt with the problems, but what are the solutions? Much in common with what the British Horseracing Board is suggesting today, I have some proposals which, if taken up, would serve to protect the racing industry and enable it to remain a major employer, a popular sport and a big money spinner well into the next century.
The real way forward for racing is to deregulate much of the industry. At present, racing gets much of its money—about £54 million a year—from the levy board, and that arrangement is regulated by the Government. Because of the present arrangement negotiated at Government level, racing stands to lose £5 million a year from this source for the next two years. In time, the racing industry needs to be able to negotiate the levy arrangements directly with the bookmakers, so that a famine-to-worse-famine situation can be avoided.
The betting industry also needs deregulating to a large extent. Why cannot bets on horse races be made in the same places at which lottery tickets are bought, in common with what happens in other countries? That would cut the industry's overheads, thereby leaving more room for negotiation between the racing industry and the bookmakers. Race courses, too, should be deregulated, to allow them to realise the true worth of their assets.
Without being controversial, I believe that the Government should not cause further problems for the national hunt industry by accommodating legislation that would cause hunting to be banned, as such a move would be very damaging to the industry—a point widely acknowledged in racing circles.
These solutions are for the future. The industry needs an immediate increase in income of £105 million a year to increase prize money significantly, improve its marketing and thereby safeguard the future of the industry and the livelihoods of those who work in it.
The British Horseracing Board has identified ways in which the industry could raise an additional £25 million a year, but that leaves £80 million a year, which must come from the betting industry. Given that bookmakers make less than 3 per cent. in profits, it is incumbent on the Government to change the present betting duty-betting levy ratio, about which I spoke earlier. The ratio is currently 6:1; if it were changed to one similar to that of France, say, to 1.7:1, the racing industry would have the

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money that it needed, enabling it to double the prize money, which would give the industry a tremendous boost, and the money would find its way into the pockets of trainers and stablehands, as well as owners.
Such a transformation in the fortunes of the racing industry can be attained simply by the Government cutting betting duty from 6.75 to 5 per cent., with the difference going to the levy board for distribution to racing. It is estimated that that would cost the Government only about £125 million a year initially, but that money would be regained in the short to medium term through extra tax receipts, which would be taken from a regenerated racing industry. In the longer term, the Government's tax take from the industry would probably increase, just as the previous Government increased their tax take by cutting the rates of tax.
Without wanting to be party political, I should point out that the previous Government helped the industry by cutting betting tax, by abolishing on-course betting tax altogether and by allowing owners to claim back VAT on training fees and bloodstock purchases. It is time for the Government to recognise the problems that the industry faces and to realise that government is the largest part of the problem.
Mr. Richard Spring: Does my hon. Friend agree that if, as has been threatened, the largest racing interest in this country, the Maktoum family, withdraws its racing interests from this country—totally out of character, the family have publicly gone on record to say that, if this dire situation continues, they may well do so—the effect on revenues for racing, and indeed on tax revenues and employment in this country and all its ancillary industries, would be catastrophic?
Mr. Robertson: My hon. Friend is absolutely right. When somebody of that gentleman's standing is persuaded to consider withdrawing his horses from British racing, that is a very dire warning of which we should all take notice. His racehorses tend to be flat-race horses, and flat racing is better funded than national hunt racing. If he sees such a problem in flat racing, the problem in national hunt racing is indeed worse.
I ask the Government to recognise that government in general has tended to be the problem in the racing industry. I should like them to consider how they might offer help to the industry. I stress that no one in racing is asking for a Government handout or subsidy; all we ask is that the Government stop taking such a large amount of money out of racing, especially when they treat other forms of gambling more leniently.
A cut in betting duty and a transfer of that to the levy board—a move seen as vital by the industry—would enable racing to continue to provide employment to thousands of people and enjoyment to millions. I ask the Government seriously to consider making such a medium-term investment in an industry which is one of the hallmarks of Britain.
1.47 pm
Mr. Geoffrey Clifton-Brown: I am grateful to my hon. Friend the Member for Tewkesbury (Mr. Robertson), my neighbour, for allowing me to have a couple of minutes of his Adjournment debate. He presented the case for national hunt racing in a
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well-structured and professional way, and all of us who are involved and have an interest in racing are incredibly grateful to him for raising this subject today.
Although I have no direct interest in national hunt racing, my family does. Indeed, I must be one of very few hon. Members to have ridden winners under the rules of the national hunt racing industry.
I shall make a couple of points in support of what my hon. Friend said. I was talking the other day to one of the more successful owners in this country, whose horse had just won—admittedly on the flat, and not under national hunt rules—£50,000 on a grade 1 race in Milan. Apparently, in this country he would have won about £5,000 or £6,000. That is the problem. Unless an owner is one of the most successful, the prize money in this country hardly covers the training fee.
As my hon. Friend pointed out, in national hunt racing, which has always been the poorer cousin of flat racing, the situation is even more dire; unless the prize money and general conditions in racing can be improved, the situation can only go downhill. That would be a pity not only for the racing industry and the trainers but for the huge host of associated industries. The stud industry—the pedigree horse industry—in this country is one of the most successful in the world. It would be a great shame if some of the best stallions in the world were not to stand in this country and were to stand abroad, with the implications that that would have on the balance of payments.
My hon. Friend the Member for West Suffolk (Mr. Spring) made the point that one of the foremost interests in the middle east, who has spent some £500 million on the flat racing industry in this country, has threatened to pull out if the situation, particularly the prize money, is not improved. My hon. Friend will be able to attest far better than I, although I was born and bred and brought up in his constituency, the financial multiplier of that money in the Newmarket area in terms of employment and the generation of various economic activities.
Many other associated industries within the racing industry are very successful in this country, notably the horse insurance and finance leasing industry, and the veterinary research in this country is some of the foremost in the world. If we start to lose all those supporting industries, this country will be very much the poorer, because of investors in the middle east not investing in this country, and also because the rich people in this country will have to send their mares abroad for covering by stallions.
I hope that the Government will take notice of what my hon. Friend the Member for Tewkesbury so expertly said. It is really a question of cutting off our nose to spite our face if we cannot bring about a little more deregulation in the betting industry in this country, and if we cannot ensure that a little more money goes back into the industry, through some mechanism from the betting industry, but particularly from the betting levy tax. It is not a huge amount of money from the Government's coffers, but if it were sensibly done I am sure that the advantage to the balance of payments, and indeed the multiplier effect of the turnover from racing increasing, would be very beneficial for this country in the longer term.
1.49 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): I congratulate the hon. Member for Tewkesbury (Mr. Robertson) on his account of the industry's problems, and his description of its contribution to our national life. I may be corrected, but I do not remember a similar debate in the House over the past decade, so it is all the more important for us to take as much advantage of today's debate as possible. [Interruption.] The hon. Member for Tewkesbury says that my memory is bad. If there has been such a debate over the past decade, I apologise, but I certainly have no recollection of it.
The hon. Gentleman placed particular emphasis on national hunt racing. I think it is true to say that no other country has a national hunt or jump racing system that is anything like ours. The grand national—which takes place in my constituency—is watched by many members of the public, both in this country and abroad. I shall say more shortly about Aintree and its role in national hunt racing.
The hon. Gentleman chose to highlight the problems faced by the industry, which is fair enough—and, as he pointed out, topical. The issues surrounding racing have been debated hotly in the past few weeks, in different forums, but, although the debate has focused on the problems, we should bear in mind the positive developments that are taking place. Cheltenham race course, in the hon. Gentleman's constituency, is both charming—I know that, as I have visited it—and successful: indeed, I understand that it is doing so well that last year it had to limit the number of admissions. We should not paint too gloomy a picture.
The Tote—whose profits go to racing—has reported an increased turnover, and is in a healthy financial position. As hon. Members who take an interest in such matters will know, it is set to expand. Racing benefits considerably from the Tote's activities. Race courses receive a 5 per cent. commission on Tote turnover, and the last Cheltenham festival, for instance, generated a record turnover of £7 million. That gives some indication of the benefit that flowed from it. Racehorse owners benefit from sponsorship, which boosts prize money. The Tote will be providing sponsorship at all 59 race courses in 1998.
It is clear that the Tote is going from strength to strength. Racing has welcomed its strategy to maximise its own long-term profits for the benefit of racing and everyone associated with it. The Tote chairman, Peter Jones, summed up the position very well in his recent Gimcrack speech—made on the same occasion as the speech by Sheikh Mohammed, to which the hon. Gentleman referred; for obvious reasons, it was probably less widely reported. Mr. Jones said:
"British racing is in its best shape for many years."
I consider that a fair reflection of the conclusion that would be reached by a number of people with a balanced approach.
However, Mr. Jones also referred to a need for improvement. As my right hon. Friend the Foreign Secretary tellingly said to a racing audience last week, there is no room for complacency. I do not want to convey the unbalanced view that we do not accept that there are difficulties and cases that must be considered, and I
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certainly feel that the racing industry and the bookmakers can build on their successes to help in the boosting of racing's share of the betting market.
Mr. James Paice: Will the Minister give way?
Mr. Howarth: Briefly; I have very little time.
Mr. Paice: I thank the Minister. I will be brief.
The Minister has mentioned bookmakers, and the share of the money that goes back to racing. I realise that he will have to discuss the matter with the Treasury, and that it is not necessarily his direct responsibility, but will he talk to the Treasury about the levels of betting duty on different forms of betting? I understand that this is one of the few countries in which everything that takes place in a betting shop is taxed at the same rate, whereas tax on the lottery is already at a different level. Will the Minister consider the possibility of relating tax more to the margins that bookmakers are making on individual betting products? He may find that it is possible to replace the money that the racing industry is seeking by reducing that amount.
Mr. Howarth: I hope to make some comments on the Treasury's responsibilities shortly, but I am not sure that it is accurate to say that there are not different rates for certain kinds of bet. Forecasts, for instance, are exempt from certain tax rates—I think; if I am wrong, I will come back to the hon. Gentleman. In any event, his general point deserves to be considered.
The British Horseracing Board's off-course betting development group has shown what can be achieved. Last year, prize money in Britain topped a record £60 million. The case of the hon. Member for Tewkesbury is that the prize money is inadequate in many lesser races, but I repeat that the total has reached a record level. [Interruption.] There are international comparisons to be made. I am simply commenting on the scale in this country now.
On behalf of the racing industry, the British Horseracing Board has prepared a financial plan. It was presented to the industry forum this morning, and I look forward to studying it in detail. Hon. Members will, I think, accept that it would be premature for me to comment on its contents before I have had an opportunity to read them, and I will confine myself to a personal comment. It has been widely reported that Lord Wakeham resigned as BHB chairman yesterday because he could not agree with the plan. On a personal level, my right hon. Friend the Home Secretary and I very much regret his departure. Such disagreements will occur; it is unfortunate that this disagreement led to Lord Wakeham's decision to resign. It now falls to the board to appoint a successor, and I hope that that successor will work—and that Lord Wakeham will continue to work—for the best interests of all who are involved in racing.
Mr. Clifton-Brown: Will the Minister give way?
Mr. Howarth: Very briefly.
Mr. Clifton—Brown: Does the Minister agree that one of the reasons why the need for reform is so urgent is the

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increasing internationalisation of the horse racing industry, and the fact that people who participate in it have more freedom to take their horses wherever they wish if they do not like the regime in this country?
Mr. Howarth: That is absolutely true, in terms not only of that side of the market but of the punters' considerations. Those in the betting industry are very shrewd: they realise that at certain times of the year it is useful to take bets on races in South Africa and elsewhere.
Aintree race course, which is in my constituency, is very successful. On 4 April—this is just one more piece of good news—it will open a new £6 million grandstand, which forms part of a £15 million investment programme. The levy has played a part in that.
The hon. Gentleman referred to betting deregulation. He felt that there was too much regulation, and rightly said that the last Government had moved towards deregulation. There were welcome developments in that regard, and I am willing to consider approaches that are made to us, but I must add that our approach must be consistent with the rest of the Government's attitude to gambling. With that caveat, I do not rule out any further deregulation measures.
The hon. Gentleman rightly said that the betting industry had benefited from previous Home Office deregulation measures relating to print advertising, changed arrangements in shops and the introduction of amusement with prizes machines. All those measures have improved turnover. Not many industries have the support that the levy affords: as I think the hon. Gentleman said, it contributes £54 million a year to
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racing. So far, no one has come forward with a better mechanism, although I am willing to look at any suggestions.
The hon. Gentleman mentioned betting duty, which he rightly said was a matter for the Chancellor. I know that he will study the BHB's plan carefully; we have an on-going dialogue with the Treasury on such matters.
I shall refer only briefly to the ban on hunting, because it has already been debated thoroughly. I accept—as I accepted on Second Reading of the Wild Mammals (Hunting with Dogs) Bill—that there will be an effect. Whether it will be as severe as those who oppose the ban claim remains to be seen, but it is no good pretending that there will be no effect.
Many of the issues raised by the hon. Gentleman need to be considered further. It is important for those who care about the future of national hunt racing and racing in general—throughout the House and elsewhere—to reach the best possible consensus. If we can reach agreement across the industry, across the House and in the Government about what can be done sensibly, what is in the best interests of the racing industry and what is in the best interests of the general public who support it in many different ways, we will have done everyone a service. It is not simple, but, if we can establish some good will and understanding, and if we can engage in the sort of friendly but well-informed debate in which we have engaged this morning, I am sure that we can make progress.
It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions
  NORTHERN IRELAND
  The Secretary of State was asked—
  NORTHERN IRELAND

    RUC Officers
    Rev. Martin Smyth: If she will list the perceived religion of (a) all officers and (b) officers above chief inspector level in the RUC in percentage terms. [20851]
    The Minister of State, Northern Ireland Office (Mr. Adam Ingram): The perceived religion of all officers in the regular Royal Ulster Constabulary at 1 December 1997 was 88.5 per cent. Protestant, 8.26 per cent. Roman Catholic and 3.24 per cent. undetermined. At superintendent level and above, the figures were 80.95 per cent., 17.26 per cent. and 1.79 per cent. respectively.
    Rev. Martin Smyth: I am sure that the Minister will join me in expressing sympathy and at the same time understanding something of the tension in north Belfast following this morning's tragic incident. I welcome the figures that he has given because they show that, if only about 8 per cent. of RUC officers are from the Roman Catholic community, at least attempts have been made to promote people whether on merit or otherwise, causing the perception to develop and the concern that there may be disproportionate promotions in the RUC.
    Mr. Ingram: I share the hon. Gentleman's sentiments about this morning's incident. We all wish the injured RUC officer a speedy recovery. I do not know where the hon. Gentleman's concerns about promotion arise from, because the majority of people in Northern Ireland want a balanced police force that represents the spread of communities. That is also the view of the RUC and its senior officers. I suggest that a large majority of RUC officers want to be accepted in the wider community. One way to achieve that is for the RUC to represent a wider cross-section of the communities in Northern Ireland.

    Policing (Public Confidence)
    Mr. Savidge: What steps are being taken to increase confidence in policing in Northern Ireland. [20852]
    Mr. Ingram: The Police (Northern Ireland) Bill currently before Parliament introduces planning and objective-setting mechanisms and other measures aimed at increasing confidence in policing. It includes the establishment of a police ombudsman for the independent investigation of complaints against the police. The Police Authority and the Chief Constable have also introduced community police liaison committees and initiatives on the promotion of a neutral working environment, recruitment processes and lay visiting.
    Mr. Savidge: I thank the Minister for that reply. Does he agree with me that everyone, including the RUC, recognises the importance of changes to policing in Northern Ireland? Does he also agree that the
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    Government's Bill merely provides the framework for those changes? Will he inform the House what plans the Government have to ensure that all sections of the community are properly consulted about the future of policing in the Province?
    Mr. Ingram: I am grateful to my hon. Friend for that question. I pay tribute to the RUC, who do a very good job in extremely difficult circumstances each and every day. My hon. Friend is right that the Bill provides a framework for the future of policing in Northern Ireland, but it is an important foundation on which new structures can be built if the people of Northern Ireland want more change. Obviously, the talks process provides an ideal opportunity for all sections of the community to have a say in the future of the policy. The Bill offers great opportunities for the future and poses a threat to no one.
    Mr. Maginnis: Does the Minister agree that the confidence of both traditions in the community in the police is manifested regularly in a very practical way? Does he also agree that one must be careful not to carry forward arguments that are propounded by the most extreme elements in society when looking at changes that may take place within the RUC? Does he further agree that society's confidence in the police requires, first and foremost, a police force that is confident in itself?
    Mr. Ingram: Clearly, the hon. Gentleman's last point is undoubtedly true: the police force should feel confident in itself. The Police (Northern Ireland) Bill will help the force in that objective because it is about increasing the efficiency, effectiveness and accountability and, therefore, the acceptability of the RUC in the wider community. That is why I said in response to the question from the hon. Member for Belfast, South (Rev. Martin Smyth) that it is about improving the basis on which the RUC operates because that is what the RUC wants. It wants to be a normal police service within a normal society.
    Mr. McGrady: Will the Minister join me in sympathising with those who were injured in the two incidents last night in Belfast? In one of them an on-duty, out-of-uniform lady soldier was shot and critically wounded by an RUC officer after hot pursuit. In the second, an SDLP councillor, one Martin Morgan, was assaulted physically and verbally by the RUC in attempting to dispel a riotous situation. Does he agree that it is not sufficient for the RUC to investigate those two incidents and will he immediately put in hand investigations into both incidents to restore the great deal of public confidence that has been lost in the past 24 hours?
    Mr. Ingram: Obviously, we all regret incidents in which people are injured. There are details about the second incident to which the hon. Gentleman referred, and that is not yet a proven case. There have been allegations, and all members of society in Northern Ireland have the opportunity to pursue allegations against the police through the normal process. If the Police (Northern Ireland) Bill is accepted by the House, there will be an independent ombudsman to deal with such complaints against the RUC, and I am sure that I can count on the hon. Gentleman's support for that measure.

    Integrated Schools
    Mr. Gareth R. Thomas: What plans she has further to develop the integrated schools sector. [20853]
    The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Tony Worthington): The pace of development of the integrated school sector will be driven by parental demand. I will continue to respond positively to viable, cost-effective proposals both for new schools and from existing schools which wish to transform to integrated status. In the past year, approval has been given to eight proposals for integrated schools, which is the highest number ever approved in a year. I am pleased to say that this morning I was able to give the go ahead to the transformation of Kircubbin primary school to integrated status.
    Mr. Thomas: I welcome my hon. Friend's reply and especially the news that another primary school has been granted permission to transform to controlled integrated status. Does he agree that there remains considerable unmet parental demand for integrated education in Northern Ireland? Will he assure the House that his Department will continue to work actively alongside the Northern Ireland Council for Integrated Education to encourage existing schools to meet the criteria to transform into genuine, integrated schools?
    Mr. Worthington: I can give that assurance. Obviously, we have to lay down fair criteria on the number of parents, on the balance between the two communities, on finding sites and on the impact on other schools. There was a recent problem when we had to turn down a couple of applications because we were fearful of the impact on other integrated schools that were building up. We shall continue to work with the Northern Ireland Council for Integrated Education to stimulate more integrated schools where parents want them.
    Mr. William Ross: Northern Ireland has a state sector that is open to all and a Church-dominated sector that is also open to all. Why, then, is a third sector being created? Will it be cost-effective in the cost per pupil?
    Mr. Worthington: The hon. Gentleman has raised this issue before. Where schools already have a balanced intake but do not call themselves integrated, it is open to them—and we would welcome it—to say that they would like to be integrated schools.
    Mr. Barnes: Would it not be a boost for integrated education in Northern Ireland if teacher training colleges provided integrated education? Currently, there is a teachers training college for Catholics, which means that the state system is comprised virtually of Protestants who make use of it. If the problem of teacher training integration was tackled, integration might then spread into primary and secondary education.
    Mr. Worthington: My understanding is that the issue was tackled some 10 years ago, but its impact was not integration but disintegration. Colleges are now entering into closer relationships with the university sector, which is to be welcomed.
    Mr. Öpik: Given that 80 per cent. of Northern Ireland's parents support integrated schooling for their
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    children, but only 2 to 4 per cent. of schooling is formally integrated, does the Minister agree that there is a job of work to be done to accelerate the process?
    Mr. Worthington: As I have already said, integration will be driven by parental demand. If 80 per cent. of the parent population want integrated schools, they should express that by getting involved in a campaign to demand integrated education, rather than saying vaguely that they would like it. If they involve themselves in a campaign and say that they want to send their children to integrated schools, that is what they will achieve.
    Mr. Moss: If any of the integrated schools are also prep schools, is the Minister going to hammer them in the same way that he is going to hammer prep school pupils and their parents through his proposal to remove funding? Where does he expect to find the preposterous savings figure of £1.5 million? Does he not realise that if less than half of prep school pupils move to the state primary sector, he will save nothing? If more move, he will face increased costs. Is this new Labour economic ineptitude or old Labour class dogma?
    Mr. Worthington: I remind the hon. Gentleman that his Government cut the contribution to prep schools a few years ago. Why, then, is he today questioning our decision to consider a similar proposal?

    Beef Farming
    Mr. Thompson: If she will make a statement on the problems facing the beef farming sector in Northern Ireland. [20854]
    The Minister of State, Northern Ireland Office (Mr. Paul Murphy): The beef farming sector is facing a difficult period, but the Government have been working on a number of fronts to alleviate the problems. My right hon. Friend the Minister of Agriculture, Fisheries and Food announced a substantial package of financial aid amounting to £85 million just before Christmas. Northern Ireland will receive about £14 million of that. We have also succeeded in persuading the European Union to restore intervention and, most important, we are pressing hard to get the beef export ban lifted.
    Mr. Thompson: I thank the Minister for his reply. May I emphasise to him that even when the beef crisis is over, there will be a considerable period before the export market builds up? Will he consult his right hon. Friend the Minister of Agriculture, Fisheries and Food to ensure that intervention continues during that initial period?
    Mr. Murphy: I am grateful to the hon. Gentleman for his question. As he knows—and as we speak—the College of Commissioners is meeting in Strasbourg and the Standing Veterinary Committee in Brussels. I very much hope that the Commissioners will agree to recommend to the Committee that it endorse the proposal for a certified herd scheme which will lead to the lifting of the ban. That will help farmers in Northern Ireland.
    I take the hon. Gentleman's point about export markets. I understand that the Northern Ireland Meat Exporters Association believes that it could restore 50 per cent. of the former export market within a year of the ban's being lifted.
    Mr. Hume: In the light of the expected very positive and welcome statement this afternoon in Strasbourg by

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    the European Commission to relieve the beef crisis, will the Minister—I join the hon. Member for West Tyrone (Mr. Thompson) in asking this question—take the necessary steps to assist our farmers to recover their lost markets? Agriculture is by far our biggest industry, and this has been by far our biggest crisis. Are the Government willing to take action to compensate farmers for the massive losses that they have already suffered, and to urge the European Commission also to go forward by implementing the date scheme?
    Mr. Murphy: I am grateful to my hon. Friend for his question. We should pay tribute to him and to his two colleagues in the European Parliament for all the work that they have put into ensuring that the Commissioners are meeting to consider lifting that ban. I take the points that he has made closely into consideration. My right hon. Friend the Secretary of State has met leaders of the farming industry in Northern Ireland. I believe that—with the lifting of the ban and the other factors that my hon. Friend mentioned—the future is brighter for farmers in Northern Ireland.
    Mr. Peter Bottomley: Traditionally, beef has been regarded as being of a very high health status and of equal status north and south of the border. Is it the Government's view that beef is still the same healthy food that it should be, and that it should be treated equally north and south of the border?
    Mr. Murphy: It is certainly not for me to respond on behalf of the Government of the Republic of Ireland on what they do with their beef industry. I will, however, confirm that it is our Government's view that the measures that they have taken over the past few months are absolutely right in ensuring that the safety aspects of the beef industry are considered, and that, ultimately, we must consider the health of the people in this country who eat beef.

    IRA Activity
    Mr. Robathan: What assessment she has made of current IRA activity. [20855]
    Mr. Ingram: All indications are that the Provisional IRA ceasefire remains stable. Consequently, terrorist activity levels overall continue at a significantly reduced level.
    Mr. Robathan: The Minister will be aware of the sixth Mitchell principle, which states that punishment beatings must stop. I do not know whether he has ever seen the effects of a knee-capping—a glib term for a cruel and vicious act designed to maim—but is he aware that there have been three such shootings in the past week, in Short Strand, Lenadoon and Clonard? Is he aware that they were allegedly, or most probably, committed by an organisation called direct action against drugs—a gangster organisation used by the IRA as a front to cover its drug-running activities? Does he therefore have any confidence that the political representatives of the IRA will genuinely adhere to the sixth Mitchell principle?
    Mr. Ingram: The Government are very much committed to the Mitchell principles, and we realise the
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    impact of events in Northern Ireland on victims and their families. All those factors must be considered. However, I should tell the hon. Gentleman that it is not appropriate for the Government—or for him—to spread speculation or allegations made by others. The Mitchell principles state that matters and facts should be demonstrably proven. Once that has been done, under rule 29 of the Mitchell principles, those matters can be considered by the talks participants. We have at all times to consider the facts of the situation and to deal with those facts, not with speculation.
    Mr. Robert McCartney: Is the Minister aware that Families Against Intimidation and Terror is to petition Senator Mitchell, the chairman of the talks process, on the vastly increasing number of shootings and beatings, which that concerned organisation attributes to both loyalist and republican paramilitaries, who are represented in the current talks by the loyalist parties and by Sinn Fein? Everyone in Northern Ireland—particularly those who are informed—is aware that a coach and four is daily being driven through the Mitchell principles.
    Mr. Ingram: I recently had a worthwhile and useful discussion with the FAIT group. I know only too well the concerns that were raised. Of course that group was not unique in raising those concerns. However, I would refer the hon. and learned Gentleman to the answer I gave the hon. Member for Blaby (Mr. Robathan). It is easy to make allegations, but, in respect of the Mitchell principles, matters have to be demonstrably proven before action can be taken. As an hon. and learned Member, he should be only too well aware of the need to prove a case before justice or any other progress can be achieved.
    Mr. Forsythe: Given that responsibility for the Bannbridge bomb has not yet been claimed by the Continuity Army Council, can the Minister tell the House whether or not the allegations that the IRA planted that bomb are true?
    Mr. Ingram: The hon. Gentleman is right that no particular group has claimed responsibility for that, although the Continuity Army Council often takes some time to claim responsibility for its actions. Indeed, that was the case in respect of the Markethill bomb. No group has yet claimed responsibility for the most recent incident that the hon. Gentleman mentioned. The RUC investigation, with the support of the Army, will continue examining the forensics and the way in which the bomb was constructed and deployed.
    Mr. Peter Robinson: Does not the Minister leave himself open to the charge of hiding evidence against paramilitary organisations? Is he not aware that, forensically, guns used in shootings and killings have been linked to organisations whose representatives are sitting around the negotiating table with him and his right hon. Friends? Is he not further aware that there was an admission in respect of the Bannbridge bomb? I have police documentary evidence of an admission by the Provisional IRA, that a warning was phoned in to a County Louth radio station and to the Samaritans in Newry? Is it not very clear, therefore, that the terrorist organisations are calling the tune and the Government are dancing to it?
    Mr. Ingram: Those are very strong words indeed, but let me remind the hon. Gentleman that it is not my

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    responsibility to assess evidence. The RUC is charged with that. I have no responsibility for hiding evidence. Certainly I receive reports on such matters, but at the end of the day it is for the RUC to proceed with its investigations and to take them to a conclusion. The hon. Gentleman has said that he has evidence contrary to what has been said publicly. If he has, I suggest that he takes it to the RUC and asks it to carry out the job that it has been charged to do.
    Mr. Wilkinson: Is it not particularly important at this critical juncture in the negotiations over the political future of Northern Ireland that the IRA and its spokesmen should not be allowed to intimidate participants in the negotiations into an outcome that is against the democratic will of the majority of people in Northern Ireland? In that context, will the Minister make absolutely certain that the decommissioning of terrorists' weapons receives the priority that it rightly deserves?
    Mr. Ingram: On the hon. Gentleman's first point, there is no evidence in the way that he asserts or indeed at all in respect of participants in the talks. As for decommissioning, this morning I attended a meeting of the liaison sub-committee to deal with that issue. Once the commission has established its full framework on handling decommissioning, and the two Governments—our own and that of the Republic of Ireland—have in place schemes—and we hope to have done so by about the middle of February if various technicalities can be resolved—we shall proceed in the way that the hon. Gentleman has suggested and the matter will be given high priority.

    Peace Process
    Mr. Winnick: If she will make a statement on the current talks on the peace process. [20856]
    The Secretary of State for Northern Ireland (Marjorie Mowlam): During the Christmas break, I together with several of my colleagues had a number of meeting with the political parties. As a result of these meetings, and despite the senseless and appalling killings which have occurred during the break in the talks, we remain confident that the commitment still exists to reach a peaceful settlement. On 12 January we witnessed this commitment when the talks participants returned to the table with renewed determination to make progress.
    Mr. Winnick: Is my right hon. Friend aware that there must be very few people in this country who do not greatly admire and respect her determination to make progress towards success in the peace process, including her visit to the prison? Undoubtedly, her judgment proved right and kept everyone on board. Is she further aware that the whole House will wish her every possible success for a peace settlement, which would be to the obvious advantage of the large majority of people in Northern Ireland?
    Marjorie Mowlam: I thank my hon. Friend for those words. The Maze visit was a difficult judgment to make, but I thought that on balance if it kept the talks moving it was the right thing to do. I put on record the telephone calls from many of the families and friends of victims of
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    the people to whom I talked at the prison. To some of the people who called I had caused offence, for which I apologise. Others who had lost husbands, brothers and sons said, "Please keep going because if the talks can move forward, other families will not have to go through the pain that our family has gone through."
    I may be the face seen on the television, but the progress has been made by the parties in the talks. It is the political parties and the people of Northern Ireland who have had the courage to get to where we have, and it is they who will get further.
    Mr. Trimble: I am sure that the Secretary of State will share the pleasure that we feel at the wide welcome in the media and in the House for one aspect of Monday's paper, namely, the suggestion that there should be a council of the British Isles to draw together all the interests within that wider group. The editorial in The Independent yesterday, while identifying the suggestion as the one radical innovation in the Government's thinking, made the point that one can defuse and divert potential conflicts by bringing them into a wider arena. Will the Secretary of State please reflect in her dealings with Irish nationalists north and south of the border the benefits that they will derive from moving outside the narrow ground on which they have been for too long and by being involved in this wider arena together with the other parties in the British Isles as a whole?
    Marjorie Mowlam: I thank the hon. Gentleman for that question—and may I take this opportunity to congratulate him on becoming a right hon. Gentleman? The document that was put on the table in the talks process on Monday is in many ways radical. It is built on many of the ideas that the parties in the talks have put forward. It joins them together. I hope that people do not prejudge the document but take time to examine and discuss it in their parties and then make a judgment as to where we can move forward to reach agreements in the talks process.
    Mr. Mallon: Does the Secretary of State agree that the television images from within the prison and the television pictures of coffins of those who were murdered leaving their grieving houses should and must shock everyone into recognising that the political problem in Northern Ireland can be solved only in, by and through the political process. Will she ensure that the momentum that has been created within the talks by the joint paper presented by the two Governments will not be lost so that we can successfully agree a settlement in the shortest possible time?
    Marjorie Mowlam: I agree with the hon. Gentleman's opening remarks. The deaths and murders that we have seen should be condemned as appalling acts by everyone. I am sure that the House offers its condolences to the family of Mr. Enright, who is being buried at this very moment. We will do everything that we can to move the process forward. We had a meeting yesterday with the parties to discuss what measures we could put in place to build trust and confidence among the parties to facilitate movement forward.

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    We will do all that we can, and I am sure that the hon. Gentleman's party and the others involved will show determination to move the process forward.
    Mr. MacKay: Does the Secretary of State accept that the Opposition whole-heartedly support the latest developments and wish her well in bringing a permanent settlement to Northern Ireland? Does she also accept that we are delighted that she has built on the work done by successive Conservative Ministers in bringing peace to Northern Ireland?
    I should like to ask the right hon. Lady two specific questions. Will she assure the House that no final settlement will be reached without the consent of the people of Northern Ireland? Will she give us an absolute assurance that she will be in no way diverted by the men of violence, who talk about a "doomsday scenario" if they do not get precisely what they want?
    Marjorie Mowlam: I thank the hon. Gentleman for his comments and I appreciate the support that we receive from the Opposition. I readily acknowledge that we have built on the work that was done by his Government. They put the framework documents on the table—and they are still there—and they helped to form the basis according to which we have moved forward.
    We agree whole heartedly about the centrality of consent for the final settlement. The Prime Minister, who has worked very hard along with the Taoiseach in the past days to get us to where we are now, has made clear on numerous occasions the importance of centrality of consent to everything that we do in the talks process and in obtaining the consent of the people of Northern Ireland in a final referendum.
    As for the men of violence, I can guarantee, contrary to some earlier comments, that we will not let ones group dictate the progress or the agenda. We want to reach a settlement that can be accommodated by all the groups in Northern Ireland and that is what we are working towards.

  The Prime Minister was asked—
  PRIME MINISTER

    Engagements
    Mr. Sanders: If he will list his official engagements for Wednesday 14 January.
    The Prime Minister (Mr. Tony Blair): This morning, I had meetings with ministerial colleagues and others. Later today I shall have further such meetings.
    Mr. Sanders: On the occasion of the first Prime Minister's Question Time after the recess, I wish the Prime Minister a very happy new year.
    The Secretary of State for Education and Employment recently said that means-testing creates disincentives to work, savings and honesty. Does the Prime Minister agree?
    The Prime Minister: My right hon. Friend said quite rightly that we must make sure that any reforms that we introduce help those who are genuinely in need. I can
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    assure the hon. Gentleman that that is precisely what we intend to do. I believe that there is widespread support, indeed in his own political party as well, for the idea that it is time to modernise and update the welfare state for the 21st century.
    Mr. Grant: Does my right hon. Friend agree that the Federal Government of the United States of America took a very big step when they decided that the Oklahoma city bombers could not be tried in Oklahoma city because they may not get justice there? If so, will he ask his friend, Bill Clinton, whether he would apply the same principle to the Lockerbie bombers, so that they can be tried in a neutral country?
    The Prime Minister: I entirely understand why people want to make sure that a trial of the alleged Lockerbie bombers takes place. We want to ensure that that happens and I understand and, in particular, sympathise with the desire of the families of the victims of the Lockerbie bombing to see justice done, but nothing must be done that casts any doubt or aspersions on the validity of Scottish courts and Scottish justice. In the end, the ball is firmly in the Libyan court. Everybody knows that those two people should be brought to trial and what stands in the way of that is not the Americans or the British, but the Libyan Government.
    Mr. Hague: The Prime Minister has already mentioned the welfare state. Does he believe that
    "means tests penalise work, tax savings, and place a penalty on honesty"?
    The Prime Minister: That is actually the question that I have just answered, but I say again that I think that what is important is to ensure that any reform of the welfare state helps those people who are genuinely in need. We need that reform of welfare; we need it because, at the moment, spending is going up but poverty is going up. That is plainly an unacceptable situation and one which we want to change. We will look at the issues of means testing, insurance benefits and categorical benefits within that context.
    Mr. Hague: The Prime Minister will often be asked that question if he does not answer it. It was his Minister for Welfare Reform who said that
    "means tests penalise work, tax savings, and place a penalty on honesty".
    This week, we have heard the Secretary of State for Social Security saying that she plans more means testing. Which of those approaches represents the policy of the Government? Who is now in charge of policy at the Department of Social Security?
    The Prime Minister: First, my right hon. Friend did not say that. Secondly, what is important in relation to means testing benefits or anything else is that we try to make sure that we design the right system for the future. It is not sensible to speculate on the outcome of the review of that system until it is complete. When it is complete, people will have ample opportunity to discuss the proposals that we have made. The plain fact is that the welfare system is not working at present. It is the

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    system that we inherited from the right hon. Gentleman's Government—his Government failed, and I want my Government to succeed.
    Mr. Hague: The Secretary of State for Social Security did talk about the extension of means testing. Two Ministers are engaged in warfare over welfare and everybody knows it—everybody in Whitehall knows it and everybody in Westminster knows it. It is as good a well-kept secret as a grudge borne by the Chancellor—[Interruption.]—in fact, the Prime Minister could ask the Chief Whip to report on it and then it could be properly opened up to everybody. Has he seen the extraordinary explanation by DSS officials of what the Secretary of State said? They said that she had used a spurious example, saying:
    "It's a spurious figure, but it's one she uses to make her point. Like a lot of figures we give, it doesn't reflect real life."
    Does not the Prime Minister agree that the idea that those two Ministers in the Department of Social Security are working successfully together does not reflect real life? Which of their approaches represents the Government's philosophy? Who is in charge at the DSS?
    The Prime Minister: What is absolutely clear is that the right hon. Gentleman has nothing whatever of substance to say on the issue of the welfare state—[Interruption.] He does not. Just last week, we launched the biggest welfare-to-work programme this country has seen—a £3.5 billion programme opposed by his party. Those are the real issues—getting people off benefit and into work—that the public expect answers on and they are getting those answers from the Government. The Opposition have nothing to say about them at all.
    Mr. Hague: The Prime Minister will get the support of the Opposition for the reform of the welfare state if his plans are based on sound principles. What we are trying to discover this afternoon is whether they will be based on any principles at all. He wants to talk about substance, but he has the Minister for Welfare Reform who wants less means testing and a Secretary of State who wants more; the Minister wants expensive reforms and the Chancellor wants cheap ones; the Minister wants to increase national insurance contributions, which the Prime Minister has already ruled out; and the Minister wants to abolish the state earnings-related pension scheme while other Ministers have already said that they would not do it. Will the Prime Minister now—[Interruption.] It is no wonder he had to send the Minister without Portfolio to Disney World to ask Mickey Mouse. Will the Prime Minister now back up the Minister he appointed to reform the welfare system, or has he already abandoned that Minister?
    The Prime Minister: No is the answer to that. The right hon. Gentleman can make as many debating points as he likes, but frankly they do not add up to a serious strategy for reform. His social security spokesman, the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), has today said that he wants to work with the Government and I welcome that, but there are two things that flow from that. The first, is the Conservatives' admission that they have failed in Government over 20 years—had they succeeded, we would not be discussing welfare reform.
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    Secondly, there will come a point where there is a simple test as to whether or not the Conservatives are serious about supporting us on welfare reform. The first part of the test is on student finance. Will the right hon. Member for Richmond, Yorks (Mr. Hague) support us on that, given that our proposals are based on the report that his Government commissioned or will he continue to play about and make debating points?
    Mr. Hague: I shall give the Prime Minister a serious proposition. We shall support the Prime Minister in reforming welfare if his reforms are based on the principles of ending the dependency culture, strengthening families, encouraging alternative provision and looking after the worst-off and disabled people. Let him say whether he will base his plans for welfare reform on those principles, even if he and I have to fight together for them against some Labour Back Benchers.
    The Prime Minister: The principles that the right hon. Gentleman has just outlined are the very principles that we have already outlined as the basis of our proposals. If that is the case and the right hon. Gentleman supports those principles, why does he oppose the welfare-to-work programme which implements them? Never mind the debating points, there is a specific programme of £3.5 billion to help young people and the long-term unemployed off benefit and into work, from dependence to independence. If the right hon. Gentleman supports our proposals if they are based on those principles, and they are, he should support that programme, but does he? No.
    Mr. Pound: In the first week of July this year, we shall celebrate the 50th anniversary of the birth of the national health service—and, coincidentally, my 50th birthday. There has been half a century of distinguished service to the nation in both cases. What plans does my right hon. Friend the Prime Minister have to mark the slightly more significant of those two anniversaries, bearing in mind the fact that in my case a modest card will be more than sufficient?
    The Prime Minister: First, I offer my personal congratulations to my hon. Friend on his 50th birthday. The very best way to celebrate the anniversary of the national health service is to make the commitment to investment and reform that this Government have made. Over this period, an extra £1.5 billion over and above the Conservatives' spending plans is to go into the national health service and there is to be reform to make the NHS work again on the basis of co-operation and partnership, rather than being run by the Conservative's internal market, which did so much damage. That is the national health service that the Labour party created when it was in government after the war and that is the NHS which we shall now renew.
    Mr. Ashdown: Listening to the Prime Minister and the right hon. Member for Richmond, Yorks (Mr. Hague) talking about co-operating on welfare reform is rather like watching a lost edition of "Call My Bluff'. Is not the truth about welfare reform simply that all three parties want to see welfare reformed and there have been two attempts to do so? Both those attempts have been Treasury driven, both have been piecemeal, both have been political and

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    both have ended up in trouble. Yet Beveridge's welfare system that we wish to reform was created by a non-party committee, whose work enjoyed cross-party support. If it is really true that the Conservatives have joined us in believing that that is the best way to approach the subject, the Prime Minister has a real opportunity. Will he now take it?
    The Prime Minister: I do not know how sincere the protestations of support from the Conservatives were. If what we have just witnessed is their support, I should not like to see their opposition. If people can join forces in order to reform the welfare state sensibly, that is a good idea. No change will be proposed without consultation and the changes will be based on the principles that I have set out. Those principles are to help those who are genuinely in need, to say that work is the best answer for the welfare of those who can work, to ensure that we root out fraud and abuse from within the system and to give as many people as possible the chance to move from dependence on welfare to independence. Those are good, sound principles, but the difficulty will be in seeing them through. We must try to do so in the most effective and humane way, and we shall do that.
    Mr. Ashdown: But that is not creating a consensus for cross-party support; that is saying, "I will put forward the proposals and you support me."
    Let me make a concrete proposition to the Prime Minister: that he could create an independent commission, that it would carry representation from all the parties and experts in the field, that he could write the remit, that it would report in a year and that, if it did so, he might then genuinely have cross-party support and he might also have a situation where his Government made proposals that were right rather than wrong.
    The Prime Minister: In the end, we must take these decisions ourselves. I mean by "ourselves" not simply the Government but the politicians in general who are in the House. Of course we should be informed by independent research, and we will be.
    As we embark on this process, it is important for us to realise that we must change a welfare system in which spending is increasing ever more and ever more, but poverty is increasing, too. We have 3.5 million households that are workless even though the people in them are not of pensionable age. Three million children grow up in households where no one is working. One million of the poorest pensioners are entitled to income support, but do not get it.
    We must change that, but we cannot load it on to an independent commission and say, "Go away and do the thinking for us"; we must do the thinking ourselves. Nevertheless, any changes that are proposed will be changes that are subject to proper consultation.
    Gillian Merron: In anticipation of marking the 50th anniversary of the national health service, will my right hon. Friend join me in paying tribute to those whose work forms the backbone of our national health service: not only the doctors and nurses but those who cook, clean or care for us, whose work often goes unseen and is undervalued?
    The Prime Minister: My hon. Friend is correct in pointing out that the national health service depends on
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    the work and dedication of a number of people who often give up their time without any payment and without any concern other than the well-being of patients. The national health service is still generally regarded by people abroad as one of the great institutions of the world. Our task is to take it, keep it true to its principles and renew it for a new age.
    Dr. Cable: Does the Prime Minister believe in the contributory principle for state pensions? If, as was reported during the recess, he has an open mind on the subject, will he indicate at what approximate income people can be considered to be too affluent to qualify? Would it be more or less than the income of Members of the House?
    The Prime Minister: There is really no point in conducting a review and inquiry and then giving out possibly speculative proposals before they are properly considered. It has to be done in a proper and serious way. Once it is done, there will be a chance for people to have a debate on the proposals. What is interesting about this discussion and the debate in the House is that there is now widespread acceptance of the need for reform, and of the fact that the past 20 years saw us fail on the welfare state and now we must change and succeed. I welcome that and I think that it is a good start to the debate.
    Dan Norris: Last night the House of Lords voted to frustrate the introduction of democracy in London. Back in the 1980s, it used its power to obliterate a whole tier of local government. Does the Prime Minister agree that if the House of Lords can use the power of privilege to obliterate democracy, the House of Commons should use the power of democracy to obliterate privilege—and may we start, please, with hereditary peers?
    The Prime Minister: Of course, last night what happened was not merely that the hereditary peers pushed through an amendment that has the effect of depriving Londoners of the chance on 8 May to vote on their authority, but that they did so with the full support of the Conservative Opposition. [HON. MEMBERS: "Shame."] They are prepared to use hereditary peers to stop people getting the chance to vote for something that was in the Labour party manifesto, that people voted for in London and that people want in London. We shall ensure, not merely that people get the chance to vote on 8 May as we promised, but that we put an end to hereditary privilege in the House of Lords.

