Commons Sitting of 5 February 2001

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  HOME DEPARTMENT
  The Secretary of State was asked—
  HOME DEPARTMENT

    Laboratory Employees (Intimidation)
    Dr. Brian Iddon: What measures he is taking to protect the employees of laboratories conducting medical research involving animals from intimidation by militant animal rights activists. [147087]
    The Secretary of State for the Home Department (Mr. Jack Straw): As I told the House last week during the Second Reading of the Criminal Justice and Police Bill, we intend to give the police additional powers to ensure that businesses and individuals can go about their lawful business without fear of violence or intimidation. The measures will allow the police to take action to prevent extremists from protesting outside people's homes and will strengthen the law against the sending of malicious communications.
    In addition, we are consulting closely with the police service, the Crown Prosecution Service and the courts to achieve an effective and consistent approach to the enforcement of the law in this area.
    Dr. Iddon: The Government have already done a great deal to cut out unnecessary animal testing, but is my right hon. Friend aware that if the current harassment of workers continues, animal testing will be driven abroad, where regulations are not as stringent as those in this country? That will not only damage a world-class pharmaceutical industry and defeat one of the prime objectives of the campaigners but will result in a loss of jobs.
    Mr. Straw: I agree entirely with my hon. Friend. So-called animal rights protesters are at best misguided, and, frankly, many of them are evil, both in their intention and their actions. We need to recognise that many medical advances are based on necessary animal testing.
    Mr. Michael Fabricant: Is the Home Secretary aware that there is a farm in Hall Cross in my constituency which breeds guinea pigs and other animals for testing, specifically to find cures for diseases and to create vaccines and so forth, and that its staff and owners have been intimidated? Does the right hon. Gentleman not
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    think that such animal fascism practised by human beings is totally wrong? The irony is that British pharmaceutical companies will simply import guinea pigs and mice from abroad, where there are not regular inspections of the kind that the Home Office conducts here.
    Mr. Straw: I do not know that particular farm, but I have great personal knowledge of a similar farm in west Oxfordshire, where I know the farmer and his wife. That farmer was subject to the most appalling intimidation by so-called animal rights protesters. In the end, he decided to close his cattery, with exactly the consequence, I imagine, that the hon. Gentleman has described; I entirely agree with what the hon. Gentleman said.
    Mr. Andrew Miller: I concur entirely with my hon. Friend the Member for Bolton, South-East (Dr. Iddon) about the importance of the work. One of the difficulties is the lack of public understanding of some of the important issues surrounding the processes used by pharmaceutical companies in developing drugs that are essential to our lives. Will my right hon. Friend consider liaising, through the Department of Health, with the chief medical officer to try to introduce into the public domain a simple guide explaining why animal testing is essential? Some of the activists are winning the argument unnecessarily, and I am sure it is possible to persuade the public otherwise.
    Mr. Straw: I agree with my hon. Friend, and I shall certainly take the matter up with my right hon. Friend the Secretary of State for Health; but British pharmaceutical companies could do more together, through their association, to publicise all the drugs and changes in medical and surgical procedures which have been dependent on animal experimentation, and I urge them to do so.
    Mr. David Lidington: I endorse the Home Secretary's approach. Does he agree, however, that one of the underlying problems that allows such terrorism to take place is the public availability of the home addresses of directors and ordinary shareholders of public companies? I invite him to take the lead in trying to achieve joined-up government on this matter because I was advised by one of his ministerial colleagues at the Department of Trade and Industry on 8 January that that Department is unlikely to consider introducing legislation to change the requirements to disclose home addresses until late in 2002 at the earliest. Does the Home Secretary agree that the terrorism and intimidation occurring at people's homes at the moment is utterly intolerable in a liberal or civilised society? I urge him to contact his ministerial colleagues to see whether other Departments can follow the lead that he is taking in Whitehall.
    Mr. Straw: I agree that this problem is also faced by the directors and shareholders of the companies. My colleague at the Department of Trade and Industry, Lord Sainsbury of Turville, was right to say that the DTI is unlikely to introduce legislation until 2002. However, I can reassure the hon. Gentleman that we are actively considering whether there is a vehicle in this Parliament which would allow us to take powers to do exactly what he, and I believe the whole House, wishes to be done.

    Crime Statistics (Northamptonshire)
    Mr. Phil Hope: If he will make a statement on the levels of crime in Northamptonshire. [147088]
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): In the 12 months to September 2000, recorded crime in Northamptonshire fell by 9.5 per cent. compared with the previous 12 months. Domestic burglary was down by 14 per cent. and vehicle crime by 15 per cent. Only two forces in England and Wales had a larger overall decrease than Northamptonshire.
    Mr. Hope: The falling crime rate and extra police officers in Corby and east Northamptonshire are welcome news to people in urban and rural areas. The Minister of State, my right hon. Friend the Member for Brent, South (Mr. Boateng), visited the Kingswood estate in my constituency a few days ago and saw at first hand not only our problems but the way in which the police and the community are working together in partnership, and with the extra Government money, to reduce burglary.
    Problems remain, however: cars continue to be vandalised and homes broken into. The effect on the victims is devastating. People's perceptions of whether the estate is a safe place to live are also affected. Will my hon. Friend assure me that he will consider seriously—and I hope respond positively to—the Kingswood estate's bid for CCTV cameras to help reduce the fear of crime?
    Mr. O'Brien: We will certainly consider the bid seriously. Of course, I cannot guarantee the outcome. The Minister of State, my right hon. Friend the Member for Brent, South, who visited Kingswood recently says that he saw the partnerships between the police, local authorities and, indeed, my hon. Friend, who has contributed enormously to building those relationships. My right hon. Friend also said that those partnerships were dynamic and were seriously addressing the problems of crime in Corby. I congratulate my hon. Friend on that. We shall do all that we can to maintain the position that, under Labour, crime is falling and police numbers are increasing.

    Asylum Support
    Mr. John Randall: What discussions he has had with local authorities regarding the dispersal of asylum seekers. [147089]
    The Minister of State, Home Office (Mrs. Barbara Roche): I regularly meet local authority representatives to discuss issues that arise from the introduction of the national asylum support service. I visited Newcastle recently to meet representatives of the north-east regional consortium for asylum support.
    Mr. Randall: The Department's dispersal strategy does not cover unaccompanied asylum-seeking children. My local authority, the London borough of Hillingdon, is currently suffering a funding gap of £3 million in providing services for those children. Now that the Department has
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    responsibilities for such funding, can the Minister assure my constituents that adequate funding will be available to my local authority?
    Mrs. Roche: I am pleased that the hon. Gentleman has raised the important matter of unaccompanied asylum-seeking children. Last year, Hillingdon received £500 per week for each unaccompanied minor aged up to and including 15, and £300 per week for each asylum seeker aged 16 or 17.
    We will consider the responses to the consultation document. The Department is in active contact with local authorities. The subject is important, which is why I have taken a close personal interest in it.
    Mr. Neil Gerrard: My hon. Friend knows that unaccompanied minors become the responsibility of the NASS when they are 18. Unlike other children who are in local authority care, they are not subject to the provisions of the Children (Leaving Care) Act 2000, under which we expect local authorities to follow children up when they become 18. Dispersal causes problems for children who have been in care and who are subsequently moved, thus losing the support of the area in which they lived. Will my hon. Friend discuss the matter again with local authorities to ascertain whether we can devise a better system for those children?
    Mrs. Roche: My hon. Friend makes an important point based on his knowledge as chairman of the all-party group on refugees. My officials are in contact with other officials on the matter. We are considering whether children can be catered for when they go on to the NASS. I assure my hon. Friend that we take account of people's location for the purposes of examinations and the educational cycle.
    Mrs. Jacqui Lait: Does the Minister believe that it is humane, as part of the dispersal technique, to require a young Rwandan refugee who lives in Beckenham to attend an interview in Liverpool at 9 am? That means that she has to catch a train that leaves London at 3 am. She speaks only French, and is traumatised by her brother's death in front of her in Rwanda. Is the Government's policy truly humane?
    Mrs. Roche: We must ensure that people are interviewed as quickly as possible. I understand the hon. Lady's interest in the matter, but nothing is more detrimental to those seeking asylum than facing years of delay. That is why we have made resources for hearing cases available in other parts of the country. We certainly consider people's travel arrangements.
    I have had correspondence with the hon. Lady on a number of other matters. She has now brought this issue to my attention, and I shall certainly consider it and get back to her. The key issue is that we must ensure that people have an early resolution of their cases. We have expanded the operation to Liverpool and Leeds in the interest of clearing the backlog which, sadly, the hon. Lady's Government left us.
    Fiona Mactaggart: I thank the Minister for attending a meeting with me and Slough borough council about support for asylum seekers. Will she assure me that

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    she will consider carefully our case for additional resources, so that the local residents of Slough will not be expected to pay for asylum seekers out of their council tax?
    Mrs. Roche: My hon. Friend will know that we have made increased sums of money available. She will also know that Slough has benefited from special increases such as those that we gave to London. Slough was the only other place to receive them, because of the particular nature of its circumstances. We shall consider carefully what the Audit Commission has to say about the variations in grant.
    Miss Ann Widdecombe: Will the Minister tell us what percentage of those who have not only failed to make a case for genuine asylum but have failed even to make a case for exceptional leave to remain on compassionate grounds have been returned?
    Mrs. Roche: As I have frequently said to the right hon. Lady, we need to increase the rate of return. Last year, we returned more than 8,000 people, which is much more than her Government were able to do. The way to affect the return rate is to have more detention space at the other end of the process. I am therefore disappointed that the Conservatives oppose the increase in detention space. I am afraid that when it is in their own back yards, they simply will not have it.
    Miss Widdecombe: Perhaps the hon. Lady has missed the point. We are proposing that all new applicants for asylum should be detained in secure reception centres. She could not give us the facts, so let me give her some. Last year, there were 76,850 refusals and only 7,610 removals. Is it not true that the Home Secretary and his friends do not know where those who have been refused are; have not a clue how to find out where they are; have no plan to work out a way of finding out; and therefore could not remove them even if they had the will to do so, which patently they do not?
    Mrs. Roche: Let me assist the right hon. Lady. I am anxious that she should be in possession of the full facts, although I realise that they will not alter her view. In 1996, 3,190 people were removed. In 1999, more than 7,600 were removed. In 2000—[Interruption.] These are provisional figures. [Laughter.] Opposition Members laugh, but the thing about provisional figures is that they can go up. In 2000, 8,971 people were removed. That is far more than before. We have doubled the figure and we are reducing the backlog.
    I shall deal with the right hon. Lady's point. It would cost billions of pounds to activate her proposals. Not only that, but she has backed away from them and now talks about applying them only to the white-list countries first. There has been a 47 per cent. reduction in that area, and we now have to deal with the difficult countries. The right hon. Lady proposes to detain people for years, which is not only expensive but inhumane and wrong.

    Home Detention Curfew Scheme
    Mr. Stephen Day: How many violent offenders have been released from prison early on the home detention curfew scheme; and if he will make a statement. [147090]
    Mr. Edward Leigh: What categories of offences have been committed by prisoners released under the home detention curfew scheme while they were on the scheme; and if he will make a statement. [147091]
    Mr. Geoffrey Clifton-Brown: How many prisoners, in what categories, have been released on the Government's early release scheme to date. [147100]
    The Minister of State, Home Office (Mr. Paul Boateng): As of 31 December 2000, 30,409 prisoners had been released on home detention curfew since the scheme began in January 1999. Of those, 5,573 had been convicted of an offence of violence. A table showing the breakdown of the original offences committed has been placed in the Library. A total of 533 prisoners have been reported to the Prison Service as having been convicted, charged or pending prosecution for an offence allegedly committed while on curfew. A table showing a breakdown of the offences by category has been placed in the Library. The most common offence types are motoring offences and theft.
    Mr. Day: The Minister will be aware that the latest figures show an increase of 21 per cent. in the number of robberies. Does he believe that there is perhaps a connection between that and the fact that the Government have released more than 1,200 robbers back on to our streets before they have served even half of their sentence?
    Mr. Boateng: No, I do not. The hon. Gentleman really ought to bear in mind his Government's record on the issue. The Criminal Justice Act 1991 introduced measures that provide for early release before completion of sentence for every prisoner, including robbers. What we are about is better management of the transition from prison to custody. The strategy is working, because there is a 94 per cent. success rate, which is better than that for any criminal justice measure that the Conservatives were ever able to introduce.
    Mr. Leigh: Will the Minister confirm that 1,035 further offences were committed by criminals while subject to the scheme—including: threats to kill, three; actual bodily harm, 22; woundings, six; assaults, 35; rapes, two; indecent assaults, one; burglaries, 46; robberies, 17; and drug offences, 111? What does the right hon. Gentleman have to say to the 1,000 people who were robbed, burgled, indecently assaulted, raped, assaulted or wounded because of his scheme?
    Mr. Boateng: I know that the hon. Gentleman gives these matters more serious consideration than his question reveals. He knows that the home detention curfew scheme was supported by the all-party Home Affairs Committee. He knows that his colleagues the hon. Members for Aldershot (Mr. Howarth), for Surrey Heath (Mr. Hawkins) and for Woking (Mr. Malins) all supported the scheme, and did so because it has a failure rate of only 1.8 per cent. That is minuscule compared with the failure rate of schemes introduced by the Conservative party. The scheme is about

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    protecting the public better and it ought to be welcomed by the all-party consensus that originally appreciated its benefits.
    Mr. Clifton-Brown: Whatever gloss the Minister may put on the scheme, he will know that those who are subject to it include 4,671 drug dealers who have been sentenced to 22 months or more but let out having served less than half their sentence. The drugs problem is particularly serious in Gloucestershire—there has been a huge increase in the number of registered drug addicts since the election—so surely it cannot be right to let people out before they have served their full sentence. It is insidious. Will the right hon. Gentleman consider revoking this half-baked scheme?
    Mr. Boateng: What I do know, as the hon. Gentleman knows, is that the Crime and Disorder Act 1998 is making a real contribution in his county to the multi-agency approach to crime reduction—a fact which he ought to celebrate. The home detention curfew scheme contributes to the controlled and measured rehabilitation and release back to the community that underpins the measure. It is sensible, it is making a difference and it is contributing to crime reduction. That is why the hon. Members for Woking, for Surrey Heath and for Aldershot supported it and why the overwhelming majority of hon. Members support it. I hope that the hon. Gentleman will come to support it and will abandon the mischievous and misguided campaign against it.
    Mr. Simon Hughes: Does the Minister accept that, despite the home detention curfew scheme—and as Lord Woolf said in his lecture last week—the public are given no greater protection when we keep in prison for short sentences a significant number of people who pose little danger to society?
    Does the Minister agree with us and with Lord Woolf that people who receive a short sentence with no rehabilitation work at all are actually getting what Lord Woolf called a "soft option"—and an ineffective option—and that community sentences would be far more effective? Will he review the sentencing policy that sends many people to prison for short periods with no work done on them that prevents reoffending? Will he also ensure that people who are ill or addicted are treated either in hospital or in the community, where they can be far more effectively rehabilitated and are less likely to offend again?
    Mr. Boateng: Each type of person to whom the hon. Gentleman referred will have been sentenced by the courts. It is the Prison Service's duty to implement and carry out sentences imposed by the courts, which take all matters, including the home detention curfew scheme and other factors, into account when passing sentence. The court determines that it is necessary that those people be in prison, and the Government must make sure that prisoners are held in safe, decent and humane conditions while we address the causes of their offending. That is what we are doing. We are investing record amounts in that, and we shall continue to do so.
    Mr. John Bercow: Is the Minister proud that the figure of 31,000 includes those guilty of
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    manslaughter, of attempted murder, of actual and grievous bodily harm, of drug dealing, of cruelty to children, of sex offences, of burglary, of robbery, of violent disorder and, indeed, of affray? How does he justify the release, after serving only six weeks, or less than one third of their sentences, of no fewer than 218 people convicted of assaulting policemen? Why does he not understand that that decision on its own makes a mockery of his claim to support the police and is yet further proof of his Department's institutionalised wimpishness?
    Mr. Boateng: The hon. Gentleman does himself no justice at all by that inane and absurd comment. He knows that our first duty is to protect the public. He also knows that the Criminal Justice Act 1991, as amended by the legislative provisions for the home detention curfew scheme, does that by controlling the release of those convicted and sentenced by the courts. It is the courts that determine the length of sentence. They impose a sentence knowing that in cases where individuals are eligible for it, the home detention curfew scheme will be the basis on which prisoners are released.
    If the hon. Gentleman would like to join me in visiting his local prison and meeting the governor there, he will find out that the risk assessment carried out by the governor has contributed to the overwhelming success of the scheme. Ninety-four per cent. is a record for which Conservative Members would have given their right arm when they were in office.

    Police Recruitment and Housing Costs
    Mr. Desmond Swayne: If he plans to meet chief constables to discuss recruitment and housing costs. [147092]
    The Secretary of State for the Home Department (Mr. Jack Straw): Ministers meet chief constables frequently. The crime fighting fund will enable police forces to recruit 9,000 police officers over and above the number previously planned in the three years 2000–01 to 2002–03, with the aim of bringing numbers overall to record levels. Following the increase of £3,300 in the London allowance, which I agreed last year, an offer has been made of £2,000 for those working in the home counties forces within a 30-mile radius of central London, and £1,000 for those within a radius of 30 to 40 miles. The Police Negotiating Board is meeting on 8 February and I very much hope that an agreement will be reached without delay.
    Mr. Swayne: The Secretary of State will be aware that the crime fighting fund has granted Hampshire an additional 82 officers in the current financial year, but that because of our inability to recruit them, we are having to ask that 62 of those be deferred to next year. That leaves us having to recruit 300 fantasy officers next year. The right hon. Gentleman's arrangements for London and the radius around it will make our position worse. What does he propose to do to address the economic realities facing recruits in Hampshire and the Isle of Wight?
    Mr. Straw: The hon. Gentleman fantasises about a variety of things, and we are all aware of the phantoms in his life. I am pleased to reassure him that the increase in recruitment is real. In January 2001, there was an increase

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    in the number of recruits entering training college of two and a half times—to 820—over the figures for January 12 months ago. The hon. Gentleman should bear in mind the fact that other home counties forces such as Sussex, Surrey and Kent do not have the recruitment difficulties that Hampshire is experiencing.
    The hon. Gentleman asked me what we are doing about the problem in Hampshire. We have made an offer to the Police Negotiating Board. I hope that that offer or something very similar to it is quickly accepted. The sooner it is accepted, the sooner the genuine recruitment problems, which I recognise exist, will be sorted out. I am pleased to tell the hon. Gentleman that the chief constable of Hampshire, Mr. Kernaghan, wrote to me only last week to say that he was pleased to learn that the Home Office was addressing the needs of home counties forces.
    Mr. Christopher Leslie: When my right hon. Friend next meets the chief constable of West Yorkshire, will he discuss with him the plans to reorganise the divisional command structures in the Bradford district? There are extremely welcome plans to rationalise and reduce the amount spent on administration and bureaucracy, but we need to ensure that those resources can be redirected to increasing the number of front-line police officers even further.
    Mr. Straw: I am happy to receive representations from my hon. Friend about the reorganisation of the Bradford district. That is a matter for the chief constable and the police authority. Many other chief constables and police authorities have reorganised their command structure, and as a result have assured the release of hundreds of additional officers for front-line duties.
    Mr. Jonathan Sayeed: On 16 February last year, the Prime Minister said:
    "every single promise that we made—on getting waiting lists down, getting class sizes down and increasing police numbers—will be met by the next general election".—[Official Report, 16 February 2000; Vol. 344, c. 948.]
    The Government are failing to get real waiting lists down, and they are failing to decrease the number of large secondary classes. Can the Home Secretary guarantee that there will be at least as many police officers at the time of the next general election as there were at the time of the last?
    Mr. Straw: I am happy to be judged by the promises that we made, which included reducing class sizes in infant schools—not in secondary schools. That promise has already been met, and waiting lists have already been reduced. The Conservative party made mendacious promises about police numbers, promising an extra 5,000 police officers when funding was to decrease. We did no such thing. The promises that we have made about increasing the number of police officers year by year will be met, and by 2003–04 police numbers will be at record levels—no thanks to the Conservative party.
    Mr. Bill Rammell: When I discussed the issue of police recruitment in my constituency recently, I was told that one of the worst decisions affecting recruitment in the south-east in the past 10 years had been the abolition of the housing allowance by the previous Government in 1994. The £1,000 and £2,000 allowances
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    are an effective response to the problem, but they have been on the table for some while now. Will my right hon. Friend press the Police Negotiating Board and the Police Federation to reach a speedy conclusion, because that will lead to higher recruitment in my constituency?
    Mr. Bercow: Robert Halfon for Harlow!
    Mr. Straw: I do not know who he is, but he certainly will not be for Harlow.
    My hon. Friend the Member for Harlow (Mr. Rammell) is entirely right. I share his frustration with the proceedings of the Police Negotiating Board. I am afraid to say that, as a result of the difficulties that preceded my offer of a £3,500 increase for Metropolitan police officers, the process was unnecessarily delayed for months and months. I hope that local police federations representing the forces, especially in the home counties, will put pressure on their colleagues in the national federation to accept that this is the best offer that could be made; that the problems go back directly to the previous Government, who abolished the housing allowance altogether; and that our proposal will make a big difference to recruitment, not least in my home county area of Harlow.

