Commons Sitting of 3 February 2000

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

  KENT COUNTY COUNCIL BILL [Lords]
  Order for Second Reading read.
  To be read a Second time on Thursday 10 February.

  MEDWAY COUNCIL BILL [Lords]
  Order for Second Reading read.
  To be read a Second time on Thursday 10 February.

  MERSEY TUNNELS BILL (By Order)
  Order for Second Reading read.
  To be read a Second time on Thursday 10 February.

  COMHAIRLE NAN EILEAN SIAR (ERISKAY CAUSEWAY) ORDER CONFIRMATION BILL
  Read the Third time, and passed.
Oral Answers to Questions
  TREASURY
  The Chancellor of the Exchequer was asked—
  TREASURY

    Married Couples Allowance
    Mr. Tim Collins: What estimate he has made of the average cost of the abolition of the married couples allowance to a couple of working age in a full financial year; and if he will make a statement. [106881]
    The Chancellor of the Exchequer (Mr. Gordon Brown): Let me, first, announce that the Budget date will be Tuesday 21 March.
    The cost to the married couple when, under the previous Government, the allowance was cut from 40p to 15p was £430. The cost of ending it is £197. The children's tax credit, which will replace it, will be worth £400—£8 a week—to families with children. However, in the case of this Government, the 1p cut in the basic rate, the introduction of the working families tax credit and the introduction of the new children's tax credit mean that
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    almost every family with children is better off. The tax burden on the average family will fall to its lowest since 1972.
    Mr. Collins: Why will not the Chancellor admit that the abolition of the married couples allowance is a tax increase, that the abolition of mortgage tax relief is a tax increase, or that ever higher petrol duties are a tax increase? Is it because to admit that would be to admit that he has clearly breached the Prime Minister's assurance that there would be no tax increases at all under a Labour Government?
    Mr. Brown: I will deal with each of the hon. Gentleman's points in turn. However, I should have thought that the first thing he would want to do is welcome the 10p tax rate, which is a Labour tax cut. I should have thought that the second thing he would want to do is welcome the cut in the basic rate of tax, which is a Labour tax cut. I should have thought that the third thing he would want to do is welcome the national insurance cuts that we have introduced—which are worth £3 a week, and are another Labour tax cut—and of course the child tax credit and the working families tax credit, which are tax cuts worth on average £24 a week for the poorest families.
    I am very glad that the hon. Gentleman raised the issue of the married couples allowance, because he might want to ask the new shadow Chancellor some questions about that. I have been looking back to the debates of the early 1990s, and the person who introduced the biggest cut in the married couples allowance and piloted it through the House of Commons was the shadow Chancellor himself. He told the House that the allowance had "no on-going justification"; he said that it was the "most anomalous" of allowances. He said:
    "I doubt that the reduction to be made in the first year … could be held to be crucial for those deciding whether they get married."—[Official Report, Standing Committee A, 22 February 1994; c. 347.]
    If the hon. Gentleman looks back at the 1992 debates on mortgage tax relief, married couples allowance, national insurance or VAT on fuel, he will find that the person who was responsible for the 22 tax rises piloted through the House of Commons was the shadow Chancellor.
    The debate in this country is between fairness, with our children's tax credit, and unfairness. It is because we are creating policies of stability and creating jobs that people are better off.
    Mr. Robert Sheldon: Is my right hon. Friend aware that the married couples allowance did make sense in the early war years, when it was an incentive to get women into the labour market to help the war effort, but that now, with women forming such a large proportion of the working population, it is not really necessary?
    Mr. Brown: It would seem strange to say so, but I agree with the Leader of the Opposition on the matter. He said that if we were to replace married couples allowance, it should go to families with children, to meet the costs that people have as their children grow up. That is why I should have thought that the Opposition would welcome the children's tax credit, which is to be worth £8 a week to almost every family in this country. I should have

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    thought that they would welcome the working families tax credit, which is worth £24 a week. I should have thought that they would welcome the rises in child benefit. That is the dividing line between the parties: we are for fairness to families; they have nothing to say to ordinary families in this country.
    Mr. Michael Portillo: May I tell the right hon. Gentleman what a pleasure it is to be standing here opposite him, and what a pleasure it will be to oppose him? I very much hope that we can have a civilised relationship. I also very much hope that we can have some fun—although I do not think that laughing at himself is the Chancellor's strong suit, but perhaps Conservative Members can make up for that.
    I do hope that we can start our relationship on a straightforward footing, because the Chancellor of the Exchequer has a reputation for ducking questions. However, does he agree that the burden of taxation in this country is rising faster than in any other industrialised country, as stated by the Organisation for Economic Co-operation and Development? Will he now admit that millions of people are going to be paying more income tax?
    The Chancellor is abolishing the married couples allowance. He is abolishing mortgage interest relief. Income tax for a one-earner couple is therefore going to increase. Is he denying that that is the case? Will he further admit that those on the lowest incomes will face the biggest increases? [HON. MEMBERS: "Oh!"] Do Labour Members think that fair? Is not Brown's first law of gravity that that which goes up just keeps going up?
    Mr. Brown: I welcome the new shadow Chancellor to his position. I look forward to the debates that we shall have over the next few months. I wish him well in his dealings with his Conservative colleagues in trying to come up with a sensible Conservative economic policy.
    I have worked under four shadow Chancellors since I became Chancellor. The first denied any responsibility for the 22 tax rises, saying that they were all down to his predecessor. The second said that he was at the Department of Social Security at the time, in the early 1990s. The third said that he was not even in the House of Commons—his alibi was that he was not at the scene of the crime. We now have the person who piloted through the 22 tax rises. I think that he will want to take credit for the fact that he piloted through the House of Commons the rise in VAT on fuel, the escalator on fuel, the escalator on tobacco and the cuts in the married couples allowance. [Interruption.] I only make those points because, while the shadow Chancellor was touring the country and recanting, the Conservative party should have been learning from its mistakes. They made an unsustainable tax guarantee in 1992, followed by 22 tax rises.
    Let me read the figures for the tax burden on families with children. When we came to power it was 21.5 per cent. It then fell to 20.9 per cent. and is falling to 20.4 per cent. By next year it will be 18.9 per cent. That is the lowest tax burden for families in this country since 1972, because we know that fairness to ordinary families matters.
    Mr. Portillo: I notice that the Chancellor did not deny that tax for single-earner married couples will increase.
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    That point is proven. I thank him for his words of welcome. Dealing with past Chancellors has sometimes been described as like being savaged by a dead sheep or nuzzled by an old ram. Dealing with the current Chancellor is like being assaulted by Mr. Toad, with the pomposity and self-congratulation that distinguish him. I did not get very far in securing answers from him. He says that he works under shadow Chancellors. Perhaps he does not yet realise that he is here to answer questions because he is meant to be part of the Government. [HON. MEMBERS: "Get on with it."] I intend to.
    I want to be entirely open to see whether we can get some openness from the Chancellor. The next Conservative Government will respect the independence of the Bank of England and will legislate to enhance that independence and increase accountability to Parliament. The next Conservative Government will not repeal the national minimum wage.
    Hon. Members: Hear, hear!
    Madam Speaker: Order.
    Mr. Portillo: I now want the Chancellor to answer questions and admit to the House that he is about to put up income tax for millions of people. I am not talking about people with children. I am talking about single-earner married couples with a mortgage. Their income tax is going up.
    Mr. Brown: The shadow Chancellor is wrong. The tax burden is falling from 37.4 per cent. to 37 per cent. to 36.8 per cent. Those are the figures published in the Red Book and the ones into which the Select Committee inquired. They have been published internationally and are accepted by those who look at such matters. So not only has the burden for the family with children been cut to its lowest since 1972, but the tax burden will be cut next year.
    I welcome the conversion of the Conservative party to Labour party policy on the Bank of England. I welcome, in particular, the shadow Chancellor who opposed the minimum wage so vigorously when he was at the Department of Employment admitting that he was wrong and now agreeing to the minimum wage. Now, will the Conservative party accept our other policies: first, the new deal to get young people back to work, which the Conservatives would still scrap; secondly, our working families tax credit, which is worth £24 a week; thirdly, our children's tax credit and our child care strategy; and fourthly, our commitment to the national health service, which they have never matched in anything they have said?
    May I give one final bit of advice to the shadow Chancellor? If he is looking back on his record and what he might learn from it, is it not amazing that, on his first day as shadow Chancellor, he has repeated the same mistake as the previous Prime Minister, the previous Chancellor and the previous Chief Secretary made when they committed the Conservative party to a politically driven tax guarantee that risks money for the NHS and the maintenance of prudence in this country? It is a tax guarantee that the former Prime Minister now says was "mad", and it puts the NHS at risk. It is a tax commitment that the former Chancellor, Lord Lamont—not noticeably

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    a left-winger on tax issues—says is "irresponsible". I put it to the shadow Chancellor that the Tories should learn from all their mistakes.
    Madam Speaker: Perhaps we could get on with questions and answers now.

    Match Funds
    Mr. Andrew George: What discussions he has had with his colleagues in other Departments about the budget for match funds for the United Kingdom's European objective 1 regions. [106883]
    The Chief Secretary to the Treasury (Mr. Andrew Smith): As part of the current spending review, I and my officials have begun discussions with all Departments on their spending plans, including those departmental programmes from which regions can draw match funding.
    Mr. George: Does the Minister accept that the Government last year signed commitments to Britain's four poorest regions, and that Cornwall will receive £314 million over the next seven years from Europe? The Prime Minister will want and expect a warm welcome when he visits Cornwall tomorrow. In order to be confident that he receives one, can the Chief Secretary assure us that the Government will honour their financial commitments to the UK's four poorest regions?
    Mr. Smith: I welcome the hon. Gentleman's thanks—I take it that is what it was—for the work of the Labour Government, in partnership with those areas, in winning the objective 1 status which, as he said, means a boost of more than £300 million for Cornwall. All departments and Government offices will work closely with the areas to benefit, to ensure that they get the match funding that they need.
    The hon. Gentleman might not be aware of how many sources of match funding there are: the revenue support grant for local authorities; the regional development agencies; business links; the new deal for communities; the Foresight and Smart programmes; the national lottery; loans from the European investment bank; and the voluntary and private sectors. We are committed to making a success of regeneration and growth in those areas. The Government will succeed where the previous Government failed—in the regions which suffered the most.
    Mr. Denis MacShane: The Chief Secretary will be aware that south Yorkshire and the other regions have got objective 1 funding because their gross domestic product per capita sank to below 75 per cent. of the European level—an indictment of the poverty politics of Planet Portillo when the Conservatives were in charge. However, that massive lifeline from Europe—I do not know whether we will see the Conservatives converting to pro-Europeanism as well by the end of Question Time—does need match funding. The money is there, but is my right hon. Friend aware that there is great concern that departmentalitis is not allowing the money to be made available? Will he look at that matter and crack the whip over other Whitehall Departments? He has indicated the sources of the money. Will he make sure that this money
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    is made available, and that we get the help from Europe that south Yorkshire certainly needs after 20 scandalous years of Tory control?
    Mr. Smith: There is certainly no question of departmentalitis, red tape or anything else standing in the way of the help that those areas need to make a success of objective 1 status. As my hon. Friend recognises, that means a £750 million boost to the local economy of south Yorkshire. The day before yesterday, my right hon. Friends the Minister for Trade and the Minister for Local Government and the Regions met representatives from the area, including hon. Members from the constituencies affected, to ensure that they gain the benefits from the programme that they need and deserve.
    Mr. David Heathcoat-Amory (Wells): Instead of scrabbling around trying to increase the level of handouts from the EU budget for those regions, why do not the Government tackle the real issue, which is that for every £2 we pay into the EU budget we get £1 back? That is not a good deal for the British taxpayer or for those regions. Why did not the Government tackle that issue at the Berlin summit last year when, for the first time for many years, the entire structure of the EU budget and finances was up for renegotiation? Instead of renegotiating it, the Government accepted a continuance of that unfair mechanism, which is bad news for the British taxpayer and which has failed to release the additional resources for the regions that would otherwise be available from our own budget.
    Mr. Smith: The truth is, of course, that we succeeded in doing what the right hon. Gentleman, and his right hon. and hon. Friends, said was not possible—we fought for and saved the British rebate in Europe. The people living in south Yorkshire, west Wales and the valleys, Cornwall and Merseyside, who will benefit from the European programmes, will remember that the Conservatives are more interested in attacking everything European than they are in securing the benefits of constructive engagement in Europe for those areas of our country.

    Working Families Tax Credit
    Mr. Tom Clarke: How many new claims for working families tax credit have been made since its introduction; and if he will make a statement. [106884]
    The Chancellor of the Exchequer (Mr. Gordon Brown): Up to the end of December 1999, there had been 630,000 awards for the working families tax credit, of which 300,000 were for families who were not in receipt of family credit at the time of the claim. The average gain to working families is £24 a week.
    Mr. Clarke: I thank the Chancellor for that reply and I assure him that many low-paid families in my constituency have benefited greatly from the working families tax credit. Indeed, some low-paid families have seen their incomes rise by more than £30 a week. I wish to encourage the Chancellor, who rightly enjoys an international reputation for challenging child poverty,

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    to continue to address, in his Budget, that challenge to domestic child poverty in constituencies such as mine and in every constituent part of the United Kingdom.
    Mr. Brown: I am grateful to my right hon. Friend, who has fought hard on international development issues and on national issues to relieve the plight of those in poverty. He will be interested to know that 130,000 families in Scotland will benefit from the working families tax credit. Some families will get up to £50 a week extra. The Inland Revenue telephone line and the special working families tax credit telephone line have received nearly 2 million calls from people inquiring about the working families tax credit; that is why most people will conclude that it is a worthwhile and necessary innovation.
    In the spirit of conversion from previous mistakes, the Conservatives might remind themselves that the policy that they cannot support in Britain was perfectly acceptable to Ronald Reagan in the United States.
    Mr. David Ruffley: May I draw the Chancellor's attention to the remarks of the Office for National Statistics and the OECD to the effect that his treatment of the working families tax credit as a tax cut is a clear breach of standard accounting rules? When will he stop fiddling the figures?
    Mr. Brown: That is absolutely wrong. In the same way as the Conservatives considered mortgage tax relief, we have considered the working families tax credit. In the same way as these matters are being debated in America and elsewhere, and in the international organisations, they are now the subject of discussion here.
    Conservative Members do not like to admit that they are opposing a £24 a week tax cut for ordinary families. It is about time that, instead of trying to get out of the commitment that they should make to working families, they started supporting the working families tax credit.
    Ms Sally Keeble: Is my right hon. Friend aware that the working families tax credit has been important in my constituency not so much in itself but because, even if people get only £1 of it, they can get the child care credit which has transformed the lives of many women in my constituency, who say that they are £60 or £65 a week better off? Will he ensure that when the literature is produced for the working families tax credit, it will make much clearer the benefits of the child care credit? Will he comment on the fact that the Conservative party would destroy that benefit—if their promises are to be believed—thus throwing those women out of work and back on to benefit, damaging their families in the process? [Interruption.]
    Mr. Brown: They do not like hearing it, but Conservative Members are opposed to the measure that is taking more children out of poverty than any other. If only a few children were released from poverty by the working families tax credit, we would all support that; but 800,000 children are being taken out of poverty as a result of this and related measures.
    The number of people claiming the child care benefit has doubled as a result of the publicity, and we will advertise it widely so that it is available for mothers and fathers who have to make the choice between working
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    and staying at home. I should have thought that, with the new evidence that 800,000 children are being taken out of poverty, the Conservative party could support what the Republicans support in America: an earned income tax credit such as we have.
    Mr. Matthew Taylor: The Chancellor talked once again of tax cuts for families, but did he not have a huge Conservative deficit—not least the legacy of the former Chief Secretary, the right hon. Member for Kensington and Chelsea (Mr. Portillo)—to overcome? The real figures show that tax has risen, but the Chancellor, like his predecessor, likes to choose indirect taxes as the means of increase. Would we not have a more honest debate if the Chancellor restored the index measuring the overall tax burden, including indirect taxes, so we could see whether it is the Chancellor or the former Chief Secretary who increased indirect taxes most?
    Mr. Brown: The hon. Gentleman is obviously very interested in the statistics, so let me tell him that the tax burden on the ordinary family with one child has fallen, and is falling, from 21.5 per cent., to 20.9 per cent., to 20.4 per cent. and to what will be next year the lowest tax burden on ordinary families for 20 years. He should support that.
    The hon. Gentleman is right about the Conservative party: we must unite on that, and remind the country that the current Conservative Front-Bench spokesmen on tax are the very people who, in the Conservative Government after 1992, put VAT on fuel, introduced the escalator, reduced the married couples allowance from 40 per cent. to 15 per cent., introduced the air passenger tax and implemented 22 tax rises: the biggest rises in tax that the country has seen.
    It seems from yesterday's performance, when the shadow Chancellor made his tax guarantee, that he has learned nothing from past mistakes. With all those tax rises behind him, he is not the Conservative party's solution: he is its problem.
    Mrs. Louise Ellman: Does my right hon. Friend accept that the benefits of the working families tax credit in areas such as Liverpool go alongside the benefits of employment opportunities provided by, for example, Government regeneration programmes and the ability of the Merseyside objective 1 area to spend £850 million of European funding, especially on business support? Does he recall that the working families tax credit was opposed in the House not only by the Conservatives but by the Liberal Democrats?
    Mr. Brown: Perhaps the Liberal Democrats need to rethink these matters. In the north-west and Merseyside, nearly 170,000 people will benefit from the working families tax credit. We now have a strategy, through the new deal, to give people new job opportunities, and through the working families tax credit, to make work pay. The child care credit makes it possible for people to work who might not otherwise be able to; and the tax changes that we are making, including the cut in the basic rate of tax, make it possible for work to pay even more for these families. We will, in the Budget, be introducing further measures that make it possible for people in the

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    areas that have been hardest hit by unemployment in the past, because of 20 years of Tory Government, to get the jobs they want.
    Mr. William Ross: How many claims for working families tax credit come from farming families? Would not that number of claims be reduced if the Chancellor and his right hon. Friends drew down the compensatory funds that are available for farming from Europe, owing to the changes in the value of the pound?
    Mr. Brown: I am grateful to the hon. Gentleman for raising this issue. I know that substantial numbers of claims have come in the past and still come from farming families. Self-employed people are also eligible for the working families tax credit and there has been a distinct increase in the number of applicants. That is the right of people in any area of this country. In Northern Ireland, 50,000 people are now eligible for, and claiming, the working families tax credit.
    Furthermore, the second biggest group of people claiming investment allowances, which we introduced in 1997, is the farming community. So we are doing what we can, within the resources that we have, to help farming families.
    Mr. Howard Flight: On working families tax credit, the Chancellor clearly believes that he has been brilliant. Can he explain why the working families tax credit has to be paid out to people whom the Inland Revenue know are not eligible? Can he explain why people earning more than £38,000 a year can be eligible to receive it? Can he explain why more than 1 million people have a marginal tax rate of 69 per cent? Can he explain why employers have to spend £100 million on administering the credit? The OECD has made it clear that it should be treated not as a tax cut, but as a social security spending increase, as it is means-tested. The Royal Statistical Society has said that the Chancellor is failing to put the national accounts on a reliable footing. I suggest that the right hon. Gentleman's skills in creative accounting have misled even himself.
    Mr. Brown: If the hon. Gentleman has any allegations about fraudulent claims for working families tax credit, let him put them to the proper authorities. Every other issue he raises shows how little he understands the working families tax credit. This is a benefit that will be paid through the wage packet because it shows that work pays. I thought that the Conservative party was interested in showing that work paid. It will encourage mothers who otherwise would not be able to work to have the resources, through child care, to do so. I should have thought that the Conservative party would want women to have that freedom. It will increase the number of jobs in the economy, and will benefit the very small businesses in which the hon. Gentleman says he is interested.
    The Government are ensuring that work pays for these people. I should have thought, on the basis of the Conservative party's new analysis of policy, that it would accept that it has been wrong over the working families tax credit, and change its policy.

    Debt Relief
    Mr. Andrew Reed: What steps he is taking to persuade other countries to offer 100 per cent. bilateral debt relief to all countries that qualify for debt relief under the enhanced highly indebted poor countries initiative. [106885]
    Mrs. Betty Williams: What discussions he plans to hold with his counterparts in other G7 countries about measures to write off the debt of the highly indebted poor countries. [106895]
    The Chancellor of the Exchequer (Mr. Gordon Brown): I am delighted that the French Finance Minister announced at the G7 meeting in Tokyo on 22 January that France, too, will provide 100 per cent. debt relief to all countries that qualify for debt relief under the highly indebted poor countries initiative. I have urged my other G7 colleagues and other countries to make similar commitments. I believe that further commitments will be announced in the run-up to the International Monetary Fund meetings in April.
    Yesterday, Mauritania received debt relief—the first country to benefit under the new enhanced initiative. Tomorrow, I believe that Bolivia will receive the debt relief that it is due, and in the next few weeks Uganda will receive its relief. The initiative is working, and I am grateful to all the Churches and community organisations which joined the campaign to make it possible.
    Mr. Reed: I am sure that the House would wish to congratulate the Chancellor on his worldwide moral lead, which has been described as
    "wonderful news and shows welcome vision and leadership".
    Those are not my words, but those of Ann Pettifor, the director of Jubilee 2000. However, countries such as Japan and Germany are still owed large debts that far outweigh the amounts that the United Kingdom has managed to write off. Will my right hon. Friend apply pressure over the next few weeks to ensure that those debts are relieved and that real poverty reduction is felt in the countries that really need it?
    Mr. Brown: I thank my hon. Friend, who leads a House of Commons group that has widely publicised the case for debt relief. The third-world countries need and should have debt relief; that should be no source of division in the House, and I hope that the Conservative Opposition will support our efforts. He is right that debt relief must lead on to poverty relief and economic development. In 1999, the world woke up to its obligations on debt relief; in 2000, we must create a virtuous circle of debt relief, poverty relief and economic development. I shall continue to press other countries. I believe that Norway and Sweden will make announcements similar to our own, and that some other G7 countries are ready to make further announcements. The widely welcomed initiative that Britain took before Christmas had a purpose and has brought results.
    Mrs. Williams: Is my right hon. Friend aware of widespread support up and down the country for the announcement that he and my right hon. Friend the Secretary of State for International Development made

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    before Christmas? I join other hon. Members in congratulating Jubilee 2000 and other organisations on their campaigning techniques. Can my right hon. Friend assure us that he will, in future discussion with G7 countries, make it crystal clear that the heavily indebted poor countries that save money will not invest it in armaments?
    Mr. Brown: I am grateful to my hon. Friend, who has led the campaign on debt relief in her constituency alongside Churches and community organisations. During the past year, we have seen one of the greatest displays of togetherness among religious denominations and non-governmental organisations as they have alerted people in Britain and across the world to the problem. She is right that debt relief must be used for poverty relief. It must not be spent on weapons of war, corruption, bureaucracy or waste. That is why we took our unilateral action.
    My right hon. Friends the Secretary of State for International Development and the Secretary of State for Trade and Industry and I have said that we will not extend export credits to 63 of the poorest countries in which export credits would lead to unproductive expenditure, such as spending on military weapons. It is unfortunate that the Conservatives have not supported that measure, and I hope that they will change their minds.
    Mr. William Cash: As the Chancellor of the Exchequer may know, I chair the all-party group on the reduction of third-world debt and have tried to take a constructive interest in the Government's views and to encourage them where possible. He will also know that many millions of people in the UK and the rest of the world have signed the petition on the reduction of third-world debt.
    In December, the Chancellor said that four countries would qualify by January, but have not only three done so? One of those is Mauritania, whose record on, for example, child labour is somewhat indifferent. Why will only three, not four countries qualify? Why has Guyana been demoted after having apparently been given assurances on the internal workings of its economy by an official of the International Monetary Fund? Will the Chancellor look into that question and find out why Guyana has not been give the debt relief that it deserves?
    Mr. Brown: Of course, I will look into the matter. The hon. Gentleman is right; hundreds of thousands of people in the UK have been involved in the campaign. At the Treasury, we have received tens of thousands of letters asking us to take action on the matter—including one that I received before Christmas from my mother. We have been trying to get countries through the initiative as quickly as possible.
    The hon. Gentleman asked why the fourth country—Mozambique—has not yet completed the process, when we had hoped that it would have done so by the end of January. I hope that he will follow these matters closely, because the reason is that Mozambique asked to be given time to formulate its poverty reduction strategy to present to the IMF board and the World Bank. It is not a delay on our part, so he should not criticise us; it was at the country's request.
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    As for other countries, we hope that 11 will be through the process by Easter, and 24 by the end of the year. The speed of progress will depend on the submission of poverty reduction plans. It is critical that we know that the debt relief will go to poverty relief. In the case of Uganda, we have already been promised that the country will halve the pupil-teacher ratio in schools from 100:1 to 50:1. We have also been promised that every child in Uganda will be educated in a classroom in a school building. [Interruption.] I should have thought that the Opposition would be interested in hearing those facts.
    Mr. Gerald Howarth: Madam Speaker, you will have heard the Chancellor of the Exchequer repeat the claim that he made on 11 January that, in the Government's great, bold manoeuvre, no fewer than 63 countries would be removed from eligibility to benefit from the support for defence exports of the Export Credits Guarantee Department. Will he confirm that, during the past 13 years, only one of those 63 countries—Kenya—has been the beneficiary of ECGD support, and that it is unlikely that Vanuatu was high on the list of British Aerospace's prospects? I invite him to acknowledge that his manoeuvre was, at best, empty and, at worst, misleading and disingenuous.
    Mr. Brown: The hon. Gentleman does not understand what happened. The reason that we have not given export credits to those countries during the past few years is that we banned them unilaterally two and a half years ago. That is why they are not receiving export credits for their expenditure on arms.
    The hon. Gentleman asks me to answer for everything that happened under the previous Conservative Government. Even with the best will in the world, I cannot do that. I cannot explain all their actions. In January, we extended the list from 40 to 63; again, I should have thought that the Conservative party would support that.

    Energy Taxation
    Mr. Tony Baldry: What recent representations he has received on energy taxation. [106887]
    The Financial Secretary to the Treasury (Mr. Stephen Timms): We have received several representations on energy taxation. In particular, we have listened closely to the views of business and other interested parties on our proposals for the climate change levy. We intend to continue the development of those proposals in an open and consultative way.
    Mr. Baldry: I hope that the Chancellor's mother received a reply to her letter sooner than the average six weeks that most of us have to wait for a reply from the Treasury.
    Is it not correct that, because of the Treasury's divide and rule negotiations over the energy tax, many larger industries have been let off, whereas smaller firms, such as Colegrave Seeds in my constituency, have been disproportionately clobbered? As the firm points out, that is all the more crazy, given that the thousands of flowers produced in its greenhouses reduce carbon dioxide emissions. Will the Government produce a year-on-year

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    estimate of the amount of the reduction in carbon dioxide emissions in relation to the tax garnered by the Treasury, or is the measure merely about further tax gathering?
    Mr. Timms: There is no size discrimination in the arrangements. We have made it clear that all the sites covered by the integrated pollution prevention and control directive will be eligible to enter discussions for a negotiated agreement. The rationale for that is strong; those sites are already treated distinctively because of their energy efficiency measures.
    We remain open to the consideration of alternatives for energy-intensive firms exposed to international competition. However, such alternatives would need a clear rationale, to be legally robust and administratively simple and to comply with EU state aid rules. We are confident that, on a conservative estimate, the levy will lead to reductions in emissions of 2 million tonnes of carbon a year and at least as much again as a result of the negotiated agreements.
    Mr. Bob Blizzard: On the tax regime for the North sea oil and gas industry, notwithstanding the rise in the oil price over the past year, does my hon. Friend agree that, looking to the future, we shall have smaller fields of oil and gas? They will be marginal fields and production will be more expensive. If we are to continue to attract investment in those fields, given worldwide competition, we need a tax regime that will encourage such investment. Will he agree to keep that tax regime under review, so that we can look forward to another 30 years' production of North sea oil and gas?
    Mr. Timms: We keep those matters under continual review and I met representatives of the North sea industry recently. As my hon. Friend said, the oil price is very buoyant at present and I very much hope that that will be reflected in increased activity in the North sea.
    Mr. Oliver Letwin: Now that the Government have mercifully—albeit possibly temporarily—withdrawn their ludicrous pesticides tax on the splendidly rational ground that it would have done nothing to limit the use of pesticides, will the Financial Secretary, after a prolonged period of reflection, promise to get rid of the dreadful energy tax, which still has a massive impact on some firms and will do little or nothing to reduce CO2 emissions?
    Mr. Timms: No, I do not agree with the hon. Gentleman on that. On the pesticides tax, we said in the pre-Budget report that we were working with the British Agrochemicals Association. It has now come forward with proposals for a package of voluntary measures and my right hon. Friend the Chancellor of the Exchequer has said that, on that basis, he will not proceed with the introduction of a pesticides tax in the Budget.
    The climate change levy, however, is very widely welcomed. It is important that we meet our Kyoto objectives, and competitor nations are also taking steps to meet them. We all want the problem of climate change to be addressed. We are taking the steps that need to be taken.
    Fiona Mactaggart: On the climate change levy, I know that firms in my constituency have welcomed the level to which the Treasury has been open
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    to considering changes and receiving representations. However, many firms are still concerned about the decision to use integrated pollution prevention and control as a proxy for the tax. British Plasterboard, which is based in my constituency, is not part of the scheme—which is not related to climate change—and it produces a very energy-efficient product. The Treasury constantly saying, "Give us an alternative" is all very well, but does my hon. Friend think that there may be other better measures?
    Mr. Timms: I am grateful to my hon. Friend for acknowledging the extent to which we have listened and taken careful account of all the representations that have been made to us. She is right that the changes that my right hon. Friend the Chancellor of the Exchequer announced in November—they increased the environmental effectiveness of the levy while safeguarding the competitiveness of UK firms—have been widely welcomed. There are number of significant benefits, such as legal certainty, to using integrated pollution prevention and control as the basis for the negotiated agreements. However, I assure my hon. Friend that we remain open to considering alternatives as long as they meet the criteria that I set out a moment ago.

    Inter-bank Transfers
    Mr. Richard Ottaway: If he will introduce legislation to provide for the payment of interest on inter-bank transfers. [106889]
    The Economic Secretary to the Treasury (Miss Melanie Johnson): I have no plans to introduce such legislation.
    Mr. Ottaway: Notwithstanding banking practice, there is an important consumer point. It takes at least three days to transfer money from one bank to another. During that time, the owners of the money do not have access to it, they cannot use it and they do not earn interest on it. Under those circumstances, will the Economic Secretary conduct a review to find out where that money has gone and who earns the interest on it?
    Miss Johnson: The hon. Gentleman is right that cheque clearance takes, on average, three days to complete, but he is incorrect to say that there is a disparity between the money going into the account and it being received at the other end. Funds commonly reach the payee's account and attract interest, if appropriate, on the same day that a cheque is presented or an electronic transfer made. The Association of Payment Clearing Services believes that the majority of banks make no profit from the clearing process.

    Economic Growth
    Dr. Rudi Vis: What are his forecasts for United Kingdom economic growth in 2000–01, 2000–02 and 2002–03. [106890]
    The Chief Secretary to the Treasury (Mr. Andrew Smith): Forecasts for growth were set out in the pre-Budget report, and were between 2.25 and 2.75 per cent. for each of the years listed. Through our tough and decisive action, the Government have established the

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    platform of stability necessary to secure stable growth in output and employment. Updated forecasts will be published in the Budget.
    Dr. Vis: I thank my right hon. Friend for that answer. Are those growth rates sufficiently high to pursue the Government's various other goals, such as full employment and an end to child poverty?
    Mr. Smith: The crucial point is that we have more than 750,000 more people in jobs since the general election, thanks to the steps that we have taken to achieve stability, sustained investment and low, stable inflation. That platform of stability, with the new deal and our other measures for investment and regeneration, will enable us steadily to increase employment. We want to move towards full employment so that all our people, who were so cruelly wasted under the Conservatives, can realise their full potential and use their talents and energies.
    Mr. Peter Brooke: Is the Chief Secretary satisfied by the productivity gains since 1997? Will he extrapolate from that performance his productivity predictions for the years in the original question?
    Mr. Smith: No one can be complacent about this country's productivity record, which is due not least to the lack of education, training and investment that we inherited from the previous Government. We continue to press ahead to improve productivity, which is why educational and vocational skills are so important and rising levels of investment are so encouraging.
    We welcome the upturn in output by manufacturing industry in the quarter to November; the annualised rate was 4 per cent., which is the highest for five years. Moreover, we are now seeing the highest ever levels of manufacturing output. It is especially encouraging that improvement is greatest among small firms. There is further to go, but we are making progress.

    Exchange Rate
    Mr. David Taylor: If he will make a statement on the impact of his fiscal policy on the exchange rate of the pound in the last six months. [106891]
    The Chief Secretary to the Treasury (Mr. Andrew Smith): The factors affecting the exchange rate are many and complex, so it is not possible to identify the precise impact of fiscal policy. However, as I have just said, the Government's fiscal policy has made an important contribution towards achieving long-term economic stability by locking in sound public finances.
    Mr. Taylor: The Minister knows that sterling has risen to levels last seen in the mid-1980s. Does he share my concern that any fiscal loosening in the March Budget risks driving up the pound even further, accentuating the difficulties experienced by small firms in North-West Leicestershire that export to, or compete with, firms in
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    Europe? What does he say to those who claim that it is safer to invest any fiscal elbow room in better public services rather than further income tax cuts?
    Mr. Smith: I am sure that my hon. Friend would not expect me to speculate on the contents of the Budget, any more than he would expect me to speculate on interest or exchange rates. Our message is clear: the programmes that we have put in place for stability, sound public finances, investment and higher skills levels are the best measures to help businesses, including small businesses, to succeed in the global economy.
    The trends for manufacturing industry are encouraging, in the east midlands as elsewhere. Output is higher than ever; exports are rising and, as this month's CBI and British Chambers of Commerce surveys showed, confidence is increasing. It is as a consequence of those measures that in the east midlands employment has gone up and unemployment has gone down since the general election, with youth unemployment down by three quarters and long-term unemployment down by two thirds. That is the confidence that we have in the businesses of the east midlands, and which they are reciprocating through their record on jobs and exports.
    Sir Michael Spicer: As the Minister has implied, when he is answering the right question, interest rates are one of the factors that affect exchange rates. Why has the Chancellor of the Exchequer, according to The Times today, in effect told what is meant to be an independent Monetary Policy Committee to increase interest rates?
    Mr. Smith: That is not what my right hon. Friend told The Times. He told it that we backed the actions of the Monetary Policy Committee and the Bank of England in taking whatever steps are necessary to ensure that we stick to the path of stability, steady growth and sound public finances that is steadily transforming the economic prospects of this country.

    Manufacturing
    Mr. David Kidney: What assessment he has made of the prospects for growth in the United Kingdom's manufacturing sector over the next 12 months. [106897]
    The Economic Secretary to the Treasury (Miss Melanie Johnson): The pre-Budget report forecast is manufacturing output growth of 1½ to 2 per cent. this year.
    Mr. Kidney: I thank my hon. Friend for that answer. Recently, Stafford's premier manufacturer, Alstom, announced quite heavy job losses later this year. As my right hon. Friend the Chancellor of the Exchequer has announced that the Budget will be on my birthday, may I ask for a birthday present, namely fiscal measures that are targeted to help those sectors of the economy that are exposed to international competition and hit by the value of the pound?
    Miss Johnson: I am sorry to hear about the difficulties that are being experienced by the company to which my hon. Friend referred. I shall be happy to meet him to talk about them.
    It is a coincidence that the Budget will be introduced on my hon. Friend's birthday. He should draw no conclusions from the fact that the Treasury team does not give birthday presents. However, our best birthday present has been to the country, and it has been the prudence with which we have looked after the economic affairs of the nation, the caution that we have deployed and our policy of sound public finances, leading to the fastest rate of growth in the United Kingdom for five years. Manufacturing output rose by 1.1 per cent. in the three months to November on the previous three months. We have stabilised the economy and ensured that we do not return to the record interest rates that the Opposition allowed to happen when in government. We have avoided a return to the boom-and-bust policies of the Tory years.
    Mr. Nicholas Winterton: The Government have talked about the optimistic outlook for manufacturing industry. I am sure that the Minister would agree that the manufacturing base is too small. Do the Government see an expansion of it? What policies will the Government pursue to bring that about, as that will lead to more stable and sustainable economic growth?
    Miss Johnson: I am grateful to the hon. Gentleman for his support for manufacturing industry, which I strongly share. Manufacturing productivity is now up by 6 per cent. on the previous year. That is the strongest growth for five years. These developments augur well for the future. The Conservative Government, in sharp contrast to the present Government, presided over zero growth in productivity from 1995 to 1997. I am sure that he agrees that it is the present Government's policies that are helping to provide the base on which manufacturing and exports will continue to grow.
    Dr. Vincent Cable: Is the Minister aware that concern about the future of British manufacturing industry has been expressed by no less a body than the International Monetary Fund, which considers the pound to be 15 to 20 per cent. overvalued? What reply has the Treasury given to the IMF?
    Miss Johnson: The IMF has given the UK Government a glowing report on their management of the economy, on which I am sure the hon. Gentleman would wish to congratulate us, although I did not hear him do so. As I said, manufacturing output has improved. We have on many occasions drawn to the attention of hon. Members an increase of 700,000 jobs across the UK economy. That is supported by strong manufacturing output.

Business of the House
12.30 pm
Sir George Young: May I ask the Leader of the House to give us the business for next week?
The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The business for next week is as follows:
MONDAY 7 FEBRUARY—Motions on Social Security Orders.
Procedure motion relating to the Sexual Offences (Amendment) Bill.
TUESDAY 8 FEBRUARY—Second Reading of the Armed Forces (Discipline) Bill [Lords].
WEDNESDAY 9 FEBRUARY—Conclusion of proceedings on the Financial Services and Markets Bill.
THURSDAY 10 FEBRUARY—Second Reading of the Sexual Offences (Amendment) Bill.
FRIDAY 11 FEBRUARY—Private Members' Bills.
The provisional business for the following week will be as follows:
MONDAY 14 FEBRUARY—Consideration in Committee of the Political Parties, Elections and Referendums Bill (First Day).
TUESDAY 15 FEBRUARY—Second Reading of the Postal Services Bill.
WEDNESDAY 16 FEBRUARY—Consideration in Committee of the Political Parties, Elections and Referendums Bill (Second Day).
THURSDAY 17 FEBRUARY—Opposition Day [5th Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.
FRIDAY 18 FEBRUARY—The House will not be sitting.
The House will also wish to know that on Wednesday 16 February there will be a debate on the 1999 review of telecommunications legislation and radio spectrum policy in European Standing Committee C.
The House will also wish to be reminded that on Wednesday 9 February there will be a debate relating to common strategy on Ukraine in European Standing Committee B, and a debate on state aid to the coal industry in European Standing Committee C. Details of the relevant documents will be given in the Official Report.
[Wednesday 9 February 2000:
European Standing Committee B—Relevant European Union documents:13523/2/99, Common Strategy on Ukraine; Unnumbered explanatory memorandum submitted by the Foreign and Commonwealth Office on 1 February 2000, Ukraine Common Strategy Work Plan; Relevant European Scrutiny Committee Reports: HC 23-iv and HC 23-vii (1999–2000). [Wednesday 16 February 2000:
European Standing Committee C—Relevant European documents:14320/98, 12838/99, 12839/99, 12840/99, 1999 Review of Telecommunications Legislation and Radio Spectrum Policy; Relevant European Scrutiny Committee Reports: HC-23-i and HC 23-vii (1999–2000).]
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The House may also like to know that it is the Government's intention that we should rise for Easter at the close of business on Maundy Thursday and return on Tuesday 2 May.
Sir George Young: The House is grateful for next week's business, an indication of the likely business for the week after, and advance notice of the Easter recess.
The whole House is concerned about events in Northern Ireland, following the completion of the de Chastelain report. Of course, we understand all the sensitivities, but can the right hon. Lady tell the House whether the Secretary of State has any plans to make a statement later today?
Can we expect statements next week from the Home Secretary on Senator Pinochet, and from the Secretary of State for Culture, Media and Sport on his proposals for the licence fee, some six months after the report of the Davies committee?
Will the Leader of the House undertake to find time for the usual St. David's day debate on Welsh affairs?
Following last night's vote, does the right hon. Lady understand that the Opposition very much regret that their nomination for the House of Commons Commission was rejected, with 16 Parliamentary Private Secretaries voting against a motion in the name of the Deputy Chief Whip? Will she use her best endeavours to resolve the inevitable difficulties that have ensued?
Finally, will the Prime Minister make a statement on Monday on his findings, following his tour of the south-west? May not that give him a welcome opportunity to revise the impression that he has given that he is totally out of touch with countryside issues?
Mrs. Beckett: First, I am grateful to the right hon. Gentleman for his welcome for some of the announcements that I made, and for giving me the opportunity to clarify the position.
The House will appreciate that discussions are continuing during the day. Given the political situation in Northern Ireland, the business that I have just announced may be subject to some revision. My right hon. Friend the Secretary of State for Northern Ireland expects to come to the House later this evening to make a statement. If that statement has an impact on the handling of business, I shall announce then any necessary changes in the business of the House.
Secondly, the right hon. Gentleman asked about Senator Pinochet. Although the application by Amnesty International in Belgium for a judicial review has been rejected by Mr. Justice Kay, Amnesty has renewed its application to the divisional court. In view of those proceedings, my right hon. Friend the Home Secretary has given an undertaking that he will not make a decision on extradition before the hearing of the application, which cannot take place before Monday 7 February. My right hon. Friend has always maintained that he will come to the House to announce the decision as soon as possible.
I note the right hon. Gentleman's wish for a statement on the Davies report. My right hon. Friend the Secretary of State for Culture, Media and Sport has that in mind and will make an announcement to the House when he can. The Government intend to find time for a debate on Welsh affairs around St. David's day.