  Official Visits (Cornwall)
  Mr. Tyler: What plans he has to pay an official visit to Cornwall.
  The Prime Minister: I have no plans to do so at the moment.
  Mr. Tyler: Would I be right in saying that the Prime Minister's briefing notes contain the following facts: that after 18 years of Conservative rule, households in Cornwall have some of the lowest incomes in the country; that our GDP is less than 70 per cent. of the European average; and that unemployment is rising? As other

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  Ministers have come to Cornwall and the south-west and have tried to tackle those problems by endorsing the bid for objective 1 status, even if the Prime Minister cannot visit us, will he, on our behalf, give an absolute assurance to the people of Cornwall that he will advocate this case in the European Council and Commission?
  The Prime Minister: I am sorry that I have not been down to the hon. Gentleman's part of the world yet—I have no doubt that I will rectify that in time to come. Objective 1 status is at present the subject of discussion between our various European partners, but I can assure him that we will keep the claims of Cornwall uppermost in our minds.
  Ms Atherton: Will the Prime Minister assure my constituents that the new development agency will work to tackle the problems that Cornwall faces, and that some or all of the agency will be located in the county? Does he believe that the agency will significantly help our efforts to create new jobs and support existing jobs, such as those at the last working tin mine in Cornwall and Europe, South Crofty?
  The Prime Minister: As my hon. Friend knows, detailed proposals for South Crofty are still being considered by the Ministry. I certainly believe that the regional development agency will play an important part in helping Cornwall, just as regional development agencies around the country will help by operating the single regeneration budget and by drawing in the inward investment that we require. The policies of the Government taken together—for jobs, through the welfare-to-work programme, and for greater health and education spending—will also play their part in raising the living standards of the people of Cornwall. I congratulate my hon. Friend on all her campaigning work on these issues.
  Mr. Andrew George: What plans he has to pay an official visit to the communities of mainland Cornwall and the Isles of Scilly in the St. Ives constituency.
  The Prime Minister: I am afraid that I have to say none at the moment, but I shall keep it under review.
  Mr. George: I thank the Prime Minister for his reply, and repeat that we would welcome him to Cornwall. The people of Cornwall face a great deal of uncertainty. Can the Prime Minister confirm that he will seize the opportunity of the European presidency to forge ahead with the effective reform of the common fisheries policy, on the principles of sustainability, decentralisation and equality of monitoring and enforcement?
  The Prime Minister: I am pleased to say that I can give the hon. Gentleman that assurance—that is precisely what we will try to achieve. Before Christmas, we achieved a better than expected outcome at the Commission negotiations. We shall continue to work on the long-term reform of the common fisheries policy. We are pressing the Commission now; I hope that we will be in a position to announce something in the not-too-distant future which will provide us with far better enforcement mechanisms under the fisheries policy than we have.

  Engagements
  Mr. Robathan: Has the Prime Minister ever given permission for Mrs. Regan to travel abroad with the Foreign Secretary at public expense?
  The Prime Minister: All these things have been handled entirely in the ordinary way. When Conservative Members raise such issues, it only goes to show how little they have to say about anything of importance.
  Mr. Chisholm: I welcome the Prime Minister's determination to modernise the welfare state, and I congratulate the Secretary of State for Social Security on her new deal for lone parents. Why on earth have both projects been torpedoed by cutting in-work and out-of-work benefits for lone parents? Will he now put those cuts into the comprehensive spending review of the social security budget, so that lone parents can take the risk of moving from welfare into work after April, and so that there may be a credible and consistent starting point for much-needed welfare reform?
  The Prime Minister: I know that my hon. Friend feels strongly about that issue, but we have put a substantial amount of money into helping lone parents off benefits and into work. Early indications of the way our programmes are working show that lone parents are desperately anxious to take the opportunity to get off benefits and into work, given that their incomes—bearing in mind how the benefit system works in relation to family credit—are likely to be far higher when they are in work than when they are on benefit.
  Mr. Luff: In the light of the growing evidence of maladministration and possibly sharp practice during the counting of votes in the Welsh referendum, will the Prime Minister urgently order a judicial inquiry into what went on?
  The Prime Minister: No, I will not, because there is no evidence whatever of impropriety. When Conservative Members put on a performance like the one this afternoon, all that they do is show why they are in opposition.
  Mr. Miller: Does my right hon. Friend agree that one of the most shameful statistics that we inherited was the fact that four out of 10 11-year-olds had failed to reach adequate standards of literacy and numeracy? Does he recall the enjoyable time that we had with children from Stanney high school, who participated in the summer literacy scheme? Does he agree that the success of that scheme supports the arguments coming from the Department for Education and Employment that we must return to the core values of literacy and numeracy in the curriculum for children up to 11 years old?
  The Prime Minister: Yes. The literacy and numeracy programme is an extremely important part of the education reforms. As my hon. Friend points out, the fact that after 20 years of Conservative government, we ended up with 40 per cent. or more of 11-year-olds not up to the proper standard in literacy and numeracy is a disaster not just for them, but for the country. I remember well the visit of his constituents, who benefited from the Government's literacy programme in the summer. Once

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  again, we hear serious issues being raised by Labour Members, and a whole lot of chatter and scorn from Conservative Members, who would not know a serious issue if it jumped up and hit them.
  Mr. Bercow: May I say how delighted I am to see the Prime Minister here? Since the general election he has spent more time in the Seychelles than in the House of Commons.
  Will the Prime Minister publish the rules on travel at public expense by Ministers' partners, as the ministerial code refers only to spouses? No waffle, no "I have to say", no "What is important is"—yes or no will do.
  The Prime Minister: The code of practice has not changed in any way since the previous Government were in office.
  I have reflected on the hon. Gentleman, as I knew that he would be asking a question today. The person of whom he reminds me most is a Mr. David Shaw. His hallmark, which the hon. Gentleman shares, was to be nasty and ineffectual in equal quantities. [Interruption.]
  Madam Speaker: Order.
  Mr. Jim Murphy: After the previous question, I am sure we all wish that someone else spent less time in the House of Commons. Does my right hon. Friend agree that the Second Reading of the Scotland Bill last evening was an historic event, not only because it witnessed the conversion of the Conservatives to devolution, and because it will strengthen the United Kingdom, not break it up, but because it gives to Scotland the Parliament that it has needed and been denied for 300 years?
  The Prime Minister: Yes. It was a significant vote in two respects. It allows us to put well under way the proposals for a Scottish Parliament, which fulfils another pledge in our manifesto. It is interesting to note that the Conservatives, who told us before the election that devolution would wreck the constitution of the United Kingdom, did not even vote against the Bill's Second Reading.
  Mr. Amess: Even though "Sorry, it ain't me, guv" seems to be the order of the day during Question Time under the new Labour Government, perhaps the right hon. Gentleman will answer the following question. As the new Scottish Parliament is to be given the power to determine its health policy, does the right hon. Gentleman agree that it should also be given the power to determine its policy on abortion?
  The Prime Minister: No, I do not agree for the reasons that were given in the White Paper.
  Dr. Palmer: On the day that the new Northern Ireland initiative became known, most newspapers led with the story of the Foreign Minister's marriage. Judging from the questions that we have heard from Opposition Members today, is it not astonishing that they appear to share that sense of priority?
  The Prime Minister: It is, but Labour can speak from a lot of experience in opposition. The first true phase of
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  opposition is when hon. Members have nothing to say about the really big issues so they run around on all the little ones. However, I am afraid that the public will find the Conservatives out in the end.

  Official Visits (Colchester)
  Mr. Bob Russell: What plans he has to visit Colchester.
  The Prime Minister: I do not have any plans at the moment. I am making many visits, but not to that particular place. [Interruption.]
  Madam Speaker: Order. Opposition Members are impossibly badly behaved. [Interruption.] Order. Otherwise, Mr. Blunt, I shall send you out for the rest of the day.
  The Prime Minister: I have no plans to visit Colchester.
  Mr. Russell: I am disappointed that the Prime Minister will not be able to come to Colchester. Will he give me a message to take back to the parents at the Mulberry Tree day nursery that is facing closure because of the Government's failure to provide sufficient resources to Essex county council whose Labour social services committee is planning to shut the nursery? What advice does the Prime Minister have for those parents, many of whom are lone parents?
  The Prime Minister: I do not know the particular circumstances of that day nursery. However, under the settlement announced a few weeks ago by the Deputy Prime Minister, more money will go to social services, and additional money will go to education. A vast sum of additional money will go to education next year.
  I understand that there will be difficulties in particular areas, but I say to the parents of the nursery to which the hon. Gentleman referred and to other parents: yes, it will take time to put right the position that we have inherited, but we are putting it right. In the end, those parents will be able to see that the education system, like the national health service, has been improved by a Government who care about both.
  Madam Speaker: Order. Time is up. We now come to a statement by the Minister of Agriculture, Fisheries and Food. [Interruption.] Order. Will hon. Members who are leaving do so quietly? [Interruption.] Order. Will hon. Members have their conversations outside the Chamber, please? [Interruption.] Order. Hon. Members should not walk in front of the Front Bench when I am waiting for a statement from the Secretary of State, and they should not move in front of the Secretary of State when I have called him.

Food Standards Agency
3.32 pm
The Minister of Agriculture, Fisheries and Food (Dr. John Cunningham): With permission, Madam Speaker, I should like to make a statement about our plans for a Food Standards Agency. Copies of this statement and the White Paper will be available from the Vote Office when I sit down.
Public consultation on Professor Philip James's report on how such a body should operate demonstrated an overwhelming consensus about the need to reform the way in which food safety and standards are handled in government. There is widespread support for the principle of separating responsibility for promoting food safety from responsibility for sponsoring the food and farming industries.
The Government have drawn up detailed proposals for the Food Standards Agency in the light of the responses to Professor James's recommendations. Those recommendations provided an excellent foundation for the White Paper, and I pay tribute to Professor James for his work. I am delighted to be able to present our proposals to the House today, on behalf of all the United Kingdom agriculture and health Ministers, in a Government White Paper, "The Food Standards Agency: A Force for Change". I particularly appreciate the support given by my right hon. Friend the Secretary of State for Health during the drafting of the White Paper, and that of our hon. Friends the Minister for Public Health and the Minister of State, Ministry of Agriculture, Fisheries and Food. Thanks are also due to my right hon. Friend the Chancellor of the Duchy of Lancaster who chaired the committee.
These proposals are genuinely radical and modernising. They are part of the wider process of reform which we are driving forward across the whole spectrum of government. They are very much in tune with our core objective of making government more open and accountable as the basis for public trust in public services and institutions.
Every family and individual in the land has a direct interest in food safety and food standards. It has long been clear that fundamental reform of the Government machinery for handling these issues is needed if public confidence is to be properly restored. We have quickly grasped this challenge. We have already made important changes to the way in which food safety and standards are tackled since we took office. We have ensured that my Department and that of my right hon. Friend the Secretary of State for Health work effectively as a team, together with our colleagues in Scotland, Wales and Northern Ireland. We have significantly increased the amount and quality of information that we make public.
Our proposals for the Food Standards Agency highlight our plans to strengthen and make transparent the way in which government deals with these vital matters. They represent a radical approach in which the clear priority is to protect public health. The agency will be a powerful new body, able to publish its advice to Ministers, free of vested interests and able to act clearly and decisively at all stages of the food chain. It will be directed by a group of independent commissioners who will provide an authoritative and wide range of expertise. They will work together in the public interest to lead an agency which
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promotes the supply of food that meets the standards that consumers expect. It will ensure that people have the information that they need to make proper choices for themselves about the food they eat, for consumers will rightly always decide for themselves about their diet. The agency will aim to help people who want to be healthier to choose a suitable diet; it will not tell people what they must eat.
Every business, from the farm, the small shopkeeper to the largest supermarket, also has a direct interest in ensuring confidence in food. They will gain from an agency which, because it is able to deal effectively with genuine food safety problems to protect consumers, will also have the credibility to reassure consumers when that is necessary.
The agency's functions will include formulation of policy advice, preparation of draft legislation, negotiation in the European Union and other international bodies, research, surveillance, public information and the monitoring of food law enforcement. Its remit will extend across the whole food chain. Where it does not have full operational responsibility, in aspects of farming practices, it will have powers to intervene if it considers that the action taken by other bodies, including the Ministry of Agriculture, does not provide sufficient safeguards for the human food chain. The Meat Hygiene Service will report to the agency rather than to agriculture Ministers.
The agency will be able to draw on the expertise of the network of independent scientific advisory committees, including a new advisory committee on animal feeding stuffs—recommended as long ago as 1992—which will advise both the agency and agriculture Departments.
By eliminating the confusion and uncertainty that have for too long surrounded the arrangements for dealing with food safety and standards issues, the agency will be able to deliver real benefits to consumers, retailers and the food industry alike. In doing so, it will need to command the confidence of all those who have an interest in its work. The agency will achieve this by adopting the best available authoritative scientific advice, and by acting in a way that is open, consultative and transparent. It will ensure that the public have access to clear and consistent information about risk.
The guiding principles that will govern the agency's actions are set out in the White Paper. They will be enshrined in the legislation that brings it into being. They will provide the framework to ensure that the agency will act responsibly and proportionately in the public interest.
The Food Standards Agency will be fully accountable for its actions to the public and to Parliament. It will report to Parliament through health Ministers, but will also work closely with the other Departments of government, including the Ministry of Agriculture, Fisheries and Food, which will retain responsibility for sponsorship of the food industry. The agency will routinely publish the basis for its advice. This will ensure that the public interest is clearly being served when policy decisions are taken and regulations proposed. The appropriate Select Committees of both Houses would, of course, be able to call the chair of the commission and the agency's chief executive to give evidence when appropriate.
The particular interests of Scotland, Wales and Northern Ireland will be fully covered. The Food Standards Agency will be responsible for advising the

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Government on the United Kingdom policy framework on food standards and safety matters. However, we recognise that issues of particular interest to Scotland, Wales and Northern Ireland arise. We therefore propose that new independent advisory committees will be formed in each of those countries to provide a focus for Scottish, Welsh and Northern Irish interests in food standards, and to advise the agency's commission and the respective Secretaries of State, or their successors from a devolved Parliament or Assembly. We will also establish Scottish, Welsh and Northern Irish executives within the United Kingdom agency to take responsibility for the existing food safety and standards functions carried out by the Scottish, Welsh and Northern Ireland Offices.
The agency will need to be properly resourced. The White Paper makes it clear that the Government intend to pursue new methods of raising some of the necessary expenditure from the food sector. We intend to consult closely all who would be affected, including, of course, the small business sector, in drawing up our detailed proposals.
The publication of the White Paper is the commencement of the next phase of public debate. Establishing an agency with such important, wide-ranging responsibilities is a complex process. We will again consult interested parties, across the whole food chain, to ensure that the Food Standards Agency will work effectively in practice and command respect from all those who have an interest in its work. The White Paper is being circulated widely for comment today. My right hon. Friends and I look forward to discussing the way forward with all stakeholders over the coming weeks.
The responses to the consultation will inform the drafting of the Bill to establish the agency. The draft Bill will be circulated for consultation and pre-legislative scrutiny by Parliament later this year. The Bill will be brought before Parliament as soon as the legislative programme permits. In the meantime, the Government are already putting into practice the principles by which the agency will operate. We will continue to ensure that the period of transition is managed successfully. We propose in particular to begin to put in place the agency's governing body on a shadow basis at an appropriate stage in the passage of the legislation through Parliament.
The White Paper contains a radical, coherent, responsible set of proposals for delivering one of our most important manifesto commitments. The Food Standards Agency will constitute a force that is dedicated to working systematically and constructively with all who are involved with the supply of food to the consumer to ensure better food safety standards. The time for change is long overdue. I commend our proposals to the House.
Mr. Michael Jack: May I first thank the Minister for his statement and for the fact that we were able to have adequate time to study it and to look at the White Paper? I am glad that his computers are fixed on this occasion.
We very much welcome any moves that will help our food to be even safer than it is now, and indeed to enhance consumer confidence in our already excellent food industry.
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I welcome the Minister's commitment to widespread consultation on the policy, and thank him for providing the opportunity for pre-legislation scrutiny. That is right, when important and detailed matters such as this are being considered.
The Minister says that there has been a loss of confidence in British food. I wonder how he reacts to the statement made by Safeway, which referred, on the publication of Professor James' s report, to
"The vast majority of our 6 million weekly shoppers continuing to demonstrate confidence in us, providing volume growth and little alteration in their long term buying patterns".
Perhaps the Minister could also comment on Safeway's view of the agency. It says that it does not believe that the Food Standards Agency, however structured, could have anticipated BSE or E. coli 0157, or that it will prevent issues of possibly similar severity in the future. It is important for the Minister to give us a view on those matters.
May I ask the Minister what criteria he will use to determine whether the Food Standards Agency is being successful? Does he intend to set a target for the reduction of reported incidents of food poisoning, or will he consider another target—possibly the elimination from the food chain of harmful pathogens such as salmonella or campylobacter? By what objective measures will he assess public confidence in Britain's food once the agency has started work? Professor James did not seem to think that much would happen. He said this morning on the radio:
"I think if in fact the food poisoning is levelling off'
that would be an achievement. Professor James hoped that the rate might fall in three to five years. Perhaps the Minister can tell us what his ambitions for the agency are.
How will the agency determine its priorities? I know that it is to produce a corporate plan. Will that plan be the subject of ministerial decision making? If so, which Ministers will decide on the objectives and policies that the agency will pursue? How will the agency change its policies from time to time, in the light of changing situations? Can the Minister tell us whether the present budgets relating to food science, which will underpin much of the agency's work, will be sustained and developed further?
How will the Minister ensure that the agency continually recognises that people, as consumers, want to make their own choices on the safe food that they eat? What safeguards can he offer the House? Can he assure us that the agency's clear, objective agenda will not be hijacked by those who would be labelled food faddists, and who would want the agency to move into what has been described an extension of the nanny state? Does the right hon. Gentleman agree with Marks and Spencer, which has said that well-being, in terms of the food that people eat, cannot be imposed on the customer?
A central part of the Minister's statement was his comment on the agency's funding. The White Paper talks of the agency's own new costs being £100 million, of which £35 million are covered by other charges; but what exactly are the new methods of raising money to which the Minister has referred? The White Paper speaks of some form of licensing or registration scheme. Will all food premises have to be licensed? If so, how will they qualify for the licence, and on what criteria might the licence be removed? I should like to know more about that from the Minister.

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The White Paper also talks of the £120 million to £150 million that local authority enforcement costs. The implication of paragraph 8.19 is that in some way, by gradual attrition, the food industry—from the farm right through to the supermarket and the restaurant—will have to pick up the tab. May we know more precisely what proportion of the costs will be placed on industry, and when the process of costs passing back will stop?
Will the Minister confirm—as the Parliamentary Office of Science and Technology has—that 44 per cent. of all reported food poisoning cases result from consumers buying meals from restaurants, hotels and other catering establishments? Does he agree that a key ingredient to achieving safer food is the proper enforcement of existing laws? The current law is unevenly enforced, so how will the agency tackle that problem? What consultations will he have with local authorities to find out how much extra money they will require to carry out their duties under the new agency?
Will the Minister give more detail of how the new agency will fulfil its legislative responsibilities? Will it have to put to Ministers all future proposals on new or revised food law? Will it be involved in environmental policy? There is concern about the disposal of bio-solids and the effect on the food chain. Will the new agency be involved in that?
Will the Minister tell the House a little more about the lines of accountability and the way in which the new agency will operate? He talked about openness, and we applaud that, but will he reassure us that the supply of information that is commercial in confidence currently given to his officials will not be cut off, as it enables them to be effective in European Union negotiations and in other areas in which the agency will operate? There is a worry that such openness may be against the interests of the dissemination of information.
In the world of food, many people give consumers alternative advice. Will the agency act as referee to give clear guidance when such information is made available? In his statement, the Minister referred to the agency's ability to interfere in farming practice if it considers that
"action taken by other bodies, including the Ministry of Agriculture, Fisheries and Food, does not provide sufficient safeguards"
for human health. Will he confirm that the agency will have the unique power to overrule him and his Department? If so, to whom will the agency be accountable for such actions? How would the agency have reacted if it had received from the Spongiform Encephalopathy Advisory Committee the advice about beef on the bone? Would it have implemented the ban, or would it have followed the line taken in the Minister's statement and ensured that the public had the knowledge to make up their own minds?
The Opposition welcome the arrival of the Food Standards Agency. [Laughter.] It is interesting to note that, my having asked the Government searching and probing questions about a serious new agency, the best that we can get from them is guffaws of laughter. Do they take the matter seriously?
Dr. Cunningham: I welcome the comments at the beginning of the right hon. Gentleman's statements, but the remarks that he made at the end rang a little hollow after his long litany of critical statements in between. He seems to be giving the Food Standards Agency a
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one-candlepower welcome. I can tell him that the agency is widely welcomed across the country by consumers, consumer organisations and major players in the industry.
The right hon. Gentleman began by saying that he believed that this is the right way forward, and clearly we share that view. He asked me some questions about the Safeway organisation. I shall tell the House what Safeway had to say following the publication of the report by Professor Philip James. It said that Safeway
"agrees with the principle of a Food Standards Agency …organisationally transparent, financially and politically independent and with 'plough to plate' scope."
That is a pretty clear statement of support from Safeway for the Government's proposal.
The right hon. Gentleman then asked me whether the Food Standards Agency could have prevented or foreseen serious food problems, such as BSE or E. coli.
Mr. Jack: That is what Safeway asked.
Dr. Cunningham: Sorry, but the right hon. Gentleman put the question. It is difficult for any organisation, within or outside government, to foresee certain problems, but the agency might have been more guarded, more careful and more cautious in its approach to what was happening in the animal food chain than the Conservative Government ever were in the lead-up to the disastrous consequences that flowed from their failures, and from the widespread infection of the national herd with BSE.
The right hon. Member asked about criteria and targets for the Food Standards Agency. The White Paper proposes that the Ministry of Agriculture, Fisheries and Food will give up all responsibility for these matters. The agency's responsibility will be to report in the first place to my right hon. Friend the Secretary of State for Health, and it will be for the Government and the agency in consultation, following what I hope will be a successful passage of the legislation, to decide whether targets—financial, operational or otherwise—should be established and on what basis. In response to the second part of what the right hon. Gentleman said on the matter, I do not anticipate that the Food Standards Agency will have the capability to eliminate coliforms, enteroviruses or pathogenic micro-organisms.
Mr. Jack: It will not tackle the problem.
Dr. Cunningham: The right hon. Gentleman says that it will not tackle the problem, but of course it will tackle the problems of food standards and food hygiene, which is what it is being established to do. We have to rest on advances in medical science to deal with some of the other problems. Even so, we know that some organisms are almost impossibly difficult to eliminate or destroy.
The right hon. Gentleman asked how we could guarantee that the agency's agenda would not be hijacked by people on one side of the argument. The important matter is that the Food Standards Agency has to be so robustly independent and so well managed that its agenda cannot be hijacked by anyone, including the food industry or people who take the extreme view against which the right hon. Gentleman rightly cautions. I agree on that: we want the agency to be tough and independent, and it will be on a statutory basis. I cannot believe that the serious and experienced people whom we intend to form

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the commission and the executive of the agency will allow their agenda to be hijacked by anyone. That would totally destroy the agency's independence and credibility, and we shall ensure that that does not happen.
In another question, the right hon. Gentleman spoke about the views of Marks and Spencer. I shall tell him and the House what Marks and Spencer said in its response to the consultation on the report of Professor Philip James. It stated that Marks and Spencer
"supports the creation of an independent Food Standards Agency to help maintain public confidence in the safety of British food."
That is another clear statement of support in principle for the Government's proposal.
The right hon. Gentleman asked an important question about funding. We have deliberately made it clear to everyone involved that funding proposals are to be the subject of further discussion and debate. It will be possible for hon. Members, those in the food industry, and all who are involved in the food chain to comment on funding. The White Paper gives a couple of illustrative examples of what might happen under a licensing system, for example. I say to the right hon. Gentleman that all these establishments are already licensed and on the record, and there is no necessity for any huge new bureaucracy in that regard.
The Food Standards Agency will clearly have a role in the enforcement of EU as well as UK legislation. It is difficult to take seriously the right hon. Gentleman's question on that point because it comes from a member of a Government who signally failed again and again to take effective, proper action fully to implement our obligations under EU and UK law. I have dealt with the main points that were raised by the right hon. Gentleman in his questions.
Mr. Jack: Accountability?
Dr. Cunningham: I have made it clear in the statement and in my response to the right hon. Gentleman that the agency will be accountable to my right hon. Friend the Secretary of State for Health, to Parliament and to Select Committees. It will be able to give unbiased advice, free from any vested interests. In turn, it will be able to take its advice from the expert scientific committees that currently advise me and my right hon. Friend the Secretary of State for Health.
I am sure that the whole country will welcome my statement, will want to discuss the White Paper and will want the Government to move forward as quickly as possible to bring an independent Food Standards Agency into being.
Mrs. Anne Campbell: I know that my right hon. Friend's statement and the White Paper will be warmly welcomed in my constituency, where people are concerned about standards in food safety. Will there be research funding for the agency to carry out its own research? If so, how will it relate to the research programmes already undertaken by my right hon. Friend's Department and the Department of Health?
Dr. Cunningham: I am grateful to my hon. Friend for her comments. Existing scientific and advisory agencies
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and research programmes will be available to guide the thinking of the Food Standards Agency, but it will also have, in its own right, the power to commission an independent research programme outside of existing Government agencies, in the private sector. Of course, if it wishes, it can continue to make use of existing Government agencies. It will be the agency's decision.
Mr. Paul Tyler: On behalf of my right hon. and hon. Friends, I warmly welcome the Minister's statement and the White Paper. We have long campaigned for an independent Food Standards Agency, and many of the proposals in both the statement and the White Paper meet our requirements.
I have some specific concerns, but, before expressing them, I want also to welcome the Government's decision to make the matter the subject of pre-legislative scrutiny in the House. I am sure that that will be warmly welcomed by all hon. Members from all parties, including Back Benchers. It is important that the emphasis that the Minister has placed on credibility, transparency and accountability receives a positive response from hon. Members—we must all endorse it.
Does the right hon. Gentleman agree that the core issue is reliability? Over recent years, there has been no lack of reliable, safe, good quality food—but there has been a lack of good, reliable, safe standards of advice on that food. Does the Minister recall that his predecessor, the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), admitted to me from the Dispatch Box that three quarters of the public did not believe what he said about food safety? His advisers were no better received by the general public. Therefore, we must be sure that the new mechanism that the Minister is putting into place will carry credibility with the general public and the consumer in a way that was patently not the case under his predecessor.
That brings me to my core concern. I accept that it is early days, and obviously we will study the White Paper with interest, but there will be some confusion in the House and in the country about precisely what accountability means. The Minister made the statement, but the Secretary of State for Health will be accountable for the agency. The simple way to square the circle would be to establish a separate Select Committee on food standards. That would bring together the interests of health, agriculture and consumer protection throughout the country.
Another issue of concern both inside and outside the House is cost. It is right that the Minister should examine the issue, and I am grateful to him for what he said. I and, I am sure, other hon. Members will not take with more than a pinch of salt the squeals of dismay from a very, very rich industry. The food processing and retailing industry made huge profits during the recession. Indeed, some of the supermarkets have made huge profits out of farmers during the BSE crisis. The industry will be asked to contribute a comparatively small sum towards restoring confidence in its products. If there was already confidence in its products, we would not need the agency. The agency is being established to ensure that there is real confidence in future. If the main cost of the new agency falls entirely on the industry, however, there is a danger that it will be suspected of being in the pocket of its paymasters. Therefore, it is important that the public purse—the taxpayer—also makes a contribution.

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With those concerns, but with a general welcome, I hope that the Minister will have the support of most hon. Members in the consultation process.
Dr. Cunningham: I am grateful to the hon. Gentleman for his generous support for both the statement and the White Paper. As he said, the matters of reliability, sound advice and public confidence are inextricably linked. The food industry, and particularly the beef industry, has suffered so many of its problems precisely because public confidence in government and in advice from government fell to such a low ebb, and the strong case for an independent Food Standards Agency became unassailable for exactly those reasons. We must have clear, coherent and independent advice from an organisation that is staffed by people in whom the general public will have confidence, knowing that they are independent administrators and independent of the industry.
I disagree with the hon. Gentleman's suggestion that there will be some confusion. One of the reasons for mistrust is that, historically, the Ministry of Agriculture has been responsible not only for the promotion and production of food but for the promotion of food standards and of food safety. Those responsibilities have all been held by one Ministry, although they occasionally conflict. That is the overwhelming case for the separation of responsibilities.
After separating responsibilities, it would be rather perverse to say that the Food Standards Agency should report to the Minister of Agriculture. The agency should report to the Secretary of State for Health, and that is what it will do. There is no need for anyone to be confused about the reasons for the separation of powers and responsibilities or about how accountability will work.
I should tell the hon. Gentleman that it is not for me to decide whether the House has a Select Committee on food safety matters. In general and in principle, I am a supporter of Select Committees in the House, but I cannot make such a commitment.
Finally, the hon. Gentleman dealt with the very important matter of costs. The White Paper gives an example of 600,000—in round terms—establishments being affected by the agency. I should apologise to the right hon. Member for Fylde (Mr. Jack) for saying that they are already licensed. They are registered, not licensed. I apologise for that slip of the tongue.
The illustrative example in the White Paper states that if the cost of a licence were £100 per annum, the net income would be £60 million. Therefore, even if we were to use that approach—there is no commitment to do so yet—such relatively small charges will not overburden an industry that, as the hon. Member for North Cornwall (Mr. Tyler) said, is profitable and able to compete vigorously and successfully, not only in domestic but in international markets. That was only one example. The Government have an open mind on the matter, and we will consult widely on it.
Mr. Dennis Skinner: Is my right hon. Friend aware that it comes easy to me to be able to support this clear-cut manifesto commitment, unlike some of the others that we have been hearing about lately, in the knowledge that the agency will provide a very big counterweight to the large vested interests in the food-producing industries? But will he take on board one
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problem? He says that the body will be independent of Ministers and of the food industries. If the agency is not truly independent of those wild-eyed people in the Common Market who make all those tin-pot proposals month after month, and if people in the agency find themselves tarred with that brush, the instincts of the British people will turn against it. I tell my right hon. Friend to have a word with those in the agency and those who are in the environmental health industries in local authorities, and to tell them that, if they are truly independent, they will have enough initiative to find out what has to be done without going over there to find the answers.
Dr. Cunningham: It is not always the case that my hon. Friend and I agree on policy issues, as he made clear, but I am always happier when we do, so I work hard to maximise the opportunities for that. I am grateful to him for his comments. He is right to highlight the crucial importance of securing and maintaining complete independence for the agency. Food law and standards are increasingly international. If our industries want to continue to export successfully, they have to meet not just United Kingdom standards, but international standards, so, whether we like it or not, there will always be a role for the European Union in these matters. My hon. Friend described some people in Brussels in a rather colourful way. I am delighted to tell him that the Commission has just approved the export certified herd scheme for British beef from Northern Ireland.
Several hon. Members rose—
Madam Speaker: Order. It seems that I need to remind the House that statements are an extension of Question Time and are not a time for Back Benchers to make long comments. We have had only four questions in three quarters of an hour. We cannot proceed in that way. I now ask for brisk questions, and brisk answers from the Minister.
Mr. Douglas Hogg: May I first say to the right hon. Gentleman that I welcome the fact that he will be publishing a Bill for pre-legislative discussion? That is a desirable step.
I understand that the agency will be a free-standing executive agency with the right—indeed, the duty—to set standards as to composition, sale, manufacture, and so on. Clearly, there will be legal requirements on producers, and, no doubt, legal offences will be created. Can he tell the House the extent of the control that the House will be able to exercise over the setting of those legal obligations and the creation of those offences? If the agency is to be truly independent, it is difficult to see what the line of accountability can be.
On a further point made by the hon. Member for Bolsover (Mr. Skinner), given that there is a single market within the European Union in food and foodstuffs, what is the relationship between the standards being set by the agency and such standards as may be set by counterpart institutions in other member states and by the European Union itself?
Dr. Cunningham: I am grateful to the right hon. and learned Gentleman. We shall certainly publish the draft legislation for consultation. He is right that it will be a

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free-standing, independent agency, but when it proposes changes in food standards or food hygiene there will have to be legislation. The agency will not have the power simply to change things. Change will have to be based on legislation which will have to pass through the House. The principal aim and objective of the agency will be to focus on food standards and food hygiene, as we made clear at the beginning of the White Paper. That will be its role. Where it believes that circumstances are not adequate, it will be able to recommend that the law is changed, but it will not be able to change the law without the proper legislative process in the House.
That also applies to the final important question that the right hon. and learned Gentleman raised in respect of the European Union. As he knows, because he has held the job that I now have the privilege of holding, we work increasingly to harmonise law on these matters exactly because our food industries, like those in other countries, have to compete and survive in a global marketplace, and we want the same standards to apply on a level playing field.
Ms Jackie Lawrence: Will the agency ensure that adequate standards are applied to the production of animal feedstuffs so that another disaster such as BSE cannot happen, particularly in the light of Professor James's key recommendations that the agency's remit should apply to the entire food chain?
Dr. Cunningham: My hon. Friend has asked an important question, the answer to which is yes it will. As I said in the statement, the Government propose to accept the recommendations of Professor Lamming, who, in a report to the previous Administration, suggested that there should be an advisory committee on animal feedstuffs. It is to the shame of the previous Administration, given the circumstances that prevailed, and what we now know, that the Conservative Government refused to act on that recommendation of the Lamming report. We shall do so.
Mrs. Angela Browning: May I ask the Minister to give a little more detail about the negotiations with Europe? When a matter related to food is discussed—usually subject, as he will know, to qualified majority voting—a great deal of negotiation takes place and there is inevitably give and take. Will there be a secretariat in Brussels associated with the Food Standards Agency? How will it work in practice in terms of advice that the agency gives to Ministers at the negotiation stage before they vote?
Dr. Cunningham: That is an important question. The Food Standards Agency will work in exactly the same way as the Health and Safety Executive advises Ministers now, and has done for some time in respect of EU legislation. It will present the case, and perhaps negotiate in detail in some of the working committees, but the final decisions, as always, will rest with Ministers.
Mr. Frank Roy: As the Member of Parliament for Motherwell and Wishaw, the constituency at the centre of last year's E. coli outbreak, I welcome my right hon. Friend's statement. Many of my close friends were hospitalised and some of
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the people in my own street tragically lost their lives. I am sure that my right hon. Friend will understand when I ask for an assurance that the No. 1 priority of the agency will be public health and the consumers at the end of the line, not food retailers or producers.
Dr. Cunningham: I can give my hon. Friend the important assurance that he seeks on behalf of his constituents. It is the first guiding principle set out in the White Paper that public health should be the first priority of a Food Standards Agency. In addition, I can tell my hon. Friend that on coming to the Ministry of Agriculture, Fisheries and Food, I put the health and well-being of people and the environment at the top of its agenda. We shall have powerful new forces within the Government and in the agency and, needless to say, in the Department of Health, putting the health and well-being of the people of this country at the top of the nation's agenda.
Mrs. Ann Winterton: Food standards in this country are exceptionally high. The Government propose that they should be higher still by the establishment of this agency, which will be extremely costly. The costs will be borne eventually by the consumer. What guarantees can the Minister give to the consumers that food imported into the United Kingdom will be of the same very high standard?
Dr. Cunningham: The hon. Lady is right; we have pretty high standards of food hygiene in this country. Let me pay tribute to our leading food manufacturers and food industries, which are able to compete successfully globally because they set excellent standards. However, like most industries, the industry has a very long and poorly performing tail which does not meet the high standards of the best in the sector.
The hon. Lady said that the agency would be costly. Let me say that the consequences of BSE, E. coli outbreaks and salmonella poisoning are colossal when compared with the likely realistic cost of such an agency. That is just the financial consequences. In terms of the health of the people and the deaths that have resulted from the problems, the cost to the people affected is immeasurable.
The people of this country are going to get a bargain out of the Food Standards Agency which will be of great value to them in terms of the quality and safety of the food that they eat and in terms of their health and well-being. Let me say again that we are working in the European Union wherever possible to ensure a level playing field for our farmers and our food industry. That is why I remind the hon. Lady and the House that from 1 January this year no beef can come into this country unless it has been subject to the same rigorous safeguards as beef produced in Britain.
Ms Sally Keeble: May I say how much I welcome the consultation paper and in particular the fact that it takes on board the wider brief of nutrition and not just food safety? Can my right hon. Friend offer some more assurances about the effectiveness of the powers of the agency and the way in which it will carry out its powers of enforcement? What type of consumer liaison will be conducted so that people can be sure that we will see improvements in health standards,

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and consumer confidence is retained in that extremely important agency so that it is a real consumers' champion?
Dr. Cunningham: I am grateful to my hon. Friend for her welcome supportive comments.
As set out in the White Paper, there is a division of responsibility between the Food Standards Agency and my right hon. Friend the Secretary of State for Health. It would be absurd if my right hon. Friend did not have some responsibility for matters of nutrition and diet, given their important role in so many of the worst illnesses with which he and his colleagues must grapple—for example, cardiovascular disease and others. That division of responsibility is clearly set out in the White Paper and I have no doubt, because nutrition is one of controversial issues, that there will be some warm, if not heated, public debate about it.
As for the second important question my hon. Friend raised about liaison, of course an agency of this kind will have permanent lines of communication open not just to the Secretary of State for Health and, where necessary, other Government Departments, but to local authorities, because of their important role in such matters. Last, but by no means least, it will have such lines of communication with consumers, consumer organisations and their representatives.
Mrs. Caroline Spelman: The Minister said in his statement that the Government are keen to put into practice the principles governing the agency. They include giving the consumer the right information with which to make proper choices. In the light of that principle, will the Minister reconsider his decision to ban beef on the bone?
Dr. Cunningham: No. I remind the hon. Lady and the House that, as yet, we and our scientists still have no idea of the incubation period of CJD. The hon. Lady should bear that in mind when she thinks about the actions that I take in respect of safeguarding public health in that matter. The principle according to which I acted in that regard was exactly the same as that followed by the shadow Leader of the House, the right hon. Member for South-West Norfolk (Mrs. Shephard), when she held my office. She made an almost identical statement about the existence of a very small risk, but nevertheless added that particular part of the animal's anatomy to the list of specified risk materials.
I am not so sure that we would have got the decision that was reached in Brussels today if I had not taken that action.
Dr. Doug Naysmith: I, too, welcome the Minister's statement and the proposals set out in it, as they have clearly been influenced by the excellent James report. What proposals does he envisage will be necessary to establish more consistent standards governing the enforcement of food hygiene regulations by trading standards officers and the environmental health officers of local authorities?
Dr. Cunningham: I am grateful to my hon. Friend for his remarks. The agency will monitor and establish common standards that, of course, in a number of respects local authority officers will have to enforce. As I have
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made clear already in answer to questions from hon. Members on both sides of the House, local authority officers will continue to have a very important role in ensuring that those standards are implemented and that the public are properly safeguarded. That is an essential part of the approach of the Food Standards Agency.
Mr. David Curry: Who will be responsible for licensing genetically modified products and when will the Ministry reach a determination on the licence applications currently before it?
Dr. Cunningham: The overall authority for the licensing of novel foods will now pass to the Food Standards Agency, but the general processes will be exactly the same as they are now.
Mr. Charles Clarke: Does my right hon. Friend accept that the credibility of the agency will depend entirely on the quality and independence of the scientific research that guides it? Can he confirm that, as I think he said in his statement, the agency will be entirely free to commission its research where it thinks fit in the interests of proper science? What ministerial guidelines, if any, will the agency have in respect of those issues of commissioning research?
Dr. Cunningham: My hon. Friend is absolutely right to say that the whole success of any agency of this sort would be completely undermined if it did not, from the outset, establish and sustain credibility about its independence. As for his specific question about research, I repeat that the agency will have the absolute right to decide where and on what terms it commissions its future scientific research programme. It will, of course, have available to it existing Government agencies, but, equally, it will have available to it options in the private sector; there will be no ministerial interference in the making of that sort of decision by the agency.
Mr. William Thompson: The report seems to suggest that devolved Parliaments and Assemblies will be subject to a requirement to consult the agency. Surely a requirement for any devolved Parliament or Assembly to consult with an agency creates a dangerous precedent and strikes at the independence of that Parliament or Assembly.
Dr. Cunningham: I hope that when the hon. Gentleman reads the proposals in the White Paper, his concern will be assuaged. He will see that we carefully made separate arrangements under a UK umbrella body for Scotland, Wales and Northern Ireland; and we have anticipated, as far as we are able to, the possible changes that will occur following devolution to Scotland and Wales. In view of all he has said in the Chamber and elsewhere in the past, I am rather sorry that hon. Gentleman did not say a word of thanks about the decision on beef in Northern Ireland.
Mr. Robin Corbett: In congratulating my right hon. Friend and our admirable and joint hon. Friend the Minister of State on the step toward a Food Standards Agency, may I say that it will be especially welcomed by environmental health officers in the city of Birmingham and elsewhere, as it will

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underpin the important work that they do on behalf of the public to enforce proper standards of food safety? In that context, may I urge my right hon. Friend to base the agency in the city of Birmingham?
Dr. Cunningham: That was the first of many bids, no doubt; but, as we have already made clear, the agency will be based in London. We think that that is the right decision, although I recognise the outstanding merits of Birmingham and my hon. Friend's ceaseless advocacy of them. I repeat that environmental health officers are an important part of the process. I have no doubt that they will want to give us their views on the White Paper officially, but I shall make it clear to them that my right hon. and hon. Friends and I will be happy to meet them for informal discussions about the way forward.
Mr. Robert Walter: In answer to an earlier question and in his statement, the Minister indicated that the agency would have responsibility in respect of nutrition, and he welcomes that inclusion. However, if we walk into any newsagent in this country, we find shelves laden with magazines that are full of good nutritional ideas; we can turn on daytime television and watch all sorts of programmes about good nutrition and cooking; and the largest-selling sector of the book market at Christmas time is cookery books, followed by gardening books telling us how to grow decent vegetables. Will the Minister tell us what else he thinks the agency will bring to the table in the field of nutrition?
Dr. Cunningham: As in other areas of its responsibility, the agency will bring independent advice—advice that is free of any commercial interest—and give that advice in a clear and consistent way which the public will be able to understand.
Mr. Tam Dalyell: Against the background of the first E. coli 0157 outbreak at Redhouse
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dairy in my constituency and the anecdotal evidence given me on 6 January by the West Lothian and Midlothian farmers union, is there a policy on the increasing spreading of raw sludge, with all the phosphate and other consequences that there might be for disease? Will either the agency or the Department be able to do something about what may be an increasing practice and is certainly a potentially dangerous one?
Dr. Cunningham: We are aware of the concern in my hon. Friend's constituency and elsewhere; the issue is being pursued jointly with the Department of the Environment, Transport and the Regions. We recognise that there are important public health issues involved. Guidelines already exist and we are awaiting further expert advice that will be acted on as necessary to protect the public and, once again, put the public interest first.
Several hon. Members rose—
Madam Speaker: Order. Thank you. I am closing the questions on the statement now.