    Dangerous Driving (Deaths)
    Mr. Tim Loughton: What recent representations he has received regarding the penalties available in cases of causing death by dangerous driving. [147093]
    The Minister of State, Home Office (Mr. Charles Clarke): The Government published a consultation paper on road traffic penalties on 19 December last year. Both before then and subsequently, we have received a large number of representations from members of the public, Members of Parliament—including the hon. Member for East Worthing and Shoreham (Mr. Loughton), whom I met to discuss the matter—and a wide range of organisations. We shall take all those representations into account before reaching final views based on the consultation paper.
    Mr. Loughton: As he said, the Minister is aware of my concern about the inadequacy of penalties for causing death by dangerous driving following the tragic killing of PC Jeff Tooley in my constituency. Yet in the year of his death, only 13 of 152 people convicted of causing death by dangerous driving were given sentences of five years or more.
    Why, in the document to which he referred, has the Minister ducked living up to his own tough words about making life sentences available for the worst cases of causing death by dangerous driving, rather than the current woefully inadequate 10-year maximum? What message does that send to the families of victims, and to perpetrators, when 190 killer drivers have been let out on the Government's early release scheme having served, on average, 42 per cent. of their time?
    Mr. Clarke: The hon. Gentleman's point about the penalties available is important. Since the beginning of 2000, we have received representations from 29 Members

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    of Parliament about the deaths of constituents during that period as a result of dangerous driving. In our consultation paper, we included a set of proposals which I believe took the situation significantly forward, not least by sending courts the message that we expect them to impose penalties that are appropriate to the crimes rather than being laughably less than that, as is too often the case.
    The hon. Gentleman's general point about life sentences is legitimate. No doubt he and others will continue to advance that argument as we decide what action to take, on the basis of responses to our consultation paper.
    Mr. Bill O'Brien: I implore my hon. Friend to have regard for the fact that the Crown Prosecution Service has a large part to play in sentencing. The offences of dangerous driving and careless driving must be divorced, as they carry different sentences. Will my hon. Friend assure us that magistrates who hear evidence about such offences will be backed up? They listen to all the evidence before making decisions, and it would be wrong to undermine their work.
    Mr. Clarke: I can give my hon. Friend the assurances that he seeks. I can also tell him that the average sentence for the causing of death by dangerous driving, for instance, has been rising rather than falling; but the Government feel that that is not enough, which is why we published the consultation paper and why we intend to take action once we know what responses have been received.
    Mr. Nigel Evans: I am extremely concerned about the number of accidents caused by drivers who have taken illegal substances. Would the Minister consider organising an education programme involving leaflets for those who apply for driving licences or to renew their tax discs? It should be explained to people that certain drugs stay in the bloodstream far longer than alcohol, and that, while they should not take such drugs in the first place, they certainly should not drive if they have been taking them.
    Mr. Clarke: The hon. Gentleman is entirely correct in all that he says. We already have a substantial education programme on drug and alcohol abuse and driving, but I shall be happy to consider his specific proposals. This is a serious problem, and it needs to be addressed seriously.
    Mrs. Gwyneth Dunwoody: My hon. Friend will know that the best way in which to murder anyone in this country is to kill them with a motor car. The problem has been with us not for a short time, but for a very long time. Will my hon. Friend please give us an undertaking that decisions will be made as a matter of urgency? The agony of families who lose someone in this way is almost unbearable, and it is terribly important for us to show them that we take the matter seriously.
    Mr. Clarke: My hon. Friend is entirely right in every respect. The consultation paper was a major step forward. It is one of which I am personally proud and it advances significantly the argument on penalties. In my role as a Home Office Minister, I have met many hon. Members, including the hon. Member for East Worthing and Shoreham, and families who have been bereaved as a
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    result of dangerous driving. Significant support can be given to the families of victims of road crime and we have increased the resources for major educational programmes on drinking and driving, but there is no doubt that the most effective cure is to prevent the accidents from happening in the first place. That is why higher penalties are necessary and why the legislation to reduce speeding through the use of speed cameras, which has just gone out of the House of Commons and is being considered by the other place, is important.

    Police Administration
    Ms Ruth Kelly: What measures he has taken to reduce and remove unnecessary administrative burdens on the police service and to ensure that police officers spend more time on operational duties. [147094]
    The Minister of State, Home Office (Mr. Charles Clarke): We are implementing proposals from the recent report entitled "Making a Difference: Reducing Police Paperwork" and, last November, we issued police forces in England and Wales with a revised manual of guidance for the preparation, processing and submission of files. That will reduce considerably the number of forms that officers have to complete when they pass cases to the Crown Prosecution Service. We are also investing in a wide range of new communications technology to minimise the paperwork that officers are required to process.
    Ms Kelly: I thank my hon. Friend for that reply. Will he assure me that he will continue to move resources from bureaucracy to front-line officers? My constituents in Bolton, West, whose communities are being scarred by a very small minority of young hooligans, feel strongly that more bobbies on the beat are needed to crack down on yobbish behaviour.
    Mr. Clarke: My hon. Friend is entirely right. May I take this opportunity to congratulate the Bolton Evening News and Labour Members for Bolton, who have campaigned energetically on precisely the points that she has raised?
    A series of factors contributes to more bobbies on the beat. One is the number of police themselves; the second is operational levels; the third is the proper use of technology; the fourth is a more effective criminal justice system than the current one to ensure that police officers are not constantly obstructed in a wasteful way; and the fifth is effective partnerships between the police and other social institutions such as local authorities. The measures that we have already put in place and which we are introducing in current legislation will make an impact on the issues that my hon. Friend, her constituents and local newspaper have forcefully raised.
    Mr. Ian Taylor: Does the Minister realise that front-line officers in my constituency welcome the reopening of the East Molesey police station, soon to be followed by Cobham police station, by volunteers? Last week, in a written answer, he gave me a bland reply in relation to support for volunteers. At the Dispatch Box, will he stiffen his sinews and say that the Government not only welcome volunteers, but will find extra ways to

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    provide modest resources to them, so that they can continue to give confidence to the communities in which they work and continue to get the police out on the beat?
    Mr. Clarke: I can give the hon. Gentleman the assurances that he seeks and apologise if my earlier reply was bland. That was certainly not my intention. I investigated that matter soon after I took up the post of Minister. One of the things that surprised me was the wide range of volunteering initiatives in different forces throughout the country, which are treated extremely positively both by the police and by the communities that they serve. We are positively looking at ways of extending such initiatives. I am happy to confirm that that is one of the issues that we are addressing with the police in relation to measures to increase visibility and to reassure communities. Those initiatives can be set up in both isolated and non-isolated communities and are often constructive.
    Mr. Peter L. Pike: My hon. Friend will know that the Pennine division in the Lancashire force and indeed the Lancashire force as a whole have effectively ensured that the police are out on the beat doing the job and are doing less administration work. They have made excellent progress, but does he agree that one other concern is that far too much police time is taken up attending court merely for the deferment of a case?
    Mr. Clarke: My hon. Friend is entirely right. Some of the changes that we have already put in place—for example, the Narey changes—are already helping, but much more needs to be done. That is why my right hon. Friend the Prime Minister asked Lord Justice Robin Auld to conduct a review of the whole criminal justice process. The inefficiencies that hit police also hit many other parts of the community. Substantial reforms are needed.
    A good range of evidence has been presented to the review. I hope that, when the report is published in a month or so, we will have an agenda on which we can make progress. The changes for which my hon. Friend is looking will have the impact of increasing the police presence locally, which I am sure the whole House would welcome.
    Mr. Nicholas Winterton: The hon. Member for Bolton, West (Ms Kelly) is absolutely right when she talks about bobbies on the beat. Time and again, my own constituents in Macclesfield talk to me about the need for police to be visible in the community. Does the Minister—who has given very rational and responsible replies to the initial question and to the supplementary ones—accept that police officers on the beat in the community, building relationships, can genuinely lead not only to a reduction in crime, but to greater information for the police force so that it can prevent crime?
    Mr. Clarke: The hon. Gentleman is entirely correct. I should like to add just one measure to the list of those that I think are important to improving the situation. Recently, new guidance has been issued on tenure for police officers, which has ensured a less rapid turnaround of community officers. That rapid turnaround had made it necessary, every couple of years or so, for new community officers to renew relationships, which was a very time-consuming process.
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    It is precisely the type of personal relationship that the hon. Gentleman has described which has made the difference in many communities across the country, as individual community beat officers have thrown their own energy into building relationships with, for example, housing organisations, schools and doctors. We want to do everything that we can to encourage that.
    Mr. Lawrie Quinn: I congratulate my hon. Friend on recognising the particular needs of rural police forces, such as North Yorkshire, in maintaining contact with the public. May I invite him to make an early visit to the experimental police station in the East division in my constituency, which is focusing particularly on making that contact with rural constituents and ensuring that law and order is ever-present in rural areas such as mine?
    Mr. Clarke: I agree entirely with my hon. Friend. I should also like to take up that invitation when next I am able to do so. I was delighted that, only a couple of weeks ago, on 26 January, the North Yorkshire police force chief constable and the chairman of the police authority announced:
    "North Yorkshire will have more police officers than ever before"—
    I stress "than ever before"—
    "with the proposed increase in strength taking the force to 1,420 officers by March 2002."
    That was an historic announcement, and I know that the right hon. Member for Richmond, Yorks (Mr. Hague) will welcome it just as much as my hon. Friend does.
    Mr. Oliver Heald: But is not the Minister aware that matters are getting worse, not better? Has he heard of the comments of the chief constable of Lincolnshire, who talks of his force being
    "in danger of sinking under a sea of targets and measures"?
    Is the Minister aware of the comments of Chief Inspector Ray Shepherd, of West Yorkshire police, who asked:
    "Is Charles Clarke, the Home Office Minister, being fed so much nonsense that he isn't aware that police officers nowadays have far more paperwork to complete than before?"
    Does not that help to explain the 60 per cent. increase in voluntary resignations from the police since 1997? Does not it help to explain the one-third fall in the number of specials? Is not it wrong to be putting police officers on to tasks of counting, measuring and filling in returns when we want those officers out there doing the job? Does not that explain why the Prime Minister will not debate the Leader of the Opposition on those matters?
    Mr. Clarke: I meet the chief constable of Lincolnshire very often; he is a member of the national crime reduction taskforce which I chair. He is not an unhappy man, but a very happy one, and I hope to see him later in the week. The hon. Gentleman can be as rhetorical as he likes, but the facts are that crime levels are falling, as they have been doing throughout this Parliament; police numbers are increasing, for the first time since 1993; police morale is increasing, contrary to what he has to say; and the various measures that we have implemented to deal with particular aspects of crime, both nationally and in specific geographical localities, are improving the situation. I do

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    not hide the fact that there is a great deal still to be done—that is certainly the truth—but we are doing extremely well, and shall continue to do so.

    Police Funding
    Mr. Colin Pickthall: What research he has undertaken into the correlation between the funding of police forces and their success in controlling the levels of crime and disorder. [147095]
    The Secretary of State for the Home Department (Mr. Jack Straw): As tables that are on the record in the Official Report show, changes in the number of officers alongside changes in crime at force level over a period in the 1990s indicate little correlation between the two.
    However, the Audit Commission reported in March of last year that there is no consistent link between increases in spending and improvements in performance. Some forces with among the best records in reducing crime have had below-average increases in funding during these years. Police numbers and funding are of course important, but as important is how effectively the resources are used.
    Mr. Pickthall: I thank my right hon. Friend for that reply, because it is important to understand that there is no direct, easy correlation between spending on police and success in fighting crime and disorder. It is as much a question of good management, good targeting and good prioritising by chief constables. Does he agree that some of the disparities between forces in this regard are striking? How can the Home Office ensure that the poorest performers are brought up to the standards of the best, such as Lancashire and Cumbria?
    Mr. Straw: My hon. Friend is entirely right that the disparities in performance are striking, even when we compare like with like as closely as possible. We are doing that with the crime statistics; grouping basic command units in crime and reduction partnership areas into what are called statistical families, which show the striking differences in performance. They also show striking differences in the use of resources. Some forces which have had average or below-average increases in funding in the past six years have increased police numbers. In other forces, the chief constables have decided to spend the money on other things. It is crucial that performance data are made available and that there is measurement and not ignorance, so the public in each area can judge the performance of their force and their police area compared with others and so forces are held properly accountable at an operational level.
    Sir Sydney Chapman: With great respect, I must take issue with the Home Secretary's comments in regard to my part of London. Surely if police numbers fall, if the time that officers have on the beat reduces and if morale is low, those ingredients are responsible for an increase in serious crime. Does not that make it more difficult for the police force in question to maintain the law and keep the peace? Will he look again at the figures, which are having serious and deleterious effects in my part of London?
    Mr. Straw: I accept that increased funding and police numbers are important. As the Minister of State, my hon. Friend the Member for Norwich, South (Mr. Clarke), has just pointed out, we are increasing funding and police numbers, reversing the decline that started in the early 1990s. Nowhere was that decline sharper than in the Metropolitan police area, where there was a drop of nearly 2,000 officers under the previous Government. With the greatest respect, I do not recall the hon. Gentleman protesting about that at the time. More resources and more police officers are important, but if he looks at the data in the Official Report, he will see striking differences in the performance of otherwise similar police areas, just as there are differences between different police divisions within the Metropolitan police. There is no magic about this. It comes down to a truth that everybody in management in the private and public sectors knows: how one performs at a given level of resources depends on management, leadership and organisation. I am pleased to say that respective performance is now improving, which is why recruitment is going up and morale is rising.
    Mr. Chris Pond: I congratulate Kent police on the 23 per cent. reduction in crime since 1997; in some areas, such as Lorton close, crime has been reduced by 70 per cent. since 1997. Does my right hon. Friend accept that, in part, that may be due to the significant increases in the resources available to Kent police but, more importantly, that it is due to the leadership provided within Kent police, its effective work within the local community and local authority and the measures taken to reduce the causes of crime; the last, perhaps, being the most significant factor of all?
    Mr. Straw: I agree entirely. Kent makes my point exactly. It has the best record for crime reduction between 1996–97 and 1999–2000 of any of the country's 43 police forces, even though it was only ninth in terms of changes in police numbers and had around average budget increases. That shows what could be done by other forces with excellent leadership of the kind provided by Sir David Phillips, with well-motivated officers and with the funding that we are now putting in.
    Mr. John Butterfill: Does the Home Secretary accept that, just as it is not right to reward poorly performing police forces, it is equally wrong to penalise those that perform well? Dorset has the second lowest funding per capita in the United Kingdom but, thanks to the inspired leadership of Jane Stichbury, our chief constable, and members of her force, it does remarkably well by targeting certain areas. It has reduced burglary and car theft, but there remains a severe problem with street crime, which is growing, and drug-related crime, because we have drug rehabilitation centres to which people are sent from all over the country.
    With yet another very low settlement, we are falling further and further behind. We were managing to maintain standards only by stretching all our resources absolutely to the limit—indeed, to breaking point.
    Mr. Straw: Like the hon. Gentleman, I pay tribute to the chief constable and all her officers and staff for their very good record. Police numbers in Dorset have increased since March 1997. I understand that the arguments about how the overall money should be

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    allocated within the standard spending assessment are perennial and will go on for ever, but it should be noted that we have made special provision for rural forces, including Dorset, and that in the full year it will receive £440,000, a substantial grant, in recognition of the county's rural needs.
    Mr. Vernon Coaker: We all want more police on the street, but does not the research into the funding of police authorities show the importance of tackling social exclusion, having more facilities for young people, and a whole variety of measures to combat the causes of crime, in the effort to bring the crime figures down?
    Mr. Straw: I agree entirely. I congratulate my hon. Friend, his district council and the local police on all the work that they are undertaking. Of course, it is the case that, if we are to get crime and disorder down, we must attack the underlying and immediate causes as well as incidents of crime when they happen. That is why we are targeting potential young offenders as well as those who have actually committed crimes. We are also joining up the powers of the education authorities and the police so that they can conduct truancy sweeps and ensure that the youngsters are back in school, as well as doing much other work the better to support families and their children at risk.

    Police Manpower
    Mr. Graham Brady: If he will list those police forces which do not have a full establishment of officers. [147097]
    The Minister of State, Home Office (Mr. Charles Clarke): Under legislation passed by the previous Government, chief officers of police were given the power to determine within available resources the number of officers that there should be in their force. There is therefore no centrally determined establishment.
    Mr. Brady: I am grateful to the Minister for that response, although it could only be categorised as less than full and frank. Will he now give the rather shorter list of those police forces that do have a full establishment of officers?
    Mr. Clarke: I am terribly sorry, but the hon. Gentleman is simply not grasping the point. As a result
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    of legislation passed by the previous Government, there is no longer a centrally determined establishment for each force in Britain, so his question is essentially meaningless. That was what I was trying, as courteously as possible, to point out.

    Police Funding
    Mr. David Heath: What assessment he has made of the average percentage change from 2001–02 to 2000–01 for police authorities in England and Wales in respect of (a) total revenue expenditure and (b) council tax precept. [147098]
    The Minister of State, Home Office (Mr. Charles Clarke): I am glad that the very full exchange on the previous question indicated its essential meaninglessness.
    These are matters for individual police authorities, which are required to set their net budget requirements and issue precepts for 2001–02 by 1 March. We can make serious assessments about levels of total revenue expenditure and council tax precept only after that date.
    Mr. Heath: Even if the Minister does not know the answer, I at least have some idea of it from having examined some of the budget papers of the west country police forces. The increase in precept has been anything from 5 per cent. to 9.7 per cent., and it has been 7.5 per cent. in my local force, Avon and Somerset constabulary. The problem is that most of the money will pay not for extra police officers but for the area cost adjustment, which the Western Daily Press has called the "tax on the West". When will we be able to put money into having extra police officers rather than paying for a national scheme that involves our funding other councils?
    Mr. Clarke: Through the police grant and our crime fighting fund, the Government are putting resources directly into funding police officers up and down the country. We debated that point last week during the police grant debate. As the hon. Gentleman well knows, the area cost adjustment is a matter for the Department of the Environment, Transport and the Regions, within which the police system works. However, for the reason suggested by the hon. Gentleman, we are putting extra resources into the crime fighting fund and rural funds, and we are, by various other means, putting more resources into policing. That is reducing crime throughout the country, and I hope that the hon. Gentleman would welcome that.

Points of Order
3.31 pm
Mr. Tam Dalyell: On a point of order, Mr. Speaker. In view of ever-increasing incursions by Albanian or Kosovo Liberation Army forces into southern Macedonia and southern Serbia and of the apprehension of KLA personnel by British personnel and their handing over not to KFOR but to the Americans at Camp Bond Steel, have you had any request from the Ministry of Defence to comment on those important events?
Mr. Speaker: No.
Mr. John Wilkinson: On a point of order, Mr. Speaker. You will remember that the Leader of the House of Commons promised on Thursday that there would be a statement from the Deputy Prime Minister when his talks with the commissioner for transport in London had reached a refined stage. Are not the travelling public in London facing a crisis at a refined stage of misery because of the political strike on the London underground? Have Transport Ministers suggested to you that they should face up to their responsibilities by making a statement to the House?
Mr. Speaker: There is a further point of order.
Mr. Bernard Jenkin: Further to that point of order, Mr. Speaker. In view of the lack of investment in the tube over the past four years, the clear deterioration of the tube and today's dreadful strike, and because of the statement made by the Deputy Prime Minister on Friday—a humiliating climbdown for him and a clear change in Government policy—do not the Government owe the House the courtesy of an explanation and a statement?
Mr. Speaker: Both hon. Gentlemen have raised that matter as a point of order, but it has nothing to do with the Chair.
Mr. Michael Fabricant: On a point of order, Mr. Speaker. A few moments ago, the Minister of State, Home Office, the hon. Member for Norwich, South (Mr. Clarke), said that a question was "meaningless". Is it not up to the Clerks and the Table Office to determine whether a question is meaningless? Was it not discourteous to the Table Office to say so?
Mr. Speaker: I do not think that the hon. Gentleman should worry too much about the Table Office, which can handle itself.
Miss Anne McIntosh: Further to the point of order made by my hon. Friend the Member for North Essex (Mr. Jenkin), Mr. Speaker. In what circumstances can we expect the Deputy Prime Minister to make a statement to the House? Is it not a normal courtesy to make statements to the House rather than at a press conference?
Mr. Speaker: That is up to the Deputy Prime Minister.