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I take note of the right hon. Gentleman's comments on the later events of yesterday evening. I did not know that 16 PPSs had voted on the matter. They slipped through the net, and the Whips were unable to prevent them from going into the Lobby. That is a stirring tribute to the impression that the right hon. Member for Bromley and Chislehurst (Mr. Forth) has made on his colleagues.
I cannot tell the right hon. Member for North-West Hampshire that the Prime Minister will make a statement on Monday, following his visit to the south-west. Any anxieties about the decision that the House made last night can be aired in the normal way.
Mr. Dale Campbell-Savours: Does my right hon. Friend agree that Question Time is being progressively destroyed by rambling questions from hon. Members and, to be blunt, rambling answers from Ministers? I do not disagree with the content of the answers, but I object to what is happening. We must stop the practice. What can my right hon. Friend do personally to stop it and to bring to the attention of Ministers the need for something to be done?
Mrs. Beckett: My hon. Friend will know Madam Speaker's strong views on the matter, which she expressed again earlier this week. I am conscious of both aspects of the difficulty to which my hon. Friend refers. Ministers should try to give succinct answers, which are to the point. I am sure that he understands that business questions are a little different. I do not criticise the right hon. Member for North-West Hampshire (Sir G. Young) when I say that when Ministers are asked a range of questions, it is difficult not to speak at some length without being accused of not replying to a question.
My hon. Friend is right to say that we are considering a matter of discipline on both sides—hon. Members and Ministers. Both Madam Speaker and I will continue to preach that message.
Mr. Paul Tyler: We welcome the Leader of the House's assurance that, if developments occur, the Secretary of State for Northern Ireland will make a statement later today rather than waiting until tomorrow, when fewer hon. Members will be present.
I want to comment on the countryside crisis. I have read carefully the contributions of the Prime Minister and the leader of the Conservative party to the National Farmers Union annual general meeting. Both contain an amazing mixture of complacency and refusal to accept responsibility. Will there be a statement and a debate in Government time on the rural crisis? Today, No. 10 pretends that everything is hunky-dory in the countryside, especially in the south-west. That is nonsense.
Will the Leader of the House assure us that there will be an early statement on the Competition Commission report into supermarket profiteering? Predatory pricing is causing huge difficulties to agriculture and creating more problems than exports.
Mrs. Beckett: First, I thank the hon. Gentleman for his comments on Northern Ireland.
I have not read all the reports of the NFU annual general meeting, although I know about some of the comments that have been made. I strongly rebut the suggestion that my right hon. Friend the Prime Minister
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is complacent. Indeed, he draws attention to the many problems of the countryside, such as lack of transport and schools. However, he also emphasises that those problems have not simply arisen since May 1997 and that the Government are trying to improve matters. I cannot promise the hon. Gentleman an early statement and debate, although he will be conscious, as I am, that that matter is raised often in this slot and I point out to him that Agriculture questions are on Thursday next. I am aware of the Competition Commission report, which is under way, and shall draw his remarks to the attention of my right hon. Friend.
Mr. Barry Gardiner: Does my right hon. Friend agree that one of the perhaps few occasions on which the British public can share in the enjoyment of the House is Prime Minister's Question Time? Does she share the concern of many Members that last week's was lost because of the efforts to talk out the business? Will she timetable a debate on procedure so that I and other hon. Members might discuss timetabling in the House, which the Modernisation Committee recommended in one of its earliest reports should be more and better used?
Mrs. Beckett: Certainly I am aware of the concern that is felt when the business of the House gets out of control. My hon. Friend is right to say that the Modernisation Committee made recommendations for the programming of suitable Bills and it proposes to examine where we are on that issue in the near future. He will also know that we debate procedural matters from time to time. I share his regret that last week's Prime Minister's Question Time was lost. He may not know that a Conservative Member who took part in that debate has made it clear on the record that Conservative Members took deliberate action in an effort to draw attention to their concerns about the business that we were debating and that they took that decision deliberately early on Wednesday morning.
Mr. Desmond Swayne: May we have a statement next week on the future of the Government information service? Of the 17 directors of communication who were in place when the Government came to office, only one remains—the 16th having been sacked last week by the Minister for the Cabinet Office. The politicisation of the civil service is a matter in which a free Parliament should take an active interest.
Mrs. Beckett: The hon. Gentleman should not believe everything he hears. There is no suggestion whatever that the head of information at the Cabinet Office was sacked. He is leaving to take up a six-month post at the Centre for Management and Policy Studies. When I was President of the Board of Trade, the head of information at the Department of Trade and Industry decided to take early retirement—entirely voluntarily and very much to my regret—for purely personal considerations. [Interruption.] I say to Conservative Members that those personal considerations were serious. It was a great source of regret that she chose to leave, but she did so of her own volition. That is another example of the silliness of making such statements and assumptions.
Mr. Jeremy Corbyn: I listened with interest to the Leader of the House's comments about a possible statement on General Pinochet, next week or

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whenever. She will have seen early-day motion 340, on correspondence between the Home Office and the lawyers for General Pinochet:
[That this House notes that on 30th January, the respected Spanish newspaper El Pais published the text of letters exchanged between the Home Office and Augusto Pinochet's lawyers from November 1999 onwards, and that these letters confirm that, despite being under no legal obligation to make such an offer, the Home Office proposed on its own initiative that Augusto Pinochet's medical details be kept secret before they received any such request from his lawyers; further notes that his lawyers informed the Home Office that their client issued them with detailed instructions about the terms under which he would submit to medical examination in November 1999 after he had allegedly suffered a major deterioration rendering him unable to prepare for trial, that, contrary to procedures adopted in previous extradition cases, the Home Office suggested General Pinochet's own British and Chilean doctors could attend his 5th January medical examination, and that the Home Office supplied him in advance with the complete list of questions they asked the independent medical team to ascertain, including queries about his ability to recall events in the 1970s; notes also that apparent loss of memory in this respect is notoriously easy to fake and that the torture offences upon which his extradition is sought occurred in the late 1980s; and therefore calls upon the Home Secretary to request that Augusto Pinochet attend a fresh medical examination at which observers for the governments of Spain, France, Belgium and Switzerland will be allowed to be present.]
The correspondence was published in last Sunday's El Pais. Will she ensure that all correspondence is made public so we can see the truth of the situation in respect of the request or otherwise for medical secrecy to surround General Pinochet's case? Will she also ensure that all the evidence and advice collected by the Crown Prosecution Service, which has been passed to the Spanish Government, is made public so that we can see the strength of the argument in respect of an appeal which would enable Pinochet to be extradited to Spain to face the trial that he so truly deserves?
Mrs. Beckett: I am afraid that I certainly cannot give my hon. Friend the assurance that all the correspondence and evidence is likely to be published. All I can say is that he will know that my right hon. Friend the Home Secretary has done everything he can to keep the House fully informed and gave a commitment to return with further information when he is in a position to do so. I shall certainly draw my hon Friend's request to my right hon. Friend's attention.
Mr. Eric Forth: May we please have, as a matter of urgency, a debate on the European Union's attitude to domestic politics, government and democratic elections in member states, and in particular on whether Her Majesty's Government are minded to support any intervention or interference in the democratic processes of a member state? Perhaps we could also consider whether the Government would be as interested in the domestic politics of a member state were an extreme left-wing party involved, as they apparently
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are—perhaps the Leader of the House will give some clarification—when the party concerned is at the opposite end of the spectrum.
I refer to important constitutional matters relating to the European Union. I am sure that the Government will want to take an early opportunity to clarify their view.
Mrs. Beckett: The Government indeed believe that it is important for all EU members to respect the provisions of the treaties. That means that they should be committed to acting against xenophobia and discrimination. Obviously, we share the concerns that other Governments have expressed.
On a lighter note, let me inform the right hon. Gentleman that, having read yesterday's Hansard, I am shocked and dismayed to discover that the views on the EU that he has just expressed are in clear contravention of the stance that he adopted yesterday. [Interruption.] Perhaps the right hon. Gentleman has learned since then; but, having taken a different attitude from his at the time when the British people made their choice, I will treat his remarks about Europe with much more scepticism in future.
Mr. Ronnie Campbell: May we have a debate on the coal industry? Is my right hon. Friend aware that, although a subsidy is available in Europe, there is doubt about whether we can obtain it? Does she realise that only 17 mines remain in Great Britain, and that every one is threatened with closure over the next 12 or 18 months?
Mrs. Beckett: I am aware of the sad position in the mining industry and of my hon. Friend's long and hard work on behalf of the mining community. The same could be said of other Labour Members. I fear that I cannot undertake to find time for a special debate in the House in the near future, but my hon. Friend will observe that I have announced a debate on state aid to the European coal industry to take place in Standing Committee E. He will know that other hon. Members can take part in that debate.
Mr. David Lepper: Is my right hon. Friend aware that, in a few weeks' time, the parties to the Convention on International Trade in Endangered Species will consider relaxing safeguards on whaling, trade in ivory and other matters? Hon. Members have already expressed concern in parliamentary questions and in early-day motion 342, tabled by my hon. Friend the Member for Bury, North (Mr. Chaytor):
[That this House believes that strong international controls on trade in ivory are necessary to protect endangered elephants; acknowledges that the European Union's abstention on a vote to relax the ban on international ivory trade at the Convention on International Trade in Endangered Species (CITES) in 1997 allowed a limited resumption in ivory trade between three southern African countries and Japan; is concerned that many African and Asian elephant range states have reported an increase in elephant poaching as a result of the lifting of the ivory ban and that there have been a number of large seizures of illegal ivory in recent months; notes Labour's manifesto pledge to 'support protection for the African elephant, and oppose any resumption of

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the trade in ivory and elephant skins'; and therefore strongly urges the Government to fully support the restoration of a ban on international trade in ivory at the next CITES Conference of the Parties in April 2000.]
Will my right hon. Friend consider arranging a debate on the meeting, in good time for those representing the United Kingdom to be informed of hon. Members' views?
Mrs. Beckett: I am aware of the concern felt by my hon. Friend and, indeed, many hon. Members on both sides of the House. I fear that I cannot provide time for a special debate on the time scale that he suggests, but he may have an opportunity to alert hon. Members to the meeting during questions to my right hon. Friend the Secretary of State for the Environment, Transport and the Regions next week.
Mr. Patrick McLoughlin: Bearing in mind the Prime Minister's successful speech to the National Farmers Union this week, does the Leader of the House think that she could persuade him to make a speech to the House about the countryside? The Prime Minister does not seem to understand that, without a prosperous farming and agriculture industry, we shall not have the beauty and attractiveness of the British countryside.
Mrs. Beckett: I thought it was clear from what my right hon. Friend said yesterday at Prime Minister's Question Time that he is well aware of the problems that have arisen in the countryside, and is also well aware that they did not all start in May 1997.
Miss Julie Kirkbride: Can the Leader of the House tell us when the Secretary of State for Culture, Media and Sport will tell the House about his proposals for the BBC's digital licence fee? As she will know, the front page of today's edition of The Sun suggests that the licence fee will be increased by £15 for all subscribers, but the Select Committee on Culture, Media and Sport has said that there should be no increase. I am sure most hon. Members agree that it is unacceptable for the BBC licence fee to increase by £15. She might also be aware of all the concerns of our constituents. Those who are aged between 60 and 74, who do not benefit from the free licence fee that the Government have announced recently, would find it a complete insult if their licence fee went up by £15.
Mrs. Beckett: I have already said that my right hon. Friend the Secretary of State anticipates making an announcement about the Davies report; he will make it when he is able to do so. The hon. Lady referred to the claims in The Sun today, which are, I understand, wrong. She drew attention to the concerns of those who are not eligible for the Government's concession on television licences for the over-75s, on which I have yet to hear any Conservative Member congratulate the Government.
Mrs. Ann Cryer: Will my right hon. Friend consider having a debate on employment among older workers, which just happens to be the title of early-day motion 341, which was tabled yesterday in my name? It has the support of 49 hon. Members from the three main parties:
[That this House observes with regret the lower earnings of workers over the age of 50 and the smaller proportion of workers over the age of 50 who are in
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employment, both in comparison with other age groups and historically; notes that the proportion of employees aged over 50 is lowest amongst large public and private sector employers; recognises that many people in their late middle years wish to be usefully employed but are not; welcomes measures taken by Governments in recent years, including the New Deal for 50 plus, and acknowledges that these measures have not had time to yield results; and calls upon the Government and other employers to put more resources into the encouragement and career development of their older employees rather than into enhancements of early retirement benefits as an addition to an active strategy to discourage discrimination against older workers.]
Simply to demonstrate a point, many of the signatories are from the older end and are hard-working, capable and valued Members of the House. It is a great pity that older workers are not so valued in other sectors of employment, particularly many Government Departments.
Mrs. Beckett: My hon. Friend will, I am sure, be aware that last June the Government launched a code of practice on age diversity in employment and are actively promoting the principles of the code in government. A further large-scale promotion will be launched shortly. The code's impact so far will be evaluated to find out whether further steps need to be taken to tackle age discrimination. Of course, I recognise and endorse her view that, within the great range of Members who are represented in the House, there are many whose years and experience lend weight and value to their contributions.
Dr. Evan Harris: Will the Leader of the House ask the Secretary of State for Health to come to the House—either in a debate, or to make a statement—to confirm a report in the press that, yesterday, he confirmed plans for a new class of after-care wards for elderly patients in an effort to free badly needed acute beds? My constituents cannot understand such sentiments coming from a Secretary of State who has closed a hospital in the constituency of the hon. Member for Witney (Mr. Woodward) and in that of the right hon. Member for Henley (Mr. Heseltine), and who has closed even more beds in Abingdon. The Government profess to want more beds for elderly care, but they are closing community hospitals.
Mrs. Beckett: Of course, my right hon. Friend the Secretary of State continues to make a number of proposals and announcements to modernise and reform the health service so that it delivers a better standard of care. I do not think there is a community in the country that is not attached to its local hospital—whatever its provision and the pattern of that provision—and does not always feel regret and concern when any proposals are made for change. I am sure that the hon. Gentleman will recognise that the Secretary of State makes or approves proposals with the wish to see a strong, healthy national health service that survives for the future and to improve that service, contrary to proposals that might come from the Conservative party.
Mr. Gareth R. Thomas: Will my right hon. Friend find Government time for a debate on the protection of public open spaces? May I tell her by way of example of the need for such a debate that the granting

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of metropolitan open land status for Field End recreation ground, Roxbourne park and Roxbourne rough is, rightly, of considerable importance to my constituents in South Harrow and Rayners Lane? I therefore ask her to put some pressure on colleagues in the Department of the Environment, Transport and the Regions to agree to such a debate.
Mrs. Beckett: I am grateful to my hon. Friend. I know that he has been running a strong local campaign on the issue and that there is much interest among his constituents. I fear that I cannot undertake to find time for another debate in the Chamber on the matter in the near future, but he may be aware that on, I believe, 2 March there will be a debate in Westminster Hall, where there may be scope for such issues to be aired.
Mr. Geoffrey Clifton-Brown: May I reinforce what other hon. Members have said by asking the Leader of the House whether she can find time for a debate on rural affairs, so that the Prime Minister could explain to the House what he explained to the NFU annual general meeting, and particularly so that he could explain to my constituent pig farmers—who at this very moment are holding a vigil outside this place—why he is effectively sentencing them to bankruptcy by imposing charges that our European counterparts who import meat into this country do not have to face?
Mrs. Beckett: I was pleased to see in the Leader of the Opposition's remarks to the NFU annual conference an admission that I have not yet heard across the Floor of the Chamber—that agriculture's problems did not start on 1 May 1997. That is certainly true, and it is particularly true for pig farmers. Many of the regulations that they are having to meet—which we know are causing them difficulties, and on which we have given a great deal of assistance and support—were introduced by the previous Government, which the hon. Gentleman supported.
Mr. Alan Simpson: I draw the Leader of the House's attention to early-day motion 347, on the completion of the biosafety protocol at Montreal:
[That this House welcomes the agreement reached in Montreal last week in respect of the Biosafety Protocol; congratulates the Minister for the Environment on his role in securing the support of European and non-aligned nations for the protocol; and recognises the overriding importance of the precautionary principle and environmental sustainability in all discussions relating to international trade and development.]
Many of the non-governmental organisations returning to the United Kingdom have spoken in glowing terms about the role played by the Minister for the Environment in achieving a remarkable agreement that, for the first time, puts the precautionary principle in human and environmental health alongside trade considerations in international affairs. Could we have a statement on those discussions so that the House may pay its own tributes to the Minister? Could a copy of the protocol also be placed in the Library to support the statement?
Mrs. Beckett: I am grateful to my hon. Friend. As he said, my right hon. Friend the Minister for the
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Environment had a considerable triumph at the Montreal conference, and I think that the whole House will welcome the fact that we have the first proper substantial international agreement on a biosafety protocol. Although I cannot find time in the near future to discuss the matter again, I shall certainly draw my hon. Friend's remarks to the attention of my right hon. Friend, who I know will be grateful and will seek to inform the House, as my hon. Friend has requested.
Rev. Martin Smyth: One understands the reasons for delays in a statement, but could the Leader of the House tell us whether the de Chastelain report will be published shortly so that people can see what he said? In the light of the Prime Minister's statement yesterday, there is deep concern that he stand by his position that no one can be in executive government without decommissioning. Mr. Ahern has said the same thing. However, because the First Minister, my right hon. Friend the Member for Upper Bann (Mr. Trimble), has taken a firm line, he has been criticised for trying to sabotage the agreement. Surely the House stands by democratic process.
Mrs. Beckett: I fear that I cannot give the hon. Gentleman the information that he seeks now, but I shall of course ensure that my right hon. Friend is made aware of the questions that he has asked so that he can consider whether he is able to answer them in the statement he expects to make later today. The hon. Gentleman will know that both my right hon. Friend and the Prime Minister have been very clear and firm about what is required, and that they—like all hon. Members, I hope—are very anxious to see the peace process continue and strengthen.
Dr. George Turner: With more than 22,000 pensioners in my constituency, I am well aware that the Government have made a good start on helping pensioners, and particularly on dealing with poverty, which is all too common in the pensioner age group. However, does my right hon. Friend accept that the needs of elderly people are varied and that not all of those needs can be met by fiscal measures? Does she agree that there are leisure, education and health issues to be addressed in provision for elderly people? Does she accept that this would be a good time to have a full day's debate, in Government time, on the needs of the elderly, so that not only those issues, but financial ones, can be debated?
Mrs. Beckett: I fear that I cannot undertake to find time in the near future for a special debate on the needs of the elderly, although I entirely share my hon. Friend's view—I think that the whole House will—that those needs are varied and are not solely financial. He will know how much the Government are doing, both for the health service and in education, to widen opportunities, not least for the elderly. However, I think that my hon. Friend will know that there are other opportunities which he and other hon. Members can seek, perhaps in Westminster Hall, to find time for those issues. I fear that, at present, I cannot offer him a Government day.
Mr. Peter Brooke: How generous a mesh does the

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Government Whips Office use if 16 Parliamentary Private Secretaries could slip through the net last night? In anticipation of our debate next Tuesday on the Armed Forces (Discipline) Bill, how do the Government currently enforce collective responsibility?
Mrs. Beckett: The right hon. Gentleman will be well aware that, although the Government prefer people to understand and recognise when collective responsibility applies, the issue that some hon. Members were discussing late last night was a matter for the House. We are all Members of the House.
Mr. Michael J. Foster: Will my right hon. Friend find time in the near future for a debate on low pay, particularly given the recent conversion of the Conservative party to the national minimum wage?
Mrs. Beckett: That conversion is so recent that I have not had an opportunity to explore its strength and depth. I understand from hearsay that the right hon. Member for Kensington and Chelsea (Mr. Portillo) has said that the Conservatives no longer propose to repeal the National Minimum Wage Act 1998. That is welcome news, although it is slightly surprising to those of us who have long observed their hostility on the matter. I wonder whether the right hon. Gentleman has told the Leader of the Opposition.
Mr. Douglas Hogg: Does the right hon. Lady agree that we should have an early opportunity to debate the Cabinet Office paper on sharing nature's prosperity? Is she aware that between the summer of 1995 and the end of 1999, 81 per cent. of those prescribed interferon in the Lincolnshire health authority area did not receive treatment? Is she also aware that during the first two years of this Government, the number of policemen in the county of Lincolnshire fell by 49? Are not those good examples of Lincolnshire not sharing in the prosperity of Britain?
Mrs. Beckett: The right hon. and learned Gentleman may not realise that he slightly confused me by appearing to talk about sharing nature's prosperity.
Mr. Hogg: The nation's.
Mrs. Beckett: I realise that now, but he confused me for a second. He has made some serious comments about concerns in Lincolnshire relating to the health authority and the police. I am aware that Lincolnshire has not always enjoyed the prosperity evident in other parts of the country. There is a great deal of work to be done there. Having been a Member of Parliament for that part of the world, I am well aware of the enormous contribution made to the difficulties of Lincolnshire by the Government of whom the right hon. and learned Gentleman was a member.
Fiona Mactaggart: Is my right hon. Friend aware that last night's decision was not merely a rejection by some of us of the judgment of Her Majesty's Opposition in nominating the right hon. Member for Bromley and Chislehurst (Mr. Forth) to the House of Commons Commission, but an expression of concern
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about the way such appointments are made? Will she find time to debate that serious issue, which was prefigured in our discussion on the Braithwaite report?
Mrs. Beckett: I do not wish or intend to be drawn in depth into the subject that was discussed yesterday. My hon. Friend is right—the Braithwaite report raises issues relating to how members of the House of Commons Commission are appointed, as well as how its responsibilities are exercised. However, I am ever mindful that the House, like any other place of business or community, works best when there is mutual tolerance.
Mr. John Wilkinson: Following the right hon. Lady's refusal to grant the debate requested by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), does she accept that there is an important issue of accountability at stake? The Foreign Secretary should be sent to the Commons to explain how and why Her Majesty's Government, at the behest of the presidency of the Council of Ministers of the European Union, propose to interfere in the internal democratic affairs of Austria while welcoming into government apologists for terrorism—namely Sinn Fein-IRA.
Mrs. Beckett: I do not propose to follow the hon. Gentleman down either of the two paths that he has raised. I am confident that he would not wish to be thought to be saying anything that in any way confers respectability on a party that has said things which I would hope all hon. Members would find unacceptable and intolerable. Also, I would hope that even Opposition Members would have no wish to do or say anything at this point which will in any way hinder or jeopardise the peace process.
Mr. Mike Hancock: Will the right hon. Lady find Government time for a debate on the tragic plight—now nearly 40 years old—of the nuclear test veterans and their families, and couple that with a statement on the latest situation with regard to the Government's response to military and civilian veterans of the Gulf? That should take place in the near future. If she cannot provide a debate on that, could she ask the Secretary of State for Defence to make a statement to the House about resourcing those two groups, so that they can get further clarification and put their cases through the courts in this country and in Europe?
Mrs. Beckett: I cannot undertake to find time for a special debate on these matters in the near future. However, the Government have doubled expenditure on research into the illnesses experienced by Gulf war veterans. Also, these issues can be raised in the context of the defence White Paper. The hon. Gentleman will be aware that the Government have a commitment to hold a debate as soon as we are reasonably able to do so and after the Select Committee on Defence has looked at the White Paper. He will find that there is time to raise these issues without a specialist debate in the not-too-distant future.
Mr. Patrick Nicholls: Bearing in mind the astonishing remarks made by the Prime Minister at the National Farmers Union conference—to the effect that there was no crisis in the countryside and that any trifling problems that farmers had could be dealt with by

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embracing the internet—could I ask the right hon. Lady to consider again the many requests that she has had for a debate on rural areas? Would not that give us the opportunity to consider the fate of sub-post offices, such as that in Liverton in my constituency run by Kay Cooper, who runs a successful enterprise, but finds that some 50 per cent. of the turnover of the shop is attributable, directly or indirectly, to the distribution of state benefits? Surely the House ought to have an opportunity to understand the devastating effect on the rural community if the Government's clandestine policy of forcing people to do their transactions through banks comes about. Bearing in mind the requests that she has had today, will the right hon. Lady consider that application for a debate?
Mrs. Beckett: I remind the hon. Gentleman that the Prime Minister said that there is a real crisis in the countryside, but that there was much about which to be positive as well. It is by no means the case that my right hon. Friend suggested that there was no crisis, but he drew attention also to the responsibility for that position that lies on the shoulders of Opposition Members. I understand that that does not comfort the hon. Gentleman.
On sub-post offices, the hon. Gentleman may know that we had such a debate—I think only last week—in Westminster Hall. [Interruption.] I apologise to the hon. Member for North Cornwall (Mr. Tyler)—the debate was promoted by the Liberal Democrats. In the debate, my hon. Friend the Minister for Competitiveness was able to state that the Government have continuing concern for the fate of rural post offices but wish also to see improvements in the way in which benefits are paid. The Government do not believe that the two issues are incompatible.
The hon. Gentleman will know that I have announced the Second Reading of the Postal Services Bill, and I anticipate that, whatever changes are made, that will take place in the near future. This may give the hon. Gentleman and others an opportunity, and allow my hon. Friend the Under-Secretary to repeat his reassurances.
Mr. Graham Brady: The Leader of the House will recall that a fortnight ago I raised the issue of the concern felt in the north-west of England about the fact that Manchester has not been given proper consideration as the site of the national athletics stadium. Since then, I have received a communication from the British Olympic Association that makes the—to me—astonishing assertion that it regards only London as an acceptable venue to be promoted for a future Olympic games bid. Does she share my concern about that? May we have a statement, or a debate in Government time, that would allow hon. Members from all regions to express their dissatisfaction that only London is now considered a worthwhile centre for the Olympic games, should they come back to the United Kingdom?
Mrs. Beckett: I can understand the hon. Gentleman's indignation and accept that it will be shared by hon. Members from many other cities. However, I understand that it is not the British Olympic Association but the International Olympic Committee which has indicated that it wishes to consider only bids from capital cities.
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I understand the view that many people will find that unacceptable, but if that is the context of the IOC's considerations, it will create a difficulty for others here.
Mr. Llew Smith: I support the request of my hon. Friend the Member for Worcester (Mr. Foster) for a debate on low pay and the minimum wage. I am sure that the Leader of the House will agree that the minimum wage was the most important legislation of this Parliament, but I am sure that she will also recognise that the time is rapidly approaching when the minimum wage will need to be increased dramatically if we are successfully to continue the fight against poverty in communities such as my own in Blaenau Gwent.
Mrs. Beckett: Of course I share my hon. Friend's view that the introduction of the national minimum wage was a step of enormous importance and one of the considerable achievements of the present Government. He will know, however, that it is not the only step. There have been many others, such as the creation of the working families tax credit, which do and will bring benefit to lower-income families. I cannot undertake to find time for another debate on the matter in the near future, but my hon. Friend will have noticed that we have Trade and Industry questions next week, and he may find an opportunity to raise the matter then.
Mr. David Chidgey: I draw the attention of the Leader of the House to early-day motion 282:
[That this House congratulates those financial institutions which are continuing to offer free access to cash machines; expresses concern that the LINK cash machine network is considering the introduction of a surcharge of £1 per withdrawal from cash machines when cash machine providers already receive a LINK interchange fee; notes the crucial role played by the free cash machines in promoting financial inclusion in deprived and in rural areas; and therefore urges all financial institutions not to adopt surcharging, due to the adverse effect this will have on the consumer in general and particularly those on low incomes and those living in areas with limited cash machine coverage.]
It stands in my name and has been signed by Members from at least six other parties. Is she aware that members of the Link network, which operates the machines, are attempting to introduce a standard £1 charge per withdrawal? Is she further aware that that will affect drastically the most impoverished and socially excluded members of our community—those who traditionally draw small amounts of money at regular intervals—who will be hit by a charge of £1 per transaction? Will she please impress on the Secretary of State for Trade and Industry the need for him to make an urgent statement about what he intends to do to bring that anti-competitive cartel to book?
Mrs. Beckett: I can tell the hon. Gentleman that the Government welcome the decision of the financial institutions which continue to offer that service free of charge. We are concerned about the issues he raises, although it is a matter for the banks to resolve with their customers in the marketplace as an issue of competition. However, he will know that my right hon. Friend the Chancellor has commissioned a review of banking under

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Don Cruickshank. We anticipate that the report will cast some light on those matters and the Government will carefully consider its recommendations.
Mr. Stephen O'Brien: Will the Leader of the House ensure that either the Prime Minister or the Chancellor comes to the House at an early opportunity to explain the new underlying thinking on green taxes, in the light of the U-turn on the pesticides tax and given that the climate change levy—as it is called by the Government, although it is an energy tax—is penalising efficient, energy-intensive manufacturing industry in this country?
Mrs. Beckett: We have just had Treasury questions and that was the hon. Gentleman's opportunity to raise that issue.
Mr. Owen Paterson: The replies by the Leader of the House this morning and speeches this week by senior members of the Government show a chronic misunderstanding and grotesque underestimation of the agricultural crisis. I meet farmers every weekend and I ring them from here most days of the week. They do not want subsidies; they want the regulations, costs and conditions imposed on them uniquely by the Government to be lifted. If the Prime Minister can find two days to go to the south-west, cannot he find two hours to discuss the matter in the House?
Mrs. Beckett: We fully accept, as my right hon. Friend the Prime Minister has made plain, that there is a deep and painful crisis in agriculture, although I remind the hon. Gentleman again that the Leader of the Opposition told the NFU conference:
"I do not pretend that my Party can wave a magic wand and all the problems will disappear overnight."
The hon. Gentleman claims that the agriculture industry does not want subsidies but wants regulations and costs imposed specifically by the Government to be lifted. All I can say is that my reading of these issues—which come up weekly and include matters such as the pig industry, which he has, quite rightly, often raised in the past—is that most of them were caused by the Conservative party in government.
Mr. Paul Burstow: May we have a statement from the Secretary of State for Social Security to explain why in January there was a double pension pay-out to about 112,000 pensioners, at a cost of about £10 million? Was that an attempt to compensate for the derisory increase of 75p in the basic state pension, or was it just another Government computer bungle? May we have a statement on why it happened, what is being done to deal with it and what steps are being taken to ensure that such bungles do not occur again?
Mrs. Beckett: I cannot undertake to find time for a special debate on the matter, but I remind the hon.
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Gentleman that we have Social Security questions on Monday, so he can ask my right hon. Friend himself. Alternatively, he may find an opportunity to raise the issue in the debate on social security motions.
Dr. Julian Lewis: May I reinforce the request from my right hon. and hon. Friends for a ministerial statement on the proposed very large increase in the television licence fee? I am sure that the Government would not want it to be thought that a motivation for that would be to put the cost of a licence beyond the reach of large numbers of electors, who would then be deprived of the spectacle every Wednesday afternoon of the Prime Minister trying to explain why he is reneging on all his election pledges.
Mrs. Beckett: I remind the hon. Gentleman that I have already said that the reports are wrong. The Government do not want to deprive people of the opportunity to watch television or indeed to watch Prime Minister's Question Time on a Wednesday. The only people who have deprived them of that spectacle lately have been Conservative Members.
Mr. John Bercow: That really will not do. Further to the opaque and unsatisfactory reply that the Leader of the House gave to my hon. Friends the Members for Bromsgrove (Miss Kirkbride) and for New Forest, East (Dr. Lewis), will she arrange for time to be made available for a full day's debate to be led by the Secretary of State for Culture, Media and Sport on the Government's plans for the licence fee? Even if he does not intend to impose an increase six times above inflation, would not a full day's debate allow the House to tell him, and him to tell the new Director-General of the BBC, that any smash-and-grab raid on the 20 million licence payers of this country would be wholly unacceptable, especially when concerns persist about programme quality, and inefficiency remains rife in the corporation?
Mrs. Beckett: I have repeatedly made it clear that my right hon. Friend is considering the Davies report. He hopes shortly to be able to come to conclusions and has said, as have I, that he will come to the House to make those conclusions known.
Mr. Allan Rogers: My right hon. Friend will be aware that the Intelligence and Security Committee has submitted its annual report to the Government, who have responded. Will she ensure that some Government time is reserved in the near future to debate it in the House?
Mrs. Beckett: My hon. Friend makes an important point. He is a distinguished member of that Committee. I cannot give him that undertaking at this moment, but I shall of course bear his request in mind.

Points of Order
1.20 pm
Mr. Christopher Chope: On a point of order, Madam Speaker. I do not know whether you have seen the report in today's press that the European Commission has issued a six-week consultation on a proposal to outlaw United Kingdom web addresses in this country. Would you be willing to respond on behalf of the House to that consultation, saying that, under no circumstances, are we prepared to give up our web address of www.parliament.uk.?
Madam Speaker: I have a short answer to that, which is no.
Mr. John Bercow: On a point of order, Madam Speaker. May I seek your guidance about the conduct of Treasury questions, which is, of course, a crucial means by which the legislature can hold the Executive to account? Did you notice, Madam Speaker, that, to the considerable regret of my right hon. and hon. Friends, the Paymaster General did not have a single opportunity to answer a question at Treasury questions? We felt considerable sympathy for her. Given that that appears to have been the result of the unexpected absence of the hon. Member for Exeter (Mr. Bradshaw) and of the legendary verbosity of the Chancellor in answering questions, I wonder whether your good offices could ensure that the hon. Lady is not so badly treated in future.
Madam Speaker: I know how popular the hon. Lady is, and I shall do my utmost to see that she has long periods of time at the Dispatch Box at the next Treasury questions.

Points of Order
  BILL PRESENTED
    ROYAL PARKS (TRADING)
    Mr. Secretary Smith, supported by the Prime Minister, Mr. Secretary Prescott, the Chancellor of the Exchequer, Mr. Secretary Straw, Mr. Secretary Blunkett and Mr. Alan Howarth, presented a Bill to make provision about certain offences under section 2 of the Parks Regulation (Amendment) Act 1926: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed. Explanatory notes to be printed [Bill 58].

Police
1.21 pm
The Minister of State, Home Office (Mr. Charles Clarke): I beg to move,
That the Police Grant Report (England and Wales) 2000–01: (HC 169), which was laid before this House on 27th January, be approved.
Madam Speaker: I understand that with this it will be convenient to discuss the following motion:
That the Police Grant Report (England and Wales) 1998–99: Amending Report 2000–01 (HC 170), which was laid before this House on 27th January, be approved.
Mr. Clarke: May I begin by welcoming to his place the hon. Member for North-East Hertfordshire (Mr. Heald)? I congratulate him on his promotion. I am sure that his skills as a barrister will strengthen the Home Office Opposition team, and I welcome his contribution to the debate. I am not sure whether he intends to announce any dramatic switch in policy, or make a U-turn of the sort that the right hon. Member for Kensington and Chelsea (Mr. Portillo) made in Treasury questions earlier today, but I look forward to some significant shifts in position.
Since I was appointed to my post at the Home Office last July, I have had the opportunity to meet many chief constables, visit many of their forces and speak to officers of all ranks. I intend to visit many more over the next few months. I have been exceptionally impressed with the professionalism and dedication of officers of all ranks in forces throughout the country. It has been genuinely inspirational for me to see the way in which many forces are looking at new and creative ways of reducing crime in their neighbourhoods, and the courage and dedication with which they do their work. I am sure that all hon. Members share my respect, and I think that it is an important moment for us to place on record our appreciation of the work that the police do.
As part of the consultation on the settlement, I have held discussions, both oral and written, with a wide variety of chief constables, police authorities and Members of Parliament. I have received delegations—
Mr. Douglas Hogg: Would the hon. Gentleman confirm that one of the representations that he received was on behalf of the rural forces, particularly in Lincolnshire, to the effect that the Government should implement the external report received in May 1999, which would give the Lincolnshire authority some £2 million more, or the equivalent of 50 officers? When will the Government implement the report produced by the external consultants, O.R.H Ltd?
Mr. Clarke: I am coming to that in detail in my speech. I confirm that, earlier in my tenure, I met a delegation of representatives from the rural authorities—including my own in Norfolk—which are concerned with sparsity. I know that the role of the Lincolnshire police authority in particular in co-ordinating that group is important. However, the clerk of the Lincolnshire authority has recently made public statements and stepped a bit out of line of the consensus of all the forces in that group. My advice to the group is to stick together in what

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they say rather than following individual public relations initiatives. However, the issue is very serious, and I will address it in detail in a moment.
Mr. Elfyn Llwyd: North Wales police are terribly concerned about the point raised by the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) because they are losing £1.9 million in grant aid. I do not know what representations the Minister has had from that force, but I am sure that it did not agree to the formula and to the effective shelving of an extremely important report. North Wales police are receiving an effective £1.5 million increase in the standard spending assessment, which implies that they are in some way inefficient. Will the Minister tell us what those inefficiencies are, assuming that he has held conversations with senior officers?
Mr. Clarke: I accept entirely that North Wales police are affected by the sparsity considerations, to which I shall come shortly. The same is true of Lincolnshire and Norfolk. Sixteen forces are working together on that issue, which is a perfectly reasonable one for discussion. I can confirm that there is no comment on efficiency in the settlement published today.
I wish to discuss the Government's spending plans across the board. The Government's overall spending plans for the police over the next three years were announced by my right hon. Friend the Home Secretary, following the comprehensive spending review. Under our plans, there will be an extra £1.24 billion for the police service in England and Wales between 1999 and 2002. For 2000–01, the total amount of police authority spending to which the Government are prepared to contribute their share of funding will be £7.35 billion. This amount is known as total standard spending. That represents an increase of £212 million or around 3 per cent. over 1999–2000.
Under our present plans, spending on the police will increase by a further 4 per cent. in 2001–02. Those sums represent a real-terms increase, albeit modest, in police spending, which police forces have welcomed.
Mr. Oliver Heald: I am grateful to the Minister for his kind comments about me.
Has the Minister read the comments of the Association of Police Authorities on the 2000–01 settlement? The association makes it clear that funding from central Government is increasing by just 2.8 per cent. in cash terms, while revenue expenditure will have to increase by more than £300 million just to stand still. Where is the real-terms increase to which the Minister has referred?
Mr. Clarke: I have read those comments and have discussed them at length with the organisations concerned. I shall come to specific points later in my speech, but I shall of course be happy to take further interventions from the hon. Gentleman if I may clarify specific points.
The Government's spending plans take no account of a variety of additional funding arrangements for the police. First, we have announced a new crime fighting fund, part of which will be used to recruit 5,000 police officers over and above the number that forces would otherwise have recruited over the three years from April 2000.
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Some £35 million will be allocated to meet costs in 2000–01 under the challenge fund. Additional funding will be available in the next two years. That is new money. All forces have made bids for it, and I pay tribute to the quality of those bids. The results of the process will be announced very soon.
There will be more new money in 2000–01 and 2001–02 to complete our pledge. The House will appreciate, however, that I cannot confirm cash figures ahead of the 2000 spending review. My right hon. Friend the Home Secretary has made a public commitment to provide necessary additional funding to follow his initiative through, and we shall stick to our promise.
Mr. David Davis: The Minister knows that I shall not oversimplify police funding, but I am concerned by what he has said about additional spending. Many complex arithmetical relationships can be found in the formulas contained in the papers for this debate, but the major cause of crime to which chief constables—particularly mine in Humberside—draw attention is drugs. Several police authorities, including Humberside and Merseyside, face particular drugs threats because they have ports that are points of access. Does any of the additional expenditure deal with that problem? Historically, Governments—the present Government and, I am sorry to say, their predecessor—have made false economies by cutting down on Customs, which puts a greater burden on the police. We should put that right.
Mr. Clarke: The right hon. Gentleman makes a powerful and correct point; I wholly acknowledge it. At this stage, I shall not embark on a general discussion of drugs, although he is right to highlight—as does his chief constable—the fantastic impact of drugs on crime rates. We must be better geared up to hit that problem.
Under the ring-fenced funding for the crime fighting fund for front-line policing to help in our crusade, we asked forces to examine three aspects to which we would give special consideration. The first was the problem of policing in rural areas; we realise that particular factors bear on that—I shall return to them later.
The second was the need to increase the profile of policing—to ensure that the officers appointed were not simply sitting in police stations, but had a visible presence in their communities. The third, which relates to the right hon. Gentleman's point, was the need for police in particular crime hot spots. There is evidence that such hot spots exist in certain areas covered by particular forces—the ports problem described by the right hon. Gentleman is a good example. I cannot recall whether the Humberside bid focused on the policing implications at ports where drugs were coming into the country. However, that was the type of problem that our initiative was intended to address.
Mr. Simon Hughes: My question is about the overall figures. Does the Minister agree that, in real terms—taking inflation into account but without adding the amount for police pensions—there was no increase during the first year of the Labour Government, but a 0.8 per cent. decrease? Does he further agree that, for the second year—the current year—the increase was 0.3 per cent., and that for next year, as he has announced, the increase

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will be 0.2 per cent? By the end of next year, there will have been a real-terms reduction over the first three years of the Labour Government of the money allocated to police grants. The crime fighting fund money—£35 million—does not change that fact; I shall return to that point later. Does the Minister agree that the first three years of the Labour Government will have seen a real-terms decrease in Government grant for policing in England and Wales?
Mr. Clarke: It is perfectly reasonable to consider under overall expenditure the points that I am outlining about funding that is additional to the police grant. The crime fighting fund was the first point that I mentioned. It is not possible to consider the resources available to the police without taking into account, for example, the £35 million for 5,000 officers this year.
The hon. Gentleman is correct to note that, during the first two years of the Labour Government, we decided to accept the spending limits that we had inherited; it was part of our policy, we made it public and it was the subject of political disagreement. That policy led to the figure of minus 0.8 per cent. in the first year. As we moved out of that period, from April 1999, we planned to increase the amounts—the increases are those that he described.
Mr. Frank Field: May I take my hon. Friend back to the question put by the right hon. Member for Haltemprice and Howden (Mr. Davis)? The question applies not only to the policing of ports, where there may be drugs problems, but to areas that have suffered significant reductions in the size of their police force. For example, in Merseyside there has been a reduction of almost 500 posts during the past five years—most of that reduction took place under the previous Government. When my hon. Friend distributes the assets from his crime fighting fund, will he pay special attention to the areas that suffered the greatest reduction in their forces over the past five years?
Mr. Clarke: We have done that. That is why the bidding documents asked for detailed information for each force on recruitment patterns and other similar factors. The short answer is that we shall take full account of what has happened in particular forces when we decide on the allocation of the money. As I pointed out, we shall make an announcement on that matter shortly.
I was talking about the crime fighting fund for the 5,000 extra police officers.
Mr. Heald: I am grateful to the hon. Gentleman for giving way. Is it not true that there will be no extra officers, as the Police Federation pointed out? Throughout the country, the number of police officers has been slashed, is being slashed and will continue to fall.
Mr. Clarke: This is a familiar debate. I am delighted that the hon. Gentleman, in reading himself into his brief, is fully abreast of the facts.
The fact is that the fund will be used—as my right hon. Friend the Home Secretary made clear when he announced it on 30 September—to recruit 5,000 police
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officers over and above the number forces would otherwise have recruited over the next three years from April 2000. That is clear.
Mr. Heald: As the Police Federation makes clear in this month's review, the number of police officers will fall by 1,000 over the three-year period. Is that not so?
Mr. Clarke: No, it is not. We seem to be talking at cross purposes. If I can help the hon. Gentleman, I shall do so. Police forces are setting about recruiting and they face all the normal difficulties that arise in trying to find police officers. We are providing funding for an extra 5,000 police officers to be recruited over the next three years. As that process goes on, as in any other profession, people will leave the service for a variety of reasons. Therefore, our conclusions as to how many police officers there will be after one, two, three, five or however many years depend on the interrelationship between the two factors.
We can try to inhibit—we are trying to inhibit in a variety of ways—the number of people who leave the police service. However, it is more important to put money into increasing the number who can be recruited. That is why my right hon. Friend the Home Secretary announced the crime fighting fund last September. The decision was to go for 5,000 over and above what would otherwise have been recruited.
As several organisations, including the Police Federation, have done, it is perfectly possible to speculate on the pattern that will emerge over the next two or three years. Therefore, the point of the hon. Member for North-East Hertfordshire is a perfectly appropriate one to make. However, I do not accept his figures. As my right hon. Friend the Home Secretary has already made clear, there is every reason to believe that our decision will lead to an increase in the number of police officers over the next three years.
Ms Sally Keeble: Does my hon. Friend agree that, whatever the arguments about figures, the ultimate test for the public will be the figures for actual crime? The chief superintendent of Northampton says that
"crime … is reducing and the clear-up rate is increasing which in stark terms means there are less victims and more offenders being dealt with this year."
He attaches the figures to that statement. Crime reduction will ultimately be the public's test of the effectiveness of the Government's policies.
Mr. Clarke: My hon. Friend is absolutely right. Crime figures are the key test and crime reduction is our key target. As my right hon. Friend the Home Secretary said to the House shortly before Christmas, we are establishing clear targets for vehicle crime, for burglaries, for violent crime and for drugs offences. Targets will be set for each force in the country, and I hope that we shall shortly be able to give further details on precisely how those targets have worked through, following consultation with the police forces.
I wish to make progress on a few of the other points that I want to emphasise. In particular, I wish to deal with the sparsity factor, a matter that was raised by the right

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hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg). It is a serious issue that concerns many Members on both sides of the House.
In addition to the crime fighting fund, we have a crime reduction programme. We are pursuing a range of interrelated initiatives to reduce crime and to reduce the fear of crime. Some £400 million over three years is allocated through the crime reduction programme, including £150 million for closed circuit television schemes and £50 million to protect 2 million homes most at risk from burglary.
I announced last month that more than 180 CCTV schemes are to receive £33 million of Government funding as part of the package, which is the largest single allocation of CCTV money to date. So far, almost 220 CCTV projects nationwide have now been awarded £39 million under this initiative, and I know from comments from Members on both sides of the House how welcome CCTV schemes have been in their constituencies.
CCTV plays a crucial role in helping the police tackle crime and disorder and in reducing the fear of crime. It is extra eyes and ears for the police and it will greatly improve the quality of life for local residents and help to regenerate some of our most vulnerable communities. In the next few weeks, we shall publish the new guidelines to spend the balance of the CCTV money and one aspect of those guidelines will give particular encouragement to CCTV schemes covering rural areas. I have seen several positive schemes where those in a central control room can look at pictures from villages up to 20 or 30 miles away and can immediately communicate with the police. They are positive developments, and we want to encourage them in the guidelines.
On other funding initiatives, we are providing £11 million to fund security measures to help reduce crime and fear of crime among low-income pensioners who are most at risk from burglary. We are providing £30 million for targeted policing, £34 million over two years to expand the national DNA database and £50 million in the new radio communications system for the police. All that is new money. With those initiatives we are demonstrating, over and above our commitment to the police grant, our commitment to extra funding that offers support for the police and local agencies, and our determination to tackle crime and disorder in rural and urban areas.
The settlement for 2000–01 also takes into account the Home Secretary's commitment to improve efficiency in the police service during this Parliament. Last year, we set a year-on-year target of 2 per cent. for efficiency improvements in the police service.
Mr. Graham Brady: The Minister mentioned additional funds that are available. I hope that he will also consider the additional costs that need to be taken into account. Greater Manchester police have received a real-terms increase of 0.26 per cent. this year, but that is set against a police pay settlement—which is welcome—of 3.6 per cent.; additional costs for the police national computer of nearly £1 million; and an increase in the national crime squad and National Criminal Intelligence Service levies of 7 per cent. and 26 per cent. respectively. There are massive cost
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increases that far outstrip the additional money available. Does that not make it inevitable that the number of police officers will fall even further?
Mr. Clarke: That is certainly not inevitable. Of course costs rise; that is the nature of life, as most hon. Members will know. I need to place on record that the figures that the hon. Gentleman quoted for the NCS and the NCIS are not correct. They are from an earlier bid, and the final precept will be lower. I simply put that on record so that the hon. Gentleman does not inadvertently mislead the House.
Many police forces have written to me to say that they do not support the amount of money going to the NCS and the NCIS, and are worried about the public safety radio communications project, to which I shall turn in a moment. Those are all competing issues, but my view is that investing in the National Criminal Intelligence Service and the national crime squad is an important means of tackling major international organised crime. That includes drugs crime, which the right hon. Member for Haltemprice and Howden (Mr. Davis) mentioned, which needs to be tackled by better intelligence and co-ordination between forces. That merits those increases in investment.
The inspectorate's assessment of the efficiency plans submitted by police forces for 1999–2000 is that the police service is on line to deliver the 2 per cent. efficiency gains required by the comprehensive spending review. Gains will be reinvested in front-line policing, and go some way to answering the point about costs made by the hon. Member for Altrincham and Sale, West (Mr. Brady). Plans are being developed by police forces and authorities to deliver a further 2 per cent. efficiency gain in 2000–01. We estimate that efficiency gains could total around £440 million over three years.
I turn now to the details of next year's funding settlement. For 2000–01, we propose to set considerable store by stability in the grant system to help police authorities to plan ahead. We shall not therefore make any changes to the method of police grant distribution for 2000–01, so there will be no substantive changes to the operation of the police funding formula for next year. There will limited changes; for example, to accommodate force boundary changes.
The issues that I shall address in explaining that position are as follows: sparsity; the continuation of the old force establishment component in the formula; the cost of the new national radio communications service, a subject that was raised by the hon. Member for Altrincham and Sale, West; the cost of police pensions and the cost of security, matters that have been raised with me by several forces. I do not want anyone to think that I am not addressing the issues that hon. Members have raised.
I need first to report on force boundary changes; 1 April will mark a major step in our programme of aligning criminal justice boundaries when we bring the boundaries of the Metropolitan police district into line with those of the 32 London boroughs. That will make co-operation between the criminal justice agencies in Essex, Hertfordshire and Surrey much more straightforward and will help our crime reduction partnership approach to be much more effective.
The four forces involved have worked closely with each other and the Home Office to ensure that a smooth transfer of responsibilities can take place in April.