BILL PRESENTED
  WARM HOMES AND ENERGY CONSERVATION (FIFTEEN YEAR PROGRAMME)
  Mrs. Linda Gilroy, supported by Mr. David Chaytor, Mr. Cynog Dafis, Mr. Alan Simpson, Mr. Peter Temple-Morris, Mr. Michael Colvin, Mr. Matthew Taylor, Mrs. Margaret Ewing, Angela Smith, Maria Eagle, Ms Joan Walley and Ms Linda Perham, presented a Bill to require the Secretary of State to draw up and facilitate the carrying out, over a period of 15 years, of a programme of action to provide at least 500,000 households per year with a comprehensive package of home insulation and other energy efficiency improvements; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon 6 February 1998, and to be printed [Bill 108].

Labelling of Products
4.30 pm
Mr. Vernon Coaker: I beg to move,
That leave be given to bring in a Bill to make further provision with respect to the labelling and display of food and goods to assist the consumer in making choices on ethical grounds; and for connected purposes.
My Bill is topical on the day when we are discussing the setting up of a Food Standards Agency.
Today, we live in economies dominated by big businesses and giant corporations. Many of those companies have turnovers far in excess of the gross national product of many countries. The ability to influence those companies' decisions often seems to be beyond the power of ordinary people or, indeed, Governments, whether acting alone or together. Decisions to locate, to exploit the natural environment or its resources, to produce in a particular way or on how to treat a work force are often made by companies whose paramount aim is the need to make a profit.
At a national level, we see companies operating in ways that may not be beneficial to the local people. Such unbridled powers have often led people, locally, nationally and internationally, to feel defenceless and frustrated as they see decisions taken that they believe to be wrong but feel that they are unable to stop.
My Bill aims to help to address that problem by tapping the relatively under-used power of the consumer. The potential of consumer power to influence the decisions of big business is huge. What business could or would produce goods or services that it ultimately could not sell? As consumers, we make choices in our shops, offices and superstores that will directly influence those companies' decisions. We can influence them to take decisions to produce goods, grow crops or rear animals in ways that are ethically acceptable. They would not be able to make such decisions in a moral vacuum.
People can change the world without leaving the high street. We have a tool at our disposal through which we can directly influence events, not only locally or nationally, but globally. Every time people go shopping, they vote. They could vote for decent standards at work, for healthy foods with humane fanning methods, for a better environment, for fair trade and for many other worthwhile objectives. The consumer is increasingly realising his power. We have seen the power that the consumer can wield in the not-too-distant past, with the consumer boycotts that were operated and helped to bring about the end of apartheid.
Those boycotts could be a small taste of the consumer power that could be unleashed. Television and newspaper pictures increasingly force us to confront the harsh realities of life. We see images of young children in the third world making cheap goods in appalling conditions, mainly for the west. We see companies exploiting the natural environment, with no regard for the future. We see the cruelty that is often involved in the rearing or transporting of animals. Those pictures come right into our homes, and it is here at home that we can begin to change things.
People's consciences are pricked by such images, and they want to take action to help to stop them, but they often wonder how. My Bill would give the consumer increased power to impose minimum acceptable standards on those practices through the decisions he makes.
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However, my Bill recognises that, to take such decisions, consumers need information about the goods or services they are buying. Information given on labels at present is generally inadequate, and does not usually give people the opportunity to make a moral or ethical choice in their purchasing. More information to enable them to do so must be included on all labels and in all labelling.
In drawing up my Bill, I recognise that many companies act in ways that would command public support. Many take care of the environment, support fair trade and try to promote the humane treatment of animals and to improve working conditions. The Royal Society for the Prevention of Cruelty to Animals has a freedom food initiative. As a Co-operative party member with one share in the Co-op, I am proud of the Co-operative stores' honest labelling campaign, and of the ethical investment policy pursued by the Co-operative bank.
While promoting the Bill, I have discovered that many other companies, such as B and Q, seem to have good practices. Charities such as Save the Children, the United Nations Children's Fund and Christian Aid have pointed out that we can change things by our purchasing, as have Friends of the Earth and Greenpeace. Perhaps Oxfam has done most to highlight some of the things that we see around us.
My Bill would build on the work being done by those non-governmental organisations by bringing legislative force behind what are at the moment voluntary codes or simply the result of some companies' good business practice. It is essential for us to acknowledge, as my Bill does, that voluntary codes or good practice are no longer sufficient. The force of law is needed, with legislation passed by Parliament.
My Bill would ensure that labels made clear to consumers the key facts about the production of goods or services. For example, it would be clear to all consumers the conditions under which animals that provided the meat or other related products on sale in shops or superstores had been kept. Were they produced in factory forms or allowed to roam free? How were they slaughtered? It is not too much to ask that that information is provided in all places where meat is bought or consumed.
When purchasing clothes or other products, we should know the answers to the following questions. What were the conditions of the workers who produced them? Were they paid a reasonable wage? Were the goods produced by child labour? Were they produced by home or outworkers? Goods that may be cheap in the shops for us may have been paid for by the misery and exploitation of others. Often it is impossible from the labels to tell exactly how things have been produced; that information needs to be provided.
Similarly, we may ask ourselves, how have crops been grown? What chemicals have been used in their growing? Have they been genetically modified? What vitamins or additives have been included? Labels often fail to give that information in a way that is understandable and easily available.
It is often said that people would be unwilling to pay for the increased prices that may result from measures such as those that the Bill would introduce. I reject that argument, because I believe that the majority of consumers, if given the choice and the information, would shop in a morally acceptable way and make that choice to do their bit to improve the conditions of people in the United Kingdom and throughout the world.

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We have shown by our practice in the House of Commons that we believe that such pressure can work, with the adoption of a fair trade coffee in our Tea Rooms. The same principle might be followed on a range of products. Recent press reports, and what we heard earlier about the Food Standards Agency, show that the Government seem to be thinking along similar lines.
My Bill would mean that, increasingly, people could act as green consumers. When buying furniture made from wood, is it possible to tell whether that wood came from sustainable forests? What is the environmental record of the company responsible for those products?
My Bill will give people the power to influence for the good the policies of major companies. If we do not like the way that goods have been produced, we can refuse to buy them. We shall have the power in our pockets, rather than the multinationals having us in theirs. However, we can have that power only if the consumer has information—the information that my Bill would require to be provided by the labelling of goods process.
My Bill would also ensure that any claims made on a label were effectively monitored and policed. It would ensure that there was a Government sign to show that the claims made on a label were accurate and true. Stores selling these goods, or businesses offering these services, would have to ensure that all this information was easily available to consumers. Displays in stores should direct people towards ethically produced goods instead of shoppers having to hunt around for them.
We need to root out bad practices. We have the power to do that, but without the necessary information it is very hard to make ethical choices. My Bill sets out to provide consumers with the information they need to exercise that power and to be that force.
4.39 pm
Mr. Eric Forth: Ten-minute Bills afford the House the traditional opportunity for the eccentric and the bizarre; and we are used to that, and fairly tolerant of it. However, the opportunity is being used these days not just for the politically correct but—it gives me some encouragement to hear it—for examples of unreconstructed, old-style, old Labour, socialist bias against the capitalist process, and against large employers and profit makers. That is not a problem for me: it is a problem for the hon. Member for Gedling (Mr. Coaker) and his party.
Listening carefully to the hon. Gentleman, I was struck by the rather charming naivety of the Bill that he is offering us, and by its utter and total impracticality. I shall leave to one side all the usual arguments about the nanny state, elements of which were paraded throughout what the hon. Gentleman said. I shall also leave aside the patronising nature of his arguments. He seemed to assume that the consumer is a dumb animal being led by the nose by wicked multinational companies, completely unable to make his own decisions or choices or to seek his own information.
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To keep my remarks as brief as possible, I will concentrate just on the practicalities—
Mr. Dennis Skinner: Will the hon. Gentleman divide the House?
Mr. Forth: I certainly will, and I hope that the hon. Gentleman will join me in seeking to do so.
Mr. Skinner: But I am on my hon. Friend's side.
Mr. Forth: I do not care which side the hon. Gentleman is on; he can join me as a Teller to make sure that there is a vote—[Interruption.] Does the hon. Gentleman want to intervene?
Mr. Skinner: I am not allowed to on a ten-minute Bill.
Mr. Forth: What a pity—I wish the hon. Gentleman could.
It surely cannot be right that the House should approve a measure which, however well motivated—and whether or not we all want political correctness in our lives—is utterly impractical.
In effect, the hon. Gentleman is asking that products be labelled in such a way as to inform consumers about their origins, the conditions in which they were made, the labour conditions of those who worked to produce them, and the environmental impact of their production. We already have comprehensive labelling to do with nutritional values. That, I suppose, is of some use to people concerned about their diets. But to expect all this additional information to be labelled on a product, however small the packaging, is patently absurd.
I hope that the House will not begin gesture voting for things that may sound superficially attractive but which are utterly nonsensical and unworkable.
What is worse, after the hon. Gentleman's rant against the wickedness of the multinationals, he seemed to suggest that they could be relied upon to provide the very information that would enable so-called ethical decisions to be made. That strikes me as an interesting proposition: I expect someone I thoroughly distrust to provide information on which I can make an ethical decision.
In other words, this is a well-meaning and well-motivated measure, but I believe it to be naive, ill founded, poorly thought out, impractical and absurd. For those reasons and many others, I hope that the House will reject it.
Question put, pursuant to Standing Order No. 23 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business), and agreed to.
Bill ordered to be brought in by Mr. Vernon Coaker, Mr. John Heppell, Mr. Jonathan Shaw, Mrs. Fiona Jones, Gillian Merron, Liz Blackman, Mr. Paddy Tipping, Mr. Colin Pickthall, Mr. Derek Twigg, Mr. Alan Simpson, Ms Karen Buck and Dr. Nick Palmer.

LABELLING OF PRODUCTS
Mr. Vernon Coaker accordingly presented a Bill to make further provision with respect to the labelling and display of food and goods to assist the consumer in making choices on ethical grounds; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 6 February, and to be printed [Bill 109].
Orders of the Day

  Regional Development Agencies Bill
  [Relevant document: The First Report of the Environment, Transport and Regional Affairs Committee, Regional Development Agencies (HC 415).]
  Order for Second Reading read.
  Mr. Deputy Speaker (Mr. Michael Lord): I must inform the House that Madam Speaker has selected the amendment in the name of the Leader of the Opposition. I should also inform the House that Madam Speaker has decided that the 10-minute limit on speeches will apply today for Back Benchers' speeches.
  4.45 pm
  The Minister for the Regions, Regeneration and Planning (Mr. Richard Caborn): I beg to move, That the Bill be now read a Second time.
  One of the commitments that we gave in our manifesto, which the British people overwhelmingly endorsed on 1 May last year, was to address the economic under-performance of the English regions. We promised each English region a strong development agency—agencies that would provide for effective and properly co-ordinated regional economic development, underpin the wider regeneration and enable the English regions to improve their competitiveness.
  The Bill provides the means for doing that. The RDAs will play a major part in the future economic success of the United Kingdom. The Bill will give the regions the tools they need.
  The success of the United Kingdom in improving its economic performance and its competitiveness depends on the success of all its regions. I can tell the House that, in our regions, there is an overwhelming desire for the opportunity to play a full part in revitalising the nation's economy. We must compete as a nation in the global marketplace, and to do that, all our regions must maximise their potential. That means finding more imaginative ways of tackling the problems they face.
  For far too long, the English regions have been disadvantaged compared with Scotland, Wales and Northern Ireland. We need to put all the regions in a position to perform at the level of the best. Many of our regions are performing well below the European average, and that is simply not good enough. Out of the 10 English regions, only two marginally come up to the productive average of the European regions.
  Since I became Minister for the Regions in May, I have visited the English regions and initiated a dialogue with the regional stakeholders. During my visits, it was evident to me that the regions are working hard to improve regional performance. Unfortunately, however, the previous Government gave them little support, for the Conservatives do not believe in regional autonomy. They centralised power and denied the regions the opportunity to prosper. They drove policy from the centre, as if the rest of the country did not exist. In effect, they put the regions off the map.
  The Tories produced programmes that lacked coherence, particularly at the regional level. They consistently ignored the views and advice of those in the regions, who, after all, are best placed to find the solutions to their own problems.

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  My discussions with people in the regions have shown that now, more then ever, the English regions are looking for a new approach, and for the opportunity to shape their own future.
  Sir Teddy Taylor: Does the Minister agree that the reason why some regions do less well than others is simply that the European Commission will not permit aid to be given to a considerable part of this country? Southend-on-Sea, for example, was put forward for aid on two separate occasions by the previous Government, but both applications were cancelled by a Commissioner. Does not the Minister think that there is some ground for suspicion by hon. Members that the whole business is part of the exercise in regional government that is being pushed all the way by Brussels?
  Mr. Caborn: That may be the hon. Gentleman's opinion, but I do not share it—and I do not think that the people in the regions do, either. They want to address the economic weaknesses in the regions.
  We are facing a grave problem in this nation. I repeat that only two out of 10 English regions are approaching the average of the European regions in terms of gross domestic product per capita. If the hon. Gentleman thinks that the problems revolve around a few grants from the European Community, he under-estimates the real problems facing our English regions.
  Our discussions with people in the regions have revealed that, more than ever, they wish to play a role in shaping their future. They have responded enthusiastically to our proposals for regional development agencies. For example, our consultation paper received more than 1,500 responses, which universally supported the case for development agencies in England to match those that have worked so successfully over many years in Scotland, Wales and Northern Ireland.
  Only last week, the UnderSecretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Wallasey (Angela Eagle), and I visited the regions again, and we found the same enthusiasm for our White Paper proposals. Therefore, I hope that we will hear no nonsense from Opposition Members who seek to contradict the clear message that we are getting from the people of this country. I have seldom seen a more badly drafted reasoned amendment to a Second Reading than that which appears on today's Order Paper.
  The people in the regions understand that RDAs will bring real added value to the United Kingdom's economic performance. They will build on the work that has been done at a regional level by local authorities, regional partners and the Government offices for the regions. For the first time, there will be an organisation in each English region that is strong enough and sufficiently broadly based to make a significant difference. The Bill is part of a radical new agenda for the English regions.
  Regional policy is one of the Government's top priorities. One of our first acts when we came to government last May was to start to address the regional economic deficit. More generally, we made it clear that we are determined to bring a new dimension to policy making.
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  We have five guiding principles for taking forward our regional policies. The first is integration. That is at the heart of our proposals for RDAs. RDAs will bring together at the regional level our policies for jobs, growth and social cohesion. We want RDAs to take an integrated approach to all their work across the regions.
  That will be particularly important in the case of rural areas. We want rural affairs to be part of the remit of RDAs, because we recognise that they, and the people who live in the countryside, have particular needs. We believe that those needs will be better addressed as part of an integrated regional approach than as a policy apart. That will avoid marginalising rural areas, as occurred under the previous Administration.
  Mr. Tim Collins: As to the importance of rural areas in the future of RDAs, will the Minister require even one of the RDAs to be headquartered in a rural area?
  Mr. Caborn: The hon. Gentleman misses the point about devolution of power: it is about devolving power to those who will take the decisions in the regions. It is difficult for the centralist former Conservative Government to comprehend that we trust people in the regions to make decisions for themselves—but we shall try to convince Opposition Members.
  Mr. Peter Luff: Does the Minister understand that that is precisely what worries hon. Members who represent rural constituencies? We expect those in urban areas to take decisions that favour them, to the detriment of rural areas. If we make positive suggestions for improving the rural dimension of the regional development agencies, will the Minister consider them sympathetically?
  Mr. Caborn: The answer is obviously yes. If the Opposition suggest reasoned amendments—I hope that they will not reflect the amendment on today's Order Paper—we shall consider them.
  There is tremendous support for RDAs. As I have said, we received 1,500 responses to our consultation paper. The Local Government Association, the National Farmers Union, the Consortium for Rural TECs, the Council for the Protection of Rural England, and Action with Communities in Rural England support the Government's action in bringing the Rural Development Commission into the regional development agencies. All responses to the consultation process have been deposited in the Library; they are on the record. All major organisations that deal with rural affairs support the Government's position on RDAs. We have discussed it with them. My hon. Friend the Under-Secretary of State and I were discussing the matter with people in rural areas throughout the country last week.
  The second principle is decentralisation. Regional development agencies are an important first step in decentralising decision making to the English regions. The Government offices were a welcome initiative on the part of the previous Administration, and that we acknowledge, but they are simply arms of Government in the regions. The RDAs will be led by regional people; they will be influenced by and take account of regional interests.

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  The Government are committed to directly elected regional government in the English regions where there is popular demand for it. That remains our intention for the longer term, as we stated in the Labour party manifesto.
  Mr. Eric Forth: Nobody wants it.
  Mr. Caborn: Does the hon. Gentleman want to rise to make his point? If what he says is correct, the regions will not be sanctioning what we have stated to be our intention. Our commitment will be with the will of the people in the regions. I understand that it is difficult for Conservative Members to understand consultation and trusting the people. Those concepts are foreign to them, but the Government believe them to be right.
  Mr. Forth: In the context of accountability and the people's wishes, what reassurances can the Minister give local authorities, in the light of clauses 24 and 25, which deal with the designation and transfer of planning powers, that there will not be a move away from elected and accountable planning authorities to a quango dealing with important local planning? Surely that in itself would be enough to give rise to a great deal of apprehension among people in the regions and among Opposition Members.
  Mr. Caborn: I shall be dealing with that specific point. However, it is not for the right hon. Gentleman to start lecturing the House about the democratic process and development corporations. If he reads the Bill carefully, he will find that all we have done is take the powers that the previous Administration vested in English Partnerships, and put them into the Bill.
  As for planning powers, even English Partnerships, which has never used them, would have to receive the sanction of the Secretary of State. The issue would be decided by the House. That is the area of land use planning that we are talking about.
  Mr. Forth indicated dissent.
  Mr. Caborn: The right hon. Gentleman may shake his head, but if he reads the Bill and understands its relationship with English Partnerships, things may become a little clearer to him. As a general principle, I ask him not to lecture us about taking powers from local government.
  In the short term, we shall make use of existing democratic structures—voluntary chambers—so that decisions taken by RDAs in the regions reflect regional priorities and are responsive to regional views.
  The third principle is regeneration. No one who knows our country—our towns, cities and rural areas—can doubt the continuing need for regeneration. That is not simply physical regeneration, although that is important, but the regeneration of communities, to restore a sense of identity and pride.
  Regional development agencies will inherit from Government offices the important role of administering the single regeneration budget challenge fund, or its successor programmes. They will take over the regional regeneration roles of English Partnerships, and the rural
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  regeneration role of the Rural Development Commission. They will thus be well placed to take a coherent view of regeneration at regional level.
  Mr. Paddy Tipping: I am delighted that one of the driving forces of RDAs will be the regeneration of inner-city areas. The single regeneration budget will clearly have a role in that. Will my hon. Friend assure me, and those who are striving to bring new investment into inner-city areas, that local partnerships will be formed, and local voices will still be heard? Will he assure me that the SRB will not be driven at regional level, but will meet local needs?
  Mr. Caborn: I can give my hon. Friend that absolute assurance. We want to build on the best of the partnerships, but within a strategic framework. It has been made clear to us by all stakeholders in the 1,500 responses that in the past we have been trying to carry out regeneration in a strategic vacuum. There has been no overview. Indeed, money has been wasted that could have been targeted.
  My hon. Friend knows the coalfield communities extremely well, and he will be aware of the initiative that my right hon. Friend the Deputy Prime Minister has taken in trying to co-ordinate activities across the areas that have been affected by mine closures. That is one of the areas in which we are trying to take a strategic overview to solve problems. We are trying to achieve that and to bring in partners on a bottom-up process. However, as I said, on regeneration the RDAs will not be able to act alone.
  Our fourth and guiding principle is partnership, and it will certainly be a guiding principle of RDAs. There have been some spectacular successes in public-private partnerships in recent years. Co-operation between local authorities, training and enterprise councils, industry, business and voluntary groups has achieved much progress.
  We want regional development agencies to build on existing partnerships, and create and foster new alliances too, to make our regions perform better, and to secure better value for money. This will be especially necessary in developing the skills agenda. RDAs will be responsible for developing a regional skills strategy within the regional economic strategy. That will help to ensure that regional economic and labour trends influence decisions about vocational education and training, and provide information to the purchasers and deliverers of education and training in the region.
  RDAs will be pivotal in highlighting problems, and co-ordinating efforts to address them, but they will be able to do this successfully only with the involvement and co-operation of regional partners—in particular, the TECs and those involved in further and higher education.
  Partnership will be the key to success in tackling the skills agenda. The announcement today by the British Chambers of Commerce clearly shows that we need such organisations to address the skills shortages that it predicts.
  Last, but by no means least, is the objective of sustainability. Sustainable development must be a key objective of all our policies. One of the RDAs' five core objectives will be to contribute to the achievement of sustainable development in the United Kingdom. RDAs

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  will need to demonstrate in their strategies what they are doing to contribute to sustainable development, and in encouraging others to do so. They will need to demonstrate in their day-to-day work that they are making a real contribution.
  Against that background, a Bill to establish regional development agencies was included in the Queen's Speech. Following a major consultation exercise last summer, we published last month the White Paper "Building Partnerships for Prosperity" which set out a bold agenda for devolving decision making from the centre to new bodies in the regions. Our aim is that these new "agencies for change" in England will match the success of the Scottish, Welsh and Northern Ireland agencies.
  We will not impose a single blueprint on the English regions. The previous Government tried the prescriptive route, and it did not work; it just created resentment and fruitless competition between the different players. We want to set the scene for an approach that builds on partnership and co-operation. The Bill provides a framework within which we can reflect the particular needs of individual regions, but our core objective is for the agencies to bring together a wide range of functions that are presently carried out by separate and diverse bodies.
  The main purpose of RDAs is to address the economic deficit that has bedevilled the English regions for many years. That is the first priority in our regional agenda, and the Bill reflects that. It sets the legislative framework for setting up the agencies as non-departmental public bodies. RDAs will be funded for the most part from public funds, and they will be accountable to Ministers and to Parliament for their actions. It will be the responsibility of Ministers to approve RDA business plans and ensure that they conduct their business with propriety.
  We want RDAs to be properly accountable to their regions, too, and the Bill makes provision for that. Consistent with our manifesto, it provides a mechanism for building on the voluntary chambers that local authorities and their regional partners have begun to develop. Specifically, clause 8 enables the Secretary of State to designate a regional chamber as the focus for regional consultation about the work of an RDA. Clause 18 allows the Secretary of State to direct RDAs to give an account of themselves to regional chambers, where they exist.
  Voluntary chambers will therefore have a tangible and important role in the work of RDAs, and a real stake in ensuring that their work reflects the needs of the whole region.
  I should say a word about London in particular. The Bill provides for a development agency for the capital, but, as the House knows, we aim to have a new strategic authority for London. Subject to the outcome of the London referendum, which we hope will take place in May, the relationship between the new authority and the London RDA will need to reflect the responsibilities of the new authority in London, and of the mayor, for economic development matters.
  Our detailed proposals for the London development agency will be set out in the White Paper on London government, which we intend to publish before Easter.
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  Let me deal briefly with the remaining provisions of the Bill. Part I provides for us to establish the nine regional development agencies whose areas will correspond with those of the Government offices for the regions. The one difference is that there will be one RDA for the north-west, which will include Merseyside.
  Clause 2 provides for the membership of the agencies. We envisage appointing 12 members to each board, although we could appoint up to 15. The boards will be business-led; they will also include people with experience and expertise from local government and further and higher education, as well as from trade unions, rural interests and the voluntary sector. The Secretary of State will be required to consult interested parties before making appointments.
  The key criterion for membership will be experience relevant to the RDA's purpose. There will be no political fixers. Let me repeat that: the key criterion for membership will be experience relevant to the RDA's purposes.
  Clause 4—not the original clause IV!—establishes RDAs as corporate bodies with five key purposes. Those purposes are to further the economic development and regeneration of their areas, to promote business efficiency, investment and competitiveness, to promote employment, to enhance the development and application of skills, and to contribute to the achievement of sustainable development. The clause specifically provides that a regional development agency's objectives will apply equally to rural and non-rural areas. That underlines the need for RDAs to take a coherent, integrated approach to their work, and recognises the interdependence of town and country.
  RDAs will be specifically required by clause 7 to formulate regional strategies and keep them under review. Our aim is for those strategies to reflect a partnership approach involving all the region's stakeholders—as well as Government—in order to provide, in time, the framework for all relevant decision-making at regional level.
  Mr. Andrew F. Bennett: My hon. Friend will know of the Select Committee report, and, in particular, the concern about how the TECs will fit into the framework. Will he confirm that, as he told us when we were making our inquiries, he hopes that the process will evolve towards a point at which the TECs will be accountable to the new regional set-up?
  Mr. Caborn: Yes. I have said very clearly that, under the Bill as it stands, the TECs will be part of the development of the skills strategy. Responsibility for the skills strategy for the regions will rest with the RDAs: that is clear, it is understood, and it was spelled out both in the White Paper and in what I said in my evidence to the Select Committee. The RDAs will be the lead organisations in regard to the skills strategy for their regions. They will also go further: as I said earlier, they will co-ordinate the strategy with further and higher education.
  Clause 6 enables Ministers to delegate functions to RDAs—for example, the administration of the single regeneration budget funds. Part I also replicates for RDAs the statutory powers and duties of the Urban Regeneration Agency—for those who do not recognise the name, it is

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  now called English Partnerships—so that RDAs can take on the regional regeneration role of EP, which the last Administration put on the statute book.
  We intend all EP's roles and functions to move in due course to the RDAs, which will themselves work in co-operation on issues that are cross-regional, and for which there is advantage in a combined approach. Meanwhile, EP's highly effective national capability and expertise will be retained in order to allow national projects such as the regeneration of the Greenwich peninsula and the coalfields initiative to continue.
  Part II provides for the Rural Development Commission and EP to make schemes for transferring property, rights and liabilities to the RDAs. Part III contains general and technical provisions.
  Mr. Barry Sheerman: Will my hon. Friend emphasise what I know to be the truth, that the very good staff of English Partnerships, who have been so innovative, will have jobs in the new RDAs? Many hon. Members feel strongly that English Partnerships' staff have made a great contribution to the regions in which they work.
  Mr. Caborn: I thank my hon. Friend for raising that issue. Last week, the UnderSecretary of State, and I went around the English regions and met the staff of English Partnerships and the Rural Development Commission. There is obviously uncertainty at a time of change, but they have been reassured—[Interruption.] Does the hon. Member for South Suffolk (Mr. Yeo) want to make a comment?
  Mr. Tim Yeo: There is no uncertainty about what you have done to the Rural Development Commission. You have taken away—[Interruption.]
  Mr. Deputy Speaker: Order. I do not have responsibility for such matters.
  Mr. Yeo: I only wish you did, Mr. Deputy Speaker.
  The Minister referred to the Rural Development Commission, but the House knows that it has been completely dismembered, because his Department has failed to get a single penny of any other Department's budget into the RDAs. He has had to take away from the highly successful, well-respected Rural Development Commission its rural regeneration budget, which covers more than half its total programme. To add insult to injury, the Secretary of State—who I notice is not present—delivered, in extraordinarily ungracious terms, an unwarranted attack on the outgoing chairman, who resigned in protest at what has happened to his agency.
  Mr. Caborn: I invite the hon. Gentleman to get out of London for a change and visit the English regions. He should speak to the staff of the Rural Development Commission, as we did last week. It would be a good idea if you went back to your constituency occasionally.
  Mr. Deputy Speaker: Order. It is important to remind hon. Members to use the correct parliamentary language.
  Mr. Caborn: I hope that the hon. Gentleman will go back to his constituency and discuss the matter with
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  members of the Rural Development Commission, as my hon. Friend and I did last week. There is tremendous excitement about the development of a coherent strategy to replace the dog's breakfast that was left by the previous Administration.
  Mr. David Ruffley: The Rural Development Commission office for East Anglia is located in Bury St. Edmunds, and I spoke on the telephone to managers there this very morning. Although they did not discuss the merits of the Bill in policy terms, they expressed grave concern about their jobs. They are worried, because they have heard nothing about their future, whether it be with the RDA or on the dole. I should be grateful if the Minister would give some comfort to my constituents to whom I spoke this morning.
  Mr. Caborn: More than that, I shall inquire immediately as to why those people were not contacted when we made our regional visit. We asked specifically for staff of the Rural Development Commission and English Partnerships to meet us as we went around the country. I shall ensure that they are contacted, and I shall find out why they were not given an invitation to the meetings that were organised last week.
  Since we published our White Paper, the Select Committee on the Environment, Transport and Regional Affairs has carried out an inquiry into RDAs, and its report was published earlier this week. We are grateful for the work that the Committee has done in the short time available. We shall consider its conclusions and recommendations carefully.
  That report will provide a useful background to the debate on the Bill. It was difficult for the Committee to complete its work in the short time available, but I hope that, like me, it feels that its inquiry was useful. The report will be helpful to the Government as we take the policy forward.
  The debate will continue in the weeks ahead, but, as it gets under way, I stress that no one is more enthusiastic than I am for RDAs, except, perhaps, the Secretary of State for the Environment, Transport and the Regions. [Interruption.] Quite honestly, Conservative Members should have paid more attention to what the Labour party was doing in the past few years. That would have been instructive, because they would have realised that my right hon. Friend was the author of a number of documents on regional devolution, and has an honourable record. Indeed, he set up the Millan commission. His record is there for all to see. He is an enthusiast for devolution, and especially for RDAs. He presented the White Paper a few weeks ago, and was questioned by Conservative Members. He gave a full and frank explanation of the Government's position on the devolution of power. The Bill comes out of that White Paper, and was supported in consultations throughout the country.
  We must be realistic about what we ask RDAs to do. They will be new bodies, and will have much to do to establish themselves and to develop their work programmes. In time, as their experience develops, there will be scope to extend their role, and the Bill allows us to delegate further functions without the need for additional legislation. For the time being at least, the package that we propose in the Bill strikes the right balance and provides the right critical mass.

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  The Bill is an important first step in our regional agenda for England. Our vision is for the English regions to grow and prosper alongside Scotland, Wales and Northern Ireland, and within the European Union. For years, we have been dogged by a lack of co-ordination in the regions. Programmes did not work to the same goals, inward investment was lost through lack of co-ordination, and indigenous industries and small and medium-sized firms lost out because of the lack of a regional strategic approach.
  The basic purpose of this exercise is to create sustainable growth and to improve our wealth-creating base in the regions: we want to bake a bigger cake. We must deal with the structural and cultural barriers to business success, and address the under-performance of the regions that we inherited from the previous Administration.
  The so-called cohesion gap between the best and the rest in Europe is already widening. European monetary union and enlargement towards the east will require our regions to run a lot faster to compete with France, Germany and others.
  The Bill will ensure that the United Kingdom has 12 strong development agencies. They will be economic powerhouses, and will work for the success of the whole of the United Kingdom. This country will, for the first time, be firing on all 12 cylinders, not just two.
  5.16 pm
  Sir Norman Fowler: I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:
  "this House declines to give a Second Reading to the Regional Development Agencies Bill because it deplores the enormous increase in ministerial power bestowed by this Bill and the accompanying erosion of the role of local authorities and because the Bill fails to reflect the concern expressed by many consultees, including local authorities of all political persuasions, about the lack of regional accountability of RDAs; regrets that policies which have successfully attracted record levels of inward investment into Britain are now being abandoned; fears that the interests of the rural community and the countryside have not been properly taken into account; and calls on the Government to withdraw this Bill until its true long-term plans for the creation of a new and additional tier of government in the form of regional assemblies have been clearly set out in detail for debate by the House and by the public. "
  I shall be brief, given the truncated nature of the debate. I agree with the Minister for the Regions, Regeneration and Planning on one issue: the importance and vitality of the regions in England. My constituency is in the west midlands, which has the twin traditions of industrial and commercial power, and the tradition of strong local government going back to the Chamberlains. Those two forces—the strength of industry and commerce and the vital part played by accountable local government—govern my attitude to this proposal.
  I need no persuasion of the suspicion in the regions that too much decision making is centred in London. I need no persuasion of the resentment in the regions that too many great national events are staged in London. I was an opponent of the Greenwich dome even before the Minister without Portfolio was put in charge of it. I need no persuasion that the continued development of the regions, such as the west midlands, is crucial.
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  A belief in the regions and their continued development does not automatically and by definition lead to support for the policy now being proposed by the Government, of which regional development agencies are but one part. For the Government to win support for RDAs, they must establish that the proposed organisations are necessary for the economic development of the regions. More than that, they must explain why those bodies will be unaccountable to the people whom they are supposed to serve. If regional government is their aim, why have the Government not set out their plans clearly? The House and the public have only one part of a picture that goes far beyond economic development.
  Mr. Caborn: I remind the right hon. Gentleman of the response from his area to our consultation document. The response was from the West Midlands Regional Economic Consortium and its partners, which include the CBI and chambers of commerce—all the other major actors on the economic stage. It states that the consortium and its partners
  "support the Government's proposals for the introduction of Regional Development Agencies … The West Midlands Regional Economic Consortium and regional partners see the introduction of the RDAs as a major opportunity to strengthen the regional competitive position in the global economy and, with this, address many of the social problems that exist in the West Midlands."
  Sir Norman Fowler: The Minister does not believe—and certainly no one in the west midlands believes—that the organisation to which he refers remotely speaks for the west midlands. To suggest otherwise is nonsense. It is elected people such as councillors and hon. Members who speak for the area.
  Beyond the issue of regional economic development, which is the Bill's stated purpose, we should recognise what has been achieved over the past 20 years. The Minister skated over that and at the end of his speech spoke about the inward investment that has been lost to this country. Under the previous Conservative Government, there was record inward investment, creating new jobs and new industries and leading to major exports. I shall describe that record not in the words of that Conservative Government, but in the words of the White Paper, which states on page 30:
  "The cumulative value of foreign direct investment into the UK has risen from 28 billion dollars in 1975 to over 344 billion dollars in 1996. The United Kingdom receives the largest share of foreign direct investment in the European Union, including about 40 per cent. of United States and Japanese overseas investment. In manufacturing, foreign direct investment accounts for 18 per cent. of employment, 32 per cent. of capital spending and 40 per cent. of United Kingdom exports. Over the last decade foreign direct investment has not only created over 600,000 jobs but has helped to develop and modernise the industrial base."
  That is the true record of the previous Conservative Government, and it is in the White Paper.
  I shall put it another way. It is estimated that between 1979 and now, 172,000 jobs were created or safeguarded in the west midlands. The figure for the north-west is 92,000 jobs, for the north-east is 84,000 jobs, and for the south-west is nearly 40,000 jobs. In securing foreign inward investment, Britain has not been the laggard in Europe but the European leader, and that investment has brought employment and development to every English region. There is nothing in the record for which Conservatives need to apologise and everything to suggest

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  that the sort of organisation and structure that we set up have been remarkably successful in producing economic development and jobs in the English regions.
  Mr. Sheerman: I spoke in Birmingham council house on Thursday, and the uniform picture that I got from local business, from the chamber of commerce and from elected representatives such as those from the European Parliament, the House and local authorities was that the past 18 years had been a disaster not only for the west midlands but for all the English regions. Since 1979, compared with the average in Europe, we have slumped down the competition league as regards the average wealth of our citizens in all the regions that the right hon. Gentleman can name.
  Sir Norman Fowler: It is plain that the hon. Gentleman is totally unaware of what has happened in the west.
  Mr. Bob Blizzard: Will the right hon. Gentleman give way?
  Sir Norman Fowler: I should like to reply to the intervention before I give way again.
  The characteristic industry in the west midlands is the motor industry, which is experiencing record exports. We turned round companies such as Rover, which were brought to their knees by the last Labour Government because of appalling industrial relations. The hon. Gentleman should speak to people in Derby and in the east midlands about Toyota's investment and to people in the north-east about that of Nissan. The hon. Gentleman shows blind prejudice. More than that, he shows a total ignorance of what has taken place over the past 20 years.
  Mr. Sheerman rose—
  Sir Norman Fowler:I shall not give way again.
  Conservatives do not need to apologise for anything. What was achieved was a remarkable revolution that was recognised by most industrialists in the west midlands to whom the hon. Gentleman has been speaking.
  It is anything but clear that the English regions will be improved by the new development agencies. What is there to suggest that there will be an improvement? It is anything but clear that England will be better served by nine competing regional development agencies, each seeking to sell its own region and, of course, comparing unfavourably any competing region. It is anything but clear that the creation of nine new development agencies, each with its bureaucracy of a chairman, a deputy chairman, board members, a chief executive and executive directors and staff, doubtless each with his own office in Brussels, will help England overall to attract new investment.
  At its mildest, the case is not proven. We shall carefully monitor the success of the new agencies and compare it with the kind of success that was achieved in the past by bodies such as English Partnerships.
  Mrs. Louise Ellman: Is the right hon. Gentleman aware that the Bill is as much about supporting existing businesses in the regions as it is about attracting new ones? That is why the Bill contains
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  provisions for investment, for the development of property, premises and training. Is he further aware that the CBI in a letter to hon. Members within the past few days states:
  "Second Reading of the Regional Development Agencies Bill takes place next week. This is an issue on which the CBI supports the Government's overall proposals for RDAs believing they can make an important contribution to enhancing the UK's growth and competitiveness."
  Was the right hon. Gentleman not aware of that statement from the national CBI?
  Sir Norman Fowler: I am sorry that the hon. Lady is obviously used to getting her instructions from organisations and not using her own judgment. Hon. Members are here to take an independent view. I shall come to the issue of consultation. The hon. Lady's argument is deeply unattractive. She says that one organisation supports the proposals so all hon. Members should immediately fall in behind that organisation. Of course that is exactly the way that the Labour party has gone, but it is not the way that Conservatives do things.
  Mr. Blizzard: Will the right hon. Gentleman give way?
  Sir Norman Fowler: No, I will not.
  I come directly to the hon. Lady's point. The Government say that the consultation has shown overwhelming public support throughout the country for the agencies. They do not speak just about the CBI. We should be frank on these matters. The consultation was probably the most invisible process of all time. It was based on what was without doubt the flimsiest document that has ever been produced by any Government including this one. The document on which they consulted is precisely four pages long—I could almost read it out now. It was copied at the Department for the Environment, Transport and the Regions, but it left many of those lucky enough to get a copy in some bewilderment.
  The hon. Lady referred to the CBI, but Ruth Lea, the head of the policy unit at the Institute of Directors—
  Mr. Caborn: It was a qualified response.
  Sir Norman Fowler: I see, we can quote only one organisation. I shall read Ruth Lea's response to the consultation as I do not think the Minister ever reads such responses, but only one or two headlines that are drawn to his attention. She said:
  "I ought to say that we did have some difficulty in responding to the document because it was about issues for discussion as opposed to the usual type of consultation document which as you know comprises fairly well focused proposals."
  In other words, the proposals set out were not remotely focused.
  In the end, out of the 40 million people living in the English regions, only 1,500 responded.
  Mr. Caborn rose—
  Sir Norman Fowler: I shall put my argument and then the Minister can respond.