Opposition Day
[4TH ALLOTTED DAY]

Poverty (Wales)
Mr. Speaker: I should inform the House that I have selected the amendment in the name of the Prime Minister.
3.33 pm
Mr. Elfyn Llwyd: I beg to move,
That this House notes that there is growing poverty throughout Wales, both in rural and urban areas with a widening gap between rich and poor; further notes the Government's failure to avoid the problems in the manufacturing industry as evidenced by the huge job losses announced by Corus which will add greatly to the problems of social exclusion in Wales; further notes that the Welsh Affairs Committee in the Third Report of Session 1999–2000, HC 365, `Social Exclusion in Wales' reported on the matter, concluding that: Government should consider regional variations in tax to encourage investment, that it may well be necessary for the basic state pension to be increased in line with average earnings, that Government should initiate a comprehensive national benefit take-up campaign, that increasing the level of benefits is central to tackling social exclusion, and that the Barnett formula should be reassessed to reflect a needs-based formula.
The term "social exclusion" conjures up many images and has been subject to a great deal of academic debate. It appears to be a moot point whether social exclusion must include poverty, but it seems to me that wherever there is an example of social exclusion, poverty is there or thereabouts.
Social exclusion is not confined to urban areas—far from it; it also exists in rural areas where public transport is poor, where village shops and post offices are closing and where the infrastructure of rural life is under threat. All of that is exacerbated by the crisis in agriculture, which has had a huge impact on the rural economy. Throughout Wales, once-bustling market towns are now quiet; the effects of out-of-town shopping and the current crisis cast a dark shadow on them. The rural post office is in danger of becoming merely a fond memory. Again, that affects people in the greatest need and those most at risk of exclusion—the elderly, the poor, the unemployed and those for whom public transport is the only means of transport.
Since taking office, the Government have stood by as one in eight of our sub-post offices have closed. Every month, Members receive a pro forma letter from Post Office Counters Ltd. about proposed closures, asking whether we know of anyone who would be interested in taking over such businesses. The advertising campaign mounted by Post Office Counters is a joke. Typically, it consists of putting up one sheet of A4 in the shop window of the nearest sub-post office for six or seven days. One would have thought that this Labour Government—of all Governments—would realise that such publicity was not very effective.
The Select Committee on Welsh Affairs has made some useful suggestions on the matter. It recommends that the Post Office should appoint a network development officer and officers in rural and socially deprived areas to ensure that unnecessary post office closures are avoided.

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The Committee recommends that, when it is known that a manager is about to retire, Post Office Counters should immediately initiate an active campaign to find a replacement on terms favourable to a prospective applicant.
The Select Committee calls for full implementation of the performance and innovation unit report. Let us not forget, however, that it was the Labour Government who initiated the Horizon project and who will, I fear, deprive us of our rural post offices—40 per cent. of their income is under threat and 60 per cent. of the existing network is estimated to be at risk.
Freudian slips are being made by Post Office Counters. When a decision is taken to close a given sub-post office, reference is made only to the nearest sub-post office that remains open. I have no doubt that the agenda of Post Office Counters is that of so-called rationalisation. An excellent candidate in my constituency—with an already flourishing business and an extremely good track record—was told by a Post Office Counters operative that taking over the post office was a waste of his time and "not worth it". How do we counter that?
Last Thursday, the Secretary of State for Trade and Industry spoke in the House about job losses at Corus. I share the right hon. Gentleman's genuine concern at the behaviour of Corus and its chairman, but the Government must face up to the fact that they have done little over the past 18 months to two years. It should have been obvious that Corus was in some difficulty—18 months ago, the company's accounts showed a loss of £1 billion. That should have rung some alarm bells among the Government.
I do not accept that it is good enough for a Minister to claim that Corus would not speak to the Government about that or that a Minister could have remained in ignorance—in the strictest sense—of what was going on. I always thought that Governments had certain economic levers available to them; after all, they have an interest in our communities and in maintaining a good manufacturing sector. Unfortunately, it appears that they have done nothing. During Labour's time in office—more than three years—16,000 manufacturing jobs have been lost in Wales alone.
Mr. Huw Edwards: The hon. Gentleman mentions discussions between Corus and Ministers. I should be interested to know whether he has held discussions with the chief executive and chairman of Corus. I assure him that, on the Monday before the announcement, my Labour colleagues held discussions with the chief executive and chairman, who told us categorically that no decision had been made on any plant. If he was telling the truth, it shows that the decisions were made in only two days; if he was not telling the truth, it shows both deceit and the contempt in which he holds the work force, Parliament and the Government. Does the hon. Gentleman agree?
Mr. Llwyd: I certainly partly agree, but I agree most definitely about last week's behaviour. I was making the point that it has been known that the industry was in difficulty for more than 18 months, and that operating aids could have been offered. We should be considering better regional policies, given the disparity between the south-east and the other constituent parts of the United Kingdom.
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I take the point made by the hon. Member for Monmouth (Mr. Edwards) and I certainly could not condone such behaviour, but the risks have been known for some time and the Government have been inactive. Until I hear differently, that is my view. During Thursday's statement, I specifically asked the Secretary of State for Trade and Industry what help had been offered to Corus. His answer was that I should find out what the National Assembly had done. With respect, his reply did not take the matter much further, and it tends to support my view that very little has been done. We can think about what happened to Rover.
Mr. Barry Jones: The hon. Gentleman and I disagree on some matters, but does he agree that the statement made by my hon. Friend the Member for Monmouth (Mr. Edwards) is true? Many of us attended the meeting with the chairman of Corus. Does the hon. Gentleman agree that Corus has treated a magnificent work force most shabbily? He might agree that the Shotton work force should not have had that kick in the teeth and that Shotton steelworks should receive investment. He might find that some of his ideas agree with ours.
Mr. Llwyd: The right hon. Gentleman is right. I do not doubt for a second what the hon. Member for Monmouth says. I know him too well to doubt anything that he says on the Floor of the House. I agree entirely with the right hon. Gentleman that things should not have happened as they did, but we have to question what action the Government took in the preceding few months. No one can condone what happened, and it is an absolute disgrace that those communities in Wales are now being cast aside in such a callous, cynical manner—the worst possible example of capitalism gone bad. [HON. MEMBERS: "Blame Corus."] That is exactly the point that I want to make if hon. Members will contain themselves for a minute or two.
I am trying to develop the point that a regional policy, operating aids and so on should be considered. If not, what is the point of objective 1, under which it is recognised that parts of the United Kingdom are doing very badly, while others are doing well? That is not only my view. I shall quote the following:
"Since 1990 the share of GDP within the UK has declined significantly in the North East, the North West, the West Midlands, Wales and Scotland. It has increased significantly in the Eastern Region, London and the South East. These are symptoms of something fundamental. We don't have to look far for some of the causes. In 1998 manufacturing businesses invested over ten times as much in research and development in the South East—£1.9 billion—than in the North East—£164 million. Lack of investment, poor skills and education qualification, these are some of the underlying causes we need to tackle."
Those comments were made by the Secretary of State for Trade and Industry in November. Obviously, he recognises that there are regional economic disparities in the United Kingdom, but what has been done to counter the problem in Wales? I shall leave the point there; I hope that it is well made. Although there is much agreement in the Chamber, it is still a moot point, and I am sure that one of my right hon. or hon. Friends will develop it further.
The quotation that I cited shows that the Secretary of State has acknowledged the disparities for some time. Therefore, why has no attempt been made to develop a regional economic policy for Wales? I mentioned

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operating aids, and in this context the Government would be entitled to introduce a lower corporation tax and a lower employer's national insurance contribution. Other grant aid is available as a spur for manufacturing industry in general. A specific package could have been introduced to assist Corus with its difficulties.
Why have those suggestions not been taken up? It is all very well making a speech about economic disparities, but what answers have been given to deal with the problems of the various regions and parts of the United Kingdom?
Mr. Llew Smith: The hon. Gentleman refers to disparities in Wales and elsewhere and to the answers that have been given to overcome them, but will he comment on what happened in the Assembly when his colleagues abstained in the vote that provided an additional £5.5 million for Blaenau Gwent? They failed to vote for that money. If their inactivity had been rewarded and the money had not come to Blaenau Gwent, not only would public services have been slashed dramatically but our council taxes would have increased by between 50 and 60 per cent. Does he think that not voting for money for areas such as Blaenau Gwent is the answer to overcoming disparities and deprivation?
Mr. Llwyd: The answer is that the settlement was totally inadequate. [Interruption.] The hon. Gentleman may laugh, but he has made his point and I did not find it very funny.
Mr. Smith rose—
Mr. Llwyd: If the hon. Gentleman bears with me, I shall respond to him. The settlement was insufficient—cuts have been made here, there and everywhere in local government. More important, much of that money has gone towards match funding for objective 1 projects, and I speak with some authority on that subject.
Mr. Smith: Does the hon. Gentleman accept that the logic of his argument is that nothing is better than something? The nationalist party did not vote for any additional money for Blaenau Gwent; it failed to vote for the £5.5 million that was allocated to our community.
Mr. Llwyd: I thank the hon. Gentleman for that point, but it was a Labour budget and it was unamendable. What does he suggest could have been done in those circumstances?
Mr. Smith: The nationalists could have shown their support for some of the most deprived communities in Wales by voting for the £5.5 million that the Labour Administration allocated for Blaenau Gwent. The fact that they failed to do so showed their disdain for my community and for some of the poorest communities in Wales.
Mr. Llwyd: I shall not respond to that final point, because it was getting ridiculous.
I shall return to the main point of this debate and the 16,000 jobs that have been lost to manufacturing industry in Wales since the Government took office. I can conclude only that some inactivity—either intentional or
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Otherwise—has led to many jobs being lost in the perceived Labour heartlands in Wales. The mood is one of anger—anger at inactivity and anger at being taken for granted as traditional Labour voters.
The next election in Wales will prove to be very interesting, and more interesting even than the National Assembly election. That might have something to do with the peculiar behaviour of Mr. Adrian McMenamin.
Mr. Denzil Davies: Who is he?
Mr. Llwyd: The right hon. Gentleman asks, "Who is he?" I did not know either until Mr. McMenamin started misbehaving; he is such a useful member of the Wales Office team. He was employed by the Secretary of State for Wales as a ministerial special adviser and he is still employed—lucky man. He is paid out of the public purse and he spends time at home and in working hours denigrating members of Plaid Cymru—the Party of Wales—in the most offensive manner. The Secretary of State for Wales says that such behaviour is okay, but I will not dwell long on his view. He is not here today and I have been told why, so I shall not make an issue of it.
The Secretary of State cannot get away with the argument that Mr. McMenamin is not prohibited from behaving in the way that I have described outside office hours, because he jolly well is. Under his designation, he is not supposed to take political actions—however strange they may be—during office hours or at any other time. I sincerely believe that, if the right hon. Gentleman wants to consider himself a right hon. Gentleman, he must dismiss Mr. McMenamin, whether he is a maverick or part and parcel of something else.
Currently, two computers are busily churning out offensive remarks about members of my party. One has been registered to Millbank and the other to the Wales Office. We know that the previous Government were beset by sleaze, but it is sleazy of the Labour party to pay an official to insult Plaid Cymru Members as individuals. The last thing that I would do is insult a Labour Member, or, indeed, a member of any political party. We have a right to express our views and not to be denigrated and slagged off.
Mrs. Jackie Lawrence: I was interested by the hon. Gentleman's remarks about the use of public funds for political opportunity. Will he assure me that the press releases sent out in my area from the office of a Plaid Cymru Member of the European Parliament are paid for by his party, rather than from the public funds allocated to MEPs?
Mr. Llwyd: Of course they are paid for properly, but, if the hon. Lady wants to raise that issue, why does not she write to the person concerned? We are such a growing party that I cannot know what goes on in every office.
Mrs. Lawrence: I did write to the office, but I did not receive a reply.
Mr. Llwyd: I hope that the hon. Lady will take cognisance of my words. I shall e-mail the MEP concerned and ask her to address the point. I hope that that will be helpful.

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Parts of the British economy are doing very well, mainly because of the way in which economic policies are being implemented. However, their success has its cost in other areas, as Welsh Members of Parliament know. I am afraid that Wales is bottom of the United Kingdom regional competitive index table—a place that I think is shared by the north-east. Wales is also bottom of the regional knowledge-based business index table. In terms of the knowledge economy, it is lacking and is in worse circumstances than any other area. Although we agree with the long-term goal, the short to medium term looks very bleak for Wales, because of the difficulties caused by the failure to establish a regional policy and to target the region's specific problems.
There must be greater balance between high-tech jobs and those in more traditional industries such as manufacturing. The Government are rightly putting a lot of emphasis on the knowledge economy, but they seem to be ignoring the needs of traditional economies. We need to ensure that incoming companies feel comfortable with the development of regional policies. We should be taking measures such as those that I have mentioned, including cuts in corporation tax, national insurance and so on.
Mr. Chris Ruane: The hon. Gentleman mentioned the need for incoming companies to be attracted to Wales. What does he think of the comment made by Seimon Glyn, a Plaid Cymru councillor, who said that the English are a drain on Welsh resources? Does he think that that comment will attract or repel inward investors?
Mr. Llwyd: Before I answer that question, I refer the hon. Gentleman to remarks made by the hon. Member for Clwyd, West (Mr. Thomas), who said:
"One particular area of concern I have brought to the attention of the Committee is the way in which some landlords are able to play the system and bring in large numbers of people from outside the area to live in substandard accommodation."
He pointed out that the cost was placed on local government. Worse still—I am quoting a publication of which the hon. Gentleman is aware—he said:
"The police do recognise there are problems in Colwyn Bay. There are those with little or no stake in the community who are known to be criminally active."
Before the hon. Gentleman or any other Labour Member throws any brickbats, let me say that I know the councillor to whom he referred, and I am not sure what he said, but he has since apologised.
Perhaps Labour Members should look a bit nearer home. A serving Member of the House has been terribly abusive to incomers to north Wales, so let us not start insulting each other across the House on that subject—there is nothing in it for the Labour party.
Mr. Ruane: Will the hon. Gentleman give way again?
Mr. Llwyd: No, I will not. The hon. Gentleman should sit down.
According to a recent report published by Robert Higgins of the centre for advanced studies at Cardiff university, entitled "An Index of Competitiveness in
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the UK: Local, regional and global analysis", Wales ranks last but one in the UK regional competitiveness index. Higgins notes:
"The index makes it abundantly clear it is the southern regions of England that are driving economic growth in the UK."
Good luck to them. I am saying that there should be a different approach in other parts of the UK. Higgins goes on to say:
"It is these regions that are home to the highest density of firms, the most knowledge-intensive firms, the highest level of economic activity, which in turn gives firms based in the areas a higher level of productivity".
He asks:
"Should we not be pushing for stronger incentives to help make the uncompetitive areas more competitive?"
That is my point.
Mr. Alan W. Williams: The hon. Gentleman's main theory about the economy is that Wales is being treated unfavourably and is at the bottom of various league tables. I understand his argument, but will he concede that in his constituency unemployment has fallen by a third from 1,640 in December 1996 to 1,051 at present and that there have been parallel falls in unemployment throughout Wales? Despite the picture of doom and gloom that he is painting, the job situation in Wales, including in traditional industries, the rural economy and south Wales, is pretty good.
Mr. Llwyd: Modesty prevents me from saying why unemployment has fallen in Meirionnydd Nant Conwy, but I can assure the hon. Gentleman that the constituency has an effective Member of Parliament. If he were to listen to my contribution, he would realise that I am not whingeing but talking about what could be done to improve various areas of the UK. I say good luck to the south-east, but this is not a one-size-fits-all situation, as the Department of Trade and Industry appears to believe. I give due credit to the Government because unemployment has fallen, and of course I am pleased about that. However, manufacturing jobs have been lost, and we need to take our eye off one ball and keep it on another. We must ensure that we have a comprehensive regional approach to the problem, and that is what I am developing. I agree with the hon. Gentleman about the figures that he quoted.
The Welsh Affairs Committee made a recommendation about regional variations in tax, and I hope that the Government will respond in due course. Happily, Plaid Cymru policy accords with that recommendation.
Mr. Dafydd Wigley: That is because Meirionnydd has a good MP.
Mr. Llwyd: I will not overdo the self-congratulation.
The Select Committee also made an important point about pensions. It said that it will
"watch the combination of the Pension Credit proposals and the Minimum Income Guarantee take-up campaign"
to ensure that pensioners are not left in poverty in future. It concluded that if those proposals do not work, the basic state pension will have to be linked once more to average earnings. That mirrors a recommendation by the Scottish Affairs Committee, and it is long overdue. That argument has long been raging in this place, and I am sure that we

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will revisit the matter. Suffice it to say that pensioners require a better deal than they are receiving at present. Few people, inside or outside the Chamber, can forget the 75p debacle.
On benefits, the Select Committee took the view that the Government should
"conduct a comprehensive national benefit take-up campaign".
It said that
"the benefits system allows people to survive, but does not lift them out of poverty."
It rightly concluded:
"Lifting the level of benefits is central to tackling social exclusion."
The Committee also examined the poverty trap, which acts as a disincentive to re-entering work. To be fair, the working families tax credit should assist. However, a substantial disincentive remains for childless people. In my view, and in that of many commentators and others who gave evidence to the Committee, there should be a transitional or tapering benefit for the first three to six months of new employment to attempt to deal with that damaging disincentive.
The Secretary of State for Wales and I have fallen out drastically about what he said or did not say in answer to a question that I asked or did not ask about the vexed matter of the Barnett formula. The Committee concludes that the Barnett formula needs reconsidering and to be made more needs based. Lord Barnett said:
"I had always assumed its use would be temporary until a more sophisticated method that took account of needs could be devised."
"Temporary" in that context is as temporary as the old traffic lights at Drws-y-nant in Rhydymain. It meant 23 years in that case; the Barnett formula is doing even better. We appreciate that such matters need to be reconsidered from time to time because they are important to the governance of Wales.
A preliminary glance at the figures shows that Wales has nothing to fear from a needs-based assessment as long as it is impartially conducted. Wales does not have to depend on the Barnett formula in its current form and would do better from a fairly calculated Barnett mark 2. We hope that the Government will take the initiative and develop a new formula after the next general election. There will be increasing pressure to reconsider an outmoded mechanism, which has worked well in the past, but should be re-examined after such a long time.
The Barnett formula constitutes a mechanistic approach and does not take account of the changing or current needs of Wales. The National Assembly has had much to say about that. It behoves us as Members of Parliament of all parties to chip in on the debate, further it, discuss it with our Assembly colleagues and try to devise a formula that is more needs based. I am therefore happy to endorse the Select Committee's recommendation that the Barnett formula should be reviewed or replaced by a needs-based system. Indeed, that is self-evident, given the huge disparity in GDP between England and Wales.
I know that several hon. Members want to speak in the debate, and I shall not take up much more time.
Mr. Paul Flynn: Before the hon. Gentleman concludes his jocular remarks, will he explain
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the reason for his belief that there is growing poverty in Wales? He said that 20,000 jobs had been lost, but that 40,000 jobs had come to Wales, including 500 today to Bridgend and 500 two days ago to Rogerstone.
The hon. Gentleman said that pensioners had a raw deal last year. Will he acknowledge that they had the biggest increase in 25 years this year? They will get rises beyond the level of earnings and that of inflation. When will he produce the evidence to support his case that there is growing poverty in Wales?
Mr. Llwyd: I do not have to look far: the GDP of Wales is decreasing. Sometimes the hon. Gentleman is beset by prejudice. He described my remarks as jocular. They are not. He might find the subject funny, but I do not. It is serious, and other Select Committee members are fully aware of the evidence that was taken in the past 12 months. We know that poverty in Wales is increasing. Yes, the Government are attempting to address the problem, but GDP in Wales goes ever downward. Let us not beat about that bush.
When the Government were elected, the cry of "Things can only get better" was uttered ad nauseam. Things have not got better for students, schools, people on benefits—such as those who have been taken off invalidity benefit—coal miners, members of the farming community, rural dwellers or Welsh steelmakers. Things have, however, got even better for the well off. That is a grave indictment of the new Labour Government and their priorities.
4.5 pm
The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
"notes the Government's central aim is a fair and prosperous society that offers opportunity for all, and that both economic prosperity and social justice depend on people being able to achieve their full potential; endorses the Government's commitment to eradicating child poverty, to providing employment opportunities for all who can work, to rewarding saving, and to ensuring that older people live secure, active and fulfilling lives and to tackling the root causes of poverty and social exclusion; further notes and expresses concern at the announcement by Corus on 1st February 2001; believes that the Corus action is a short term solution which is damaging for the individuals affected and the communities concerned; and calls on the company to think again about the planned closures and redundancies and instead work with the trade unions, Government and the National Assembly for Wales to identify a better way forward.".
Every right hon. and hon. Member will have been shocked by the devastating announcement made by Corus last week. The company has made a short-term decision that is bad for Wales and I believe that it will look back on it and regret it. Our steel industry has achieved magnificent productivity gains over the past 20 years, averaging 10 per cent. a year. We have the greatest output per employee in Europe: 571 tonnes per man, compared with 543 tonnes in Germany and 534 tonnes in France.
There is strong evidence of the underlying strength of the economy. Employment grew by 239,000 last year, and, as my hon. Friend the Member for Newport, West (Mr. Flynn) pointed out, it grew in Wales, too. Manufacturing output rose by 0.7 per cent. and manufacturing exports, despite a high pound, grew by 7 per cent. Many other companies recognise that underlying strength in the economy. In the past two