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The allocation of money under the funding formula reflects the increased size, and hence policing need, of the three county forces. In the settlement, the Government have also recognised that, in preparing for the change, the three authorities will continue to incur additional costs next year.
The Government will therefore make special payments of grant in 2000–01 totalling £10 million, in recognition of the additional costs resulting from the changes to the Metropolitan police district boundaries. Essex will receive £1.25 million; Hertfordshire will receive £2.75 million; the Metropolitan police will receive £500,000; and Surrey will receive £5.5 million. Those payments are reflected in the grant report.
Sir Sydney Chapman: The Minister has mentioned the variation in allowances because of the changes in the Metropolitan police boundary. He will understand that the Metropolitan police have lost areas in Essex, Hertfordshire and Surrey. I understand that he is allowing an additional £500,000 to the Metropolitan police because of the adjustments that have to be made. Does not that figure depend on the numbers of people and the numbers of assets that have been transferred out of London? Will the hon. Gentleman think again about £500,000, which has left many parts of London that remain within the Metropolitan area, especially those nearest the areas affected, with some very difficult problems?
Mr. Clarke: I understand the concerns raised by the hon. Gentleman, especially in respect of his constituency. It is in the position that he describes, being near the border. I shall talk about police funding and I shall consider the issue that he has raised, but it is important to pay genuine tribute to the co-operative way in which the Essex, Hertfordshire and Surrey forces and the Metropolitan force have worked together in dealing with the difficult managerial issues that have been involved in the transition. It is not only kit that is involved, but people. Difficult issues have arisen and the individuals involved, from chief constables downwards, have used a great deal of creativity to try to minimise the problems that any change will bring so that policing in areas such as that represented by the hon. Gentleman will not be adversely affected.
I fully accept the point that has been made by many that the police funding formula is not sufficiently sophisticated or flexible to respond to the distinct characteristics and responsibilities of the Metropolitan police. It is for that reason that the Met receives a special payment of grant outside the funding formula. In recognition of the Met's specific needs, we have increased the level of the special payment from £151 million in 1998–99 to £176 million in 1999–2000, and to £182 in 2000–01. This is paid as a 100 per cent. Home Office grant and is not charged to London council tax payers. It is an acknowledgement of some of the problems referred to in the hon. Gentleman's intervention.
Mr. Simon Hughes: I intervene specifically on London matters. We have seen the appointment of the new Commissioner of Police of the Metropolis, who has taken over this week. Will the Minister confirm that both the
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outgoing and incoming Commissioners have made the strongest representations to Ministers that, at the level at which the Met is funded for the foreseeable future, it is likely that there will be a considerable reduction in the numbers of people who are able to serve it, in both civilian and uniform capacities? The implication is that, if there is a wish to keep up the service, even though the numbers of police officers may be falling, the local authorities that will be precepted to raise money for the Met will see significant increases in the sums that they are asked to pass on to London taxpayers and ratepayers.
Mr. Clarke: I can confirm that both the previous and current Commissioners have been strong and vigorous in making the case for proper funding for the London force, as they properly should. The Government believe that they have taken serious consideration of the representations that they have received, given the figures that I am announcing. The Metropolitan police, along with other forces, are bidding for resources from the crime fighting fund, for example. That, too, will help the situation that the hon. Gentleman describes. Sir John Stevens has already shown outstanding leadership in trying to address these issues. I think that we shall see significant changes, which will be welcome, certainly to all London Members.
The Metropolitan police service needs a reasonable budget increase to prevent significant reductions in police numbers in London. The proposed cash increase is not excessive, at about 2 per cent. above the comparable figure for 1999–2000. About 87 per cent. of MPS funding comes from central Government, with only about 13 per cent. accounted for by council tax. That is below the average of 15.2 per cent. for police authorities in Britain. The MPS is already on target to deliver efficiency savings of more than 2 per cent., which is around £35 million.
Another major development in policing in the next financial year will be the creation of a new police authority in London.
Mr. Heald: I am grateful to the Minister, who has been generous in giving way. Is it right that, by the end of March 2000, the Metropolitan police will be 400 officers under strength? If the hon. Gentleman can confirm that, will he explain why that is?
Mr. Clarke: I cannot confirm at the Dispatch Box the specific figure to which the hon. Gentleman refers. However, I can confirm, as I did earlier, that the Metropolitan police force is under serious pressure on numbers. There were substantial reductions during the final period of the Conservative Government—[Interruption.] There were substantial reductions under the last period of the Conservative Government, and the Metropolitan police is now trying to stabilise the position. That is precisely the subject of the conversations to which I referred earlier, between the Commissioner, the force and the Home Office.
Another major development in policing in the next financial year will be the creation of a new police authority in London—the Metropolitan Police Authority. With the arrival of the MPA, arrangements for the policing of London will be brought more closely into line with arrangements elsewhere. As from July, there will be an independent body of 23 members, drawn from the London Assembly, the magistracy and other walks of life,

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who will be responsible for securing an efficient and effective police service within the Metropolitan police district.
I look forward to the new Commissioner and police authority working together constructively to build on the existing strengths of the Met and to improve the links with the communities that it serves.
I turn to the main issues that I heard and discussed during representations on the settlement. As I said earlier, five main issues arose: the problems of policing sparsely populated rural areas; the continuation of the old force establishment component in the formula; the costs of the new national radio communications service; the costs of police pensions; and national security policing.
On sparsity, as the right hon. and learned Member for Sleaford and North Hykeham noted in his intervention, we commissioned independent research in 1998 to try to nail once and for all the question of whether extra costs were involved in policing sparsely populated rural areas. The research study was finalised last year. It found that additional costs were, indeed, incurred in policing such areas.
I emphasise that the report was not about police numbers; it was about the costs of policing in rural areas. A copy of the full report and the executive summary was put in the House Library in November and circulated to police authorities and chief constables. The report recommended that the police funding formula be changed to reflect the additional costs—that is, by switching some funding from the metropolitan forces to the shire county forces.
My right hon. Friend the Home Secretary announced in November that he did not intend to change the funding formula for 2000–01 because of the moratorium on changes to the grant distribution system for local authorities and police authorities, pending a wide-ranging review announced by the Deputy Prime Minister in July 1998.
As I said earlier, I met a number of delegations, including one from all the authorities in sparsely populated areas, and I received individual representations from Members of Parliament, chief constables and police authorities in areas of sparsity. I recognise that my right hon. Friend's decision not to change the funding formula was a disappointment for the forces for which rural sparsity is a significant factor.
As I said to the delegations, I understand and sympathise with their concerns, but I emphasise to the House, as I emphasised at those meetings, that we are considering the position. We will consider the position again fully next year. I think that the force of the argument is well understood.
Mr. Hogg: Will the Minister give way?
Mr. Clarke: I am happy to take interventions on this particular point, as I shall not return to it later in my remarks.
Mr. Hogg: I am grateful to the hon. Gentleman for giving way. He has already given way to me once, and I acknowledge that fact.
In the case of Lincolnshire, the report recommends a change that would increase the number of police men by 50 for the county. Does the Minister accept the principle
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of changing the formula to take account of sparsity, or is his hesitation simply due to lack of money? I understand that money is a problem, but I should like to know whether he accepts the principle and the line of the recommendations, and whether his inability to give a commitment today is due essentially to his inability to allocate money for that purpose.
Mr. Clarke: I am unable to give a commitment today because of the moratorium on changes to the grant distribution system for local authorities and police authorities while the review announced by the Deputy Prime Minister is taking place. It is not possible—or not easy, at any rate—to make changes to one aspect without looking across the whole range.
For my part, I believe that the argument of the sparsity report is well made and widely accepted. It was a factual research study, which examined the real costs of policing in sparsely populated rural areas. I am familiar with the matter from my own constituency, which, although not a rural area, is in a rural county. Those issues are well understood.
The issue is the cost of rural policing, not police numbers specifically. I understand, of course, that there are relationships and knock-ons in the way that those factors operate, but the key argument is about the additional costs of rural policing, and that is what the research report addresses.
Mr. Brady: I have no difficulty with giving sparse areas extra resources. However, if I understood the Minister correctly, he suggested that resources should be transferred from metropolitan areas to sparsely populated rural areas. That is a cause for anxiety, especially when the Government's figures show that crime is increasing most rapidly in metropolitan areas.
Mr. Clarke: I did not say that there would be a direct transfer. I was making the obvious point that, in a zero-sum game, increasing resources for a specific area has implications for other areas. Two serious policy considerations weigh against the sparsity argument. First, as the hon. Gentleman said, despite anxiety about crime in rural areas, there is significantly more crime in urban areas, and resources have been focused there. Crime levels are significantly higher in Norwich in my constituency than in the rural parts of the county, despite the fears that exist there.
The second factor is relevant to our debate. Urban forces argue, with justification, that policing densely populated urban areas involves specific costs. It is an example of the interplay of arguments and the reason for not making a move in one direction outside the context of the overall review. That is why my right hon. Friend the Deputy Prime Minister's review is so important. I did not suggest that there was a specific shift from urban to rural areas, but I acknowledge that there is a debate.
Mr. Christopher Chope: What should police authorities do about council tax payers, in view of the major impact of the review on them? In Dorset, council tax payers pay a higher proportion of the police bill than in any other county or authority in the country. The figure approaches 30 per cent. Does the Minister recommend that the police authority reduce its costs until

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the Government issue a fair grant settlement, or should the additional burden be imposed on a population comprised largely of pensioners?
Mr. Clarke: The hon. Gentleman and I have had previous exchanges about the extreme poverty of the residents of Christchurch and Dorset compared with those in other parts of the country. I shall not repeat those arguments in the context of policing rather than education. This year, Dorset received an increase of 3.2 per cent., which was more than the average for England. I shall not accept his invitation to recommend what precept police authorities should set; that is a matter for them. However, I shall answer his second question: police authorities should try to make efficiency savings of 2 per cent. a year in the way in which we suggest. I have no reason to believe that Dorset does not reduce costs through greater efficiency.
Mr. Llwyd: The Minister has been refreshingly candid. I urge him to implement the sparsity policy next time round. In north Wales, we have lost all outlying small police stations and policing is done from afar. In some months, police do not have petrol for the cars. That is not due to incompetence; the money is simply not there.
Mr. Clarke: As I said earlier, I understand and sympathise with the argument. I make an appeal to hon. Members: sparsity is an important element in the rural crime and policing debate, but it is only an element of it. The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) talked about higher police presence in a whole area. Developing better crime reduction partnerships between rural district councils and the police, and giving policing a higher profile, are only partly related to resources. Other issues must be considered. The Government will address them fully as part of our overall strategy on rural matters. I hope that, like the hon. Member for Meirionnydd Nant Conwy, other hon. Members will consider rural crime in the round, not only in the context of sparsity and funding.
I want to move on to the second point on which I received representations: the continuation of the old force establishment component in the formula, sometimes called "damping". Police establishment levels were originally included in the formula to provide stability and some continuity with the previous funding system. The Government always intended that those historic manpower levels should be part of the formula only on a temporary, transitional basis, and that they should be removed at whatever rate was compatible with the need for stability in funding.
It remains our intention in due course to get rid of that part of the formula, which accounts for only 10 per cent. of overall funding. However, for reasons that I explained earlier, we are making no formula changes for next year.
Mr. Mark Todd: Does my hon. Friend recognise that the retention of the establishment element in the formula works strongly against a county such as Derbyshire, which has had a low establishment for historical reasons, and that an early change to that formula would be welcomed there?
Mr. Clarke: I entirely recognise my hon. Friend's point, with which I am familiar in respect of not only
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Derbyshire, but a number of other forces. He makes his argument forcefully and, as I have suggested, it remains our intention to get rid of that part of the formula in due course. Although it represents only 10 per cent. of overall funding, it operates unjustly, as he described.
Most of the costs of implementing the public safety radio communications service are contained in annual charges for the core service. These will be met by central funding by means of a deduction from total police grant provision. As part of next year's funding settlement, £5 million has been provided from police grant and standard spending assessment provision towards core service costs. It is estimated that the cost will be about £150 million a year at today's prices when the service is fully operational, which will be equivalent to 2 per cent. of police authority budgets. That needs to be set against the expenditure that forces already incur in maintaining their existing radio communications systems. The cost will be reduced by the £50 million subsidy announced by my right hon. Friend the Home Secretary last September.
The costs of the public safety radio communications project will also be taken into account in the overall resources provided for the police service in future years. That new digital radio and data service is tremendously important to improving the efficiency and effectiveness of the police service. It will provide state-of-the-art, fully digital secure mobile radio communications services and offer users ready access to the police national computer and other computerised databases. The new PSRCP system will ensure that the police have a crime-fighting tool that is at the cutting edge of new technology. That development is difficult but important, and I believe that it will be widely welcomed.
Mr. Heald: For absolute clarity, is the Minister announcing genuinely new money in the third year, over and above the comprehensive spending review, or is the money part of the comprehensive spending review that we already know about?
Mr. Clarke: As the whole House knows, we are undergoing the next comprehensive review and the process will be concluded next June for the next three years.
Mr. John Greenway: Is that June 2000 or June 2001?
Mr. Clarke: With effect from June 2001. I am sorry, Mr. Deputy Speaker. I am at risk of misleading the House. I responded to the hon. Gentleman's comment, which was made from a sedentary position. I cannot remember the legal term, but he is briefing his colleague, the hon. Member for North-East Hertfordshire, on exactly how to operate. In June 2000, the outcome of the comprehensive spending review will be clear, so we shall know what the position is. It covers the three coming years. In the context of that review, which is taking place, the additional costs arising from the PSRCP will be taken into full consideration as we see where we can make progress. The force as a whole welcomes the service, although aspects of it have been controversial. Generally, it will affect the nature of policing and increase its quality substantially.
Mr. Todd: I thank my hon. Friend for giving way again. Does he recognise that, with no change in the support given to implement the new service, which he

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rightly says is welcome, it has been calculated that a force such as Derbyshire would have to cut the equivalent of about 173 officers to meet the cost, either through the additional revenue cost of the system or through additional contributions to the capital cost from revenue?
Mr. Clarke: I acknowledge that that representation has been made by Derbyshire and appreciate the way in which my hon. Friend makes his point, as he said that those could be the implications "with no change" being made. My right hon. Friend the Home Secretary has already announced changes, such as the extra £50 million to which I referred a moment ago, and there may be other changes further down the line. I am experiencing slight wry amusement as I am new to this game. Whatever forces attacked—the cost of the PSRCP, the sparsity factor or the National Criminal Intelligence Service—they had drawn up a little equation about the cost of one measure versus more bobbies on the beat in each particular locality and ran that argument every time. I appeal to hon. Members to listen to the advice of my hon. Friend the Member for Northampton, North (Ms Keeble), who said that, although we should consider police numbers, we should also look at what we are doing to reduce crime. That issue has to run through the whole debate.
The fourth issue on which I received representations was that of police pensions, a difficult and problematic subject. The Government have recognised the increasing costs of police pensions: we increased the proportion of funds to be distributed for pensions from 13.2 per cent. in 1998–99 to 14.5 per cent. in 1999–2000.
The arrangements whereby police pensions costs form part of each police authority's budget are long-standing. They have some merits in ensuring that police forces concern themselves with, for example, the number of unnecessary medical retirements that they permit; but we accept that rising costs are a matter of concern to the police service.
The absence of a funded scheme is not the only or, indeed, the main reason for the increasing costs. That is why we did not advocate a move to a funded scheme in the March 1998 consultation exercise. In the light of the consultation, we have been giving further consideration to the case for a funded scheme. No decision has been made, but a funded scheme is not an easy option, given the extra start-up costs. Those are substantial—around £25 billion—and the money would have to come from somewhere. That is why the focus of the review has been on a more affordable scheme for new entrants, and the improved management of ill-health retirements for current as well as new officers.
Mr. Chope: How many of the 1,642 medical retirements of police officers and the 839 medical retirements of civilians that took place in the last year for which figures are available does the Minister think were unnecessary?
Mr. Clarke: I cannot answer that at the Dispatch Box, but I do not wish to demean the hon. Gentleman's point. There are serious issues relating to the operation of the system and the way in which it has moved forward. I have had a number of discussions with chief constables about the possibility of establishing more effective systems to control such important personnel decisions. I am not
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prepared, and would not be prepared in any circumstances, to speculate about how many retirements are reasonable; I do not think that that is the right way in which to proceed. The right way in which to proceed is to introduce a more rigorous method of examining the issues to which the hon. Gentleman refers.
Mr. Chope: Can the Minister explain why he is able to assert that some medical retirements are unnecessary?
Mr. Clarke: As I tried to explain earlier, I have discussed the issues with a range of forces and individuals, and have concluded that some of the arrangements—I only say "some"—may not be operated with the fullest rigour in certain areas of the public service. I simply say that; the hon. Gentleman probably understands what I mean.
I also received representations about the costs of security from a number of forces whose members were concerned about the costs of specific matters in their police authority areas. Representations were made to me by, for instance, the Gloucestershire and Norfolk forces. I considered them to be fair and well made, and we will examine the position.
Mr. David Drew: My hon. Friend is being generous with his time. He will not be surprised by my intervening at this point. Does he accept that the problem is not just the overall sum—my chief constable in Gloucestershire says that the allocation there is down on that of the previous year—but the fact that it leads to perceptible difficulties when local communities allege that they are losing out because of the amount that must go into the security budget?
Mr. Clarke: I agree that this is a question of perception. When the delegation in which my hon. Friend participated discussed the matter with me, we talked about the various homes in Gloucestershire of members of the royal family, and I was reminded of similar issues relating to royal family homes in Norfolk. I find that people welcome the idea that members of the royal family are living in the community, but we must try to deal with questions of perception such as this.
The amending report laid before the House corrects the effect of an error that has come to light in the distribution of grant as set out in the 1998–99 report. The distribution of grant under the pensions component of the funding formula is based on projections of expenditure on police pensions by the Government Actuary's Department. Unfortunately, data relating to Derbyshire police was processed incorrectly. The Derbyshire police authority expressed concern about the data at the time, but, despite investigations by the Government Actuary's Department and the Home Office, it was only some time later that the processing error was identified.
The amending report rectifies the error by allocating a further £800,000 to Derbyshire and clawing that sum back from the other authorities. We consulted chief constables and police authorities on the amending report. No representations were received.
The Government are determined to do all they can to reduce crime and the fear of crime. We also want to see more police officers back on the beat. We have a series of measures to address those policy goals. Those measures

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and the additional resources that are being provided will help the police to play their key part in tackling crime and disorder, in conjunction with other authorities.
Our aim is to make people feel safer and to ensure that the chance of their becoming a victim of crime is reduced. We have started work on that aim. The funding settlement for the police that has been announced today, along with the other initiatives that are being put in place by the Home Secretary, are providing the police in England and Wales with extra resources to carry out their excellent work in tackling crime and disorder. We are providing a well resourced, well equipped police service, and I commend the reports to the House.
2.10 pm
Mr. Oliver Heald: Again, I thank the Minister for his kind words of welcome and I echo his tribute to the professionalism and hard work of the men and women of the police service. Their dedication and commitment mean that they do an invaluable job for our communities throughout the land, in rural and urban areas alike.
I was amused when the Minister talked about the amending report following the error on Derbyshire police pensions. I wondered whether it was another example of problems with the Home Office fax machine. Was it another example of a document going AWOL between the Government Actuary and the Minister's office?
We should not just do what the Minister has just done—talk about serious issues, discussions and meeting people, making the points that Ministers always make—but should look at the background to the debate. A year ago, the position was different: with the Government's having come into office saying how tough they would be on crime, the Minister of State, Home Office, the right hon. Member for Brent, South (Mr. Boateng), said at the Dispatch Box that it was "sterile and simplistic" to talk about police numbers. He told us that there was no link between detection of crime and police numbers.
A year later, the job of the police has become even more difficult; the number of police officers in England and Wales has gone down yet again—it is 1,000 below the number at the general election—more experienced officers have been leaving the force; it is more and more difficult to attract high-calibre recruits; and the police feel that they have been misled over the 5,000 new officers.
The Home Secretary offered the police the enticing prospect of new officers and reinforcements to fight the battle against crime, but his speech was torn up before the ink was dry on it. The fact is that those are not new officers. Morale in the police service is crumbling, and one can understand why. For six years, crime was falling—and particularly violent crime, which is precisely the sort of crime about which people, and in particular elderly people, worry. Now, violent crime is up by 6.3 per cent., and robberies—one of the most worrying forms of crime—are up by 19 per cent. It was all so predictable: it is common sense.
Mr. Greenway: We predicted it.
Mr. Heald: We did indeed. My hon. Friend, who did such a noble job in the shadow Home Office team before
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moving to the world of sport, is assisting me today. My right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) said that it was nonsense to pretend that police numbers did not make a difference.
The hon. Member for Northampton, North (Ms Keeble) said that what was important was not just the size of the police force but efficiency in every area. No one would disagree that efficiency is important, but more efficient officers means more crimes detected.
Ms Keeble: On the overall crime figures, I understand that, although there have been substantial increases in places such as the Metropolitan police area and some other big cities, in other areas—for example, Northampton—the trends have been different. The graphs are there; the hon. Gentleman is welcome to examine them. Does he not agree that, if we are to beat crime, which is what the public want—they do not want semantics—we will have to understand what is happening and then address the situation? That is exactly what the Government's targeted approach is intended to do. It has shown results.
Mr. Heald: Does the hon. Lady not accept that it is obvious what will happen? If we increase the number of bobbies on the beat, crime will fall. More crime will be detected and the police service will be more effective. To give an example, over the Conservative years, 15,000 more police were employed. In the previous Parliament—1992 to 1997—which is often cited by Labour Members as a period when police numbers fell, the number of bobbies on the beat increased by 2,200. What happened to crime? It fell, year after year after year.
The present Government came into office talking about being tough on crime, but they have not delivered because the number of front-line beat officers has fallen by 900 since they came into office. What has happened? We have had a 19 per cent. increase in robberies, and violent crime is up. It is time for a common-sense revolution.
Ms Keeble: The hon. Gentleman would not expect me to agree with that, but I am grateful to him for giving way. Of course, if we had extra, more efficient people, extra work would be done. That goes without saying, but does he not accept that, if we did that, we would also have to put up taxes, which his party opposes? My constituents want a fine balance between the tax burden and effective, efficient public services. Does he not accept that the Government's proposed plans balance the two, look at effective ways in which to target the type of crime that hurts people most and address those needs?
Mr. Heald: Should not the hon. Lady—I ask her rhetorically—direct her question to Ministers? The Opposition are saying that they would find the resources to build the number of police officers back up to the level at which it stood when we left office. That is not something that the Government are saying. That is our guarantee of security to the public.
Ms Keeble: Will the hon. Member give way?
Mr. Heald: The hon. Lady has had two goes. I think I will move on.
Police morale is at an all-time low. A recent survey showed that 70 per cent. of officers would leave the service if they could find a job with the same pay. Why

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is that? It is because crime is rising again, criminals are being let out early to reoffend and police numbers have been slashed. That is the background against which we debate the settlement for the coming year.
The Minister mentioned the crime fighting fund. It is right that, in year one, £35 million is available, but the hon. Gentleman has already had bids for £96 million for the first year from hard-pressed police authorities throughout the country. They are asking for double the number of officers that he is prepared to provide in the first year. For the three years as a whole, 8,200 officers have been requested, against a maximum of 5,000.
The Government have to ask themselves this: is it not time to move from the talk phase to the delivery phase? Although it is easy to make the odd joke in these debates—as we have—the fact is that policing is a very serious matter for the public; the fear of crime is one of the most important issues for people throughout the country. It is a tragedy that what was a falling crime rate has been reversed so soon after the general election.
Mr. Charles Clarke: On the hon. Gentleman's point about the delivery phase, does he accept that my right hon. Friend the Home Secretary announced the extra 5,000 officers in September? We then went to get bids. We have those bids and will announce a decision shortly, which will mean that more people will start to be recruited from 1 April. That will deliver the numbers to which we referred.
Mr. Heald: I shall simply quote what the Police Federation said—[Interruption.] The Minister laughs at the body that represents the interests of police constables across the country—
Mr. Clarke: It is a trade union.
Mr. Heald: The Minister may recall that a Conservative Government introduced the first laws to protect the rights of association. Although we have had our differences about unions over the years, I certainly would not be so disparaging about an important body representing police officers.
In November, the Police Federation said:
"We doubt the extra £35 million for additional recruiting will enable forces to do more than replace officers who are retiring or leaving the service prematurely. Indeed, we believe that by the end of 2000 there will be fewer police officers and a further reduction in front line services."
In January 2000, in Police Review, the Police Federation went further, stating that it believes that there will another 1,000 fewer officers. In all, that is 2,000 fewer officers. The Minister will not persuade me that that will not make a difference in the fight against crime or that it will help to reverse the trend of crime increasing. As I was saying when he intervened, that is a tragedy.
Police are being asked to accept a Government spending programme that is mean and that leads to cuts in police numbers, withdrawal of specialist services and the closure of police stations—and more of the same is predicted in the year ahead.
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It is wrong to set funding levels that are inadequate to maintain authorities' budgets. Let me give an example relevant to someone close to where I am standing—my hon. Friend the Member for Ryedale (Mr. Greenway), who until last night had responsibility for police matters. In North Yorkshire, the increase will be £2.1 million. However, the force needs £3.9 million simply to pay for pensions. In 1999, North Yorkshire lost 50 officers. This year, there will be no recruitment. Next year, only 15 officers will be recruited. There will therefore be a net loss.
Mr. Drew: I am always intrigued by the pensions issue, which has been known about for a long time. I just wonder why Conservative Members, when in government, did not try to do something about it.
Mr. Heald: As the hon. Gentleman will know, we did do something about it, and the result under the Conservative Government was six years of crime reduction. If he compares that with his own Government's miserable record, he will see that—two years after those Conservative plans ended—we now have a tragic situation in which crime is rising again. The Conservative Government were addressing those issues, whereas the current Government are all talk and no delivery.
Last year, the Minister of State, Home Office, the right hon. Member for Brent, South predicted that future increases would be "modest". Indeed they are: this year, there is barely a real-terms increase at all. The Association of Police Authorities has said:
"funding from central government will increase by just 2.8 per cent. or £205 million".
whereas authorities need £300 million just to stand still.
The Minister mentioned the new radio system, with which huge costs will be associated. The Association of Police Authorities has said:
"Unless additional funding is made available to finance this new national service, a large part of the cost will inevitably have to be met from money which would otherwise go to pay police officers."
Today, all we have received from the Government is an indication that that new money may be considered in the June spending review. There is no promise of any new money. However, Councillor Neil Taggart, the Labour chairman of West Yorkshire police authority, has described the Government's current funding as a mere "drop in the ocean" compared with the costs of the project. Does the Minister agree with the chairman of the West Yorkshire Police Federation, Roger Benn, who said that the costs of the radio scheme would "decimate the force"? Would the costs decimate the force?
Mr. David Heath: I should like to take the hon. Gentleman back to the pensions issue. In the latter years of the previous, Conservative Government, I was the chairman of a police authority and represented police authorities in their negotiations with the then Conservative Government. Year after year, Home Office Ministers assured us that they would address the pensions issue. I received a categorical assurance from the right

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hon. Member for Penrith and The Border (Mr. Maclean) that he would produce the answer to the pensions problem in January 1996. We are still waiting.
Mr. Heald: The hon. Gentleman has obviously forgotten that we changed the formula to address the issue—[Laughter.] It is easy to laugh, but the facts sometimes hurt.
Mr. Gareth R. Thomas: Bring back Greenway.
Mr. Heald: I am grateful to the hon. Gentleman for showing such confidence in the new Conservative sports spokesman.
The Government could be excused if it was only the Opposition who were attacking the settlement, but it is not. The settlement has been attacked, as I said, by the Association of Police Authorities, which now describes the Government as "tough on police budgets". The chairman of the Police Federation has accused the Government of shortchanging the service. The chairman of the Metropolitan Police Federation recently called for the Home Secretary's resignation.
When I asked the Minister whether it is right to say that, by March 2000, the Metropolitan police will be 400 under strength, he was unable to reply. We should be concerned if it will be 400 under strength.
As the hon. Member for Somerton and Frome (Mr. Heath) said, it really is time that the Government dealt with the problem of police pensions. It is no good Ministers sitting on a report for two years, doing nothing about it. The problem needs to be sorted out, and the Government are the ones who are in power—or at least that is the rumour.
The Metropolitan police is at a crossroads. We all wish Sir John Stevens well, but he will need more than the good wishes of people in this place, including the Government. If he is to fight against crime in the capital, he will need our active support and help. I hope that the Government will give him all the support that they possibly can.
We should ask ourselves what will be the effect of the settlement on the Metropolitan police and recruitment. Is it right, as the chairman of the Metropolitan Police Federation said, that at current levels, the Metropolitan police stands no chance of recruiting to fill current vacancies, never mind to increase its strength?
What does the Minister think about Sir Paul Condon's comments last year:
"the officers in this hall and the many others in London feel angry, confused, anxious about their future"?
In 1996, the Home Secretary told the Labour party conference:
"The police deserve and receive our support and gratitude."
The Labour manifesto said that
"the police have our full support".
Is it not time for the talk to be turned into action? Is not this police grant settlement a sad event, and an opportunity missed to tackle rising crime and the problem of police numbers and morale? Should this not have been
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an opportunity to perform the first duty of Government—to safeguard citizens, to stop the fear of crime stalking our streets, and to stop the thin blue line from getting thinner?
The next Conservative Government will provide the resources to reverse cuts in police numbers. I look forward to sitting on the Treasury Bench listening to my right hon. Friend the Member for Kensington and Chelsea (Mr. Portillo)—who made such a glittering start today—make that announcement.
2.29 pm
Mr. John McDonnell: I welcome the hon. Member for North-East Hertfordshire (Mr. Heald) to the Front Bench. We shall miss the Ryedale wriggler.
My hon. Friend the Minister said that the introduction of the radio communications system was contentious. The problem is not just the funding, but the nature of the system, which needs careful attention. Several of us have received representations from companies in our constituencies about how the decisions on the commissioning of the system have been arrived at. I should welcome close ministerial attention on that issue.
This is a particularly relevant debate for some of us. I say that not only because I was burgled two days ago—I am sure that it was not one of my constituents; it must have been someone passing through—
Mr. Drew: From a rural area.
Mr. McDonnell: Yes, probably from a rural area. The debate is also pertinent because this morning a delegation from the London borough of Hillingdon—including the hon. Members for Uxbridge (Mr. Randall) and for Ruislip-Northwood (Mr. Wilkinson) and me—met my noble Friend the Under-Secretary to discuss the issues facing our area. The problems of some areas that are sometimes described as leafy suburbs are neglected, even though they contain pockets of considerable deprivation. Inner-city areas have had access to substantial resources allocated by successive Governments under special schemes and rural areas are getting significant attention from the Government. Areas such as mine fall between those two stools and our problems have not received enough attention.
Over the past few years we have also been penalised as a result of our success in policing. The London borough of Hillingdon, like other areas, has had a significant fall in crime of about 5 per cent. Worryingly, there has recently been a slight increase in violent crime, motor vehicle crime and burglary—as I have experienced to my cost. The fear of crime has been top of the agenda in the local residents' survey for five years. It has outstripped all other issues, largely as a result of perceptions, but also as a result of the reality of crime becoming personalised, particularly with social disorder in public areas. We have done everything possible locally to work together to combat crime and raise community safety issues. We have established community safety as a priority. We have an active police consultative group representing 50 local organisations. We were among the first to set up a crime and disorder audit under the Crime and Disorder Act 1998. That helped us to tackle our priorities of reducing crime involving young people, tackling drugs, dealing with disorder in public places and combating the high statistics for crimes such as burglary.