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  Very few responses came from members of the public. I suspect that not as many as one person in 1,000 in England knows that there has been a consultation on regional development agencies. The responses have come predominantly from organisations of one sort or another, virtually all of which suffer from one defect. Whatever criticisms they had, in the final analysis—and here the Minister is right—those criticisms would always be qualified, for the very good reason that if RDAs were going to be set up, most of the respondents wanted to sit on the new boards. As the White Paper suggests, many of the responses were no more than collective job applications. I do not decry that. The Government have a massive majority and they will doubtless get their legislation through. The RDAs will be set up and there will be competition to sit around the boards' tables. If it is the only game in town provided by the Government, organisations will not want to be excluded.
  Yet even in the muted consultation process, rather more criticisms have been made than is evident in the words of the copy writers who put together the White Paper text. Central to that criticism is the lack of accountability of the new agencies and the erosion of the power of local authorities.
  Mr. Caborn: The right hon. Gentleman mentioned the IOD. Mr. Tim Melville-Ross came to my office to have a wide discussion—
  Sir Norman Fowler: He wants to be on a board.
  Mr. Caborn: He does not—he said that he did not want to be on the board. He said that now that the IOD understood what the RDAs were about, it would support the proposal—[Interruption.] If the right hon. Gentleman wants a note of the meeting, I can make that available to him. It does the Opposition no credit to make disparaging remarks about every major actor on the economic stage and say that they entered consultations in the manner that he suggested. They are responsible organisations that responded positively to a genuine Government consultation process. I do not think that 1,500 responses should be disparaged.
  Sir Norman Fowler: I am quoting from the Government's White Paper. On page 49, paragraph 10.6, it says:
  "The consultation process gave rise to many calls for individual interest groups to be represented on the boards of RDAs. It is quite clear that, even with boards much larger than those being proposed, there would always be too few seats to represent all such interest groups separately."
  Those words are in the Minister's White Paper, just as the words I quoted previously on inward investment were in his White Paper.
  I remind the House of what the Prime Minister said when he was Leader of the Opposition:
  "We need to roll back the tide of quangos and to have a revival of proper democratic local government."
  In Government, the reality is very different. RDAs represent the most powerful quangos ever seen in this country. Board members will be appointed by Ministers—they will be creatures of Whitehall, unaccountable to the
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  local public. None of the board members will be directly elected. Only a third of the board will be councillors, but—this is an extraordinary provision—they will be able to remain on the board even if they are voted out of office as a direct protest against the action of the RDAs.
  Mr. Hilton Dawson: Will the right hon. Gentleman give way?
  Sir Norman Fowler: I will not, if the hon. Gentleman does not mind.
  It is that lack of accountability that runs through so many of the responses to the consultation process. As the Minister rightly said, the responses are set out. The City of Sunderland council said:
  "The city council would like to point out that when in opposition the Labour party attacked the democratic deficit proposed by the creation of quangos at regional and local levels which were not accountable to local democratically elected local authorities."
  Sheffield council—the Minister's council—said:
  "It is imperative that RDAs are democratically accountable within their region."
  Kingston upon Hull council said, on the issue of democratic accountability:
  "It is crucial to the operation of RDAs if they are not to become just another quango."
  Mr. Blizzard rose—
  Sir Norman Fowler: No, I will not give way.
  What should really concern local authorities is that the establishment of RDAs marks the start of a transfer of power away from elected local councils.
  Mr. Forth: Including planning.
  Sir Norman Fowler: I take my right hon. Friend's point about planning. The Bill contains powers for the Secretary of State and the RDAs together to exercise powers of compulsory purchase and to designate areas that they want developed. That point was put into a letter, on 9 January, to the Department from the chief executive of Bromley council. He referred to sections 24 to 27 relating to designation orders and said:
  "In such circumstances, therefore, planning powers would be handed over to RDAs which are unelected appointed bodies."
  The House should be concerned about that.
  The House should also be concerned about the evidence showing how such powers have already been exercised by the Government. As it happens, that sort of development is being forced through on green-belt land on the edge of Birmingham in my constituency. In precis—I want to return to the issue more fully on another occasion—the existing West Midlands development agency applied for planning permission to develop 150 acres of green-belt land under active farming. It wanted the land for industrial use. In fact, the land is owned by Birmingham city council, which will receive a substantial capital settlement for the site.
  The proposal was very hard fought locally. I, among others, appeared before the public inquiry and opposed it. We were faced with legal teams, headed by Queen's Counsel, from the agency and from Birmingham council. Nevertheless, we won our case with the inspector. The

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  report was with the then Department of the Environment on the day the Government took office on 1 May—but by some oversight, the issue was not decided until a week after the House went into recess in August. Then, on a Friday, the Minister announced that the Government had overruled the inspector and that the development of agricultural land for industrial use would go ahead. According to my recollection that has been the only speculative application affecting green-belt land in which an inspector's report has been overruled in recent years.
  I therefore tell hon. Members that they need not speculate about what will happen. Given the Government's position, if regional development agencies decide that sites are required in green-belt land for industrial development, nothing will prevent those sites from being developed, for the good reason that the Secretary of State is the final arbiter of those issues.
  Mr. Caborn: The powers in the Bill were vested by the previous Administration in English Partnerships, and the Bill simply moves those powers to the regional development agencies. The right hon. Gentleman knows as well as I do that, before any action can be taken on land acquisition or an application for compulsory purchase, the matter will have to return to the House via the Secretary of State. It would be wrong to infer that the Bill does not contain that protection.
  Sir Norman Fowler: Is it not typical that, although the hon. Gentleman presumably listened to what I said, he absolutely failed to answer the point? The point is—
  Mr. Caborn: It is irrelevant.
  Sir Norman Fowler: The point is not irrelevant. It shows just what the Government will do. It shows that, even when a public inquiry finds for local people—[Interruption.] The Minister tells me not to get excited, but I do get excited about it. He took one of the most disgraceful actions that I have seen in my 25 years in the House. Therefore, I get excited, and I deplore what he has done. I warn the House and the public that, under the Government, the green belt is not safe from industrial development. If the Minister had the courage, I wonder why he left making his announcement until the first week of August, after the start of the summer recess?
  Mr. Caborn: If the shadow Secretary of State wants to raise the issue of a specific green-belt application, he has every right to do so. However, he is doing it in the wrong place. The Government are transferring powers to the RDAs that the previous Administration bestowed on English Partnerships. The point that he is raising cannot be dealt with by the Bill. He is making a spurious and personal constituency point, and he is taking the opportunity to do so from the Opposition Front Bench. This debate is on the Regional Development Agencies Bill, and his point should be made in another debate.
  Sir Norman Fowler: The point is not remotely spurious. It establishes a case of a development agency applying; it establishes a case of a council that owns the land; and, above all, it establishes the Government's attitude. As for the Bill, the point undoubtedly establishes that the Government will take no notice of the public,
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  and that Ministers could not care less about accountability to the British public. The Minister has failed completely to answer the case that I have put.
  Sir John Stanley: Does my right hon. Friend agree that the point made by the Minister is spurious? Although the powers under the English Partnerships legislation may parallel the powers given in the Bill to the RDAs, the ambit of the English Partnerships powers is completely different from that in the Bill. This Bill, and this Bill alone, applies those powers to every square inch of England.
  Sir Norman Fowler: I agree with my right hon. Friend, who has tremendous experience in this subject. In all conscience, I tell him—as I am sure hon. Members on both sides of the House will appreciate—that, because of the Minister's lack of response, we will develop the issues further, both in Committee and on the Floor of the House.
  Some advocates of development agencies say that all the issues of accountability will be solved once there are either statutory regional chambers or, even better, regional government, but that is not the answer. The better course is not even to establish the RDAs. What is significant is the chronic confusion at the centre of government on the issues.
  On 3 July 1997, the Local Government Chronicle reported that the Minister himself was urging councils to lobby the Government for statutory regional chambers to hold the regional development agencies to account. A chief executive who attended a meeting with the Minister was reported as saying:
  "He is very keen for statutorily based chambers rather than voluntary ones and wants everyone to say this in the consultation."
  A meeting in September between representatives of the Local Government Association and two members of the No. 10 policy unit revealed that the message from Downing street was slightly different. The No. 10 line was that regional governance was not on the agenda, and that a "minimalist" outcome was desired. In that debate with No. 10, the Minister, for some unaccountable reason, found himself to be the loser. There are therefore no statutory regional chambers, although there are lots of comforting words about trains coming along later.
  The position on regional government for England is even more unsatisfactory. The definitive position—if it can be so described—is stated by the Deputy Prime Minister in the introduction to the White Paper. He states:
  "The Government are committed to move to directly-elected regional Government in England, where there is demand for it, alongside devolution in Scotland and Wales and the creation of the Greater London Authority. But we are not in the business of imposing it."
  What does that mean? First, it means that no regional government proposals will be made in this parliamentary Session. Therefore, any structure that the House approves today will be unchecked for as long as this Parliament continues. The only promise is that, if the Government remain the Government, they want to introduce regional government on a step-by-step basis.
  How can that work? If regional government assemblies are established, they must have powers. Where will those powers come from? If they come from central Government, what will happen in areas where there is no demand for regional government? Will the powers be

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  given to existing local authorities? Despite those inconsistencies, that is the path that the Government have deliberately chosen to take.
  In his December interview with The Scotsman, the Minister was quite frank. He said, "We are managing transition." That transition is to regional assemblies and to regional government. Undoubtedly that is fine for those who support an England broken into regional assemblies. However, many more people do not want regional government, prefer a solution based on the existing structure of Westminster and local government, and reject the slide to regional government.
  The Bill does not deserve support on its own terms. I do not believe that it will lead to increased inward investment, and there is a real danger that it will lead to a reduction in such investment. The Bill is not an exercise in devolution. It establishes ministerially appointed quangos, which, only a few months ago, the Labour party said were quite unacceptable. Even supporters of regional governance might think twice before supporting the creation of bodies that are unaccountable and show every prospect of being unsuccessful.
  I believe even less that the Bill deserves support as part of a step-by-step process to regional government in England. The Government evidently want regional government, but Ministers and No. 10 Downing street know that, if they had a referendum on that proposition, they would lose. The public would reject the proposition. They have therefore come up with a half-baked proposal which is that, at some undefined stage in the future, if they are re-elected, they will introduce legislation that will introduce regional government to some parts of the country but not to others.
  The proposals are not policies for the development of the English regions. Constitutionally they are objectionable; economically they do not add up; and I believe that the House should reject them.
  5.54 pm
  Mr. Derek Foster: It is a bit rich for Labour Members to be lectured about taking powers away from local government by the party that emasculated local government over an 18-year period and put it in such a financial straitjacket that it became simply an agent of central Government. The industrial policies of the right hon. Member for Sutton Coldfield (Sir N. Fowler) sounded like an awfully tired trail through the failed policies of the 1980s. They reminded me of what Lord Healey used to say when we used to lose elections: the play was a huge success and the audience was a failure. There was an election in 1997 and some of us want to move on.
  The Bill will have wide acclaim throughout the northern region. We have been campaigning for a regional development agency for 25 years. When I was chairman of the North of England development council in 1974, it was painfully obvious that we were at a distinct competitive disadvantage compared with the Scots and the Welsh in respect of inward investment.
  The right hon. Gentleman seems to think that we are discussing only inward investment. The regional development agencies have a far wider agenda. We are talking about the regeneration of indigenous industry, the
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  stimulation of small business, and regions trying to sharpen their competitive edge as we approach the 21st century when the information age will be upon us. The right hon. Gentleman's speech sounded like a tired tale and that is how it will appear to the entire country.
  When I was chair of the NEDC, I learnt a great deal about economic development from the Washington development corporation. At the time, I was one of the lonely individuals in the Labour party who sought the transfer of new town development corporation powers to solve the urban regeneration problems; I was in favour of urban development corporations. In my view, the Tyne and Wear urban development corporation has been a great success. The Government are combining the powers of the existing agencies for inward investment with those of the urban development corporations and locating them on a regional basis.
  In the north, we have a successful inward investment agency—the Northern Development Company. It was the successor to the body that I chaired and it has operated for a decade. It was set up on a tripartite basis with equal representation of the trade unions, the local authorities and business. It has enjoyed the support of the entire region throughout a decade of successful operation. It is a little sad that an organisation that was set up on a tripartite basis will be succeeded by an organisation with diluted trade union representation. My colleagues, Joe Mills, Tom Burlison—now in another place—and Bob Howard, the regional secretary of the TUC, worked extremely hard to make the NDC a success. The northern region could have had extra trade union representation, but I would not go to the wall over that.
  For the entire 25 years that I have been involved in regional politics, Cumbria has been included in the northern region. I know that this is a sensitive issue—I shall not dwell on it—but we believe that Cumbria should remain in the northern region. We know that it will not happen immediately, but we shall return to the matter because most of the people in Cumbria want to belong to the northern region and not to the north-west, although that is not a universally held view.
  I represent 600 sq miles of rural territory. The Rural Development Commission was a very successful organisation and I want to add my compliments to its effectiveness during the 70-odd years of its existence. Factories in Barnard Castle, Middleton in Teesdale, Evenwood, Cockfield and other parts of my constituency would not have existed without the far-sighted policies of the Rural Development Commission.
  I hope that my hon. Friends have got it right and that they will ensure that in what will be an urban-dominated body—dominated by urban business people, urban local authority representatives and perhaps even urban academics and trade unionists—the interests of the rural areas will not lose focus.
  As my hon. Friend the Minister said, there is a huge opportunity to integrate urban and rural policy. I look forward to that happening and, to that end, consideration might be given to the MAFF presence in our region being beefed up and given a locus in the regional office of the north-east. That would ensure that the Government can put some strong advice from a revamped MAFF into the regional development agencies.
  I very much enjoyed reading the report of the Select Committee co-chaired by my hon. Friends the Members for Denton and Reddish (Mr. Bennett) and for Crewe and

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  Nantwich (Mrs. Dunwoody). I fully endorse all their recommendations. We are delighted with the regional development agency, but it deserves additional powers. We are also delighted that the Bill enables additional powers to be provided without the need to return to primary legislation.
  In particular, I should like to endorse what my hon. Friend the Minister said about training. I do not think that he repeated in the House what he said in evidence to the Select Committee. We are bidding for a model rather like Scottish Enterprise where the training and enterprise councils or local enterprise companies in Scotland are overseen by the development agency which monitors their activities. I would advocate such a model and I hope that my hon. Friend will look favourably it as the policies develop.
  It is just as important to co-ordinate the response of further and higher education to regional regeneration. Some universities in the north already make an outstanding contribution in that respect and I hope that they will continue to be encouraged in that role. I am envious of the 30,000 jobs at Cambridge university that resulted from the involvement of higher education in information technology. I hope that institutions in the northern region will enjoy such development over a period of time.
  The structures of devolution are of secondary importance. Devolution is about releasing the skills, energies, commitment and creativity of the people of the regions. It has always been wrong that the man or woman in Whitehall knows best. I have held that view in great contempt although it originated from a Labour Cabinet Minister all those years ago. There is a great deal of wisdom in the regions and it is the business of Government to release that skill and talent.
  These days, government is not about controlling: it is about enabling, facilitating and empowering. We want the regional development agencies to release all the skill and talent in business, universities, further education, local government and communities and galvanise it so that people themselves can renew their communities and regions. If we succeed in doing that—I dearly hope that we shall—the Bill will be the huge success that my hon. Friend the Minister and my right hon. Friend the Deputy Prime Minister wish and which all Labour Members look forward to.
  6 pm
  Sir John Stanley: The Minister for the Regions, Regeneration and Planning and I have at least one thing in common, which he and I may find deeply amazing: we both became Ministers of State at the Department of the Environment shortly after a change of government. In the light of his comments about what he inherited, I mention to him that in 1979 I took a helicopter flight from Tower bridge virtually down to the Thames estuary. The vista from the air, which could never be fully appreciated from the ground, was mile upon mile of dereliction, emptiness and inactivity.
  Less than 20 years later, the view from that same helicopter journey is the most staggering visual transformation. It is probably the most staggering transformation that has taken place in any urban area anywhere in western Europe. For that, enormous credit
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  is due to the London Docklands development corporation and the previous Government, who created it.
  I mention the London docklands not to make a party political point but to say that as someone who was responsible for the new town development corporations in England for four years, and from my experience in Northern Ireland of the excellent work of the Industrial Development Board there, I need no persuading that the setting up of development corporations and agencies, even on the basis set out in the Bill, is justified and can turn out to be a proven success where they have a limited job to do in a limited area. I am in no doubt about that.
  My difficulty with the Bill is the Government's quantum jump from the proposition that it is valid and effective to create such bodies to the proposal that they should be imposed on the whole of the territory of England, which is the effect of the Bill. There may be parts of the regions of England in which hon. Members feel that such bodies are justified. As a Member from a south-east constituency, I feel that development agencies are least justified in the south-east, which for the purposes of the Bill excludes London. It is nonsense to suggest that an organisation that covers the area from my coastal county of Kent to as far west as Oxfordshire and from the Isle of Wight to Milton Keynes has some commonality of development and planning requirements.
  Mr. Brian White: Will the right hon. Gentleman give way?
  Sir John Stanley: I shall not give way, if the hon. Gentleman does not mind, in view of the shortage of time.
  The Bill rests on a fundamentally false premise. The Government cannot be justified in taking such powers over the length and breadth of England unless they can demonstrate that the development and planning process was a failure, not only in specified areas but throughout England. I do not believe that that is demonstrable. I can speak only from my constituency and county experience. In my constituency, I have at Kings Hill one of the most important high-tech industrial park developments anywhere in western Europe. That has been achieved entirely without a regional development agency by the normal commercial process and the democratic planning system. I believe that that experience is true of the greater part of England.
  The Bill takes enormous powers on the premise that the existing industrial development system and democratic planning process has failed throughout England. I simply do not believe that that premise is sustainable.
  I have three specific, deep concerns about the Bill. Previously, where compulsory purchase powers and powers to override the normal democratic elected planning authorities have been taken, as they were in the new towns legislation by the post-war Labour Government and in the urban development corporation legislation by the previous Conservative Government, the bodies involved had a finite life. The bodies set up by the Bill are permanent. It is not justifiable to take such powers for a body which under statute will be permanent.

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  Let us consider the ambit of the combination of compulsory purchase powers and designated area order-making powers given to the Secretary of State. They are powers of the most enormous geographical width. They extend through the whole of England. Indeed, no other legislation in the post-war period has given such wide powers to the Secretary of State to override and supplant the democratic planning process. That is the reality. The powers are given not merely on a wide geographical basis but with the maximum discretion as to how they can be used.
  The House will be aware that in legislation the phrase
  "in the opinion of the Secretary of State"
  should always set the alarm bells going. [Interruption.] I fully acknowledge that the phrase is used by Governments of both parties. Clause 24—the critical clause on designation orders—begins:
  "This section applies to any part of the area of a regional development agency which, in the opinion of the Secretary of State, is suitable for regeneration or development."
  That is a huge discretionary power—the maximum that can be given by the parliamentary draftsman—and it covers the whole of England. I hope that it is clearly understood by hon. Members on both sides of the House and by people outside that the planning suspension powers, which is what they are, will become available not only in every constituency in England but in any part of every constituency.
  My remaining point reinforces what my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) said. The protection given to rural areas is inadequate. I should be much less worried about the Bill if, for example, it were limited to urban areas or urban areas plus so-called brown-land areas. It is not. There is no protection against the use of the powers in rural areas. There is no protection against the use of the powers in the green belt. My right hon. Friend gave an alarming illustration of the use of such powers by the Government. There is no protection from the use of the powers in areas of outstanding natural beauty or national parks. That is not acceptable.
  There is a significant omission from the Bill. It is having its Second Reading the day after the conclusion of the Second Reading debate on the Scotland Bill. In that debate, the Government failed—as always—to answer the West Lothian question. Their response is to offer the English part of the United Kingdom the mere sop of regionalism. The Scotland Bill contains reserved powers for the new Scottish Parliament to have exclusive legislative control over the main areas of domestic Scottish legislation. Reciprocal reserved powers should be contained in the Regional Development Agencies Bill so that non-Scottish Members of Parliament at Westminster have equal exclusive control over the same domestic legislation governing England and—
  Mr. Deputy Speaker: Order. Time is up.
  6.10 pm
  Mr. Andrew F. Bennett: I am disappointed to note the sour response of the official Opposition in their amendment and in their speeches so
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  far. If they considered the corrosive effect that the rivalry of the past 50 years between Manchester and Liverpool has had on the north-west, they would appreciate that progress is now being made, partly as a result of the Milian commission, partly because of our manifesto commitment and partly because of the way in which discussions have taken place in recent months. There is now a much greater cohesiveness and willingness to act as a region in the area. That is a major triumph.
  I congratulate my hon. Friend the Minister for the Regions, Regeneration and Planning on getting the Bill thus far. I should like to refer briefly to the inquiry held by the Environment, Transport and Regional Affairs Committee. The House made it clear when it set up the Modernisation Committee that it wants to improve the way in which it scrutinises legislation. Despite a limited timetable, the Select Committee has tried to look at the Government's proposals. I am grateful to our advisers, Professor Alan Harding, Bob Nicholson and Professor Michael Parkinson for their help, and to all the witnesses who submitted written and oral evidence to the Committee. The Committee itself worked hard for a week to go through that evidence and I believe that we have produced for the House a useful report that will do a lot to inform today's proceedings and the subsequent Standing Committee debates.
  It was clear that the Committee was divided on party lines and that it would not be useful for it to look at the principles behind the Bill. Once the Committee had accepted, however, that we were to study the Bill on the basis that it would be introduced come what may, it was surprising to note the unanimity that became evident. We wanted the Bill to do the job well.
  We stressed that we wanted the work of the training and enterprise councils, business links, the regional assistance areas and that connected with tourism and further and higher education to be co-ordinated in a single strategy. I stress to my hon. Friend the Minister that I hope that such an approach can evolve. He assured the Committee that that is possible. My one reservation is that if the regional bodies are to evolve, they must have high-calibre staff to start with. It is important that they are able to attract the right calibre of staff and that they understand that the process of evolution will take place.
  To the doubters on the Opposition Benches, I recommend the evidence that the Select Committee took from Graham Meadows of the European Commission. He emphasised the way in which other regions in Europe were able to compete within the European framework. It is extremely important that we consider the Bill in that context and appreciate that as long as we are part of Europe, Britain must behave in the most effective way when lobbying to get resources from Brussels. The Bill will do a lot to improve that process.
  That is all I have to say about the work of the Select Committee; I should like to spend the rest of my brief speech emphasising a few points. Regional chambers are extremely important, but I recognise the concern expressed by Conservative Members about the danger of a democratic deficit. It is important that when those regional chambers are established, the people appointed to them recognise that they must keep in contact with their constituent organisations, particularly the local authorities, and involve them in discussions. The sooner we can move to the establishment of elected bodies to take over from those chambers, the better.

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  If we have to wait until the next Parliament for those elected bodies, the House should consider whether it should set up regional Select Committees. It would be extremely difficult for the Environment, Transport and Regional Affairs Committee to examine what is going on in the nine regions. It would be possible, however, for the House to establish a Select Committee for each region, composed of Members from that area, to look at the rate of progress achieved.
  Almost all the bodies that operate in the regions claim that they have a regional strategy, but it is no good having a planning strategy to deal with housing and industrial location and others to deal with transport and training. Those responsibilities should be integrated in one regional strategy.
  Conservative Members have also expressed fears about competition. I accept that there may be problems as a result of competition between the nine regions and between Scotland, Wales and Northern Ireland. I do not believe, however, that that poses the major problem—the major problem is achieving regeneration within each region. The amount of footloose industry in the world is fairly limited. Some evidence suggests that although such industry can be attracted to a region by good grants and other influences, it stays for a short period only and never becomes a part of the given region. If we are to succeed in our regions, we must ensure that new business are created within them and that new small business can grow. Their growth should not be restricted by a lack of resources.
  The Bill is the engine for the regeneration of our regions. I hope that it will reach the statute book soon and that it will be the first stage in the process leading to effective regional government that releases all the energies and excitement that exist in our regions.
  6.16 pm
  Mr. Nick Harvey: I welcome the introduction of a Bill to establish regional development agencies. The Liberal Democrat party has long seen the need for them and we welcome the fact that the Government have introduced them in the context of the wider pattern of devolution to the regions. We hope that that will come about as soon as possible, although we respect the fact that it cannot happen immediately.
  The need for strong strategic regional economic players must surely be beyond dispute. Many parts of the country are suffering from an economic deficit, as the Minister has said. My part of the country, the far south-west, which is also represented by many of my hon. Friends, suffers from low income levels, high unemployment and other serious economic problems. To date, the arrangements made to deal with those problems have been incapable of providing an answer.
  The creation of strong strategic regional bodies must be a welcome development in trying to improve the economic prospects of regions such as the south-west. To date, confusion has been caused by too many players seeking to create economic development. They have duplicated each other's functions and the bureaucracy that supports them. The need to bring all those functions together so that there is one strong player in each region is beyond reasonable doubt.
  If the new bodies are to have the ability to meet the ambitious targets that have been set for them they need the resources to do the job and the powers to go with
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  those resources. My party has certain reservations about that. If the new regional bodies are to compete for inward investment and European grants within an increasingly tough global marketplace—more and more parts of the European Community and beyond have established strong economic marketing operations—they need the wherewithal to do so.
  I deplore the fact that the RDAs are not to have at their disposal any new funds, but will simply recycle funds that are available through existing schemes, which are inadequate to the task set before them. We would have preferred the prospect of more grant from central Government. When, in the fulness of time, there are democratic assemblies in the regions, which should have their own tax-raising powers and which may determine that it is a political priority that there should be more work on economic development in their region, we want those bodies to be able to set aside additional funds for the RDAs. Given that they are partnerships that include the private sector, we also want RDAs to be able to go out and raise money on their own account. Unless some or all of those solutions are adopted, I seriously question what the RDAs will be able to do.
  There are also confusion and contradictions surrounding the whole question of what the RDAs' powers are to be. It makes no sense for central Government, through the Department of Trade and Industry, to retain responsibility for the allocation of regional selective assistance. If RDAs are to be responsible for economic regeneration and given that there is a grant system that aims to help in that process, it makes no sense for RDAs not to be the bodies responsible for allocating those grants. I appreciate that the Minister has had to go out and argue this point with other Departments, but I hope that, as time goes on, the question can be revisited and progress made.
  I echo the voices of those who have said that the work of the training and enterprise councils should come under the direction of the RDAs. I welcome the Minister's having said that the RDAs are to have a role in that respect, but if there is to be any sense in the arrangements, they need to have overarching responsibility in commissioning work from the training and enterprise councils and in setting out what they must achieve.
  There is a contradiction in central Government Departments holding back certain powers while other bodies—for example, the Rural Development Commission—are expected to hand over theirs. I am concerned that most, if not all, of the new bodies will be dominated by urban interests. The new RDAs will be populated and therefore dominated by urban politicians, urban business men and urban academics and I wonder whether the rural voice can be heard when the organisation that has the experience in expressing rural interests is no longer the channel for those views. I would welcome some clarification from the Minister as to how a voice for rural interests on each of the RDAs is to be guaranteed and enshrined.
  The accountability of the new chambers worries me greatly. I appreciate that the assemblies or chambers are not yet in place for accountability to be clearly defined at a regional level, but it is worrying that the new bodies are to be appointed by the Secretary of State and answerable to the Secretary of State. The Secretary of State will be answerable to the House for their work, but that does not seem to follow the principle of devolving power and

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  responsibility to the regions. It may not be long before there are directly elected regional assemblies that can govern and supervise the work of the RDAs; but if the interim measure is to be regional chambers of local authority representatives, the Government need to be more assertive in getting those bodies up and running, rather than passively waiting for that to happen. If the RDAs are to have democratic validity from the outset, the chambers need to be up and running from the word go, so that there can be accountability to the regions. Only then can the hopes articulated in the House this afternoon, that economic priorities will no longer be set in Whitehall but in the regions, be given some reality.
  I welcome the fact that there are to be local authority representatives on the RDA boards. I hope that the political colour of those local authority representatives will reflect the political balance across the region as a whole and not simply represent the dominant party—whichever it may be—in the region. I note that the Secretary of State is to appoint those representatives rather than inviting the local authorities to elect them. That might result in domination by the Labour party in many areas and by the Liberal Democrats in others. In all cases, we must ensure plurality of political representation on these bodies.
  I listened with some amazement as the right hon. Member for Sutton Coldfield (Sir N. Fowler) deplored the fact that people would be allowed to remain on the bodies after being voted off local authorities. He is quite right, of course, but I cannot help but remember that, when the Conservatives were in power, after people had been voted off local authorities they were appointed to quangos. In my constituency and in successive elections, one gentlemen was voted off a parish council, a district council and finally a county council; yet after each of his defeats, he was rewarded with yet another quango chairmanship. The right hon. Gentleman was right, but such views sounded a little odd coming from him.
  The right hon. Gentleman's point about the planning powers that it is intended the RDAs should have was well made and was taken up by the right hon. Member for Tonbridge and Malting (Sir J. Stanley). I accept the Minister's point that that simply transfers English Partnerships' powers, but two wrongs do not make a right—English Partnerships should never have had those powers in the first place. We certainly want some qualification of the powers so as to ensure the involvement of local authorities.
  My last point is that the boundaries of the new bodies worry me greatly. Existing economic boundaries are the product of central Government statisticians—a matter of convenience for the purposes of accounting and record keeping; they do not in any way, shape or form reflect true communities. To suggest that the south-west is a coherent region stretching from Penzance up to Gloucester and across to Christchurch is absolute nonsense. I welcome the signs from the Government that, as we go forward with this process, the Secretary of State will have the facility to vary the boundaries, but I deplore the fact that the number of regions cannot be increased as the regions in the south are far too big. Sensible and coherent regions can be achieved only if there is the facility, first, to change their boundaries and, secondly, slightly to increase their number.
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  If we are to embark on a process of developing a regional level of government in this country—a thoroughly good thing, which I entirely welcome and which cannot come soon enough—it will be a disastrous error if the foundations of that regional tier of government are phoney regions that do not reflect communities, cannot win people's loyalties and do not have economic, political or social coherence. I appeal to the Government to keep an open mind on that issue. It is right that the important functions that these bodies are to fulfil should be the priority of our debate—at this stage, we must not get locked into parochial arguments about where lines should be drawn—but there must be the flexibility to allow these issues to be revisited later in a proper and orderly manner.
  I welcome the Bill, although we shall seek to make many amendments as it passes through its stages and hope to secure some improvements thereby. We are doing a good thing today and these changes cannot come soon enough.
  6.27 pm
  Mr. Gerry Sutcliffe: I am saddened, but not surprised, by the Opposition's approach. The regional debate is not new and many of us who have been involved in regional organisations, such as the Yorkshire and Humberside Development Association and the Yorkshire and Humberside Regional Association in my own area, have sought to involve Conservative Members in debates about the regional approach and we have seen some positive contributions. I am therefore sad that, yet again, the Tories have been consistent.
  The Tories want to rewrite history. Listening to what they say, one would not believe that they had lost an election; nor, when hearing them speak about how wonderful the Conservative Government were, would one believe that, as a result of their policies, the proportion of GDP supplied by manufacturing in this country went down from 30 per cent. in 1979 to less than 20 per cent. today, or that we are now a net exporter of investment. After their election defeat on 1 May, they have conveniently forgotten their legacy, but many of our communities cannot avoid that legacy in the form of high unemployment and deprivation.
  I congratulate my right hon. Friend the Secretary of State for the Environment, Transport and the Regions and his ministerial team on their work and on bringing the Bill to the House today. I also congratulate my right hon. Friend on the work he carried out in opposition in consultation with organisations throughout the country. The Opposition have been carping about many of the leading organisations that have been involved in the consultation. They include organisations such as the Confederation of British Industry, the Trades Union Congress and, particularly, local government, which can see the elements that are needed.
  In my area, we need jobs for people and we need to regenerate the communities—there are local, national and regional elements to that. In Bradford, we have to create 1,000 jobs a year just to stand still. We lost 22,000 jobs over a four-year period in the early 1980s, which was devastating to our communities. The Government did not want to do anything about that. They came forward with ideas such as city challenge and the single regeneration budget, but those ideas were piecemeal and left

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  communities competing with each other. There obviously needed to be a regional approach. There have been good practices and good examples of the regional approach elsewhere in Europe, but if we mentioned Europe to the previous Government, they did not want to know.
  I was the leader of the council in Bradford when it became the second largest receiver of European grants in the United Kingdom. We considered the regional approaches in other countries such as France, Italy and Germany and realised that when communities in those countries lost their mainline industries, they could recycle and redevelop other industries, but the previous Government did not want to consider that. I believe that that approach is the way forward.
  I am concerned that we are talking merely about regional development agencies. I am committed to regional government and I believe that the partnership approach that we shall see between organisations and communities within the regions will help to develop the long-term objective of getting people back to work.
  In Yorkshire and Humberside, a regional assembly has recently been set up through local government—I accept that we shall have to get away from the confusion of titles among regional assemblies. The assembly has set out a framework for Yorkshire and Humberside for the next 10 years. It is a positive document which takes account of various organisations across the range.
  I am not concerned about lack of accountability. I could not believe it when the right hon. Member for Sutton Coldfield (Sir N. Fowler) talked about accountability and tried to set himself up as the champion of local government. His Government, the Conservative Government, over-centralised government and decimated local government's ability to react to local needs. The assembly in Yorkshire is made up of all the organisations that want to contribute to a successful region.
  We talk about the comparisons with Scotland and Wales; in Yorkshire, we have a population of 5 million people, a diverse community and a diverse geography in terms of urban and rural settings. We see that the organisations from those communities are able to come together and work together. I do not want to see the situation that occurred under the previous Government when we were competing against each other—Leeds against Bradford, and Leeds against Sheffield—not trying to promote the region's common objective.
  National Government should set out the strategic plan and regional government should respond; local government should set forward their objectives. There is unemployment in the United Kingdom and in our regions, but there are skill shortages. Those shortages existed at a time when there should have been investment. The previous Government talked about inward investment; it is important, but so is the establishment and development of existing businesses within our communities.
  I want the present Government to talk to people and organisations. I know that they will do so because, unlike the previous Government, they are willing to co-operate and to be accountable. It will have to be an evolutionary process; the Government will talk to organisations and people, and will not be deterred by the political dogma that prevented the previous Government from talking to organisations such as trade unions about how to develop.
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  Before I entered the House, I was a full-time officer in the printing industry. Towards the end of my time in the industry, printing companies were unable to compete because of regional variations and the problem of lack of support from central Government. The present Government recognise that the Government alone cannot create jobs. It is important that we set up a framework and promote the conditions in which employment can develop. I am sure that the Bill will go a long way towards that.
  The organisations that have been consulted have some concerns, but I am sure that they will be met as the Bill progresses through Committee. The involvement of the Labour Government and Ministers over a long period has built up their credibility and trust among those organisations with which the previous Government could not get involved. The CBI, trade unions and local government are happy with the principles behind what we are trying to achieve. I have no doubt that the regional development agencies will benefit our constituents and will prove to be a benefit in the future. I applaud the Government for what they are trying to do.
  6.35 pm
  Mr. David Curry: I would be willing to give the new regional development agencies a chance, but I should have preferred it if the Front-Bench team had today answered some of the questions raised when the White Paper was presented. We have had no greater clarification today than we had then on a number of crucial issues.
  The organisations will have a substantial competence, a lot of money and a hefty bureaucracy. We therefore need to know precisely how they will function and how they will look after the resources. The first question that has not been answered and which I asked specifically when the White Paper was presented is what the Government intend to do to manage the threat of subsidy wars between the regions, which is a real problem. The problem for England has been the incoherence of the English voice within the British ensemble. People have always spoken for Wales and Scotland with a single voice, but we now have a series of voices apparently competing to represent the English interest, and the present proposals contain a number of dangers.
  The first danger is the risk of the fragmentation and dissipation of the programme to attract investment to England, which often leaves confusion in the minds of potential investors. If half a dozen people take the flight to Japan to bid for their regions, does that help or do other people think that we do not have a coherent strategy?
  Secondly, the Government have not addressed the perennial problem of Wales and Scotland gazumping for investment. There is no doubt that that problem could get even worse under the Scottish Parliament and the Welsh Assembly which will be anxious to prove their virility. Three months ago, the Government said that they would deal with the problem, but as I understand it all we have is a sort of concordat without any idea of how it will work.
  Under the previous Government, we had the monstrous situation of £247 million being lobbed in the direction of LG to bribe it into Wales. That resource would be beyond the scope of the English scene nationally, let alone a regional assembly in England. We would not spend that sum on the second coming, even were it to take place in the Dome, although it would be an experience and it would be religious.

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  There is the risk of subsidy competition and it is likely to get worse. Japan is in stagnation and South Korea is in crisis. A large proportion of our inward investment has come from those two suppliers over recent years, so the problem of the situation in those two countries has to be addressed. When the White Paper was presented, the Deputy Prime Minister acknowledged that that important question needed addressing, but the Front-Bench team have said nothing about that today.
  It is clear that the Department of Trade and Industry has won the turf war over the control of direct subsidy because regional selective assistance is to remain with it. But offers of land, infrastructure and training are also important material incentives and we need to know how they will be brought within a framework of fair competition—the level playing field which, I understand, is one of the Government's favourite expressions.
  The next big question involves the future of regeneration policy. The fourth round of the SRB is currently being bid for—I think that the bids have to be in soon. But there is a great deal of speculation about the Government toying with the French concept of "Contrat de Ville". It is interesting that the Government should be tempted by that concept just as the French are becoming disenchanted with it. Do the Government intend to move towards a more targeted form of regeneration such as the city challenge model? Do they intend to retain competition? What will the funding be? What is the timing?
  If the Government say that regeneration is at the heart of the development agencies, we need to know what that regeneration, which is to be at the heart of the strategy for the regions, is going to be. The Minister for the Regions, Regeneration and Planning is in charge of regeneration as well as regional strategies. It would be helpful if he would tell us what he is planning to do on the regeneration prospectus.
  To continue with the same stream of thought, there is a possible link between regeneration, the development agencies and another Government initiative: the education action zones. I applaud the education action zones, but we all recognise that unless regeneration is comprehensive—the Minister repeatedly uses the concept of the comprehensiveness of the approach—and unless that education regeneration takes place in the context of a wider regeneration, it will not work.
  Will the education action zones be incorporated within bids for the regeneration budget? Will wider social and economic regeneration take place alongside them to make them work? I asked that question of education Ministers when they presented their White Paper and there was no response whatever. I hope that the Minister is talking to his education colleagues and can explain how things will work.
  There is an argument for maintaining English Partnerships to make the important process of land regeneration accountable and to ensure that there is an approximately level playing field. There is an argument for getting rid of English Partnerships, on the ground that those functions are being transferred elsewhere. I find it immensely difficult to see the validity of the present proposal, which is to get rid of the overwhelming majority of the functions of English Partnerships but to maintain
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  it for things such as the millennium dome—which I believe is wittily described in the White Paper as a national asset. English Partnerships is being reduced to an ineffective rump to manage a limited number of programmes. The Minister must make up his mind whether to back it or get rid of it.
  Then we have the problem of the representation of regional interests. The White Paper says that the ideal board numbers about 12. The hon. Member for North Devon (Mr. Harvey) spoke about the south-west. I have had enough experience of Cornwall to know that Cornwall recognises almost nothing that is this side of the Tamar, so it will be very difficult to link Cornwall with Bristol and rest of the south-west.
  My region, Yorkshire and the Humber, will take in Hull, South Yorkshire, and the West Yorkshire conurbations—which are almost over the Lancashire border—and extends into the north of Yorkshire, which borders on Teesside. It will be difficult within a board of 12 to achieve a representation that not merely covers people's different functions and expertise but gives them geographical coverage. We need to know how that will work, especially given the demise of the Rural Development Corporation.
  The Minister constantly uses the phrase, "They are going to be business-led". What does it mean to be business-led?
  It is important that we explore the relationship between the Government offices and the regional development agencies because the agencies will draw staff from the Government offices, from English Partnerships and from the Rural Development Commission. How many staff will they draw? What is the Minister's concept of the officialdom that will be needed to run the regional development agencies?
  I now raise a point raised by my right hon. Friend the Member for Tonbridge and Malling (Sir J. Stanley). The Thames gateway development in the south-east has been crucial. Will the Minister ensure that, within the regional set-up for that part of the world, the specificity of the programmes for the Thames gateway is maintained so that we can maintain the momentum of a remarkable development programme based on common action and co-operation between people?
  I am no fan of regional assemblies, but I congratulate the Deputy Prime Minister on creating—however reluctantly—a disjuncture between the creation of the development agencies and the regional assemblies. The idea that everyone is foaming at the mouth to get regional assemblies misreads the popular mood. The number of people who come to my constituency surgery and say, "Mr. Curry, I just wanted to tell you how eagerly I am waiting to have an elected regional assembly" compared with the number of people who come to me with worries about housing benefit or disability benefits is actually rather small.
  The problem of accountability remains. If the regional offices are to be partly subsumed and if other currently accountable bodies are to be partly subsumed, we need to know how to get a handle on the regional development agencies. It is a very partial response to give them some sort of partial subordination to nominated bodies—the present assemblies that have set themselves up. Those embryonic shadow assemblies are not adequate regional representatives.