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months, many companies have announced important investments in Wales, including Wireless Systems International, which is investing to create 264 new jobs at a high-tech telecommunications project in Cwmbran, and Ford, which announced 500 new jobs at Bridgend today.
The Government urge Corus to reconsider its decision. The company should be working with the trade unions, the National Assembly for Wales and the Government. The Secretary of State for Wales had meetings in Cardiff today with the First Minister and the Finance Minister of the Assembly, and he will also have meetings with Cabinet colleagues today, including the Secretary of State for Trade and Industry and the Secretary of State for Education and Employment. At this moment, he is having a meeting with the Prime Minister.
Mr. Alun Michael: Would my hon. Friend care to contrast the behaviour of Corus with that of Ford when jobs at Bridgend were threatened? Over a considerable period, the management of Ford in the UK—right up to Ian McAllister—and the local trade unions at Bridgend worked closely with Ministers, particularly with me when I was Secretary of State for Wales. The battle was taken to the management, and the door was open for negotiations as far away as Detroit. Is it not sad that Corus will not take such a positive approach and work with us on such difficult issues in these difficult times?
Mr. Bayley: My right hon. Friend is absolutely right and his experience gives real weight to his comments. It is in the interest of Wales, of the work force, of the Government and of the company for Corus to work with the Government to look for ways forward in circumstances such as these.
Mr. Ieuan Wyn Jones: Does the Minister accept that if Corus had wanted to announce in Holland the kind of redundancies that it has just announced in Wales, it would not have been able to do so because the Dutch Government have adopted the EU regulation on consultation between trade unions, the Government and other bodies? Will the Minister give us an assurance that the Government will reconsider the introduction of those regulations? We do not want any company to treat Welsh workers in this way again.
Mr. Bayley: I do not accept that, because the redundancy package in the Netherlands is broadly the same as the severance arrangements here in the United Kingdom. Furthermore, there has been dialogue between the Government and the company. We have raised the question of a package of measures, including assistance with business rates, environmental projects—[Interruption.] The hon. Gentleman shakes his head, which shows that he is not interested in tackling the real issues. It is right that the Government made those offers to the company and it is unfortunate that the company did not respond, but we still want to work with Corus. The Government urge it to think again.
Mr. Wigley: Will the Minister give way?
Mr. Bayley: No, I must make progress.
Across the board, the Government are making progress in tackling poverty and social exclusion. The Corus announcement is a painful reminder that obstacles will
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continue to get in our way and that the Government have more to do, but let us consider the facts. When the Government came to power three and a half years ago, the problems of poverty and social exclusion in Wales were stark and the gap between rich and poor had been widening for two decades. One child in three in Wales lived in a low-income household; one child in five lived in a household in which no adult was in work; about one pensioner in four in Wales lived in a low-income household; and the poorest communities in Wales had high unemployment, high levels of poor housing and high crime. After years of neglect by the Conservatives, whole generations and whole communities in Wales had been written off.
Those problems are deep and complex, interlinked and inter-generational. They span people's lives, from childhood through working age to retirement. New solutions were desperately needed to challenge years of Conservative complacency and inaction. My right hon. Friend the Secretary of State for Social Security announced in February 1999 that we would publish not a vague wish list, but an annual report setting out the action that we were taking to tackle poverty, backed up by indicators against which we would be judged.
In March 1999, the Prime Minister put tackling child poverty right at the heart of that strategy with his historic pledge to halve child poverty in 10 years and eradicate it in 20. Alongside that, we set goals to end long-term unemployment, to help adults into work when they can work—while providing more support for those who cannot work—to ensure that pensioners live secure, active and fulfilling lives and to ensure that we rebuild communities crippled by years of inaction by the previous Government.
Those goals are challenging, not easy, and cannot be achieved overnight. There is no simple way to brush aside two decades of high unemployment and growing poverty. As the Corus announcement shows, there will be setbacks even when progress is being made, but the Government remain determined to make a difference, and we are making a difference because we are following policies that make a difference. Our first annual report on poverty, which was published in September 1999, examined the problems that we faced and outlined what we would do to overcome them. In September last year, we published our second annual report, which provided a detailed account of the actions that we have taken in Wales and elsewhere since we announced our strategy in September 1999.
The motion stresses the importance of benefit levels and take-up. Those are indeed important, but the motion ignores what the Government have done to improve benefits in real terms for those who cannot work and what we have done and are doing to promote take-up. We introduced a minimum income guarantee for pensioners in 1999 to target more help on those who need it most. Last year, we launched the most comprehensive take-up campaign ever run to help more pensioners to claim the minimum income guarantee, but poverty and exclusion are much wider ranging and more complex than just a lack of cash. Therefore, the Government strategy set out in the "Opportunity for All" reports focuses not simply on low income, but on access to education and quality in child care, housing and health.

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Instead of focusing only on benefits and income, our strategy is to address the causes of poverty as well as the symptoms and to tackle in the round the problems that can drag people down into poverty and social exclusion at different stages in their lives.
Mr. Edwards: Will my hon. Friend confirm that the success of the Government's welfare-to-work policies has led in part to a reduction in expenditure on social security? Will he acknowledge the concerns of citizens advice bureaux and other advice agencies and the recommendation in paragraph 69 of the Select Committee's social exclusion report that, as a result of those savings, the Government could centrally fund independent advice agencies like the citizens advice bureaux and thus improve the take-up of benefits and other services?
Mr. Bayley: Let me pay tribute to my hon. Friend, and to my hon. Friend the Member for Clwyd, South (Mr. Jones) and all the members of his Committee, for producing an important piece of work. The Government are considering it and will respond in the normal way to the report and its recommendations. The fundamental point that my hon. Friend raises is absolutely right: we promised in our manifesto to reduce spending on the costs of economic failure and instead to make pathways back into work for people who could work. We have done so, and unemployment is now at its lowest level for two decades. That has released resources that we are able to spend elsewhere, not least on making substantial increases in pensions, which will be introduced in April this year.
Children are a special priority in our poverty strategy, because they have only one opportunity to get a good start in life. That is why £11 million a year has been spent on sure start in Wales, on programmes approved by the Assembly and delivered by a partnership of local authorities, health services and voluntary organisations, to provide better services in the crucial early years of a child's life. We are investing in education, too, to give children the tools they need to succeed in the 21st century. An extra £12 billion was announced in the spending review for education and training in the UK over the next three years.
If we are to raise children out of poverty we need to raise family incomes, and we are doing that. Measures in the past four Budgets will lift some 50,000 children out of poverty in Wales. Those measures include a significant increase in child benefit—now £15 a week for the eldest child and £10 a week for other children. Plaid Cymru, in its manifesto at the last election, promised to link child benefit with the cost of living. We have linked child benefit with the cost of living and done more—26 per cent. more—than that. There has been a 26 per cent. real-terms rise in child benefit since 1997. If hon. Members want to do something to relieve child poverty, here is something that the Government are doing. Some 650,000 children in 360,000 families in Wales gain from those increases.
The introduction of the working families tax credit and the minimum wage together guarantee families with children, with one person in full-time work, a minimum income of £208 a week, which rises to £214 a week in April of this year. Some 67,000 families in Wales are benefiting from that. We also increased the sure start maternity grant from £200 to £300 in September last year.
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Thus all families with children in Wales will be better off by on average £15 a week. A couple on income support with two children under the age of 11 will be better off by nearly £30 a week compared with 1997. Families on the working families tax credit receive on average £30 a week more than they received on family credit, which it replaced. More than 30,000 lone parents in Wales receive benefit from the new working families tax credit.
However, we can and should do more for parents and their children by encouraging parents into work, which we are doing through the new deals and the ONE service. Children are benefiting from being in families with higher incomes and from seeing at first hand that work is the route out of poverty and the way to a better life. The new deal for young people has helped some 35,000 young people in Wales so far. Half of those have found work, while a further 11,000 have entered training or education.
Another barrier to work is the difficulty in getting affordable child care. That is why we have introduced the child care tax credit, which is now claimed by 5,600 families in Wales. The average gain from the child care tax credit is about £32 a week, compared with £22 a week with the family credit.
The Tories used to say that they wanted wealth to cascade down the generations. It always has, but poverty is inherited, too. If people are poor, their children grow up in poverty and are more likely to be in poverty in adult life. We want to break that cycle of deprivation. We are helping people of working age to rise out of poverty and social exclusion.
The system that we inherited was designed 50 years ago and is no longer up to the job. Our goal is clear: we want a modern, active welfare state that creates opportunities and incentives, and is based on the fundamental principle of work for those who can work and security for those who cannot. We are making progress towards that goal. Employment is up by more than 1 million since the election. More people are in work than ever before. Since 1997, we have more than halved the number of long-term unemployed in Wales: it went down from 27,000 in May 1997 to around 12,000 in May 2000. We have reduced youth unemployment, which went down from 22,000 to about 15,000 in the same period. We have also cut the overall level of unemployment in Wales from 6.5 per cent. to 4.6 per cent. We are investing £89 million in the ONE service to bring together benefit and employment services in 12 pilot areas, including south-east Gwent, which will help the unemployed to work.
Mr. Simon Thomas: At the start of this long list of Government achievements, the hon. Gentleman gave three headline figures for poverty in Wales which were the legacy of the Conservative Government when the Labour party took over. Will he give the current figures, so that the people of Wales can see what has been achieved in the past four years—not what will be achieved?
Mr. Bayley: The hon. Gentleman may have stopped concentrating for a minute. I gave him the unemployment

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figures for May 2000. [Interruption.] He asks me a question, then he will not listen to the answer. He asked for figures for May 1997.
Mr. Thomas: No.
Mr. Bayley: Yes. The hon. Gentleman asked for figures for May 1997 and for more recent figures. I have given him the figures that are available, which are the unemployment figures. Unemployment has come down in Wales.
Mr. Thomas: I fear that I may have misled the Minister, although not deliberately. I referred him to the three headline figures that he used at the start of his list of Government achievements. They had nothing to do with the unemployment figures. He referred to the number of children in fatherless, unemployed households, and the number in pensioner poverty. What are those figures after four years? He has not given them.
Mr. Bayley: Those figures for Wales, as opposed to the United Kingdom as a whole, are not yet available because of the way in which the statistics are collected. However, I hope that the hon. Gentleman will be pleased to hear that the number of children growing up in workless households is down in Wales as it is elsewhere in the UK. That is good. Some of the other figures will take longer, because they are produced two years after the event. They will be published, and we should and will be judged by them. Progress is being made, but I agree with the hon. Gentleman that more is needed. We cannot wipe out 20 years of increasing social exclusion and deprivation under the previous Government in just a few years. It is a long haul, but we have started.
Mr. Nigel Evans: While the Minister is rattling through this glorious Government's wonderful list of achievements, will he give some attention to the farming industry, which is suffering greatly under this Government? Will he tell us how many people have left farming, and the levels of income in the industry under this Administration?
Mr. Bayley: The hon. Gentleman ignores his party's lamentable record on farming. The level of support for farming, in Wales and elsewhere, is higher than the level of support for all other industries put together. I do not deny for a minute that smaller farmers have real problems, but our Government are addressing those problems.
To encourage people to move from welfare into work, we need to ensure that work pays. We have introduced the national minimum wage, which is helping about 90,000 workers in Wales. As I have said, we are doing more to give extra help to pensioners: the minimum income guarantee has already helped around 95,000 of the poorest pensioners in Wales.
Over the weekend I read the Select Committee's report. It is a very good report, but let me be clear about one thing. Those 95,000 pensioners who benefit from the guarantee would not have gained at all from an earnings uprating of the basic state pension, because every penny that they received on the basic pension would have been taken off their income support.
The Tories may have different plans, but let me make it crystal clear that under this Labour Government the basic state pension will remain the foundation of
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retirement income. For most people, however, the best way to secure a good standard of living in retirement is to contribute to a good second pension. As a result of our reforms, more people than ever will retire with better second pensions, and some will be able to receive such pensions for the first time ever.
As we promised, we are building on SERPS through the new state second pension, and 18 million people will have significantly better second pensions as a result. For the lower paid, the state second pension will in some cases more than double what they would have received under SERPS. That means that someone earning £120 a week will be £40 a week better off in retirement than he or she would have been under the Tories.
Moreover, for the first time, full-time parents, carers and disabled people will receive more money in retirement. For example, a state second pension of £50 a week, on top of the basic state pension, will be available to someone who has been a carer throughout his or her adult life. For people who cannot have access to occupational pensions and for whom personal pensions are inappropriate, we have introduced stakeholder pensions, which are flexible, secure and good value for money. They are revolutionising the way the pensions industry does business, by cutting charges, although they are coming on stream only from April this year. Those reforms mean that more and more people will retire on decent incomes. We will ensure that people who save during their working lives are rewarded.
More recently, my right hon. Friends the Chancellor and the Secretary of State for Social Security announced further help for vulnerable groups. We are tackling pensioner poverty by aligning all the rates of the minimum income guarantee with the highest rate. The winter fuel payment has been increased from £150 to £200 for this winter only, as part of a bridge to our new pension credit. We have abolished capital limits in the sure start maternity grant and funeral payments, to ensure that families on low incomes with small amounts of savings receive support to help cover the costs associated with the birth of a baby or the death of a close relative.
We have introduced a package of measures to help carers and the severely disabled on low incomes. That means that from April this year there will be an extra £10 a week for carers on income support, increasing the rate from £14.15 to £24.40. The disabled child premium, within income support, will rise from £22.25 to £30, a real-terms increase of £7.40. The new disability income guarantee will increase the weekly incomes of the poorest and most severely disabled people by £7.25 a week for single people and children and by £11.05 a week for couples, which means that a single person on DIG will receive £142 a week while couples will get £186.80.
These policies are already making a difference to people's lives, but we are developing more. By 2003 we shall be introducing the integrated child credit, a new employment tax credit and a pension credit to reward pensioners who have worked and saved hard during their working lives.
Mr. Lembit Öpik: Will the Minister give way?
Mr. Bayley: No, I shall not.
We are already witnessing real change as a result of our policies. The close consultation and co-operation between the United Kingdom Government and the

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devolved Administration lie at the heart of our joined-up strategy. We are determined to continue to make a difference to people who live in Wales by providing real opportunity for all.
4.30 pm
Mr. Nigel Evans: I am grateful to have an opportunity to contribute to the debate.
Mr. Ruane: Where are the hon. Gentleman's mates?
Mr. Evans: Plenty of my mates will be here after the next general election. We will be sitting on the Government Benches, not on the Opposition Benches. We look forward to that and we will miss the hon. Gentleman.
I have been told that the Secretary of State cannot be here because he is having a meeting with the Prime Minister today about the steel job losses. I accept that fully. I hope that considerable progress can be made at that meeting. I urge the Minister to encourage lobbying for the traditional 1 March debate, so that we can discuss Welsh issues on a much wider scale.
This is a vital debate on social exclusion, poverty and job losses in Wales. I welcome the Minister, with his particular remit on social security. As we have heard, he knows his statistics well, although many people living in Wales will be scratching their heads and wondering how much of that relates to them. I think that he will understand what I mean when I refer to certain sectors in Wales that he failed to mention.
The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) said that there were many interpretations of social exclusion. He referred to the rural economy, although the Minister made scant reference to it. It plays a dominant part in Wales. We need a vital rural economy to ensure that many people, particularly those living in west, mid and north Wales, can benefit from any growth in the economy generally.
Mr. Öpik: Does the hon. Gentleman agree that the rural economy is affected by the on-going loss of manufacturing jobs in places such as mid-Wales? For example, uncertainty surrounds 200 jobs at the firm formerly known as BSK, in Llanidloes. Does he agree that it is incumbent on the Government to work with the Assembly in Wales to ensure that those rural jobs are not forgotten, despite the situation at Corus, which naturally gives rise to concern?
Mr. Evans: I rarely agree with the hon. Gentleman, but on this occasion I do. Manufacturing jobs are vital: if jobs in rural areas are lost, it will be incredibly difficult to attract industry back to those areas. Infrastructural and service problems exist there, so losing 200 jobs in a rural area has a greater impact than it would in an urban area. Long-term problems of attracting jobs back to rural areas is that much more difficult.
Mr. Alan W. Williams: I have looked up the unemployment figures for the constituency of the hon. Member for Montgomeryshire (Mr. Öpik). The latest figures for December show that 594 people were out of
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work, an unemployment rate of 2.2 per cent. I think that he and many of us who represent rural areas are relieved that unemployment is relatively very low in our areas.
Mr. Evans: I hope that the hon. Gentleman never loses that book, because he will have nothing to say if he does. It is all very well to trot out statistics glibly and to say what the rate of unemployment in the Montgomeryshire constituency is, but everything the hon. Member for Montgomeryshire (Mr. Öpik) said was right. People are fearful of jobs going in rural areas. The arrogance that the hon. Member for East Carmarthen and Dinefwr (Mr. Williams) is displaying does him no great credit. People who work in manufacturing industries, not just in Wales but throughout the United Kingdom, will know that, since 1997, 370,000 manufacturing jobs have been lost. In Wales, 16,000 have been lost. It is a real problem when manufacturing jobs, the bread and butter, the guts, of British industry, are lost.
Mr. Öpik: Does the hon. Gentleman agree that, although the statistics for Montgomeryshire are very good, that is not an excuse for ignoring the dangers that he has been describing? The thousands of Corus job losses are unquestionably a serious matter. However, the loss of 200 jobs—the losses are not definite yet—in a place like Llanidloes would have at least the same impact as the Corus job losses will have at Ebbw Vale.
Mr. Evans: Of course I accept that job losses in rural areas have a disproportionate impact. I suspect that Labour Members representing rural constituencies will also accept that and realise how much more difficult it is to attract industry to those areas. I should hope that all hon. Members agree that jobs, particularly manufacturing jobs, in rural areas are hard to come by.
We have already heard about the post office closures of the past four years. We also know that, for many people, the post office may be their only village shop. It is pointless saying that those people can simply get into their cars and go to a neighbouring village where a post office may have survived, because many people do not have a vehicle. Additionally, rural transport is poor—although I concede that it has always been poor. The state of rural transport, however, should only make us recognise all the more the importance of the post office network in rural Wales.
Petrol is another bugbear. We now have some of the highest petrol prices and petrol taxation in the world. We really do need to recognise that fact. Several months ago, spontaneous petrol disputes were a recognition of that fact. Since then, however, very little has happened to change the situation. We have all heard about the wonderful new low sulphur petrol, but I have yet to see it being sold in any of the garages that I visit—[Interruption.] I am not saying that it will not be available, but currently many garages do not sell it.
Mrs. Lawrence: As the hon. Gentleman does not represent a Welsh constituency, he may not be aware that the Government's policy on both ultra-low sulphur diesel and ultra-low sulphur petrol has secured, in the medium to long term, the refinery in my constituency which is one of the major employers there.
Mr. Evans: I was in the hon. Lady's constituency, with the excellent Stephen Crabb, the prospective