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However, our ability to deal with those priorities depends heavily on the police being proactive and responsive on the ground. That brings me to the concerns that we expressed to my noble Friend Lord Bassam this morning. We are concerned about the reduction in the number of police officers. It would be wrong of me not to draw that to the attention of the House. The figures for recent years are startling. The briefing that was courageously provided by our local divisional commander shows that we have gone down from 440 police officers to 354, and from 107 civilians to 84. The overall reduction is from 547 to 438. That is a reduction of 20 per cent.—more than 100 people. At the same time our constituents have had a 34 per cent. increase in their precept.
Our worry is that unless suburban area receive attention on two levels we shall be faced with another dramatic round of cuts. The new Commissioner of Police of the Metropolis needs to recognise our problems and adjust his regional formulae for distributing policing resources and my right hon. Friend the Home Secretary needs to consider the bids for resources from police authorities. I shall outline what those cuts could mean for Hillingdon.
We are about to lose our entire permanent beat officer force. They will be withdrawn. There is also the prospect of an end to all school involvement, our junior citizenship scheme and the involvement of the police in youth activities. The first time that a young person in my constituency comes into contact with a police officer could be when they are arrested or given a caution. At the moment, police come into schools and are constructively involved in youth activities. We are concerned about the reduction in community policing and neighbourhood watch support. I have already lost opening times at two of my local police stations. I am now faced with the possible closure of Hayes police station and the sale of the site. Those are just some examples of what faces us unless the Metropolitan police's budgetary decisions and the overall settlement direction are reversed as a result of today's announcement.
I acknowledge that this is special pleading. We require a longer-term strategy that tackles the issues of suburban areas. We are being penalised for our success. We have reduced crime as a result of community partnership schemes in line with what the Government have asked of us. I pay tribute to my right hon. Friend the Home Secretary, who came to my constituency before the general election and explained what was required of us and then came again several times after the election to help us to set up the new schemes. We have done that and reduced crime as a result.
We have had some superb divisional commanders who have created an efficiency agenda in line with what the Government have asked for. We have reduced sickness levels dramatically. However, we are being penalised as a result of those successes in efficiency and reducing crime, because the formulaic approach used by the Commissioner and, at times, the Government in their regional distribution results in resources being withdrawn when crime is reduced. That is a short-sighted approach to crime and policing across all three Hillingdon constituencies. We need a longer-term programme that addresses the issues of suburban areas, recognising that investment, particularly in preventive work among young people, will reap rewards in future by stabilising crime levels and reducing them in the long term. I am grateful for the support that the borough has been given in
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developing the recent closed circuit television scheme in Hayes and St. Dunstan's close. Our problem is that, although the CCTV schemes will help us to identify crimes being perpetrated in the area, we shall not have the police resources to respond quickly enough if the reductions go through.
I am pleased that the additional resources that my right hon. Friend the Home Secretary announced have been translated into reality in today's settlement. That enables us to bid for those resources. Suburban areas such as mine must not be penalised for the successful work that we have undertaken. Our serious problems—immediate and long-term—need to be acknowledged through adequate Government support.
2.38 pm
Mr. Simon Hughes: I welcome the Minister to this important annual debate. This is the first time that he has spoken in it on behalf of the Government. I apologise to him because he had to suffer me this morning upstairs in the Committee considering the Terrorism Bill and he now suffers me here discussing police matters. At least we are both involved in important business.
I wish the hon. Member for Ryedale (Mr. Greenway) well in his new responsibilities and I welcome his successor, the hon. Member for North-East Hertfordshire (Mr. Heald). I hope that he does not suffer the same fate as another previous Conservative candidate who stood against me in Bermondsey and then went on to slightly more profitable fields, representing Harrow, West and being promoted within his party before disappearing almost as suddenly. If the hon. Gentleman thinks that it is only a rumour that the Government are in power, no wonder his party is not doing very well.
The Liberal Democrats echo without qualification the tribute that the Minister paid at the start of his speech. Like him, I visit police forces and officers throughout the country. One of my most impressive duties since taking on this job in October was to attend the police constable of the year award ceremony last autumn at St. James's palace, also attended by the Prince of Wales. Each force selected one person and there was then a selection from around the country. Last year's award was won by an officer from Bedfordshire policing in Luton. He is a white police officer policing in a multiracial area and was commended by all sectors of the community, not least the minority ethnic communities, for his excellent community policing. In the previous year, the award was won by a police officer from Northern Ireland. It is obvious how widely valued the police service is.
This will be the last debate held during the time that the Metropolitan police force has been responsible for its larger area. When police authority responsibilities go from the Home Office, and the Home Secretary personally, to a Londonwide government—something many of us welcome—the boundaries will become the logical boundaries around Greater London. I thank the Met for the work that it has done in its extended area over the years. The force has done a good job, as has been recognised by local communities. The boundaries are being changed not because of complaints, but because it is logical.
We also wish the new Commissioner well, and we hope that he succeeds in his ambitions and objectives. He wrote to many Members to set out what he planned to do, and

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we hope to have the opportunity soon to talk to him. We thank his predecessor for much good work over many years.
Given the events of less than a week ago in Cheltenham, I would like to pay particular tribute to Gloucestershire police on behalf of my hon. Friend the Member for Cheltenham (Mr. Jones) and our councillors, some of whom are on the police authority for Gloucestershire. The hon. Member for Stroud (Mr. Drew) will also have heard that they did an excellent job, as would be expected. We are all conscious of the obligation that we owe to them.
I share the view that we need to strengthen the national forces—the National Criminal Intelligence Service and the national crime squad. I look forward to talking to the Minister before the election about ideas that we are formulating on how we can build up the profile of the national service to deal with national responsibilities. I share the Minister's implied views on that matter.
It is clear that a new communications system is needed to give the efficiency that we ask for. I have had informal and formal representations that some of the technology that the police work with is not 2000 technology—nor is it even 19-something technology. I have seen it work, and I have seen it not work. The amount of technology downtime that hampers the police is frustrating.
The hon. Member for Northampton, North (Ms Keeble) said that of course police numbers were not everything, and that crime figures are important. Here there is a difference of view between the Opposition and the Government. Although police numbers are not everything, the numbers of police officers have a direct implication on the ability of the police service to do its job. Nurses are not everything in the health service; however, the fewer nurses there are, the fewer beds we have, and the fewer beds we have, the fewer people we can treat. The fewer people we can treat, the less likely the health service is to do the work demanded of it.
The more good and competent officers we have, the more likely we are not just to reduce crime, but to increase clear-up rates—which, in some areas, are still low. In some areas of Northern Ireland, clear-up rates are very low, and in some areas covered by the Met the rates are far lower than our constituents want.
The Minister referred to the sparsity factor, and it is not just those of us who represent urban seats who understand that a conclusion is needed to this debate. I understand that it is better to have a comprehensive review across Government of the formula for allocating money to local authorities and police. However, there has long been dissatisfaction across the country with the formula.
One of the frustrations is that the recipients—in this case, the police authorities—are not able to agree what the formula should be. If they cannot agree, the matter comes to Ministers. If we had a sort of papal conclave to come up with a formula, there would have to be a compromise. I have a London caveat to add to that, but I hope that we will not have many more years of Ministers saying that they are doing the work but that they have not come up with a solution.
One element of the police grant—the 10 per cent. element—is based on the strength of the forces as they were in 1994. That has less logic with every year that
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passes, and it ought to go. If Ministers are clear that everything should not be determined by the numbers of people in police forces, we should not allocate a part of the formula on the number of people in forces in 1994. The police chief constables are now given the responsibility of deciding how to use their money—even more reason why we do not tie the amounts to forces. I should be grateful if the Minister could address whether that matter is on the agenda, and how soon that measure might be abolished.
Mr. Charles Clarke: I said earlier that it remains the Government's intention to get rid of that part of the formula in due course.
Mr. Hughes: Like many ministerial answers, that is helpful as far as it goes, but we would like something more specific than "in due course". However, I am grateful for the Minister's confirmation that that part of the formula is on the way out.
The police complain regularly that one of the implications of the funding formula is that they cannot have the money for capital spend that they would like. Money for capital equipment is often hugely spent. An article in Public Finance, headed "Police funding reaching crisis levels", stated:
"As well as the boost to revenue funding, police authorities want a major increase in capital allocation. The allocation for 2000/01 … is £144 million. This compares with forces' investment plans of £349 million. These plans rely heavily on capital receipts and contributions from revenue."
There is a major problem and a deficit in that regard.
As police funding largely goes on pay and pensions, one of the complaints will always be when the funding allocation from the Government is not tied to pay increases. If the pay increase goes above inflation or above the percentage police grant increase from the Government, there is less money left. Given that these matters are not negotiated together, as in other public services such as the health service, the formula ought always to take into account—in my view, much more explicitly—the increase in pay. That ought to be effectively ring-fenced as, to a large extent, there can be very little choice. We cannot suddenly lay off a number of police staff, although we can project the number of people due for retirement in the near future.
The hon. Member for North-East Hertfordshire did not give my hon. Friend the Member for Somerton and Frome (Mr. Heath) the answer that he was hoping for—nor, indeed, the answer that the hon. Gentleman knew would have been expected. The Tory Government did not deliver a removal of or a fundamental change to the pension arrangements. I know that this is now on the new Government's agenda, and I have argued the case often.
Across the emergency services, if we are to make what is given by the Government relate to the service on the ground, we must find a way of taking the pension allocation and the pension spend out of the general spend. The pension bill keeps going up—it is something like 14 per cent. at the moment—and there is no direct account taken of that in the formula. For every £1 million spent on pension entitlements, there is £1 million less to spend on front-line policing. If the allocation does not

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take into account the pension amount, it will be much more fictitious and will not reflect the needs on the ground.
Mr. Heald: I agree that the previous Government changed the formula to some extent, but this Government have been sitting on the report on the issue for almost three years. Is not it time for action?
Mr. Hughes: Absolutely. It is time for action—not only because politicians are calling for it, but because it is a grievance and a source of frustration that it has been on the agenda for so long. I have told Ministers before that I am comfortable with the idea of sitting down with representatives from the Conservative party and other parties and with the Government to try to reach agreement on how to sort out the pensions issue. The longer it passes from desk to desk, the further away a solution is and people become more and more frustrated.
Mr. David Heath: My hon. Friend is right in what he says about the grievance about pensions and the squeeze that funding them puts on police authority budgets. The problem is that each year the problem is not addressed, the difficulty of addressing it becomes greater. The only tenable long-term solution is a funded scheme. The longer that is delayed, the greater the costs become. I can understand Ministers' difficulty, but somebody must grasp the nettle.
Mr. Hughes: I could not have put it better. [Interruption.] I do not necessarily agree with everything my hon. Friend says, but on this occasion he was word perfect.
Police officers often point out to me that the more successful their police force is in bringing crime figures down, the more it is penalised in its financial allocation. We must avoid penalising successful forces which use their resources efficiently and deliver the outputs—to use the jargon—that everyone wants. Such forces can be in the suburbs, such as the local force of the hon. Member for Hayes and Harlington (Mr. McDonnell), in an inner-city constituency such as mine, where crime levels are high, or in a rural area, such as those which my hon. Friends the Members for Somerton and Frome and for Taunton (Jackie Ballard) represent. It should be a given that successful policing, producing fewer crimes and higher clear-up rates, is not penalised by fewer resources.
The Liberal Democrats will vote against the Government motions at 4 o'clock because, unfortunately, the Government are for the third time proposing a funding settlement that will mean less money will be spent on the police than in the year before Labour came to office. I have obtained the figures from the Library. In the first year the Government inherited a fall of 0.8 per cent. Funding went up 0.3 per cent. in the second year and up 0.2 per cent in the third year. Even my elementary maths is sufficient to work out that that means a net fall of 0.3 per cent. over the three years. It is true, as the Minister pointed out, that the figures show that the level will start to pick up after that, but the grant settlement for next year that we are being asked to approve this afternoon will provide less money in real terms for the police from central Government than was the case three years ago.
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The comparison is simple and has been provided by the Association of Police Authorities. The education settlement for the coming year will increase by 8.7 per cent, the social services settlement by 5.6 per cent., and the fire service settlement by 3.5 per cent.—only the police settlement increase is below 3 per cent., with a pre-inflation level of 2.9 per cent and a post-inflation figure of 0.2 per cent. That is not acceptable, given the pressures the police are under.
Many authorities have had a decrease in real terms this year, if pensions are removed from the equation. They include Bedfordshire, City of London, Cleveland, Cumbria, Essex, Hertfordshire, Humberside, Lincolnshire, Merseyside, Sussex, Warwickshire, West Mercia, West Midlands and West Yorkshire. The Library's figures for the settlement proposed for the coming year show that some forces will be specifically penalised. The City of London force will have a real-terms cut for the third year in a row. The Gloucestershire police—sadly, in the light of the tribute we have paid to them—will have a real-terms decrease for the fourth year in a row, with a 0.6 decrease in the coming year, having had a 0.9 decrease in the year just finishing. The North Wales police—the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) has just left his place—will have a decrease after a couple of years of small increases, and the South Wales police will also have a decrease. As a whole, the police in Wales will have exactly the same amount, neither an increase nor a decrease. In those four specific force areas, the financial position will be worse than elsewhere.
What do the figures mean for police numbers? On that point, there is no dispute between the Conservatives and ourselves because the Library figures are clear. The police service numbers inherited across England and Wales were 127,158. The figures for March 1999 were 126,096. Pending the announcement of the latest figures, the reduction is 1,062. The argument about the 5,000 extra still hinges on the fact that that figure must also take account of the reduction so far and the number of officers retiring or leaving the force. In the same period, we have also seen a reduction of 3,390 in the number of special constables.
The experience of the hon. Member for Hayes and Harlington in west London is replicated throughout the Metropolitan area, just as it is in many other areas of the country. I know what has happened in my local authority better than in others, but in Islington—where the Liberal Democrats have just taken control of the council—the number of police in the Holloway area has fallen from 245 to 226, and has fallen from 284 in Islington. My local authority of Southwark, south of the river, has seen police numbers fall from 874 to 851 in the past year. In Bromley, an outer London borough, police numbers have fallen from 442 to 432, and in Kingston they have fallen from 329 to 325.
All over the place, police numbers have fallen and police stations have been closed. We can argue about whether every police station is justified, but the public need to have a police presence, and fewer police officers make it less easy to deal with crime and the fear of crime.
My final point concerns the famous crime fighting fund. In an answer I was given on Tuesday this week by the Minister—which the hon. Member for North-East Hertfordshire has obviously also seen—it was confirmed that 43 forces have bid for the £35 million available. The total number of officers bid for was 2,908, which would

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cost more than £96 million, so only about a third of every bid will be satisfied. For example, Avon and Somerset bid for 65 officers, but if its bid is successful it may get only 23. The Metropolitan police force bid for 600, but it may get only 216. The Sussex bid was for 45, but only 16 may be granted.
We have had an allocation of £35 million for next year. That will not be enough over three years to deliver 5,000 officers unless it is doubled in the following two years, and will be enough to keep those officers only if we have the additional money in subsequent years as well. Money at the beginning is sufficient only to bring them in, not to keep them there. I hope that the Government will realise that £35 million—interestingly, they said that that was the extra cost of policing the millennium—is hardly a large additional sum.
Police numbers will be down in the coming year; there will be fewer police stations; and the council tax police precept that our constituents have to pay will be higher. People will pay more and get less. To follow up something that the hon. Member for North-East Hertfordshire quoted, the police and many of the public feel that the Government are being too tough on the police and far too tough on police funding. We need more of both, and very soon.
3.1 pm
Mr. Mark Todd: I welcome the relatively generous settlement for Derbyshire, which did not appear on the list that the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) gave. One reason for that is the correction, not before time, of a pension error, but the settlement was fairly generous in any case.
We still have about 250 officers fewer than the average for a county force. The force is thinly stretched at any time, but last year, with three murder inquiries running concurrently and the call on specialist officers hitting some sections disproportionately—including the one that covers a substantial part of my constituency—there was an incredible burden.
For some time, an area of about 70 square miles, with a population of about 60,000, was policed on a shift basis by only three or four officers. It is scarcely surprising that things became very difficult from time to time. Thankfully, the area is generally extremely law-abiding, but some parts of it, including Linton and Newhall, have faced short-term increases in crime that have alarmed local people significantly.
The authority has applied for a share of the crime fighting fund, and I have already written to my hon. Friend the Minister expressing strong support for that bid. If it were granted in full over the full three-year period, the force would just about reach the average strength of a county force; but the likelihood of that is perhaps remote if the funding figure that my right hon. Friend the Home Secretary gave at the Labour party conference last year is adhered to. There is an opportunity to review that figure in the light of the bids that have been received.
With the full increase, the Swadlincote section, which serves the bulk of my constituency, could increase the team available to fight and prevent crime by seven or eight officers. That may not seem a great number, but it would make a vast difference to the number of times one saw a uniformed officer in one of my villages.
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I have regular meetings with my police inspector, and I expect him to bring me up to date on a variety of local issues when we meet tomorrow, but I know already that the difficulty in responding to local pressures is acute. The increase would make a vast difference to his ability to direct officers to deal with crime, whether in Swadlincote town centre—where local shopkeepers and residents have expressed concerns—or in the outlying villages. The two other sections serving my constituency would have roughly equivalent increases. One of them covers a significant rural area as well as part of the city of Derby. Let us hope that the bid is viewed favourably.
The public safety radio communications service will be a welcome enhancement to the ability of the police to respond to crime and communicate about it. I fully endorse the project, but its cost is substantial: in Derbyshire, the additional revenue element of more than £2 million would cost the equivalent of about 80 officers a year.
I noted what the Minister said about forces' tendency to cite officer equivalents for every cost with which they are laden, but it is none the less a convenient shorthand way of looking at a cost. The capital cost, to which the county would have to contribute, is well beyond the capital resources that have thus far been given to the county to meet its obligations, so it will have to continue to make a contribution to capital from revenue funding, as it has done for some time.
In the year in which that contribution was made, there would be a further hit of about £2 million, which would once again take out about 70 or 80 officers. It has been said that forces will be decimated if the technology is introduced without further thought about the cost implications and on-going revenue commitments. I would not use the word "decimated" in the Latin sense, but it would certainly have a substantial impact on my force's ability to deliver the services that my constituents expect. The reductions cannot be accepted and we require additional resources to fund that valuable increase in service.
Derbyshire has sought to increase the local share of the cost of policing. I am probably unusual—I am happy to admit it publicly—in having written to my police authority last year urging it to use the opportunity of the removal of capping substantially to increase its precept to my constituents. It took my advice in spades and introduced a swingeing increase, but one that was at least understood and recognised as a step towards improving the quality of local policing by people whom I have met who read their council tax bills with some attention.
There are limits to the ability of local citizens to bear that extra burden and, presumably, to the Government's tolerance of the wholesale desire to ignore the spending guidelines and suggestions on what level of council tax increases might be acceptable. Last year, the authority did not receive a yellow card, and I hope that the same indulgence will be given this year, but one must recognise the limits of that source of funding.
The force has been historically underfunded. It seems that best value was invented here. It has committed itself repeatedly to finding ways of squeezing every ounce of fat out of the service. That is one of the difficulties of imposing savings targets on services in a blanket fashion. No doubt many police authorities have not had to go through the same exercises that Derbyshire had to

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go through in the 1990s, yet the same broad savings targets that are sought from Derbyshire are sought from them. That is seen as unfair, bearing in mind what we have gone through.
The Derbyshire force has an excellent record in many respects. Incidentally, in the most recent year, crime overall in Derbyshire fell marginally and has certainly fallen since the election. The force is still held in high regard, although many people wish that they saw more of the police officers so that they could express that high regard more freely.
Derbyshire police authority has led the way in a variety of areas. It was one of the first in the country, if not the first, to commit itself to DNA tracing, for example, which led to a conviction. Civilianisation has proceeded apace and there have been strong new controls on sickness and medical retirement. The force also has a strong commitment, led by the chief constable, to increasing representation from our minority communities. The chief constable, who served in other ways last year, made strong and supportive comments on the Lawrence inquiry and the responsibilities of the police service in that regard. He leads from the front in Derbyshire as well, and has earned great respect on that count.
I look forward to a positive response from the Government to the force's bid regarding the crime fighting fund, and a review of the Government contribution to the public safety radio communications service. I welcome unreservedly, and wish to see through to completion, the Government's statement that the removal of the establishment element of the funding formula is imminent.
3.12 pm
Sir Sydney Chapman: It will come as no surprise to you, Mr. Deputy Speaker, to hear that I shall concentrate my remarks on the Metropolitan police in general and the Barnet borough division in particular. The remarks of the hon. Member for Hayes and Harlington (Mr. McDonnell) mirror the problems that we, in a similar borough, face—although all boroughs have significant differences—in that, although Barnet is generally regarded as a leafy suburb, it has areas of great deprivation.
We can argue about figures until the cows come home. I have done my best to be independent on this. I know that the incidence of recorded crime fell for six consecutive years until recently. The last Metropolitan police service report stated that street crimes went down in the area by 2.3 per cent. and burglary by 8.3 per cent. to a 20-year low. That is good news. Assaults on police officers and incidents of police officers suffering injuries on duty went down significantly in 1998–I hope that that trend continues. However, I remind the House that, in the year to September 1999, recorded crime was up by 8.7 per cent. in the Metropolitan police area. I hope that that is only a temporary trend, but it is nevertheless very worrying.
Twenty years ago, there were only about 22,000 Metropolitan police officers. By the early 1990s, the figure had reached its peak at 28,000. It has been fluctuating since, dropping slightly in general, but a recent fall brought the figure to 26,500. I am concerned that there is every prospect that the figure will tend to fall and not rise. Incidentally, I am also concerned that, in the last year, the number of special constables in the Metropolitan constabulary decreased by 5 per cent.
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Another problem faced in the Metropolitan police area is the wastage in early retirements and transfers. In the past year, the figure increased by nearly 13 per cent. to 1,750. The Metropolitan police have recruiting problems in that so many who train and begin their career in London are seduced, as it were, to go to other police forces or, because of their experiences in London, they seek other jobs. We must think radically about how to deal with that problem because morale, sadly, is very low.
The income and expenditure of the Metropolitan police force is about £1.75 billion. That figure has increased by 100 per cent. over the past 20 years. The Minister's colleague in the other place confirmed in a letter to me that it is planned to increase the grant this next year by only 1.7 per cent. That, I understand, is also dependent on efficiency savings of 2 per cent.
I accept that the way in which the grants are calculated are necessarily complex, because they are comprehensive. The more I try to understand them—I have not broken through the knowledge barrier yet—the more they seem to be a byzantine labyrinth that would make the Ottomans drool with envy. Despite the previous Government's protestations that they were increasing the budget for the police year on year, resources seemed to be diminishing, on the ground and on the beat, at least partly—and not a little significantly—due to the escalating cost of pensions, which are unfunded. The present Government are also witnessing that problem. Although I want to see bigger and better pensions for everybody—something that I will say more frequently as the next election approaches—I am horrified that the figure for pensions in the Metropolitan police force is £335 million, including those for the civil staff. That represents 17 per cent. of total expenditure. We must find a better way of funding those pensions. My plea is popular and simple, but terribly difficult to realise. Can we devise a system in which the pension increase is taken out of the reckoning of the other vital parts of the service?
I have three brief points to make. First, I am deeply concerned about the number of emergency calls that are not genuine. The total annual figure in the Metropolitan police area is about 2 million—there were 200,000 emergency calls last November alone-80 per cent of which were not genuine. People may say that they accidentally touch the wrong numbers on their mobile phones, or whatever. I do not know much about this new-fangled technology, but surely it is not beyond the wit of these technologists to find some way of dealing with that problem.
Secondly, nearly 3,000 demonstrations and other public order events have to be policed in the Metropolitan area. I hope that some consideration is given to that in the budget.
Thirdly, Barnet borough is in a crisis with regard to policing. A very senior officer in my borough said to me that he finds the Metropolitan police service, in particular in the borough of Barnet, to be in a crisis situation.
Three weeks ago, my council—it is not, I regret, Conservative controlled, but I make that party political point only to show that the following criticism does not come only from Conservatives—wrote me a letter. I shall summarise and paraphrase it, but I assure the House

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that I am not misleading anyone or placing the wrong emphasis on what was said. The letter said:
"The Council notes with dismay that the number of police officers and civilian support personnel in Barnet continues to fall … there is a crisis in policing in our Borough."
It noted that
"the number of notifiable offences committed in the Borough has increased in the past twelve months."
It added:
"The Council expresses grave concern about the insufficient financial support given to the Metropolitan Police by HM Government in the form of this year's Local Government Settlement."
The council also recognises that that problem is Londonwide, and that it
"will result in the probability of Barnet Council Taxpayers being forced to pay above inflation increases in the form of the Police precept in order to finance the Metropolitan Police."
Those remarks are echoed by the chairman of Barnet borough watch—our network of neighbourhood watch schemes, to which I pay tribute. With 15 years of experience, she says that Barnet's manpower has been cut yet again and that there has been a near 50 per cent. reduction on the level of four years ago. The figure may reflect the fact that some officers are being taken out of the borough to serve in Hertsmere, but the minimum manpower per shift is 22 officers, while the recognised minimum shift strength should be 32. Those 22 officers must cover a population of 320,000.
We must address these real problems responsibly. We owe that both to our constituents and to those who serve us in the Metropolitan police, and who do a difficult, dangerous and sometimes dirty job. We must make sure that they have the resources to carry out that job and decent conditions in which to do it.
3.22 pm
Mr. David Drew: It is a pleasure to follow the hon. Member for Chipping Barnet (Sir S. Chapman). Although my angle on the police is slightly different, I can agree with some of what he said.
I thank my hon. Friend the Minister for meeting a delegation from Gloucestershire early in the new year. It was a useful meeting. One member of the delegation was the hon. Member for Cheltenham (Mr. Jones), and I am sure that the whole House will wish him a speedy recovery. As the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) said, events in Cheltenham have brought home to us the unpleasurable role that the police carry out with ultimate efficiency and sensitivity. The police have already visited my constituency office to review security arrangements and to make some recommendations.
I do not wish to go over old ground, having spoken in the same debate last year, when the Minister of State, Home Office, my right hon. Friend the Member for Brent, South (Mr. Boateng) replied. I do not apologise for re-emphasising some themes. Policing is of acute interest in Gloucestershire, which has received the lowest increase. It would be easy for me to criticise the Government for that, but, as my hon. Friend the Member for South Derbyshire (Mr. Todd) said about his area, I feel that a slightly rum figure has been used to calculate the amount for Gloucestershire.
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I hope that the Minister will keep his door ajar, because I am convinced that the figure is a rogue. That has nothing to do with the Home Office, but results from peculiarities in the way in which the Office for National Statistics has judged the population of Gloucestershire to be falling over the past year. I cannot repeat the phrases used by the hon. Member for Chipping Barnet, but I feel that the ONS must be the only people in the country who believe that. The statistics used make a huge amount of difference to our grant allocation, which is 1.8 per cent. below average. My hon. Friend the Minister may await some serious calculations from the county council and others before we make further representations.
The matters on which I wish to touch have already been covered, so I shall merely put a local spin on them. We welcome the sparsity report, and I hope that its recommendations will come into play. It would make a welcome difference of about 1.3 per cent. to Gloucestershire. The problem is that most counties are not dissimilar to Gloucestershire in being rural with an urban core. We must strike the proper balance between policing the urban core of Gloucester and Cheltenham and the more sparse surrounding areas. In Stroud, we would argue that people are sucked into urban areas, particularly at weekends, which makes a dramatic difference to the number available. Shift patterns also make a difference.
Mrs. Diana Organ: My hon. Friend mentioned the difficulties caused by the lack of government funding to recognise rural sparsity. Like him, I represent a rural constituency in Gloucestershire, and it faces a double whammy. The difficulty of providing a force in rural areas is not recognised, and the fact that our force is both small and efficient means that efficiency savings are difficult to find.
Mr. Drew: I thank my hon. Friend, who represents the area across the water from me. She has made her point clearly, and we shall continue to argue that case. We have several times made the point to the Minister about the impact of efficiency savings on a smaller force. Our force is efficient, and I pay tribute to its policing of Gloucestershire. We cannot keep cutting the service.
Like every other force, Gloucestershire has put in a bid for what are colloquially known as the "Jack Straw bobbies". Our bid is realistic. I cannot say that I think that it will simply be taken from the shelf and implemented, but it is as realistic as it can be. We would certainly like additional police in the rural areas, even if a training element would mean their helping Gloucester and Cheltenham. There is a need for policing in rural areas so that officers can be seen to be in action as well as actually being in action.
As I said last year, I understand the Government's difficulties over pension provision. Perhaps because he is new to his post, I felt that the hon. Member for North-East Hertfordshire (Mr. Heald) did not quite answer my point that the Tories had had plenty of opportunities to sort out that problem. We have those opportunities now, and we must deal with the report that has been produced.
From the point of view of the police, we cannot improve on their pension provision. The only way in which to do something about it would be to set up a funded scheme. I believe that we must do so. It would cost money, and the Treasury would have to find it.

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Sooner rather than later, we must grapple with this almost impenetrable problem. As the hon. Member for Chipping Barnet said, pensions take up to 17 per cent. of the budget, and that figure will increase, as the hon. Member for Southwark, North and Bermondsey said. We cannot allow that. It would be neither sustainable nor practicable to continue as we are. It is already doing enormous damage, and the operational impact is clear.
The Minister generously said that security is still—let me put it no more strongly than this—open to investigation. We feel especially hard done by because, although the overall budget may have increased, so too has the number of forces bidding for it. The perception of the matter must be taken into account. We do not want conflict between local communities over the way in which we fund security arrangements. That would serve no one's purpose. Robbing Peter to pay Paul is not a good way to run a police force.
The overall budgetary problems are clear, and we shall continue to advocate our case in that regard. However, our greatest concern is about the damage that can occur to the partnerships by which the Government set such great store. It is good to see community policing arrangements working to promote safety initiatives.
However, as officers of all ranks have told me, not only does that have to be paid for in time and money, but it results in an administrative overload. That has to be dealt with. The resources will not come out of fresh air—changes in policing need to be funded. It is good to implement such initiatives, but we cannot do so indefinitely without some money coming in.
The same point applies to best value programmes. It also applies to the tri-service initiative in Gloucestershire—of which we are extremely proud—for unifying the emergency call services. People are starting to realise the benefits of some communality for all three emergency services—ambulance, fire and rescue and police. We can build on that, because the public want the services to work together and to know that they will receive the best possible reaction—in both time and professionalism.
Budgetary problems need to be solved. I am glad that my hon. Friend the Minister's door seems to be open, because we shall be pursuing those matters with him in due course. We want our slice of the £35 million, although we have made it clear that we do not want more than our pro rata share.
The proof of the Government's ability to master the problems of law and order will be seen not only in budgets but, as my hon. Friend the Member for Northampton, North (Ms Keeble) said, in the impact on the streets and in the perception of what is happening. I recently read a document commissioned by the Salvation Army, but produced by the Henley Centre for Forecasting—an interesting combination. I was rather depressed to note that the document showed that people stated that the fear of crime was the single most worrying aspect in their quality of life. That is a key factor in people's perceptions. We have to get that right in Gloucestershire and throughout the country.
3.33 pm
Mr. John Horam: As the hon. Member for Hayes and Harlington (Mr. McDonnell) pointed out, the leafy suburbs have traditionally been neglected in debates on policing. I hope that my contribution and that
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of my hon. Friend the Member for Chipping Barnet (Sir S. Chapman) will go some way to redress the balance.
I illustrate the problem with an example. I have always been proud of the fact that my constituency includes the village of Biggin Hill with its famous fighter airfield, which was at the heart of the battle of Britain. Today, Biggin Hill is a pleasant place in which to live—full of character, as are its people.
However, the village has a problem—as the chairman of the residents association, many other residents and local councillors told me last Friday evening at my regular advice bureau. Until last year, it had a fully operating police station, right in the main road. As recently as the late 1960s, 14 police officers were working from that one station.
Last year, the police station was closed to the public and, more recently, the number of home beat officers was reduced from two to one. To have only one officer would seem to render the service almost non-operational, but that is the situation. The latest local rumour is that the police station is to be turned into a pizza parlour. If hon. Members think that that is bad enough, a police station in Chislehurst may be about to be converted into a theme pub. I do not know what that will do for the local crime problem.
The local police are still searching for somewhere suitable in Biggin Hill to locate the remaining home beat officer. The people of the village feel completely exposed. Orpington, which houses the main police station, is some distance away across winding country lanes; it can easily take 30 minutes to get from there to Biggin Hill. By that time, any incident would be over and all the miscreants would have gone.
As a result, a hard core of about 12 teenagers have taken to rampaging around local streets, causing mayhem. In a recent incident, they threw iron bars at overhead electricity cables, bringing them down and plunging the neighbourhood into darkness. Drink and, increasingly, drugs are part of the problem. That causes stress, anger and fear in the neighbourhood.
Biggin Hill is not alone. After six years of improving crime figures, which started under the Conservatives, there was a reversal of the trend last year; notified offences increased by 12 per cent.—a large increase—in the Orpington sector. As my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) said, that is a tragedy: much hard work went into reversing the previous rise in crime figures and produced that long six-year run of lower figures, but that has suddenly been dramatically reversed in areas such as Biggin Hill.
The Orpington police have worked hard to overcome those problems; I make no complaint about them. They have had successes, but there are now 20 fewer police officers in the Bromley district than there were two years ago. London itself has 400 fewer officers; during the past two years, the number is down by more than 1,000 over the whole country.
The Assistant Commissioner, Denis O'Connor spelt out the facts at a recent meeting of the Bromley police community consultative group. He said that he needed 6 per cent. extra resources each year even to keep the present strength. The Government have allocated an extra 2 per cent.; the force has to find 2 per cent. from extra efficiency and there is a 2 per cent. shortfall.

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The Minister's speech makes it obvious that the situation will not improve in the foreseeable future. According to his figures, with the Government's resources, police numbers will decline again over the coming year, but the police precept will rise—in my area, possibly by 16 per cent. People will be paying much more for a lot less.
The police are being starved of resources when our society demands more policing—especially a more visible police presence on the streets. I am delighted that my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) committed the Conservative party to reversing Labour's cuts in police numbers. I am glad that my hon. Friend the Member for North-East Hertfordshire reiterated that firm guarantee today.
The Government are beginning the second phase of their comprehensive spending review, to be concluded in June. I ask them to reconsider this matter urgently. If they do not, crime will be a big issue at the next general election.
3.39 pm
Mr. James Paice: I welcome my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) to his new position, although given his splendid record as a Minister in the previous Government, we should hardly be surprised at his excellent debut today. He has clearly explained the national situation, but I add one point.
During the first 10 years that I served as a Member of Parliament—all of them under Conservative Governments—total expenditure on the police increased by a real-terms average of 3.8 per cent each year. Yet here we are under a Labour Government, who pledged to be tough on crime, being asked to approve a real-terms increase of just 0.3 per cent. Even that figure is highly questionable, given that for Cambridgeshire, at least, the Home Office has imposed extra costs that were not imposed before.
Not surprisingly, I wish to deal with the position in Cambridgeshire, Britain's fastest growing county. It has consistently been at, or close to, the bottom of the league for the ratio of police officers to population. Given the time lag in statistics for a growing county, the true figures are almost certainly even worse.
Cambridgeshire also figures close to the bottom of the list for the level of council tax among police authorities. Only three have lower figures. Total resources in Cambridgeshire are about £17 per head of population below the average for England. If we had just the English average, it would mean as much an extra £10 million a year for the Cambridgeshire police authority.
I suspect that the Minister and other Members may say that the Cambridgeshire force does not need resources as much as an inner-city force. That would be a superficial and mistaken judgment to make. Last year, crime in Cambridgeshire rose by 4.7 per cent.—one of the highest rises outside the Metropolitan police area. A large part of Cambridgeshire is rural—much of it I represent—and the crime levels are becoming intolerable for my constituents. Much of that crime may be at the lower end of the seriousness league—it tends to be burglaries and
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robberies—but it is no comfort to people whose homes have just been ransacked to tell them that at least they have not been murdered. For them, the crime is palpable and serious.
A problem that is not unique to Cambridgeshire, but is particularly bad in the county, is the impact of a large traveller population. I do not suggest that all travellers are criminals; they are not. Many are perfectly good, law-abiding citizens. However, there is no doubt whatever that a significant proportion of them are. As a senior police officer in Cambridge told me, they are no more than a mobile crime wave.
In the last few weeks in my constituency, I have been made aware of cases in which outdoor machinery and landscape and other equipment have been stolen. In one case, the equipment was replaced and was stolen again a week later. The police often know who is responsible. However, if the goods are disposed of or if a car is taken—car theft is also common—and left burnt out in a gateway only 50 yards from a caravan, they cannot prove who did it. In addition, the fear of reprisals is commonplace in the countryside. If people act as witnesses against some of the traveller population, there is a serious risk that they will be at the receiving end of further crime.
The police in Cambridgeshire are extremely thinly stretched. Travel times in rural areas are very long. The Government study mentioned by my hon. Friend the Member for North-East Hertfordshire and other Members found that additional costs are involved in sparsely populated rural areas. However, the Government have chosen not to implement the study that they commissioned, which would have given Cambridgeshire another £1.2 million.
The Minister said that the study was not implemented because of the moratorium on changes to the formula. Frankly, that is a poor excuse. I do not criticise him for that; I know that the decision was taken by more senior Ministers. However, given how he handled himself today, he may become one of them before too long, and I wish him well. I say that in all honesty. He addressed the issues seriously and with candour, and I appreciate that. It made a great change from his predecessor's approach.
If the sparsity factor is introduced into the formula, it will have a significant effect on Cambridgeshire. If it is not, at some times of the day and night there may be only one police car in literally hundreds of square miles in some parts of the county. It can take 20, 25 or 30 minutes from the time of a call for a police car to arrive at the scene. That is not the fault of the police; it is the result of the low level of policing in the county.
I wish to consider the figures. The proposal for Cambridgeshire is an increase in total resources of 3.2 per cent., and I accept that that is marginally above the national average. However, the pension increase charge is more than £1 million. In addition, the Home Office's priorities include increased use of DNA and there will be a first-time charge of almost £200,000 for the police national computer and a first-time charge for a radio licence. When put together, all the Home Office's priorities will cost the policy authority more than £1.1 million, which will leave only £200,000 out of the total to cover inflation and everything else. Therefore, it is not surprising that our police authority is considering how much can it spend over and above the standard spending assessment and the police grant.

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A budget increase of 3.2 per cent. will equal a 3 per cent. council tax increase, and will mean a cut of 72 officers and 86 civilians. The county would need a 16 per cent. increase in council tax just to eliminate the need for officer and civilian reductions in the coming year. Even that would ignore the fact that the number of officers will be reduced by 40 by the end of this year. That is why the so-called "crime fighting fund" would be a joke if the matter were not so serious.
The fund will take away local discretion, and, as my hon. Friend the Member for North-East Hertfordshire said, it will do nothing to increase officer numbers in real terms. Cambridgeshire has bid for 43 extra officers and I have written to the Home Secretary to support that bid. Even if it gets that number—from what we have heard today, it is unlikely that all the bids will be met—it will merely balance out the reductions that have had to be made this year. Depending on the authority's decisions, the number of officers could be reduced by another 60 this year. The Government have let Cambridgeshire down not only on the sparsity and establishment factors, but on the promise that the Prime Minister made in Cambridge in the election campaign to rid us of the area cost-adjustment problem.
I wonder how long my constituents will have to wait before they have the number of police officers they need. What can I say to the residents of Soham and Ely, who face youths on the street causing disturbances and engaging in vandalism and threatening behaviour, when nothing can be done? What about the farmer whose machinery is stolen or whose buildings are set on fire but who is afraid to doing anything about that for fear of further reprisals?
Cambridgeshire police do their very best, but they cannot be everywhere. In parts of the county, the thin-blue line is about as visible as the river of fire on millennium night. Rural areas deserve law and order just as much as inner cities. Under the proposals before us, they will not get it.
3.48 pm
Mr. David Heath: It is a pleasure to follow the hon. Member for South-East Cambridgeshire (Mr. Paice), and I shall pick up on some of the points that he raised. His constituency is not that dissimilar to mine.
I wish to make a few general points, but I do not want to concentrate on the general case because we have already covered that in the debate. We have discussed the problems of pay, pensions and the public safety radio communications project, although I very much welcome what the Minister said about the potential for its funding. We have discussed the National Criminal Intelligence Service and the national crime squad top cut. I believe strongly in such national squads—I had something to do with NCIS in the past—but we must strike a balance between what individual constabularies pay and the perceived benefit that they receive from the national squads.
The one area that we have not debated sufficiently is capital budgets. I am extremely concerned that we shall apparently have a freeze on the overall capital budget to the 1999–2000 figures, which in themselves were 50 per cent. lower than those for 1995–96. Given the increased demand for capital, one might expect the Government to be more responsive to need.
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Most of what I have to say is unashamedly parochial and will relate to the Avon and Somerset police authority, which I had the great pleasure to chair for three years and for which I have great affection and respect. Avon and Somerset police do an excellent job, and in the main I like not only what they do but how they do it.
I worry, however, about the consequences for the force of this year's settlement. I know that the police authority will meet in the next couple of weeks to consider a budget that will give it stark choices. It faces a £7 million shortfall. Those of us who have been in local government know that such shortfalls are a regular occurrence, but the force has been recognised as particularly efficient and it has for some time been innovative in its management practices, so there is not a great deal of scope for efficiency savings.
Mr. Heald: Will the hon. Gentleman give way?
Mr. Heath: No, I am sorry, I do not have time to give way.
The settlement for Avon and Somerset is not the worst in the country. It is about two thirds of the way down the list; 27 authorities have done better and 11 have done worse. However, the settlement does not meet the inflation cost of the pay awards, which is £6.1 million, or the additional pension deficit of £2 million. It does not allow for a capital programme that goes beyond the basic investment in information technology needed to meet Government programmes, plus some maintenance of buildings, for which there is a £7 million backlog. The tragedy is that £9 million of capital receipts is locked in a cupboard and cannot be used. If that could be utilised, it would benefit the police authority.
The council tax benefit limitation scheme also penalises Avon and Somerset by £500,000, which in itself is the cost of 20 police officers. The Minister said earlier that he is faced with a currency of police officers, whereas in his previous job he was faced with a currency of teachers, but that is how we must look at these issues. What will happen if funds are limited in a manpower-intensive service such as the police? We will lose police officers. That, I fear, will be the effect in the Avon and Somerset force this year.
In the next couple of weeks, the police authority will be asked to approve a budget that next year will provide for 30 fewer police officers, less civilian support and fewer of the services that the constabulary would like to provide, such as financial investigation. That is not matched by a reduction in council tax. Far from it—there will be an 11.5 per cent. increase. The hon. Member for Northampton, North (Ms Keeble) said that people do not mind if taxes go up and they see the benefit in the service. People in Somerset will experience an 11.5 per cent. increase in the council tax for the police, on top of a 10.5 per cent. increase last year, but there will be 30 fewer officers on their streets. They will ask why that is happening and why they are being so badly served.
We may well come up trumps in the crime fighting fund application. Who knows? Maybe we will be given everything that we ask for, but I suspect not. If my hon. Friend the Member for Southwark, North and Bermondsey (Mr. Hughes) is right and we receive 27 officers from that fund, but lose 30 officers because of the general budget, it does not take a mathematical

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genius to realise that we will be worse off in terms of the number of officers fighting crime in Avon and Somerset. That is a labour of Sisyphus for the constabulary, because every time we think that we can make improvements, the stone rolls back and we are worse off.
What can the Minister do? First, of course, he can argue—I am sure that he is doing so—for a greater total sum for the police, which is not keeping up with other services. For Avon and Somerset, he can argue also for the removal of the area cost adjustment, because there can be no justification for such an adjustment for a police service in which pay and conditions are determined nationally, yet that is maintained year after year.
There is also sparsity, which the Minister said he is addressing. Avon and Somerset is a strange police authority because we have urban Bristol, including St. Paul's, and Exmoor, and the two have rather different policing needs. We have to police a large rural area, and that must be recognised. Having sympathy for the concerns of hon. Members who represent rural areas is not equivalent to doing something about the formula.
We have a complicated formula for the police grant that awards authorities that have terraced housing. That is wonderful for us because we have Bath, with the Royal crescent, and Clifton with its Georgian crescents, and we get rewarded for that.
Mr. Geoffrey Clifton-Brown: Will the hon. Gentleman give way?
Mr. Heath: No, I am sorry, I do not have time.
Let us have some sense about the costs of policing, and a needs-based budget. There is also the establishment factor, which the hon. Member for South Derbyshire (Mr. Todd) mentioned. It does not fit with a needs-based formula to base 10 per cent. of a force's budget on historical accident, favouring those forces who happen to have been favoured many years ago.
I could say much more, but I want to give the Minister the opportunity to give a brief reply. Before I do so, I shall make one point. The effect of squeezing police expenditure is not that the police will investigate murders or other serious crimes any less effectively. It is the marginal activities that get squeezed, such as patrols and the provision of cover in rural areas, which affect the visibility of the police. Local commanders have difficulty in carrying absences and abstractions for major crimes, which means that the public have less confidence in their local police, and the police are less visible. I hope that no Member of the House wants that.
3.56 pm
The Minister of State, Home Office (Mr. Charles Clarke): I shall respond briefly to this useful debate. Pensions were mentioned by many hon. Members, who made legitimate points. That issue is difficult to deal with across government, not only in the police. As has been suggested, we need to sort it out. I make no party political criticism in saying that the matter was not addressed fully under the previous Government; it has not yet been fully addressed, and it needs to be dealt with.
I am glad that the National Criminal Intelligence Service and the national crime squad have been complimented. They are in a different position from
1262
other forces, but I am glad that many hon. Members have referred to the quality of their work and the importance of supporting them. I am strongly committed to doing so.
My hon. Friend the Member for Hayes and Harlington (Mr. McDonnell) and the hon. Members for Orpington (Mr. Horam) and for Chipping Barnet (Sir S. Chapman) powerfully made the suburban metropolitan case. I have not heard the suburban argument made that clearly before, and I shall consider those important issues, which fall between those of inner-city crime and those of rural deprivation.
The area cost-adjustment point is well made, but as I said earlier, the overall review conducted by the Deputy Prime Minister is dealing with that, among other matters. Many hon. Members criticised the formula and made interesting points. My hon. Friend the Member for Stroud (Mr. Drew) talked about how population movements are measured, which will be part of the process.
The hon. Member for Southwark, North and Bermondsey (Mr. Hughes) mentioned the difficult issue of success being penalised, which runs through much of public policy. Obviously, the worse the problems in an area, the greater the inclination to give it more resources, but those areas that have done better then feel, reasonably, that their success is not being properly recognised. I take that problem very seriously.
I did not deal with capital in my opening remarks because of the limited time available. We are now in a period of stability for capital after successive years of cash cuts in police capital provision. Police capital funding next year will remain at this year's figure of £144 million, and our plans will allow police authorities to plan ahead with confidence. In addition, there are private finance initiative schemes.
I am sure that the numbers debate will run on. I merely want to emphasise that police presence on the streets is not simply related to police numbers. We had a meeting near Emneth, close to Norfolk, where there was a terrible murder last Thursday, and people raised the issue of the burden that the criminal justice system places on the police by requiring them to spend more time in police stations and not enough on the beat. There are issues of that kind that are at least as important.
I welcome the debate. I have tried briefly to respond to the points that have been made. I shall be happy to discuss these issues further outside the Chamber.
It being Four o'clock, MR. DEPUTY SPEAKER put the Question, pursuant to Order [28 January].
The House divided: Ayes 271, Noes 156.