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  I hope that those issues will be seriously explored in Committee. I do not set off from the assumption that this is necessarily a wicked and silly proposal. I concede the argument for trying to get co-ordination, but it is easy to talk about co-ordination and an integrated approach, and to see a structure as answering a problem.
  One must be sure that the structure is sufficiently responsive, sufficiently targeted, sufficiently accountable, able to use public money with sufficient responsibility and sufficiently cost-effective to give people the sense that it identifies local needs and can respond to local needs while being able to co-ordinate in a way that the same people do not regard as offensive—for example because of planning strategies, which may have to go against what a community wants. It is a difficult feat to pull off.
  I hope that the regional development agencies succeed because I am as anxious about regional development as any hon. Member, but the Minister will help us greatly if in Committee he explains how in practice these bodies will work, so that we can get past some of the high-sounding phrases and into the nitty-gritty of the operations of bodies that will have immense power, immense influence and, one hopes, a large success.
  6.44 pm
  Mr. Jim Cousins: The Opposition's arguments tonight have been extraordinary. The right hon. Member for Skipton and Ripon (Mr. Curry) criticised the proposals because they did not include training and school education. That is extraordinary, given that the right hon. Member for Tonbridge and Malling (Sir J. Stanley) criticised the Bill because a stray planning power, given to English Partnerships by the previous Government and never used, is incorporated in the Bill.
  What an extraordinary contrast of criticisms: one type of criticism that says that a tiny power that has never been used has been incorporated into the Bill and another type that says that the Bill should have swept up into regional strategies, under the command of a regional development agency, even matters such as school education. It is absurd.
  The right hon. Member for Skipton and Ripon gave the game away when he spoke about gazumping and competition between regions. That began under the previous Government. It all took place behind closed doors and was never rehearsed before the House of Commons. It was never brought under any political control. The Bill will enable those issues to come out into the open and to be dealt with openly and democratically, for the first time.
  Perhaps the two most decisive arguments that were made in favour of the Bill were made by the right hon. Member for Sutton Coldfield (Sir N. Fowler) when he spoke about inward investment into regions and took the example of Nissan in my region, in the north-east of England. He is right: the north-east of England has been staggeringly successful at attracting inward investment. Nissan's was the first of those major investments. It was a spectacular achievement.
  However, those inward investments were occurring in what was—and still is—one of the most disadvantaged regions in Europe and which, with Wales and Northern Ireland, bumps along at the bottom of the table of every social and economic indicator that one could mention,
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  despite those spectacular inward investments. One could not have a better presentation of the case for a regional development strategy that would go wider of these spectacular jewels in the economic crown and really address the disadvantage of people—the dreadful cycle of low opportunities and low hopes that affects many people in regions such as my own.
  Inward investment jewels in the crown of the type that the right hon. Member for Sutton Coldfield mentioned do not by themselves tackle those problems. A wider regional development strategy is needed.
  We must address environmental problems that cannot sensitively be dealt with unless they are dealt with regionally. We must develop occupational health dimensions that cannot sensibly be developed unless they are developed regionally.
  The right hon. Member for Sutton Coldfield mentioned that the agencies would be quangos. That is a peculiar argument to hear from the Conservative party. If any party created a massive number of quangos it was the Tory party. The Bill, for the first time, will bring out into the open political and economic processes which have hitherto been hidden. Indeed, it will begin a cull of quangos, because for the first time we shall be able to control the raft of economic development agencies that have been springing up on every side in a chaotic manner. For the first time, too, we shall be able to relate economic work to education and health matters, which are so important to economic success.
  The Bill is a bold beginning, and I would have expected no less of the Minister of State and the Deputy Prime Minister. The Bill has great potential—but it is only a beginning. In the Government office for the north-east region of England, the tasks of economic regeneration, modernising the state and renewing democracy cannot be separated: they must be tackled together. The hopes of our people have been lowered by so many decades of systematic disinvestment, both in industry and in the social infrastructure. Aspirations in the area are not nearly as high as they could and should be.
  The Bill cannot possibly attempt to solve these problems in their entirety—it does not aspire to do so—but it is at least a beginning. I have a great regard for the Minister of State's talents, but I repeat to him that the Bill must be seen only as a beginning. We must move decisively forward and set up the regional chambers that will facilitate open accountability as between the RDAs and stakeholders in the region.
  We must then move beyond that and set a course that will lead, for the regions that want it—not for those that do not—to the possibility of democratically elected regional assemblies. They were part of the democratic renewal project offered by the Government when they came to power. I strongly believe in the idea; I hope that the Minister will assure us that that course is still open to the regions that want to pursue it.
  More needs to be done. If we are to have regional development agencies, they must at first be built on current spending allocations by the Government. None of us argues with that. Looking to the future, however, we see two things: first, the need to examine regional spending across the board—health, education and environment programmes, not just economic development programmes. Secondly, we need proper assessments of the needs of the various English regions. Scotland and

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  Wales cannot be exempted from that process—although I know that my Liberal colleague on the Treasury Select Committee, hailing as he does from Scotland, fiercely opposes that idea. I take some comfort, however, from the fact that his colleague, the hon. Member for North Devon (Mr. Harvey), who is from England, shares my view, which is that we must scrutinise regional and national needs—including those of Scotland and Wales. I see the hon. Gentleman nodding in agreement with that, a gesture which I shall bring to the attention of the hon. Member for Gordon (Mr. Bruce), who happens to be the Liberal party's Treasury spokesman. It was once said of the Liberal party that it had two or three hearts that beat as one, although they voted as four or five.
  One of the great advantages that Scotland and Wales have enjoyed—I do not seek to deny it to them; I want it for every English region, too—is a block allocation capable of being switched around to meet regional priorities. I hope that the Minister can offer us some hope of the Government's moving in that direction. Once we have achieved regional chambers and are closer to democratic assemblies, we should have block allocations which stakeholders and democratic regional assemblies can move around to suit regional priorities.
  My one last hope—
  Mr. Deputy Speaker (Mr. Michael J. Martin): Order. Time is up.
  6.54 pm
  Mrs. Caroline Spelman: My particular concern relates to rural interests. It is well illustrated by the geographical position of my constituency, which consists mainly of green belt land sandwiched between the urban centres of Birmingham and Coventry. Under the Government's proposals, it would fall into the west midlands regional development agency area. Although the RDA contains other rural areas such as those in Warwickshire, Staffordshire, Shropshire, and Hereford and Worcestershire, no one would deny that the vast majority of the population live in urban areas; and it is not clear from the White Paper how the Government can guarantee that rural areas such as Meriden will receive the attention and priority that they require from the RDA.
  Even if a duty were placed on the Secretary of State to put rural appointees on the board of the RDA, they would be unlikely to constitute anything more than a minority voice in an urban-dominated region.
  Allow me to illustrate the type of problem that my constituents anticipate from the new powers granted to the RDAs. Among the functions envisaged for them is the administration of the single regeneration budget. Until now, Meriden has benefited from substantial sums from that budget for the areas of deprivation in the north of the borough of Solihull. But those funds might be regarded from the standpoint of a different set of priorities in the west midlands region; the needs of inner-city Birmingham or Coventry might be regarded as more pressing, and the sheer size of the proposed RDAs will make it more difficult to accord priority to small pockets of deprivation in apparently sound semi-rural areas.
  The role of the local authority—in my case, Solihull metropolitan borough council—has been vital in ensuring that regeneration resources are most effectively targeted.
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  If it is undermined or overshadowed by its big brother, Birmingham city council, the refinement of accurate targeting of resources may be lost.
  We have already seen that in other policy areas such as health. I know that health falls outside the remit of the RDA, but the problem is illustrative. Average health indices for the whole borough apparently show a high prevalence of good health, and the funding formula is calculated accordingly, but that disguises the fact that beneath the average figures are significant areas of poor health to which far more resources need to be directed.
  A further risk involved in the functions to be attributed to the new RDAs concerns transport, planning and housing, areas in which the RDAs are to play a special consultative and advisory role. What my constituents most fear is that the rural voice will be drowned out on the RDA, and that that will result in a further erosion of the green belt by urban encroachment. That has already happened with the expansion of Birmingham international airport, the national exhibition centre and the Birmingham business park—all built on green belt land in my constituency. That reinforces the point made by my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) about the Padmore industrial development. It is the idea of that sort of decision being taken away from the local planning authority which we most fear. All these developments were justified on the ground of regional economic development, but they brought extra pressures to bear on the countryside, especially in the form of traffic congestion and demand for housing. That tension reveals how difficult it is on a regional basis to resolve the urban/rural balance. There are inherent tensions in the main purposes of the RDAs that may not be resolved to the benefit of rural areas.
  There is a specific concern in my constituency about the provision in clause 20 for the RDAs to be given full powers of compulsory purchase of land. My constituency has seen many bad examples of the present compulsory purchase order system. People's homes have been blighted by the motorway and the airport expansion. The Bill may not be the right place to try to sort out the compulsory purchase order system, but paragraph (1) of schedule 5 would permit the Secretary of State to confirm part of the land in a compulsory order and to postpone consideration of whether to confirm the compulsory acquisition of the rest of the land. That would lead to confusion and controversy over which bits of land were blighted by the development.
  Another illustration of the "poor cousin" position of the rural areas in the new RDAs concerns the aim to promote employment and enhance the development and application of skills. In an urban context, it is easier to provide training facilities and subsequent employment opportunities, as those are often to hand, whereas in more remote rural areas there are often no training facilities at all, and transport systems are often inadequate to help people living in the countryside to get to training centres or jobs. The unit cost of providing training for rural inhabitants is much higher, and they are often discriminated against when decisions are taken in a wider regional context.
  The White Paper states that the RDAs will take on the regeneration programmes of the Rural Development Commission. I seek an assurance from the Secretary of State that the expertise and initiative of the RDC will not be lost as its functions and property are absorbed into

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  other public bodies. Over several years, the RDC conducted work of great value to the rural economy, which it would be a tragedy to lose. Can the Secretary of State assure Parliament that rural areas will receive the same level of resource in future as they did through the RDC?
  My constituents fear that the creation of the regional development agencies will lead to the federalisation of the United Kingdom and ultimately to a Europe of the regions. When that risk was discussed by the West Midlands Economic Consortium, of which I am a member, representatives of all parties saw the danger of the region's losing the structural funding that it now receives from the European Union. As Europe is enlarged, our region may no longer qualify for structural support, as there will be other regions with greater needs.
  Can we be assured by the Secretary of State that the Government will approach such negotiations as a nation state with real clout and voting power in a greater Europe? Subsidiarity should ensure that decision making will take place at the appropriate level. The strategic advantage of speaking for a population of 58 million and reserving the right to allocate funds secured on its behalf should not be traded for the delivery of an ill-conceived manifesto pledge to deliver regional government, which would undermine the national interest.
  7.2 pm
  Mr. Mohammad Sarwar: I start in the name of Allah, who is the most beneficent and the most merciful. I have taken the opportunity to prefix my maiden speech in the traditional Muslim custom by starting in the name of God. This, I believe, is a testament to the fact that Britain is now a multicultural and multi-religious society, of which we are all members.
  I begin by paying tribute to the late Jimmy Dunnachie, the former Member of Parliament for Glasgow, Pollok, which includes a substantial part of my new constituency. Jimmy Dunnachie tragically passed away at the beginning of September 1997. He was a popular and well-respected Member of Parliament and will be sadly missed in Glasgow.
  I am extremely grateful to the people of Govan for the privilege and honour that they have conferred on me by electing me as their Member of Parliament. They have subsequently stood by me through some difficult times.
  Govan is a rainbow state representing Christians, Muslims, Hindus, Jews, Sikhs, Chinese, Africans and Caribbeans, who include professionals, academics, the self-employed, employees and employers. Some would say that the political spectrum in Govan is perhaps too awash with colour. We have right-wingers, old lefties, Blairites, liberals, communists, Militant, nationalists, and even the odd Tory can be seen early on a Sunday morning.
  The early beginnings of Govan were as a centre of Christianity. During the mid-1800s, Govan grew to become a burgh and by the end of the century had developed into one of the world's industrial powerhouses. Between the war years, heavy engineering industries and the Clydeside shipyards continued to employ thousands of men and women. However, after the second world war the decline of shipbuilding and the consequent reduction in heavy engineering took their toll, and the economy of greater Govan went into decline.
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  For that reason, my constituents were disappointed by the recent decision of the Secretary of State for Defence not to site the royal yacht Britannia on the River Clyde, which is its natural home.
  I hope that the future of shipbuilding on the Clyde and the problems faced by Kvaerner Shipbuilding at Govan Cross will be addressed satisfactorily by our Government.
  It is interesting to note that even in its darkest days, Govan produced and nurtured people of the highest calibre. Bruce Milian, a successful politician who represented the people of Govan with dedication and diligence, became the Secretary of State for Scotland during the late 1970s and later became the second European Commissioner.
  Alex Ferguson, the manager of Manchester United, is one of the greatest football managers in the world. He is leading British football in Europe and we wish him and Manchester United every success.
  Who in the labour movement could ever forget the world's first work-in, orchestrated by Jimmy Airlie and Jimmy Reid, whose speech inspired the shipyard workers on the Clyde to stand up for their right to work?
  Those individuals are well known, but the real heroes are the people of Govan, who have faced the challenges of a steady decline with dignity and passion. Those are the people whom I am proud to represent.
  The people of Govan and Glasgow were delighted by the recent decision of the Millennium Commission and the Glasgow development agency to award a grant of more than £50 million towards Scotland's first national science park in my constituency. A further £19 million for the park still requires final approval from the European Commission in Brussels, but I am confident that approval will be granted and that the development can be concluded before the millennium. I hope that you, Mr. Deputy Speaker, and hon. Members will take the opportunity to visit the centre when it is up and running.
  The national science park is a perfect example of the role that development agencies can play in attracting inward investment. Development agencies, in conjunction with local government and the private sector in Scotland, have played an extremely important role in tackling economic and social decay.
  In Glasgow, for example, Scottish Enterprise and the Glasgow development agency, in partnership with Glasgow city council, Strathclyde regional council and Govan Initiative Ltd., have been successful in tackling the economic and social problems that the city experiences. The regeneration of the merchant city, the development of the Scottish exhibition centre, the Burrell gallery, the royal concert hall and the Kelvin hall all demonstrate the huge difference that development agencies have made in Glasgow, so much so that Glasgow is seen as a prime example of urban regeneration, and only last week was described by The Big Issue as the coolest city in Britain. That is why I believe that the Bill is an important element in the process of democratic renewal and local empowerment.
  I believe that the success of our Government will be measured simply by the real actions that we initiate to combat poverty. My constituents look to the Government to deliver practical, real-life solutions. Unemployment in Govan, which stands at 14 per cent., is still far too high. Until last May, too many people had no hope of

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  employment. Too many of our young people are involved in drug misuse and too many leave school without the right skills. Many people are still forced to live in intolerable housing conditions, while many pensioners must still make a choice between heating and food—especially during the cold winter months.
  One development that has increased the level of poverty is low pay. The introduction of a national minimum wage is vital if we are to ensure that that level of poverty does not continue. Other countries, not least the United States, have shown that a reasonably set minimum wage helps to improve economic performance and productivity.
  My constituents are also expecting significant progress in housing. The Scottish people rely more on public sector housing than those in the rest of Britain. More resources should be made available for building and, in particular, for renovating houses. Renovation is important, as merely concentrating on building further housing will shift attention away from areas such as Govan where demand for housing can be met adequately only by regenerating and renovating the existing stock.
  Education is another area which is of great concern to the people of Govan. The schools in Govan do a tremendous job under severe financial pressures, but they need further support from the Government. The July Budget, which gave £2.3 billion for school repairs and raising literacy and numeracy standards, was greatly welcomed in my constituency.
  An issue that has come to concern me increasingly over the years, and one which I hear about repeatedly from the Muslim community and her friends in Britain is the growth of Islamaphobia. The Runnymede Trust's report "Islamaphobia, a challenge for us all" is an excellent insight into that prejudice, and I trust that my right hon. Friend the Home Secretary will take on board the recommendations made in that report.
  I should like to draw the attention of hon. Members and of the Government to the poor representation of ethnic minorities—including the total exclusion of Muslims—in the House of Lords. I trust that our Government will change that unacceptable situation.
  I look forward to making my own contribution by working fully with the Labour Government and by realising our vision of a new Britain where power and resources are in the hands of the many and not the few.
  7.12 pm
  Mr. David Ruffley: In speaking in support of the Opposition amendment, I draw particular attention to the way in which the logic of the Bill discriminates against rural areas. I shall address particularly the way in which it fatally undermines rural economic development and regeneration.
  I acknowledge the speeches made so far—particularly that of the hon. Member for Glasgow, Govan (Mr. Sarwar), which I am sure hon. Members found very interesting.
  The details of the Bill are very concerning. I think that I speak for all Opposition Members when I say that the legislation compounds the injury felt by rural constituency interests. The Minister for the Regions, Regeneration and
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  Planning—who is not in his place at present—has a cavalier disregard for the green belt in England, which he describes as being up for grabs. The Government have certainly caused a great deal of concern in my constituency—one has only to read the local newspapers in Suffolk to see how much concern exists.
  In addition, there is concern about the way in which the Government have handled the issue of beef on the bone and the continuing problems associated with BSE. There is further concern about the Government's refusal to seek adequate compensation for the revaluation of the green pound, and about the disgraceful way in which the United Kingdom presidency of the European Union has not been used to introduce common agricultural policy reforms, which Labour promised during the general election campaign to deliver.
  If one seeks details of why the Bill is bad, one need look no further than the Rural Development Commission and what has been done to it. That commission is responsible in two ways for regeneration and redevelopment in rural areas. First, its budget of half the national total of £44 million is directed to specific projects. Its other function is national advisory and research work.
  The Bill contains no safeguards that guarantee that both halves of the £44 million budget will go to rural areas and be devoted to rural regeneration and redevelopment when the commission is eventually subsumed into the RDAs' budget. I hope that the Minister will give specific assurances to those hon. Members with rural interests about the destination of that £44 million after the Bill is passed—which we may assume will occur. We look forward to her comments in that regard.
  It is hardly surprising that the chairman of the Rural Development Commission resigned when he saw the contents of the Bill. It is also little wonder that he is not the only one to have problems with the legislation. Fears have been expressed also by the Consortium of Rural TECs, the National Farmers Union, the Country Landowners Association and many others. Such groups have welcomed minor parts of the Government's rural policy, but reject the details of the Bill.
  The hon. Member for Stafford (Mr. Kidney) smirks, as is his wont. If he took the time to read the representations from the bodies that I have mentioned, he would know that they are concerned about the way in which rural areas and their interests are downgraded by the Bill and the way in which it is drafted.
  It is little wonder that such groups say quite openly that the structure—the quango nature—of the RDAs will tend towards urban dominance of those bodies. We know why that is so. The political logic behind the RDAs' structure as proposed by the Bill is perfectly clear. The most visible deprivation occurs in towns that are more populous. Therefore, it is obvious that politicians who serve on RDAs will be more likely to listen to the clamour from urban areas simply because such areas are more populous. The Bill does nothing to protect rural interests against the political logic of a tendency for urban areas to get a bigger share of the action, as my hon. Friend the Member for Meriden (Mrs. Spelman) pointed out.
  The Rural Development Commission was a dedicated body, with a long and distinguished history since its establishment in 1909. It was able to work at grassroots level to identify the fairly small pockets of privation that

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  often go unnoticed in rural areas. That is why the body was so effective. This Bill destroys that organisation's specific remit. Nothing in it suggests to the Opposition that RDAs will be able to re-create that function and that bespoke approach to alleviating poverty in rural areas, which is not always obvious.
  The assurances we seek in respect of the £44 million budget must be delivered. In particular, the Minister must say what will happen to half of that budget as it relates to advisory and research work. We are told that the money is now part of the Treasury's comprehensive spending review. Those of us who know what that means realise that it is a kind of fiscal Bermuda triangle. I do not think that we shall see that money again.
  We must understand what will happen to the individuals in the Rural Development Commission, who are in limbo. They do not know what will happen to the commission's national advisory work. The work is still there, but it has not been tackled. We do not know what will happen.
  I wish to correct the Minister for the Regions, Regeneration and Planning—the hon. Gentleman is not in his place—on a comment that he alleged that I had made. I did not say that my constituents in the RDC office at Bury St. Edmunds had not been consulted. The Minister misinterpreted what I said. I said that they did not know whether they would have a job in a few months' time. The question is not whether they have been consulted but whether they will have a job.
  I seek an answer to that question. My constituents will be grateful to receive an honest and straightforward reply, and I hope that that will be forthcoming when the Under-Secretary of State responds to the debate. Alternatively, the answer can come in written form after the end of the debate.
  There are specific concerns about the lack of safeguards in the Bill. First, why does paragraph 4.22 of the White Paper make it clear that there should be rural representation, specifically on the RDA boards, when the Bill does not spell out that commitment? Surely the Bill should place an obligation on the Secretary of State to have rural interest representatives on the boards. Will the Under-Secretary please take up that point?
  I ask the Minister also to explain why clause 7, which deals with the strategy of the RDAs, makes no specific reference to rural strategic interests. Let us have that in the Bill if the Government want to allay fears in rural areas about whether a strategic approach to rural matters will be observed and followed by the new RDAs.
  I end by referring to the other fears of my constituents and the local media. It is all very well for Labour Members and Ministers to say that the CBI and this, that and the other body support the Bill. I can tell the House that a grassroots, non-partisan newspaper such as the East Anglian Daily Times, a not insignificant regional newspaper but not a partisan one, had a leader yesterday in which it described the structure set out in the Bill as bureaucratic nonsense. It accused the structure of duplication, of breaking up the United Kingdom and, furthermore, of being nonsense.
  In what sense does anyone in the historic part of East Anglia believe that he or she has anything in common with Thurrock, Woburn and Peterborough, which are also in the relevant area? Why do so many people in my constituency, of no political persuasion, think that we have a dog's breakfast of a Bill and a concept?
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  Let us acknowledge that the Government are trying to create a false consciousness and a false regional identity that simply does not exist. It is for those reasons that I support the Opposition amendment, and will be doing so in the Lobby tonight.
  7.22 pm
  Mr. Barry Sheerman: It is a great pleasure to be able to speak in the debate. I congratulate my hon. Friend the Member for Glasgow, Govan (Mr. Sarwar) on his maiden speech, to which the House listened with great attention. It was a multi-faceted contribution. My hon. Friend was generous in his remarks about his predecessors. His pride in his constituency shone through.
  I am excited about the debate because I have been interested and involved for a long time in trying to make our country more competitive. The situation in most of the regions is dire. As my hon. Friend the Minister for the Regions, Regeneration and Planning said in his opening remarks, only two of the United Kingdom regions are above the European Union average in terms of the quality of life that our constituents enjoy. That is pretty disgraceful.
  Interestingly enough, the Opposition Front-Bench spokesman, the right hon. Member for Sutton Coldfield (Sir N. Fowler), who had such a leading role in former Conservative Governments, could only crow about securing inward investment. What a sorry situation he left us in when we consider the average quality of life of our individual constituents in the various regions. That is not only because of the relative economic decline of our country and our failure to compete but because of the way in which misguided policies over 18 years destroyed the independent base of our regions.
  Consider the way in which Conservative Governments changed the basis of the utilities. The electricity, water and many other utilities lost the bedrock of being independent organisations based in the regions. That has all gone. Most of the electricity companies are owned by the Americans, and water companies are owned by the French. Some of us are lucky that our local companies retain an allegiance to development in the region but many of the companies have much less of a commitment to the region than did the former public utilities.
  Look at the way in which Conservative Governments allowed building societies to move into the private sector. They are now footloose financial institutions with little commitment to those places that grew them, invested in them and developed them over 120 years.
  The basis of independent companies—large employers—in the regions with their headquarters in the regions has diminished dramatically over the past 18 years. We need the regional development agencies to try to turn back some of the dreadful things that have happened.
  Who are the major players in most constituencies today? The major employers in my constituency and in many others that include the towns and cities of our country are the local university or universities, the hospital and health trust and the local authority. There are few large employers left in our constituencies and in the regions. That is partly due to the nature and industrial structure of modern Britain and of the global economy, but much of it is down to accelerated decline, and that is

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  the responsibility of 18 years of a Conservative Government who did not, strangely enough, understand the need to be competitive.
  It was interesting to listen to the right hon. Member for Sutton Coldfield, who had been a Cabinet Minister for so long. The only straw to which he could clutch was inward investment. The right hon. Gentleman argued that we were up there as the best in Europe as the home for the most inward investment. I give him that, but that is why he focused on inward investment. However, Conservative Governments failed to initiate the regeneration of our industries within our country, using the talents and skills of our people. That is what they failed to do over 18 years of Conservative rule. They failed to grow successfully the companies that we needed to create the good life, the quality of life that we in this place are elected to try to secure through governmental policies. Those Conservative Governments failed for 18 years.
  The RDAs have the possibility of focusing upon and bringing together the tremendous efforts that are being made in every region that I visit in the United Kingdom. I meet people of tremendous ability in the private sector. Many of them are running their own businesses and are prepared to go that extra mile and to give up extra time to try to do something about improving the local regional economy.
  I meet people who give of their time without charge. They are highly qualified people, including leading business people. When I talk to them, they say uniformly that they need a regional development agency. They say, "We are all doing very good things" but our effort is not properly focused. The strategic role of an RDA would be invaluable. That is the voice of people with whom Opposition Members have ceased to engage in conversation. I am talking of leading industrialists, entrepreneurs, people who are engaging in successful wealth creation in our towns and cities. They are excellent people. There are also the leading lights in local government and those who run our training and enterprise councils and universities.
  The universities are key players. In looking to the future in considering where we create our wealth, we have underrated the universities. That is my one little criticism. We must bring in the universities and give them a powerful role. They have enormous potential for creating growth, development and enterprise and yet we have not begun tapping into that skill, knowledge and innovative base. There should not be just a token university representative on the RDAs. They should take on the university role. In Yorkshire and Humber, we have nine universities, which are crucial for the future of our economic development.
  If hon. Members want to know about the success of the Conservative Government, the IBM consultancy report— "The True State of Britain's Manufacturing Industry"—with the London business school, said that, after 14 years of Conservative Government, only 1 to 1.5 per cent. of British companies were world class. There were 38 per cent. which, with a superhuman effort, could become so. One had to start praying for the rest.
  We do not have enough world-class companies in this country. We have to tackle that, not by expecting some
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  wonderful Japanese or Korean company to settle in our region. To compete we have to grow innovative, enterprising small and medium enterprises.
  Seventy five per cent. of people who leave school today will work in small and medium enterprises—not ICI, Zeneca or BP, not the giants, not Rover, not the large companies, but for small, innovative companies. We have to grow them at a great rate. The regional development agencies will have the capacity to lead and focus that fight.
  I like the Bill because it is enabling. If some regions do not want to move as fast as others, so be it, but if some of our regions want to run fast and hard, let us be allowed to do so. That is right. Our regions are diverse and different, and some of the less cohesive regions will run faster than those that traditionally see themselves as much more coherent, so there will be very real change there.
  I also like the Bill because it will allow for growth. It is organic. Of course training and enterprise councils, business links, the universities and other sectors will have to be more absorbed into the RDA as time goes on.
  We must also ensure that the democratic deficit is made up. There is one small gap in the measure: a parliamentary Select Committee system tailored for regional development and the regions. It is no secret that Labour Members have constituency weeks. There is a great, untapped potential for hon. Members to be involved in this great enterprise of regional development through a regional Select Committee that will close the democratic loop and be very valuable.
  I entreat my hon. Friends on the Front Bench to be aware of that. It is a campaign that we on the Government Benches will run. I hope that Opposition Members will join us to ensure that we get such a Select Committee system.
  We have the opportunity in the Bill to get it right. It is so important to get it right because the future well-being of our people in this country depends on realising the opportunity—
  Mr. Deputy Speaker (Mr. Michael J. Martin): Order. Time is up.
  7.32 pm
  Mr. Andrew Rowe: I should, perhaps, begin by noting that it can never be easy to make a maiden speech, and to have done so under the difficulties that the hon. Member for Glasgow, Govan (Mr. Sarwar) is currently enduring is a tremendous additional effort. I learned more about Govan in 10 minutes than I could have imagined. I am sure that the House will feel that, if the difficulties are cleared away, the people of Govan will be represented by someone who is very knowledgeable about their interests.
  The excitement of office after so long is very understandable. I sometimes feel that the Minister for the Regions, Regeneration and Planning, who moved the Bill, is like a traveller in an antique land: he is so thrilled with what he sees that he describes it in immortal prose in the White Paper. Who can fail to respond to insights such as:
  "England's regions contain areas of cultural and historical significance as well as of natural beauty,"
  or
  "The regional economies are the building blocks of a prosperous economy."

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  With insights such as that, it is rather churlish in a way to doubt the contents of the Bill, but I remind the Minister of what travellers in antique lands encounter:
  "Two vast and trunkless legs of stone Stand in the desert."
  For our current traveller, the names on the legs of this edifice might well be Redcliffe-Maud on one and Banham on the other. One of the great temptations for all reforming Governments is to imagine that, if one simply changes the boundaries of local government, one will somehow set free the talents of the nation. Neither Redcliffe-Maud nor Banham, set up by Governments to modernise Britain, produced changes that have made any serious long-term difference. The people of England, as report after report has shown, feel neither loyalty to, nor interest in, arbitrary groupings created by Governments for administrative convenience.
  I remember when I was a civil servant in the Scottish Office—indeed, working with Bruce Millan—that Kilbrandon, the Scottish equivalent of Redcliffe-Maud, recommended, with perfect logic, that the banks of a river should be in the same local authority, but the people of Fife rose as one man, or woman, and rejected it. The result was that two of Scotland's great rivers remained with one bank in one local authority and one bank in the other.
  It is no good the Government, trying to pretend that economic success can be achieved by the creation of new and artificial regions. The Government are obsessed with the German model of regional government. They cited it in support of their Scotland Bill, and no doubt they will cite it in support of this one. Why can they not understand that the German regions are older than Germany's central Government, and are not its creation? German Governments exercise powers given up to them, not the other way round.
  Page 15 of the White Paper contained a revealing map of gross domestic product per head in the European Union. What it shows is an impressive concentration of the successful areas—coloured grey or black—in the heart of Europe. The only areas in the United Kingdom that compare are the two nearest the mainland, yet the Government quote the success of the Welsh and Scottish development agencies as the model for their new RDAs. If they are so successful, why are their regions not grey on the map as well?
  The map suggests that it is national, not regional, policies that need to be overhauled. If Scotland has done better than many expected, is it not likely to be due at least as much to its extraordinary success in getting 50 per cent. of women graduates as to the operation of a development agency?
  I start from a thoroughly sceptical position on the proposed agencies. I believe that their creation is driven by Labour's desire to balkanise England and dilute the risk that England will, in time, reject new Labour. We all know that, to guard against that day, the Government have insisted on giving no proper answer to the West Lothian question.
  Let us look at the Bill. In my region we have Kent, the Isle of Wight, Portsmouth, Milton Keynes and Oxfordshire. We do not, of course, have London, yet all our main travel routes go to London. A huge percentage of our population commutes daily to London. We do not commute to Portsmouth or Oxford. Moreover, in my
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  county we have made alliances, very profitably, across the channel. That is where our other centre lies. So why do we want this hybrid, artificial, incoherent region? We do not.
  Regions will enhance the way in which we are governed. We know that, because the White Paper says so. They will modernise Britain and decentralise decision making. That is claptrap. In February 1997, the right hon. Member for Sedgefield (Mr. Blair), now Prime Minister, said:
  "We need to roll back the tide of quangos and to have a revival of proper democratic local government."—[Official Report, 20 February 1997; Vol. 290, c. 1076.]
  He then sets up the most powerful quango that he can devise, to be run by business leaders appointed by Government. Three or four local councillors will be added, but to ensure that they have no genuine local accountability, they will stay on the quango even if the electorate chucks them out. He then gives those quangos a host of powers. We have heard a great deal about the compulsory purchase powers in clause 20, for instance, and I will not say more about those just now; but they are pretty horrendous.
  Who will be the business men and women? Will they genuinely be locally based? Most locally based companies consume too much of their people's time to allow for such service—but, if they are nationally or internationally based, why should they care especially about their region? Will those people be paid? If so, how much; and if not, will they be able to give the region the priority it requires?
  In these bodies will be subsumed the powers and duties of the Development Commission. That is typical of the present Government, who claim to care about rural areas, but then destroy the only body that really focused on them.
  It is interesting that, despite the determination to create an integrated policy to regenerate the regions, the proposal for the regional development agencies leaves out the national health service. We heard earlier how important it is for the health of the locality to be included. The NHS is a huge employer, a huge landowner and a massive purchaser, yet it remains wholly under the hand of central Government. I suppose I should be glad about that, however: otherwise, after the RDAs have got into their stride, the House would have very little to do.
  The Bill is a further step in the downgrading of the House. Rather than establishing artificial, unwanted, unrecognisable regional assemblies, we should try to build up the position of an English Parliament. It is here in the House of Commons that English issues should be debated and resolved. The cranes across the street are now beginning to build a new office for the United Kingdom Parliament; but it is one of the truths of history that organisations only secure the premises they need in order to function effectively when they no longer have a function to perform.
  7.41 pm
  Mr. Bill O'Brien: I am pleased that the Bill is before the House. I fully support it. As one who represents a constituency in the Yorkshire and Humberside region, I believe that the Bill will genuinely benefit that region; moreover, it is a further demonstration

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  that the Labour Government are keeping promises that they made to the electorate in May. This was one of the promises in the manifesto, and I am glad that we are keeping it. Another pleasing feature of the Bill is that it will remove many of the quangos that were the hallmark of the most recent Tory Government. Under the Tories, we saw the introduction of a "new magistracy" of appointees who sat as members of public bodies, spent taxpayers' money and made decisions—often in private—that should properly have been the preserve of elected local politicians.
  Elected councillors have been removed from bodies on which they used to sit as of right. Under the Tories, quangos spent more than £60 billion—about 20 per cent. of total public expenditure, and far in excess of what was allocated to local government in England and Wales in revenue support grant. Unelected people were spending more money than elected bodies throughout England and Wales. We must provide safeguards in the legislation: we must ensure that we do not set up further quangos, and that we adopt a democratic approach to RDAs.
  Taking evidence on RDAs, the Select Committee—of which I am a member—obtained views from many interested bodies. We took evidence for a week, and interesting contributions were made. We would have liked to consult other organisations, but sadly, because of pressure of time, we did not have the opportunity to do so. I am sure, however, that those who wish to speak and to table amendments will have an opportunity to do so in Committee.
  Decision making will be a significant factor in the RDAs' operation. The Confederation of British Industry—which supports the Bill—wants them to report to a Cabinet Committee whose members would be drawn from the Department for the Environment, Transport and the Regions, the Department for Education and Employment, the Department of Trade and Industry and the Treasury. The CBI suggests that RDAs should take account of the views of the partners in their regions, and involve them in the decision-making process. Clearly, the CBI has its views about how the RDAs should operate, but who the partners will be, and how they will be involved in decision making, will have to be considered by the Standing Committee. The local government representatives who gave evidence to the Select Committee consider that the aim in establishing the board should be to achieve a geographical coverage by business as well as the local government sector.
  The appointment of the chairperson gave rise to concern, but it is now agreed that the chairperson should be the best person for the job, and should not come from a particular sector.
  A significant aspect introduced to the discussions by the local authorities was the question of regional chambers. Such chambers now exist in many areas, having been set up with the encouragement of the Minister of State and paid for by local government. The regional chamber is the highest level of the new regional machinery. It will be in the best interests of the RDAs to work within the wider framework prepared by the regional chambers and their partners. In the Yorkshire region, all local authorities are represented on the regional chamber, and other organisations—including voluntary organisations—have an interest, and contribute to the
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  chamber's work. Given the wide-ranging responsibilities of the boards for strategy and strategic co-ordination, it must be agreed that those responsibilities are set within the chamber's strategic framework—that its work should contribute significantly to the strategic operations of the board.
  It is clear that the various roles should be defined in a way that prevents duplication and overlap with the regional chambers. If we do not get that right, we shall rightly be accused of generating additional bureaucracy and a lack of clear "value added". In Committee, it must be made abundantly clear that there will be no duplication, and that we will reduce bureaucracy wherever possible.
  Local government says that regional chambers should be consulted, should endorse operational plans and should receive mid-year and annual reports. The work of the RDAs must be scrutinised, and the regional chambers are the most appropriate bodies to do that, given their involvement and their responsibilities in the regions.
  The Yorkshire and Humberside region contains four sub-regions: South Yorkshire, West Yorkshire, North Yorkshire and Humberside. A fair political balance in the operation of the RDAs can be achieved only within the local government sector. Without a fair and honest balance of representation, we could have a turf war, which would not be to anyone's benefit.
  The paper submitted by the British chambers of commerce to the Select Committee welcomed the creation of RDAs, and in particular the proposals for the regional skills agenda. It said that the Government should have gone further than the proposed role for RDAs in monitoring training and enterprise councils. It suggested that the responsibilities of the TECs and the resources channelled into them should be transferred to RDAs.
  I support the view of the British Chambers of Commerce, given my experience of the Wakefield TEC. TECs have been operating in the Yorkshire and Humberside region for 10 years, but there is still a shortage of skilled labour. They have failed my constituents and many people in the Yorkshire and Humberside region.
  Mr. Deputy Speaker: Order. The hon. Member's time is up.
  7.51 pm
  Mr. Brian Cotter: May I begin by joining my hon. Friend the Member for North Devon (Mr. Harvey) in his expression of support for the concept of the Bill. As he said, the Liberal Democrats, in broad principle, welcome the Government's proposal to create regional development agencies. We have long argued for a more devolved system of government. However, our view is tempered by several serious reservations about the Bill.
  Many hon. Members would agree that strategic and sustainable economic regeneration through the regions is the key to a prosperous future for us all. However, attention must be paid to the detail of the Bill to ensure that real economic regeneration is achieved.
  Regional development agencies can make an important contribution to United Kingdom growth and competitiveness. They should be business-led organisations which work closely with local government. They should intrinsically act as vital catalysts to regional development and investment.

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  The United Kingdom has lost out in the past decade owing to regional weakness. We have lost out within the European Union because of the deficiency of strong and properly resourced regions to which EU development funds can be routed and which are capable of raising matching funds.
  The long-term success of RDAs depends on adequate funding and on their ability to pursue private finance. The Government's proposals have failed in that important respect. The relevant clause should be reconsidered, because it seems to allow only temporary borrowing in the form of an overdraft, and then only to a limited extent.
  As the Bill stands, the agencies will be prevented from having access to all the functions and funding that they should have. That will be a waste of public resources, and the Government should expand the scheme further.
  The Government seem to have missed a golden opportunity, in that it would make sense for the RDAs to be involved in the process of establishing a regional minimum wage. It seems logical that such an approach could deal with many of the concerns of small businesses.
  The Government's proposals should be bold and daring, with much more consideration given to long-term strategy. As the Liberal Democrat spokesman on small businesses, I have a particular interest in the creation of RDAs. One of the declared primary purposes of the agencies is to help small and medium-sized enterprises. The future for all small firms is local, regional, national and even global. The emphasis on very large business organisations has rightly been reduced in recent times. Increasingly, more and more SMEs are contributing to our national competitiveness.
  There is little doubt that initiative and innovation are to be found in small firms in great quantities, but many promising business plans founder due to lack of resources and support. I hope that the RDAs will deal with that problem.
  Several hon. Members have mentioned the role of training and enterprise councils and business links. In the past, there has been an inordinate amount of duplication and unnecessary bureaucracy, and money has been wasted. The Department for Education and Employment will still run TECs, and the Department of Trade and Industry will still have control over economic development grants. Reference was made earlier to the system of local enterprise companies in Scotland, which should also be considered. It is my experience that many businesses are unaware of TECs and business links, so I hope that the RDA will address that problem.
  The system for economic regeneration requires clarification and simplicity to maximise efficiency and to provide businesses with the first-class support that they deserve. That is why the Liberal Democrats support the one-stop approach.
  Business links and TECs are driven by national Government programmes and targets. Conflicts will inevitably arise between RDAs and business links and TECs, which will create weaknesses in regional economic development and regeneration programmes that reflect regional needs. The Government's proposals do not fully take into account the vast differences between the regions. Regional diversity must be recognised.
  As the Confederation of British Industry pointed out in its briefing on the Bill, staffing is a key issue. It said:
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  "RDAs must have high calibre boards and chief executives. Remuneration must be competitive to attract individuals from the private sector. During the first years of establishment … there will be a particularly large workload in bringing together the regional partners and establishing RDA leadership."
  The big problem with the Bill is the lack of accountability. Too much power will be in the hands of the Secretary of State. The role of the regional chambers should be strengthened, so as to hold the RDAs to account. At the moment, the voluntary aspect of this proposal is most unsatisfactory. The Liberal Democrats believe that it should be statutory. The Local Government Association made that very point. It said:
  "As bodies appointed by Ministers, they"—
  the RDAs
  "need to be accountable at a regional level to ensure they are able to respond to regional needs."
  Business organisations agree with that point. The association went on to say:
  "As bodies that will be business-led, it is vital that they are held to account by a broad range of regional interests to ensure real coherence with strategies and programmes elsewhere in the region. Consultation is insufficient."
  Regional interests are paramount, and unnecessary interference by central Government should be avoided at all costs. I hope that the Secretary of State will heed my comments, which will be repeated by my colleagues and me as the Bill proceeds. We agree in principle with the establishment of RDAs, but my points need to be addressed.
  7.59 pm
  Mr. Ian Pearson: The establishment of regional development agencies in England is long overdue. As a former chief executive of a regional economic development company and a current non-executive director of Greater London Enterprise, I warmly welcome the Bill, which commands widespread support among economic development professionals. In the west midlands it has the full and enthusiastic backing of local authorities, the CBI, chambers of commerce, the TUC, further and higher education institutions and the voluntary sector.
  There is a growing realisation that regions throughout Europe are competing against each other not just to attract inward investment, but to increase the capability of the business base and expand its capacity. Large towns and cities are increasingly becoming magnets for industries and industrial sectors and are developing strategies that focus on developing industrial and service sector clusters and increasing specialisation.
  In the 21st century, the ability to innovate, the quality of the skills base and the quality and capacity of the infrastructure that links them will be the keys to economic success locally, regionally and nationally. It is vital for RDAs to be an effective tool to make sure that our regions are capable of competing throughout Europe and further afield. It is important for them to take a leading role in developing visions for their regions and formulating effective regional economic development strategies that set out a viable framework for economic development and regeneration. The RDAs must address such issues as the rivalry between towns and cities within regions and should recognise the need to balance economic development and rural and urban priorities.