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parliamentary candidate for her constituency, who showed me round Haverfordwest and Milford Haven. As she herself would concede, Milford Haven is an unemployment black spot and has tremendous problems, and it would take a disproportionate effort to attract jobs to her constituency. I realise that. I lived in Swansea for 33 years, and it was difficult to attract investment even there, although it is only an hour from Cardiff. It will take even more energy to attract investment further west.
Mrs. Lawrence: The hon. Gentleman's comments seem to highlight his lack of knowledge—despite his recent visit to my constituency, about which he did not notify me. The employment figures in my constituency have improved massively, primarily because of the 1,500 jobs at Cyber Park that we anticipate will have been created by June, although almost as many have already been created. Most of Cyber Park's employees come from my constituency. At the opening of the latest development there, the Employment Service made the point that those jobs have had the knock-on effect of creating another 4,000 jobs in the community. Perhaps, having been to my constituency, the hon. Gentleman will acknowledge at least those facts.
Mr. Evans: I have apologised privately to the hon. Lady for the discourtesy in not notifying her, and I do so again publicly. I can also guarantee her that, in just a couple of weeks, when I visit her constituency with the most excellent Stephen Crabb, I shall most certainly let her know. Perhaps she could join me in a walk-round. Perhaps we could go to Milford Haven and see the problems there. Although I hear what she says, I am sure that she will concede the difficulty of dealing with unemployment in western and rural Wales and the need for even more energy to be devoted to attracting industry there.
Mr. Alan W. Williams: Will the hon. Gentleman give way?
Mr. Evans: No. I have to make a little more progress, but I shall give way later.
I asked the Minister about farming, and he conceded that it is experiencing real and severe problems. Even the Minister, however, may not fully understand the impact that the farming crisis is having in parts of Wales. Recently, the Western Mail reported that 73 jobs a week were being lost to Welsh farming. The total number of people employed on Welsh farms in June 2000 was 55,700, 3,800 fewer than a year before. These statistics come from the National Assembly. The president of the Farmers Union of Wales, Bob Parry, said:
"This serves to underline just how badly the agricultural sector in Wales is suffering."
Hugh Richards, the president of the National Farmers Union in Wales, described the figure as
"a very sad indictment of the appalling state of the agriculture industry in Wales."
There has been a dramatic fall of 13 per cent. in the number of full-time farmers over two years, from 25,800 in 1998 to 22,600 in 2000. Mr. Parry said:
"Politicians must take this crisis seriously and take positive action to stem the flow of jobs from farming. Losing 73 jobs every week in rural Wales has a detrimental knock-on effect on the entire economy, a fact that must be recognised by the Assembly and also by Whitehall."
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From 1995–99 to date, farm incomes have fallen by more than half, and some farmers now survive on well below the minimum wage. They are self-employed; as one farmer said to me, not all farmers go out of business, but a lot go poor. Unfortunately, that is happening in too many areas. When we talk about poverty and social exclusion in Wales, we must not forget the farming industry.
Many of those involved in farming are coming to London on 18 March. I have encouraged the Prime Minister to be here on that date to meet a delegation of rural dwellers from my constituency. Perhaps the Under-Secretary of State could say whether he will be here on that date to meet representatives of Welsh farmers and those who live in rural areas; they will have a strong message to send to him. Many people in Wales are scratching their heads and wondering why time is being taken to legislate on hunting with hounds when there are so many deep-seated problems in Wales.
An additional problem for which the Government are specifically responsible is the introduction of the climate change levy. I ask Ministers to look carefully at the impact that that will have on those farmers in Wales—particularly horticulturists—who use a lot of energy. Will Ministers scrap this dreadful and appalling tax?
Tax on petrol, in particular, is regressive and hits the poorest parts of society. On average, each family in Wales is paying £670 net more taxes today than in May 1997; after the Government's promise that there would be no new taxes, that seems a bit rich to these people. The real problem comes when people think, "We are paying the taxes, so where are the services?"
I shall refer to one example that should worry everyone in the country. Nothing is more socially excluding or hurtful to the poor than to have the NHS not delivering the decent health care that they expect after paying their taxes. Many people in this Chamber could afford private health care if they so wished. Those who are socially excluded and live on low incomes have no choice; they must use the health service. The total of Welsh residents waiting for in-patient or day-case treatment has gone up from March 1997 by 14.7 per cent. The number of patients waiting over 12 months rose between 31 March 1997 and 31 December 2000 by 85 per cent. For the same period, the number of patients waiting more than 18 months has gone up by 251 per cent. Those are chilling figures, and the Government should work with the Welsh Assembly to ensure that we get a much improved service for the people of Wales.
When the Government of Wales Act 1998 was enacted, establishing the Assembly, Government Members gave the impression that everything would be rosy and that it was guaranteed that waiting lists would go down. We were almost tempted to believe that the Welsh rugby team would win every game—although, sadly, after Saturday, that is clearly not the case. There is not much that the Government can do about Welsh rugby, but there is everything that they can do about the health service in Wales.
The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): How will the hon. Gentleman's proposed cuts in public spending help the national health service in Wales? How will his opposition

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to the working families tax credit, to child benefit rises, to the minimum wage and to public spending by local authorities help socially excluded rural areas?
Mr. Evans: The Government trot out the line that the Conservatives plan to cut expenditure, but they fail to recognise that we may well plan to cut the proposed enormous increases in expenditure by £8 billion overall, which will be returned to the people in tax cuts that they can spend themselves; but we also intend to ensure that we spend money more effectively and efficiently.
The cost of government has gone up by £2 billion a year, for example. In Wales, we now have MEPs, MPs, Assembly Members, local authority councillors—where does it all stop? This all costs an enormous sum. Are the people of Wales getting a better service? No. At a time of crisis in the national health service in Wales, the Welsh Assembly is to spend £42 million on a new building, when people who voted in the referendum were told that it would cost between £12 million and £17 million. Surely it would be better to stay within budget and spend the difference on the health service. Does anyone here believe that the money should be spent on the Assembly building? The silence at least indicates some consensus. [HON. MEMBERS: "No."] Plaid Cymru may have something to say.
Mr. John Bercow: My hon. Friend will have heard the Under-Secretary referring to the working families tax credit. Does he agree that it shares with the child care credit and the student loan repayment administration regulations, whatever their intrinsic merits or demerits, the characteristic of shuffling responsibility from central Government to beleaguered businesses, forcing them to become unpaid tax collectors and benefit distributors? Would not it be sensible, instead of creating the deepest sea of regulation that businesses have ever had to negotiate, if the Government eased the burden and allowed them to breathe, to grow and to prosper?
Mr. Evans: My hon. Friend is absolutely right. [Interruption.] He can see that many hon. Members are keen to reply to his telling point.
Several hon. Members rose—
Mr. Evans: I think that Plaid Cymru should have its say on the Assembly building.
Mr. Llwyd: The hon. Gentleman mentioned £42 million being spent on the Assembly building. Will he remind the House of the cost of the office in which he is situated, and perhaps compare the figures?
Mr. Evans: I had no involvement in the costs of that building and have gone on the record to condemn its extortionate cost. If the hon. Gentleman is saying that the people of Wales, who were told that the new building would cost between £12 million and £17 million, but who now face a bill of £42 million—and no one seriously expects it to be built for much under £60 million; at least, I do not—would rather have the money spent on a palace for self-styled Ministers than on the NHS, he is more out of touch than I suspected.
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The hon. Gentleman cannot deflect me from the excellent points made by my hon. Friend the Member for Buckingham (Mr. Bercow). I attended the launch of "Barriers to Survival and Growth in UK Small Firms", a document produced by the Federation of Small Businesses in November 2000 following responses from 927 small businesses. I own a small business in Wales, but I am not a member of the federation so have no interest to declare. Small businesses make the economy grow, and we must look to them to expand it in all parts of Wales, particularly rural Wales.
Mr. Ruane: Will the hon. Gentleman give way?
Mr. Evans: In a moment.
Some 95 per cent. of respondents said that they were dissatisfied with fuel costs, a fact that should not be lost on the Government. Some 71 per cent. said that they were dissatisfied with local council business charges, and 76 per cent. were dissatisfied with the amount of local business. On the very point made by my hon. Friend the Member for Buckingham, table 28 on page 25 refers to dissatisfaction with legislation. Some 81 per cent. were dissatisfied with the volume of legislation; 83 per cent. with its complexity; 79 per cent. with the rate of change in legislation; 79 per cent. with the interpretation of legislation; 59 per cent. with the ability to employ staff—
Mr. Flynn: The weather?
Mr. Evans: The hon. Gentleman may make light of the problems that small businesses face, but steelworkers in his constituency are losing their jobs and will seek new jobs from small businesses. If I were he, I should not treat so lightly the concerns of 927 small businesses in Wales. He should listen instead of making cheap comments.
Some 65 per cent. of respondents were dissatisfied with the cost of compliance, and 66 per cent. were unhappy with the implementation of European Union regulations. The Minister may already have read this excellent document; he is giving half a nod, so I shall ensure that he is sent a copy and will highlight the tables to which I hope he will pay some attention. Small businesses want to grow but the Government are stifling them.
Mr. Bayley: Does the hon. Gentleman acknowledge that employment in Wales is going up and that unemployment is falling? Many of the new jobs are in the small business sector.
Mr. Evans: Of course unemployment has gone down, as it did towards the end of the period of Conservative government. The trend left as part of the previous Government's economic legacy has been continued, but we fear that the legacy will be destroyed. If job losses rise, I am sure that the Government will say that it is not their fault—"it's not me, guv.com." Nothing is ever the responsibility of the Government, but the United States of America is in fear of job losses and a recession, and the same thing is happening in Wales.
Mr. Ruane: Will the hon. Gentleman give way?
Mr. Evans: In a moment.

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Manufacturing industry is Wales's bread and butter, and more important, proportionally, than it is elsewhere in the United Kingdom. The hon. Member for Montgomeryshire spoke of fears of job losses in his constituency, which I am certain are real. I applaud the announcement of 600 new jobs made today by Ford; the £240 million investment in Wales comes as a welcome tonic for us all. However, it cannot be taken in isolation.
As I listened to the Secretary of State for Trade and Industry making his statement on the job losses at Corus, it was almost as though he were making a speech about how wonderful manufacturing is in Britain; but we know that there are real problems. We cannot hide the fact that there are severe job losses in manufacturing: at Courtaulds Textiles in Wrexham, 167 jobs were lost; we know exactly how many jobs will be lost at Corus—on top of job losses at the company last year; at Dewhirst, the women's clothing factory in Pembrokeshire, 300 jobs were lost—
Several hon. Members rose—
Mr. Evans: I shall give way in a moment.
At Scottish Courage, 1,300 jobs were lost. There were also job losses at Hitachi, Sony and Panasonic. The announcement about Corus was made the day after Dairy Crest announced 500 job losses and the creation of 250 jobs—a net decrease.
Mrs. Lawrence: The hon. Gentleman again makes a fundamental mistake about my constituency. No job losses have occurred at Dewhirst in my constituency. Hopefully, with the help of the Assembly and Members of the House, there will be no such losses. Negotiations are at a sensitive stage; the matter depends on commercial considerations. I would be grateful if the hon. Gentleman got his facts right for once.
Mr. Evans: All I can say is that the announcement was made. If the National Assembly for Wales is able—
Mrs. Lawrence rose—
Mr. Evans: Perhaps the hon. Lady could restrain herself for a moment.
If the National Assembly and, indeed, the Secretary of State for Wales and the First Minister, can do something to alleviate job losses from that factory, I should welcome it.
Mr. Simon Thomas: Will the hon. Gentleman give way?
Mr. Evans: I shall give way in a moment. I am always grateful for any assistance from the hon. Gentleman; I once tried—completely unsuccessfully—to prevent him from getting his job.
On the job losses at Corus and elsewhere, we all have to recognise that part of the problem relates to who is speaking for Wales on the economy—that came out on Thursday when the job losses were announced. Is it the Secretary of State for Trade and Industry? Is it the Secretary of State for Wales? Is it the First Minister? Is it
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the Liberal Democrat Deputy First Minister, the Minister for Economic Development? There has been such fragmentation of responsibility.
People who are losing their jobs realise that the one great growth industry in Wales is politics—there are far more politicians and assistants for politicians. However, it certainly did not help the workers at Corus to hear the Secretary of State for Trade and Industry say at the Dispatch Box that he knew nothing about the job losses. If only the right hon. Gentleman read the Financial Times, The Daily Telegraph, The Times or any other newspaper, perhaps he would have had an inkling.
Mr. Thomas: The hon. Gentleman recently visited my constituency and informed me of his plans to do so. Unfortunately, he has not realised that the job losses at Dewhirst to which he referred took place in my constituency—165 jobs were lost. There is also a threat of job losses in Fishguard, to which many of my constituents travel to work. That is the reality of job losses in rural areas; in a small town such as Lampeter, the loss of 165 jobs—mainly held by women—is a tremendous blow.
Mr. Evans: On top of all that, an enormous number of jobs has been lost at Associated Dairies during the past two to three years. Furthermore, it is extremely hard to put jobs back into the dairy sector.
I know that a meeting on job losses is being held today. Many people will be affected; not just those who work directly for Corus, but those working in other industries that rely on the company. Service jobs and those in other manufacturing sectors depend on the health of Corus. Those people will be looking to the Government to set up a package of support and regeneration in the area. I hope that the Under-Secretary of State for Wales will be able to offer us some guidance on that matter as quickly as possible; those people must be extremely worried about the job losses. I do not know whether the meeting has finished—[Interruption.] The hon. Gentleman indicates that it will finish shortly.
The Library has produced figures on social exclusion in Wales; in each category, the document gives figures for the United Kingdom as a whole, followed by the figures for Wales. The number of children in workless households is higher than in the United Kingdom generally. The number of children in households with relatively low income is higher in Wales. The number of working-age people in employment is obviously lower in Wales. The number of working-age people in workless households is higher in Wales. The number of working-age adults on income support for two years or more is higher in Wales. That makes fairly bleak reading.
The report entitled "Social Exclusion in Wales"—to which the hon. Member for Clwyd, South (Mr. Jones) will, no doubt, shortly refer—contains some chilling statistics, especially those on teenage pregnancies, to which he refers specifically.
Mr. Martin Caton: If the Conservative party is so concerned about social exclusion in Wales, why has it boycotted the entire social exclusion inquiry by the Select Committee on Welsh Affairs?
Mr. Evans: The hon. Gentleman is referring to the fact that the Select Committee's Conservative Members were unable to be present during the deliberations.
Several hon. Members rose—
Mr. Evans: I will not give way. The hon. Gentleman will be able to discuss that matter with the individuals concerned.
The incoming Labour Government told us that things could only get better in Wales; they were trusted by people in Wales, but things have got decidedly worse in the past four years. Things will get better; they will get better in a few weeks' time when we have a general election. We are fed up to the back teeth with hearing statistic after statistic from Ministers. They tell us how good things are, but we know from visiting villages, towns and cities in Wales that there is real poverty. There are areas of growth, too, but the pockets of poverty hurt deeply. Things will only get better when this rotten Government are chucked out a few weeks from now.
5.1 pm
Mr. Denzil Davies: The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) requests that there should be a further look at the Barnett formula. He calls for a Barnett formula mark 2, which would be more needs based and perhaps more sophisticated than the current one. The Select Committee on Welsh Affairs also issued that call. I certainly would not resile from that, but if we have a needs-based Barnett formula mark 2, more money will presumably come to Wales from the British Exchequer. I do not object to that; it is the purpose of having a better formula, but neither the hon. Gentleman nor his hon. Friends have told us how their policies could bridge the gap between the even greater public expenditure derived from a Barnett formula mark 2 and the amount of tax, sadly, that is raised in Wales.
Total public expenditure in Wales is about a third higher than the total sum raised in tax. If we had a better Barnett formula—let us have one—that gap would be even greater. Plaid Cymru Members want to leave the British Union and join the European Union. That is their policy, and they are perfectly entitled to it, but they must tell the people of Wales how they would bridge that gap in expenditure.
Plaid Cymru Members may say that they could somehow borrow the difference, but that would be practically impossible because a borrowing requirement of 15 per cent. of GDP would be involved, but the Maastricht criteria allow for 3 per cent. at most. If they borrowed at that 15 per cent. rate, they would not be allowed to join the euro, and they would have given up the British pound. Perhaps they will therefore tell us in what currency would the Welsh steel industry trade. Clearly, that policy would be a total disaster not only for the Welsh steel industry, but for the Welsh economy.
I agree with the hon. Member for Meirionnydd Nant Conwy and the terms of the motion tabled by his party that the Corus cuts and closures will worsen the problems of social exclusion in Wales. Of course, they will certainly make them worse in the short term, but I hope that the position can be retrieved in the medium term. I speak as the Member of Parliament for a constituency that does not produce basic steel, but it does produce tinplate. It has produced tinplate from before the first world war and it was producing it when President McKinley and the United States imposed the McKinley tariff on Llanelli tinplate.
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In the 1970s, three factories in Wales produced tinplate. They were at Trostre in my constituency; Velindre in the constituency of my hon. Friend the Member for Gower (Mr. Caton); and Ebbw Vale in the constituency of my hon. Friend the Member for Blaenau Gwent (Mr. Smith). If the Corus proposals go through, only one plant will remain. In the 1970s, those three factories had 90 per cent. of the domestic tinplate market in the United Kingdom. More than 20 years later, that figure is now down to 50 per cent. and British Steel has never explained to me how it managed to lose almost 40 per cent. of the market. Perhaps it was too much to expect it to hold on to 90 per cent. of the domestic market—that figure may have been artificial—but the considerable decline has left us with the prospect that only the plant at Trostre will remain.
It gives no pleasure to those who work in Trostre and those who live in my constituency—they have lived with the problem for years—that our plant will be the last one remaining. Under the plans, the plant at Ebbw Vale is expected to close. We hope that the proposals put forward by the trade unions mean that at least two plants will produce tinplate in Wales. We need two plants to maintain a 50 per cent. market share, and, if that share is eroded any further, it will affect the plant in my constituency and the plant at Port Talbot that produces steel for the tinplate industry.
My hon. Friend the Member for Monmouth (Mr. Edwards) and others mentioned the meeting that some of us had with the chairman and chief executive of Corus. We heard what was said and have considered it carefully. Indeed, I have studied the press release that Corus issued. It seems fair to say that Corus gave three reasons for embarking on this venture. First, the euro-sterling exchange rate is a problem; secondly, it sees a decline in the UK's manufacturing base; and, thirdly, problems are associated with the overproduction and price of steel. I shall return to those three reasons shortly, but they are all external to the company.
I accept that the company was losing money but, as I understand it, the reconfigurated debt will be higher than the one it had before the reconstruction and all the cuts and closures took place. Although the company was losing money, no one has ever suggested that there were internal reasons for that. As we have heard, productivity is excellent and the steel industry in Britain is probably as efficient as almost any steel industry in Europe and it is close to being as efficient as the industry in Japan. The problems are not internal, but Corus is using internal measures—a blood sacrifice or slaughter of the innocents among the workers in the industry—to try to solve or react to external problems. It is not sitting down with the Government and the trade unions to consider how to deal with those external factors.
No one is suggesting that a solution is easy—some forces are outside all our control—but the company should do what Ford did. It should sit down with Government to try come to terms with the problems. The company's problems are not the result of a lack of productivity, but of external factors. Although we accept that the chairman and chief executive of Corus is under considerable pressure, it is totally indefensible for him not to come to Government to describe the external problems that the industry faces and to ask for help in alleviating them as best we can. The company failed to do that and engaged in an old-fashioned blood sacrifice that will not resolve the problem. Such an approach is totally out of date.