Division No. 62]

[4 pm

AYES

Abbott, Ms Diane

Beard, Nigel

Ainger, Nick

Beckett, Rt Hon Mrs Margaret

Ainsworth, Robert (Cov'try NE)

Bell, Martin (Tatton)

Alexander, Douglas

Bell, Stuart (Middlesbrough)

Allen, Graham

Benn, Hilary (Leeds C)

Anderson, Donald (Swansea E)

Benn, Rt Hon Tony (Chesterfield)

Armstrong, Rt Hon Ms Hilary

Benton, Joe

Atkins, Charlotte

Berry, Roger

Austin, John

Best, Harold

Banks, Tony

Betts, Clive

Barnes, Harry

Blackman, Liz

Barron, Kevin

Blears, Ms Hazel

Bayley, Hugh

Blizzard, Bob

1263

Boateng, Rt Hon Paul

Henderson, Ivan (Harwich)

Borrow, David

Hepburn, Stephen

Bradley, Keith (Withington)

Heppell, John

Bradley, Peter (The Wrekin)

Hesford, Stephen

Brinton, Mrs Helen

Hill, Keith

Brown, Rt Hon Nick (Newcastle E)

Hinchliffe, David

Brown, Russell (Dumfries)

Hodge, Ms Margaret

Browne, Desmond

Hood, Jimmy

Burden, Richard

Hoon, Rt Hon Geoffrey

Burgon, Colin

Hope, Phil

Butler, Mrs Christine

Hopkins, Kelvin

Byers, Rt Hon Stephen

Howarth, George (Knowsley N)

Campbell, Ronnie (Blyth V)

Howells, Dr Kim

Cann, Jamie

Hoyle, Lindsay

Caplin, Ivor

Hughes, Ms Beverley (Stretford)

Casale, Roger

Hughes, Kevin (Doncaster N)

Cawsey, Ian

Humble, Mrs Joan

Chapman, Ben (Wirral S)

Hurst, Alan

Chaytor, David

Hutton, John

Clapham, Michael

Iddon, Dr Brian

Clark, Paul (Gillingham)

Illsley, Eric

Clarke, Charles (Norwich S)

Jackson, Helen (Hillsborough)

Clarke, Rt Hon Tom (Coatbridge)

Jenkins, Brian

Clarke, Tony (Northampton S)

Johnson, Alan (Hull W & Hessle)

Clelland, David

Jones, Rt Hon Barry (Alyn)

Clwyd, Ann

Jones, Helen (Warrington N)

Coaker, Vernon

Jones, Ms Jenny (Wolverh'ton SW)

Coffey, Ms Ann

Coleman, Iain

Jones, Dr Lynne (Selly Oak)

Colman, Tony

Jones, Martyn (Clwyd S)

Corbyn, Jeremy

Kaufman, Rt Hon Gerald

Corston, Jean

Keeble, Ms Sally

Cousins, Jim

Keen, Alan (Feltham & Heston)

Cox, Tom

Kelly, Ms Ruth

Cranston, Ross

Kemp, Fraser

Crausby, David

Kennedy, Jane (Wavertree)

Cryer, Mrs Ann (Keighley)

Khabra, Piara S

Cunningham, Jim (Cov'try S)

Kidney, David

Darvill, Keith

Kilfoyle, Peter

Davey, Valerie (Bristol W)

King, Andy (Rugby & Kenilworth)

Davidson, Ian

Laxton, Bob

Davis, Rt Hon Terry (B'ham Hodge H)

Lepper, David

Leslie, Christopher

Dawson, Hilton

Levitt, Tom

Dean, Mrs Janet

Lewis, Ivan (Bury S)

Dismore, Andrew

Linton, Martin

Dobbin, Jim

Lloyd, Tony (Manchester C)

Doran, Frank

Lock, David

Dowd, Jim

Love, Andrew

Drew, David

McAvoy, Thomas

Eagle, Angela (Wallasey)

McCabe, Steve

Eagle, Maria (L'pool Garston)

McCafferty, Ms Chris

Efford, Clive

Macdonald, Calum

Ellman, Mrs Louise

McDonnell, John

Etherington, Bill

McGuire, Mrs Anne

Fitzsimons, Lorna

McIsaac, Shona

Flint, Caroline

McKenna, Mrs Rosemary

Foster, Michael J (Worcester)

Mackinlay, Andrew

Fyfe, Maria

McNulty, Tony

Galloway, George

MacShane, Denis

Gapes, Mike

Mactaggart, Fiona

Gardiner, Barry

Mahon, Mrs Alice

George, Bruce (Walsall S)

Mallaber, Judy

Gerrard, Neil

Marsden, Gordon (Blackpool S)

Godsiff, Roger

Marshall, Jim (Leicester S)

Goggins, Paul

Maxton, John

Golding, Mrs Llin

Meale, Alan

Gordon, Mrs Eileen

Michie, Bill (Shef'ld Heeley)

Griffiths, Nigel (Edinburgh S)

Miller, Andrew

Griffiths, Win (Bridgend)

Mitchell, Austin

Grocott, Bruce

Moffatt, Laura

Grogan, John

Moran, Ms Margaret

Hall, Patrick (Bedford)

Morris, Rt Hon Ms Estelle (B'ham Yardley)

Hamilton, Fabian (Leeds NE)

Heal, Mrs Sylvia

Mountford, Kali

Henderson, Doug (Newcastle N)

Mullin, Chris

1264

Murphy, Jim (Eastwood)

Smith, Llew (Blaenau Gwent)

Naysmith, Dr Doug

Snape, Peter

Norris, Dan

Soley, Clive

O'Brien, Mike (N Warks)

Southworth, Ms Helen

O'Hara, Eddie

Spellar, John

O'Neill, Martin

Squire, Ms Rachel

Organ, Mrs Diana

Stewart, David (Inverness E)

Palmer, Dr Nick

Stoate, Dr Howard

Pendry, Tom

Strang, Rt Hon Dr Gavin

Perham, Ms Linda

Stringer, Graham

Pickthall, Colin

Stuart, Ms Gisela

Pike, Peter L

Sutcliffe, Gerry

Plaskitt, James

Taylor, Rt Hon Mrs Ann (Dewsbury)

Pollard, Kerry

Pound, Stephen

Taylor, Ms Dan (Stockton S)

Powell, Sir Raymond

Taylor, David (NW Leics)

Prentice, Ms Bridget (Lewisham E)

Temple-Morris, Peter

Prentice, Gordon (Pendle)

Thomas, Gareth R (Harrow W)

Prescott, Rt Hon John

Timms, Stephen

Primarolo, Dawn

Tipping, Paddy

Prosser Gwyn

Todd, Mark

Purchase, Ken

Touhig, Don

Quinn, Lawrie

Trickett, Jon

Radice, Rt Hon Giles

Truswell, Paul

Raynsford Nick

Turner, Dennis (Wolverh'ton SE)

Turner, Dr George (NW Norfolk)

Reid, Rt Hon Dr John (Hamilton N)

Turner, Neil (Wigan)

Roche, Mrs Barbara

Twigg, Derek (Halton)

Rogers, Allan

Twigg, Stephen (Enfield)

Rooker, Rt Hon Jeff

Tynan, Bill

Rooney, Terry

Vis, Dr Rudi

Ross, Ernie (Dundee W)

Ward, Ms Claire

Rowlands, Ted

Wareing, Robert N

Roy, Frank

Watts, David

Ruddock, Joan

White, Brian

Russell, Ms Christine (Chester)

Whitehead, Dr Alan

Ryan, Ms Joan

Wicks, Malcolm

Salter, Martin

Williams, Rt Hon Alan (Swansea W)

Savidge, Malcolm

Sawford, Phil

Williams, Mrs Betty (Conwy)

Sedgemore, Brian

Wills, Michael

Shaw, Jonathan

Winnick, David

Sheldon, Rt Hon Robert

Winterton, Ms Rosie (Doncaster C)

Shipley, Ms Debra

Wise, Audrey

Short, Rt Hon Clare

Wood, Mike

Simpson, Alan (Nottingham S)

Woolas, Phil

Singh, Marsha

Worthington, Tony

Skinner, Dennis

Wyatt, Derek

Smith, Rt Hon Andrew (Oxford E)

Smith, Angela (Basildon)

Tellers for the Ayes:

Smith, Miss Geraldine (Morecambe & Lunesdale)

Mr. Mike Hall and

Mr. Greg Pope.

NOES

Ainsworth, Peter (E Surrey)

Bruce, Malcolm (Gordon)

Amess, David

Burns, Simon

Ancram, Rt Hon Michael

Burstow, Paul

Arbuthnot, Rt Hon James

Butterfill, John

Atkinson, David (Bour'mth E)

Chapman, Sir Sydney (Chipping Barnet)

Atkinson, Peter (Hexham)

Baldry, Tony

Chope, Christopher

Ballard, Jackie

Clappison, James

Beggs, Roy

Collins, Tim

Beith, Rt Hon A J

Colvin, Michael

Bercow, John

Cormack, Sir Patrick

Beresford, Sir Paul

Cotter, Brian

Blunt, Crispin

Cran, James

Body, Sir Richard

Davey, Edward (Kingston)

Boswell, Tim

Davies, Quentin (Grantham)

Brady, Graham

Davis, Rt Hon David (Haltemprice)

Brake, Tom

Day, Stephen

Brand, Dr Peter

Duncan, Alan

Brazier, Julian

Emery, Rt Hon Sir Peter

Breed, Colin

Faber, David

Brooke, Rt Hon Peter

Fabricant, Michael

Browning, Mrs Angela

Fallon, Michael

1265

Flight, Howard

McIntosh, Miss Anne

Forth, Rt Hon Eric

MacKay, Rt Hon Andrew

Foster, Don (Bath)

McLoughlin, Patrick

Fowler, Rt Hon Sir Norman

Madel, Sir David

Fox, Dr Liam

Major, Rt Hon John

Fraser, Christopher

Malins, Humfrey

Gale, Roger

Maples, John

George, Andrew (St Ives)

Maude, Rt Hon Francis

Gibb, Nick

Mawhinney, Rt Hon Sir Brian

Gill, Christopher

May, Mrs Theresa

Gillan, Mrs Cheryl

Moore, Michael

Gorman, Mrs Teresa

Moss, Malcolm

Green, Damian

Nicholls, Patrick

Greenway, John

Norman, Archie

Grieve, Dominic

O'Brien, Stephen (Eddisbury)

Gummer, Rt Hon John

Page, Richard

Hamilton, Rt Hon Sir Archie

Paice, James

Hammond, Philip

Paterson, Owen

Hawkins, Nick

Pickles, Eric

Heald, Oliver

Prior, David

Heath, David (Somerton & Frome)

Redwood, Rt Hon John

Heathcoat-Amory, Rt Hon David

Rendel, David

Hogg, Rt Hon Douglas

Robathan, Andrew

Horam, John

Robertson, Laurence

Howard, Rt Hon Michael

Roe, Mrs Marion (Broxbourne)

Howarth, Gerald (Aldershot)

Rowe, Andrew (Faversham)

Hughes, Simon (Southwark N)

Ruffley, David

Hunter, Andrew

Russell, Bob (Colchester)

Jack, Rt Hon Michael

St Aubyn, Nick

Jackson, Robert (Wantage)

Sanders, Adrian

Jenkin, Bernard

Shephard, Rt Hon Mrs Gillian

Kirkbride, Miss Julie

Shepherd, Richard

Kirkwood, Archy

Simpson, Keith (Mid-Norfolk)

Laing, Mrs Eleanor

Soames, Nicholas

Lait, Mrs Jacqui

Spelman, Mrs Caroline

Lansley, Andrew

Spicer, Sir Michael

Leigh, Edward

Spring, Richard

Letwin, Oliver

Stanley, Rt Hon Sir John

Lewis, Dr Julian (New Forest E)

Steen, Anthony

Lidington, David

Streeter, Gary

Livsey, Richard

Stunell, Andrew

Lloyd, Rt Hon Sir Peter (Fareham)

Swayne, Desmond

Loughton, Tim

Syms, Robert

Luff, Peter

Tapsell, Sir Peter

MacGregor, Rt Hon John

Taylor, Ian (Esher & Walton)

1266

Taylor, John M (Solihull)

Whitney, Sir Raymond

Taylor, Matthew (Truro)

Whittingdale, John

Taylor, Sir Teddy

Wilkinson, John

Thompson, William

Willis, Phil

Tonge, Dr Jenny

Wilshire, David

Townend, John

Winterton, Mrs Ann (Congleton)

Tredinnick, David

Winterton, Nicholas (Macclesfield)

Tyler, Paul

Yeo, Tim

Tyrie, Andrew

Young, Rt Hon Sir George

Viggers, Peter

Walter, Robert

Tellers for the Noes:

Wardle, Charles

Mr. Geoffrey Clifton-Brown

Waterson, Nigel

and

Wells, Bowen

Mr. John Randall.

Question accordingly agreed to.
Resolved,
That the Police Grant Report (England and Wales) 2000–01: (HC 169), which was laid before this House on 27th January, be approved.
MR. DEPUTY SPEAKER then put the remaining Question required to be put at that hour.
Resolved,
That the Police Grant Report (England and Wales) 1998–99: Amending Report 2000–01 (HC 170), which was laid before this House on 27th January, be approved.—[Ms Armstrong.]
Mr. Crispin Blunt: On a point of order, Mr. Deputy Speaker. An announcement is running on teletext that the Secretary of State for Northern Ireland is to make a statement to the House later tonight. Have you had notice that we can expect such a statement, or is that simply speculation by the BBC?
Mr. Deputy Speaker (Sir Alan Haselhurst): Had the hon. Gentleman been present for business questions, he would have heard the Leader of the House foreshadow the possibility that there would be a statement later today. I cannot add to that, but notice has certainly been given to the House.

Local Government Finance
4.13 pm
The Minister for Local Government and the Regions (Ms Hilary Armstrong): I beg to move,
That the Local Government Finance Report (England) 2000–01 (HC 160), which was laid before this House on 27th January, be approved.
Mr. Deputy Speaker (Sir Alan Haselhurst): With this, it will be convenient to discuss the following motions:
That the Local Government Finance (England) Special Grant Report (No. 52) (HC 161), which was laid before this House on 27th January, be approved.
That the Local Government Finance Report (England) 1998–99: Amending Report 2000 (HC 162), which was laid before this House on 27th January, be approved.
Ms Armstrong: I shall set the financial settlement in the context of the Government's radical reform for local government. Modernising and improving public services is central to the Government's approach, to enable people throughout the country to have a higher quality of life. High-quality, accessible and affordable local public services are an essential part of community life.
Promoting the economic and social regeneration of our villages, towns and cities, tackling crime, ensuring that our schools deliver excellence, maintaining decent health and social care, enhancing the local environment, and protecting our most vulnerable citizens—all these are responsibilities which local government at its best fulfils best in partnership with others.
Our ambitious and long-term reform agenda for local government requires a long-term approach to the funding of public services. As my right hon. Friend the Prime Minister has made clear, dealing with the Tory inheritance has taken and will take time. We are determined not to make the mistake of boom and bust, and instead have sought to create a stable economic climate within which our public services can develop and improve over time.
Mr. A. J. Beith: I am grateful to the right hon. Lady for giving way. I must point out to her that the only thing stable about education funding in Northumberland is the fact that we are still working on the plans of the previous Government, and that even this year the education standard spending assessment for Northumberland is one of the lowest of any shire county. When can we hope for some improvement in the situation in which children in Northumberland have so much less spent on them per head than in so many other parts of the country?
Ms Armstrong: As the right hon. Gentleman knows, there has always been a system of redistribution, taking account of need. We have paid greater attention to the sparsity factor, which has benefited Northumberland. I know the problems of Northumberland because, as the right hon. Gentleman knows, my constituency is separated from it only by the river.
The problems are being tackled. There has been a 4.4 per cent. increase in education funding this year. Everything possible is being done to ensure that all children in Northumberland get the opportunity that they deserve.
1268
A distribution formula inevitably means that not every place gets exactly the same amount of money per child, but we are conducting a review and looking at how we can ensure that people throughout the country know that they are getting a better deal. They know that this year because, however low education spending in Northumberland is, it is a lot more than it was in the last three years of the previous regime.
Mr. Peter Atkinson: Will the Minister give way?
Ms Armstrong: I am sure that the hon. Gentleman, who is my neighbour, will speak later in the debate. I must make progress.
We were acutely aware that local government inherited a short-term challenge, exacerbated by a 4.3 per cent. cut in real terms in the three years preceding 1997. There has been no such cut since this Government were elected. I am pleased to confirm today that this year's settlement will mean that over the first three years of this Government, grant to local councils will have increased by £6 billion. That is a real-terms increase of 7.8 per cent., compared with a 4.3 per cent. cut in the three years preceding the election of a Labour Government.
Mr. Andrew Robathan: I am grateful to the right hon. Lady for giving way. May I move the debate from Northumberland down to Leicestershire? The right hon. Lady may not know that Leicestershire has the lowest standard spending assessment for education of any shire county. The Government's recommended spending on education in Leicestershire would involve a 3.3 per cent. cut per pupil. However, that is not going to happen, because Leicestershire county council is to spend more than the recommended amount.
Will the Minister speak to her right hon. Friend the Secretary of State for Education and Employment and explain, first, that Leicestershire is concerned about the small amount of money that it is getting from the Government through the education SSA and, secondly, that the leader of the council is not the chief executive? Although the Secretary of State has been told that on more than one occasion, he keeps writing to the chief executive, Mr. Sinnott, as the leader.
Ms Armstrong: The average increase in education standard spending assessments is higher in shire counties than in metropolitan counties. That means that Leicestershire received a higher increase than many other authorities. Not everybody can be average or at the top in a system that uses a distribution formula.
Mr. Peter Atkinson: Will the right hon. Lady give way?
Ms Armstrong: I shall be neighbourly to the hon. Gentleman.
Mr. Atkinson: The Labour leader of Northumberland county council has written to the Secretary of State for Education and Employment to plead for extra help. Northumberland county council has had to cut its education budget and, consequently, it cannot take

1269
up £2.8 million of standards fund money because it does not have the match funding. Schools in Northumberland currently face that problem.
Ms Armstrong: Despite the substantial increases, some authorities and schools have historically received low funding. The hon. Gentleman knows that, under the previous Government, his local authority suffered substantial cuts. The Government have ensured increased funding. We have not been able to put everything right, because righting all the previous Government's wrongs will take time. We are considering the third settlement. I remind the hon. Gentleman of the real-terms increase of 7.8 per cent. for local councils since the general election, in contrast with what was happening before the election.
The Government are mindful of the long-term challenges that local councillors face, and appreciate that they are eager to modernise the fabric of the community through capital investment, of which the Tories starved them. We have therefore made available more than £6 billion of additional capital to invest in schools, homes and other much-needed community facilities.
Additional resources must be invested wisely. That is why we are committed to modernising the local government finance system, which at present makes up in complexity for what it lacks in transparency. If local councils are to plan ahead and work effectively in partnerships, they need assurances about the stability of future funding. That is why we announced totals for SSAs and grant for three years, during which we do not expect to change the SSA formulae. The Local Government Association welcomes that move.
Sir Paul Beresford: Will the right hon. Lady explain the enormous variations between last year and this year, and the rumours that they are caused by a glitch in a computer, which affected the previous year's data?
Ms Armstrong: I do not deal in rumours. Changes have been made this year because of the additional investment that we are providing, and because of changes in data. As the hon. Gentleman knows, we have consistently said that we would change not the formulae, but the data. Of course changes have occurred, but the good treasurers were able to predict what would happen.
We continue to work with the LGA to review the revenue grant and capital control systems to ascertain whether, together, we can achieve a simpler, fairer system that puts the grant where it will do most good. That is why we are implementing radical proposals for a more efficient, transparent and accountable local democracy.
We have abolished crude and universal capping and we no longer set authorities' spending limits in advance. Those changes make councils more accountable to local people for their tax decisions. In general, councils responded well to that approach in 1999–2000. Unlike Conservative Members, the Government are not in the business of forecasting council tax increases. Indeed, it is becoming a tired old ritual for Opposition Members to forecast high council tax increases and make alarmist predictions that rarely materialise.
Mr. Nigel Waterson: The Minister cannot divorce herself entirely from the impact of the
1270
settlement on council tax, because real people pay that tax through real councils. Many of those people face hardship in paying increased council tax.
Ms Armstrong: That was an interesting intervention. Given the hon. Gentleman's predictions, I wonder about his intentions. Today, he predicted increases of more than 10 per cent. Is he trying to encourage authorities to do that? Last year, Labour councils increased council tax by 6.1 per cent., whereas Tory councils raised it by 7.6 per cent. Perhaps the hon. Gentleman is trying to encourage profligate spending by Tory authorities. Thank goodness there are not many of them.
It is important that councils consult local people and consider fully the scope for increased cost-effectiveness before setting their budgets. I am delighted to say that, since I announced the provisional figures in November, efficient management of the transitional costs of local government reorganisation has produced a saving of £35 million. As part of the Government's continual drive to ensure that investment is focused on front-line services, I decided to return the £35 million through an increase in grant support to local authorities to help them fund service improvements and keep council tax increases down.
In addition, my right hon. Friend the Secretary of State for Education and Employment recently confirmed that an extra £50 million for schools will be paid through a special grant to all education authorities.
Mr. Adrian Sanders: But to qualify for that £50 million, local education authorities must maintain last year's education budget as well as finding extra cash to match the Government's increase on the education SSA this year.
Ms Armstrong: My right hon. Friend has written to local authorities to say that he is interested in the way in which they will pass the education money to schools. He will examine that before he makes a decision. I am happy to support my right hon. Friend.
Overall Government grant to local authorities will be £41.9 billion in 2000–01. That is nearly £2.3 billion or 5.8 per cent. more than in 1999–2000.
Mr. David Watts: Depopulation in many poor areas causes severe problems in maintaining standards and services, and for the council tax. Will my right hon. Friend specifically consider the poorest areas, such as St. Helens and Barnsley, which are suffering while we wait for the review of the SSA system? We all want that to happen as soon as possible.
Ms Armstrong: I shall tackle that later in my speech.
As I said, the overall effect of our policy is an increase this year. Total standard spending will be £53.6 billion, which is £2.9 billion or 5.8 per cent. more than in 1999–2000. Individual authorities' SSAs will have moved slightly since the provisional figures were announced in November to reflect updating or corrections to data. I do not propose a change in the method of calculating SSAs, except when that is needed to take account of the changes that are connected with establishing the Greater London Authority. However, in a formula-based system such as the standard spending assessment, changed circumstances change the amount of grant that individual councils

1271
receive. Specifically, when the data that feed into the formula change, the SSAs for individual authorities change. Those changes led to representations on three issues in particular.
Lower interest rates affected the distribution of the element of the SSA that relates to capital financing. The authorities that lost by that change—principally metropolitan authorities with debt, but low interest receipts—suggested to me an alternative means of calculation. I understand their argument that using an interest rate at a particular point in time may not be representative of a whole year. However, we have said that we intend to stick to the existing method of calculating SSAs and we have to be consistent in that. I must also make the obvious point that reducing interest rates results in a reduced cost to authorities of servicing debt. That is reflected in the particular SSA.
A number of representations suggested that more grant be given to those authorities with the lowest grant increases and that the threshold of 1.5 per cent. that we had proposed for central support protection grant be increased. The Government, though, have to strike a balance between protecting authorities with low increases and allowing the new data to work through the grant formula to give larger increases to others. I consider that we have that balance right.
Authorities such as those to which my hon. Friend the Member for St. Helens, North (Mr. Watts) referred—which lost grant because of data changes and, in particular, declining population—suggested that we should introduce a mechanism to phase in those losses. I am not persuaded that that would be sensible. It must be true that, other things being equal, a decline in local population will feed through to lower spending. However, that is one of the issues that we shall continue to examine as we consider the review.
I have considered those and other points carefully. However, I remind the House that our July 1998 White Paper, "Modern Local Government—In Touch with the People", set out our plans for the period of the review of revenue grant distribution. We stated that although we did not expect to change the method of distribution, we would update the SSAs of individual authorities to reflect changes in the demands for their services, as reflected in the data used to calculate SSAs. We see no reason to change that view. Therefore, I do not intend to make any changes to the basis of grant distribution that I proposed on 25 November.
The Local Government Association sought information about the arrangements for phasing in the effect of grant changes. I accept its argument, which chimes with the Government's emphasis on providing a stable financial environment in which authorities can plan and deliver better services. I therefore announce today that we intend, for 2001–02, to use the same arrangements for phasing in grant changes as for 2000–01. That means that no authority will lose grant, and local authorities with education and social service responsibilities will receive a grant increase of at least 1.5 per cent.
I also intend to maintain stability in another area that relates to council tax benefit subsidy. We received and considered representations on our proposals for subsidy limitation. Some were opposed to the scheme itself and some sought modifications. However, none convinced me that the basic principle behind subsidy limitation is wrong.
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Local authorities will therefore continue to contribute to the benefit costs of council tax rises, if those are above a guideline. The guideline will operate cumulatively, as we said last year. In other respects, the scheme remains as last year.
Mr. Christopher Chope: I understand that the guideline is about 4.8 per cent. Why is that so much above the rate of inflation? Does it not demonstrate that the Minister knows that the consequence of the grant settlement is that council tax rises will be significantly above the rate of inflation next year, as they have been in the last two years under this Government?
Ms Armstrong: The hon. Gentleman has a short memory. He knows that when he was in charge of these things—or at least when he was one of the Ministers in the Department—he supported changes that drastically changed the amounts raised through central Government grant and locally. The balance was redressed slightly by changing the basis of that, but his Government changed those amounts. That has been maintained, but we are considering it in the review. It is not true that the guideline is 4.8 per cent. and it is not true that councils have to spend up to it. Councils have already planned to spend well below the guideline, which is not a suggested council tax increase but the guideline at which council tax benefit subsidy limitation kicks in. That is a very different matter.
Mr. Harry Barnes: An aspect of the council tax benefit subsidy limitation scheme presents a problem. Parish council precepts are included in the amounts to be considered, but parish councils are in control of their own expenditure. Some authorities have a great number of parish councils in their area, so should not that matter be removed from these considerations?
Ms Armstrong: I have considered that. It would be difficult to administer my hon. Friend's proposal and the cost of administration might far outweigh the amount that would be taken. Following discussions with the National Association of Local Councils, we decided not to go down that road. However, I understand his point.
Mr. Sanders: I am grateful to the Minister for giving way a second time. Combined fire authorities, which have no control over the local authorities that set their budgets, are affected by the council tax benefit subsidy limitation scheme. Will she consider making reforms, as the scheme is very unfair to them?
Ms Armstrong: I do not accept that argument. Combined fire authorities comprise representatives from member authorities, and it is their responsibility to ensure that decisions taken by the combined fire authorities do not inflict exacting tolls on the council tax payer. It would not be fair to put that liability on to the other authority, which does not set the tax.
Mr. Sanders: The Minister has that the wrong way round.
Ms Armstrong: I do not; maybe you have.
Mr. Deputy Speaker: Order. I am sure that the Minister did not mean to refer to me.
Ms Armstrong: Absolutely not—I apologise, Mr. Deputy Speaker. The liability rests with the authority

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that sets the budget. If the fire authority sets the budget, council tax benefit subsidy limitation impacts on that budget. The authority must take responsibility for the decisions that it takes.
This is the third local government settlement under the Government and the second within the comprehensive spending review. We are providing unprecedented financial stability for local government, together with proper funding. I acknowledge that some authorities face difficulties. That is why we are continuing to seek long-term reform of the local government finance system. Our proposals for 2000–01 have been widely welcomed by local government. They represent the best deal for local government since the introduction of the council tax. They lay the foundation for reform and modernisation, and enable councils to plan effectively for the provision of decent public services that underpin strong communities. I commend them to the House.
4.40 pm
Mr. Nigel Waterson: Here we are again, Mr. Deputy Speaker.
This is a Government who like to pretend that they are the friends of local government. They talk a great deal about enhancing local democracy and use that famous word in the new Labour dictionary, "modernisation". When this Government start talking about modernisation, it is time to start counting the spoons. The last thing that they want is vigorous, independent, representative local councils standing up for local people and opposing harmful policies imposed by central Government. As we see from their attitude to the London mayoral race, there are clear limits to devolution under this Government. They are not prepared to tolerate a mayoral candidate who will not wear a pager and take his lead from Millbank or No. 10.
In the rest of the country, the Government wish to impose their own blueprint for local government structures. The Secretary of State is now leaving the Chamber; I am sorry about that. The Government also refuse point blank to allow the so-called fourth option—to let councils and local people choose the status quo if it suits their needs. Yet so unsuccessful have the Government been in attracting genuine support, rather than sullen acquiescence, from councillors for their plans that not one solitary councillor in Labour-controlled Camden could bring himself or herself to support their plans for reorganisation.
Ms Armstrong: That is not true.
Mr. Waterson: I understand that the council voted 40-something to zero, with three abstentions, against the Government's plans for reorganisation and that one of those who abstained was the Labour leader of the council. If the Minister thinks that I am wrong, however, I shall be happy to give way to her.
Ms Armstrong: Council members properly abided by the group whip, which demonstrates, to an extent, that the current committee system does not provide full, free and open access to discussions relating to decisions.
Mr. Waterson: This is unreal. The Minister is saying that the Labour group debated her proposals for local
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government modernisation and decided against them, and that there was then a Labour whip against those proposals. She really should take stock. Is it the case that everyone else is wrong, and she is right?
The Minister may not agree with me about Camden, although I believe that that is a matter of record. She may know, however, that there is a campaign in the Labour party for open local government, which claims to have more than 1,000 Labour councillors as members. [Interruption.] I am sorry if hearing this is painful for Labour Members, but it is what happens when the Government's policies part company with the aspirations of grass-roots Labour party members. Sometimes, that also brings about ministerial resignations.
Ms Armstrong: I will not resign.
Mr. Waterson: The last thing that Conservative Members want is for the Minister to resign, but I was referring to the hon. Member for Liverpool, Walton (Mr. Kilfoyle).
Nowhere is the Government's control freakery more apparent than in local government finance. Their approach reeks of it. Yet again, we have heard much from the Minister about stability; but, as I said at the time of the original statement, it is no consolation for a council that is treated unfairly in year 1 to be told that it can make plans on the basis that it will be treated just as unfairly in years 2 and 3.
Let me take this opportunity to ask the Minister in more detail how she and her colleagues are progressing with the review of the working of standard spending assessments. I am sure that that is of interest to hon. Members on both sides of the House. According to what I last heard, 19 countries' systems were to be considered. I believe that that has now been narrowed down to four: four countries are to benefit from a ministerial visit, or junket. It would be interesting to know what time scale Ministers have in mind for the reaching of conclusions.
The Government are trying to downplay the significance of the settlement. That is hardly surprising; I do not blame them. Let us look at the facts. The settlement confirms that, over the past three years, the Government have channelled £425 million out of county councils, and £180 million out of London boroughs, in order to subsidise largely Labour-controlled metropolitan councils. In this year alone, shire counties' standard spending assessments will be £160 million below the level that they would have reached without the Government's changes to the funding formula.
Mr. Tim Loughton: Does my hon. Friend agree that the migration of funds from the shires to spendthrift northern metropolitan boroughs under Labour control is all the more absurd when the population figures are rising in the south-east—and, because of that, the Deputy Prime Minister wants to impose 1.1 million new houses on us—while the population figures in northern boroughs are falling? Is not the per head settlement weakening all the time in the south-east?
Mr. Waterson: I am grateful to my hon. Friend for making a point that neatly links this debate with the debate that we had only yesterday.

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This year's settlement was particularly hard on shire district councils. Funding for environmental protection and cultural services was cut in real terms, and that makes up a substantial proportion of district council spending. District councils are set to lose 6.1 per cent. of their cash revenue support grant; if we take inflation into account, that means a cash shortfall of more than 8 per cent.
The Government say that they are increasing the grant to every authority. That, however, has been achieved because of a large surplus on the business rate pool from last year, which the Government are obliged to transfer to local authorities. I think it fair to say that, without that money, many councils would face steep cuts—actual cuts—in their overall grant.
Mr. Peter Atkinson: May I return my hon. Friend to the subject of shire counties? The Government do not necessarily discriminate: Labour-controlled Northumberland county council has suffered badly in terms of cuts. I have been sent the records of a meeting between staff and council officers who are worried about the situation. They are quite revealing. The staff said:
"The commitment to spending at SSA in relation to education will mean a cut in school budgets—perhaps a commitment should be made to school budgets rather than SSA."
The answer was:
"The council is going through a process of closing old people's homes and cannot spend above SSA for education because of the implications for other services."
Further on in the minutes, a 6.5 per cent. increase in council tax is predicted.
Mr. Waterson: That paints a bleak picture of how Northumberland will fare as a result of the settlement. I intend to return to the Northumberland example when I deal specifically with education.
The Minister adopted an extraordinarily detached attitude to council tax levels, as if they were an act of God and wholly unrelated to the settlement that we are debating. However, last year's increase of 6.8 per cent.— a sharp rise under this Government—came on top of a record increase of 8.6 per cent. the previous year. The average band D household is already paying £100 more in council tax this year than when Labour took power.
That would be bad enough were it not for the fact that, if council spending increases at the same rate as last year, council taxes could go up by more than 10 per cent., with an average band D household facing a further rise of £85. By the end of the process, many homes throughout the country could pay getting on for £200 more in council tax than at the general election. We are not necessarily talking about wealthy people. Ordinary families on tight budgets and elderly people who have trouble meeting such bills may face those costs. Those are serious matters.
If one goes into the figures in even more detail, it will produce some interesting results. If one looks at the real-terms changes in SSA and TES—total external support—one will reach the following conclusions. Last year's settlement was notably biased against councils in the south of England, a point that was made by my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton). Councils in the south of England and the west midlands will have a smaller percentage of their SSA real-terms increase matched by a TES real-terms increase. The Minister is right to say that council taxes are fixed
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by councils, but within constraints. That produces the potential for higher-than-average council tax increases in those very councils.
Dr. Alan Whitehead: I am somewhat puzzled. Is the hon. Gentleman saying that, somehow by magic, the formula on which the settlement is based has surreptitiously been changed without anyone noticing, or that the method by which the SSA is formulated is the same as it was under his Government? Therefore, provided the rules have been kept to, the Government are simply carrying out the formula. While he is at it, is he not saying that, if it were not for the fact that there is more money from the business rate, there would be less money? That seems a strange method of opposing a settlement.
Mr. Waterson: Yes, I am saying that in the first year of the three-year process, the goalposts were moved. The point about the business rate is that, were it not for the surplus from last year, the Government would be looking at real cuts in grants for certain councils.
Let us do a political analysis of the real-terms increases in both SSA and TES for councils and look at the party political control of the councils. The TES increase as a percentage of the SSA increase—a crucial part of the formula—for Conservative-controlled councils is 55.3 per cent., compared with 62.6 per cent for Labour-controlled councils. If it is any assistance to the Government's friends on the Liberal Democrat Benches, the equivalent figure for Liberal Democrat-controlled councils is 53.5 per cent., so they might have something to say about the way in which the councils that they temporarily control are treated by the Government in one or two of those Cabinet Committees.
Therefore, a smaller percentage of the SSA real-terms increase of Conservative and, incidentally, Liberal Democrat-controlled councils will be matched by a TES real-terms increase. As I have said, that lays the groundwork for higher-than-average council tax increases in those councils, even though the Minister went out of her way to suggest that it was nothing to do with her.
As we have heard, the methodology was not altered this year. We are part of a three-year cycle. There are 21 authorities whose total SSA in 2000–01 will be lower in real terms than in 1999–2000, assuming inflation of 2.5 per cent. One of the them, Tewkesbury, will suffer a fall in SSA. The reason why most—in fact all, except the London borough of Merton—of the councils on that list are shire district councils is because the increase in funding to local government was directed primarily at education and social services. That is a major reason why those councils have been treated unfairly.
The other point, which I think is accepted by the Minister, if I understood her properly, is that the year-on-year changes are data driven. They are based on size, composition of population and so on. They have nothing to do with decisions by Ministers. That is one of the pitfalls of having a three-year period in which no changes are made to SSAs, and in which Ministers have said that they are unwilling to receive representations other than in writing from local councils.
Additionally—this point was made earlier in the debate—some police and fire authorities are receiving a below-inflation increase: Merseyside and West Yorkshire are two examples. That also will have a serious knock-on effect in the areas affected.

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A moment ago, I touched on the question of representations. The other day, in answer to a question of mine, the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Stretford and Urmston (Ms Hughes), listed eight authorities that had made requests in writing for meetings to discuss the financial settlement for the coming year. She makes it clear—because this is the basis on which they entered the process—that
"No Minister from this Department met those authorities to discuss their representation",—[Official Report, 1 February 2000; Vol. 343, c. 518W.]
although Ministers did receive representations in writing and from the Local Government Association and other bodies.
Again, however—I have made the point before, but I happily make it again—it really cannot be right to have a system that allows Ministers to avoid the necessity of meeting delegations from local authority areas to discuss whether they have been fairly treated. When the previous Government were in power, Ministers regularly met such delegations—I led delegations myself, from Eastbourne—and they listened patiently and courteously to those representations. That is, in part, what Ministers are for.
It is really quite a difficult concept in a parliamentary democracy to have Ministers who refuse to have that type of consultation.
Mr. Watts: I took part in delegations to see the previous Administration about various problems, but we were shoved through one door and out the next. Very rarely did anything come from those meetings; they were pointless. Often, the Ministers did not understand the issues that we were raising and showed very little interest in the problems facing local authorities.
Mr. Waterson: Perhaps it had something to do with the leadership of the delegation. My experience is that Ministers were unfailingly courteous, and—in the shape of my hon. Friend the Member for Mole Valley (Sir P. Beresford), who is in the Chamber—extremely knowledgeable indeed, having been leader of an extremely well-run local authority.
Sir Paul Beresford: There is a contrasting view, as Ministers sometimes had to recognise that those who were in a delegation did not understand the points that they were trying to make. Occasionally, graphs we were given were filled in upside down. When it was pointed out to them that the axes had slightly changed, their whole argument would collapse. However, that said, there was much positive gain from receiving those deputations. In the final year of the previous Government, my fellow Ministers and I saw about 92 delegations, which was beneficial.
Mr. Waterson: Perhaps I can draw a line under this particular part of the debate by admitting that there were occasions when I was present when I had the eerie feeling that no one in the room understood the point that was being discussed—but perhaps that is the nature of SSAs. We are hoping that the Minister will come up with a whizz-o, easy-to-understand new system; we shall see.
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There are other ways in which the Government, through the local government finance system, are trying to impose their own agenda on local government. One of them is the growing use of specific grants. Conservative Members are friends of the block grant. We think that, in the past, our Government, too, were guilty of having too many specific grants, in which the Government think that a particular priority is important and impose that sense of priorities on local government.
The figures on specific grant are quite significant. [Interruption.] For education—[interruption.]
Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman. Could I persuade the right hon. Lady the Minister that a running commentary is not helpful?
Mr. Waterson: I have learned not to listen, Mr. Deputy Speaker.
The figure for education specific grant, in 1997–98, was £302 million. In 2000–01, the outturn is £1,475 million. For personal social services, it goes from £193 million to £611 million. Those are very significant changes.
Mr. Loughton: The issue is not just specific grants the purpose of which is controlled by central Government. Grants are being phased out and the majority of the additional money available to local authorities is through loans. That gives the Government even greater central control over the use of the money, regardless of local needs and the democratic wishes of the people who elected the councillors.
Mr. Waterson: My hon. Friend gives another good example of how local decision making is being constrained.
If the Minister does not want to accept what I am saying, she should listen to the Labour-dominated Local Government Association, which has said that non-police specific grants have doubled as a proportion of aggregate external finance since 1997–98. Combined with more indirect forms of hypothecation such as passporting and ministerial exhortation, that has led to a significant erosion of local financial accountability. Given the usually restrained language of the LGA, that is a serious allegation.
Then we come to teachers' pay. The LGA has expressed concern that the 3.3 per cent. pay settlement announced only a couple of days ago could mean fewer staff and larger classes if the Government fail to give local education authorities extra resources, because most LEAs have put aside 3 per cent. or less for pay rises. There is a shortfall across the board of £110 million. I do not necessarily expect the Minister to accept that from me, but she must listen to Councillor Graham Lane, the Labour chairman of the LGA's education executive, who has said:
"This pay rise is £110 million more than LEAs put aside in their budgets. Unless the Government meets the shortfall there will be less money to employ teachers and class sizes will rise while standards drop."
That is the voice of Labour local government. My hon. Friend the Member for Hexham (Mr. Atkinson) told us in stark detail of the repercussions of the settlement for Northumberland, in particular the fact that the county is going to have to cut its education budget.

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Another disturbing development has just come to light.
Mr. Eric Illsley: How does the hon. Gentleman reconcile what he has just said about the restraints on local government caused by specific grants and the fact that authorities are not able to choose how they spend some of their money with the statement that he accepted from his hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) that northern authorities are spendthrift? How can they be spendthrift if they are being constrained in spending the money that they have?
Mr. Waterson: My hon. Friend said that northern authorities were doing better than non-Labour-controlled authorities further south under the three years of the settlement. I agreed with him.
I should like to mention a specific and technical education issue that the hon. Member for Torbay (Mr. Sanders) has already referred to—I think that this is the same point that he raised. The Government's decision to ease pressure on education budgets following the removal of £150 million from the education SSA has attracted support from the LGA and elsewhere. The Government consulted on how the extra £50 million would be distributed. It has recently emerged that the Secretary of State for Education and Employment has decided—not suggested, as the Minister said—to allocate all the additional £50 million through specific grant, with the additional caveat that, before deciding whether to release an LEA's share of the money, he will need confirmation that the whole of the increase in the education SSA has been passported through to education. That is unprecedented and is causing great concern in the LGA and elsewhere. It runs counter to the traditional notion of a block grant, under which authorities were allowed to distribute money between services as they saw fit. For the first time, there will be a financial penalty for failing to comply with the Government's view of how the money should be spent. One of the documents sent to me describes that as "a very disturbing precedent".
Mr. Chope: Will my hon. Friend confirm that it is particularly disturbing for local authorities that are spending above the level of their education SSA, as they will be penalised by this extraordinary action by the Government?
Mr. Waterson: My hon. Friend is absolutely right to say that there will be an extra penalty for those education authorities. That entirely sums up the Government's approach—they do not trust local government to make decisions.
Another issue is the cost of Government initiatives. We are always hearing about the Government rolling out new initiatives on this, that or the other, but they all have to be paid for locally. That means that councils are often running up a lot of expenditure—on officers' time and so on—on the initiatives. Some councils have begun to strip out from their figures the cost of these initiatives, which shows that the costs are mounting at the moment.
I ask the Minister again not to claim that she has abolished capping, because that is just not true.
Ms Armstrong: Cruel and universal capping.
Mr. Waterson: The Minister says more from a sedentary position than she ever says at the Dispatch Box
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during these debates. She has replaced cruel and universal capping with two versions of capping. First, there are the so-called reserve powers. I have described these before—councils worry about a knock on the door in the middle of the night after the event, when they are told that they have spent too much. They never know from one year to another whether they will be invited in for a ministerial ticking-off.
Secondly, there is so-called refined capping—the council tax benefit subsidy limitation scheme. The scheme is a precise and targeted way, as the LGA has said, of making the nearly poor pay for the really poor. The nub of what the Minister said was that she had had representations from local government and that she was not going to take a blind bit of notice of any of them. The scheme will continue, and on a cumulative basis. Our policy in the next Parliament is not to have capping at all. [Laughter.] I thought that that would go down well.
The best value regime is in danger of turning into an expensive farce, with some councils having to cope with no fewer than 179 performance indicators. A good idea—which, in many respects, grew from the success of compulsory competitive tendering under the Conservative Government—has been strangled by this Government's over-prescriptive and nannying approach to local government. The LGA says that the costs of implementing best value are causing problems for smaller authorities in particular. We should not forget the draconian powers that the Government took in the Local Government Act 1999 to intervene in the running of councils which they did not think were up to scratch.
Last year, some social services SSAs declined in Labour heartlands such as Hackney, Lambeth and Newham. It is no wonder that hon. Members such as the hon. Member for Walton are beginning to lose faith in the Government's attitude to old Labour heartlands around the country. We all know the pressures on local social services departments, and there will be hardship as a result of this settlement—let us be in no doubt about that. In addition, many local businesses will be picking up the bill in business rates for the Government's unfair treatment of some parts of the country.
On a brighter note, we welcome the Government's announcement yesterday about the appeals system for business rates. A new programme has been set out, so that ratepayers will have an idea when their appeals are to be considered by the valuation officer or the valuation tribunal. The Government say that they are encouraging the early submission of appeals. We can all envisage that there will be many appeals under the new revaluation, and it is to be welcomed that the system will be streamlined to some extent.
The problem of asylum seekers and refugees is causing much concern to some councils. The LGA has spoken of the uncertainty of funding
"having a damaging effect on the voluntary dispersal scheme for adults and families with children".
It continued:
"Local authorities are concerned about the perceived lack of an overall strategy for funding the particular additional service needs of asylum seekers and refugees."
I hope that the Minister will let us know when she winds up the debate whether more flexibility can be introduced into the system to deal with that specific issue.
Mr. Loughton: My hon. Friend will know that Gatwick airport is in the neighbouring county to mine.