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  We are starting from behind. We are late in developing regional development agencies, and the figures that have been given about income per head of population show that we are lagging behind. The west midlands competes head to head with Baden-Württemberg in Germany and Emilia Romagna in Italy, especially in the automotive sector. In the European prosperity league, Baden-Württemburg is ninth and Emilia Romagna is 11 th, but the west midlands is a lowly 56th.
  My home town of Dudley is twinned with Bremen in Germany; there are good reasons for that. They share similar characteristics, not the least of which is an excellent brewing industry—Becks in Germany and Batham's in my constituency. However, Dudley's living standard is 75 per cent. below that of Bremen. That shows how far we have to go to ensure that the fruits of economic prosperity do not just trickle down but are seen to benefit people in Dudley and the west midlands as a whole.
  We have a great deal to learn from regional development agencies in Europe. The GOMs in Belgium; centres such as StorstrÖms business centre in Denmark; the Spanish development agencies; and not just the German model but some of the Italian experiences should be considered. They have been at the game for longer than us and have been effective in arguing with the European Commission for resources. They seem to be able to get European programmes that many of us in the west midlands and further afield would like to have.
  The west midlands, like the areas of many hon. Members who have spoken, would have preferred a single vote of resources and to have training and enterprise council budgets and regional selective assistance within the direct ambit of the RDAs. We in the west midlands certainly intend that the West Midlands development agency, which is one of the existing regional development agencies that are funded by the Department of Trade and Industry, should be folded into the new RDA. The Bill does not make provision for such regional development organisations, but I trust that there will be flexibility so that if regions decide that that is an effective way to proceed, they will be allowed to go ahead.
  I have two brief points about the Bill's detail. Encouragingly, the White Paper refers to the RDAs taking the lead in developing regional strategies. However, that is not in the Bill. RDAs have a responsibility to develop strategies to meet the purpose for which they were set up, but the Bill does not give them a clear leadership role. It would be useful for the Bill to do that.
  Secondly, clause 5 places restrictions on the operations of RDA powers and states that the Secretary of State's approval is required if an RDA wants to provide financial assistance to companies or to dispose of land at anything other than best value. It also places a restriction on the provision of housing. It is not difficult to imagine circumstances in which it might be entirely sensible and appropriate within the new state aid rules to provide financial assistance to companies. By the same token, disposing of land at less than best value could play an important part in an economic development package. Similarly, there are many mixed urban regeneration projects in which, as part of the package, it might make sense for RDAs to become involved in building new houses.
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  I do not know why the restrictions are needed in the Bill and we should consider taking account of these matters in clause 31, which provides for guidance and directions by the Secretary of State. We are needlessly restricting the powers of regional development agencies.
  I welcome the fact that the single regeneration budget challenge fund will be part of the responsibilities of RDAs. I hope that there will be permission to take an axe to the labyrinthine bureaucracy that surrounds the programme. That is vital, and I am sure that RDAs can get better value for money out of the SRB than can be had at the moment.
  The capability and calibre of the people who will be attracted to the RDA boards and those who will staff and run them will be crucial to their success. I want a strong, agile and effective regional development agency and it is essential to secure high quality board involvement. We are at risk of not attracting people of sufficient calibre. I do not want RDAs to be seen as relatively weak and therefore capable of attracting only second-rate managers from business to their boards. I am encouraged by the prospect of RDAs because they can provide enormous benefits and it is important to recruit the most able people. It is proposed that staff will be transferred from offices in the regions and from English Partnerships to the RDAs. I have many friends who work for English Partnerships and who work in Government offices. However, there will need to be an injection of new blood into the running of regional development agencies if they are to have the sort of culture and ambition necessary effectively to fulfil their remit.
  RDAs have a tremendous potential. They can play an absolutely crucial role in increasing economic prosperity and promoting social cohesion in the west midlands and across the United Kingdom.
  8.10 pm
  Mr. Tim Collins: Almost the first line of the explanatory and financial memorandum to the Bill reads:
  "Clause 1 and Schedule 1 provide for England to be split into nine areas."
  Has there ever been a more grim and solemn line in a Bill? That is the effect and, to some extent, the purpose of the Bill.
  If the new Welsh and Scottish institutions need to be balanced with the rest of the United Kingdom, the way to do so is to balance them with English institutions, not to split England into nine artificial regions. England is a nation with at least as much history and culture as Wales and Scotland. It should not be belittled and split asunder in ways that Labour Members would not have permitted in Wales or Scotland.
  It is also clear, as we have heard from hon. Members on both sides of the House, that the proposed regions simply do not command the loyalty, assent or even the comprehension of many of the people who are supposed to live in them. The hon. Member for North Devon (Mr. Harvey), who spoke for the Liberal Democrats, said that the south-western region was absurd. My hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe) and my right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley) said that the south-east region was absurd. The right hon. Member for Bishop Auckland (Mr. Foster) said that he was not in favour of the present

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  borders of the northern region and argued that Cumbria should be absorbed into the Newcastle-dominated area. As he is not a Cumbrian Member of Parliament, whereas I am, I can assure him that a large number of people in Cumbria do not wish to be run from Tyneside for any purposes whatsoever. However, he demonstrated—yet again—as hon. Members on both sides of the House have, that the proposed regions do not command widespread public consent.
  My hon. Friend the Member for Meriden (Mrs. Spelman) gave another reason why splitting England into regions is dangerous and absurd. She said that the agenda behind the Bill is to split England—otherwise one of the strongest inherent nation states in Europe—into bite-sized chunks, each less able to resist the impulse of a centralising Brussels bureaucracy. It is precisely because the United Kingdom has been a strong, united, unitary state that we have been able to survive all the challenges of the 20th century, not least external challenges from Nazi Germany and Soviet Russia. We should be very careful before we split up the United Kingdom and, within that, split up England.
  Yet another reason why the Bill is so absurd is that it harks back to the 1960s and 1970s. We heard from Labour Members about the importance of economic development and economic growth. Who would argue with that? However, they sound like old 1960s and 1970s politicians when they say, "How do we get economic growth? We will set up a committee, establish a new set of bureaucracies and produce a new strategy, and in that way we will generate wealth." Old Labour used to believe that the man in Whitehall knew best; new Labour believes that the bureaucrat in Newcastle or Manchester knows best. Most people recognise that no bureaucrat knows best and that the most successful and dynamic economies are not those with huge swathes of bureaucracy and extra tiers of government, but those that minimise them.
  The White Paper contains an extremely misleading map at the front, which attempts to show that the UK is an exceedingly unsuccessful economy compared with the rest of Europe. The Labour party is schizophrenic. The Prime Minister lectures Europe that the UK is cool Britannia. He lectures Europe that it should learn from us on a whole range of issues, not least the need for labour market flexibility. He lectures that the United Kingdom represents the future for Europe because we have overcome many of the economic challenges that the rest of Europe still needs to overcome. Yet time and again in the debate we have heard Labour Members saying that the UK is the worst performing economy on a whole range of measures. That is patently absurd.
  The hon. Member for Huddersfield (Mr. Sheerman), who has left his place, said that my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) was clutching at straws when he referred to inward investment—that, somehow, inward investment did not matter much. I had thought that that was the primary purpose of the Prime Minister's trip to Tokyo. The hon. Gentleman ignored the fact that of the 20 top companies in Europe, more than half are in the UK. He also ignored the fact that comparative employment rates, based on the map in the front of the White Paper, show that the UK is performing a great deal better than almost anywhere else on that map. That is a further demonstration of the flaw in the economic strategy behind the Government's approach—the idea that by setting up a new committee,
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  bringing together some more bureaucrats, creating a new agency and putting up taxes to pay for it all will create wealth.
  Who are the dynamic wealth creators who will transform the performance of our regional economies? The Bill tells us who they are—representatives from local government, from education and from trades unions. Only socialists could believe that a collection of some shop stewards, some National Union of Teachers members and some clapped-out councillors will suddenly produce a dynamic new economy. If the idea were not so sad, it would be hilarious.
  We also heard from hon. Members on both sides of the House about the importance of rural areas. The Minister, who is chuntering away to himself, has dismissed the arguments on rural areas, but I ask him to pass on two concerns to the Minister who is to reply to the debate. Can we have an assurance that those who are appointed to the RDA governing boards as rural representatives will be genuinely rural people with their roots in rural areas? We are not interested in people who happen to have a holiday home in a rural area, where they spend a little time. We want people who were born and brought up on farms or who spend a large proportion of their lives in rural areas and villages. [Laughter.] Labour Members are laughing, but we need rural representatives who have genuine rural roots.
  I hope that the Minister will take seriously the point that I made, when I intervened in his speech, about the symbolic importance, if nothing else, of ensuring that at least one RDA has its headquarters in a rural area. Frankly, out of sight is out of mind. If every RDA is headquartered in an urban area, urban areas will be first and foremost on their agenda.
  We have heard a great deal from Labour Members and, to some extent, from Liberal Democrats, about their wish for training and enterprise councils to be brought under the operation of RDAs. I very strongly counsel the Minister against that. I hope that he will say firmly and clearly that the undertaking given in the last Parliament by the Labour Opposition, that they would not tamper with the structure, independence, financial autonomy or role of TECs, will be upheld.
  My right hon. Friend the Member for Sutton Coldfield was instrumental in creating TECs. In fact, to a large extent they were his idea and I pay tribute to him for that. I had the great honour of serving as a special adviser to my right hon. Friend's successor, the present shadow Foreign Secretary—my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard)—and it was during his time at the Employment Department that most of the TECs were established.
  The House will know that the essence of the success of TECs has been that the whole of their governing boards have been chief executives of businesses. Time and again, chief executives of businesses have said that they would take part in the operation of TECs only if they did not have to deal with all those people who, in the past, have stopped them achieving all that they have wanted to achieve for the local economies—in particular, local councillors, teachers and others, who are precisely those who will be put above them in the RDAs that will represent the absurd regions.
  Mr. Hilton Dawson rose—
  Mr. Collins: I do not have time to give way.

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  The Bill is bad because it splits up England; it represents a clapped-out, dated and archaic theory of how to generate wealth and economic growth and, above all, it threatens the success of genuinely local, genuinely business-led, successful organisations—the TECs. For all those reasons, it should be rejected.
  8.19 pm
  Dr. Ashok Kumar: Thank you, Mr. Deputy Speaker, for calling me to speak in this debate—a debate which is vital for the economic future of my constituency and of the Teesside region. I unreservedly welcome the central thrust of the Bill, although I should like to ask one or two questions about some of its provisions. The people of Teesside and of the north-east will also welcome it.
  The Bill is necessary. Over the years, and especially in the past 18 years, the people of Teesside have suffered greatly from the Tory party's boom and bust policies. Many thousands of jobs were lost in the steel and chemical industries, and people on the Tees saw the end of shipbuilding. The wider local economy, which depended on the good health of Teesside's core industries, collapsed.
  In 1977, the Cleveland county area was one of the more prosperous regions of the United Kingdom. It was third in the GDP per head table in the UK, behind only Greater London and Berkshire. By 1987, it was 34th. In 1989, according to the Royal Bank of Scotland's index of prosperity, it was the 61st poorest of the UK's 63 counties and regions.
  The north-east's regional economy was the wider economic casualty of Thatcherite restructuring. Proportionately, the northern region lost more of its manufacturing base in the late 1970s and 1980s than any other UK region. In Teesside, we lost about 67,000 jobs in two to three years. Such facts show the necessity of the Bill and of the other important legislation that is now being steered through the House—to ensure that we have a coherent approach to development and a welcome concentration on policies that are in tune with what the people want, rather than with what the Tory party thought was good for them. It is because of such attitudes that the north will soon have a regional development agency.
  My hon. Friend the Minister for the Regions, Regeneration and Planning will not need to be reminded that the north-east was in the vanguard of the movement for proper development agencies. The new RDAs will mean that, at long last, our demands will finally be met for a regionally based voice and a regionally controlled tool to ensure the creation and nurturing of sustainable development policies.
  The northern region did not only demand RDAs; in the early 1980s, the north-east anticipated such agencies by establishing the Northern Development Company. That was a unique agency, based on a tripartite partnership between the region's local authorities, private business and trade unions. It has worked very hard to promote inward investment opportunities, to build good and lasting supply chain networks and to facilitate indigenous business growth across the region.
  In recent years, the NDC's work has meant that much of the inward investment from the Pacific rim and elsewhere has located and prospered in the north-east. The
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  names of those inward investors is a roll-call of the world's leading-edge companies: Fujitsu, Siemens, Samsung and, in my constituency, Caterpillar. The NDC's success shows that, from April 1999, the north-east is well placed to have the first fully fledged RDA. We will, after all, only be building on what we have already achieved.
  Although we are geared up and ready to establish our new agency, we should ask one or two questions. There are specific concerns, particularly in the north-east, that have to be answered in this debate. We have to ensure, first, that each agency is allowed maximum autonomy in determining regional economic policy, because what may be right for Middlesbrough may not be right for Manchester, and vice versa. We must particularly ensure the growth, technological competence and diversification of our indigenous industries. Perhaps we should give those objectives far more weight, rather than merely compete to win the perceived goal that may lie at the end of the inward investment rainbow.
  There is a need for well-developed and robust regional economic strategies that deal with the need for both economic and social regeneration. Those strategies must take account also of sectoral strength and not be afraid to take robust long-term decisions to encourage high technology and inward investment. We have to ensure that there is a correct balance between the pressing need for urban revitalisation and the equally pressing demands of deprived rural areas.
  As an hon. Member who represents a partly rural constituency—Conservative Members have been talking about such constituencies throughout this debate—comprising former ironstone mining villages where unemployment has been a fact of life for far too long, I shall need particular reassurance that those demands will be met. I shall be very interested to hear my hon. Friend the Minister's comments on that matter.
  I note that the RDA will subsume the work of the Rural Development Commission, and I do not dissent from that objective. I note also, however, that the Bill states explicitly that one of the RDA's core functions will be to promote rural regeneration and that at least one RDA board member must have specific knowledge and expertise in rural development issues.
  The Cleveland area will have to know very soon whether the RDA will continue with the vital socially based work of the RDC. In our village communities, this work—based on initiatives such as providing volunteer-run nursery provision, local collective projects based on housing needs, and conservation and environmental activities with a specific rural remit—fits somewhat uncomfortably in the RDA's proposed portfolio.
  Such activities underpin and complement the economic development work being done by the borough council and by other bodies. I should very much like my hon. Friend the Minister properly to reassure my constituents that the machinery for continuing those activities—within the ring-fenced boundaries of an RDA area that still has the highest unemployment of any such area in England and Wales—will be established with proper and democratic funding channels.
  I should like also to be assured by my hon. Friend that there are proper safeguards for European funding arrangements. My constituency has been the beneficiary of many projects backed by structural and social funds,

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  which have been accessed by a variety of organisations and agencies. All those agencies have experienced problems with the previous Government's cherry picking and ruthless top slicing of European funds for their own pet schemes.
  It is proposed that RDAs should distribute European funds. I welcome that, but I should like to be reassured that the funds will still be handled fairly and that arrangements will be made to prevent RDAs replicating those previous top-slicing practices.
  I commend the Bill. Its success will ensure that my right hon. Friend the Deputy Prime Minister and my hon. Friend the Minister will gain a place in the United Kingdom's history books and a special place in the heart of the people of the north-east.
  8.28 pm
  Mr. Graham Brady: My hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) said that Labour Members have had a somewhat schizophrenic approach to this debate, sometimes talking about the great success of the English regions and sometimes talking about their enormous poverty and failure. That schizophrenia has been highlighted by the hon. Member for Middlesbrough, South and Cleveland, East (Dr. Kumar).
  In the past 10 to 15 years, inward investment has helped to create the important success enjoyed especially by the north-east. There is a telling contrast between the years in which the north-east's old industries declined and its recent development of new and successful industries. I know that from personal experience in the north-west in the years before prosperity spread to the north-east. The Conservative party and the previous Government can be justly proud not only of the inward investment that put Britain at the top of the league table for inward investment, but of the enormously successful regeneration of some of our great cities. Liverpool, Manchester and Newcastle are fine cities with a proud history and a great heritage and they are once again prosperous places where people love to live and work.
  How do we take forward that success? That is a challenge which the new Government must face. I do not know whether it will be taken forward by a new breed of centrally appointed quangos. Nor do I believe that it can be taken forward by additional bureaucracy and the mistaken extrapolation of some of the successful enterprises of the previous Government to a new regional level. Although TECs and development corporations have achieved a great deal and have been effective in certain areas, that does not mean that a similar exercise will succeed at a regional level or, still less, across the whole of England. We risk developing a new generation of quangos too far removed from reality, too far away from any particular town or city and certainly too far removed from democratic control, as they will have no direct relationship with the elected local authorities.
  We are told that local business men will be appointed to the boards. Local to where? In the north-west, will they be local to Liverpool, Manchester or Carlisle? It makes an important difference. The introduction of a new regional tier is a misguided attempt at economic planning over very large areas.
  It may be appropriate to introduce a regional body for the north-east, where there has been a long-standing call for such a body and which has a far greater regional
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  identity than most parts of England, but it is an absurd suggestion for the north-west. The north-west is not one region, but three or more. The previous Government recognised that by creating separate Government offices for Merseyside and for the rest of the north-west, but even that overestimated the extent to which the north-west can be coalesced into particular regional groupings. Merseyside and Liverpool, the Manchester area, the area north of Manchester and Cumbria all have completely different natures. There is a completely different feel to them and I see no logic in treating them as a single region.
  My right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) remarked on the wasteful competition that could be introduced between regions which may be competing for inward investment or companies to move into their areas. I shall focus on some of the difficulties that could arise within the regions. What planning and distribution of effort and benefit might there be within a region such as the north-west? Would a regional development agency have a role to perform in deciding what should go to Liverpool, Manchester or elsewhere? On what criteria would those decisions be based? The distribution of income, European grants, investment and the effort of marketing a region may differ greatly between urban and rural areas, but there are equally broad differences between the cities of Manchester and Liverpool and between those two great cities and the rest of the north-west.
  Cumbria may be a special case. My hon. Friend the Member for Westmorland and Lonsdale said that in his constituency there was no clamour to be ruled from Newcastle. I can understand that, but nor is there any great desire to be tied to Manchester or Liverpool. Cumbria is a distinct area with its own interests and a far more rural heritage. There is no logic or sense in tying the north-west together under one regional development agency.
  All that leads to a more important conclusion. If it is wrong to have a regional development agency for the north-west because the region has no collective identity, there must never be any suggestion of a new tier of regional government. If an RDA for the north-west is absurd, an elected assembly for the north-west is even more so. Nor is there any demand for it. Although I doubt that an RDA for the north-west will achieve very much for my constituents or the region, I very much hope that we will not have a further costly and unnecessary level of bureaucracy through the establishment of a regional chamber for the north-west.
  8.35 pm
  Ms Rosie Winterton: My hon. Friend the Minister for the Regions, Regeneration and Planning has a personal commitment to developing an economic strategy for the English regions. I join my hon. Friends in congratulating him on introducing the Bill in the first Session of this Parliament. Like myself, the Minister represents a South Yorkshire constituency and the Bill will bring many benefits to our region.
  At present, Britain is the only member of the European Union without regional decision making. In 1975, the Labour Government established development agencies in Scotland and Wales and the improved economic performance of those countries shows what can be achieved by development agencies. Even in the most severe days of Thatcherism there was no real effort to disband them. So in many senses the Bill is unfinished business from the 1975 Labour Government.

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  Recently, I visited Japan and spoke to business men who were considering locating factories in Britain. It was obvious that the Welsh Development Agency and Scottish Enterprise played a key role in shouting for their areas. I hope that hon. Members representing Scottish and Welsh constituencies will not mind my saying that my own area of South Yorkshire has just as much potential, but, without the resources of a development agency, finds it difficult to achieve the same profile with potential inward investors. That is why one of the strong messages from my region as a result of the consultation process carried out by my hon. Friend the Minister was that inward investment and the marketing of a region should be a core function of the regional development agency.
  It is extraordinary that the Opposition's amendment states that the Bill will reduce inward investment when all the evidence is absolutely to the contrary. As other Labour Members have said, the Bill is not only about inward investment. Every region requires the tools to develop the potential of its indigenous economy. I believe that the Bill will be one of the key ways in which the Government can achieve their aim of full employment.
  My region, Yorkshire and the Humber, has seen massive industrial and structural change in the past 20 years. South Yorkshire now achieves just 75 per cent. of the average European Union gross domestic product. That makes it eligible under current European laws for objective 1 status—the highest level of financial assistance available from the EU. As I am sure my hon. Friend the Minister is aware, there is concern that the change that is being considered by the EU may make areas such as South Yorkshire ineligible for objective 1 status. I wonder whether in her reply the UnderSecretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Wallasey (Angela Eagle) will assure me that the Government will do everything possible, especially during the United Kingdom presidency, to ensure that areas such as South Yorkshire can continue to achieve objective 1 status.
  One of the major problems that will need to be tackled by the regional development agencies, and which is reflected in South Yorkshire's eligibility for objective 1 status is long-term unemployment. That is why I particularly welcome the fact that RDAs will be expected to develop a skills agenda within their regional economic strategies.
  Huge industrial changes have occurred in my area, which means that the nature of work has changed. For example, in its heyday the rail engineering industry used to employ 5,000 people in Doncaster. Now it employs just a few hundred. British Rail Engineering Ltd. used to run a training school in conjunction with the local college which was recognised throughout Britain for the high level of skills training that it provided. That training supplied a skilled work force not only for Doncaster but for the whole of Yorkshire. I visited one of the plants of what remains of BREL the other week. Out of a work force of a few hundred, there were no apprentices. People can no longer rely on training for one industry and staying with one company for the whole of their working life. Technical advances mean that skills need constantly updating.
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  Yet employers complain that there is a skills shortage while unskilled and unemployed people lack opportunities for retraining and developing higher level skills. That problem has been highlighted today by the Association of British Chambers of Commerce. In any region, numerous organisations have responsibility for education and training. The problem is that there is often duplication of effort and lack of co-ordination in matching skills requirements to training. The RDAs will be able to provide a coherent strategic framework for skills development at regional level and bring together all the organisations that have responsibility for vocational training and education. That will enable a skills strategy to be drawn up to match training provision with skills required.
  We are already seeing some move towards co-ordination of education and training organisations under the new deal proposals. Structures are being established to bring them together. Could the Minister comment on what role her Department could play in highlighting lessons that can be learnt from the success stories of the new deal? Certainly, the skills agenda will have to cater for those people who have been unemployed long term and those who have the lowest level of skills if the stated aims of reducing poverty and social exclusion are to be achieved.
  In my constituency there are pockets of unemployment, some three times the national average, alongside fairly affluent areas. In the areas of unemployment, some 40 per cent. of people have been unemployed for more than a year. That is why it is extremely important to ensure that strategies for economic development link with skills strategies. Can the Minister tell us what types of powers will be granted to RDAs to ensure that economic strategies relieve local unemployment and improve local skills and prevent the importation of work forces, as has sometimes occurred under previous regeneration programmes?
  One of the most positive developments to flow from the regional debate maintained by my hon. Friend the Minister for the Regions, Regeneration and Planning and my right hon. Friend the Deputy Prime Minister has been the coming together of local authorities and others in regional assemblies. As my hon. Friend the Member for Bradford, South (Mr. Sutcliffe) said, the regional assembly for Yorkshire and Humberside has carried out excellent work with other partners in the region and is drawing up a strategic framework for Yorkshire and Humberside for the next 10 years.
  The assembly also hopes to be an integral part of the new regional chamber. There is a desire, however, as reflected in the report of the Select Committee on the Environment, Transport and Regional Affairs on RDAs, that regional government should be established as soon as possible. Perhaps the Under-Secretary can give us an idea of when the Government hope to be able to introduce it.
  The establishment of the RDAs will bring considerable benefits to my area. It has great potential, but all its possibilities can be realised only within the framework of strategic regional planning. The Bill will enable that long-awaited strategic planning to take place at last.
  8.44 pm
  Mr. Andrew Lansley: It is always a pleasure to listen to such debates because there always comes a point, particularly when listening to

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  Labour Members, when one arrives at the reason for the introduction of legislation. The hon. Member for Doncaster, Central (Ms Winterton) finally gave us the answer—the Bill has been introduced to complete unfinished business from the Labour Government of 1975.
  That thought had already occurred to me. I started work as a civil servant at the Department of Trade and Industry and I was introduced into a division called Industrial Planning. My hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) said that the Bill represented the resuscitation of planning, in this case on a regional scale. I had the same feeling when the hon. Lady talked about the 1970s.
  I have the same feeling about regional development grants because I worked in the branch that gave £110 million to Sullom Voe, and for what? The money was spent on a project that went ahead in any case. We abolished such grants.
  My right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley) spoke about what the Conservative Government did to help the Thames corridor, Docklands and places such as Corby, which has been subject to long-term competitive decline. Because of the Conservative Government's efforts, an enormous amount of inward investment was attracted to those areas, although that was not the sole improvement introduced by our Government. The hon. Members for Middlesbrough, South and Cleveland, East (Dr. Kumar) and for Huddersfield (Mr. Sheerman) suggested that inward investment was the only saving grace of the previous Conservative Government, but that Government encouraged a great deal of indigenous activity that occurred alongside such investment, such as sub-contracting. Such efforts are part of the means of securing inward investment.
  As time is short, I should like to talk about inward investment, not because I consider it is the only aspect worth mentioning, but because it reveals what is at the heart of one of the problems associated with the Bill. I am afraid that the Bill is a case of "not proven". In the introduction to the Government's White Paper, the Deputy Prime Minister offered a far from comprehensive and exhaustive set of reasons for why an inward investment project might come to the United Kingdom. He spoke about the co-ordination of potential sites, finance, training and services such as transport and power supplies. That begs the question about what causes inward investment to be awarded to United Kingdom projects.
  I remember standing next to the then Secretary of State for Trade and Industry in 1984 when he signed the heads of agreement with Nissan. Many factors contributed to that deal. Let us consider how many of them will be changed in substance by the establishment of regional development agencies, which will replace existing structures and arrangements.
  Let us consider regional selective assistance. Will it be provided by the RDAs and eventually determined by them? No. It will be determined by Government Departments as it has been in the past. As for the infrastructure, which we know is always important to the prospect of inward investment, will it be provided by the RDAs? No, in large part it will be provided at the behest of the Department for the Environment, Transport
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  and the Regions through its borrowing approvals. It will also be provided by county and other local authorities in accordance with their local plans.
  Is the planning framework that will determine which areas or zones are to be available for industrial or business use to be determined by the regional development agency? No it is not. As now, such decisions will be made under planning legislation—at least I hope they will, although there is some speculation to the contrary. They will essentially be the product of strategic planning guidance leading to structure plans and planning decisions via a democratic framework inside local government.
  Is the training framework to be delivered by the regional development agency? No, it is not, because training and enterprise councils will remain outside the RDAs. Having created TECs, which my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) initiated, it would be a retrograde step for them now to be subordinated to a Government-controlled quango. That would run contrary to the principle of business-led skills and training that was always at the heart of TECs, so RDAs will not be delivering training. The hon. Member for Doncaster, Central says that the RDA can cause a region's training and education bodies to come together and talk to each other. That might not happen in Yorkshire, but in my part of the world training and education bodies already talk to one another and it does not require a regional development agency to make that happen.
  There is a case for co-ordination in these matters and, although much of that co-ordination already takes place, there have been gaps. Members of Parliament representing the south-west have talked about what used to be called the Devon and Cornwall development company and we have heard about the Northern development company. In Scotland and Wales, bodies have been established that were designed specifically for the purposes of attracting inward investment and bringing together and co-ordinating activity to sustain inward investment projects.
  In the east of England, there was a lack of such a body, although there was no lack of interest in inward investment. The hon. Member for Huddersfield talked about the importance of universities as a stimulus to development, but no part of the country is more aware than Cambridge of how a university can be a focus for investment. Our problem in East Anglia is not the availability of investment, but the availability of land for development. Sometimes, we have development projects that are not willing to travel an extra 10 or 15 miles and locate in a more distant and peripheral location, rather than in the specific location that they find desirable because of its proximity to markets, high-technology and infrastructure. Therefore, there was a case for looking at the regional mechanisms whereby infrastructure could be created and sites packaged so as to take the large amounts of inward investment wanting to come to East Anglia in support of the Cambridge phenomenon and spread that phenomenon to a greater extent.
  The East of England Inward Investment Agency was created and I was interested to read the evidence of that agency. It said that it was happy with the prospect of a regional development agency; but it was happy because the RDA would, in effect, subcontract to the existing agency the business of co-ordinating a relationship with inward investment projects. Therefore, as we examine

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  inward investment projects and consider what functions must be carried out in relation to them, we find that they are already being carried out by existing bodies, which were created for perfectly good reasons in different places and which are perfectly capable of co-ordinating with each other.
  It is interesting to consider what caused all those bodies to tell Ministers that they thought that RDAs were a good idea. I would say first that Ministers should not believe their own propaganda. My right hon. Friend the Member for Sutton Coldfield made it clear that those who responded to the consultation exercise were collectively making job applications, but I would put it another way: just because people are kow-towing to him, the emperor should not conclude that he is wearing clothes. During the debate on the Greater London Authority (Referendum) Bill, the hon. Member for Brent, East (Mr. Livingstone) talked about the prospect of the terracotta army and people are responding to the prospect of RDAs in the same way. They know that the Bill will be passed and that RDAs will come into being and they do not want to be on the wrong side—but that does not mean that the emperor has clothes. It is our job, when the emperor does not have clothes, to expose the nakedness of the Government's intentions.
  Our attitude is not negative to the legislation or to regional development activity. Our party supported the Welsh Development Agency, the Invest in Britain Bureau, Locate in Scotland, and the urban development corporations. As my right hon. Friend the Member for Tonbridge and Mailing said so clearly, we have understood the case for focused activity where there is a defined need and we can add value.
  The hon. Member for Liverpool, Riverside (Mrs. Ellman) mentioned the letter from the Confederation of British Industry. Later in that letter, the CBI said:
  "the key test for RDAs will be whether they add value."
  That is exactly my point: will they add value? I submit that the evidence so far suggests that they will not, and that the legislation is merely a stalking horse for regional government by Labour authorities, who will be able to point to a body with growing powers and say that it should be made more democratic—
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman must resume his seat.
  8.55 pm
  Mrs. Louise Ellman: Regional development agencies will breathe new life into the regions of England. They will provide a focus for integrated development, investing in companies and in skills training and retraining, developing appropriate property and sites, and supporting commerce and industry. They will do that to support and develop existing business as well as attracting new business.
  I am an enthusiast for regional development agencies, because I have seen at first hand what they can do. Between 1981 and 1997, I was leader of Lancashire county council, and from 1982 I was the unpaid vice chairman and director of Lancashire Enterprises, the economic development company set up by the council in that year. It was set up originally as a company limited
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  by guarantee, but following hostile legislation from the Conservative Government, in the form of the Local Government and Housing Act 1989, a plc was formed as well, with the county council-controlled company owning around 19.9 per cent. of the equity, the maximum allowed, to enable it to continue to operate effectively.
  Over those years, I saw what Lancashire Enterprises, working as an economic development agency with the public and private sectors, could achieve. I saw thousands of jobs saved at Leyland Trucks after the collapse of Leyland DAF; defence diversification in partnership with British Aerospace; regeneration of the Leeds-Liverpool canal; inner-city regeneration at Whitecross in Lancaster; the setting up of 10 investment funds with the private sector, some of which—including the Rosebud fund, which raised £5 of private finance for every £1 of public finance invested—were particularly concerned with the needs of small businesses; more than £30 million of European funding coming directly to Lancashire businesses; support for hundreds of small and medium enterprises; and the setting up of a co-operative development agency.
  In all, the company directly supported about 26,000 jobs, 24,000 training places and the building up of £40 million of public assets. It operated as an investment-led rather than a grant-giving agency.
  In the north-west, there is widespread support for a regional development agency. That support comes from public, private and voluntary sector stakeholders throughout the region: stakeholders who have been working together on a regional basis for the past six years, through the North-West Regional Association and the North-West Partnership. They include local government; the Confederation of British Industry; the chambers of commerce; the business leadership team; Co-operative Enterprises North-West; the North-West Trades Union Congress; higher education; and training and enterprise councils.
  All those stakeholders, working together, do not accept that it is right for the north-west to have a low gross domestic product per head. They do not accept that it is acceptable for the north-west to have a low rate of company formation and new company survival. They do not accept the record of poor inward investment to the north-west and they are extremely worried about reports of skill shortages in all sectors—including shortages of operatives, professionals and management.
  All those stakeholders want to work with a regional development agency that can focus on developing the strengths of the region, an agency that can help the region to restructure from its industrial past to a new industrial future with regeneration. Those stakeholders want an agency to help manufacturing industry, to develop our strong science base and strong vehicle manufacturing base, to support the new industries in media and in culture, to build on the base of high technology and to ensure that the vast array of knowledge in our institutions of higher and further education is used and developed commercially to the maximum.
  The regional development agency should continue working on technology transfer with such major companies as British Aerospace and British Nuclear Fuels, ensuring that the vast reservoir of skills and knowledge in major companies is used not only within those companies but, with the support of those companies, to support additional companies and enterprises.

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  Regeneration is taking place in the north-west. In my constituency, a great deal is happening, and much is happening locally with local people in local communities. However, the strength of a regional development agency is that it can act sometimes as a prime mover, sometimes as a partner, sometimes as an organisation putting together packages of public and private sector support to help individual companies or sectors of industry. A regional development agency is there to react when a problem arises and to anticipate problems in the regional economy.
  One reason why there is such strong support for a north-west development agency throughout the north-west is that for six years, all the stakeholders that I have mentioned—in the public, private and voluntary sectors—working together, have developed an economic strategy that not only deals with the north-west region as a whole but identifies the specific needs of each part of the region. Although the north-west as a whole has major needs, including transport and environmental needs, there are also many differing needs in the Manchester area, the Lancashire area, Merseyside, Cumbria and Cheshire. The work that has been done in the past six years by all the stakeholders together has shown that it is possible to have an effective regional strategy that takes into account the specific needs of different parts of the region.
  During the past six years, that strategy has developed into action. A major transport study has just been published based on the work that was done. A private sector-led working party is working now on regional innovation, ready for a regional development agency. A working party on social exclusion is about to report. The work that has taken place during the past six years with the North-West Regional Association and the North-West Partnership has shown how influence can be exerted.
  There have been some specific achievements, such as the establishment of a north-west office in Brussels, bringing additional funding, and the creation of a network of technology centres, which are already starting to operate around the north-west—but how much more could be done with a regional development agency. The existing structure has influence and is starting to have effect, but we really need an executive authority working as the regional development agency. The White Paper and the Bill refer to the importance of a regional chamber. I believe that that is an essential part of the programme for a regional development agency.
  In the work that has been done in the north-west with the North-West Partnership and the North-West Regional Association, we have demonstrated the very important role that a regional chamber can play. Therefore, it is extremely important that the Minister uses his powers to ensure that the regional development agency links with the proposed regional chambers.
  We in the north-west are far advanced. Now we need to develop the regional chambers, based on current structures. Stakeholders have already said how they think they should operate, so there will be an interplay between those in the region—elected members, other stakeholders—and the RDA.
  The proposal for RDAs has widespread national support. It has the support of the Local Government Association, representing local government across the country; of the private sector and the voluntary sector; and
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  of the trade union movement. This is an excellent Bill, part of the process of revitalising the regions and of devolution. I support it and I urge the Minister—
  Mr. Deputy Speaker: Order. The hon. Lady must resume her seat.
  9.5 pm
  Mr. Peter Luff: I begin by declaring an interest as an adviser to the Rural Development Commission before I was elected to the House, and as a recently appointed member of my regional Country Landowners Association committee.
  Having listened to the debate, I think that the Government are living in a fool's paradise. I wish that Labour Members were right in all their noble hopes and their aspirations for these regional development agencies, but the road to hell—on this occasion, perhaps, the electronic super-highway to hell—is paved with good intentions. I honestly believe that Labour hopes and aspirations are seriously misplaced. Although I wish that they were right, it is impossible to legislate for economic growth at 3 per cent. and inflation at less than 2 per cent. The real world is a messy and complicated place which cannot be resolved by simplistic, bureaucratic structures of the kind the Government seek to impose on the country.
  The hon. Member for Liverpool, Riverside (Mrs. Ellman) made much of the fact that there has been support from outside bodies, but my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) spoke of the danger of the emperor believing that he had clothes just because people kow-towed to him. I urge the Minister and the Labour party to listen to what is really being said to the Government in the consultation period, because it is much more complicated than they believe. I am reminded of the words of Simon and Garfunkel in "The Boxer"—possibly an appropriate song for the Deputy Prime Minister:
  "A man hears what he wants to hear and disregards the rest".
  Listen to what the National Farmers Union says in its letter to hon. Members about the RDAs:
  "There has been much concern in rural areas that the RDAs will be unduly biased towards urban concerns, and that the legitimate interests of the rural areas may be overlooked or sidelined."
  That is hardly a robust statement of support.
  It is true that the CLA, in its letter to Members, generally welcomed the Bill, but it went on to say:
  "The CLA highlights outstanding concerns for rural communities and businesses which must be addressed in this Bill, its implementation and the day to day activities of the RDAs".
  The Deputy Prime Minister made some highly regrettable remarks about the Rural Development Commission in his statement about the Bill to the House. Indeed, I wrote to him asking for an apology for what he had said about Lord Shuttleworth, but no such apology has been forthcoming. In any case, the CLA said:
  "The Government must demonstrate at Second Reading and beyond that the RDAs will be at least as committed as the RDC to these programmes"—
  of rural regeneration—
  "and that the effect on rural areas will be a benefit, not a loss."
  No such demonstration has been made today, and I am more concerned than ever about the negative impact that the RDAs will have on the rural areas of England.