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I should like to deal with the three reasons to which I referred, for which I have a ladder of escalation. The third reason on that ladder is the relative values of the pound and the euro. There is no doubt of the importance of that factor, as the exchange rate clearly worked against the steel industry. It has now improved a little, but the weakness of the euro was bound to affect British companies—including those in the steel industry—that were trying to export to the continent at a time when the pound was strong.
However, we should not imagine that the problems would not have arisen or that jobs would not have been lost if we had joined the euro. Indeed, we are not hearing that suggestion as much as we did previously and I certainly do not believe that Corus takes that view. When I ask people who favour joining the euro at what rate they would do so, I do not get an answer. Joining it at the present exchange rates or even the higher rates of six months ago would crucify not only the steel industry, but most of Welsh and British manufacturing.
On the other hand, it is sometimes suggested that devaluation is a great panacea. I have never thought that that is the case; devaluation is merely something that occasionally has to happen. I shall not betray any confidences, but I think that the Corus chief executive said in our meeting that, if devaluation was to help the company, it would have to occur at a rate of some 20 per cent. on present levels. Indeed, some European Commissioners have suggested a devaluation of 20 to 25 per cent. I find surprising the idea that the Germans and French would allow us to devalue at such a rate. If they did so, there would be other consequences: higher interest rates, higher taxes, cuts in public expenditure or a combination of the three. We would be in a completely different situation. Devaluation is not a panacea, and neither is joining the euro.
The second factor on my escalator of reasons is the decline in manufacturing industry. We must agree with Corus to some extent on that point. Yes, there has been a decline.
Mr. Öpik: I was of the belief that the reduction of interest rates was a mechanism by which one could devalue a currency. The right hon. Gentleman appears to feel that the opposite is true.
Mr. Davies: If the hon. Gentleman is speaking about a slow and gradual devaluation that enables us to slide into the euro at a much lower rate, then perhaps we could reduce the interest rates, but how would that affect inflation? Interest rates cannot be reduced for the sake of devaluation alone; other factors must be taken into account.
There has been a decline in manufacturing, partly for structural reasons. Emerging countries have moved into the basic manufacturing activities in which Wales has been especially involved. Years ago, people laughed at Brazilian steel, but that does not happen these days. The emerging countries are producing the basic heavy metals and goods that Wales produced in the past. Structural decline has occurred not only in Wales and Britain, but in Europe and the United States. British Steel was responsible for the reduction from 90 per cent. to 50 per cent. of Wales' share in the tinplate market. That affected the steel industry; less steel can be produced in Port
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Talbot because so much of the tinplate market was lost. British Steel was, therefore, responsible for some of the decline.
I remember well the benign neglect and antipathy with which successive Conservative Governments treated the manufacturing industry in the 1980s. They had a hatred of the industry and its unions that was seen by the House time after time, year after year. Perhaps reality crept in towards the early 1990s, when it was, to some extent, realised that such an attitude was mistaken. However, manufacturing was a pariah for long periods and was not to be supported in any way.
All Governments seem to have the notion that they cannot touch manufacturing or the markets. The European Union has introduced competition rules that did not exist in the 1970s, and which make it much more difficult, although not impossible, to support manufacturing. The general agreement on tariffs and trade and the World Trade Organisation also make that much more difficult. Governments and politicians have to try to reassert themselves. We must state that we have a role. These rules cannot be made to dominate us when our communities and entire economies are under threat. It will not be easy, but politicians must stand up, rather than allowing matters to drift and fashion to prevent us from assisting manufacturing.
Corus gave three reasons for its decision. Hon. Members can choose which one is the most important, but for me, the main reason is our old friend—or perhaps not a friend—global capitalism. I talk to people in manufacturing industry in my constituency, such as those at Trostre. Enormous pressure is exerted on prices by global forces that none of us can really understand or control. That pressure means that costs must constantly be driven down to try to make a profit at the lower prices.
At our meeting with the chairman and chief executive, he said, in answer to a question that I asked, that we are getting to a point at which there is a world price for steel. I am not a great expert on the steel industry, but having been the Member for Llanelli, where tinplate is made, for 30 years, I have observed the industry. There did not used to be a world price for steel. I can see that the right hon. Member for Caernarfon (Mr. Wigley) is anticipating what I am about to say. There used to be a national steel price and a regional steel price. Indeed, there was a common belief in the industry that the prices were fixed. I do not know whether they were fixed, but if they were, those who fixed them were very clever about it, because the steel industry managed to keep out of the restrictive trade practices court, unlike cement manufacturers, who were frequently before that court.
It was thought that there was an unofficial European steel cartel. I do not blame the industry for that. Territories were carved up, partly because steel is heavy and it costs a great deal to transport it a long way. There was, perhaps, some price fixing, but it is all disappearing. It is significant that the chairman and chief executive of Corus said that we are close to having a world price for steel. He said it as if he could not believe it—after all, he is of that earlier generation in the industry.
We have heard a lot about farming. I do not want to provoke some of my hon. Friends who are not as keen on the farming community, but we have world prices for agricultural products. World prices, whether in manufacturing or farming, are determined by the lowest

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costs, which are often in emerging economies outside Europe and north America. When asked about that, the chairman and chief executive of Corus said, "Where is the steel coming from then?" It is coming from Brazil and former Soviet Union countries such as Russia, and Soviet satellites such as Poland and Czechoslovakia. Perhaps it is not very good steel—I do not know. Maybe one could not make tinplate from it; it probably has too many impurities. However, it is pouring into Europe and creating a world price for steel.
I understand that the European export price for hot-rolled coil has fallen by $100 a tonne in the past 12 months. The price at the beginning of that period was $300 a tonne, and is now down to $200 a tonne. I am not saying that the price will fall further. Maybe special factors were involved. I am not an expert on the steel industry, but what will happen to Corus if the price falls again by $100 or even $50 a tonne? Where will that leave our industries? All Governments and politicians must pay less obeisance to the market and to globalisation than we have tended to in the past. We must see what we can do; otherwise, our communities and our economies may gradually disappear. That is why Corus should have talked to the Government. Perhaps they could not have provided a solution, but the company did not have an answer either, and it should therefore have consulted the Government. It is better to talk, to get together and try to resolve the problem.
We live in deflationary times but we have a structure for inflation. The marketplace determines the price and the grand governors of central banks—the Basle mafia—decide interest rates and pretend that they are all powerful and that they have made a great impact. That also applies to Dr. Alan Greenspan. Perhaps those bankers are all right when there is inflation, but they are no good in times of deflation. For example, half the Japanese banks have gone bankrupt. In times of deflation, we do not need central bankers, but government. We needed government in the past in such times, and we shall need it again in future if deflation worsens.
I have listed the three factors, and I believe that the third is most significant. Whatever factor is most important, companies should talk to Governments, let them get involved and ascertain whether we can tame the forces that often drive our industry to the wall. It will be a major task to rebuild our communities, but I believe that it can be done. We must try to broaden our manufacturing base. Everybody says that, and it is easy to say, but harder to do. We must broaden our base to include information and communication technology if we can. That will not be done by what my noble Friend Lord Healey used to describe as monetary and financial wheezes. A couple of points off corporation tax and 0.5 per cent. off the interest rate may help—I do not decry such measures—but many of our communities in south Wales have a genuine structural problem.
There is also a structural problem in education, especially in science and mathematics. I do not mean training after leaving school, but basic education in those subjects. Why is the south-east of England powering ahead in manufacturing? Why is the gap widening, as the hon. Member for Meirionnydd Nant Conwy said? Partly because the education and training that people receive there is better than that in Wales. We must match the
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best. We must start pursuing excellence again, and stop equating excellence with elitism, which is different. We did it once, and we can do it again. We must show the political will to achieve that. Yes, we must have the resources, the money from the Treasury, but let us show the political will to raise the standard of education and learning in our communities. Then we will solve the problem.
5.23 pm
Mr. Dafydd Wigley: I congratulate the right hon. Member for Llanelli (Mr. Davies) on his speech. I agree with many of his comments, and his point about education was vital. We must regenerate our pride in education and our commitment to it. It is essential to future industries, technologies and job opportunities in Wales.
I congratulate the Select Committee on Welsh Affairs on its comprehensive report, which forms the background to the debate. It makes many excellent recommendations, and I congratulate its Chairman, the hon. Member for Clwyd, South (Mr. Jones) and its members. I congratulate especially my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd) on getting so many Plaid Cymru policies adopted by the Committee. His influence is far reaching.
The challenge is to persuade the Government to adopt the Committee's recommendations and not to leave the report on dusty shelves. They need to be implemented. The Minister's opening speech made no commitment to taking any action on the report. As he knows, I have a lot of respect for him, but his speech was awash with complacency. He boasted about action that the Government claim to have taken. Poor people in Wales know the truth; they experience the reality of poverty. No amount of Government spin can change that.
Let us consider some of the economic factors that form the background to the report. Gross domestic product per head in Wales has dropped from 92 per cent. of the United Kingdom average in the 1960s to 79 per cent. now. In 1999, the proportion of working-age people in employment in Wales was 68 per cent., compared with 80 per cent. in south-east England. The proportion of working-age people in workless households in Wales was 16 per cent., more than twice as high as in south-east England.
The employment rate for people with disabilities in Wales was only 31 per cent., compared with 51 per cent. in south-east England. The employment rate for lone parents in Wales was 47 per cent., compared with 56 per cent. in south-east England. The employment rate for those aged over 50 was 56 per cent. in Wales, compared with 74 per cent. in south-east England. Those are some of the background figures to the social and economic problems that Wales is facing.
Mr. Ruane: The right hon. Gentleman mentioned some of the negative statistics for Wales. May I counter them with some positive ones? There have been 40,000 new jobs in Wales since 1997—29,400 in the two years to September 2000—and 67,000 families have benefited from the working families tax credit. The new deal has helped 27,000 jobless people into work in Wales. More than 100,000 workers in Wales are benefiting from the

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national minimum wage—approximately 10 per cent. of the work force. All that has been achieved under Labour over the past three and a half years.
Mr. Wigley: I was not expecting the hon. Gentleman to read out his manifesto for the forthcoming election in his Clwyd constituency. No doubt he will put the best spin that he can on the figures that exist. However, he acknowledges that—as the Committee stated in its report—severe problems face Wales. Of course, we welcome the new jobs have that have been created, such as the 600 at Bridgend that were re-announced today by Ford. We welcome any good news. However, we must look at the targets at which we should be aiming. The gulf in GDP per head has widened over the past 20 years, and the problem is getting progressively worse—even over the past three years, as my hon. Friend the Member for Ynys Môn (Mr. Jones) rightly said.
I turn to this week's disastrous news about the job losses in the steel industry. The hon. Member for Vale of Clwyd (Mr. Ruane) will not be surprised that I am referring to this, because the decision has hit Shotton as it has hit the steelworking towns of south Wales. The First Minister in the Assembly, who represents Cardiff, West here at Westminster, has estimated that the total effect of the decision, including knock-on effects, will be the loss of about 7,000 jobs in Wales.
That loss will be on top of a loss of between 2,000 and 3,000 jobs in the agricultural sector over the past 18 months, which was mentioned earlier. Although we welcome the confirmation of the new jobs that have been announced, even with the knock-on effect taken into account, they go only one tenth of the way towards remedying the recent job losses, and they will certainly not represent any progress in increasing the amount of income per head in Wales.
It is unacceptable that any company should treat its work force as Corus has done. It is equally unacceptable that the Government should have stood back from the crisis that has been rapidly developing over the past 18 months. When we warned of the dangers, we were told to stop scaremongering. However, not only the steel industry but all manufacturing has been hit by the Government's policy of maintaining the high parity of the pound. The number of manufacturing jobs in Wales decreased from 230,000 in 1990 to 192,000 last year—a decrease of 38,000 jobs. Tourism and agriculture have also been hit by the over-valued pound.
Mr. Martyn Jones: I want to correct the right hon. Gentleman. As I understand it, the Government's policy is not to maintain the parity of the pound but to maintain interest rates. That has nothing to do with the parity of the pound.
Mr. Wigley: Goodness me! If one retains interest rates as the only tool with which to control inflation, and holds them at too high a level, that will inevitably affect the parity of the pound because money will be sucked in. That is basic economics. Handing over control to the Bank of England, with only one objective—to control inflation—will inevitably have a knock-on effect on employment. Even the United States gives its central bank the twin objective of having regard to employment and to inflation.
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The Government are totally culpable in passing over responsibility to the Bank of England without giving it responsibility for employment as well as inflation.
Mr. Llew Smith: The right hon. Gentleman obviously disapproves of handing over powers to the Bank of England, and I agree with him about that, but what are his views on handing over powers to the European central bank? As I understand it, if we hand over such powers, the matters that the right hon. Gentleman believes should remain in our control will no longer do so.
Mr. Wigley: I believe that such policies must be accountable to the people and that policies followed by the Bank of England or the European central bank must have an eye on what is acceptable to the people in terms of employment as well as inflation. For the Government—a Labour Government—to have abandoned employment as a criterion for the Bank of England in controlling the economy beggars belief. The founding fathers of the Labour party, including those in the hon. Gentleman's Blaenau Gwent constituency, must be turning in their graves as they contemplate this situation.
There is a need to get the pound to a realistic parity against the euro and I believe that, having achieved that realistic level, we should be in the European currency system to give manufacturing the confidence it needs to plan its future. It is unacceptable that the factories of Wales—
Mr. Smith: Will the right hon. Gentleman give way?
Mr. Wigley: No, not at the moment. I shall make progress rather than take running interventions from the hon. Gentleman.
I hope that some Labour Members agree, unless they have totally changed their colours, that it is unacceptable that the factories of Wales should be put in jeopardy by the vagaries of the currency casino from which we are suffering, now and over recent years.
The steel issue runs even deeper. Steel is a basic commodity of the manufacturing economy, basic for construction and basic for any independent defence policy of these islands. For the Government to sit back and allow the future of that basic industry to be determined by shareholders in the New York stock exchange and decisions of Dutch executives is not acceptable. The steel job losses will hit Gorseinon and Shotton and cast a grave shadow over the future of the Llanwern steelworks, where productivity is 20 per cent. higher than that of the Dutch steelworks that will benefit from Corus's cuts in the United Kingdom.
For Ebbw Vale—yes, the constituency of the hon. Member for Blaenau Gwent (Mr. Smith)—the news is absolutely calamitous. That community depends on steel. It still has not got over the previous round of cuts and has some of the worst figures in Wales for poverty and deprivation. Now it is to be hit by the scandalous and unacceptable closure decision. A Labour Government—yes, a Labour Government—are sitting back and letting that happen, but let us not pretend that they are helpless.
Of course the Government can do something, as the right hon. Member for Llanelli suggested. They could and should have intervened to tell Corus in no uncertain terms that they would not sit back and allow such a

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vital industry to be undermined, but they did not. They could intervene even now on the basis of the strategic importance of the steel industry, as suggested last week by Edwina Hart, Labour's Minister for Finance and Communities in the National Assembly. They could say that, unless Corus rethinks, they will act to take the United Kingdom steel industry back into some form of public ownership or, at the very least, to underwrite the trade union proposals for a takeover or a management buy-out. They could examine the model successfully followed by Tower colliery or the Glas Cymru model for Welsh Water.
What is not acceptable is for the Government to wring their hands, shake their head and utter spurious, cynical noises of sympathy while doing absolutely nothing to save those vital jobs.
Mr. Smith: Will the right hon. Gentleman give way?
Mr. Wigley: Not at the moment.
What on earth is the point of electing a Labour Government if they stand back and watch communities such as Ebbw Vale be sacrificed on the altar of the New York stock exchange?
Mr. Hanson: The Labour Government are not sitting back and watching jobs being lost. Like my right hon. Friend the Member for Llanelli (Mr. Davies) and some of my hon. Friends, I represent steelworkers. We met Corus and met the unions before, during and after the announcement and we shall continue to do so. I will not take posturing from the right hon. Gentleman on those points.
Mr. Wigley: And I will not take mock anger at the Dispatch Box from the Minister. If the Government were doing something, we should have known what they were doing. By now, they should have shown their colours by their actions.
It is time that the Government shook themselves out of the self-congratulatory complacency that they have shown in the debate. We need action on steel. We need a proactive regional policy, as recommended by the Select Committee. We need to lower corporation tax to attract new investment, as has been done in Ireland. We need regional variation of tax as a tool of regional policy, as recommended by the Select Committee. We need operating aids such as lower national insurance in objective 1 areas. We need—again, as highlighted by the Select Committee—a revised Barnett formula to ensure that resources are available to tackle social deprivation in Wales in line with our needs. It is sad to see that the Secretary of State for Wales has already ruled out that option in his reply to a question on 18 January.
It is outrageous that the funding available for Wales in 2001 is still based on the 1978 formula, taking no notice of the enormous structural changes in the Welsh economy over the past 20 years. Unless the Labour Government are prepared to act on such social priorities, what on earth is the point of their existence? The clock is ticking not just for Ebbw Vale and Llanwern, but for new Labour in Wales. Unless they change course, their time will soon be up.
5.35 pm
Mr. Llew Smith: For me and for my constituency, the past week has been sad, dramatic and awful—to say the least.
For many years, my community has been built on coal and steel. The coal industry was wiped out by the previous Tory Government immediately after the 1984 miners' strike, when miners in my community stood up to defend their industry and, indeed, their community. Now, the steel industry might also be wiped out, once again by the privatisation policies of the previous Tory Government.
What annoys many people in my community is the refusal to accept that privatisation is the problem. What makes us angry is when Corus spews out a long list of excuses why Ebbw Vale as a steel town should close and why other steel jobs should go. We are told on one day that it is a problem of transport costs, on another that it is because of the climate change levy and on yet another that it is a problem of rates. We are then told that it is a problem of the euro.
Corus seems to have changed its position on the euro almost daily. A few weeks ago, it said that the euro was the problem. A week or so ago, one of its chief executives said that the euro was not the problem. When the closure was announced, we were told once again that the euro was the problem. However, some 24 hours after the closure, the Financial Times reported that the euro was not the problem. I do not believe that the euro, transport costs, the climate change levy or rates had anything to do with the closure of the Ebbw Vale tinplate plant and the loss of other jobs throughout the steel industry. I believe that it has happened as a result of the incompetence of the Corus directors, who, instead of building on the productivity achieved by the work force, spent the past 18 months asset-stripping the industry. The community in Blaenau Gwent is now paying for that.
I have said it before and I shall say it again: ominously, on the day on which Corus was formed, one of its first acts was not to make a statement saying that it was determined to build up the steel industry but to hand over approximately £700 million, which Moffatt described as a special payment, to its shareholders. As Moffatt said, had the £700 million not been handed over, it is unlikely that the merger would have gone ahead. Thus, we know that the merger was about money, not about building up one of our greatest industries.
Corus also appropriated some £900 million from the workers' pension fund. It was a workers' pension fund in more ways than one. Corus seemed to have forgotten that much of the money was paid into that fund when the steel industry was publicly owned. Over the past 18 months, Corus has spent some £135 million buying up companies throughout the world. Although it found the £135 million to do that, it could find only £3 million to invest in the UK steel industry.
It is ironic and obscene not only that Corus did not invest in the plant in Ebbw Vale as it should have done, but that 24 hours before the closure was announced, it got around to investing in a nameplate for the plant. During the previous 18 months, the company had not been willing to invest in a new nameplate. A piece of white tarpaulin with the name "Corus" splattered across it had been thrown over the previous nameplate. That says something about the company's contribution.

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The joint chief executives were sacked a while back. If we accept what we were told, they were sacked for incompetence, so why were they given millions of pounds of compensation? On top of that, when Corus was formed, one of its first acts was to give massive wage increases to the former Dutch managers. Surely that cannot be right. It is certainly not right when we compare that with the treatment of the steelworkers—the people who built the industry, and turned the plant in Ebbw Vale into one of the most efficient and productive in the world.
Steelworkers in Ebbw Vale have made sacrifice after sacrifice by accepting changes in their conditions of employment and wages. All that seems to be irrelevant to Corus. After making those sacrifices and building the industry and the plant into one of the most successful in the world, surely the workers should have been rewarded for their endeavours. In fact, they have been punished.
The media have reported that 750 jobs will be lost if that plant closes. They are wrong. Over the past couple of years, Corus has outsourced much of its work. People who were previously employed by the company are now employed by other firms but are still working at the plant. That is another 250 jobs. On 1 March, another 250 workers will be made redundant as a result of the last lot of job losses. The small community of Ebbw Vale will suffer 1,250 job losses. No matter how we measure deprivation—unemployment, low wages, ill health or bad housing—sadly, that community is top of the list. We have not recovered from the previous job losses in the steel industry or from the wiping out of the mining industry.
What annoys people in the community is that they made cuts in their conditions of employment, such as wage standstills, but Corus has never accepted that it is those workers who are the real experts. They have worked in the steel industry not for one or two years, but for 20, 30 or 40 years. They know the industry inside out. Sadly, their skills, talents and creativity were ignored by Corus's management. On no occasion did Corus say to those workers that it wanted to use their skills, talent and creativity to help it to build up the industry in the months ahead.
Cores showed disdain not only for the work force but for the Government, trade unions and other public representatives. I have been going into the tinplate works in Ebbw Vale for many a long year, but in recent years there has been a change and I have been prevented from doing so. A few weeks back, I said to Mr. Stuart Wilkie, the works manager, that I wanted to go into the plant to have a chat with the management and the union regarding the problems facing the industry and the possible job losses. Mr. Wilkie said that I could go into the plant, but only after the decision had been taken. Indeed, on the day of the decision, Mr. Wilkie said that Mr. Vickers, one of the managing directors, had asked him to contact me to explain the redundancies.
Like most other Members who are present, I never use foul language. Never does an "expletive deleted" pass my lips. That occasion, however, was an exception, because the Mr. Vickers who advised the plant manager to inform me on the telephone of redundancies and the closure of the plant was the very same Mr. Vickers—the very same managing director—who, on the day on which Corus was formed, rang me at home at 8.30 am and assured me that there would be no job losses, that the plant's future was not threatened and that the plant was secure. Obviously
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the position has changed dramatically, because of the contribution of the Moffats of this world, the Vickerses of this world and yes, the works managers of this world. Instead of building up the industry, those people have tried to destroy it.
I think I am known in my group as one who, when I think the Government are wrong, says so and votes accordingly. In this instance, however, I do not believe that the Government are to blame. The blame lies entirely with Corus, and any Member who tries to shift the blame will do a disservice to my community—to the 1,250 people who will lose their jobs, and the 1,250 families who will suffer. They will suffer as a result of Corus: Corus and privatisation have caused this disaster.
When we met Mr. Moffat some days ago, I came away totally demoralized—not just in the context of the future of Ebbw Vale, but in the context of the steel industry's future in the United Kingdom. If the Moffats of this world remain in power within the industry, I predict that in five years there will be no steel industry in the United Kingdom. It seemed to me that Mr. Moffat had no commitment to the industry and no strategy for it; I sensed short-termism.
What probably happened was this. Mr. Moffat sacked the two chief executives and then thought, "I will sort this out", but he could not sort it out. He could not sort out the problems that obviously existed with the banks.
Another thing annoyed me. Mr. Moffat told us that no decision had been made about the future of the Ebbw Vale plant, yet about 24 hours later he and the others were planning a press release saying that the Ebbw Vale tinplate works would close. Mr. Moffat was lying through his teeth: it is impossible to reach any other conclusion.
It was bad enough to lie to me. What is more repulsive is the fact that Mr. Moffat lied to people who depended on the industry and the plant for their future: he and people like him will not be forgiven for that.
The current debate in Ebbw Vale is not about whether the Government can provide extra money; it is still about saving the plant, and that is what we must do. By working-class standards—by the standards of Blaenau Gwent—those were 1,250 good jobs. When the people who no longer have those jobs sign on the dole, the alternative will be not 1,250 jobs in some other manufacturing firm but, probably, security officers' jobs at £4 an hour. That cannot be right.
All our energies must go into saving the plant. In doing so, we shall not only be saving the lives of many people in that community; we shall be saving the life of the steel industry. That is a goal worth fighting for, which is what those in my community are still doing.
5.49 pm
Mr. Richard Livsey: My heart goes out to the hon. Member for Blaenau Gwent (Mr. Smith). What Corus has done to his community is unforgivable, and he rightly makes a cry for a fightback by the work force. We must all support him in that, whatever party we are in. We must do something to save the community, which depends totally on the steel industry. I feel strongly about the matter.
In Wales, the background to this subject is extraordinary. Social exclusion has been linked with problems of unemployment, poor skills, low incomes,