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Because of the number of asylum seekers, especially children, coming through the airport, social services in West Sussex have faced a 50 per cent. increase in the number of children requiring care in the past year alone. The social services SSA for the past five years has decreased by 16 per cent. Does he agree with the Minister when she described as "profligate" attempts by counties such as mine to keep up social services spending, which will involve an extra £4 million on the budget, despite the decline in the SSA and the additional factors such as asylum seekers?
Mr. Waterson: My hon. Friend makes a good and serious point. The Home Secretary was unable to tell me the other day how many asylum seekers and refugees are living in my constituency. We do know that more than 200 were assigned to local GPs in Eastbourne in November and December last year. It is only when people present themselves to some branch of health or social services that one knows they are there. [Interruption.] I now have a running commentary from two lady Members on the Labour Benches. I am very grateful, but they are drowning each other out.
Ms Armstrong: The hon. Gentleman may not realise it, but one must register with the local social services department in order to qualify as a refugee or asylum seeker.
Mr. Waterson: Does the Minister really believe that 100 per cent. of them ever do register? As we all know, many places such as Eastbourne have large numbers of asylum seekers and refugees sent there by London boroughs that will not perform the simple courtesy of informing the local council that they are coming. Local communities deserve more support from central Government to meet the costs entailed, and the asylum seekers themselves need support more than most, in language, health and social services.
Mr. Edward Davey: The hon. Gentleman's point about asylum seekers and refugees is pertinent to my local council, the royal borough of Kingston. We have several demand-led pressures, including asylum seekers and homelessness, of which the SSA does not take account. The council faces £4 million of cuts because of the allocation it has received from the Government. However, under the Tories, Kingston council's grant was cut year on year. The problems we now face are exacerbated because of the council's inheritance from the Tory years of misrule.
Mr. Waterson: One can never accuse the Liberal Democrats of not being even-handed in their abuse. When it comes to local government, Labour is all talk and no delivery. Despite all the rhetoric about this year's settlement for local government, the reality is that the council tax has already risen sharply under Labour and could go up next year by more than 10 per cent. All together, band D households could be nearly £200 worse off under Tony Blair's Government. It is another example of the great Labour lie.
Labour's figures are biased against the south of England. County councils, London boroughs and shire district councils are all losing out. Education authorities,
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as we have heard, will be short of a total of £110 million to meet the teachers' pay settlement. Even Labour leaders in local government admit that that will mean fewer teachers or larger class sizes—or both. The Government are threatening education standards as well as law enforcement.
The Government's attitude to finance for local government is symptomatic of their control freak tendency. They have a centralising agenda and are taking more and more control over what local councils spend. They are undermining local government and local choices. The Labour Government are ripping off local government.
5.15 pm
Mr. Jim Marshall: The hypocrisy and bare-faced cheek of Opposition spokesmen and women, on not only this subject but every aspect of Government policy, are incredible, but their attitude is especially inappropriate when we are discussing local government finance.
The hon. Member for Eastbourne (Mr. Waterson) criticised the Government for not doing enough to encourage what he called the vigour and independence of local government. I happen to believe that that accusation is unjust: I think that the Government's attitude to local government is in tune with their devolution policy generally, devolving power away from the centre and enabling more and more individuals, at national, regional or local level, to take the decisions that affect themselves.
Let us compare the hon. Gentleman's accusation with the practice of the previous Tory Government from 1979 to 1997, when year by year they took power and responsibility away from local government and put constrictions and constraints and a straitjacket on local authorities such as had never been seen before. It is bare-faced cheek for him to accuse my right hon. Friend the Minister of seeking to undermine the independence and power of local authorities.
Sir Paul Beresford: Does the hon. Gentleman agree that the movement of funds into specific grants, with the ties and straitjackets involved, is a form of centralisation? If not, he disagrees with the Secretary of State for Education and Employment.
Mr. Marshall: There is clearly some justification for that point. I have some fears about the direction that the Government are taking on that matter, but I think that central Government have a right, when trying to improve standards and to experiment at local level, to ensure that the necessary funds are spent on the services to which improvements are sought rather than on the generality of services.
The hon. Member for Eastbourne also accused my right hon. Friend the Minister of fiddling the formulae to benefit Labour authorities. If the Government are doing that, they are signally failing in my local authority in Leicester. The accusation is totally inappropriate from the spokesman of a party that, in government, fiddled the figures to such an extent that Westminster, one of the country's wealthiest local authorities, with some of the wealthiest people, received an exorbitant amount of help compared with that provided for Leicester. We should not have to listen to such humbug.

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The threat to do away with capping after the next general election is an empty one, because the probability of the Tories winning that election is so remote as not to place it on the political agenda.
Mr. Peter Brooke: The hon. Gentleman referred to Westminster. Will he take it from me that the number of households living below the poverty criteria in my constituency makes it the poorest Conservative constituency in the country, and that the situation would be even worse in the constituency of the hon. Member for Regent's Park and Kensington, North (Ms Buck)?
Mr. Marshall: I concede that there are poor people living in Westminster. I am one of the right hon. Gentleman's constituents, so I am as aware as he is of the population distribution in Westminster. That does not deny the reality that, in terms of global wealth, it must be one of the wealthiest, if not the wealthiest, constituency in the United Kingdom.
Mr. Watts: Is my hon. Friend aware that Westminster is about the same size as St. Helens? If St. Helens received the same grant as Westminster, it would not need to charge any council tax whatever and could, at the same time, afford to send all its constituents on holiday to Spain. That shows how the previous Government fiddled the council tax system.
Mr. Marshall: My hon. Friend's comments speak for themselves.
I should like to make a final comment on the speech of the hon. Member for Eastbourne. He made a cheap political jibe about the Government neglecting their heartlands. I think that he referred to Newham and, in the same context, to my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle). However, the hon. Gentleman chose the wrong example, because he referred to the reduction in social service expenditure last year. I know about that, because my city suffered severely. It was as a consequence of the decision no longer to recognise ethnicity as producing an extra burden on social services. I remind the hon. Gentleman that the ethnic population in Walton is virtually zero, whereas in Newham it is fairly high. If he makes a cheap political point, he should at least ensure that the facts that he uses support rather than undermine it.
I should like to make a few points about the settlement's impact on the city of Leicester. My view is that the overall settlement nationally is good and to be welcomed. Perversely, Leicester has done badly, which is what I wish to highlight.
The Minister said last year that she did not wish this year to see deputations or delegations from specific local authorities about their position, but she kindly met me and my hon. Friend the Member for Leicester, West (Ms Hewitt) yesterday evening to discuss the longer-term financial plight and situation in Leicester, not the specific difficulties that we face at present, of which she is aware. I thank my right hon. Friend for that meeting, and just hope that, when the Department brings forward the longer-term solutions concerning the future funding
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formula, she will take account of the particular difficulties that Leicester faces, and has faced for at least four or five years.
Mr. Waterson: It is typically courteous of the hon. Gentleman to give way. He chose his words carefully, and I hope that he was not suggesting that he had had a meeting with the Minister to discuss this finance settlement for Leicester. Ministers have made it clear that they are not meeting any local authorities; I would not wish to think that they were meeting Labour authorities and not non-Labour authorities.
Mr. Marshall: I thought that I chose my words carefully and had made the position clear. I said that my hon. Friend the Member for Leicester, West and I had a discussion yesterday with my right hon. Friend about the long-term financial position in Leicester. It became clear during the course of the meeting that my right hon. Friend was fully aware not only of the long-term implications, but of the short-term implications of both last year's and this year's settlement. My point is that, as my right hon. Friend is fully aware of those factors, they will be taken into account when the formula for future distribution eventually emerges from the Department.
Leicester has experienced well-documented deprivation and social exclusion. It is both unfair and unfortunate that year-on-year disappointments in financial settlements should have two effects. First, standards in some services are reduced. Secondly, the range of services that the local authority is able to provide is also reduced. For example, several neighbourhood centres in Leicester, which play a real part in the vitality of local communities, will close over the next financial year because of the cuts that the local authority must make as a consequence of this year's settlement. I regret to say that one of those centres—Lansdowne neighbourhood centre—is in my constituency, but I assure its users that I shall use all my influence and do everything in my power to try to save it.
The Minister is well aware that Leicester has faced a difficult financial situation for at least a decade. Successive settlements since local government reorganisation have put the council in an invidious position. Only extra financial resources will resolve the problems. I shall briefly put the problems into an historical context. In 1997–98—the first year of unitary status for Leicester—the capping regime resulted in cuts amounting to £17 million. The following year saw further cuts in services, and the overall grant settlement led to a council tax increase of 26 per cent. In 1999–2000, we had the lowest SSA increase of any local education authority outside London and a further round of cuts.
I can reinforce the point made by the hon. Member for Eastbourne by making it slightly differently. In part, this year's round of cuts was brought about by a change in formula for social services expenditure, which ceased to recognise ethnicity as a factor that gave rise to additional costs. That was particularly damaging in Leicester, where 30 per cent. of the population is of ethnic minority background.
We have not done as badly in this financial year as in previous years. However, we have still done worse than most. Leicester has received an SSA increase of only 3.9 per cent., which is below the national average. The general situation has been compounded by the loss of

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central Government protection grant of £1.3 million. To make matters even worse, the increase in education SSA—3.3 per cent.—is again among the lowest in the country. Overall, Leicester believes that, since unitary status began, it has received the lowest cumulative increase in SSA of all similar authorities. It has also had the lowest increase in education SSA of all local education authorities.
I admit, of course, that the Government are making additional resources available nationally to raise standards. However, Leicester is not receiving its fair share of the additional resources, and that is being felt at the sharp end by school pupils across the city. Clearly, parents do not thank the Government or the council for that. The Minister could help in numerous ways, but I shall not delay the House by enumerating them.
I ask the Minister to ensure that there will be an end to the uncertainty over future settlements, and to acknowledge the fact that the settlements for Leicestershire in recent years have made it extremely difficult for the council to meet the needs of our citizens—let alone their aspirations. I know that the Minister is listening—I hope that the whole Government are listening and that they will take action so that, for the next three years, I do not have to make the same speech that I have made for the past three years.
5.30 pm
Mr. Adrian Sanders: The Minister proposes yet another settlement that will prevent many local authorities from meeting local community needs. Increases in grant will be wiped out by inflation, pay settlements and increased responsibilities—just as they were under the Conservatives. As in the past, local government will gain duties but lose power.
Since Labour came to power, the trend has been to increase the cost burden for local government while dictating where money should be spent. Taxation has been shifted from the centre to the council tax payer; and the statistical anomalies, which disadvantage many councils and inhibit their ability to respond to local needs, have been ignored.
I have some points to make about the cost burden imposed on local authorities. In the Government's first Budget, they put a tax on pensions. In year 1, that cost local authorities £300 million. However, that cost also applies in years 2 and 3 and will recur thereafter. Local authorities have never been compensated for that loss.
In year 1, there were eight changes to the SSA; each one tended to take money away from shire councils. In 1998 and 1999, the inflation assumptions were inaccurate; that resulted in a loss of money to local authorities. There was also the council tax benefit subsidy, which resulted in the poor having to subsidise the nearly poor—mainly in poorer local authorities. In the first two years of the Labour Government, rural areas lost about £250 million and London lost £140 million.
The Government examined council tax bands, but failed to reform them. There is a disproportionate council tax burden on people in the A band; those who live in mobile or park homes, which are worth half the amount at the top of that band, have to pay the same rate of tax as people whose property is worth twice as much.
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The Government dictate how the money that they give local authorities should be spent. It is one thing for the Secretary of State for Education and Employment to apply pressure on councils to spend up to the amount of the SSA, but to make grants dependent on confirmation that the money will be passed on to schools is quite different.
The Secretary of State wrote to education directors and chairs of education committees in relation to the £50 million special grant. The letter stated:
"The grant will not be paid automatically to authorities. I shall look for prior confirmation that the whole of the increase in your authority's education SSA has been passed on to education before deciding whether to release your share of the grant.
The problem with that—as it is for those authorities which already spend up to or above SSA—is that, if authorities pass on the maximum amount to schools, any increase in the education budget from the Government goes straight to the school. If the other services that have to be met from that budget have not been given an increase, they will suffer a cut. That is why many education authorities have great difficulty in maintaining school transport, special needs provision, school music services, educational psychology, discretionary grants and central support services.
That is all based on the presumption that the SSA is accurate, which brings me to the inaccurate statistics on which the settlement is based. For example, local education authorities must pay for the pupils who attend school today, so they have to pass the money down to the schools for each pupil. However, the figures upon which the grant that they receive from central Government is based are up to 18 months out of date. Therefore, a local authority with rising pupil numbers has to find funds from other parts of its budget, outside of education, to meet the Secretary of State's requirement that it spends up to SSA and that all the money is passported to schools. That means that other services suffer.
The same is true of the budgets for people in residential care and social services. The number of people going into care in one area may be rising, but the figures on them may be behind the SSA figures and the money for them will not arrive until a later year. Therefore, an authority may have to suffer a cut to other services even though it knows that it may make the sums up later. That is a reverse of the depopulation argument advanced by the hon. Member for St. Helens, North (Mr. Watts).
The number of people on the electoral register has a major impact on the SSA figure and on the amount received by a local authority. That is a particular problem for areas that have a high turnover of residents. That point may be of interest to the hon. Member for Eastbourne (Mr. Waterson), because it relates to seaside resorts, where people often live in short-term let accommodation. They may live in the area for many years, but may change their address twice a year and never get on to the electoral register.
My local authority is probably an extreme example, but its officers estimate that nearly 5,000 people receive services from the local authority for whom they do not receive a penny from central Government. That equated into grant would make the difference between a council tax rise of the rate of inflation and the 16.9 per cent. rise that the council had to levy. The impact is greater the smaller the authority happens to be.
Mr. Waterson: The hon. Gentleman is making points that apply to my constituency, which is also a seaside resort.

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Does he agree that councils would like to have the option of putting such arguments to Ministers annually when they feel that they are being treated unfairly by the formula and do not want to be locked into a three-year cycle?
Mr. Sanders: That is very true. Councils should be able to talk directly to Ministers because they cannot rely on the large Local Government Association, which is dominated by the metropolitan councils. The councils representing seaside resorts do not constitute a majority on the association, so perhaps there is an argument for a "seaside resort councils association". If the Government want to encourage one body to represent all local government, it is difficult for authorities that are not like the norm to make their voices heard. Ministers should have an open-door policy to meet the members of such authorities.
Mr. Barnes: I presume that the hon. Gentleman will welcome the introduction of the Representation of the People Bill. It will mean that people can be registered as they move. Although the problem that he mentioned will remain for a while, I hope that it will eventually disappear.
Mr. Sanders: The hon. Gentleman is right. The problem will reduce, but it will not be done away with completely. Because of it, we have suffered under the SSA regime for years, but I do not suppose that we will be compensated once the Bill is on the statute book.
The fact that most authorities spend more than the SSA on social services and education could suggest that the SSA is flawed. A mathematically constant formula that is designed to give average outcomes will always be unfair to those local authorities whose demographic, economic and/or geographical factors are furthest from the average. Seaside resorts, rural areas and peripheral areas, in particular, lose out every year. Sticking to the formula compounds the problem year after year.
We want a transparent system with clear accountability. The Minister said in her opening statement said that she believed the system to be clear and accountable. Yet, if one reads the Red Books, one sees that the receipts expected from council tax have increased each year, so the Chancellor is clearly shifting the burden of taxation from the centre to the council tax payer. We want a system that takes account of an area's ability to pay and gives local people choices about how community needs can be met.
Liberal Democrats want to shift tax raising from national to local government, with more of what councils spend raised through local income tax and local business tax. A buoyant, independent revenue source would do much to rejuvenate local government and strengthen local accountability.
This Government do not trust local government any more than the previous Government did. In fact, as I have said, the Chancellor has gone even further down the road of shifting taxes from the centre to the local council tax payer or the user of local services, which have either gone up in price or been cut. While the Chancellor gets a pat on the back, local councillors get it in the neck.
Mr. Edward Davey: My hon. Friend has undersold the policy of a local income tax. Does he agree that large council tax increases particularly hit pensioners on low
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incomes? The Tory-run Royal borough of Kingston upon Thames increased council tax by £90 last year, and we face a possible 7.5 per cent. increase this year. Those increases affect pensioners who would be protected under the Liberal Democrat policy of a local income tax.
Mr. Sanders: My hon. Friend is spot on. Pensioners and people on fixed incomes have problems with council tax levels and increases, as do those who live in areas where council tax rates are high because of property values.
My hon. Friend forgot to say that allowing local councils to raise some of their money from income tax would mean a corresponding reduction in central income tax. Fear of allowing local areas to have that power and freedom may be the reason why central Governments of both parties have tended to resist that measure.
The Minister claims that she has increased the grant so that councils can spend more, but increasing the grant does not mean that councils will not have to make cuts, increase charges or put up council tax. If the increase in total standard spending is greater than the increase in the Government's contribution towards it, councils face a gap. The Government claim that they have increased the amount that councils can spend, the amount that they can borrow and the amount that they receive from central Government, but many councils still find themselves worse off.
Likewise, every year the Government claim that the settlement is most generous. Last year, they claimed that it was the most generous settlement ever. Of course, this year's settlement is the most generous ever—inflation sees to that—but it still represents a cut for many local authorities.
This is a patronising settlement; it is a pocket-money settlement with no room for sweeties. It will result in cuts, increased charges and above-inflation rises in council tax for many local authorities, and we shall vote against it.
5.44 pm
Mr. Eric Illsley: I am grateful for the opportunity to speak in the debate, not least because it has been curtailed to two and three quarter hours, of which the two Front-Bench speakers took an hour, the Liberal Democrat spokesman took 15 minutes and I understand that 20 minutes will be taken up by winding-up speeches. Given that the Government no longer seek representations from Members of Parliament, someone should rethink the length of the debate. We should either reinstate representations from Members of Parliament or have a full-day's debate on local government finance.
I shall speak briefly about Barnsley's position under the local government settlement and then about the South Yorkshire fire and civil defence budget, which has particularly acute problems.
As the Government know, Barnsley is one of the authorities that consistently loses out under standard spending assessment methodology. I have complained about that methodology ever since its inception in 1990. We are impatiently waiting for a review of the system.
Mr. David Heath: Will the hon. Gentleman give way?
Mr. Illsley: I am sorry, no. Time does not permit me to give way.

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Despite the fact that we are using out-dated SSA methodology, Barnsley is one of the first councils to employ the new modernised council system. We have a cabinet system and commissioning. It has become a model for other authorities and Barnsley has been visited by the representatives of more than 100 other local authorities to examine the set up with a view to introducing it in their areas. It is a pity that SSA methodology is not as modern as Barnsley's cabinet system. It has been flawed since its inception in 1990, when Barnsley was one of 21 authorities to be capped, a third of which were coal-mining areas.
One of the keys to SSA methodology is that it is biased against coal-mining areas, especially in the north of England. Contrary to what the hon. Member for East Worthing and Shoreham (Mr. Loughton) said, northern authorities are not spendthrifts. If he examined the performance indicators of any northern local authority, he would be pleasantly surprised.
I make a plea on behalf of former coalfield areas. Instead of giving us coalfield regeneration task forces, which are all very well in themselves, as is the money that goes with them, why not give the money to local authorities to enable them to pull themselves up and out of the problems that now beset them?
Barnsley metropolitan borough council is again facing a round of cuts. There will be a £5 million shortfall this time. That is to be added to the year-on-year cuts that we have suffered over the past 10 years.
Barnsley and other local authorities welcome the consistency of the settlement and the real increase in total standard spend of about 5.8 per cent. Welcome also is the predictability and stability of the comprehensive spending review, provided that there is predictability and provided that that works.
Barnsley does not welcome the fact that it takes 31st place among metropolitan authorities in terms of SSA per head. Why is it—I have been asking the question for the past 10 years—that schools in Barnsley at all levels receive hundreds of pounds less in SSA than schools in similar authorities, such as St. Helens? I can think of no reason other than political bias against Barnsley and South Yorkshire on the part of Governments of both parties.
We do not welcome data losses in Barnsley, but we have to use the present formula because the Government will not change it. As a consequence, we must cope with the losses. These are affected by the flow of SSA. Local authorities throughout the country are still using the 1991 census returns for general data. I appreciate that some data are updated. During 2000–01, Barnsley's data losses will amount to £180,000. That is a substantial sum for the authority and one that we cannot afford to lose. The loss will be about £58 million for all the metropolitan authorities.
We do not welcome capital finance control totals, which mean a loss for Barnsley of £700,000 this year. Similarly, we do not agree with capping. This year, the percentage rate of annual increase, before the loss of subsidy under the council tax limitation subsidy, has been reduced to 6.2 per cent. Again, local authorities are being capped. The cap squeezes year on year; as in previous years, this year's capping regime is worse than that which prevailed last year.
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I shall make one or two pleas for the future. Let us get on with changes to the SSA methodology. Progress is desperately needed in areas such as Barnsley. I make a plea for the Government to consider extra damping to counter the data losses in education and to ensure the minimum SSA.
The Government must maintain the tax base. For example, since 1991, house prices in greater London have increased by 50 per cent. and in the south-east of England by 28 per cent. SSAs in the shire counties have increased by 4.7 per cent., in outer London by 4.5 per cent.; and in the metropolitan authorities by 3.8 per cent. Our house prices have increased by only 5.6 per cent., so we have lost grant and we have a lower capacity to fund our services. I am told that the effect is equivalent to a £50 reduction in band D council tax.
South Yorkshire's fire and civil defence service will get an increase in grant this year of 2.1 per cent. Previously, the figure was 1.7 per cent.—exactly half the average for other fire authorities. Why is South Yorkshire's settlement lower than that of most other fire authorities? There is no answer other than political bias against the north of England and South Yorkshire. Each year from 1990, the previous Government imposed cut after cut on South Yorkshire, until in 1995 the Home Office accepted that the South Yorkshire fire service was operating below the minimum standards drawn up by the chief fire officer. A delegation that met Home Office Ministers was told to break the capping regulations in force at the time, whereas the Department of the Environment would not permit the capping regulations to be breached. In the event, with the support of the chief fire officer, we breached the capping regulations and the Government recognised that we needed more money. We seem to be in the same situation as in 1995, because we are operating at minimum standards and face the prospect of falling below them if we accept the financial settlement that is to be imposed on us.
Conservative Members speak of spendthrift authorities. To illustrate what South Yorkshire fire service has gone through during the past 10 years, I draw their attention to the closure of Goldthorpe, Hoyland, High Green, Oaks Lane and Kiveton Park fire stations—five stations closed, and new ones opened at Tankersley and Aston Park.
There has been a reduction in the uniformed establishment from more than 1,200 to fewer than 1,000—a 25 per cent. reduction in manpower over the past 10 years. The number of pumping appliances on the run has been reduced from 43 to 33. The service has to contend with indifferent building stock, a decreasing fleet of appliances and equipment, an unfair SSA and low morale.
However, there have also been achievements in South Yorkshire. We have improved the image and the profile of the force. We have been praised by the district audit management. The service has achieved the Investors in People award and is awaiting the charter mark award. It has received the Royal Society for the Prevention of Accidents gold health and safety award. Those are the achievements of an authority running at minimum standards and on a very low budget.
South Yorkshire fire service is proud of having brought about a culture change towards the prevention of fires. An article that appeared in the local press last year stated:
"The proposed new structure would free up resources and encourage a culture change from firemen fighting fires to educating the public how to prevent them."

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The South Yorkshire force is penalised by the fact that it attends fewer fire calls than forces in other authorities, despite the fact that the authority has been trying to educate the public to call the service out less.
South Yorkshire fire authority faces a shortfall of £1.5 million, which will force it below minimum standards. Our fire brigade is one of the most cost-effective in the country. As a South Yorkshire ratepayer, I pay 53p a week for the fire service.
The district auditor, Colin Earl, attended a meeting to present his annual management letter to the authority. He said that the authority had adopted a prudent financial approach in previous years, and that the announcement of the local government settlement was disappointing for the authority. He also stated that the settlement would present the authority,
"which is already in a tight financial position"—
that is an understatement—
"with some difficult decisions to make."
Why is our settlement so low? When the Minister refused to meet a delegation of Members of Parliament to discuss the matter, she wrote me a letter in which she said that our calls had decreased compared with those of other authorities. Thus all the hard work that the authority has undertaken to increase fire prevention and reduce calls penalises it. Capital financing and the drop in interest rates have also penalised the authority.
The problem of declining populations has already been mentioned. Fire risk comprises categories A, B and C; it is not entirely down to population areas or residential matters. Fire risk is assessed on the type of building. Thousands of people visit the Meadowhall shopping centre in Sheffield every day, although no one lives there. The nearby airport also constitutes a high risk, but the population has no effect on it. The M1 and M18 motorways run through South Yorkshire, and the fire authority has to service them. It is required to attend if there is an accident on those roads.
South Yorkshire Members of Parliament requested a meeting with the Minister to discuss those matters, but our request was refused. Under the previous Government, we could at least put issues to Ministers face to face. In 1995, that yielded results, contrary to the claims of one or two other hon. Members. We were able to show that we were below minimum standards and needed more money. We shall have to approach the chief fire officer again, and tell him that that applies now. It is disappointing that we have been unable to put our case.
The £1.5 million shortfall means that we shall lose five fire pumps and are likely to lose 100 firefighter posts; we shall also fall below minimum standards. I did not believe that a Labour Government would allow us to fall into the same predicament as the previous Government allowed. The Government should reconsider, because the people of South Yorkshire deserve a better funded fire service. If we do not receive the funding, how can the Government claim that there is no north-south divide? Our predicament proves that it exists.
Mr. Deputy Speaker: Before I call the next speaker, I stress that many hon. Members seek to catch my eye and that, unless contributions are much briefer, many will be disappointed.
5.58 pm
Sir Paul Beresford: I was stunned to realise that I agreed with the opening remarks of the hon. Member for Barnsley, Central (Mr. Illsley)—the debate is important, but it has been shortened. I believed that the Secretary of State would follow tradition and present it. That would have been entertaining, if nothing else. However, he ducked out. That is an insult to local government. The debate is perhaps even more important than usual because this year's report, taken with last year's and Government decisions and actions, has taken real government out of local government.
The revenue support grant is a major source of revenue for local authorities. It is distributed by a standard spending assessment system, which, although it was complicated previously, was accepted by independent experts as a fair system based on need. That has changed. The proportion of local government funding that is paid directly by council taxpayers and business ratepayers has increased. That applies especially to some of the key geographical areas of the country.
Last year's RSG funding was blatantly moved out of the home counties and London to the north. The report builds on that action and two points make it particularly galling. First, most of the local authorities that received funding boosts last year—generally, they will be correspondingly better off this year—were among the most incompetent. Secondly, I find the spin that has been put to hard-hit councils particularly unpleasant.
Three authorities operate in my constituency: Surrey county council, Guildford borough council and Mole Valley district council. All have been hit, and hit hard, but I shall use Mole Valley as an example. The real-terms reduction in its grant under this and the two previous reports means that it faces the prospect of effectively all its revenue expenditure being raised locally in the near future. In other words, it faces the possibility of not only a zero increase, but zero Government RSG funding. The local council tax and business rate payers will pay for that as they will be loaded with an additional and increasing local tax burden. If there is a stealth tax, that has to be it.
The Minister said yet again that this is the best settlement since sliced bread. Although she is not present, it is worth quoting a key passage from her Department's letter to the chief executive of Mole Valley district council—which she can read in Hansard—on this year's grant. The last paragraph says:
"Your grant support from central government will be £0.0 million higher than this year … This is less than the national average increase of 3.7 per cent."
What a brilliant deduction. It continues:
"And, provided that there are no significant changes in the key data for your area, you can expect to receive a further real increase in funding next year."
For goodness' sake, that is ludicrous.
The Minister's actions will clearly result in dancing in the streets in Mole Valley. There are not only stealth taxes, but year-on-year rising stealth taxes for my semi-rural area. There will be higher council taxes and higher business rates; care for the elderly, education and police budgets will be squeezed; and police numbers will drop. On it goes. As it is topical, I must add that farmers in my area, many of whom are going out of business, may be helped because the Secretary of State is showing great concern: he is seriously considering flooding Surrey with 90,000 new homes on their land.

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It is worth looking beyond that to what else comes or flows from the report. First, we heard again that Labour promised to remove universal capping. It did that with one hand, but put two forms of capping back with the other. One is arbitrary and decided by ministerial whim; the other is crude and universal, and nothing less than that. Secondly, we were promised in last year's report three years' stability in funding. Tonight's report shows that that expectation was nonsense. This year, there were huge variations in grant distribution, which were generated by deficiencies in last year's income support data. I understand that that is down to another Government computer fiasco. Thirdly, we have all been fed the story that the Government have been converted from high taxation, but in my area in particular the report means that the council tax—a stealth tax—may rise by three times the rate of inflation. If it does not, that will be because of cuts in expenditure by beleaguered local authorities.
Even more deceitfully, there has been a stealthy movement of grants from a fair distribution system based on an assessment of need through the general grant. More and more funding, particularly from the Department for Education and Employment, is being moved to a specific grant system. Those grants are administered by ministerial whim if need be—we have seen examples of that—and linked to ministerial desires. Frequently, absolutely no regard is paid to local decisions. Furthermore, Ministers frequently require matched funding, which can put a squeeze on local authorities as they have to remove money from other budgets that they feel are more important locally.
I understand that funding by specific grant—I think the phrase is "funding by plans"—is in prospect for local government. That is appalling: it presents the prospect of the removal of local democracy, and the introduction of Big Brother patronage. While that may be all right for the Labour party as an organisation, it is not suitable for local government as a whole.
Fourthly, we have increased costs to local authorities purely through Government-imposed statutory obligations involving more bureaucrats and more bureaucracy. Perhaps this is where the Prime Minister is finding his new jobs. For example, the Audit Commission has just announced that the cost of implementing its part of best value for the first part year—hon. Members should note that I said "part year"—for Wandsworth council will be £300,000. The cost to my little Mole Valley will be £40,000. The internal cost to those authorities is likely to be four times as much. That means that Wandsworth will incur a new cost of £1.2 million, as well as £300,000 for the auditors.
Wandsworth is an efficient council, but under so-called "best value", it will have to find £1.5 million in savings just to stand still. The Mole Valley equivalent would be about £200,000. The authority's revenue support grant is only £3.2 million, and it must still take into account inflation on its £0.0 million increase.
This gerrymandering Government should be ashamed, but I imagine that they will continue to believe their spin doctors. Meanwhile, the public will receive fewer services at greater cost.
6.6 pm
Mr. Barry Gardiner: I think it was the Duke of Wellington who said of Field Marshal Blucher, the Prussian who arrived too late at Waterloo, "Better late than never." I now know how he felt. I have waited two hours to speak today, but in truth I have been waiting since 4 pm on 4 February last year, the occasion of the debate on the three-year funding settlement. I did not manage to speak then, so I am pleased to be doing so today.
This year's local authority financial settlement was set within the parameters laid down in the three-year framework for stability in local government outlined by my right hon. Friend the Secretary of State last year. Stability is to be welcomed when the status quo is benign; unfortunately the situation in Brent, my own borough, was malign, and that malignancy has been locked in by the three-year approach.
Last year, Brent received the worst settlement of all 150 upper-tier authorities as a result of the change in the calculation of children's personal social services SSA. The decision to abolish the ethnicity criteria wiped out at a stroke a staggering 25.66 per cent. of Brent's children's social services SSA. Brent's children lost £7.5 million. The criteria were changed following research by the university of York, an institution of learning for which I have the highest regard.
When I help my children with their homework—particularly maths—I always say to them, "Look, darling, apply the formula, work out the answer, but always check it against common sense." That is a rubric that the professors at York would have done well to observe. The common-sense check cannot have been applied to a formula intended to reflect need in social services that has resulted in a 25.7 per cent. increase for Bromley, a 49 per cent. increase for Bexley and a 164 per cent. increase for the City of London, while cutting the social services grant for Camden, Lambeth, Newham, Hackney, Haringey and Brent. Those six of the 33 London boroughs contained more than 50 per cent. of London's ethnic population, and had to bear more than 75 per cent. of the £47 million that London boroughs lost in children's personal social services SSA.
On 25 November, when the provisional settlement was announced, I reminded my right hon. Friend the Minister for Local Government and the Regions that my borough of Brent was one of the most ethnically diverse in the country. A total of 106 different mother tongue languages are spoken in our schools and 61 per cent. of our children speak English only as a second language. In one school reception class that has a total of 29 pupils, 21 different first languages are spoken as the mother tongue. For those children, the settlement has not been fair.
Last year, Brent received £4.2 million in damping grant to afford some protection from the effect of the settlement on children and other vulnerable people in the borough. This year, that £4.2 million cushion has been reduced to just £197,000. The loss of more than £4 million from the aggregate external finance means that the grant that Brent will receive in the 2000–01 financial year is just 1.5 per cent. more than in the 1999–2000 financial year. For the average London borough, the increase is 3.52 per cent. Brent has just three sevenths, or 42 per cent., of not the best, but the average increase. Brent has the 25th lowest grant out of 33 London boroughs, yet it is the 20th poorest authority not in London, but in the entire country.

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I understand that these two years have seen the best settlement for local government throughout the country for more than a decade. I recognise that the stability of the three years of the comprehensive spending review has been welcomed by councils, which have been able to plan on the basis of that basic formula. Even my council has welcomed that stability of planning. In her opening speech, the Minister said that the Government had promised that they "would not change formula, but we would change data." One of the issues that I would like to raise with Ministers is their failure to change data with regard to Brent.
On 1 April, Torah Temimah school will transfer to Brent—a school is transferring from the private to the public sector, and I am sure that the Government will welcome that—but the transfer has not resulted in any increase in our overall funding for 2000–01. Brent will receive the damping grant in line with central Government policy, which ensures that all local education authorities receive at least a 1.5 per cent. increase in overall funding; we do, just. However, we would have received that amount if the school had not transferred and therefore must now fund the additional £480,000 that is needed for the school from our already diminished and depleted resources. I ask Ministers to look carefully at that situation and ensure that, as the commitment was given, data will be changed, even though the formula will not.
I shall try to observe your stricture to be brief, Mr. Deputy Speaker, because I appreciate that many Back Benchers want to speak in what is an important debate. On the council tax benefit subsidy limitation scheme, the model that the Department of the Environment, Transport and the Regions has provided suggests that, if Brent sets a budget at SSA for 2000–01, our local residents will incur £817,000 in clawback. In Brent, that is the equivalent of £9.01p at band D level council tax.
It seems unjust that councils, such as my own in Brent, that have traditionally spent below the SSA—the standard spending assessment; the level at which the Government say that councils should be spending to provide a standard level of services—should be penalised if they spend below the level that the Government recommend for the current year. With some other Labour Members, I urge Ministers to look once again at the penal way in which the clawback scheme operates.
6.15 pm
Mr. Christopher Chope: It is a pleasure to follow the hon. Member for Brent, North (Mr. Gardiner). His last point was very powerful and I hope that it will persuade him to join us in the No Lobby when we vote on the motions.
Today's debate could easily be entitled, "council tax debate limitation". It is clear that the Government are really about trying to restrict hon. Members—particularly Labour Back Benchers, but also Opposition Members—in the debate.
I was struck by the fact that the Minister avoided telling the House the most important figure in the settlement—the national average council tax at standard spending. We know that that figure is £695, and that, last year—which is the current year—it was £664.88. We also know that the difference between the two figures is just over 4.5 per cent. It is not surprising that the Minister did not want to
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admit those facts. If she had done so, she would have been admitting that the Government themselves realise that there will have to be a 4.5 per cent. increase in council tax bills even if local authorities spend in line with their standing spending assessment.
The 4.5 per cent. increase is no less than four times the amount of the pension increase—which brings me to the petition that I had the privilege of presenting to the House, on 8 July 1999, from Daniel Charles Tissington, of Christchurch, which was supported by 8,500 other people from the borough of Christchurch.
Mr. Tissington is a pensioner, as are most of the other people who signed his petition. He pointed out that, living in his band D bungalow situated in the borough of Christchurch, since 1993, his council tax has increased from £491 to £815. That is a 66 per cent. increase, whereas the retail price index has increased by 17.5 per cent. His petition, which was signed by those thousands of people, called on the Government to reduce increases in council tax to below the level of inflation.
The Government—rather than giving a direct response to the petition, saying that there was no way in which they would support such a policy—ducked the issue. However, now that the figures have been revealed to us, we can see that the Government's policy is that, in the coming year, council taxes should increase by at least 4.5 per cent., as that is the percentage by which council tax at standard spending will increase.
I therefore urge the Government to face up to the problems that are being caused to pensioners across the country. If Mr. Tissington and other people living in band D properties in Christchurch have to pay 4.5 per cent. extra in council tax, almost all the extra pension that they receive next year will have to be used to pay it.
The Minister started her speech by saying that she believes in establishing a higher quality of life, but there is no way in which pensioners will be able to have a higher quality of life if almost all their pension increase has to be spent on higher council tax. We hear today that there will be a £15 increase in the television licence fee for pensioners under 75. That will only be salt in the wound.
My hon. Friend the Member for Mole Valley (Sir P. Beresford) spoke eloquently about the Government's imposition of extra burdens on councils at the same time as they are telling councils to act reasonably and keep council tax at a reasonable level. The Department of the Environment, Transport and the Regions sets itself a target of dealing with all call-ins within seven weeks. Why did it take 22 weeks to decide to call in the planning application made by Bournemouth international airport for a new passenger terminal? That delay had enormous consequences. It will be an expensive exercise for the borough of Christchurch and everybody involved. The application was first submitted on 28 November 1997 and was the subject of extensive and exhaustive consultation. After sitting on it for 22 weeks, the Government decided to call it in, ensuring that it would be delayed for at least another year. That is typical of their cavalier attitude to my constituents.
In the previous debate, the Minister of State, Home Office, the hon. Member for Norwich, South (Mr. Clarke) made disparaging remarks about Christchurch people, saying that they were so well heeled that they could afford the penalty of having to make the largest percentage

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contribution towards police expenditure from council tax of any local authority in the country. I assure the House that they are not as well off as the Minister supposes. Many of them are on fixed pensions or fixed incomes. They are in despair at the way in which the Government have let them down.
6.21 pm
Mr. Harry Barnes: The problems in local government finance were created by the previous Government. The hon. Member for Christchurch (Mr. Chope) was part of that, having been a Minister at some stage. He helped to create that situation and, when he replies to his constituents, I hope that he tells them about his role in the whole sorry business.
On the surface, Derbyshire seems to have done well out of the settlement. It has the top percentage SSA increase of any shire county—up by 5.8 per cent. whereas the average increase is 5 per cent. Neighbouring Staffordshire, which is in 34th and bottom position, has only a 4.3 per cent. increase. The situation looks superficially good for Derbyshire. When the money that has come from the Department for Education and Employment for schools, often in specific grants, is added to that, Derbyshire is again in a high position in the league and is often top. The only problem with the grants is that they make it difficult for us to work out who stands where, because some money comes from one Department and some comes from another, some comes in bits and pieces and some comes in the general settlement.
However, when considering Derbyshire's apparently good settlement, we need to look at what that 5.8 per cent. comes on top of. Between 1989–90 and 1998–99, East Sussex had a 30 per cent. cumulative increase above the average in the then capping levels. Derbyshire was bottom of the shire counties league table, with a 37 per cent. fall below the average increase. That was the result of the previous Government fiddling the arrangements for standard spending assessments and of the Local Government Finance Act 1988, which also introduced the poll tax. The poll tax may have been replaced by the council tax, but the rest of that Act is still in place.
Band D council tax levels for North East Derbyshire district council show part of the problem. The figures include the district council precepts, the county council and the police. I shall contrast them with the English average and the figures for Westminster. In 1996–97, the last year of Conservative rule, the figure for North East Derbyshire was £758, and the English average was £688—a difference of £70. For Westminster, the figure was £304—£454 less than in North East Derbyshire. In 1999–2000, the figure for North East Derbyshire is £905, and for England, £747—a difference of £148. The figure for Westminster is £350—£555 less than North East Derbyshire. Although slight differences have occurred in this period between North East Derbyshire and Westminster, there is a ghastly distinction between the figures. I will try to explain some of the details later.
The House of Commons document No. 160 on the subject shows what is wrong with the methodology. Page 9 deals with the formula for primary education, and the principles are the same for secondary and post-16 education. Money is given per pupil in various areas,
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which is a fair formula. Money is then given for additional needs and free meals, which is perfectly reasonable. However, if an area is mixed—Derbyshire, like all shire counties, is certainly mixed—money given for particular provisions is diluted by what happens in other areas. It is almost as if money is given with one hand and taken away with another. We need to devise a formula in which the extras stick and do not dilute the other arrangements.
There has been an improvement in terms of the money given for sparsity, but there is a claim that that is necessary for village schools and other matters. One of the big problems is the area cost adjustment, which is listed in detail within the document. This must be tackled, although it need not necessarily be done away with. However, if there were less weighting, and money were available for distribution—and not pinched by the Treasury—that would be important.
In Derbyshire, the area cost adjustment goes across the board—to police, fire services and highway maintenance. The problem is thereby extended. Derbyshire's funding plight cannot be corrected by tiny creeping percentage increments, welcome though they are. There has to be a change which takes into account the cumulative problems that Derbyshire has suffered year by year. We cannot wait another two years for a change in the hideous legislation—I served on the Committee—that is the Local Government Finance Act 1988.
I turn once more to the situation in North East Derbyshire district council. I hope that, if I keep saying these things, Ministers—it used to be Conservative Ministers, but it is now Labour Ministers—will respond and take some of it on board. One problem from which we suffer is the enhanced population figures. If people move out of the area in which they are resident to work or to travel for other purposes, a quarter of their SSA money is transferred elsewhere. Some areas will benefit considerably from those arrangements because they have people coming in. I am not saying that Westminster, the seaside resorts and other places benefiting from the arrangements should not have any of the money. However, the weighting is excessive and was one of the Conservative Government's major fiddles. Let us correct it. A myth is perpetuated—for instances, by a journalist on the Sheffield Star—that the people of North East Derbyshire who work and use leisure facilities in Sheffield are freeloaders, making use of the facilities without paying from them. That is far from the truth, because we pay through the nose for provisions in the Sheffield area.
The outdated 1991 census figures are used to help to work out the allocation, and some of our money is transferred to the Bolsover and Chesterfield areas because they used to have people going there to work in the pits. The pits were closed by the previous Government, but North East Derbyshire is still getting hammered by the transfer of money. We lose £3 a head to neighbouring authorities because of the weight given to the enhanced population figures.
We also suffer from the provision designed to accommodate social mix. We suffer even more seriously from that, because we lose £14 a head. In any case, the population in the east of the constituency has an almost identical social structure to Bolsover, but that area does