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  Listen to the rest of the CLA's letter:
  "The Government should be pressed … the Government must confirm … the Government should be pressed … if these powers are to he justified … the Government should be pressed"—
  hardly a ringing endorsement from an outside body, and I suspect that other representations that the Government have received are in the same terms, if they will only listen to them with an open mind, not the closed mind that they have exhibited so far.
  The rural question is at the heart of the fundamental flaw in the Bill. The Bill may be fabulous for Birmingham, the west midlands, Dudley and the black country. If I represented those urban areas, I might well be arguing for the Bill myself, because it would offer me the opportunity to draw resources from rural areas into the urban heartland. But what about the rural question? I was grateful to the Minister when I intervened in his opening speech. He said that if specific ideas were proposed to improve the situation for the rural areas under the Bill, the Government would listen to them. Let me put forward four specific issues now. I appreciate that in the short winding-up speeches tonight, there will be no opportunity to reply to them in detail, so may I have a response in writing from the Minister on these four specific points?
  First, clause 4 could be significantly strengthened in line with the commitment to the rural areas that the Government have expressed in the past, to make it clear that that commitment is not just words, but reality. A strengthening of the commitment in clause 4(2) would do much to reassure me that that was the case.
  Secondly, membership of the RDA boards has been discussed extensively in the debate, and rightly so. How can the relatively small boards covering such large areas represent such a diversity of economic activity, special interests and the counties and authorities that comprise the regions? Each RDA board must include at least one rural member. That could be specified in the Bill, and would be a useful step forward.
  Thirdly, what about the important work that the RDC has done in identifying rural needs, monitoring them and reporting back to the Department of the Environment, now the Department of the Environment, Transport and the Regions? It would be extremely helpful if the Government could say specifically how the RDAs will be expected to assess rural needs, and to monitor and report on rural conditions and on what they have done each year to address those rural needs. Will needy rural areas continue to be determined nationally on the advice of the RDC, if it still exists—we are waiting to hear whether it will or not—or by its successor body, or will that be left to individual RDAs to decide? If so, I fear for those rural areas.
  Fourthly, what about funding? We have heard a lot about the desperate attempt to claw money into the RDAs from various pots around Whitehall. Will the funds transferred from the RDC for rural regeneration be ring-fenced for rural regeneration within the RDAs? If not, why not? Those are the issues which the Government must address if they are to reassure my constituents that the RDAs will not act against the interests of rural areas.
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  In addition, the Bill raises a series of worrying issues, such as the regional chamber concept, which makes matters worse for the rural areas. We have a very effective chamber of commerce in Hereford and Worcester, which was developed out of the TEC and merged with the local chamber, and is doing a first-rate job for the local economy.
  Am I seriously hearing from the Treasury Bench that the Government want to merge such rural chambers into some super-regional chamber, where again the rural interest will be subsumed in the urban heartland of the regional chamber? The concept of a regional chamber is fundamentally flawed. Are we to have regional chambers, and local chambers as well? If so, no business men will serve on the local chambers, because they will constantly be overridden by the regional chambers. No business man worth his salt would serve on the local chamber. Again, the rural chambers will suffer.
  Why, for heaven's sake, are the Government playing into the hands of the European Union's federal ambitions for Europe? A leaflet published two years ago by the European Commission was entitled "The west midlands—a region of the European Union." With respect, the west midlands—a concept which is useful in planning terms—has no historic or cultural tradition and no relevance to the people of Worcestershire. If it exists at all, it is a region not of the European Union, but of the United Kingdom.
  Do the Government not understand that the Bill sidelines this place? It gives more power to Brussels, and it takes power away from Parliament and hands it to the placemen whom the Secretary of State will appoint to the RDAs.
  Look at the duplication that already exists. Wychavon district council in my constituency has an economic regeneration function. Worcestershire county council has an economic section. The Government will still have the Department of Trade -and Industry and the Department of the Environment, Transport and the Regions to decide some of the most important issues. Four tiers will be concerned with economic development and regeneration in my area. Where is the sense in that? It is just bureaucrats making jobs for bureaucrats and doing nothing for business.
  Poor old Worcestershire is caught between the Government's "economic powerhouse for Wales"—to use the words in the White Paper—and the grandiose ambitions of Birmingham. Worcestershire does not belong to the west midlands or to anything else—it is sui generis: of its own. In that sense, it is rather like Gloucestershire next door. Perhaps the Government should consider being more flexible about the number of RDAs—after all, the Bill will pass and we will have these wretched things. Perhaps we should have a mid-west RDA, rather than a south-west or a west midlands RDA; it could take proper account of the interests of essentially rural counties such as Worcestershire, Herefordshire and Gloucestershire.
  I accept the strictures from Labour Members about our attitude to local government. Perhaps the former Conservative Government made some mistakes in that area in the past 18 years; perhaps we did not do enough. However, if Labour Members were really concerned about helping local communities to develop their economic infrastructure, they would have given the

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  powers to county councils. Instead of doing that, the Government plan to impose them on RDAs that will do nothing except create a few jobs for bureaucrats. I wish the Bill every failure.
  9.15 pm
  Mr. John Gunnell: We have only to contrast the last two speeches—the hon. Member for Mid-Worcestershire (Mr. Luff) denied the existence of the regions and my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman) pointed to the many achievements of Lancashire Enterprise and the great difference that it has made to the economy of Lancashire—to appreciate the balance of debate in the Chamber today.
  After 18 years of Conservative government, whose economic mismanagement did so much to create the present disparity of income between the different English regions and which ensured that any initiatives to redress that at local government level were either frustrated or, in the case of metropolitan counties, abolished outright, it is a relief to have before us a Bill that vests some responsibility and some authority in the regions to tackle their economic development needs.
  There is much that is very welcome in the Bill and in the White Paper, "Building Partnerships for Prosperity"—not least the RDAs' responsibility for drawing up a strategy for economic development that serves every region and is both economically and environmentally sustainable. I also look forward to a significant role for RDAs in the transport White Paper and to the leading role that RDAs have been promised under a new system of allocating EU structural funds from 2000.
  However, I am concerned to ensure that RDAs are given sufficient flexibility and empowerment to make their economic strategy work to best effect. I am particularly concerned about that in the context of Scottish and Welsh devolution, which I strongly support. I fear that, in the context of a Scottish Parliament and a Welsh Assembly, the Bill may not go far enough to prevent England and its regions from falling further behind the Scots and the Welsh in promoting economic development.
  A great deal has been said today about inward investment. I spent a number of years as the chair of the Yorkshire and Humberside regional development association, which had responsibility for inward investment. Regional selective assistance will remain the preserve of Whitehall and its offices in the regions, while the role of the RDAs will be to provide advice to the President of the Board of Trade to ensure that regional economic strategy is taken into account when support for individual companies is being considered. That will not be the position in Scotland and Wales.
  Personal experience in seeking and securing Japanese investment in Yorkshire and Humberside tells me that, when faced with Scottish Enterprise or a Welsh Development Agency that is able to take decisions in house or an English RDA that must go to the Department of Trade and Industry for approval for any incentive packages, Japanese business men or other potential investors might prefer to deal with those parts of the United Kingdom that are directly empowered to act. We are committed to providing a level playing field for inward investment. I hope that there will be clear answers about how we shall achieve that aim in the context of the Bill and those powers granted by other legislation.
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  I am concerned about the way in which regional skills are developed, and I support the comments about training and enterprise councils and about RDAs and higher education matters. I am also concerned that Treasury restraint on regional development agencies may be responsible for some disparity of powers. As the YHDA was very successful in securing a large amount of private sector investment, has any thought been given to the way in which. RDAs might acquire private investment? In those circumstances, the way in which the Treasury dealt with their expenditure might mean that they would be less dependent on the public sector borrowing requirement.
  I welcome the proposal that RDA boards will draw in all the regional stakeholders, including local councillors. I would not want local government figures to dominate RDAs or to exercise control over their work, but it is important that there is some regional accountability. I believe strongly, as does my hon. Friend the Member for Liverpool, Riverside, that the regional chambers must represent all stakeholders and that ultimately we must give responsibility to directly elected regional assemblies.
  It is important to ensure that the needs of the regions are being properly met by both direct access and by the accountability of the democratically elected representatives of the regions and their distinct parts. More needs to be done to build on the good work of the Northern regional assembly, the parallel organisations that exist in the north-west, and, more lately, the Yorkshire and Humberside regional assembly. It is important that they are more than bodies that are merely listened to. I hope that the time will come when they have greater significance, or when their successors have greater significance.
  If we deny RDAs adequate power by giving them insufficient control over regional development purse strings, they may not be seen to be successful. If we give them power without responsibility, they may fail to be the efficient and rational promoters of economic development that we would wish. If that were to happen, the cause of regional accountability would be set back, along with our hopes of securing genuine democratisation of the regions.
  The best policy must surely be to give RDAs the opportunity at least to secure powers that are adequate to their brief, including some of the jealously guarded powers of the Department of Trade and Industry. We must make them accountable to the regional chambers but not their playthings. That will help to ensure that the chambers serve as a bridgehead to directly elected regional assemblies.
  9.22 pm
  Mr. Gerald Howarth: It is an irony that the debate should follow two days of consideration of the Scotland Bill. That measure was accurately described by the hon. Member for Linlithgow (Mr. Dalyell), who has been in his place for most of this debate about English matters. The hon. Gentleman described the Scotland Bill in a devastating indictment of the devolution cause as
  "the paving Bill for the dissolution of the United Kingdom. —[Official Report, 12 January 1998; Vol. 95, c. 85.]
  I agree with him entirely.
  The essential hallmark of the Government's programme is a raft of policies that are designed to break up the United Kingdom. Devolution, regional government and closer integration with Europe all lead inexorably to that destination. At its core is Scottish devolution.

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  I have three key objections to the Bill. The first is that it is irrelevant to the needs of England. Secondly, it is ill considered. It substantially extends the power of central Government to control powerful regional quangos and it threatens the currently democratically elected councils. Thirdly, and perhaps most important, it significantly increases the prospect of European federalism by dividing England into bite-sized chunks for European federalism to be swallowed up by Brussels.
  I shall briefly deal with each of the issues that I have mentioned.
  Mr. Caborn: It is only an RDA Bill.
  Mr. Howarth: The Minister says from a sedentary position that it is only an RDA Bill, but it confers on him and his colleagues in the Government substantial powers of patronage, and paves the way for further organisations, such as elected regional assemblies, which will be the instruments of the break-up of the Kingdom.
  The Bill's principal purpose is to give a spurious legitimacy to the transfer of powers exercised by Westminster to Edinburgh. Proposals that England should suffer the same affliction arising out of Scottish devolution are not new. As the hon. Member for Doncaster, Central (Ms Winterton) said earlier, that was part of the agenda of the last Labour Government, who, in 1976, issued a Green Paper, "Devolution: the English Dimension", which considered the implications for England of Scottish and Welsh devolution and suggested a number of options for devolution in England. None of the options was pursued, but, as she rightly pointed out, the Bill is picking up a 1970s agenda.
  Today, there remains no enthusiasm for devolution in England, save, as has been suggested, in some parts of the north of England. I do not have constituents beating a path to my door in Aldershot, saying, "What we must have, Mr. Howarth, is a regional assembly for Aldershot and the south-east." It is not an issue for them. The hon. Member for Liverpool, Riverside (Mrs. Ellman) made the point that there is already substantial voluntary activity between the public and private sector to promote the cause for that particular region, so there is no necessity to have an RDA for that purpose.
  While some in the north may be in favour, I can tell the Minister that my own county council in Hampshire has declared its outright hostility to the outline proposals for regional government in England that the Bill foreshadows; many others have expressed grave reservations about the proposals, although these are not included in the White Paper, of course. The British chambers of commerce; those representing rural interests; even Labour councils concerned at the democratic deficit resulting from the massive extension of "quangoland" created by the Bill: they have all made it clear that they have reservations. Indeed, the Local Government Association has expressed reservations about the Bill.
  There has been an extraordinary rewriting of history by the Government, as though nothing happened in the 18 years of Conservative government, during which we saw the most massive investment in industrial and manufacturing jobs in the United Kingdom, including, for example, Honda, Nissan and Toyota. None of those
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  required an RDA to bring them to the United Kingdom. What brought them here were the policies pursued by central Government for labour market flexibility, control of inflation and for good infrastructure and the best communications in the world. [Interruption.]
  The Minister says, "What about Scotland?" I am pointing out that much of that great investment in this country came here notwithstanding the fact that there was no development agency. That brings me to my second point about the Bill's intrinsic defects.
  Although the Government's real agenda is to create directly elected regional assemblies, they cannot do so in the Bill because they have no mandate for that. In the absence of such a mandate, they plan to create a series of massive quangos giving Ministers vast powers of patronage.
  Recognising that interest in regional government is largely confined to the north of England, and that there is outright hostility elsewhere, the Deputy Prime Minister intends to create a patchwork of constitutional confusion throughout England. Parts of the north will have regional assemblies, the south will have no truck with it, and the south-west will be locked in permanent argument about which side of the Tamar the Assembly is to be located—assuming that they can agree that one is in their interests.
  The forerunners of regional assemblies will add a further expensive tier of bureaucracy to this country. We face the prospect of powers going to these authorities. None of those powers will come from central Government, but they will have to come from somewhere—from local authorities, which are already working responsibly in this area.
  Hampshire county council has made the point that it is working voluntarily with other organisations to achieve some of the strategic objectives that the Bill seeks to formalise under the RDAs. For example, it is co-operating with organisations such as Serplan, and recently the south-east regional forum. Hampshire county council says that the establishment by the Government of additional bodies to replace that activity would be both unnecessary and expensive. I agree with the county about that.
  Let me return to the third point that I raised. I believe that, whether by design—I do not know whether it is by design—or by inadvertence or, indeed, by incompetence, these proposals will give heart to those who want the sovereignty of these islands to be diminished, and the United Kingdom to be consumed by a federal European structure. My hon. Friend the Member for MidWorcestershire (Mr. Luff) referred to a document. This is a serious issue, and I do not believe that the people of England realise what is happening.
  The people do not realise that this Parliament will be dominated by constitutional change—and one of the constitutional changes will be the Bill, which will split up the United Kingdom into chunks that are convenient for the administrative purposes of the European Union. Only Christopher Booker, in The Sunday Telegraph, has made that point, but it poses a real danger to the people of Britain, and the Bill represents the key to that danger.
  9.30 pm
  Mr. Tim Yeo: We have had an excellent debate, in which hon. Members from all quarters have raised many questions. I hope that, in the time available, the Minister will answer some of them.

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  The debate was, in my view, marred only by the extraordinary and rather churlish refusal by some Labour Members to acknowledge the superb economic inheritance that the present Government have enjoyed, uniquely among post-war Administrations. It made it clear that this is a Bill for which there is little public demand and no rational case. It is a Bill which creates nine new quangos that are unlikely to attract a single pound of new investment. It is a Bill which—as the Chairman of the Select Committee, who is not present now, and the hon. Member for Huddersfield (Mr. Sheerman) both recognised—conspicuously fails to make those quangos accountable. It is a Bill which—as my hon. Friend the Member for Aldershot (Mr. Howarth) just pointed out—massively increases the powers of the Secretary of State and the role of central Government, and erodes the powers of local authorities. It is a Bill which reflects the Government's continuing hostility to the countryside.
  It is also a Bill which—as my hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe) and other Conservative Members pointed out—has been presented solely because the Government remain totally unable to answer the East Lothian question. [HON. MEMBERS: "West Lothian."] All right, the West Lothian question, but I prefer East Lothian, myself.
  As my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) explained, this is a Bill which creates regions whose boundaries have no logical basis. It is a Bill whose premises ignore the recent history of investment growth in England's regions, as my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) so knowledgeably demonstrated.
  This Government have inherited the control of a country which is enjoying record levels of inward investment. One might think, "If it ain't broke, don't fix it," but this Government are very uncomfortable when they see an unrivalled success story that stems solely and directly from Conservative policies, so they decide to meddle. They are, after all, the Government who sent the hon. Member for Coventry, NorthWest (Mr. Robinson) to abolish personal equity plans and tax-exempt special savings accounts—and it is the right hon. Member for Hull, East (Mr. Prescott), whom I welcome to the debate, who is now ending the policies that have made our country the envy of the European Union because of our ability to attract inward investment at a greater rate than any other European country.
  For a decade, this country has enjoyed new investment at a rate of £200 million a week. As my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) asked so powerfully, how and why do the Government think that the nine new quangos will increase new investment? By how much will our record share of foreign investment increase as a result of the creation of regional development agencies? How, indeed, will the Government prevent the kind of damaging competition between the individual RDAs that was described so clearly by my right hon. Friend the Member for Skipton and Ripon (Mr. Curry)?
  Hon. Members on both sides of the House have stressed the lack of accountability of the proposed RDAs, and that is one of the most serious weaknesses of the Bill. The only reference to parliamentary scrutiny is in clause 17, which requires the Secretary of State to lay each RDA's annual report before the House. What will that document contain? The Bill states that the report will contain
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  "such information as the Secretary of State may specify by directions to the agency".
  There we have it. The Government, who have often boasted of their commitment to greater openness, are establishing nine new, unaccountable bodies which will wield considerable powers and control significant budgets, and are apparently intended to achieve great things. That same Government have decided that all that Parliament can be told about those bodies is what the Secretary of State decides it is safe to disclose. Clause 17 makes the Minister without Portfolio's approach to the running of the millennium dome look like a shining example of transparency.
  The use to which regional development agencies put their compulsory purchase powers, the dangers of which were trenchantly exposed by my right hon. Friend the Member for Tonbridge and Malling (Sir J. Stanley), will be described to the House of Commons only in terms specified by the Secretary of State.
  Sadly, these quangos will be no more accountable to the regions. Clause 18, which is hilariously entitled "Regional accountability", says that if there is a regional chamber, the Secretary of State can specify, through directions, what information the RDA can give it. If that chamber asks any questions, the Secretary of State will specify in what manner the agencies will answer them. The Secretary of State will even specify where RDAs should hold their public meetings. He will give guidance and direction about how those meetings are to be conducted.
  Is that what the Secretary of State meant—I am not sure where he has just gone—when he wrote in his introduction to the White Paper that the Government were elected to democratise decision making? Is it what he meant when he claimed:
  "We believe that these tasks cannot all be directed from London"?
  Will the Minister tell us whether she agrees with the views of the North Durham Labour party in its response to the consultation document? It said:
  "We believe that the mechanisms of accountability proposed in the Consultation Document are palpably inadequate".
  The truth is that the Bill involves a huge increase in the powers of the Secretary of State. Although the Minister for the Regions, Regeneration and Planning said that the Government trusted the people, clause 2 gives the Secretary of State the sole power to appoint the regional development agency boards. Clause 7 enables the Secretary of State alone to dictate the strategies that RDAs should follow. Clause 8 allows the Secretary of State alone to decide whom the regional development agencies should consult. Clauses 9 to 13 give the Secretary of State total financial control over the RDAs, even to the point of telling them how they should keep their books—and so on throughout every part of the Bill.
  A great deal of the parliamentary draftsmen's time could have been saved if the Bill had been cut to a single clause saying that the Secretary of State shall have the power to establish and run RDAs as he sees fit without the tedious inconvenience of informing Parliament of what he is doing.
  Furthermore, the Bill shows how comprehensively the Secretary of State and his ministerial team were routed in the interdepartmental war inside Whitehall. His colleagues in the Department of Trade and Industry must

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  be laughing up their sleeves. They conceded nothing: not a single power, nor a penny of their budget. Even regional selective assistance remains under DTI control.
  More serious than that is the fact that some of the powers that the Secretary of State will exercise—or will tell the RDAs how to exercise—will have been seized directly from local authorities. As my right hon. Friend the Member for Tonbridge and Mailing said, they include planning powers, which is a flagrant breach of the commitment in the White Paper published only weeks before the Bill. It said that planning would remain clearly under local democratic control, so that is another promise which Labour has broken.
  In response to my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler), the Minister for the Regions, Regeneration and Planning tried to claim that the planning powers proposed for the regional development agencies are no different from those currently exercised by English Partnerships. Will the Under-Secretary confirm in her winding-up speech that section 159 of the Leasehold Reform, Housing and Urban Development Act 1993 severely circumscribes the kind of land over which English Partnerships may exercise those powers? Will she amend the Bill so that it contains similar limits on regional development agencies, and will she admit that the Minister of State was misleading the House when he claimed that the powers to be given to RDAs were the same as those that were already exercised? [Interruption.]
  Will the Minister also confirm that the press have been invited to the Department for a private briefing tomorrow afternoon on planning issues? Will that briefing cover the use of planning powers by regional development agencies?
  Mr. Bennett: On a point of order, Mr. Deputy Speaker. Is it in order for the Opposition spokesman to accuse my hon. Friend the Minister of misleading the House?
  Mr. Deputy Speaker: To my hearing, he did it indirectly and not in an infamous way, so I let it pass.
  Mr. Yeo: I shall now turn to another of the Bill's glaring weaknesses—the relationship of RDAs to rural communities, an issue eloquently highlighted by my hon. Friend the Member for Meriden (Mrs. Spelman).
  As the Secretary of State was unable to persuade any other Department to contribute a penny to the RDA budgets, he plundered the budgets of an agency that is under his direct control. His attack on the Rural Development Commission provoked the resignation of its chairman, my noble Friend Lord Shuttleworth. As my hon. Friend the Member for MidWorcestershire (Mr. Luff) said, the Secretary of State literally added insult to injury by his extraordinarily ungracious slur on the work of my noble Friend.
  I welcome the fact that the right hon. Member for Bishop Auckland (Mr. Foster) at least paid tribute in his speech to the work of the Rural Development Commission. Unfortunately, it is the right hon. Gentleman's party which has effectively dismembered that commission. It has seized the commission's rural
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  regeneration programme, which constitutes more than half the commission's budget, and that renders the RDC rump scarcely viable.
  My hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) rightly raised the concern about how the cash that was taken from the RDC will be used. Will the Minister confirm that that money from the RDC budget will go back into rural areas, and will not be diverted into towns?
  The White Paper states that the regional development agency boards will have 12 members, although the Bill provides for up to 15. The White Paper says:
  "each RDA Board will include at least one member who can contribute a strong rural perspective,".
  That is an extraordinary insight into the Government's attitude to the countryside. Never mind that one person in five lives there and that four fifths of the land area is rural: in the Government's mind, a token board member is sufficient to discharge their responsibilities to the rural community.
  In its response to the consultation paper, the Consortium of Rural TECs stated:
  "There are concerns that the Regional Development Agency model may increase the focus on inner cities and fail to address the needs of the communities in the rural areas."
  There are widespread fears that the RDAs will be urban-based bodies that will focus on urban issues. Like many of my hon. Friends, I represent a rural seat. I live in a small village, and the fear in that rural community is that RDAs are another plank in the Government's strategy to urbanise Britain, first through the planning system, and secondly by starving the rural areas of resources by changes to the revenue support grant and in other ways. Thirdly, they will change the character of the countryside by banning traditional recreations.
  As my right hon. Friend the Member for Sutton Coldfield said when he opened for the Opposition, the Government have a longer-term agenda. Behind a smokescreen of claims that they favour decentralisation and want bodies that are accountable to the regions, they are conducting an exercise whose long-term aim seems to be to increase ministerial control, expand quangos, empower bureaucrats and undermine local government.
  The Government's plans for the eventual creation of regional assemblies remain hazy, perhaps because they have not yet decided how those bodies will fit into what remains of this United Kingdom after the Labour party, pursuing its own narrow party political interests, has finished trying to smash the Union. Perhaps it is waiting to see whether the European Union evolves into a Europe of regions rather than a Europe of nation states. Whatever the reason, the confusion, the secrecy and the deceit that characterise the way in which the Government are edging towards regional assemblies should be ended forthwith.
  This is a bad Bill. It implements a mistaken policy; it inhibits rather than encourages investment; it increases the power of Ministers; it reduces the accountability of Government; it cuts back on the role of local authorities—in short, it has nothing to recommend it. I commend the Opposition amendment, and I invite the House to reject the Bill.
  9.44 pm
  The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Angela Eagle): I congratulate my hon. Friend the

  447
  Member for Glasgow, Govan (Mr. Sarwar) on his maiden speech. I agree with him when he abhors racial prejudice and the development of Islamaphobia. I also agree with his desire to ensure that ethnic minorities are treated equally and given a fair chance.
  This has been an interesting debate, but there has not been a consensus across the Floor on what the Bill is about. Indeed, I wonder whether Tory Members live in the same world as the rest of us. It has been an interesting spectacle. The Tory militants now occupy the Front Bench as well as parts of the Back Benches. The hon. Member for Westmorland and Lonsdale (Mr. Collins) was quite hysterical—he made Baroness Thatcher look like a wet liberal. He and the hon. Members for Bury St. Edmunds (Mr. Ruffley), for Mid-Worcestershire (Mr. Luff) and for Altrincham and Sale, West (Mr. Brady) demonstrated a Eurosceptical paranoia of epic proportions, putting all sorts of connotations on the Bill—[Interruption.] How could I forget the hon. Member for Aldershot (Mr. Howarth)? I shall put him in with the rest of them. They were joined—worryingly for the future of the Tory party, but it has to resolve its own difficulties—by the right hon. Member for Sutton Coldfield (Sir N. Fowler) and, as ever, the hon. Member for South Suffolk (Mr. Yeo).
  We should contrast the hysterical meanderings of those hon. Members with the extremely interesting and thoughtful speech by the right hon. Member for Skipton and Ripon (Mr. Curry), who brings a great deal of expertise to these matters—[Interruption.] I am sorry to embarrass the right hon. Gentleman, but his contribution was thoughtful and full of the expertise he has gained from being in office. It is a problem for the Tory party that, in the extreme party that it has become, the right hon. Gentleman is unable to take a seat on the Front Bench. I hope that the Opposition will allow him his voice and that he will serve on the Standing Committee, so that we can have some constructive discussions.
  The right hon. Member for Sutton Coldfield could not decide whether the Bill was the end of democracy as we know it or a damp squib. He asked why the RDAs were not accountable, while also saying that we had gone too far in creating them. He cannot have it both ways. The Bill is essentially evolutionary. It is not the final say on regional government; it is the beginning of what we hope will be an evolutionary process that will lead to the creation of regional government that will make our regional economies more focused strategically and more able to act efficiently, thereby giving to the people of the regions the higher living standards that this Government believe they deserve.
  The right hon. Gentleman read out a long list of figures for inward investment, but failed to mention that the Bill is about the English regions. Most of the figures that he quoted included Scotland and Wales. The issue is not only about inward investment, important though that is; it is about creating a structure that allows us to foster our own local businesses so that we can be more dependent on our own resources and have a flexible economy that can react to the economic cycles that occur in a global economy.
  The right hon. Member for Sutton Coldfield talked so much about the remarkable revolution of the Conservatives' 18 years in office that I wondered why they suffered a landslide loss in the general election and face a 178-seat Labour majority in the House. They enjoyed the worst electoral result since 1906, and the worst
  448
  performance in seats since 1832. If that is a remarkable revolution, let us hope that there are more of them, particularly when we get round to holding the next general election.
  A difficult part of the right hon. Gentleman's speech was when he said that the 1,500 responses to our consultation process—which was genuine, despite his scepticism—agreed with the Government views because they were merely collective job applications. That comment is more revealing of his thought process than it is of the way in which people responded to a genuine consultation process. The comment displayed unbelievable cynicism.
  The right hon. Gentleman seemed to say that the Institute of Directors was somehow against the Bill. On 25 November, my hon. Friend the Minister for the Regions, Regeneration and Planning met Tim Melville-Ross, of the I0D. The minutes state that, at the end of the meeting, Mr. Melville-Ross
  "was much more reassured by the Minister's explanation of the rationale for the RDAs"—
  and that
  "He would reflect this accordingly at the meeting of his regional chairmen on 26 November, and would write a positive piece in a forthcoming issue of Director magazine."
  Therefore, the IOD—with many of the other organisations that we consulted, which is something that the previous Government rarely did when in power—approves of what we are trying to do in the Bill.
  We have heard some interesting speeches. What struck me about many of them was the breadth of experience of the regions displayed by many of the hon. Members—not only Labour Members but Liberal Members—who spoke. Their speeches demonstrated what is already known by those of us who bother to go out into the regions and talk to people: the Bill will create a strategic focus in making progress on the regional agenda.
  Conservative Members seem to think that the United Kingdom's economic performance is acceptable because two of the current 10 regions are close to the European average gross domestic product per head, but the Government are not satisfied with that performance. The Bill is about baking a bigger cake so that we can better distribute and increase prosperity. It is evolutionary legislation that will create partnerships, to ensure that we can effectively accomplish those goals.
  Mr. Yeo: Will the hon. Lady confirm that the figures for regional GDP per head in the White Paper are extremely misleading, because they relate to 1993? Since 1993, the United Kingdom has enjoyed four years of outstanding economic growth, in which national GDP growth has been substantially above the EU average, has beaten every other major European country and has been substantially above the Organisation for Economic Co-operation and Development average. If up-to-date figures had been used in the White Paper, the picture would have been completely different.
  Angela Eagle: The hon. Gentleman again displays his complacency. The Government are not as complacent about what is happening in the economy as the previous Government were in their 18 years in power. If anything, we believe that the position is getting worse. We know that we have to create efficient regional economies, so

  449
  that we can react to increasing competition in the global market. The Bill is intended to accomplish those objectives.
  My hon. Friend the Member for Denton and Reddish (Mr. Bennett) welcomed the Bill and was kind enough to say a few words about the report of the Environment, Transport and Regional Affairs Committee. The Government welcome the Select Committee's report and the work that it did in producing it so quickly. We shall respond in due course to the individual points in the conclusion of the report.
  We recognise the democratic deficit argument, but the Bill is evolutionary. It is the first stage and, with the consent of those at regional level, we hope to pursue the accountability argument and, where the regional electorate wants it, create directly elected chambers. In the meantime, it is quite right that the RDAs should be accountable directly to Ministers for the money that they spend. Ministers will ensure that RDAs are involved in the shadow regional chambers that are being formed in every English region so that we can ensure that the partnership that is the key to making the idea work develops.
  I should mention the rural dimension, as there has been much scaremongering about the alleged urban bias of RDAs. It relates to the old language about urban domination, but RDAs are about partnership and building co-operation—creating a strategy at regional level that will ensure that the needs of all the communities involved are taken account of, planned for and met. I reject the idea that rural areas will be dominated by urban areas when, in many cases, their needs are pretty similar and can often be met in a strategic way. We are not creating RDAs so that rural areas will be dominated by urban areas. Opposition Members who fear that or go around talking about it are simply scaremongering. Quite rightly, there will be a strong rural dimension to all the economic work that we undertake.
  The hon. Member for Bury St. Edmunds is one of the main perpetrators of the rural alarm myth that has been much quoted by Conservative Members. The hon. Gentleman failed to congratulate my hon. Friend the Member for Glasgow, Govan on his maiden speech. He then did not wait to hear the whole of the next speech by my hon. Friend the Member for Huddersfield (Mr. Sheerman). When the hon. Gentleman observes the courtesies of the House, I shall give him the courtesy of a reply to his questions.
  The Bill is evolutionary. It is the beginning of a process for which the English regions have waited a very long time. My hon. Friend the Member for Doncaster, Central (Ms Winterton) made an eloquent case for RDAs. I can assure her that we are taking a very robust approach to the negotiations on European structural funds and that we shall do our best for her area, but she must also recognise that they are tough negotiations.
  My hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman) made an extremely eloquent speech demonstrating her wide understanding and experience of these complex issues, and showed what a difference development agencies can make. I recognised her descriptions of what was happening in my own area much
  450
  more than I recognised those by the hon. Member for Altrincham and Sale, West, who did not seem to be living in the same region.
  RDAs will bring positive added value at regional level. They will have an executive role in administering the single regeneration budget challenge fund and they will take over the regional regeneration role of English Partnerships and the rural regeneration role of the Rural Development Commission. They will ensure better value for money for the public sector funds that we invest in the regions.
  A key objective of the Government is to ensure that the best use is made of existing programmes and resources. RDAs will provide the means of securing better value for money for existing spending by taking a more focused approach to delivering services, improving output and enhancing job opportunities, and it is with a great deal of pride that I commend the Bill to the House.
  Question put, That the amendment be made:—
  The House divided: Ayes 148, Noes 388.

  Division No. 127]

  [9.59 pm

  AYES

  Ainsworth, Peter (E Surrey)

  Gibb, Nick

  Amess, David

  Gill, Christopher

  Ancram, Rt Hon Michael

  Gillan, Mrs Cheryl

  Arbuthnot, James

  Goodlad, Rt Hon Sir Alastair

  Atkinson, Peter (Hexham)

  Gorman, Mrs Teresa

  Baldry, Tony

  Gray, James

  Bercow, John

  Green, Damian

  Beresford, Sir Paul

  Greenway, John

  Blunt, Crispin

  Grieve, Dominic

  Body, Sir Richard

  Gummer, Rt Hon John

  Boswell, Tim

  Hague, Rt Hon William

  Bottomley, Peter (Worthing W)

  Hamilton, Rt Hon Sir Archie

  Bottomley, Rt Hon Mrs Virginia

  Hammond, Philip

  Brady, Graham

  Hawkins, Nick

  Brazier, Julian

  Hayes, John

  Brooke, Rt Hon Peter

  Heathcoat-Amory, Rt Hon David

  Browning, Mrs Angela

  Hogg, Rt Hon Douglas

  Bruce, Ian (S Dorset)

  Horam, John

  Burns, Simon

  Howard, Rt Hon Michael

  Butterfill, John

  Howarth, Gerald (Aldershot)

  Cash, William

  Hunter, Andrew

  Chapman, Sir Sydney (Chipping Barnet)

  Jack, Rt Hon Michael

  Jackson, Robert (Wantage)

  Chope, Christopher

  Jenkin, Bernard

  Clappison, James

  Johnson Smith, Rt Hon Sir Geoffrey

  Clark, Rt Hon Alan (Kensington)

  Clark, Dr Michael (Rayleigh)

  Key, Robert

  Clarke, Rt Hon Kenneth (Rushcliffe)

  King, Rt Hon Tom (Bridgwater)

  Kirkbride, Miss Julie

  Clifton-Brown, Geoffrey

  Laing, Mrs Eleanor

  Collins, Tim

  Lait, Mrs Jacqui

  Cran, James

  Lansley, Andrew

  Curry, Rt Hon David

  Leigh, Edward

  Davies, Quentin (Grantham)

  Letwin, Oliver

  Davis, Rt Hon David (Haltemprice)

  Lewis, Dr Julian (New Forest E)

  Dorrell, Rt Hon Stephen

  Lidington, David

  Duncan, Alan

  Lilley, Rt Hon Peter

  Evans, Nigel

  Lloyd, Rt Hon Sir Peter (Fareham)

  Faber, David

  Luff, Peter

  Fabricant, Michael

  Lyell, Rt Hon Sir Nicholas

  Fallon, Michael

  MacGregor, Rt Hon John

  Flight, Howard

  McIntosh, Miss Anne

  Forth, Rt Hon Eric

  MacKay, Andrew

  Fowler, Rt Hon Sir Norman

  Maclean, Rt Hon David

  Fox, Dr Liam

  McLoughlin, Patrick

  Fraser, Christopher

  Madel, Sir David

  Gale, Roger

  Malins, Humfrey

  Garnier, Edward

  Maples, John

  451

  Mates, Michael

  Stanley, Rt Hon Sir John

  Maude, Rt Hon Francis

  Steen, Anthony

  Mawhinney, Rt Hon Sir Brian

  Streeter, Gary

  May, Mrs Theresa

  Swayne, Desmond

  Moss, Malcolm

  Syms, Robert

  Nicholls, Patrick

  Tapsell, Sir Peter

  Norman, Archie

  Taylor, Ian (Esher & Walton)

  Ottaway, Richard

  Taylor, John M (Solihull)

  Page, Richard

  Taylor, Sir Teddy

  Paice, James

  Tredinnick, David

  Paterson, Owen

  Trend, Michael

  Pickles, Eric

  Tyrie, Andrew

  Prior, David

  Viggers, Peter

  Randall, John

  Walter,Robert

  Redwood, Rt Hon John

  Wardle, Charles

  Robathan, Andrew

  Waterson, Nigel

  Robertson, Laurence (Tewkbry)

  Wells, Bowen

  Roe, Mrs Marion(Broxbourne)

  Whittingdale, John

  Rowe, Andrew (Faversham)

  Widdecombe, Rt Hon Miss Ann

  Ruffley, David

  Wilkinson, John

  St, Aubyn, Nick

  Willetts, David

  Sayeed, Jonathan

  Wilshire, David

  Shephard, Rt Hon Mrs Gillian

  Winterton, Mrs Ann (Congleton)

  Shepherd, Richard

  Woodward, Shaun

  Simpson, Keith (Mid-Norfolk)

  Yeo, Tim

  Soames, Nicholas

  Young, Rt Hon Sir George

  Spelman, Mrs Caroline

  Tellers for the Ayes:

  Spicer, Sir Michael

  Mr. Stephen Day and

  Spring, Richard

  Mr. Oliver Heald.

  NOES

  Abbott, Ms Diane

  Burden, Richard

  Adams, Mrs Irene (Paisley N)

  Burgon, Colin

  Ainger, Nick

  Burnett, John

  Ainsworth, Robert (Cov'try NE)

  Burstow, Paul

  Alexander, Douglas

  Butler, Mrs Christine

  Allan, Richard

  Byers, Stephen

  Allen, Graham

  Caborn, Richard

  Anderson, Janet (Rossendale)

  Campbell, Mrs Anne (C'bridge)

  Armstrong, Ms Hilary

  Campbell, Menzies (NE Fife)

  Atherton, Ms Candy

  Campbell, Ronnie (Blyth V)

  Austin, John

  Canavan, Dennis

  Ballard, Mrs Jackie

  Caplin, Ivor

  Banks, Tony

  Caton, Martin

  Barnes, Harry

  Cawsey, Ian

  Barren, Kevin

  Chapman, Ben (Wirral S)

  Battle, John

  Chaytor, David

  Bayley, Hugh

  Chidgey, David

  Beard, Nigel

  Chisholm, Malcolm

  Begg, Miss Anne

  Church, Ms Judith

  Beggs, Roy

  Clapham, Michael

  Beith, Rt Hon A J

  Clark, Rt Hon Dr David (S Shields)

  Benn, Rt Hon Tony

  Clark, Dr Lynda (Edinburgh Pentlands)

  Bennett, Andrew F

  Benton, Joe

  Clark, Paul (Gillingham)

  Bermingham, Gerald

  Clarke, Charles (Norwich S)

  Berry, Roger

  Clarke, Eric (Midlothian)

  Best, Harold

  Clarke, Rt Hon Tom (Coatbridge)

  Betts, Clive

  Clelland, David

  Blackman, Liz

  Clwyd, Ann

  Blears, Ms Hazel

  Coaker, Vernon

  Blizzard, Bob

  Coffey, Ms Ann

  Blunkett, Rt Hon David

  Cohen, Harry

  Boateng, Paul

  Colman, Tony

  Borrow, David

  Connarty, Michael

  Bradley, Keith (Withington)

  Corbyn, Jeremy

  Bradley, Peter (The Wrekin)

  Corston, Ms Jean

  Bradshaw, Ben

  Cotter, Brian

  Brand, Dr Peter

  Cousins, Jim

  Breed, Colin

  Cox, Tom

  Brinton, Mrs Helen

  Crausby, David

  Brown, Rt Hon Nick (Newcastle E)

  Cryer, Mrs Ann (Keighley)

  Brown, Russell (Dumfries)

  Cryer, John (Hornchurch)

  Browne, Desmond

  Cummings, John

  Buck, Ms Karen

  Cunningham, Jim (Cov'try S)

  452

  Dafis, Cynog

  Hope, Phil

  Dalyell, Tam

  Hopkins, Kelvin

  Darvill, Keith

  Howarth, Alan (Newport E)

  Davey, Edward (Kingston)

  Howarth, George (Knowsley N)

  Davey, Valerie (Bristol W)

  Howells, Dr Kim

  Davidson, Ian

  Hoyle, Lindsay

  Davies, Rt Hon Denzil (Llanelli)

  Hughes, Ms Beverley (Stretford)

  Davies, Geraint (Croydon C)

  Hughes, Simon (Southwark N)

  Davies, Rt Hon Ron (Caerphilly)

  Humble, Mrs Joan

  Dawson, Hilton

  Hurst, Alan

  Dean, Mrs Janet

  Hutton, John

  Denham, John

  Iddon, Dr Brian

  Dewar, Rt Hon Donald

  Illsley, Eric

  Dismore, Andrew

  Ingram, Adam

  Dobbin, Jim

  Jackson, Ms Glenda (Hampstead)

  Donohoe, Brian H

  Jackson, Helen (Hillsborough)

  Doran, Frank

  Jenkins, Brian

  Dowd, Jim

  Johnson, Alan (Hull W & Hessle)

  Drown, Ms Julia

  Johnson, Miss Melanie (Welwyn Hatfield)

  Dunwoody, Mrs Gwyneth

  Eagle, Angela (Wallasey)

  Jones, Barry (Alyn & Deeside)

  Edwards, Huw

  Jones, Mrs Fiona (Newark)

  Efford, Clive

  Jones, Helen (Warrington N)

  Ellman, Mrs Louise

  Jones, leuan Wyn (Ynys Môn)

  Ennis, Jeff

  Jones, Ms Jenny (Wolverh'ton SW)

  Fearn, Ronnie

  Field, Rt Hon Frank

  Jones, Jon Owen (Cardiff C)

  Fisher, Mark

  Jones, Dr Lynne (Selly Oak)

  Fitzpatrick, Jim

  Jones, Martyn (Clwyd S)

  Fitzsimons, Lorna

  Jowell, Ms Tessa

  Flint, Caroline

  Keen, Alan (Feltham & Heston)

  Flynn, Paul

  Keen, Ann (Brentford & Isleworth)

  Follett, Barbara

  Keetch, Paul

  Foster, Rt Hon Derek

  Kelly, Ms Ruth

  Foster, Don (Bath)

  Kemp, Fraser

  Foster, Michael Jabez (Hastings)

  Kennedy, Jane (Wavertree)

  Foster, Michael J (Worcester)

  Khabra, Piara S

  Foulkes, George

  Kidney, David

  Fyfe, Maria

  Kilfoyle, Peter

  Galbraith, Sam

  King, Andy (Rugby & Kenilworth)

  Gapes, Mike

  Kingham, Ms Tess

  George, Andrew (St Ives)

  Kirkwood, Archy

  George, Bruce (Walsall S)

  Kumar, Dr Ashok

  Gerrard, Neil

  Ladyman, Dr Stephen

  Gibson, Dr Ian

  Lawrence, Ms Jackie

  Gilroy, Mrs Linda

  Laxton, Bob

  Goggins, Paul

  Lepper, David

  Golding, Mrs Llin

  Leslie, Christopher

  Gordon, Mrs Eileen

  Levitt, Tom

  Grant, Bernie

  Lewis, Ivan (Bury S)

  Griffiths, Jane (Reading E)

  Liddell, Mrs Helen

  Griffiths, Nigel (Edinburgh S)

  Linton, Martin

  Griffiths, Win (Bridgend)

  Livsey, Richard

  Grocott, Bruce

  Lloyd, Tony (Manchester C)

  Gunnell, John

  Llwyd, Elfyn

  Hain, Peter

  Lock, David

  Hall, Mike (Weaver Vale)

  Love, Andrew

  Hall, Patrick (Bedford)

  McAllion, John

  Hamilton, Fabian (Leeds NE)

  McAvoy, Thomas

  Hanson, David

  McCabe, Steve

  Harman, Rt Hon Ms Harriet

  McCafferty, Ms Chris

  Harris, Dr Evan

  McCartney, Ian (Makerfield)

  Harvey, Nick

  McDonagh, Siobhain

  Heal, Mrs Sylvia

  Macdonald, Calum

  Healey, John

  McDonnell, John

  Heath, David (Somerton & Frome)

  McFall, John

  Henderson, Ivan (Harwich)

  McGuire, Mrs Anne

  Heppell, John

  McIsaac, Shona

  Hesford, Stephen

  McKenna, Mrs Rosemary

  Hewitt, Ms Patricia

  Mackinlay, Andrew

  Hill, Keith

  McLeish, Henry

  Hinchliffe, David

  Maclennan, Rt Hon Robert

  Hodge, Ms Margaret

  McNamara, Kevin

  Hoey, Kate

  McNulty, Tony

  Home Robertson, John

  MacShane, Denis

  Hoon, Geoffrey

  Mactaggart, Fiona

  453

  McWalter, Tony

  Russell, Ms Christine (Chester)

  McWilliam, John

  Ryan, Ms Joan

  Maginnis, Ken

  Salter, Martin

  Mahon, Mrs Alice

  Sanders, Adrian

  Mallaber, Judy

  Sarwar, Mohammad

  Mandelson, Peter

  Savidge, Malcolm

  Marek, Dr John

  Sawford, Phil

  Marsden, Gordon (Blackpool S)

  Sedgemore, Brian

  Marsden, Paul (Shrewsbury)

  Shaw, Jonathan

  Marshall, David (Shettleston)

  Sheerman, Barry

  Marshall, Jim (Leicester S)

  Sheldon, Rt Hon Robert

  Martlew, Eric

  Shipley, Ms Debra

  Maxton, John

  Short, Rt Hon Clare

  Meacher, Rt Hon Michael

  Singh, Marsha

  Meale, Alan

  Skinner, Dennis

  Merron, Gillian

  Smith, Rt Hon Andrew (Oxford E)

  Michael, Alun

  Smith, Angela (Basildon)

  Milburn, Alan

  Smith, Rt Hon Chris (Islington S)

  Miller, Andrew

  Smith, Jacqui (Redditch)

  Moffatt, Laura

  Smith, John (Glamorgan)

  Moonie, Dr Lewis

  Smith, Llew (Blaenau Gwent)

  Moran, Ms Margaret

  Soley, Clive

  Morgan, Ms Julie (Cardiff N)

  Southworth, Ms Helen

  Morley, Elliot

  Spellar, John

  Morris, Ms Estelle (B'ham Yardley)

  Squire, Ms Rachel

  Morris, Rt Hon John (Aberavon)

  Steinberg, Gerry

  Mountford, Kali

  Stewart, David (Inverness E)

  Mowlam, Rt Hon Marjorie

  Stinchcombe, Paul

  Mudie, George

  Stoate, Dr Howard

  Mullin, Chris

  Stott, Roger

  Murphy, Denis(Wansbeck)

  Murphy, Jim (Eastwood)

  Strang, Rt Hon Dr Gavin

  Murphy, Paul (Torfaen)

  Straw, Rt Hon Jack

  Naysmith, Dr Doug

  Stringer, Graham

  Oaten, Mark

  Stuart, Ms Gisela

  O'Brien, Bill (Normanton)

  Stunell, Andrew

  O'Hara, Eddie

  Sutcliffe, Gerry

  O'Neill, Martin

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Öpik, Lembit

  Organ, Mrs Diana

  Taylor, Ms Dari (Stockton S)

  Osborne, Ms Sandra

  Taylor, David (NW Leics)

  Palmer, Dr Nick

  Taylor, Matthew (Truro)

  Pearson, Ian

  Temple-Morris, Peter

  Pendry, Tom

  Thomas, Gareth R (Harrow W)

  Perham, Ms Linda

  Thompson, William

  Pickthall, Colin

  Timms, Stephen

  Pike, Peter L

  Tipping, Paddy

  Plaskitt, James

  Todd, Mark

  Pond, Chris

  Tonge, Dr Jenny

  Pope, Greg

  Touhig, Don

  Pound, Stephen

  Trickett, Jon

  Powell, Sir Raymond

  Truswell, Paul

  Prentice, Ms Bridget (Lewisham E)

  Turner, Desmond (Kemptown)

  Prentice, Gordon (Pendle)

  Turner, Dr George (NW Norfolk)

  Prescott, Rt Hon John

  Twigg, Stephen (Enfield)

  Primarolo, Dawn

  Tyler, Paul

  Prosser, Gwyn

  Vaz, Keith

  Purchase, Ken

  Vis, Dr Rudi

  Quinn, Lawrie

  Wareing, Robert N

  Radice, Giles

  Watts, David

  Rammell, Bill

  Webb, Steve

  Rapson, Syd

  White, Brian

  Raynsford, Nick

  Whitehead, Dr Alan

  Reed, Andrew (Loughborough)

  Wicks, Malcolm

  Rendel, David

  Williams, Rt Hon Alan (Swansea W)

  Robertson, Rt Hon George(Hamilton S)

  Williams, Alan W (E Carmarthen)

  Robinson, Geoffrey (Cov'try NW)

  Willis, Phil

  Rooney, Terry

  Wills, Michael

  Ross, Ernie (Dundee W)

  Winnick, David

  Ross, William (E Lond'y)

  Winterton, Ms Rosie (Doncaster C)

  Rowlands, Ted

  Wise, Audrey

  Roy, Frank

  Wood, Mike

  Ruane, Chris

  Woolas, Phil

  Ruddock, Ms Joan

  Worthington, Tony

  Russell, Bob (Colchester)

  Wray, James

  454

  Wright, Anthony D (Gt Yarmouth)

  Tellers for the Noes:

  Wright, Dr Tony (Cannock)

  Mr. Kevin Hughes and

  Wyatt, Derek

  Mr.David Jamieson.