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poor housing, high crime, poor environment, bad health and family breakdown. The archetypal view is that social exclusion is found on inner-city estates, but one must remember that it can be found in rural areas, too, and that poor people in rural areas can be particularly excluded because of a lack of transport, increased costs and remote services.
Wales suffers disproportionately compared with other areas in the United Kingdom. Wales has a higher rate of children living in poverty, lower levels of educational achievement, more housing of poor quality, low rates of pay, a higher rate of households with no one in employment, a higher proportion of people on income-replacement benefits, a particularly high proportion of people in receipt of sickness and disability benefits, lower life expectancy and higher mortality rates. I am sorry to have to say it, but that is a legacy of 18 years of Conservative rule. The Conservatives have nothing to be proud of in leaving that legacy for us to pick up.
Social exclusion refers to more than a set level of income. It refers to the marginalisation of people in society and to their exclusion from what we would normally think was a thoroughly decent society.
Gender is important in this respect. In Wales, 245,000 women live on or around the poverty line. That is inexcusable. Lone parents, who are nearly always women, are even less likely to be in paid employment. Women represent the most significant group of socially excluded members of society. That must not be forgotten. With all the job losses, it is the women who have to struggle to bring up their families in poverty—that is what we are talking about.
People over state retirement age comprise 20 per cent. of the Welsh population. That is higher than in the UK as a whole. In my constituency, 24 per cent. of the population are in that category.
Mr. Öpik: Does my hon. Friend agree that sparsity considerations make it more expensive to cater for the social needs of the elderly in rural areas such as mid-Wales and that it is important that the Government are sensitive to that? Otherwise, they create elderly ghettoisation, which exacerbates the life expectancy and health problems that he describes.
Mr. Livsey: I thank my hon. Friend for that intervention, but, as he knows, that problem already exists in many areas. Indeed, where post offices have closed, elderly people cannot go to collect their pensions. I know that they can get them through the post, but that contributes to closures of even more post offices. The blame for that lies both with the previous and present Governments. They have both closed an awful lot of sub-post offices.
Chronic ill health and mortality rates are significantly higher in Wales than in England. A lack of public transport, particularly in rural areas, hits people very hard.
Children and young people are disproportionately affected by social exclusion. Thirty-seven per cent. of children live in poverty—in a household with well below 50 per cent. of average income, which currently stands at £200 a week. More than 5 per cent. leave school at
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16 with no qualifications. In some parts of Wales, the figure is much higher than that. It used to be about 20 per cent. in some of the valley areas, but that is being tackled.
Young people aged 16 to 18 are excluded from the national minimum wage. I am a member of the Select Committee on Welsh Affairs, which investigated social exclusion. We met that problem head on in interviews with young people. They must get fair treatment and assistance to earn the full minimum wage. Few young people have access to a car, so they are particularly affected by the lack of public transport.
The rate of teenage pregnancy is particularly high in Wales. The vulnerability of children who are looked after by local authorities has been highlighted by the north Wales child abuse tribunal. It is important to remember that children in care and those leaving care are highly vulnerable. We are starting to attack that problem, rightly, with the establishment of a Children's Commissioner for Wales.
People with disabilities or long-term illnesses are frequently excluded from the mainstream of society. People in ethnic minorities suffer higher unemployment by far than those in other categories.
The crisis in agriculture and the disastrous decline in farm incomes have had a knock-on effect on the rural economy. Good jobs in the sector are in short supply. The rural population is ageing. As those of us in mid-Wales know, the average age of farmers in the area is 58. I do not know whether young people will replace them. We are losing an entire generation of young farmers, who are finding work elsewhere and, indeed, leaving our communities. A graphic figure has been quoted in a different context: between 1998 and 2000, 6,000 farmers left the land in Wales. That is the equivalent of the announcement by Corus last week on the steel industry: 6,000 people in England and Wales as a whole will have to leave the industry.
There is a crisis in both manufacturing and farming. Wales overall depends on both sectors. The 3,000 job losses at Corus are supplemented by 550 job losses in the dairy manufacturing industry in Carmarthen and Cardiff. Welsh milk is to be bottled in Gloucestershire and sent back again. The environmental costs of that are frightening.
Wales's gross domestic product has declined by 12 per cent. in the past 20 years. Half a point of GDP went for every year of the 18 years that the Conservatives were in power.
The problems with pay are serious. We have 28.3 per cent. of the population earning less than £250 a week. As a result of unemployment and low pay, many people in Wales depend on social security benefits. Twenty-five per cent. of households in Wales and nearly 500,000 people received income support or family credit in 1997, for example.
The Corus announcement comes on top of everything that I have referred to. We believe that many aspects of the Corus shutdown and the redundancies in the steel industry mean that there will be very little, if any, investment and a great decline in jobs.
There is a strong case for a management buy-out of the Ebbw Vale plant. It should be by a combination of management and work force. The Government should support that with investment money. We should start with Ebbw Vale and go through to Llanwern because, again, almost half the work force is going there.

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It was stated over the weekend that Corus had no plans whatever for new investment in the steel industry. I agree with the hon. Member for Blaenau Gwent—I do not think that there will be a steel industry left in five years. I am critical of the Government for allowing British Steel to be amalgamated into Corus, which was a fundamental error of judgment.
Steel is a fundamental part of our economy and we can have very little manufacturing without it. The Government must intervene in the matter, but that must not involve straightforward renationalisation. The work force have to be assisted to manage plants, perhaps by bringing in management, and to secure a profitable industry. There may have to be restructuring and the industry may have to be made more efficient, but that cannot happen without massive investment to make the industry more competitive.
Mr. Llew Smith: The hon. Gentleman talks about a management and workers' buy-out at Ebbw Vale. Although I have no knowledge of such a buy-out, he may be aware that Mr. Moffat, the chairman and chief executive of Corus, has said that he does not favour competition and that he will not accept a buy-out of any part of the industry. It seems ironic that people who oppose public ownership because they oppose monopolies and who support privatisation because they support competition do not favour competition when it is in their own backyards.
Mr. Livsey: I understand why the hon. Gentleman says that. However, Corus's objective is to remove 3 million tonnes of steel from United Kingdom steel production. That figure has been chosen because it is the amount of UK steel production that is currently being exported unprofitably.
We cannot expect a very sympathetic response from some multinational companies. I worked for a multinational company for quite some time and I realise that some boardrooms will cut and run. I think that we are dealing with just such a boardroom in this case. Other boardrooms will co-operate and negotiate. In its announcement today, on Bridgend, Ford has given an example of the latter type of management. Hon. Members are wrong, however, if they think that Corus will negotiate; it will not. Corus will not even try to negotiate.
I believe that we must resurrect the steel industry and that we have to do so in the many plants that will be closed down.
Mr. Smith: There is obviously a communication problem. I thought that the point of my comments was to make it clear that Corus is not going to negotiate with the Government, public representatives or trade unions. It is not going to negotiate, full stop. I was not implying that Corus will suddenly decide to negotiate on the possibility of allowing alternative ownership for plants being closed. Corus has categorically stated that it will not sell those plants. We therefore assume that it will knock down and clear away the buildings.
Mr. Livsey: The hon. Gentleman is correct to say that Corus is a public company. However, if the company is £1.6 billion in debt, as it is, and if an offer can be made, surely it would be better to pursue that option than to
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spend money for years on social security payments for those who have lost their jobs, which is what could happen. There is room for a constructive initiative to save Britain's steel industry. That is what we are talking about. We must save our steel industry as a basic part of our economy.
There are many ways in which action can be taken. We have to encourage the development of skills in the work force. I should say, to be fair, that the National Assembly is taking some action to address that issue. We are committed to training programmes that will bring enormous benefits to the overall economy. However, it is essential that we have even more investment in education.
We must also reduce the gap between rich and poor, and not allow it to widen as happened under the previous, Conservative Government and is occurring even under this Government. However, I applaud the efforts being made, through the new deal and other measures, to try to plug the wealth gap.
More has to be done for pensioners and for people on low incomes to improve their quality of life. As the Welsh Affairs Committee's report makes clear, much more assistance must be given to poor nations and regions. Additionally, reform of the Barnett formula has to be based on needs themselves. We should help lower-paid people by reducing taxation for poor taxpayers. The Liberal Democrats' policy is to raise tax on those earning more than £100,000 and to redistribute it among those who are on very low incomes.
We hope to regenerate deprived rural and urban communities, wherever they are, and to boost local services by directing more money to the provision of high-quality services, such as those provided in post offices. We also believe in tackling social disadvantage by developing an inclusive society.
Liberal Democrat Members believe very strongly that the Assembly must have more power and that fundamental new primary legislation would enable us to take immediate action to abolish, for example, tuition fees for students. We could also take immediate action to provide free care for the elderly, as has happened in Scotland.
Such legislation would also enable us more strongly to encourage the Government to change employment law, to ensure that the type of disaster that Corus has thrust upon us does not happen again. There was an opportunity at the Nice summit to take action on that issue, but it did not happen. The Government must think again about providing our employees with greater protection. Additionally, corporation tax relief and national insurance tax relief should be available in hard-hit regions.
One of our fundamental problems is that, on 1 January 1999, we did not enter the eurozone. It is a massive problem which has aggravated the difficulties with the steel industry and the exchange rate. I disagree with hon. Members who believe that it has not been a problem. Steel is not profitable largely because of the exchange rate and our position outside the euro. Manufacturing and agricultural commodity prices, whether for milk, lamb or steel, have all been affected by the disparity. The Government have to tackle the problem.
There is a lot of work to be done. The steel industry has to be saved, but only Government intervention can do that. There was intervention in the 1920s and 1930s, when

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my family was ejected from the iron and steel industry in south Wales, to which we were never to return. I do not want another generation to be placed in a similar position.
About 20 years ago, 14,000 people were working in that plant in the constituency of the hon. Member for Blaenau Gwent. Today, we are bemoaning the loss of 1,250 jobs there. The massive productivity of the steelworkers has made those jobs much more precious. Wales's steelworkers have to be rewarded for their efforts. We must give them a hand up and help them as much as possible. If that requires direct Government intervention, so be it.
6.8 pm
Mr. Martyn Jones: I am pleased to have an opportunity to speak on an issue that, for much of the past two years, has exercised the Welsh Affairs Committee and been the focus of our work. The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) is not only a Committee member, but moved today's Opposition motion. Although I am pleased to be able today to debate and to defend the Government's action to tackle social exclusion in Wales, I am somewhat puzzled about Plaid Cymru's real reason and motive for initiating the debate.
On Monday 15 January 2001, the Welsh Affairs Committee published its much awaited report "Social Exclusion in Wales", which has attracted cross-party support in Wales. On that very day, in an interview with BBC Radio Wales, the hon. Member for Meirionnydd Nant Conwy said:
"The Report is a step in the right direction".
It is indeed a step in the right direction.
The hon. Gentleman went on to tell the BBC that he wanted to see both the Government and the National Assembly for Wales working together to tackle social exclusion. As he put it, he wanted to see "all agencies working together". In today's motion, however, he has demonstrated supreme impatience with and discourtesy to one of those partners, by criticising the Government before they have been able to give their considered response to the Committee's report. Allowing such a response to be made is not only a convention of the House, but the most sensible way of approaching serious and important matters such as social exclusion.
By tabling today's motion, Plaid Cymru is simply jumping the general election gun. I believe that Plaid Cymru Members are losing their nerve at the most critical moment because they see that we have put in place the new deal, achieved the lowest ever unemployment in Wales, helped 100,000 people in Wales with the minimum wage and created the pensioners' minimum income guarantee and the working families tax credit. Only today, we heard the Government's announcement on the child tax credit. Plaid Cymru has demonstrated possibly the worst case of premature elaboration seen in this House for many years.
Mr. Llwyd: I am not going on the record as a sufferer. With respect to the hon. Gentleman, he knows as well as I do that it took nine months for the Government to
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respond to the last report. Frankly, that is not good enough. All Committee members were concerned about that; this debate may elicit an early response.
Mr. Jones: I agree, but the Government have not had time to respond to the report—they have had 21 days—so what he says is slightly disingenuous. Plaid Cymru wants things both ways. The motion castigates the Government for their alleged failure, yet it cannot wait for the Government to give a detailed response. That is not good enough.
Last June, the hon. Member for Meirionnydd Nant Conwy rightly berated the Government, saying:
"Over the past few years, we have been disappointed in the content of the responses from Governments to reports, and in the fact that there have been delays of nine, 10 or 12 months before such responses have been made available. These delays have been something of a scandal."—[Official Report, Westminster Hall, 21 June 2000; Vol. 352. c 69WH.]
I agree. However, that does not mean that the Government can respond in 21 days.
Mr. Llwyd: Has the hon. Gentleman read the motion? It does not ask for a response within any given time; the motion merely "notes" certain matters.
Mr. Jones: That is a bit disingenuous. The hon. Gentleman must be expecting a response to a motion that asks the House to take note of a report. If he carries on at this rate, he will be demanding that the Government respond to our reports before we have even had the inquiries.
What have Plaid Cymru achieved by holding this debate today? If the motion is an attempt somehow to wrong-foot the Government, it has failed miserably. If it is a serious attempt to address the problems facing Wales, it has failed. The Welsh Affairs Committee has already had an inquiry into social exclusion and we now await the Government's response. If the motion is an attempt by Plaid Cymru to advance its own agenda on social exclusion, it has failed, on its own admission. I am sure the House will be delighted to learn that Plaid Cymru fully supported the recommendations of the report.
Let me not just criticise Plaid Cymru, however. At least its Members are here—all four of them. The official Opposition showed their contempt for the issue by having only two Members sitting on their Benches. I tell a lie; the hon. Member for Buckingham (Mr. Bercow) popped in after 56 minutes, stayed for 25 minutes and has now disappeared.
Mr. Evans: My hon. Friend spoke more sense during his short contribution than the hon. Gentleman is speaking now.
Mr. Jones: Oh no, he didn't. That is the hon. Gentleman's opinion; I do not think any other Member of the House would agree.
Mr. Edwards: Could I remind my hon. Friend that when the hon. Member for Buckingham was on the Welsh Affairs Committee, he did at least attend the Committee? Would my hon. Friend confirm that the two Opposition Committee members during the social exclusion inquiry attended virtually no sittings whatever in the entire year?
Mr. Jones: My hon. Friend can say that; as the Chairman of the Committee, I could not possibly comment.

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One of the problems with having the debate today is that it is likely that the Liaison Committee will not now accept my bid for a debate on the report. Although we have very little time, I need to make a few points about the report.
The inquiry that led to our report started early in 1999—a few months before devolution—and continued until nearly the end of last year. It was one of the largest inquiries undertaken by the Committee, involving consultation with nearly 100 organisations, nine formal hearings and 11 days of visits throughout Wales. We also held three seminars—two with academics and one with representatives of ethnic minority groups in Cardiff—and an informal meeting, to which the hon. Member for Brecon and Radnorshire (Mr. Livsey) referred, with young people in Machynlleth. That was very enlightening. In addition, we visited the Republic of Ireland in March 2000, and the United States of America in June 2000.
Tackling social exclusion is a key area in which co-operation between the UK Government and the National Assembly for Wales is crucial. The National Assembly has responsibility for housing, health, transport, education and training and local government in Wales; but responsibility for social security benefits, taxation, the Employment Service, the regulation of financial services, the indirect management of the Post Office and the fight against crime all rest with the UK Government.
The Committee's main emphasis was on those areas for which the UK Government have responsibility. It is quite proper that, as a Committee of the UK Parliament, we should seek to examine most closely the activities of the UK Government. Equally, it would be difficult for us to carry out our scrutiny of the Government effectively without impinging from time to time on matters that are properly for the National Assembly for Wales.
The main area where we believe the Government can make a difference in tackling social exclusion in Wales is in tackling poverty and financial exclusion. By poverty, I mean the lack of money to buy the necessities of life and to participate fully in society. There is obviously scope for debate on what constitutes poverty and what constitute the necessities of life. The Government use an indicator of relative poverty to measure poverty—normally 50 per cent. of average incomes—but some of our witnesses argued for different definitions.
Whatever definition of poverty is used, it is all too clear that many people in Wales are poor. Unemployment in Wales is higher than in the UK as a whole, and the employment rate is lower. In some areas of Wales, such as Blaenau Gwent and Merthyr Tydfil, the proportion of the working-age population in employment is less than 60 per cent. However, there is no evidence of absolute poverty increasing and plenty of evidence of employment rising.
It is not only a matter of unemployment; for those who are in work, low pay contributes to poverty in Wales. Some 28.3 per cent. of full-time adult employees in Wales earn less than £250 a week, compared with 23.7 per cent. for Great Britain as a whole. We recommended the lower rate of the national minimum wage for 18 to 21-year-olds and entitlement to the minimum wage being extended to 16 and 17-year-olds, as the hon. Member for Brecon and Radnorshire pointed out. I hope the Government will respond to that, although we would not expect a response today.
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The problem of poverty is further exacerbated by the fact that, for many poor people, the necessities of life are more expensive. Those who have no car often pay more for their food in local shops than they would if they could reach the out-of-town supermarket. Meter payment rates for gas and electricity are higher than the rates available to those who pay monthly by direct debit.
We believe that uplifting social security benefits is central to tackling social exclusion. At present, the benefits system allows people to survive, but does not lift them out of poverty. Although poverty is one of the most obvious causes, and one of the symptoms, of social exclusion, it is not the whole problem. People may be socially excluded because they are elderly; because they have a disability; because of poor education or language barriers; because they live in a remote area with poor amenities; or for a host of other reasons. It is important to bear in mind the fact that the problems that we are addressing are varied and complex, and we should not expect simple solutions to be effective.
Central to our report is the emphasis on local solutions within a national framework. During our visits in Wales, one of the common, positive themes that emerged was that the community spirit is very much alive and just needs a helping hand. We witnessed that in the Maes Geirchan estate, in Caia Park in Wrexham, at Llanelli Hill in Abergavenny, in the City of Swansea—
Mr. Ruane: In Rhyl?
Mr. Jones: As my hon. Friend says, we witnessed it in Rhyl, and when we published our report last month at the Dusty Forge centre in Ely, Cardiff.
Capacity-building programmes—led from the bottom up by enthusiastic, energetic local people—can, we believe, be extremely effective in tackling social exclusion, especially when they are run in close co-operation with a supportive local authority, as we observed in Swansea, Torfaen and Wrexham.
The common problem associated with all the projects has been a lack of stable, sustainable funding. To address this, we recommend that funding for social exclusion projects should in most cases be for a minimum of five years. Project organisers should be given a little breathing room to put their begging bowls away for a few years and concentrate on the core work of the project. It struck us that many enthusiastic, talented people who wanted to put their energies into regenerating their local community had to spend much of their time justifying their funding and trying to make sure that the project would still exist the following year.
Pump-priming has its place and can produce impressive results, but it will not be enough in every case. In some of the most disadvantaged areas, funding may be required on a permanent, or at least an on-going, basis. We also believe that the funding regime for social exclusion projects should be streamlined and simplified. At the moment, there are too many different pots of money and too much bureaucratic control is exercised over them. It may be that we need to learn to accept a degree of risk in our social investment. After all, how often is the cost of not investing in a project given equal consideration to the cost of spending the money?
We need to move away from challenge funding to sustainable funding wherever it is required. But the National Assembly will be unable to provide this unless