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much better from the arrangements. The money allocated to North East Derbyshire should not be dissipated by other considerations.
I asked the Minister earlier about parish council expenditure. Some 24 parish councils cover the whole of North East Derbyshire. The council tax benefit subsidy limitation scheme—incredibly—takes into account parish precepts. If parish councils in North East Derbyshire decide to spend large sums of money to try to make up for the money that the district and county councils cannot afford to spend on social problems, the district council—which has no control over the parish councils—is hit under the subsidy limitation scheme. That is a serious problem in Derbyshire, which, last year, was capped.
I hope that the Minister has in mind some dramatic improvements that will overcome the county-district-parish financial problems in Derbyshire and similar areas beyond the welcome bits and pieces that the Government have already introduced, especially since the comprehensive spending review changed the direction of the process. Derbyshire did not benefit from the shifts and changes of the first two years of the Labour Government, when money was redirected from areas of lesser need to areas of greater need, because we have a mixed social structure. Money was given with one hand and taken away with the other. We now have a bit more money—and we are grateful—but we have so many serious problems to overcome from the previous Government's mishandling that we need a considerable improvement in our ability to provide a better standard of education, social services and the other services provided by local government.
6.34 pm
Mr. Peter Brooke: The hon. Member for North-East Derbyshire (Mr. Barnes) and I share an interest in Northern Ireland and we shall both be here at 7 o'clock. I do not propose to take him up on his remarks about Westminster, save to say that if he re-examines his speech he will see that he made a further initial mathematical error before he made the one that he spotted and corrected.
I shall be brief and unashamedly make a constituency point. The Government are well aware of the effect on Westminster of the settlement in 1998–99, which reduced its SSA by £26 million. I shall not revisit that issue but it is a backdrop to the problems I shall set out.
I want to allude to the special grant of £50 million from the Department for Education and Employment, the balance of its extra £64 million after £14 million had been bestowed on "Excellence in Cities" local education authorities. The Secretary of State for Education and Employment mentioned the distribution mechanism for that grant in his letter of 25 November to councils, which was copied to Members of Parliament. It said that officials would follow up in January to seek confirmation that the Government's additional funding had been carried through into relevant local authorities' education budgets.
In Westminster, I have seen the whole of the subsequent correspondence, culminating in the Secretary of State's letter of 31 January, summarising his conclusions, which was quoted by the hon. Member for Torbay (Mr. Sanders). To distil the correspondence, the Government are asking Westminster to spend 6 per cent. more on education because its proposed education standard spending assessment has risen by that amount.
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Westminster's overall grant increase is only 1.1 per cent., which already puts it behind the game, but in addition it was already spending 11 per cent. above its education SSA last year. It has conspicuously been supporting education, which is of course a Government priority, and is suffering from the squeeze to which my hon. Friend the Member for Christchurch (Mr. Chope) referred.
I infer from the correspondence that Westminster will receive no grant from the Department for Education and Employment and its £50 million because, confronted with the massive gap between a 1.1 per cent. increase in grant and a notional 6 per cent. rise, when it is already spending 11 per cent. above its SSA, it cannot guarantee that it will raise its education budget by a further 6 per cent. this year. I am a bear of very little brain, but it seems to me that the Government's proposal within such an equation could be a recipe for cutting rather than increasing the budget, as, if one concentrates on sticks rather than carrots, one offers no incentive to an authority whose heart is patently in the right place.
At this hour, I cannot bring in the other variables alluded to by the Association of London Government, not a Conservative-controlled body, in its briefing on the cost to some inner London boroughs, plus Brent—the hon. Member for Brent, North (Mr. Gardiner) made that case—of not raising the central support protection grant threshold from 1.5 per cent. to 2 per cent. Nor will I allude to the ALG briefing on the costs of homelessness, asylum seekers and unaccompanied children in London, although those children and the families of asylum seekers—because of the diverse languages—add to the educational challenge that Westminster has to face.
I am genuinely left wondering whether the Government really have an education priority. The ALG says that what are technically known as the passporting criteria for distributing the extra £50 million do not take account of local circumstances; but perhaps to a centralising Government, local circumstances are of no account.
6.37 pm
Mr. Neil Turner: Coming so late into the debate, it is difficult to say the good things that one wants to say, because one has to concentrate on some of the critical points, so I hope that Ministers will accept that I broadly welcome the settlement that we have had and especially the fact that, for the third year, my local authority is able to increase both the quality and quantum of services in Wigan.
There is a problem with the £50 million for teachers' pay. I have no difficulty with the fact that the Government want to ensure that the full amount given for education is passported through to schools—that is perfectly reasonable—but unfortunately the formula takes into account the number of failing schools. A local authority with failing schools gets more than an authority such as mine, where the schools are very good. Failing schools should be dealt with by different methods. The additional money for the teachers' pay rise should be passported through to schools in proportion to the number of teachers.
I support what my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) said about the area cost adjustment. I accept that some authorities have cost differentials, but the fact that some get twice as much as others for providing the same services cannot be right.

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The council tax benefit subsidy—the clawback—cannot be right. It is inequitable and unfair. It is inequitable because two authorities, with the same increase, will not have the same amount of money taken away from them, and it is unfair because the authority that has the most money taken away from it is the one with the greatest problems. That issue has to be addressed, and I hope that the Minister will do so.
6.40 pm
Mr. Robert Syms: Let me say to the hon. Member for Wigan (Mr. Turner) that some of my best speeches have been two or three minutes long as well, and I am glad that he managed to make his points before the end of the debate.
In the previous Parliament, debates on local government took on average five and a half hours, allowing Members on both sides of the House to express their real concerns about the grant settlement and what was happening in their locality. Not only do we, in this Parliament, have much shorter debates, Ministers no longer see delegations from local councils and Members of Parliament. My hon. Friend the Member for Mole Valley (Sir P. Beresford) said that when he was a Minister, he saw more than 90 delegations last time.
There are some very important issues to do with local government. Members of Parliament spend most of their weekends visiting local authority institutions and schools. They also spend a great deal of time in surgeries, seeing constituents with problems to do with local government. I think it a great pity that the Government have adopted an extremely arrogant view when it comes to seeing delegations from local authorities and Members of Parliament. Many Labour Members have said in this debate that they would have wished to go to the Department to make points on behalf of their authorities. It is a pity that they have not had the opportunity to do so.
In November, the Minister for Local Government and the Regions forecast that council tax bills would go up by 4.8 per cent if Whitehall kept to spending guidelines. The Times has already said that local government experts believe that the rise could be as high as 6 per cent., and many other people predict rises of 10 per cent. or more. Local authorities and town halls have many burdens on them—next year there will be an additional 24,000 school children, high public sector pay settlements and a rise in demand for long-term care for the elderly. Labour is proving to be no friend of local government. It promised to give councils more autonomy, but it is centralising power while cutting funding and increasing taxes for many councils.
Labour is trying to play down the significance of the settlement, as based on its three-year comprehensive spending review announced last year. But central Government funding is set to rise by less than the average spending commitments of local authorities. The result will be three years of higher council taxes, cuts in services and a continuation of the bias against shire counties.
Labour talks about spending more money on education, but it says one thing and does another. To fund the £1 billion that it costs to introduce performance-related pay for teachers, Labour is reducing the increase in education standard spending assessment by £150 million
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in 2000–01 and £280 million in 2001–02. Rather than giving more resources to teachers, Labour is simply recycling existing money—top slicing.
The Local Government Association has said that the 3.3 per cent. teachers' pay settlement announced on 1 February will mean fewer staff if the Government fail to give the local education authorities extra resources. There are warnings that while most LEAs have put aside up to 3 per cent. for pay rises, many will have to find the extra £110 million through council tax rises. As that well known Labour chairman of LGA's education executive, councillor Graham Lane, put it:
"This pay rise is £110 million more than LEAs have put aside for their budgets."
The key issue is that the Government are switching resources away from local authorities, particularly those in rural areas, their political allies in Labour-controlled metropolitan areas. Barnsley seems to be the exception. We had an eloquent plea for south Yorkshire and Barnsley from the hon. Member for Barnsley, Central (Mr. Illsley), who set out the problems that he faces with his local authority and the fact that the three-year settlement has set in stone some of the difficulties in funding his area.
Rural areas have already lost more than £500 million. That is in spite of the fact that they face specific problems, particularly over lack of transport. Labour has little interest in improving living standards for those in the countryside.
Before the election, Labour promised that it would end crude and universal capping. But this is just another example of the great Labour lie. Labour has replaced it with reserve powers to cap budgets. The Government now practice arbitrary and retrospective capping—they decide, after councils have set their budgets, whether to cap them. That is blurring accountability and transparency. It does local authority planning no good. By contrast, we have made it clear that the next Conservative Government will not cap councils. We are now the friends of local government.
Labour is centralising power, shifting resources from the block grant towards specific grants. Specific grants for education and personal social services have increased by more than 50 per cent., even before we take into account the effects of performance-related changes. Councils consequently have less discretion over how to spend resources, and that is weakening local democracy. Labour is cutting councils' environmental protection and cultural budgets. This year's increase of 1.9 per cent. represents a real cut of 0.6 per cent. That will hit district councils in particular, as that area represents a significant part of their overall budgets, and it will result in higher council taxes and service cuts.
The Labour party manifesto committed the Government to a fair distribution of grant. The settlement confirms that over the past three years, they have funnelled £425 million away from county councils and £180 million away from London boroughs to subsidise the wasteful antics of mostly Labour-controlled metropolitan authorities. This year, the SSAs for shire counties will be £160 million lower than they would have been if the Government had not changed the funding formula.
The Government are presenting the settlement as a great triumph. In reality, as we have heard in speech after speech, most hon. Members have real concerns about their local authorities. The Government claim to be increasing

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grant to every local authority, but that has been achieved only because of a large surplus in the business rate pool from last year, which the Government are obliged to transfer to local authorities. Without that money, many councils would face cuts in overall grant.
Council tax has already risen sharply under Labour. Last year's increase was 6.8 per cent., which came on top of a record 8.6 per cent. increase in 1998–99. Band D households are paying considerably more than they did when the Government came into office.
Mr. Loughton: Is my hon. Friend aware of the damage being done to local authority pension funds by the abolition of advance corporation tax? In the case of my local authority, West Sussex, that has resulted in a shortfall of £3 million, or 2 per cent. on the council tax, as the money must be found somewhere to keep up the income flow.
Mr. Syms: My hon. Friend makes a good point. That change was not compensated for by the Government. The same point was central to the speech of the hon. Member for Torbay (Mr. Sanders).
If council spending increases at the same rate as last year, council taxes could rise by more than 10 per cent., which could leave a band D household facing a tax rise of £85. As my hon. Friend the Member for Christchurch (Mr. Chope) said, pensioners receiving a 75p increase will find it hard to cover that.
Council tax increases will be compounded by the Government's unfair scheme to limit the amount of council tax benefit subsidy payable to local authorities. Local taxpayers will have to pick up the tab for others who have their council tax paid for them. Again, we will see the nearly poor paying for the really poor, as the LGA has put it. From the Government Benches, the hon. Members for North-East Derbyshire (Mr. Barnes) and for Brent, North (Mr. Gardiner) made eloquent pleas against that aspect of Government policy.
Last year, £30 million was added to council tax bills across the country by the scheme, which does nothing to increase accountability. No one in the affected areas has the faintest idea of how much extra they are paying because their council is exceeding the Government's limits. There is no justification for the scheme—it is just another stealth tax.
Specific grants are increasing. Hypothecation is in vogue. As a proportion of aggregated external finance, it has increased from 13 per cent. in 1997–98 to 17 per cent. in 2000–01. That is restricting authorities' ability to make their own decisions. Many hon. Members have expressed concerns about passporting.
The settlement is bad news for local authorities and the people who depend on their services. It is bad news for hard-pressed council tax payers. The Government are not only wrong, but they arrogantly refused to meet delegations from councils and Members of Parliament of all political persuasions. They have stopped listening to people because they cannot stand to hear the truth about their proposals.
Today's debate has been a traditional one on local government finance. We have heard as much criticism from those on the Government Benches as from those on the Opposition Benches. When people see what is happening in their localities, they realise that problems lie ahead.
6.50 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes): We have held an interesting debate about a settlement, which—despite the carping from the Opposition—represents £2.3 billion of extra investment in local services. That is a 5.8 per cent. increase on top of the 5.5 per cent. rise last year.
I understand that hon. Members always want to press points that affect their areas—so they should. However, I want to stress some facts about the overall settlements that we are making with local government.
Several hon. Members rose—
Ms Hughes: I will give way in a moment; I want to make some progress.
Just as we are doing in the whole economy, we are replacing cuts and uncertainty with the funding and stability that councils need to plan ahead and deliver better services, at a reasonable cost to the council tax payer. That is in stark contrast to the record of the Opposition, who, when in government—after the disaster of the poll tax, devised by the right hon. Member for Wokingham (Mr. Redwood) and imposed by the right hon. Gentleman who is now the Member for Kensington and Chelsea (Mr. Portillo) —deliberately cut grant to local authorities by 4.3 per cent. in real terms in their last three years in office.
Mr. Christopher Gill: Will the hon. Lady give way?
Ms Hughes: In a moment.
By contrast, the Labour Government have worked with local government to provide a more stable and generous framework. Any hon. Members with experience of local government—although there are not many of them sitting on the Opposition Benches—will acknowledge that that framework has been welcomed by councils across the political spectrum.
That is why we received representations from only a handful of authorities. Indeed, our survey of local authorities informed us that their top priorities were stability and predictability.
Mr. Gill: I am most grateful to the hon. Lady for giving way. It is no good for her to bandy figures with the House. There is much anger in my county; the real-terms increase in Shropshire is less than 1.5 per cent. We are bottom of the league in police funding, and almost at the bottom for health and local authority funding. Does she not realise that there is great anger in Shropshire about the Government's unwillingness to tackle the real problems?
Ms Hughes: I realise that all parts of the country—including the hon. Gentleman's area—have done much better under the Labour Government than they ever did under the Conservative Government. He needs to realise that.
Much has been made by Opposition Members of our alleged refusal to meet local authorities to discuss their settlement and of the timing of this debate. We made it clear that, given the stability that we were introducing,

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we would not invite local authorities to meet Ministers. However, we held formal and extensive meetings with all the associations.
As for the timing of the debate, Opposition Members will know that that is a matter for the business managers on both sides of the House. Opposition managers agreed to the timing.
Let me put the record straight on local areas. For the second year running, rural areas have received above-average increases—as have sparsely populated areas and shire counties. Contrary to Opposition allegations, the southern regions also received above-average increases at 4.6 per cent.
The hon. Member for Mole Valley (Sir P. Beresford) lamented what he saw as a poor settlement for his district council, but he failed to say that Surrey county council, which provides most of the services, had an SSA increase of 4.9 per cent. I point out to him and to my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) that I met the district councils; they are happy that, with our previous two settlements, the Government are improving their relative position.
Sir Paul Beresford: Will the hon. Lady give way?
Ms Hughes: I am sorry; I shall not give way at the moment, I need to make some progress.
Several hon. Members made general points about their areas. However, it is testimony to the overall satisfaction with the settlement that so few Members made points about the improvements that they wanted in their area.
In response to the point made by my hon. Friend the Member for Brent, North (Mr. Gardiner), I understand that the data for the school to which he referred have been included in the data changes for Brent. Even with these data, Brent would have received a grant increase of less than 1.5 per cent. without the guaranteed uplift that we have introduced.
My hon. Friend the Member for Leicester, South (Mr. Marshall) spoke with great knowledge about his authority. He knows that we recognise that it has a particular problem. The authority and my hon. Friend are to be congratulated on the way that they have responded to the situation. Certainly, the changes that we want to consider in the overall review will include some of the issues that he has raised.
As we have heard, some northern areas have complained about the impact of the current system on them. My hon. Friends the Members for Barnsley, Central (Mr. Illsley) and for North-East Derbyshire referred to the area cost adjustment. However, I remind them that those areas have also received substantial increases, although they may wish that they had been greater. Certainly, they will know that, in the review that we are undertaking, the area cost adjustment is an issue that we are particularly considering.
We heard much from the Opposition parties about control freakery. The Tories complain that we are too controlling and that they are now the champions of local
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choice and local decision-making. Now they do not like block grants, having cut grants in real terms year on year. Now they do not like capping, having capped with a vengeance. Now they do not like best value; it is too prescriptive, unlike compulsory competitive tendering, of course. That is a big U-turn. It is beginning to sound like the warm words of a party that knows that it will be in opposition for a very long time and not have to administer any local government settlements.
We are striking the right balance. I make no apologies for central Government's responsibility and legitimate role in having an interest in the way that public money is spent and the way that taxes are raised locally. If Conservative Members are now saying that they will abdicate that responsibility, we will not.
In that context, Conservative Members raised the issue of specific and special grants. In the forthcoming financial year, specific grants will constitute 17 per cent. of the total settlement, which leaves 83 per cent. for local discretion. Again, we make no apology for ensuring that Government priorities in education and other important services—which we back with funding, unlike the Conservatives when they had the opportunity—have to be part of the priorities for local councils. That is the difference between this Government and the previous one: we are working with local authorities to help them improve education and other services. The Conservative Government simply put the screws on across the board.
Conservative Members also claimed that the teachers pay award will be a problem. The award is 3.3 per cent. and the national increase in education funding is 8.7 per cent. within which SSAs are up by 5.6 per cent. That gives ample headroom to cover pay and prices' effects on local education authorities.
The right hon. Member for Cities of London and Westminster (Mr. Brooke) and my hon. Friend the Member for Wigan (Mr. Turner) talked about the extra £50 million that will be paid to local authorities as a special grant for the teachers pay award. I remind them that the letter of my right hon. Friend the Secretary of State for Education and Employment said that he would take into consideration whether local authorities had passported fully their education grant into schools and the education budgets. My right hon. Friend has not made it clear how he will take that into consideration, but he said that he would. That is his right. Education is a top priority for the Government and if we are giving more money for education, that is where it should be spent.
In conclusion, we are continuing to deliver the most generous local government settlement since the introduction of council tax. It means more money for local services, a better deal for council tax payers and stability so that councils can plan ahead sensibly and creatively, as many are doing. Annual above-inflation increases are a far cry from the year-on-year cuts that we had under the previous Government. Advance announcement of grant totals and distribution formulae has established a climate of stability that local authorities have wanted for a long time. We recognise that local authorities—
It being Seven o'clock, MR. DEPUTY SPEAKER put the Question, pursuant to Order [28 January].
Question put:—
The House divided: Ayes 266, Noes 146.

Division No. 63]

[7 pm

AYES

Abbott, Ms Diane

Denham, John

Adams, Mrs Irene (Paisley N)

Dismore, Andrew

Ainger, Nick

Dobbin, Jim

Ainsworth, Robert (Cov'try NE)

Dowd, Jim

Alexander, Douglas

Drew, David

Allen, Graham

Eagle, Angela (Wallasey)

Anderson, Donald (Swansea E)

Eagle, Maria (L'pool Garston)

Armstrong, Rt Hon Ms Hilary

Ellman, Mrs Louise

Atkins, Charlotte

Etherington, Bill

Austin, John

Field, Rt Hon Frank

Banks, Tony

Fitzpatrick, Jim

Barnes, Harry

Fitzsimons, Lorna

Barron, Kevin

Flint, Caroline

Battle, John

Foster, Michael J (Worcester)

Bayley, Hugh

Fyfe, Maria

Beard, Nigel

Gapes, Mike

Beckett, Rt Hon Mrs Margaret

Gardiner, Barry

Bell, Stuart (Middlesbrough)

George, Bruce (Walsall S)

Benn, Hilary (Leeds C)

Gerrard, Neil

Benn, Rt Hon Tony (Chesterfield)

Gibson, Dr Ian

Benton, Joe

Godman, Dr Norman A

Bermingham, Gerald

Godsiff, Roger

Best, Harold

Goggins, Paul

Blackman, Liz

Golding, Mrs Llin

Blears, Ms Hazel

Gordon, Mrs Eileen

Blizzard, Bob

Griffiths, Jane (Reading E)

Borrow, David

Griffiths, Nigel (Edinburgh S)

Bradley, Keith (Withington)

Griffiths, Win (Bridgend)

Bradley, Peter (The Wrekin)

Grocott, Bruce

Brinton, Mrs Helen

Grogan, John

Brown, Rt Hon Nick (Newcastle E)

Hall, Mike (Weaver Vale)

Browne, Desmond

Hamilton, Fabian (Leeds NE)

Burden, Richard

Heal, Mrs Sylvia

Burgon, Colin

Henderson, Doug (Newcastle N)

Campbell, Ronnie (Blyth V)

Henderson, Ivan (Harwich)

Cann, Jamie

Hepburn, Stephen

Caplin, Ivor

Heppell, John

Casale, Roger

Hesford, Stephen

Cawsey, Ian

Hewitt, Ms Patricia

Chapman, Ben (Wirral S)

Hill, Keith

Chaytor, David

Hinchliffe, David

Clapham, Michael

Hoey, Kate

Clark, Paul (Gillingham)

Hood, Jimmy

Clarke, Charles (Norwich S)

Hoon, Rt Hon Geoffrey

Clarke, Rt Hon Tom (Coatbridge)

Hope, Phil

Clarke, Tony (Northampton S)

Hopkins, Kelvin

Clelland, David

Howarth, George (Knowsley N)

Clwyd, Ann

Howells, Dr Kim

Coaker, Vernon

Hughes, Ms Beverley (Stretford)

Coffey, Ms Ann

Hughes, Kevin (Doncaster N)

Coleman, Iain

Hurst, Alan

Colman, Tony

Hutton, John

Corbyn, Jeremy

Iddon, Dr Brian

Corston, Jean

Illsley, Eric

Cousins, Jim

Jackson, Helen (Hillsborough)

Cox, Tom

Jenkins, Brian

Cranston, Ross

Johnson, Alan (Hull W & Hessle)

Crausby, David

Jones, Rt Hon Barry (Alyn)

Cryer, Mrs Ann (Keighley)

Jones, Mrs Fiona (Newark)

Cunningham, Jim (Cov'try S)

Jones, Ms Jenny (Wolverh'ton SW)

Darvill, Keith

Davey, Valerie (Bristol W)

Jones, Dr Lynne (Selly Oak)

Davidson, Ian

Jones, Martyn (Clwyd S)

Davies, Rt Hon Denzil (Llanelli)

Keeble, Ms Sally

Davies, Geraint (Croydon C)

Keen, Alan (Feltham & Heston)

Davis, Rt Hon Terry (B'ham Hodge H)

Kelly, Ms Ruth

Kennedy, Jane (Wavertree)

Dawson, Hilton

Khabra, Piara S

Dean, Mrs Janet

Kidney, David

1308

Kilfoyle, Peter

Reid, Rt Hon Dr John (Hamilton N)

King, Andy (Rugby & Kenilworth)

Roche, Mrs Barbara

Laxton, Bob

Rogers, Allan

Lepper, David

Rooker, Rt Hon Jeff

Leslie, Christopher

Rooney, Terry

Levitt, Tom

Ross, Ernie (Dundee W)

Lewis, Ivan (Bury S)

Rowlands, Ted

Linton, Martin

Roy, Frank

Lloyd, Tony (Manchester C)

Ruddock, Joan

Lock, David

Russell, Ms Christine (Chester)

Love, Andrew

Ryan, Ms Joan

McAvoy, Thomas

Salter, Martin

McCabe, Steve

Sedgemore, Brian

McCafferty, Ms Chris

Shaw, Jonathan

McDonagh, Siobhain

Sheldon, Rt Hon Robert

Macdonald, Calum

Shipley, Ms Debra

McDonnell, John

Short, Rt Hon Clare

McGuire, Mrs Anne

Simpson, Alan (Nottingham S)

McIsaac, Shona

Singh, Marsha

McKenna, Mrs Rosemary

Skinner, Dennis

Mackinlay, Andrew

Smith, Rt Hon Andrew (Oxford E)

MacShane, Denis

Smith, Angela (Basildon)

Mactaggart, Fiona

Smith, Llew (Blaenau Gwent)

McWalter, Tony

Snape, Peter

Mahon, Mrs Alice

Soley, Clive

Mallaber, Judy

Southworth, Ms Helen

Mandelson, Fit Hon Peter

Squire, Ms Rachel

Marsden, Gordon (Blackpool S)

Starkey, Dr Phyllis

Marshall, Jim (Leicester S)

Stoate, Dr Howard

Marshall-Andrews, Robert

Strang, Rt Hon Dr Gavin

Meacher, Rt Hon Michael

Straw, Rt Hon Jack

Meale, Alan

Stringer, Graham

Michie, Bill (Shef'ld Heeley)

Stuart, Ms Gisela

Miller, Andrew

Sutcliffe, Gerry

Mitchell, Austin

Taylor, Rt Hon Mrs Ann (Dewsbury)

Moffatt, Laura

Moran, Ms Margaret

Taylor, Ms Dari (Stockton S)

Mountford, Kali

Taylor, David (NW Leics)

Mullin, Chris

Temple-Morris, Peter

Murphy, Jim (Eastwood)

Thomas, Gareth R (Harrow W)

Naysmith, Dr Doug

Todd, Mark

Norris, Dan

Trickett, Jon

O'Brien, Mike (N Warks)

Truswell, Paul

O'Hara, Eddie

Turner, Dennis (Wolverh'ton SE)

O'Neill, Martin

Turner, Neil (Wigan)

Organ, Mrs Diana

Twigg, Derek (Halton)

Palmer, Dr Nick

Twigg, Stephen (Enfield)

Pearson, Ian

Tynan, Bill

Pendry, Tom

Vis, Dr Rudi

Perham, Ms Linda

Ward, Ms Claire

Pickthall, Colin

Wareing, Robert N

Pike, Peter L

Watts, David

Plaskitt, James

White, Brian

Pollard, Kerry

Whitehead, Dr Alan

Pond, Chris

Wicks, Malcolm

Pope, Greg

Williams, Rt Hon Alan (Swansea W)

Pound, Stephen

Powell, Sir Raymond

Wills, Michael

Prentice, Ms Bridget (Lewisham E)

Winnick, David

Prentice, Gordon (Pendle)

Winterton, Ms Rosie (Doncaster C)

Prescott, Rt Hon John

Wood, Mike

Primarolo, Dawn

Woolas, Phil

Prosser, Gwyn

Worthington, Tony

Purchase, Ken

Wyatt, Derek

Quinn, Lawrie

Radice, Rt Hon Giles

Tellers for the Ayes:

Rapson, Syd

Mr. Don Touhig and

Raynsford, Nick

Mr. Clive Betts.

NOES

Amess, David

Ballard, Jackie

Ancram, Rt Hon Michael

Beggs, Roy

Arbuthnot, Rt Hon James

Beith, Rt Hon A J

Atkinson, David (Bour'mth E)

Beresford, Sir Paul

Atkinson, Peter (Hexham)

Blunt, Crispin

Baldry, Tony

Body, Sir Richard

1309

Boswell, Tim

Hogg, Rt Hon Douglas

Bottomley, Peter (Worthing W)

Horam, John

Bottomley, Rt Hon Mrs Virginia

Howard, Rt Hon Michael

Brady, Graham

Howarth, Gerald (Aldershot)

Brand, Dr Peter

Hughes, Simon (Southwark N)

Brazier, Julian

Hunter, Andrew

Brooke, Rt Hon Peter

Jack, Rt Hon Michael

Browning, Mrs Angela

Jenkin, Bernard

Burns, Simon

Kennedy, Rt Hon Charles (Ross Skye & Inverness W)

Burstow, Paul

Butterfill, John

Kirkbride, Miss Julie

Cash, William

Laing, Mrs Eleanor

Chapman, Sir Sydney (Chipping Barnet)

Lait, Mrs Jacqui

Lansley, Andrew

Chope, Christopher

Leigh, Edward

Clappison, James

Letwin, Oliver

Collins, Tim

Lewis, Dr Julian (New Forest E)

Colvin, Michael

Lidington, David

Cormack, Sir Patrick

Lloyd, Rt Hon Sir Peter (Fareham)

Cotter, Brian

Loughton, Tim

Cran, James

Luff, Peter

Davey, Edward (Kingston)

McCartney, Robert (N Down)

Davies, Quentin (Grantham)

McIntosh, Miss Anne

Davis, Rt Hon David (Haltemprice)

MacKay, Rt Hon Andrew

Day, Stephen

McLoughlin, Patrick

Donaldson, Jeffrey

Major, Rt Hon John

Emery, Rt Hon Sir Peter

Malins, Humfrey

Faber, David

Maples, John

Fabricant, Michael

Mawhinney, Rt Hon Sir Brian

Fallon, Michael

May, Mrs Theresa

Flight, Howard

Moore, Michael

Forth, Rt Hon Eric

Moss, Malcolm

Foster, Don (Bath)

Nicholls, Patrick

Fowler, Rt Hon Sir Norman

Norman, Archie

Fraser, Christopher

O'Brien, Stephen (Eddisbury)

Gale, Roger

Page, Richard

Gibb, Nick

Paice, James

Gill, Christopher

Paisley, Rev Ian

Gorman, Mrs Teresa

Paterson, Owen

Green, Damian

Pickles, Eric

Greenway, John

Prior, David

Grieve, Dominic

Redwood, Rt Hon John

Gummer, Rt Hon John

Rendel, David

Hamilton, Rt Hon Sir Archie

Robathan, Andrew

Hammond, Philip

Robertson, Laurence

Hawkins, Nick

Roe, Mrs Marion (Broxboume)

Heald, Oliver

Rowe, Andrew (Faversham)

Heath, David (Somerton & Frome)

Ruffley, David

Heathcoat-Amory, Rt Hon David

Russell, Bob (Colchester)

1310

St Aubyn, Nick

Townend, John

Sanders, Adrian

Tredinnick, David

Shephard, Rt Hon Mrs Gillian

Tyler, Paul

Shepherd, Richard

Tyrie, Andrew

Simpson, Keith (Mid-Norfolk)

Viggers, Peter

Soames, Nicholas

Wardle, Charles

Spelman, Mrs Caroline

Waterson, Nigel

Spicer, Sir Michael

Wells, Bowen

Spring, Richard

Whitney, Sir Raymond

Stanley, Rt Hon Sir John

Whittingdale, John

Steen, Anthony

Wilkinson, John

Streeter, Gary

Willis, Phil

Stunell, Andrew

Wilshire, David

Swayne, Desmond

Winterton, Mrs Ann (Congleton)

Syms, Robert

Winterton, Nicholas (Macclesfield)

Tapsell, Sir Peter

Yeo, Tim

Taylor, Ian (Esher &Walton)

Young, Rt Hon Sir George

Taylor, John M (Solihull)

Taylor, Sir Teddy

Tellers for the Noes:

Thompson, William

Mr. John Randall and

Tonge, Dr Jenny

Mr. Geoffrey Clifton-Brown.

Question accordingly agreed to.
Resolved,
That the Local Government Finance Report (England) 2000–01 (HC 160), which was laid before this House on 27th January, be approved.
MADAM SPEAKER then put the remaining Questions required to be put at that hour.
Resolved,
That the Local Government Finance (England) Special Grant Report (No. 52) (HC 161), which was laid before this House on 27th January, be approved. — [Mr. Sutcliffe.]
Resolved,
That the Local Government Finance Report (England) 1998–99: Amending Report 2000 (HC 162), which was laid before this House on 27th January, be approved. —[Mr. Sutcliffe.]

COMMITTEES
Resolved,
That Mr. Michael Colvin be discharged from the Defence Committee and Dr. Julian Lewis be added to the Committee.—[Mr. McLoughlin, on behalf of the Committee of Selection.]

Northern Ireland
7.13 pm
The Secretary of State for Northern Ireland (Mr. Peter Mandelson): With permission, Madam Speaker, I shall make a statement on the current situation in Northern Ireland.
I first pay tribute to the way in which the new institutions have got on with their challenging tasks in the past two months. The Assembly, the Executive, the north-south bodies and the British-Irish Council are all now up and running, as intended under the Good Friday agreement.
I pay particular tribute to each of the Ministers in the new devolved Executive, and their parties, who have taken up their new responsibilities in good faith, with good will towards each other and a genuine determination to serve all the people of Northern Ireland. I believe that that augurs well for the long-term success of devolved government in Northern Ireland.
Late on Monday, the latest report of the Independent International Commission on Decommissioning was delivered to the British and Irish Governments.
I pay tribute to the patient efforts of the Commission members, General John de Chastelain, Ambassador Andrew Sens and Brigadier Tauno Nieminen, over recent months—indeed years—and their readiness to continue those efforts to secure decommissioning as intended under the Good Friday agreement.
With the appointment of contact persons by the IRA and the UFF in December 1999, all the main paramilitary groups on ceasefire are now engaged with the commission. That is a significant advance. The commission's report points to a number of other positive factors. The ceasefires remain in place. The silence of the guns and the unequivocal support of the IRA and the other paramilitary groups for the political process have played a vital part in recent political advances. The assurance, repeated this week, that there is no threat to the peace process from the IRA is important and will be welcomed.
However, the report also stated that there has not yet been any decommissioning of arms by a major paramilitary group. If this continues, it is totally unacceptable. Notably in the case of the IRA, it has to be clear that decommissioning is going to happen. The commission believes that its conclusion in its report of 10 December—that recent events gave the basis for an assessment that decommissioning will happen—remains well founded. But it needs further evidence to substantiate that conclusion. In particular, it needs definite information about when decommissioning will actually start.
Over the past few days, my right hon. Friend the Prime Minister and I have had intensive discussions with the Irish Government and the main parties. Even as I speak, those discussions are continuing. The decommissioning body has been kept closely in touch with those discussions and it has informed me that it is ready at any time to report further in the event of concrete results emerging from those discussions. If the commission provides a further report, which renders out of date the information that I am giving the House now, I will, of course, make a further statement.
Even at this very late stage, it is right that we and all the parties continue to see whether there is a basis on which the institutions can continue to operate and
1312
decommissioning start. The institutions, though, can work only on the basis of cross-community confidence. Without clarity over decommissioning, I have no doubt that this confidence will ebb quickly. All the parties must have certainty that all aspects of the Good Friday agreement are being implemented, without some being forgotten and others overlooked.
If it becomes clear that, because of a loss of confidence, the institutions cannot be sustained, the Government have to be ready to put on hold the operation of those institutions. Nobody who is genuinely committed to the peace process will relish this prospect. However, our purpose if it comes to this will be to preserve them from collapse and to create the time and space in which to rebuild the confidence required to sustain them.
I shall therefore publish a Bill tomorrow to enable us to institute such a pause should one prove necessary despite our best efforts.
This will only be the case if the current unsatisfactory state of affairs is not changed clearly for the better.
We shall invite the House to consider the Bill early next week, with a view to royal assent later in the week unless events between now and then clearly make that unnecessary. In the meantime, we shall redouble our efforts, with the Irish Government and the main parties, to resolve the present difficulties.
Even at this late stage, I believe it remains possible to rebuild confidence in the institutions, to enable devolution and the other institutions to continue, and to ensure that decommissioning starts. But, I stress, those three things are interdependent. We cannot partially implement the Good Friday agreement. It is all or it is nothing.
Mr. Andrew MacKay: This is a sad day for the people of Northern Ireland. For weeks, they have prayed and hoped that there would be a proper start to the decommissioning of illegally held arms and explosives. They have been badly let down by the paramilitaries, both republican and so-called loyalist.
May I put it to the Secretary of State that the right hon. Member for Upper Bann (Mr. Trimble), and his Unionist colleagues, made a courageous decision to take ministerial posts in an Executive last December, even though there was no decommissioning by the paramilitaries? It was a courageous decision that we on the Opposition Benches strongly supported. Will he also confirm that there was an understanding that the Provisional IRA would properly start decommissioning its illegally held arms and explosives within a matter of weeks? As General de Chastelain has now reported, this has not happened.
Will the Secretary of State also confirm that all the other signatories to the Belfast agreement have fulfilled all their obligations in full? The only people who have not are the parties inextricably linked to the paramilitaries, whether so-called loyalist or republican. Will the right hon. Gentleman give us an undertaking that General de Chastelain's report will be published so we can learn from it and perhaps gain guidance from it? Will he agree with me that it would be unwise at this juncture to continue with the Disqualifications Bill, which has now gone to another place? That should be put on hold.
Will the Secretary of State accept that we believe that he had no alternative and that he is absolutely right—if we do not, at this late hour, have positive moves

1313
on decommissioning—to suspend the Executive, the Assembly and related bodies? When he brings legislation before the House next week, will he accept my assurance that, as far as we are concerned, it will receive a speedy passage?
Will the Secretary of State also accept that many people—myself included—will regret the return to direct rule? The great majority of people in Northern Ireland, in both communities, have appreciated and enjoyed the end of the democratic deficit. They have welcomed the fact that their democratically elected politicians are taking important decisions and running much of the Province, and there will be regret that those within the Unionist community and the nationalist community who have done so much and have fulfilled their obligations are now being penalised in the same way as those who have failed to fulfil those obligations. We must bear it in mind that, particularly, the right hon. Member for Upper Bann and the Deputy First Minister—the hon. Member for Newry and Armagh (Mr. Mallon) —have done an outstanding job and they also deserve better than that an Executive should be suspended through no fault of their own.
Mr. Mandelson: I thank the right hon. Gentleman for his support for what I have announced today. I entirely share his analysis of the courage and the initiative shown by the right hon. Member for Upper Bann (Mr. Trimble) and his colleagues as well as other Members of the House who are present tonight. Both the First Minister of Northern Ireland and the Deputy First Minister of Northern Ireland—both of whom are here tonight—have shown tremendous strength of leadership to both traditions throughout Northern Ireland. I know the House will wish strongly to commend them for the leadership that they have shown.
I accept that it was clearly understood during the course of the Mitchell review that, while no commitment or guarantee was given that decommissioning should happen in January, none the less it was equally clear throughout, among all those who were involved in the Mitchell review, that if there was no decommissioning by the end of January, the Ulster Unionists would be unable to sustain their involvement in the Executive in Northern Ireland. There was no ambiguity about that—no guarantee, but no ambiguity either. It is, therefore, a disappointment that progress has not yet begun on decommissioning.
The right hon. Member for Bracknell (Mr. MacKay) was right in what he said about everyone else's obligations under the Good Friday agreement. I believe that the criminal justice review has yet to be published. That will happen in a matter of weeks. I cannot think of anything else that has not been done, is not being done, or is not about to be done.
I am not going to engage in some sort of blame game tonight, but everyone in Northern Ireland will be disappointed that progress has not been made in decommissioning, for precisely the reason given by the right hon. Member for Bracknell. People in Northern Ireland are rightly proud of the Executive. They like seeing local people—locally elected politicians with local accents—taking charge of local affairs, and they want that to continue. It will only continue if all aspects of the Good Friday agreement are properly implemented.
1314
I can tell the right hon. Gentleman that, in the event of a further report from the de Chastelain commission, the report that the commission gave the Governments on Monday will also be published, at the same time, so that any difference between the two can be carefully noted.
As for the Disqualifications Bill, it is not linked to what I am talking about now, and I think that its passage can be safely left to the other place.
Mr. David Trimble: As the Secretary of State has said, it is clear that no decommissioning has occurred. Can he confirm that there has also been no serious discussion, let alone agreement, on the modalities of decommissioning of any specific terrorist weapons, and that the progress made over the past six weeks has been minuscule and deeply disappointing? Does he understand the disappointment we feel—after taking the risk to proceed, in advance of decommissioning, with the formation of the Administration—about the fact that now, months later, there has been such a contemptuous response from the paramilitaries concerned? Does he understand our astonishment at the fact that, after all the discussions and the review, so little has happened? I think the House will appreciate that, now that the basis on which we proceeded to devolution has been falsified, we have no alternative, and cannot continue in an Administration with those who have disappointed the hopes that were created.
I must ask the Secretary of State whether he intends, unless there is clear, significant and verifiable decommissioning in the next few days, to suspend the institutions. He referred to the presentation of a Bill that would receive royal assent next week; can he say precisely when it will be brought into operation?
Mr. Mandelson: Let me say straight away that no one doubts—indeed, I think every Member will applaud—the commitment of the right hon. Member for Upper Bann (Mr. Trimble) to the Good Friday agreement. That is beyond doubt. Equally, let me say that we shall need his strength and determination again to keep the process moving ahead.
Both traditions throughout the community in Northern Ireland want to see the agreement work. They want to see the political parties—they want to see their political leaders—working together as well in the future as they have during the last two months. I hope that the right hon. Gentleman and his colleagues will not take precipitate action in relation to the Executive, and that they will allow the events of the next few days to unfold before making a final judgment.
I have to confirm, however, that, as the right hon. Gentleman said, there has not been an adequate engagement on the part of any of the paramilitary organisations with General de Chastelain's body. That is simply unacceptable. It is a betrayal of the entire community in Northern Ireland, of whatever hue, whatever background or whatever tradition—especially when it is abundantly clear from every expression of public opinion and every opinion poll published on the subject, both in Northern Ireland and in the south, that Unionists, nationalists and, I suspect, most republicans, overwhelmingly want decommissioning to happen, and want it to start now. I appeal to the paramilitary

1315
organisations to heed the call of the people to get cracking and to enable local self-government in Northern Ireland to flourish once and for all.
Mr. Seamus Mallon: May I commend the Prime Minister, the Taoiseach, the Secretary of State and the Minister for Foreign Affairs for the remarkable efforts that they have been making recently to solve the problem, and are making now, as we speak, on the issue?
The Secretary of State knows that I believe that suspension of any kind of the institutions in the north of Ireland at this time and in this context would be unwise for three reasons. One: it could do serious and perhaps lasting damage to the new political dispensation, which is beginning to work and is beginning to work well, if I may say so. Two: it would make obtaining decommissioning immeasurably more difficult, if not ultimately impossible. Three: it would play straight into the hands of those who are opposed to the agreement, its institutions and the working of those institutions.
May I ask the Secretary of State if he agrees that the priority as of now must be to allow and ask General de Chastelain to obtain answers from all the paramilitary groups to two questions? One: "Will you decommission?" Two: "If yes, when will you decommission?" Will the Secretary of State then inform the House of those answers; inform all the political parties in Northern Ireland; consult with the Irish Government; and, in light of those answers, decide how to proceed—but not until answers are got to those questions, which should have been answered many, many months ago?
Mr. Mandelson: I think that all those questions are extremely relevant and I can assure my hon. Friend that those are precisely the detailed questions that I have already put to General de Chastelain. I regret to say that, in answer to most of them, the answers have been extremely lacking. Let me make it absolutely clear to him: no one is seeking suspension of the Executive. It is the very last thing that I would want to see happen, save to have those institutions collapse and fall apart. If that is the choice, suspension is the better of those two options and that is what is motivating us.
No one wants to do anything that will make decommissioning any harder to achieve, but there comes a moment when we have to express our impatience and, indeed, our intolerance, that decommissioning is failing to happen. I know that the hon. Gentleman has expressed his own impatience and his own very strong feelings on behalf of the people whom he represents, and that is welcome.
May I say this, too? I know that there will be many nationalists whom the hon. Gentleman represents who will be bitterly disappointed that, having gained their places in government after being treated as outsiders for so long in Northern Ireland, they might be suddenly snatched away from them. To them, I say, "Have faith and have confidence." There are no longer any second-class citizens in Northern Ireland. Their place in government is absolutely assured. That is precisely why we are trying to build up the confidence of everyone in Northern Ireland in the Executive and in the institutions that have been
1316
created—just so that their place and the place of every section of political opinion can be properly secured in that Government in Northern Ireland.
Mr. John Major: Many hopes—hopes across the divisions in Northern Ireland—will have been fractured by the failure of the paramilitaries to decommission. One of the great conundrums of the process from the very outset has been whether the leadership of the paramilitary groups—and most important of all of Sinn Fein-IRA—wished to disarm, but were inhibited from doing so by the views of the membership, or whether there was in reality never any real intention to disarm at all. That, sadly, is still unclear to me, and I suspect that it is still unclear to the House.
What is clear is that the leaders left the impression that there would be disarmament; but there has been none. In the circumstances, sadly, and I hope, temporarily, the Government have no alternative left to them but to return to direct rule, and there should be no doubt where the blame for that backward step now clearly lies.
May I follow up the important point made by the hon. Member for Newry and Armagh (Mr. Mallon) by making a slightly different point? Can the Secretary of State tell me whether Sinn Fein and the IRA have ever been directly asked by the Government if they would place a proposal for disarmament before the general council of the IRA and a general meeting of volunteers? Can he tell me whether that point has ever been put? If not, can the Secretary of State undertake to put that point now, so that this House may know the clear intentions of those people with whom the Government have been negotiating on behalf of this House for some time?
Mr. Mandelson: I can say to the right hon. Gentleman without any equivocation at all that we would not have got this far, and that the Government would not have treated with Sinn Fein in the way that we have, had it not been made absolutely clear by that organisation that they regard decommissioning as an essential part of the peace process. That having been said, the IRA, in their statement at the conclusion of the Mitchell review, said among other things that they accepted the leadership shown by Sinn Fein. I think most people would infer from that that they were accepting and endorsing the political strategy as expressed by the leadership of that organisation.
If that is the case, they must accept, as Sinn Fein has said, that decommissioning is an essential part of the peace process. That is what they are being tested on and that is what they will be judged by. I hope very much indeed that, in the time that is available to them, the IRA will make that clear—just as Sinn Fein has made that clear—so that the powers that I am proposing to take in the legislation next week do not have to be used and so that we do not have to suspend the Executive and the institutions. There is time yet.
We have not reverted to direct rule yet. I hope that everyone will come to their senses, see the value in what has been created and not put it in jeopardy any more.
Mr. Simon Hughes: Does the Secretary of State accept that Liberal Democrat Members will offer complete, but sad, support for the proposition that we shall have to have reserve powers to suspend the working of the Northern Ireland Assembly, if that is what is required at the end of next week?