  Question accordingly negatived.
  Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading):—
  The House divided: Ayes 383, Noes 147.

  division No.128]

  [10.15pm

  AYES

  Abbott, Ms Diane

  Church, Ms Judith

  Adams, Mrs Irene (Paisley N)

  Clapham, Michael

  Ainger, Nick

  Clark, Rt Hon Dr David (S Shields)

  Ainsworth, Robert (Cov'try NE)

  Clark, Dr Lynda (Edinburgh Pentlands)

  Alexander, Douglas

  Allan, Richard

  Clark, Paul (Gillingham)

  Allen, Graham

  Clarke, Charles (Norwich S)

  Anderson, Janet (Rossendale)

  Clarke, Eric (Midlothian)

  Armstrong, Ms Hilary

  Clarke, Rt Hon Tom (Coatbridge)

  Atherton, Ms Candy

  Clelland, David

  Austin, John

  Clwyd, Ann

  Ballard, Mrs Jackie

  Coaker, Vernon

  Banks, Tony

  Coffey, Ms Ann

  Barnes, Harry

  Cohen, Harry

  Barron, Kevin

  Colman, Tony

  Battle, John

  Connarty, Michael

  Bayley, Hugh

  Corbyn, Jeremy

  Beard, Nigel

  Corston, Ms Jean

  Begg, Miss Anne

  Cotter, Brian

  Beggs, Roy

  Cousins, Jim

  Beith, Rt Hon A J

  Cox, Tom

  Bennett, Andrew F

  Crausby, David

  Benton, Joe

  Cryer, Mrs Ann (Keighley)

  Bermingham, Gerald

  Cryer, John (Hornchurch)

  Berry, Roger

  Cummings, John

  Best, Harold

  Cunningham, Jim (Cov'try S)

  Betts, Clive

  Dalyell, Tam

  Blackman, Liz

  Darvill, Keith

  Blears, Ms Hazel

  Davey, Edward (Kingston)

  Blizzard, Bob

  Davey, Valerie (Bristol W)

  Blunkett, Rt Hon David

  Davidson, Ian

  Boateng, Paul

  Davies, Rt Hon Denzil (Llanelli)

  Borrow, David

  Davies, Geraint (Croydon C)

  Bradley, Keith (Withington)

  Davies, Rt Hon Ron (Caerphilly)

  Bradley, Peter (The Wrekin)

  Dawson, Hilton

  Bradshaw, Ben

  Dean, Mrs Janet

  Brand, Dr Peter

  Denham, John

  Breed, Colin

  Dewar, Rt Hon Donald

  Brinton, Mrs Helen

  Dismore, Andrew

  Brown, Rt Hon Nick (Newcastle E)

  Dobbin, Jim

  Brown, Russell (Dumfries)

  Donohoe, Brian H

  Browne, Desmond

  Doran, Frank

  Buck, Ms Karen

  Dowd, Jim

  Burden, Richard

  Drown, Ms Julia

  Burgon, Colin

  Dunwoody, Mrs Gwyneth

  Burnett, John

  Eagle, Angela (Wallasey)

  Burstow, Paul

  Edwards, Huw

  Butler, Mrs Christine

  Efford, Clive

  Byers, Stephen

  Ellman, Mrs Louise

  Caborn, Richard

  Ennis, Jeff

  Campbell, Mrs Anne (C'bridge)

  Fearn, Ronnie

  Campbell, Menzies (NE Fife)

  Field, Rt Hon Frank

  Campbell, Ronnie (Blyth V)

  Fisher, Mark

  Canavan, Dennis

  Fitzpatrick, Jim

  Caplin, Ivor

  Fitzsimons, Lorna

  Caton, Martin

  Flint, Caroline

  Cawsey, Ian

  Flynn, Paul

  Chapman, Ben (Wirral S)

  Follett, Barbara

  Chaytor, David

  Foster, Rt Hon Derek

  Chidgey, David

  Foster, Don (Bath)

  Chisholm, Malcolm

  Foster, Michael Jabez (Hastings)

  455

  Foster, Michael J (Worcester)

  King, Andy (Rugby & Kenilworth)

  Foulkes, George

  Kingham, Ms Tess

  Fyfe, Maria

  Kirkwood, Archy

  Galbraith, Sam

  Kumar, Dr Ashok

  Gapes, Mike

  Ladyman, Dr Stephen

  George, Bruce (Walsall S)

  Lawrence, Ms Jackie

  Gerrard, Neil

  Laxton, Bob

  Gibson, Dr Ian

  Lepper, David

  Gilroy, Mrs Linda

  Leslie, Christopher

  Goggins, Paul

  Levitt, Tom

  Golding, Mrs Llin

  Lewis, Ivan (Bury S)

  Gordon, Mrs Eileen

  Liddell, Mrs Helen

  Grant, Bernie

  Linton, Martin

  Griffiths, Jane (Reading E)

  Livsey, Richard

  Griffiths, Nigel (Edinburgh S)

  Lloyd, Tony (Manchester C)

  Griffiths, Win (Bridgend)

  Llwyd, Elfyn

  Grocott, Bruce

  Lock, David

  Gunnell, John

  Love, Andrew

  Hain, Peter

  McAllion, John

  Hall, Mike (Weaver Vale)

  McAvoy, Thomas

  Hall, Patrick (Bedford)

  McCabe, Steve

  Hamilton, Fabian (Leeds NE)

  McCafferty, Ms Chris

  Hanson, David

  McCartney, Ian (Makerfield)

  Harman, Rt Hon Ms Harriet

  McDonagh, Siobhain

  Harris, Dr Evan

  Macdonald, Calum

  Harvey, Nick

  McDonnell, John

  Heal, Mrs Sylvia

  McFall, John

  Healey, John

  McGuire, Mrs Anne

  Heath, David (Somerton & Frome)

  McIsaac, Shona

  Henderson, Ivan (Harwich)

  McKenna, Mrs Rosemary

  Heppell, John

  Mackinlay, Andrew

  Hesford, Stephen

  McLeish, Henry

  Hewitt, Ms Patricia

  Maclennan, Rt Hon Robert

  Hill, Keith

  McNamara, Kevin

  Hinchliffe, David

  McNulty, Tony

  Hodge, Ms Margaret

  MacShane, Denis

  Hoey, Kate

  Mactaggart, Fiona

  Home Robertson, John

  McWalter, Tony

  Hoon, Geoffrey

  McWilliam, John

  Hope, Phil

  Maginnis, Ken

  Hopkins, Kelvin

  Mahon, Mrs Alice

  Howarth, Alan (Newport E)

  Mallaber, Judy

  Howarth, George (Knowsley N)

  Mandelson, Peter

  Howells, Dr Kim

  Marek, Dr John

  Hoyle, Lindsay

  Marsden, Gordon (Blackpool S)

  Hughes, Ms Beverley (Stretford)

  Marsden, Paul (Shrewsbury)

  Humble, Mrs Joan

  Marshall, David (Shettleston)

  Hurst, Alan

  Marshall, Jim (Leicester S)

  Hutton, John

  Martlew, Eric

  Iddon, Dr Brian

  Maxton, John

  Illsley, Eric

  Meacher, Rt Hon Michael

  Ingram, Adam

  Meale, Alan

  Jackson, Ms Glenda (Hampstead)

  Merron, Gillian

  Jackson, Helen (Hillsborough)

  Michael, Alun

  Jenkins, Brian

  Milburn, Alan

  Johnson, Alan (Hull W & Hessle)

  Miller, Andrew

  Johnson, Miss Melanie (Welwyn Hatfield)

  Moffatt, Laura

  Moonie, Dr Lewis

  Jones, Barry (Alyn & Deeside)

  Moran, Ms Margaret

  Jones, Mrs Fiona (Newark)

  Morgan, Ms Julie (Cardiff N)

  Jones, Helen (Warrington N)

  Morley, Elliot

  Jones, Ms Jenny(Wolverh'ton SW)

  Morris, Ms Estelle (B'ham Yardley)

  Morris, Rt Hon John (Aberavon)

  Jones, Jon Owen (Cardiff C)

  Mountford, Kali

  Jones, Dr Lynne (Selly Oak)

  Mowlam, Rt Hon Marjorie

  Jones, Martyn (Clwyd S)

  Mudie, George

  Jowell, Ms Tessa

  Mullin, Chris

  Keen, Alan (Feltham & Heston)

  Murphy, Denis (Wansbeck)

  Keen, Ann (Brentford & Isleworth)

  Murphy, Jim (Eastwood)

  Keetch, Paul

  Murphy, Paul (Torfaen)

  Kelly, Ms Ruth

  Naysmith, Dr Doug

  Kemp, Fraser

  Oaten, Mark

  Kennedy, Jane (Wavertree)

  O'Brien, Bill (Normanton)

  Khabra, Piara S

  O'Hara, Eddie

  Kidney, David

  O'Neill, Martin

  Kilfoyle, Peter

  Öpik, Lembit

  456

  Organ, Mrs Diana

  Southworth, Ms Helen

  Osborne, Ms Sandra

  Spellar, John

  Palmer, Dr Nick

  Squire, Ms Rachel

  Pearson, Ian

  Steinberg, Gerry

  Pendry, Tom

  Stewart, David (Inverness E)

  Perham, Ms Linda

  Stinchcombe, Paul

  Pickthall, Colin

  Stoate, Dr Howard

  Pike, Peter L

  Stott, Roger

  Plaskitt, James

  Strang, Rt Hon Dr Gavin

  Pond, Chris

  Straw, Rt Hon Jack

  Pope, Greg

  Stringer, Graham

  Pound, Stephen

  Stuart, Ms Gisela

  Powell, Sir Raymond

  Stunell, Andrew

  Prentice, Ms Bridget (Lewisham E)

  Sutcliffe, Gerry

  Prentice, Gordon (Pendle)

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Prescott, Rt Hon John

  Primarolo, Dawn

  Taylor, Ms Dari (Stockton S)

  Prosser, Gwyn

  Taylor, David (NW Leics)

  Purchase, Ken

  Taylor, Matthew (Truro)

  Quinn, Lawrie

  Temple-Morris, Peter

  Radice Giles

  Thomas, Gareth R (Harrow W)

  Rammell, Bill

  Thompson, William

  Rapson, Syd

  Timms, Stephen

  Raynsford, Nick

  Tipping, Paddy

  Reed, Andrew (Loughborough)

  Todd, Mark

  Rendel, David

  Tonge, Dr Jenny

  Robertson, Rt Hon George (Hamilton S)

  Touhig, Don

  Trickett, Jon

  Robinson, Geoffrey (Covtry NW)

  Truswell, Paul

  Rooney, Terry

  Turner, Desmond (Kemptown)

  Ross, Ernie (Dundee W)

  Turner, Dr George (NW Norfolk)

  Ross, William (E Lond'y)

  Twigg, Stephen (Enfield)

  Rowlands, Ted

  Tyler, Paul

  Roy, Frank

  Vaz, Keith

  Ruane, Chris

  Vis, Dr Rudi

  Ruddock, Ms Joan

  Wareing, Robert N

  Russell, Bob(Colchester)

  Watts, David

  Russell, Ms Christine(Chester)

  Webb, Steve

  White, Brian

  Ryan, Ms Joan

  Whitehead, Dr Alan

  Salter, Martin

  Wicks, Malcolm

  Sanders, Adrian

  Williams, Rt Hon Alan (Swansea W)

  Sarwar, Mohammad

  Savidge, Malcolm

  Williams, Alan W (E Carmarthen)

  Sawford, Phil

  Willis, Phil

  Sedgemore, Brian

  Willis, Michael

  Shaw, Jonathan

  Winnick, David

  Sheerman, Barry

  Winterton, Ms Rosie (Doncaster C)

  Sheldon, Rt Hon Robert

  Wise, Audrey

  Shipley, Ms Debra

  Wood, Mike

  Short, Rt Hon Clare

  Woolas, Phil

  Singh, Marsha

  Worthington, Tony

  Skinner, Dennis

  Wray, James

  Smith, Rt Hon Andrew (Oxford E)

  Wright, Anthony D (Gt Yarmouth)

  Smith, Angela (Basildon)

  Wright, Dr Tony (Cannock)

  Smith, Rt Hon Chris (Islington S)

  Wyatt, Derek

  Smith, Jacqui (Redditch)

  Smith, John (Glamorgan)

  Tellers for the Ayes:

  Smith, Llew (Blaenau Gwent)

  Mr. Kevin Hughes and

  Soley, Clive

  Mr. David Jamieson.

  NOES

  Ainsworth, Peter (E Surrey)

  Brady, Graham

  Amess, David

  Brazier, Julian

  Ancram, Rt Hon Michael

  Brooke, Rt Hon Peter

  Arbuthnot, James

  Browning, Mrs Angela

  Atkinson, Peter (Hexham)

  Bruce, Ian (S Dorset)

  Baldry, Tony

  Burns, Simon

  Bercow, John

  Butterfill, John

  Beresford, Sir Paul

  Cash, William

  Blunt, Crispin

  Chapman, Sir Sydney (Chipping Barnet)

  Body, Sir Richard

  Boswell, Tim

  Chope, Christopher

  Bottomley, Peter (Worthing W)

  Clappison, James

  Bottomley, Rt Hon Mrs Virginia

  Clark Rt Hon Alan (Kensington)

  457

  Clark, Dr Michael (Rayleigh)

  Maclean, Rt Hon David

  Clarke, Rt Hon Kenneth (Rushcliffe)

  McLoughlin, Patrick

  Madel, Sir David

  Clifton-Brown, Geoffrey

  Malins, Humfrey

  Collins, Tim

  Maples, John

  Cran, James

  Mates, Michael

  Curry, Rt Hon David

  Maude, Rt Hon Francis

  Davies, Quentin (Grantham)

  Mawhinney, Rt Hon Sir Brian

  Dorrell, Rt Hon Stephen

  May, Mrs Theresa

  Duncan, Alan

  Moss, Malcolm

  Evans, Nigel

  Nicholls, Patrick

  Faber, David

  Norman, Archie

  Fabricant, Michael

  Ottaway, Richard

  Fallon, Michael

  Page, Richard

  Flight, Howard

  Paice, James

  Forth, Rt Hon Eric

  Paterson, Owen

  Fowler, Rt Hon Sir Norman

  Pickles, Eric

  Fox, Dr Liam

  Prior, David

  Fraser, Christopher

  Randall, John

  Gale, Roger

  Redwood, Rt Hon John

  Garnier, Edward

  Robathan, Andrew

  Gibb, Nick

  Robertson, Laurence (Tewk'b'ry)

  Gill, Christopher

  Roe, Mrs Marion (Broxbourne)

  Gillan, Mrs Cheryl

  Rowe, Andrew (Faversham)

  Goodlad, Rt Hon Sir Alastair

  Ruffley, David

  Gorman, Mrs Teresa

  St Aubyn, Nick

  Gray, James

  Sayeed, Jonathan

  Green, Damian

  Shephard, Rt Hon Mrs Gillian

  Greenway, John

  Shepherd, Richard

  Grieve, Dominic

  Simpson, Keith (Mid-Norfolk)

  Gummer, Rt Hon John

  Soames, Nicholas

  Hague, Rt Hon William

  Spelman, Mrs Caroline

  Hamilton, Rt Hon Sir Archie

  Spicer, Sir Michael

  Hammond, Philip

  Spring, Richard

  Hawkins, Nick

  Stanley, Rt Hon Sir John

  Hayes, John

  Steen, Anthony

  Heathcoat-Amory, Rt Hon David

  Streeter, Gary

  Hogg, Rt Hon Douglas

  Swayne, Desmond

  Horam, John

  Syms, Robert

  Howard, Rt Hon Michael

  Tapsell, Sir Peter

  Howarth, Gerald (Aldershot)

  Taylor, Ian (Esher & Walton)

  Hunter, Andrew

  Taylor, John M (Solihull)

  Jack, Rt Hon Michael

  Taylor, Sir Teddy

  Jackson, Robert (Wantage)

  Tredinnick, David

  Jenkin, Bernard

  Trend, Michael

  Johnson Smith, Rt Hon Sir Geoffrey

  Tyrie, Andrew

  Viggers, Peter

  Key, Robert

  Walter, Robert

  King, Rt Hon Tom (Bridgwater)

  Wardle, Charles

  Kirkbride, Miss Julie

  Waterson, Nigel

  Laing, Mrs Eleanor

  Wells, Bowen

  Lait, Mrs Jacqui

  Whittingdale, John

  Lansley, Andrew

  Widdecombe, Rt Hon Miss Ann

  Leigh, Edward

  Wilkinson, John

  Letwin, Oliver

  Willetts, David

  Lewis, Dr Julian (New Forest E)

  Wilshire, David

  Lidington, David

  Winterton, Mrs Ann (Congleton)

  Lilley, Rt Hon Peter

  Woodward, Shaun

  Lloyd, Rt Hon Sir Peter (Fareham)

  Yeo, Tim

  Luff, Peter

  Young, Rt Hon Sir George

  Lyell, Rt Hon Sir Nicholas

  MacGregor, Rt Hon John

  Tellers for the Noes:

  McIntosh, Miss Anne

  Mr. Stephen Day and

  MacKay, Andrew

  Mr. Oliver Heald.

  Question accordingly agreed to.
  Bill read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63(Committal of Bills).

  REGIONAL DEVELOPMENT AGENCIES BILL [MONEY]
  Queen's recommendation having been signified—
  Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),
  That for the purposes of any Act resulting from the Regional Development Agencies Bill it is expedient to authorise—

  (1) the payment out of the National Loans Fund of any sums required by the Secretary of State for making loans under the Act to a development agency established under the Act;

  (2) the payment out of money provided by Parliament of—

  (a) any sums required by the Secretary of State—

  (i) for making grants under the Act, or

  (ii) for fulfilling guarantees given under the Act, and

  (b) any administrative expenses of a Minister of the Crown (as defined in the Ministers of the Crown Act 1975) which are attributable to the Act;

  (3) the reduction of the assets of the National Loans Fund by amounts corresponding to such liabilities of the Development Commission or the Urban Regeneration Agency as the Secretary of State may extinguish by virtue of the Act;

  (4) the payment of sums into the National Loans Fund or the Consolidated Fund.—[Mr. Allen.]

  Question agreed to.

  NORTHERN IRELAND GRAND COMMITTEE
  Ordered,
  That—

  (1) the matter of priorities in education in Northern Ireland, being a matter relating exclusively to Northern Ireland, be referred to the Northern Ireland Grand Committee for its consideration.

  (2) At the sitting on Thursday 29th January:

  (i) the Committee shall take questions for oral answer pursuant to Standing Order No. 110 (Northern Ireland Grand Committee (questions for oral answer)) and shall then consider, pursuant to Standing Order No. 114 (Northern Ireland Grand Committee (legislative proposals and other matters relating exclusively to Northern Ireland)) the matter referred to it under paragraph (1) above; and

  (ii) at the completion of those proceedings, a Motion for the adjournment of the Committee may be made by a Minister of the Crown, pursuant to Standing Order No. 116(1)(H) (Northern Ireland Grand Committee (Sittings)).—[Mr. Allen.]

  Teesside Development Corporation
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]
  10.30 pm
  Dr. Ashok Kumar: I am grateful for the opportunity of this short debate. One of the flagships of the so-called Thatcher revolution was the creation of the urban development corporations. They were designed to re-create the industrial strength and vitality of Britain's manufacturing heartland and to recast the nation's self-image along impeccably Thatcherite lines.
  Now, 10 years on, we can see that they were, if anything, what could be called Potemkin flagships—a glossy and frequently imposing facade hiding a history of often inappropriate and threadbare achievement. The picture is becoming apparent only now, as those bodies come to the end of their lives and the reality of audit and actual achievement are laid bare.
  I have asked for the debate because the urban development corporation covering my area, Teesside, is coming to the end of its life. Many of us are concerned that there are skeletons in the cupboard of the Teesside development corporation—skeletons of possible liabilities and possible problems for our local authorities and the residuary body. We must calm those fears or take action to deal with the problems.
  Among a number of damning reports that have been made public in the past year were the findings of the National Audit Office when it investigated the affairs of the now defunct Bristol and Leeds UDCs. In both cases the National Audit Office found serious problems: in the case of Leeds, problems with land deals in the Kirkstall area that led to accusations of double standards and murky behaviour on the part of individuals in the Leeds UDC; in the case of Bristol, problems relating to standards of infrastructure provision, the late processing of compulsory purchase orders, bad record keeping and cost monitoring and a bill to the then Department of the Environment for £4.9 million to clear up the mess.
  As a result of that debacle, the National Audit Office submitted a report dated 28 February last year to the House of Commons and the then Secretary of State for the Environment in which it recommended a number of actions that it considered essential in all future wind-ups of UDCs.
  The NAO recommended, in summary, that all UDCs should provide the Department of the Environment, Transport and the Regions with a risk assessment examining the likelihood of winding-up tasks not being completed and identifying strategies for the management of outstanding tasks; that all existing UDCs should ensure that document storage and retrieval systems are of a high standard, that files should not be destroyed and that after wind-up reliable records should be available for the location of every file; and that UDCs should consult widely on future regeneration proposals and pay more attention to the transfer of knowledge on the development opportunities of each site.
  I mention those recommendations because they are central to my concerns about the present situation in regard to the winding up of what has been called Mrs. Thatcher's favourite UDC, the Teesside urban development corporation.
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  The TDC is, in terms of the land that it covers, the largest of the urban development corporations. In its decade of existence, it has sponsored many schemes and it has certainly made its mark locally through its lavish advertising and public relations budget. I do not want to be entirely negative about the TDC and the projects that it has sponsored. Some projects, such as the one that set up the joint university college of Teesside and Durham universities at a site in Stockton and the creation of the Hartlepool marina have been welcomed in Hartlepool, Stockton and elsewhere on Teesside.
  However, once the PR hype and the trumpet fanfares ceased to echo, other schemes failed to emerge or were highly controversial and faced opposition. In that context, I cite three developments. The first is the massive Teesside Park out-of-town shopping centre. It was vigorously opposed by the local authorities at the time and has had to be countered by the use of state funds through city challenge to safeguard high street shopping in Stockton.
  Secondly, plans for a massive hypermarket on the old Middlesbrough dockside—which created much hostility among planners, a neighbouring local authority and other town center retailers—have now been called in by my right hon. Friend the Deputy Prime Minister. Prior to the call-in, the promotion of the scheme at the planning stage was so badly handled by the TDC that a successful appeal to the High Court found that the corporation was, in the words of Mr. Justice Sedley, guilty of
  "a pervasive departure from the requirement of law that a planning authority must evaluate an application objectively, and without prejudgment of its merits."
  Referring to the fact that he would have to direct the TDC to reassess the application, Mr. Justice Sedley said:
  "if it were a bench of justices that had erred, I would direct that the decision be taken by a fresh bench."
  Mr. Justice Sedley regretted that that was not possible in this context.
  Thirdly, it is widely known in the region that the TDC was unwilling or unable to produce a full business plan to support Millennium Commission funding for a proposed tall ships centre for the Middlesbrough docks area. That has led to considerable delays to a scheme that has much public support.
  It is a well-known fact of life on Teesside that the TDC and particularly the corporation's chief executive, Duncan Hall, are difficult to deal with. It is also a well-known fact that many Teesside local authorities, both past and present, have found it difficult to work constructively with the TDC. It is well known in the corridors of power and in the Teesside business community that it is difficult to achieve joint working with the corporation unless it is on its terms. It is well known among the local media that it is well nigh impossible to obtain detailed information from the TDC—indeed, a regional Sunday newspaper recently described the TDC as a "secretive" body.
  I must inform the House that there is an almost complete lack of confidence on Teesside in the Teesside development corporation's willingness to achieve, or interest in achieving, a wind-up in the spirit of the advice from the National Audit Office. The secrecy of the corporation is also giving rise to fears among local authorities on Teesside that many cash liabilities may be hidden in the woodwork. Those liabilities may become apparent only long after the corporation has been consigned to its grave and the present

  461
  massive PR campaign is long forgotten. I would like to know the cost of the "long goodbye" that we seem to see every half hour on regional television at present.
  The National Audit Office argued persuasively that there should be full and wide disclosure of regeneration possibilities with legatee bodies—principally the local authorities of the area that the UDC covers—and the designated residuary body, the revamped Commission for the New Towns. Those arguments have been accepted by the Labour Government—they were also accepted by the previous Government—and they have been incorporated in the advice of the Department of the Environment and that of the Department of the Environment, Transport and the Regions to the urban development corporations. I understand that, unfortunately, to date, there have been only minor discussions with many of the local authorities on Teesside. I understand also that they have been mainly technical, relating to the transfer of planning applications files, planning agreements and details of highway adaptations.
  There has been little or no discussion on important issues such as key regeneration matters—issues our local authorities have had to dovetail with their own work. These are issues that I have written about in letters to my hon. Friend the Minister for the Regions, Regeneration and Planning.
  The scale of the refusal to deal in a meaningful way with Teesside's local authorities is summed up in a report that went to members of Middlesbrough borough council on 16 December last year. The report, written by the council's chief economic development planning officer, stated:
  "The TDC will not reveal information on current land deals and site development proposals because of client confidentiality, and the Council is therefore not aware of the TDC's intentions."
  The report adds, astonishingly, that the council's officers
  "have been unable to obtain any detailed information of plans or proposals that may have been drawn up by the TDC for future regeneration as this is being handled exclusively by the TDC's Chief Executive."
  This is a level of secrecy that smacks more of the inner chambers of a Medici princeling than of a public body set up by statute and spending public money.
  The report continues in terms of the council's future policy plan. It states:
  "therefore it is probable that the Tees Corridor Study, being prepared by consultants on behalf of both Middlesbrough and Stockton Councils, and also English Partnerships, will differ from ideas that the TDC might have, and any proposals it may be working up or have implemented by the wide-up date."
  I am told by senior council officers on Teesside that the secrecy of the TDC on these matters is affecting the ability of our local authorities to bid properly and effectively for European structural fund cash for the preparation of strategic sites for new, or potential, inward investors. That is money that will now go elsewhere.
  It could be said that Middlesbrough council has been somewhat lucky in having the TDC talk to it at all. Another local authority body on Teesside, the Tees Valley joint strategy committee—a body set up by statute following the passing of the statutory order for local government reorganisation for Teesside—has been entirely ignored. The JSC is not a local government body of whim. I repeat that it is a creature of statute that is made up of serving
  462
  councillors from all the boroughs in the former Cleveland area and from Darlington, and it is entrusted with all matters relating to strategic planning issues.
  The JSC has been trying to set up meetings with the TDC for over a year now to discuss winding-up matters in the overarching strategic context. It has had its requests constantly and adamantly refused by the TDC's chief executive and no logical reasons given for the refusals.
  The need for consultation with the JSC is vital. It is now in the midst of preparations for the drafting of the new Tees Valley structure plan which, to be robust, needs to be based on knowledge of, and insight into, the development proposals of the TDC.
  There are other matters that need to be discussed with Teesside's local authorities. Above all, we need from the Department an honest statement on the risk assessment of the TDC projects. I am particularly concerned about completed large infrastructure projects such as the river Tees barrage.
  Ms Dari Taylor:I am most grateful to my hon. Friend for allowing me to intervene. He has mentioned that there has been no exit policy and that we have received no information from the TDC. In my patch, we are left not just with the Tees barrage, where there could be serious maintenance problems, but with the imposition of a scheme that no local person wants in a part of rural Stockton that is beautiful and for which there is lottery money. These are serious problems for local people and they have no recourse; they cannot discuss it because nobody from the TDC will discuss it with them or with the council.
  I am most grateful to my hon. Friend for taking these issues on board and for bringing them to the attention of the Government and, I hope, the wider media and people. I thank him for that.
  Dr. Kumar: My hon. Friend is absolutely right. She just reminded me that the River Tees barrage is in her constituency, but it is nevertheless a Teesside issue. This is a very important issue involving environmental problems that we might encounter, which might need a lot of cash to solve. Local councils need very early notice regarding those problems.
  The other issue identified by the National Audit Office is the keeping of accurate audit records and files. Again, there has long been suspicion on Teesside that the standard of record keeping and file systems in the TDC does not meet the National Audit Office's demands.
  In the Middlesbrough borough council report to which I referred earlier, the council's chief officer said that although files relating to statutory matters will be kept and handed over, the TDC
  "has indicated that it will destroy files relating to completed or aborted projects".
  A modern "Bonfire of the Vanities" perhaps. That flies in the face of National Audit Office recommendations and can give rise only to fears that the TDC has something to hide. I have to say that, having regard to, and in view of knowledge of, the history and ethos of the TDC, I share those fears.
  The TDC is notoriously secretive. It meets in secret behind closed doors, with no printed public minutes and without any scrutiny of its decision-making process by the

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  local media or by local people. That is contrary to the spirit of the Nolan committee. The TDC announces decisions by way of press releases and often refuses to take part in debates on the merits or otherwise of its schemes—and it is funded by public money. I believe that the House would rightly condemn such behaviour.
  In this context, I must mention recent press reports in the regional media that pose questions about successor companies set up by the TDC—companies which, it is said, apparently involved, at a salaried level, prominent figures associated with the existing TDC. I shall pass on these cuttings to my hon. Friend the Minister and ask her to look at them and to make the appropriate inquiries within the Department for which she is responsible.
  I wish to put a number of concrete suggestions to my hon. Friend about the winding up of the TDC. There are actions that my hon. Friend can undertake: that the TDC be immediately charged to set up a committee, chaired by the regional government office, comprising the TDC, the Commission for the New Towns, the Tees Valley joint strategy committee and the four boroughs; that it be made clear to the TDC that the committee will operate within the access to information legislation currently applicable to local authorities; that the committee operates to a strict calendar of meetings and that that calendar is adhered to; that the TDC produce for the committee an inventory of all the sites in its ownership, current development proposals, actual and potential private sector partners and potential prospects for development by 31 March; that the TDC produce for the committee a list of all projects that will not be finished by the end of March this year and proposals for their funding; and that the TDC produce for the committee a list of liabilities, a programme for the transfer of liability and proposals for the amelioration of the total weight of the potential debt burden. I also ask that the TDC produce a complete list of files concerning key sites with information on ground conditions, means of access, financial evaluation and financial proposals. [Interruption.]
  I will leave it at that. I could go on, but I want to hear what the Minister has to say.
  10.50 pm
  The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Angela Eagle): I congratulate my hon. Friend the Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) on securing the debate, and on the way in which he presented the issues that concern him and his constituents. In the nine minutes left to me, I shall do my best to give him at least some reassurance.
  As my hon. Friend knows, we are coming to the end of an era with the development corporations. We are now concerned with their wind-up processes and exit strategies. Urban development corporations were established by the last Administration, and I remember the considerable resentment that accompanied their establishment, particularly in local government. Some councils felt that they were being excluded from the process of regeneration, and in some cases they were portrayed as being hostile to regeneration. Although the development corporations were expected to work with the local authorities in their areas, I accept that practice varied across the country. Some were better than others at working in partnership with local government. Of course, most of that is now history, or fast becoming so.
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  The Government recently set out their vision for economic development and regeneration in the English regions—which we have just been debating—and we hope that that will provide a better framework for the regeneration programmes that we hope to see in place by October this year.
  Before I deal with the specific issues raised by my hon. Friend, let me say something about the Teesside development corporation. When it was established in May 1987, it was the largest of the urban development corporations, covering an area of more than 4,500 hectares. Its aim was the regeneration of that area, and it was given substantial public funds for the purpose. The public money was used to "lever in" private-sector investment on Teesside, focused on specific projects. We now take that approach for granted, but, at the time, given the problems that existed in the urban development areas, it was a novel approach.
  As my hon. Friend has acknowledged, some of the developments that have been sponsored by the Teesside development corporation have been welcomed by the people and the local authorities on Teesside. It would be pointless to deny that the development corporation has achieved a significant transformation of its area, and brought considerable benefits to Teesside—not least over £1 billion of new investment.
  The position was different in 1987. Teesside was experiencing decline in all four of the principal industrial sectors on which the local economy and local employment depended. Many people recognised at the time that those sectors—iron and steel, chemicals, heavy engineering and the port—needed to change, either through growth or through restructuring; but they recognised that the change could not take place overnight. More important, they recognised that new investment had to be attracted to Teesside, either in similar or associated businesses or in entirely new businesses.
  Decline of the traditional industries on Teesside was not the only problem. Teesside was not seen as a place in which to invest. In 1987, it was seen as a centre of industrial decline, severe environmental dereliction and an unduly heavy concentration on what were seen as "bad neighbours"—industries such as steel and chemicals. Creating a new image for Teesside was the priority for the development corporation. There was a need to break from the past, and to be at the forefront of environmental change, improvement and rehabilitation. There is no doubt that Teesside development corporation approached the task with enthusiasm and skill. It felt the need to be bold and imaginative, and it is not surprising that, in the process, some feathers were ruffled.
  I must say to my hon. Friend that I would have preferred there to be less tension; but, as I have said, development corporations will soon be a thing of the past, and I look forward to more effective partnerships as the new regional development agencies are established.
  As a result of the corporation's activities, an unprecedented amount of private-sector investment has been attracted to Teesside. Much has been achieved in the last 10 years to transform what were some of the worst areas, and few today would deny that their perception of Teesside has changed. In particular, I would mention the new marina and historic quay at Hartlepool, the Teesside site between Middlesbrough and Stockton-on-Tees that is now the location for new business, housing and education

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  development, the Teesside Park retail and leisure development at the former Stockton race course site, the new business park at Preston Farm and the developments on the River Tees itself, including the offshore base and the Tees barrage.
  Of course, it has not all been plain sailing, and not everything the corporation has tried to do has been successful. My hon. Friend referred to the planning application for a major retail development at the Middlehaven site that has been called in by the Secretary of State. We are both aware of what the High Court said about the way in which the corporation handled the application. For obvious reasons, I cannot say anything about the application. We shall have to wait for the outcome of the public inquiry.
  My hon. Friend mentioned the Teesside Park retail development. I think that it is going too far to suggest that it was the only reason for the Stockton city challenge bid for funds. At that time, Stockton had many other problems that the city challenge bid identified for urgent action, and the developments then being undertaken by the corporation made those problems more obvious. He may recall that the bid submitted to my Department included the Teesside development corporation as one of the partners.
  I should now like to turn to the specific issues that my hon. Friend raised about the wind-up of Teesside development corporation. On the general issue of exit strategy, my Department has given guidance to all development corporations on how they should wind up their affairs. That guidance has taken account of the recommendations made by the National Audit Office in its report on the wind-up of the Leeds and Bristol development corporations. Each corporation is responsible for preparing its own exit strategy, and for consulting as necessary with the appropriate Government office, local authorities and others.
  The main task now falling to Teesside development corporation is the disposal of its remaining land holdings and other assets to public and private sector organisations, to enable further development to take place and to continue the momentum of regeneration. The corporation is quite properly talking to individual local authorities on Teesside about their taking over certain infrastructure projects. However, I am surprised that, unlike other development corporations, Teesside development corporation has decided not to enter into any agreements with the local authorities on Teesside for them to take on packages of assets and liabilities. The guidance given by my Department does not dictate succession strategies, but it is concerned that all available options should be considered. Development corporations are encouraged to discuss their succession arrangements with local authorities and with English Partnerships, as they are ready-made vehicles for continuing regeneration work.
  I am concerned that the local authorities on Teesside feel that the corporation has not considered it necessary to discuss its strategy in detail with them. I can understand why that approach has not been well received by either the authorities or by my hon. Friend, and I would have liked to see wider discussions than those that have so far taken place.
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  In line with the guidance that my Department has given, the corporation has identified all the assets and liabilities that must be disposed of by 31 March, and has prepared detailed risk assessments. While I understand my hon. Friend's concern that this information is not in the public domain, I am sure that he will appreciate that it often includes commercially confidential, and therefore private, information. However I can assure him that it is available, to my Department and is being carefully monitored by my officials in the Government office for the north-east. Regular meetings are held with the corporation's officers, and I can assure him that action is taken when it is required.
  My hon. Friend will know that the Secretary of State has power to give directions to development corporations, and although rarely used, the power is available if required. The exit plans prepared by the corporation form the basis for discussions with the Commission for New Towns, which is the designated residuary body that will inherit any assets and liabilities not disposed of by 31 March. I assure my hon. Friend that there is no question of the local authorities on Teesside receiving any liabilities that they have not agreed to take on before 1 April. Any of the corporation's liabilities that have not been disposed of by the end of March will automatically transfer to the Commission for New Towns.
  My hon. Friend has raised the issue of the destruction of files by the corporation, which implies that essential records will not be available to successor bodies or to the National Audit Office. The Minister for the Regions, Regeneration and Planning has recently written to him on that specific issue. My Department's advice is that development corporations are not required to retain all their files: it recognises that corporations will have accumulated many thousands of them. However, it advises that they should be cautious about destroying files unless they are sure that they will not be of future use. We expect all corporations to err on the side of caution in that respect.
  I have no reason to believe that Teesside development corporation is not following departmental guidance on these matters. If it does have any doubts about whether a file or other records should be retained or destroyed, it knows that my Department's staff in the Government office for the north-east are always available to advise.
  I have listened carefully to the suggestions made by my hon. Friend about the wind-up of the corporation. As I have said, officials in the Government office for the north-east are already closely monitoring the exit plans. I am willing to stay in touch with him on the development of that process.
  I know that my hon. Friend is concerned about the future of regeneration on Teesside once the development corporation is wound up. He has referred to concerns expressed by at least one of the local authorities. One of the tasks that my Department has given to all development corporations as they approach the end of their lives is the preparation of a regeneration statement, which will help inform future policy.
  I hope that I have given my hon. Friend some of the reassurances that he sought.
  Question put and agreed to.
  Adjourned accordingly at Eleven o'clock.