1317
Will the Secretary of State join me in appreciating the enormous efforts made by Members—both Unionists and nationalists—of this House who have brought us to the brink of peace, and whose efforts we must all try not to frustrate at this stage?
Will the Secretary of State explicitly share with me the view that, given how far so many people have come already down the Good Friday road, it is now absolutely clear that it is, above all, the IRA who must take the next step; and that General de Chastelain's report made it clear that, unless the next step is taken very soon, it will not be possible for the May deadline for decommissioning to be met? Does he also agree that the Unionists who have stayed on the road very firmly, despite pressures and temptations, must be encouraged by all of us to stand firm and not to be pushed off course, and that their leadership is the prerequisite to our continuing to make progress together towards continued devolution of power to Northern Ireland?
I have two specific questions on the factual timetable. Will the Secretary of State confirm that, if there is progress over the next few days, there need not even be legislation to produce reserve powers? More importantly, will he confirm that, if there has to be legislation, he will not take a decision to suspend until the last moment, always seeing that as the worst option, and that suspension can be lifted almost immediately if the people who now have a responsibility take the steps that are clearly required to start making progress towards the decommissioning that the whole of the United Kingdom and Ireland need them to take?
Mr. Mandelson: I can confirm what the hon. Gentleman says. Of course, as I have said already, nobody wants to take this step. If we can possibly avoid it, we will, but only if an objective change in the circumstances allows us to make that change. For that to happen, we must see a different approach and a different stance on the part of the IRA. The hon. Gentleman is right in referring to the fact that there is only one deadline for decommissioning in the Good Friday agreement. It is not January, it is not February, it is not March; it is May—to be precise, 22 May of this year. Nobody is trying to impose new deadlines for people to meet. Nobody—not the Unionists, not the Government—is trying to rewrite the Good Friday agreement. All that we are seeking is the full implementation of the agreement that we had. That should be clearly understood by those in the republican movement who have expressed some anger at the turn of events this week. It is very important that they realise that. Nobody is trying, as some have accused me this week of doing, to abandon faith in the political process or the institutions that have been created—far from it: I am motivated solely by a desire to save and preserve the process and the institutions that have been created. That will certainly determine all the Government's actions in the coming week and in the months ahead.
Mr. David Winnick: At this very disappointing time for Northern Ireland, should we not bear in mind that there remains overwhelming public support in the United Kingdom, as in the Irish republic, for the Good Friday agreement, and that the vast majority of people in both countries want that agreement to remain
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in force? As far as the IRA is concerned, is it not "make up your mind" time? If the IRA want the agreement to remain in force and the Executive and the north-south bodies to continue, they know what they should do. The vast majority of people in Ireland—the Republic and the north—want them to do what we in Parliament want them to do: decommission.
Mr. Mandelson: My hon. Friend is absolutely right. If we did not have the Good Friday agreement and we were starting all over again with all the negotiations from scratch, I have absolutely no doubt that the agreement that suits everyone's needs and aspirations most clearly and the one with which we would end up all over again is the Good Friday agreement. That is why it is so important that we move ahead and implement it in its entirety, but it has to be clear that decommissioning is going to happen. "No more ifs and buts"—that is what people want to hear and that is what they are entitled to hear. The method of decommissioning is for the de Chastelain commission. The commission must act in accordance with decommissioning schemes made by the two Governments. They provide for a variety of methods, but all require arms to be destroyed or made permanently unusable or inaccessible. That must be the basis for the action that is undertaken by all the paramilitary organisations.
Mr. Peter Brooke: Can the Secretary of State and General de Chastelain confirm that there is not a scintilla of a possibility of a misunderstanding on the part of the paramilitaries and of those associated with them of what the consequences would be of a continuance of their present stance?
Mr. Mandelson: I hope that, in everything that I have said—which, I am sure, is echoed in every part of this House—there is no ambiguity, but if there is, let me make it absolutely clear. If there is no decommissioning, there will be no full implementation of the Good Friday Agreement. If there is no full implementation, there will be no devolution in Northern Ireland. That is a matter of colossal regret, but it is a fact.
Mr. Tony Benn: May I thank the Secretary of State for making his statement to the House, and for giving an assurance on any proposed legislation or any further statements to this House next week, because we have as great an interest in this matter as the people of Northern Ireland? May I thank him also for the cautious, confident and moderate statement that he made, because he knows that the people of Northern Ireland want this to succeed? May I put it to him that those in either community who are opposed to the Belfast agreement have an interest either in not decommissioning or in suspending the Executive? They feed upon each other.
In considering what might have to happen if no progress is made, will the Secretary of State consider that we do not really want to go back to the old direct rule, because it was under that that so many of the tragedies occurred? May I ask him to give an assurance to the House that the one element that will remain firmly in place is the close co-operation between the British and Irish Governments, because neither is involved in any

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suspension, and that this direct rule should be direct rule by London and Dublin together, as a way of carrying the process forward?
Mr. Mandelson: I am grateful to my right hon. Friend for his support. He is absolutely right that there are rejectionists on both sides of this argument who are prepared, in some cases, I am afraid, to fill the atmosphere with hatred and poison, which simply serves to deepen the divide in Northern Ireland's community, to polarise opinion and to frustrate the whole cause of making peace.
I can assure my right hon. Friend that the co-operation between our own and the Irish Government remains very close indeed. As the Taoiseach said in the Dail last November:
"The whole Agreement is based on mutual confidence, partnership and the sense that everybody is acting in good faith in implementing all its terms. If there is difficulty, either in relation to devolution or decommissioning, we are, by definition, in a very serious situation. In those circumstances, where the Agreement was not being implemented in significant respects, the Governments would have to step in and assume their responsibilities, including through appropriate suspension arrangements."
Nobody wants it, but both Governments know that if it has to be, it will be.
Rev. Ian Paisley: Does the Secretary of State agree that the statement made by the previous speaker, the right hon. Member for Chesterfield (Mr. Benn) that we should have a new form of joint rule from Dublin and this House is the sort of statement that would bring about a disastrous situation? Should not the Secretary of State tell the House today that no such joint rule will take place in Northern Ireland?
Secondly, does not the Secretary of State understand that his statements tonight are not at all helpful to the people of Northern Ireland? He says that the
"unequivocal support of the IRA and the other paramilitary groups for the political process has played a vital part in recent political advances".
Surely we are here tonight because the IRA has not played its part, and has not lived up to the promises that it made. The other amazing statement was that
"the assurance repeated this week that there is no threat to the peace process from the IRA is important and will be welcomed".
Surely the threat from the IRA is that it has the means to destroy life in Northern Ireland, and that it has an arsenal bigger than any other terrorist arsenal in western Europe, which it refuses to decommission. When he comes next week to present his Bill, can he give us an assurance that we will possess de Chastelain's report? It is unfair to ask Members from Northern Ireland to discuss this matter next week if we do not have in our hands the report of de Chastelain. The Secretary of State said something about another report, but if there is no other report, will we have the report of which we have not as yet seen the contents? If there is going to be a pause, may I ask him, "Will he pause the release of prisoners?" Will he stop the implementation of the Patten report? These are matters that need to be handled, and handled urgently.
Mr. Mandelson: I must say that I did not share the hon. Gentleman's precise interpretation of the remarks by my right hon. Friend the Member for Chesterfield (Mr. Benn). I do not think that he was calling for joint rule as such, but in case there is any ambiguity about the
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Government's policy, I may say that we do not support joint rule—however advantageous and beneficial it is to the people of Northern Ireland to have the ready support and contribution of the Irish Government for the political progress that has been made in Northern Ireland.
If the hon. Gentleman does not mind my saying so, I think that he is slightly splitting hairs over the statement that I have made. Of course I readily acknowledge—indeed, I said—that the arsenal of weapons held by the IRA makes their continuing, indefinite involvement in democratic politics impossible. We know that, and they themselves have accepted that, which is why they say that decommissioning is an essential part of the peace process. I do not know whether the hon. Gentleman disagrees with me, but I happen to believe that the ceasefires are not unimportant as an essential condition for political progress.
I think that anyone who is in any doubt about the difference that has been made to life in Northern Ireland by the ceasefires could just go over there and live there for a few days, and talk to the people who live there. They would soon find out that it has made an enormous difference to the quality of life of everyone there.
I hope that the hon. Gentleman will reflect and provide not rancour and not recrimination in these circumstances, but his support for those who have made such a success of Northern Ireland's government. Among those, I include the representatives of his own party, who have been excellent Ministers on the Executive.
Mr. Harry Barnes: Would it be correct to say that my right hon. Friend's statement is a holding operation? It is an essential holding operation and has a dynamic contained in it, in that the Bill will provide the arrangements by which the suspension of the Executive is imminent unless the paramilitaries deliver. Therefore, there is a duty on right hon. and hon. Members who have any influence with our friends from Northern Ireland to point out to Unionists the significance of the Bill that will be put forward. Those who have links with Sinn Fein should press them to see that decommissioning takes place.
Mr. Mandelson: All of us will be pressing all the paramilitary organisations to ensure that decommissioning takes place. My hon. Friend is right, in a sense, that I am describing a holding operation, but it is an operation that will not permanently be on hold. I will take the necessary powers in case the discussions that are going on now are unsuccessful. That is a prudent preparation to enable me to move as quickly as the situation demands, and nobody should be in any doubt that I will.
Mr. Robert McCartney: Will the Secretary of State confirm that the House will not have to wait until there is a second report from General de Chastelain before we get the first report that he received on Monday of this week?
Is the Secretary of State aware that General de Chastelain and his fellow commissioners, in a report on 7 July 1999, set out the clear criteria for the commencement of the process of decommissioning—not decommissioning itself, but the process—which contained two requirements: that the paramilitaries had given an unambiguous commitment to the completion of

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decommissioning by 22 May; and that the interlocutor had agreed all the modalities, including timing and verification? Will the Secretary of State confirm that neither of those criteria has been met?
Mr. Mandelson: I think that I made it absolutely clear in my opening remarks that that is precisely the situation and that we find it disappointing and unacceptable. That is why we hope and assume that the paramilitary organisations will rectify the situation without delay.
Dr. Norman A. Godman: I warmly endorse my right hon. Friend's positive remarks concerning the democratic functioning of the institutions in Northern Ireland. I spent the whole of Tuesday at Stormont and I saw Members of the Legislative Assembly going about their work in a way that would be immediately familiar to Members of Parliament and, dare I say it, Members of the Scottish Parliament. Assembly Members and many members of the local public said to me that they were deeply alarmed at the prospect of the enormous loss of what has already been achieved in terms of stable partnership government and the working of the Assembly.
If my right hon. Friend has to introduce a period of suspension, I urge him and members of the Irish Government to do their utmost to ensure that it is as short as is humanly possible, so that democracy can take healthy root in Northern Ireland.
Mr. Mandelson: I strongly welcome and echo my hon. Friend's comments. I can give him this reassurance: the only point of creating a pause in the operation of the Executive of the institutions in Northern Ireland would be to avert their collapse and to allow them to get back on track as rapidly as possible. I am proposing to take this power in the legislation next week precisely because I fear that, if we did not put them on hold, should the circumstances arise and so demand, confidence in the institutions would continue to ebb and we would place in jeopardy their continued operation, through the actions of other people. The aim is precisely to save the institutions, to preserve what has been created for the benefit of the people in Northern Ireland.
My hon. Friend is right to say that the Members of the Assembly and those in the Executive are thoroughly conscientious and diligent. Above all, whatever political background they come from and whatever tradition has elected them, it is most noteworthy that all the Ministers speak and act for the interests of both traditions and all people in Northern Ireland. That is a huge step forward and something that we will want to preserve at all costs.
Mr. Peter Bottomley: I have been cautiously pessimistic about the process in Northern Ireland for well over 10 years, but there are grounds for hope. I spent the day in Mid-Ulster today, and there was no sense of crisis, although clearly there is a political problem that could develop into a crisis. People right across the political spectrum, from Sinn Fein to the Unionists, had far more sense of partnership on practical matters. We have a week, possibly, before the Executive would have to be suspended; does the Secretary of State
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think that Sinn Fein-IRA will be able or will choose to make possible a continuation of the Executive without suspension?
Mr. Mandelson: I hope very much that that is the case. I do not think that any of us in the House can begin to imagine what the inner workings and political dynamic of Sinn Fein and the IRA are. I certainly do not know. I suspect from what I glean that there is a strong debate, a strong argument—a bit of a struggle—going on among different people who probably come from different backgrounds and have different leanings within the republican movement as a whole.
I suspect that Sinn Fein's leaders have tried hard. I believe that they have been personally sincere in their commitment to fulfilling that statement originally made by Sinn Fein at the close of the Mitchell review. But words, in these matters, while welcome and valuable, are not enough to sustain the confidence of both traditions in Northern Ireland for the political process. It is in order to rebuild and replenish that confidence in both traditions that we ask and plead that all the paramilitary organisations now do what the people of Northern Ireland want—that is, make a proper start to decommissioning.
Mr. Stuart Bell: As I understand my right hon. Friend, what we are doing next week is passing legislation that will be a sword of Damocles over all the work and institutions that have been created in Northern Ireland and throughout the island of Ireland. Will my right hon. Friend confirm that there can be no veto over these democratic institutions by terrorist organisations, and that the Government of the Republic of Ireland and the Government of the United Kingdom are absolutely as one that there can be no veto.
Can my right hon. Friend also confirm, building on the point made by my right hon. Friend the Member for Chesterfield (Mr. Benn), that it would be unwise to rush back to direct rule? We need time and patience. We need closeness with the Government of the Republic of Ireland. Is it not a fact that such closeness and co-operation are as much in the interest of Unionism as they are of nationalism?
Mr. Mandelson: I think that my hon. Friend's words are extremely wise and to the point. It is so frustrating and vexatious for people in Northern Ireland, who are so committed to devolution and to democracy in Northern Ireland, to find themselves cheated of those things by the actions of those who had hitherto placed themselves outside the democratic process. What we have seen over recent years is not only the all-important ceasefires, but, inching ahead, month by month, year by year, a growing distance being put by the paramilitary organisations between themselves and the violence that they engaged in in the past. The problem is that while they are now a long way from the sort of violence and military strategy, the bombings and the barricades, that were such an appalling feature of Northern Ireland in the past, they none the less seem no nearer to the decommissioning that is essential if the peace process is to be sustained in the future. It is that change that we need to see now.
Mr. John D. Taylor: The Secretary of State has confirmed from the de Chastelain report that, even though decommissioning of illegal arms was a

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requirement of the Belfast agreement almost two years ago, and our Prime Minister confirmed that he expected it to begin in June 1998, there is still no decommissioning of IRA arms. Could the right hon. Gentleman refer to another part of this absent de Chastelain report—which I hope some day we will see—and confirm that it states that such is the magnitude of the IRA arsenal, decommissioning would need to begin now for the completion date of 22 May 2000 to be achieved?
When the Secretary of State talks about suspension of the institutions, is he also intending to suspend the north-south bodies and the British-Irish Council? Finally, does he fully understand the seriousness of the situation in Northern Ireland tonight, irrespective of some comments from other parliamentary colleagues, and that spin and words will not rescue the situation? The only way to save devolution in Northern Ireland is to move swiftly to suspension and not play for time, because if we play for time, we will lose everything.
Mr. Mandelson: Nobody is playing for time. We are playing for product and playing for progress. If that progress and product require a little more time, I am sure that the right hon. Gentleman will be the last to deny anyone an opportunity to make it work, even at the 11th hour. If, in the event, that does not happen and fortuitous circumstances do not arise, I have already said that we shall take the powers necessary to place on hold the working of the institutions. I do not think that I can do more than that.
As for the right hon. Gentleman's remark about the magnitude of the weaponry that is held, he is right that it is great. It is not the case that General de Chastelain and his colleagues have said that for the deadline of complete decommissioning to be reached in May, a start has to be made now. It is desirable and necessary that a start should be made now, but the practical time frame to which the right hon. Gentleman referred is a little shorter than that.
Dr. Nick Palmer: Does the Secretary of State agree that the already difficult process of ensuring that deadlines in the Good Friday agreement are met is not necessarily made easier by the tendency of some parties to impose additional deadlines on other parties? Does he agree that we are discussing the need for a credible plan from the IRA for meeting the May deadline, and no other deadline? If it is necessary to suspend the institutions for a period, and in order to avoid demoralisation and discontinuity during that period, will my right hon. Friend consider asking some of the bodies that are working at the moment to continue on a shadow basis to advise the institutions of direct rule so that they will be able to resume their work officially, should the opportunity arise?
Mr. Mandelson: I can confirm that the legislation that we shall introduce next week will make it clearly understood that existing Ministers will continue to hold their posts, but will not exercise any of their functions. When—I hope it will be in a short time—devolution and the Executive resume, the status quo ante will simply apply. All existing Ministers—including the First Minister and the Deputy First Minister, assuming they are willing—will revert to their previous ministerial roles.
It is true to say that the only deadline in the Good Friday agreement is for decommissioning in May, and I certainly agree that we need a credible plan to achieve
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that from the IRA. However, I must add that a deadline is one thing, and a credible plan another. For one to be reached and the other implemented, we require the maintenance of confidence right across the community in Northern Ireland. If that confidence subsides, people's ability to sustain the Executive and the institutions will inevitable wane. It is in order to replenish confidence among everyone in all the parties in Northern Ireland that we need not just credible plans, but early moves to achieve decommissioning.
Mr. John Maples: Can the Secretary of State tell us whether the Irish Government fully support the statement that he has made and the actions that he proposes to take? Will they make their support absolutely clear, so that an unequivocal message goes from both Governments to the terrorists?
Mr. Mandelson: I do not think that there is any doubt at all—I must say this—about the position of the Irish Government in relation to this issue. The Taoiseach and his deputy and other Ministers have made it clear, again and again. As recently as January—on 13 January—the Taoiseach said:
"It is my view with certainty that the entire thing will fall apart if decommissioning does not take place. Whatever happens after that, that is another thing."
I do not think that he could have been clearer. I think that his support and his commitment to the implementation of the Good Friday agreement as a whole are necessary and welcome. He should be applauded for the strength of that commitment.
Mr. Mike Gapes: Those of us who had the privilege of participating in the negotiations in Castle Buildings in April 1998 always knew that the agreement was reached without trust. Does the Secretary of State agree that trust has begun to creep in, and that one of its bases is the excellent relationship between the British and Irish Governments? Will he assure the House that, whatever happens during the next week, we will not go back to bad relations between our two Governments, and that the excellent relationship that has been established will be built on in the future? Will he also assure the House that the agreement is the property not of the eight parties that signed it, or of the two Governments, but of the people of Ireland—in the north and the Irish Republic—who voted for it overwhelmingly? Will he confirm that the agreement will not be torn up, as some rejectionists want, but will continue in some form in the future?
Mr. Mandelson: There is absolutely no question of the Good Friday agreement being torn up. It will encounter many vicissitudes; it will encounter difficult times and, no doubt, strong opposition from familiar quarters. However, in my view, it is strong enough—robust enough—to withstand all that, because it is the right agreement for the people of Northern Ireland, as well as for those in the Republic. The agreement simply could not have been achieved without the efforts, put in over so long a time, by people in political parties in north and south and by the Governments both here and in the south. It is absolutely important that those relations are built upon, and they will be, so that that trust, which my hon. Friend rightly says has crept in, is kept in and built on in the future.
Mr. Jeffrey Donaldson: Will the Secretary of State now confirm exactly when we can

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expect to receive the de Chastelain report? Secondly, if decommissioning has not been completed by 22 May 2000, will the Secretary of State confirm that, under the terms of the Northern Ireland (Sentences) Act 1998, he is under a statutory obligation to halt the early release of terrorist prisoners, which is not due to be completed until July 2000; that between 22 May and the end of July, there is a considerable number—perhaps somewhere in the region of 150—of terrorist prisoners remaining to be released; and that it would be most unfair if those releases were to continue in the absence of the decommissioning of terrorist weapons?
Mr. Mandelson: On the specific point of the prisoner releases, the provisions relating to those flow from legislation that was foreshadowed in the Good Friday agreement. Prisoner releases had always depended not on the state of decommissioning, but on the state of the ceasefires. That remains the case. The maintenance of the ceasefires obviously remains under permanent scrutiny by the Government. We will not be suspending the Good Friday agreement; therefore, we are not going to put into reverse all those gains and all those changes that have flowed from its implementation. We will be suspending, if we need to—and only if we need to as a last resort—the operation of the political institutions, for what I hope will be a very short period of time.
As for the report issued by General de Chastelain, I have described fully and accurately—and certainly somewhat disappointingly—the contents. I can give the hon. Gentleman this assurance: it will not be changed prior to publication and it will be published alongside any further report, should one be issued.
Mr. Tony McWalter: In agreeing wholeheartedly with the tone and the content of my right hon. Friend's statement, may I ask him whether he thinks that the key to progress is to try to get some clarification of the relationship between Sinn Fein and the IRA? There seems to be a variable distance between them. When there is a ceasefire, Sinn Fein claims that it is close to the IRA and, hence, that it deserves the credit for the ceasefire. When there is a failure to decommission, there is a huge gap between them and Sinn Fein claims, as it did to us yesterday in Belfast, that it is nothing, or very little, to do with it. Does my right hon. Friend agree that, if there is a huge difference between Sinn Fein and the IRA on the matter, the undertakings that Sinn Fein gave in the Belfast agreement were not given in good faith because it did not have the necessary relationship to give those undertakings?
Mr. Mandelson: No, I do not think that it would be fair to say that any commitments made in relation to the Good Friday agreement were made in bad faith. I genuinely do not believe that. I think that there was a sincere commitment made by individuals to do their best to bring about the changes to persuade their colleagues in other parts of the republican movement to fulfil the Good Friday agreement in the way that they had signed up to. They do not appear to have been entirely successful, however. Rather than spending time clarifying the
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relationship between Sinn Fein and the IRA, I would just urge them to agree on what needs to be done and to get on and do it.
Several hon. Members rose—
Madam Speaker: Only five Members are waiting to be called. I am conscious that the Secretary of State has been at the Dispatch Box for more than an hour, and it is not usual to keep a Secretary of State at the Dispatch Box for even an hour. All parts of the statement have been well aired, so can I have brisk questions and brisk answers from the Secretary of State? I do not wish to disappoint hon. Members on such an important issue.
Mr. Andrew Hunter: The Secretary of State appears to be saying that he will not publish independently, in advance of any second report that there may be, the de Chastelain report on which he based his statement. Why is that?
Mr. Mandelson: I have already described accurately and fully the contents of the report. If I felt it were important and relevant for the House to see and to compare one report with another in the event of a further report being issued, I shall make sure that the original one is published alongside it.
Mr. Dominic Grieve: Will the Secretary of State take the opportunity, when he speaks to Sinn Fein, to point out to it that the two-year time frame was largely for the benefit of those who needed to have trust built? If they are not taking advantage of that to take staged decommissioning when the opportunity exists as they go along to have the reassurances that they may need, they are losing the benefits of the agreement to which they themselves signed up.
Mr. Mandelson: The hon. Gentleman—perhaps inadvertently—puts his finger on a thorny issue. The problem for members of Sinn Fein as they would present it, if they had taken up their seats here and were to respond to him directly, is that, whereas the Good Friday agreement was signed 18 months and more ago, the Executive and the institutions came into effect only last December. Therefore, they think that the time frame has become somewhat concertina-ed. It is a matter for them to make the case on their own behalf—I am certainly not going to do so for them—but it is not unreasonable to take that into account even though it does not provide an excuse for the inaction that we have seen.
Mr. Nicholas Winterton: When is an understanding and an agreement not an understanding and an agreement, and when are procrastination and good faith not procrastination and good faith? Does the right hon. Gentleman accept that it appears to be when we are talking about decommissioning? Does he accept that there can be no lasting, certain peace in Northern Ireland without the decommissioning of the huge arsenal of terrorist weapons? Will he now lay down a firm timetable for such decommissioning? We have been talking about it for three years.
Mr. Mandelson: The hon. Gentleman misunderstands the nature of my responsibilities and those of General de

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Chastelain and his colleagues on the decommissioning body. It is their job, not mine, to do what he has described, and they are trying their best to achieve it.
Mr. William Cash: Will the Secretary of State give the reasons for the Disqualifications Bill? Will he deny that it was based on a secret agreement with Sinn Fein-IRA?
Mr. Mandelson: The reasons for the Disqualifications Bill remain the same as described by my hon. Friend the Under-Secretary, and no, they were not the subject of any deal made with any organisation.
Mr. David Wilshire: I am most grateful to you, Madam Speaker, for your forbearance on this occasion.
In order that the people of Northern Ireland and the Members of the House can make a complete, fair and balanced judgment, will the Secretary of State undertake to publish the de Chastelain report before the House rises tomorrow afternoon?
Mr. Mandelson: I have nothing to add to the answers that I have already given on four occasions during the course of the statement.

Thames Gateway
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dowd.]
8.21 pm
Mrs. Christine Butler: Previously called the East Thames corridor, the Thames gateway begins in east London, and extends from Stratford and Greenwich to Tilbury in Essex and Sittingbourne and Sheerness in Kent.
Tonight, I shall argue that the Thames gateway should be further extended to include areas north of the river, just as at present it includes areas along the Kent coast to the south. That view is supported by the Essex chamber of commerce, and it is a major plank of the south-east Essex economic strategy document. Essex county council and the Essex economic partnership are strong supporters of that proposal, as is the East of England development agency, and the south-east regional planning committee, which is better known as Serplan.
The panel report following the public examination of the regional planning guidance for the south-east was a huge disappointment not only for its suggestion that the south-east should have 1 million more dwellings, but for its recommendation that the Thames gateway should not be further extended into Essex.
In December, Castle Point council informed the Government office for the east of England that the panel report did not reflect an adequate understanding of the economic problems of south-east Essex, and that further consideration should be given to those matters in a review of the Thames gateway planning guidance.
The council also expressed its concerns about the unco-ordinated approach to the transport infrastructure generally and the lack of attention to the problem of south Essex in particular. It went on to say that the panel report did not reflect a sustainable approach to the development of the region, and was likely to result in increased pressure on existing resources.
The south-east regional planning statement justified the extension of the gateway. South Essex has direct links to London and the existing gateway, with major industrial and service agencies linked to those of London. While it traditionally provides a large part of London's work force, a more sustainable strategy needs to be developed.
The north Thames area provides the nearest resort, tourism and leisure facilities outside London for the local Essex and visiting London population. It has direct transport links by road and rail to the existing gateway and London. They also link to the M25 and London Southend airport. The LTS rail route forms part of the trans-European network, and that reflects the area's appeal as the gateway to the continent. That is further supported by port facilities. The area also has pockets of deprivation that compare to those in the existing gateway south of the Thames.
Inclusion in the gateway would bring opportunities for sustainable economic development by reducing traffic demand on major routes into, and out of, London. It would reduce competition for jobs in London and the existing gateway. It could provide local people with better accessibility to local jobs, improve transport links by air, rail and water, and increase the range of economic development, including port and river facilities.

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That sets in context the plea that I make for Castle Point and, in particular, Canvey Island. For the life of me, I never understood why Canvey Island was ignored when the Thames gateway regeneration project first emerged. After all, it is an island strategically placed in the gateway to London, surrounded by the Thames and within the Port of London authority.
Almost 2,000 years ago, in the first century, the Romans spotted its advantages, as did the Viking invaders about 800 years later. The Vikings were defeated in 893 by King Alfred's army in the battle of Benfleet. When the Dutch settled on Canvey, they turned what had been rather a deserted place into farmland and established a small but thriving community. They drained the land, built a church and set about defending the island from the power of the sea.
Successive settlers did not change the essentially rural landscape that much until the 20th century. During the industrial revolution, Canvey escaped unscathed. No Dickensian horrors of urban living can be traced on Canvey, although visitors will find a plaque on the wall of the Lobster Smack noting that this remote spot was the inspiration for scenes from "Great Expectations". Even when the railways came and a new station was built at Benfleet, visitors from London seeking the joys of Canvey would have to cross Benfleet creek by the stepping stones.
Today, Canvey Island is a very different place. The strong sea defences established after the 1953 floods and the added security that they brought began to draw a much greater interest in the place from developers. Housebuilding started to accelerate. However, those intent on making a good profit from real estate were not the only ones to have their eye on the commercial potential of Canvey Island. This interest may have come late to Canvey but, when it did, it was rapid and merciless to the growing community of islanders, and Canvey was not prepared.
Canvey again was seen to occupy a strategic location on the Thames. It was recognised as a good place to store oil, a good place for an oil refinery and an ideal location to import all sorts of high-bulk commodities, from coal to crushed rock, to feed the rapacious jaws of London and its hinterland. The competing interests between a rapidly rising population and new industrial development was never properly resolved. There was no comprehensive plan to care for Canvey and Canvey suffered.
How could a small island be expected to cope with all those competing pressures? Well, it could not. Thank goodness Essex county council stepped in during the early 1990s to back islanders against the plans of Peter de Savory to build a massive 4,500 more houses on the last remaining expanse of ancient grazing land on the western part of Canvey.
My involvement with the island began at the time of the public inquiry into the proposal and, despite all the lobbying that was going on at the time by various politicians, the Secretary of State made the right decision and refused the application. However, Canvey's future was still uncertain. Development, taking no account of the needs of the population or a long-term, sustainable future for Canvey, still remains a threat.
Very soon, the planning committee will have to consider an application for the storage and auction of accident-damaged cars on a 30-acre site at the bottom of
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Haven road. That is a big area. Many of the cars will become scrap. The application comes from HBC, which trades from Charfleets industrial estate. Should the project go ahead, the result could be an expansion of a land use that is prejudicial to the best interests of the island. Canvey does not need more scrap cars on this scale. The scheme will offer virtually no employment. Instead, it will worsen traffic conditions, in particular making the lives of the people living in and around Haven road a misery. It will create an enormous ugly scar on the flat landscape of Canvey. Who would want to be near that?
Canvey needs to attract the kind of things that its people need and want, such as good, clean jobs, better amenity and improved road access. I firmly believe that Canvey is not big enough to accommodate dirty, untidy industry and almost 40,000 people. We need to implement a new 21st century vision for Canvey, putting the blight of the last half of the 20th century in the history books.
Part of this speech, which outlines my apprehension for the future of Canvey, was printed in one of our local newspapers recently, and it seems to have touched a raw nerve on the part of one Terry Holding, principal director of HBC Group. He responded in a disgraceful and shameful manner.
Yesterday, my office received several telephone calls from concerned constituents who had been the unfortunate recipients of a malicious and defamatory letter about their Member of Parliament, written by that man. He is the same person who was rejected at the ballot box when he stood as a Conservative candidate in the local elections less than a year ago. I cannot allow myself to be intimidated by such an approach, and nor could any Member of Parliament. I will continue to represent the interests of Castle Point and my constituents.
With reference to Mr. Holding's allegations, and to set the record straight, I have never said that I had secured a company to build and run a marina at Holehaven on Canvey, but I have pushed the idea that a marina could be the key to unlocking the problems that we are experiencing in attracting the right kind of investment on development land around Safeway.
Properly and sympathetically designed, that could help to regenerate the land on which the former Occidental oil refinery once stood. It could attract projects for environmental regeneration, protected open space, conservation and amenity, promoting the attractiveness of the area. Plans for a high-quality business park would therefore be far more likely to go ahead.
It is of paramount importance that a better image—as well as reality—should be created for Canvey. For the land south of Northwick road, that will require a great deal of hard work, commitment and imagination. We must be brave enough to challenge old expectations and welcome new thinking. We must believe that, in the end, our aspirations can be realised. We can overcome the legacy of past carelessness, but we need help.
Castle Point is one of the riparian authorities included in the new Thames Estuary partnership. The partnership is a neutral body set up to promote integrated policies for the whole of the Thames estuary. It is looking at matters such as improving air quality, enhancing bio-diversity, sustainable commercial use, managing fisheries, flood defences, cultural resources, landscape character, and waste and water management. It aims to act as a catalyst to co-ordinate sustainable activities through London to the lower reaches of the Thames.

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I have just read the partnership's strategy document, "Today's Estuary Tomorrow" and I applaud the way in which it has been drawn up. It gives a significant lead to the way in which we should be thinking about the Thames estuary. It would be an anomaly if the Thames gateway planning guidance did not extend to all the Thames estuary authorities, including the north side of the Thames. And it would be a great shame if, to steal a phrase, Canvey Island were left out and forgotten.
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The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes): I congratulate my hon. Friend the Member for Castle Point (Mrs. Butler) on securing the debate. I welcome the opportunity to reassure her of the Government's desire to encourage new economic development and investment in Canvey Island and the whole of south-east Essex, and to reiterate our commitment to regional planning.
I am aware that, in recent years, south-east Essex may not have prospered to the same extent as some other parts of the south-east region. The area has much to recommend it, as my hon. Friend made clear. It is rich in history and has areas of countryside that are important for nature conservation, and some prestigious new shopping and leisure developments.
However, like my hon. Friend, I am conscious that there are still pockets of previously used land, especially on the Thames estuary, that suffer from dereliction and contamination and where improvements to the environment are a priority. There is a need to attract new jobs to the area, and to create opportunities for local people to learn new skills and make more rewarding use of their existing skills. We also want to reduce the number of people who have to leave the area every day to work elsewhere. I know that such daily commuting adds to the congestion that is a common occurrence, especially for those trying to get in and out of Canvey Island.
Regeneration of the area in accordance with the principles of sustainability to which the Government are committed must be a clear objective, and we will do all that we can to encourage that process. Regeneration can best be achieved through partnership and co-operation between local authorities, local people and local businesses. My hon. Friend talked about a local partnership.
The policies and proposals in the Castle Point local plan and the emerging Essex and Southend replacement structure plan, which have been subject to full public consultation and debate, set out the strategy for future development in the area. It is right that decisions about the scale and location of new development, whether intended to provide houses or jobs, should be made by local people. However, there is also a strong regional dimension, which my hon. Friend recognises.
Local authority development plans are part of a framework, which must continue to be set by regional planning guidance, so that what happens in south-east Essex is not divorced from the spatial strategy for the wider region. It is the role of regional planning guidance to consider whether there are, regionally or sub-regionally, suitable areas or broad locations for major housing, business, retail and leisure uses.
At regional level, regional development agencies can play an important role in encouraging and attracting economic investment to areas such as south-east Essex,
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where that is urgently needed, and in supporting regeneration. The RDAs for the eastern and south-eastern regions have published their strategies for improving the region's economic performance and enhancing its competitiveness. They will need to be reflected in the final RPGs for those regions.
I do not need to remind the House of the changes we have made to the preparation of regional planning guidance. From being top-down statements of generality under the previous Administration, we intend that they should from now on embody an agreed spatial strategy for each region. The strategy will be agreed by the interests in the region. Those groups will integrate spatial planning with economic and transport planning and incorporate a more sustainable approach, bearing in mind the needs of local communities such as those that my hon. Friend described, and those who live, work and take their leisure in the area.
As my hon. Friend knows, RPG is subject to a public examination. Preparation of RPG for the south-east and the East Anglia is now at an advanced stage.
As the House knows, Serplan's draft RPG for the south-east has been subject to public consultation and a public examination. It is now necessary, following the public examination, for the Secretary of State to consider the panel's report and all the representations that have been made on the draft RPG. We want sustainable development in the south-east to be the basis for continued economic growth. We cannot carry on building in the dispersed pattern encouraged by the previous Government. However, as has been illuminated in the wider debates, including recent debates in the House, since Serplan published the draft RPG there are clearly some issues that need to be carefully addressed before we go forward to the final RPG.
We hope to be able to publish proposed changes to the draft RPG shortly, and my hon. Friend will understand that I cannot say more at this time about those changes. However, they will be subject to full public consultation.
My hon. Friend has made a powerful case for the Thames gateway to be extended beyond its present boundaries to include Canvey Island, and I understand her desire for that to be given the green light. There is no doubt that the whole of the Thames gateway, from London to Essex and north Kent, offers huge potential. We have a range of sites, acres of development land and a real commitment from central and local government. The Government are committed to co-ordinating the delivery of policies at a level never seen before and recognising the importance of an approach that combines environmental, economic and social objectives. We are working with partners, especially local authorities and regional development agencies, to bring together the support available and needed to make sure that the Thames gateway is developed in a way that maximises the benefits for everyone. As the economies in the Thames gateway prosper, we expect them to bring beneficial spin-offs to neighbouring areas, including those in Essex.
The proposed extension of the Thames gateway boundary to include not only Canvey Island but the whole of Castle Point plus Southend, part of Basildon and the area of Thurrock fronting the river that is not currently within the gateway is strongly advocated by Essex county council and the district authorities concerned. As my hon. Friend said, it has been raised by Serplan as part of the

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review of RPG for the south-east. Serplan's draft RPG emphasises that the Thames gateway remains a key regional priority and states that its designation should be extended to include Castle Point, Southend and part of Basildon. The draft RPG also identifies the extended Thames gateway, embracing south-east Essex, as a priority area for economic regeneration—a specific priority area.
As my hon. Friend pointed out, the Crow panel report—the report on the public examination of Serplan's report—did not consider an alteration of the Thames gateway boundary to be necessary, so there is a conflict between it and Serplan's recommendations. I know that that is one of her concerns. As I said in relation to the draft RPG as a whole, I cannot therefore comment on the merits of the proposed boundary extension at this time—I know that she understands this—because that would
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pre-empt the formal consultation process and the Secretary of State's consideration of the matter, which he is actively undertaking at present. However, I can say to her that the Government are under no obligation to follow the Crow report blindly. We are taking account of the panel's recommendation in the light of all the material factors and making an assessment of how the regeneration of the Thames gateway and those areas adjacent to it can best be achieved. We have before us the different views from Serplan and the district councils on the one hand and the panel on the other.
My hon. Friend has made a strong case and I have heard her very clearly. I shall ensure that her views are fully considered. I thank her for giving me the opportunity to provide that assurance and to make those points to the House.
Question put and agreed to.
Adjourned accordingly at eighteen minutes to Nine o'clock.