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it is provided with adequate resources. Objective 1 offers a unique opportunity to bring a large injection of public funding to west Wales and the valleys, and we must ensure that it is used to good effect to tackle social exclusion. European funding is not the only answer, though. The Government must match their fine words by tackling social exclusion with hard money. The extent of social exclusion in Wales
must be recognised in the funding allocation to Wales.
Ms Julie Morgan: Does my hon. Friend agree that one of the key issues highlighted in the Select Committee's inquiry was the difficulty of moving from benefits into work? Is it not one of the important recommendations that new benefit ideas should be tried out in a pilot area in Wales?
Mr. Jones: Indeed. We need to test which benefit changes might work in the effort to tackle social exclusion. In Ireland, benefits are tapered to allow people back into work without running into a brick wall of benefit loss.
It is true that the Barnett formula is probably overdue for a revamp to reflect the real needs of both Wales and other parts of the United Kingdom. We need an anti-poverty strategy with the goal of eliminating not only child poverty—as the Prime Minister has already pledged—but all poverty, within a realistic time scale, based on clear, objective measures of the number of poor people. The Government have set the date of 2020 for the elimination of child poverty, so perhaps we could aim at eliminating all poverty in 30 years.
Mrs. Lawrence: Does my hon. Friend agree that the fact that 360,000 children are benefiting from increased child benefit shows that the motion is totally incorrect in its insinuations?
Mr. Jones: Absolutely. I will not read out the whole list of all the benefits that the Government have brought to Wales. [HON. MEMBERS: "Oh, go on.''] All right, then. In Wales, 67,000 families are benefiting from the working families tax credit; 27,000 jobless people have been helped into work through the new deal; since the launch of the new deal throughout Wales, the number of 18 to 24 year-olds unemployed and claiming jobseeker's allowance for six months or more has fallen by 73 per cent; more than 100,000 workers are benefiting from the national minimum wage—that is especially impressive in Wales, with our lower gross domestic product; and 500,000 pensioner households are receiving the increased winter fuel payment of £200.
Mr. Ruane: How does my hon. Friend feel about the contrast with the Conservative Government, under whom 5,000 pensioners froze to death—they had hypothermia—in their own homes in 1985 because they were too scared to turn on their gas or electric fires? How does that compare with Labour's record of reducing VAT on fuel from 8 per cent. to 5 per cent.—the Tories wanted to stick it up to 17.5 per cent.—and giving pensioners £200 last December in a winter fuel allowance so that they can be secure in their own homes and know that they can keep warm and pay their fuel bills?
Mr. Jones: Winter fuel allowance for those on income support means that they, too, need not suffer from cold in the winter.
In Wales, 210,000 pensioner households are entitled to free television licences; all 630,000 pensioners are to gain from above-inflation pension increases this year and next: 360,000 children are benefiting from increases in child benefit; and we have had the longest period of sustained low inflation since the 1960s.
The Government are also responsible for the tax regime, which is so important to the economic prosperity of Wales. In Ireland, the tax regime—notably the low rate of corporation tax—is attractive to both inward investors and domestic entrepreneurs, who consider it far more important than objective 1 funding in promoting economic growth and regeneration. It is time for the Government to consider regional variations in tax to encourage investment in the less developed areas.
Mrs. Lawrence: Does my hon. Friend agree that one of the major issues in tackling social exclusion must be economic stability, especially for people on low incomes? Does he agree that the fact that we have the lowest mortgage and interest rates for 30 years and the lowest unemployment rate since 1978 will go a long way towards tackling social exclusion?
Mr. Jones: Absolutely, and that also gives the Government the wherewithal to help those areas of the economy that have not yet benefited from the economic turnaround.
Mr. Evans: I am sorry to intrude on the love-in taking place on the Government Back Benches, but what about the fuel tax, which hits poor people disproportionately hard?
Mr. Jones: We reduced fuel tax from 8 per cent. to 5 per cent., as my hon. Friend the Member for Vale of Clwyd (Mr. Ruane) said. The hon. Gentleman cannot have been listening.
Mr. Evans: I am talking about petrol tax. We have among the highest petrol taxes in the world.
Mr. Jones: The Conservative Government put the biggest chunk of tax on fuel when they increased VAT to 15 per cent. The hon. Gentleman is trying to stir up this nonsense again about fuel costs being down to tax. He talked about how farmers are struggling. Many of them are struggling because of the increase from 7p to 28p a litre. There is no duty.
Mr. Evans: When farmers drive cars and use lorries to transport goods, they are paying duty. When the accelerator had done its bit and it was proved that it was not working—
Mr. Jones: You introduced it.
Mr. Evans: Indeed, but when accelerators come to the end of their useful life, they should be scrapped. The Government have been putting petrol taxes up for four years, hitting the poorest hardest.
Mr. Jones: The hon. Gentleman argues against his own case. The fuel tax escalator—rather than accelerator,

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as he was saying, perhaps because he knows that if he kept his foot off the accelerator he would not be spending so much on fuel—was begun by the Conservative Government, and we stopped it.
Mr. Evans: Labour put it up.
Mr. Jones: Of course we put up the price in accordance with the escalator before we stopped it. Fuel for the hon. Gentleman's farmers went up from 7p a litre to 28p a litre. That was the biggest increase, and everyone else was paying it, too. As usual, he is talking a load of nonsense.
Mr. Denzil Davies: To return to the proposal about a differential rate of corporation tax, and the Irish lower rate, did the Committee consider the fact that the lower rate in southern Ireland covers the whole country, so that Dublin and Galway do not have differing rates? Did it consider the problem that, if we introduced a differential system in Wales, there would be a different rate in Newport, outside the objective 1 area, and in Swansea, which is inside it?
Mr. Jones: My right hon. Friend is right. The Irish corporation tax rate is nation wide. We noted that a lot of the country's industry is based around Dublin. The economy as a whole is doing very well, but there are regional problems. We should try out different ideas, recognising that they might not all work.
Mr. Öpik: Does the hon. Gentleman accept that road haulage is particularly important in rural areas where there is no rail network on which to move goods? It would be helpful if the Government gave strategic consideration to managing that issue so that the countryside was not disadvantaged.
Mr. Jones: The hon. Gentleman will remember the Chancellor's special measures for rural transport, which added up to the equivalent of 8p a litre. The Government have listened on that point and they recognise the problem, as the Committee does in the report.
My time is up. The Committee awaits the Government's response with great anticipation. Plaid Cymru, in submitting today's motion, have demonstrated an impatience and a need to grab headlines for a day instead of waiting for a considered response from the Executive. That is sad.
6.30 pm
Mr. Simon Thomas: I congratulate the hon. Member for Clwyd, South (Mr. Jones) on his chairmanship of the Select Committee on Welsh Affairs. He and his Committee deserve all credit for their hard work on the excellent report before us. That said, I cannot accept the hon. Gentleman's criticism of our timing of the motion. Today's timely debate has allowed many Labour Members to give their views on matters including manufacturing and Corus, and to express constituency concerns and angers. Our motion is worded extremely carefully. It notes the report, and calls for no action from the Government. We expect Labour Members to support it because it is a tame motion and has cross-party support.
I pay tribute to the hon. Member for West Carmarthen and South Pembrokeshire (Mr. Ainger), who made a great contribution to the debate by distributing useful lists
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among Labour Members. He has provided much fun. Unfortunately, as my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd) has just said to me, those lists give only the good news. I agree that new Labour has a good news story to tell on job creation, and neither we nor our motion have detracted from that.
The motion addresses the wider issues of social exclusion that my hon. Friend set out in his sterling opening speech. By setting out his definitions of poverty and social exclusion, my hon. Friend made it clear that social exclusion goes wider than employment or even wages. It includes access to services, particularly in rural areas, where there are many difficulties in Wales. My hon. Friend was clear on how steps could be taken to engender indigenous business growth and support. That could have been of use to Corus, although it is too late to find out whether that would have been so. Certainly, such support should be available for the future support of what remains of the steel industry in Wales.
My hon. Friend made it clear that the Government could yet intervene in the debate on the future of that industry. The right hon. Member for Llanelli (Mr. Davies) acknowledged that the Government have a role, and it has been too long since a Government were prepared to intervene in industrial policy. After 18 years of Conservative Governments ignoring industrial policy, we have had four years in which Labour has been content to let the Bank of England decide industrial policy. That has been disastrous for Wales.
My hon. Friend the Member for Meirionnydd Nant Conwy concluded with some remarks on the Barnett formula. It is worth impressing on the House some views on the formula. Lord Barnett himself assumed that it would be temporary. My hon. Friend compared the formula to the Drws-y-nant traffic lights, which he said had been in place for 23 years too long. I must tell him that the Barnett formula has existed for 22 years, so it will need only one more year before it beats that record. As with traffic lights on roads that we pass along every day, we have grown used to the Barnett formula. It can turn red or green as it lets us have some money one year or none the next. We never question the need for the formula, and that is the point of this debate.
I was pleased to hear Labour Members acknowledge the need to review the formula because it is outmoded, mechanistic and formulaic. It is based on what the Welsh economy was like 20 years ago, when gross domestic product was closer to 90 per cent. than the 80 per cent. that it represents today. For 20 years, the formula has been entrenched, instead of dealing, as it was supposed to, with changes year on year. The passage of time means that it deals with figures above the funding coming into Wales, not just with changes to funding. The case for changing the formula is unanswerable. The only opposition to change has come from the hon. Friend the Member for Brent, East (Mr. Livingstone).
Mr. Caton: Will the hon. Gentleman give way?
Mr. Thomas: I do not have much time. I did not write a brief before arriving, as many Ministers do, and I want to respond to everyone who has made a point in the debate. If I have time later, I will give way to the hon. Gentleman.
Labour Members suggest that we see the Barnett formula as meaning that every part of the country must get back what it gives in income tax and other taxation.

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That is not the purpose of the formula. In fact, that is the view taken by the hon. Member for Brent, East, who is now the Mayor of London. The Barnett formula should be a true, needs-based analysis of the needs of the. Welsh economy and public services, and any review should take that into account. If that were so, the formula would go closer to doing what European regional development funds do. They consider what happens all over the European Union and recognise which areas need extra support.
Redistribution is a good, old-fashioned socialist word, but that is what we want enshrined in the relationship between Wales and the Westminster Parliament so long as the people of Wales still want that relationship to exist. The Barnett formula has its place, but it must be reviewed and its analysis must be more closely based on need. If it is not, the people of Wales will question even more the relationship between this place and the National Assembly and Government in Wales.
We welcome the Under-Secretary of State for Social Security, the hon. Member for City of York (Mr. Bayley), to a Plaid Cymru debate. Usually, the hon. Member for Vale of York (Miss McIntosh) attends Welsh questions, and it is good to see her neighbour today. The Minister spoke well from his brief—he had it off pat—but it was a brief full of statistics with no feeling for how people lead their lives in Wales. What he said would not go down well with those who feel the depths of social exclusion, poverty and low incomes. By telling us always what the Government intend to do, the Government betray their own voters, who expected them to have done something after four years in government.
The Minister was quite right to refer to the 18 extraordinary years of Conservative Government, but the Government have had nearly a quarter of that time: they should be at least a quarter of the way towards reforming society, but that does not seem to be so.
Mr. Bayley: If the hon. Gentleman reads my speech later, he will find that I have listed not what the Government intend to do, but what we have done. When we came to power, 95,000 pensioners had pensions of £62.45 a week or less, and they now receive the minimum income guarantee. Their incomes are £18 higher, and will rise to £92 in April. Unemployment is down, and the number of parents no longer on income support but in work has risen. In response to the hon. Gentleman's point on children, I can tell him that 21.1 per cent. of children in Wales were in workless households in spring 1997, and the figure is now 19.5 per cent. We are moving in the right direction, although I would be the first to agree that there is a long way to go.
Mr. Thomas: The Minister finishes on precisely the point that I wrote down from his speech—the Government need to do more. That is precisely what the motion says. Statistics may show movements this way or that, but there is an amazing sense of complacency from Labour Back Benchers, particularly as regards manufacturing industry.
The hon. Member for Ribble Valley (Mr. Evans) was correct to concentrate some of his remarks on the rural areas, because they have been somewhat ignored by Conservative Members. I was pleased to see him
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occupying the Conservative Benches this afternoon. He is right to point out the problems in rural areas. When numbers of job losses are small, they do not give rise to the shock headlines that the media want to publish.
There is a lack of understanding of the real social exclusion in rural areas. It has to be seen to be believed. It takes a visit to a dairy farm where the farmer's income is less than £4,000 and he is too proud to claim the benefits that are available. He will not make that claim on behalf of his family because he is a business man who has always run the farm himself—he has always kept it going. That happens increasingly in rural areas.
In two years, 6,300 farming jobs were lost—under the Labour Government, not under any previous Government. By comparison, 16,000 manufacturing jobs were lost. Between 165 and 175 jobs are being lost in my constituency: of 700 people—mainly females—employed in manufacturing in Ceredigion, 165 have lost their job overnight, with the closure of a factory in a town of fewer than 2,000 people. That has a devastating effect. Such job losses may not make the headlines, but they are just as damaging to small communities.
In the countryside, we are experiencing a silent shutdown. The countryside is slowly being turned off—tractor by tractor; factory by factory; post office by post office—until it will be nothing but scrubland or a nice place to visit. That is the truth about what is happening in the countryside at present. Labour Members must understand that context for social exclusion and poverty, as well as that for the large numbers of people affected in the valleys and the south-east of Wales. Those areas are equally important, but the countryside has been overlooked.
The right hon. Member for Llanelli pursued excellence in his speech. He gave a concise account of his understanding of the events at Corus during the past few months. I do not disagree with his three analyses. His speech was similar to the one that he always makes about Barnett; he made a threadbare defence of the Treasury's control of the economy of Wales.
Mr. Caton: Will the hon. Gentleman answer the question posed by my right hon. Friend the Member for Llanelli (Mr. Davies)? Under an independent Wales, if Plaid Cymru was successful, how would it meet current public expenditure with a much lower tax take? We need an answer to that question.
Mr. Ruane: Where is the beef?
Mr. Thomas: Hon. Members will have to wait for our manifesto at the general election—[Interruption.] I recommend that the hon. Member for Gower (Mr. Caton) reads the manifesto. He will see exactly what our policies are for the people of Wales—[Interruption.] We will certainly send a copy to the right hon. Member for Llanelli. He will need to read the Plaid Cymru manifesto, because he will need to know where his opposition is coming from.
My right hon. Friend the Member for Caernarfon (Mr. Wigley) made the most powerful speech of the debate—with its combination of intellect and emotion. I pay tribute to him. The House will miss his voice—as a Member of this place for a quarter of a century, he has advocated policies in an impassioned way. That will be

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missed. The National Assembly's gain will be our loss, although I am sure that the Plaid Cymru Bench will be full enough—partly, at least, to make up for that.
The hon. Member for Blaenau Gwent (Mr. Smith) is no longer in the Chamber. He spoke eloquently on behalf of his constituents and expressed their anger at the closure in Ebbw Vale. All hon. Members have great sympathy with them. Plaid Cymru Members realise that Ebbw Vale and Blaenau Gwent are among the most deprived areas in Wales. Our motion does not seek to undermine that.
Although British Steel was privatised by the Conservatives, its merger with Corus was approved by the Labour Government. At the time, the situation in the financial markets was known; the Government must have known that the merger presaged large financial restructuring. There is Government responsibility. Although Corus wielded the axe, the death sentence was passed by the Government's economic policies.
I can do no more than read from a memo; it is internal to the National Assembly, but unfortunately, it fell into the wrong hands. It states:
"So I think the message is the Government is not willing to offer any help to Wales at this very bleak time."
That memo was sent to civil servants by the second most senior civil servant in Wales. It shows clearly that the Government have responsibility for what happened at Corus.
The hon. Member for Brecon and Radnorshire (Mr. Livsey) made his usual measured and excellent contribution, although his party has partial responsibility for the actions of the National Assembly. Its members in Wales will be judged on that record.
The motion sets out the recommendations of the Select Committee, although our debate has been somewhat overshadowed by events at Corus—rightly so. In a recent report on manufacturing in Wales, the TUC referred to the haemorrhaging of jobs—that is clearly shown at Corus. The motion includes short-term and long-term prescriptions that have cross-party support. We are not actually asking the Government to do much more than note the motion. It would thus be delightful if Labour Members who represent Welsh constituencies could join us in the Division Lobby to show the people of Wales where their hearts are and where their intentions lie.
In the meantime, the Government make the lame argument that at least they are not the Conservatives. Thank goodness that in Wales we have Plaid Cymru to take on the fight from the Labour party at the next general election.
6.46 pm
The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): The debate has been interesting. I want to clear up one matter immediately for my hon. Friend the Member for Clwyd, South (Mr. Jones). We very much welcome the report of the Select Committee on Welsh Affairs. The Government will consider it and will respond to it in due course, so I do not want to pre-empt discussion of the report in this debate.
One of my hon. Friend's key points was about partnership. The Government are considering that idea; we support partnership between ourselves, the National Assembly and local authorities in Wales to ensure that we tackle social exclusion. I shall take lessons from no one
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in the House about social exclusion. I see it every day in my constituency—as my right hon. and hon. Friends do in their areas. Many of us came into politics to tackle social exclusion. The contribution of the Select Committee is certainly welcome, but we recognise those exclusion issues and we will take them on in due course.
There has been considerable discussion of the situation at Corus. My right hon. Friends the Members for Alyn and Deeside (Mr. Jones) and for Llanelli (Mr. Davies), the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd), the right hon. Member for Caernarfon (Mr. Wigley), my hon. Friend the Member for Blaenau Gwent (Mr. Smith), the hon. Member for Brecon and Radnorshire (Mr. Livsey) and other hon. Members referred to Corus in their contributions. Last week's announcement at Corus was devastating for the individuals and communities affected. I live among steelworkers—the Shotton plant is close to my constituency. Many of my friends and neighbours work there.
There is no doubt that Corus has been facing difficulties. Trading conditions are difficult; the company has had to consider such issues. However, for the Government, I say that the response of Corus represents short-termism at its worst. As my right hon. Friend the Member for Llanelli pointed out, that response is defeatist; it is a short-term reaction, with no planning for the longer term.
Other manufacturing companies in Wales have taken a different stance. They have taken the long-term view, as my right hon. and hon. Friends pointed out. Toyota and Nissan, in recent weeks, and Ford at Bridgend today have taken decisions on investment in the United Kingdom that are not based on short-term issues.
The Corus decision does not reflect the excellent productivity gains made by the UK steel industry, as my right hon. Friend the Member for Llanelli pointed out. In 1999, UK steel output was 571 tonnes per man—compared with 543 tonnes in Germany and 534 tonnes in France. As has been noted, the Government and Corus should get round the table. Corus should reconsider its decision and work with the trade unions, the Government and the Assembly to make progress on the matter.
My hon. Friend the Member for Blaenau Gwent is not in the Chamber because he is meeting the Prime Minister—as is my right hon. Friend the Secretary of State for Wales—to try to bring some common sense to the matter. They want to discuss with Corus the issues that have been raised in the debate and show the company the correct way forward. Not one steelworker in Wales needs to lose his job. Corus should think again. The company and Corus should consider those issues.
Mr. Caton: Will my hon. Friend assure me that the discussion with Corus will move on? If we cannot persuade Corus to maintain production, it should allow the management and work force to takeover and run the plants themselves. The fact that Corus is frightened of competition suggests that the units can function perfectly well. The work force and management in Bryn Gwyn and Gorseinon in my constituency are considering that option. We must press Corus to allow that to happen, if it is not prepared to carry on production itself.
Mr. Hanson: I hope that Corus will consider those options. As the hon. Member for Brecon and Radnorshire

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said, Corus should consider such issues. In fact, proposals have been put to it from several sources, including Llanwern. However, having attended, as a constituency Member, last week's meeting with Sir Brian Moffat, as did many of my right hon. and hon. Friends, I doubt whether Corus will consider those issues.
While dealing with Corus, I wish to nail an issue to the floor. In his speech, the hon. Member for Ceredigion (Mr. Thomas) mentioned e-mails from the National Assembly. Discussions are under way, but no final decision has been taken on the issues mentioned in the e-mail, which does not represent the final view of officials, let alone those of Ministers or Assembly Members. The Treasury has not been involved in those discussions. I ask the hon. Gentleman to work with the Government to ensure that we deal with Corus on a united front, as we should.
Mr. Ieuan Wyn Jones: I welcome the Minister's assurance that we have moved on from the information given in that e-mail. Will he assure the House that if the Treasury provides money for Wales as a result of those job losses, it will be in addition to the Barnett block and will not be set off against, or top-sliced from, our current budget? Will it be additional money—yes or no?
Mr. Hanson: The hon. Gentleman would expect me to say that the discussions are on-going. We need to work for a solution for Corus and Wales as a whole.
It is not all bad news in Wales today, as many of my hon. Friends have said. In the past two months, the creation of many new jobs has been announced, including 264 jobs at Wireless Systems International in Cwmbran; 110 new jobs at Pure Wafer in Swansea; 100 new jobs at IQE (Europe) in Cardiff; and 83 new jobs at Surface Technology Systems in Newport. BAE Systems has created many new jobs near my constituency, with Government support. Today, Ford has announced more than 500 new jobs at Bridgend, bringing the production of a new generation of Jaguar V6 engines to Wales. The employment action zones in Preseli, Merthyr and north Wales have been important in bringing employment to Wales.
Ford's £240 million investment in Bridgend is particularly welcome because it shows that the Welsh economy and the British economy are open to major foreign investments, which support and bring employment to this country. That challenges the issues that Corus has brought to the table about the impact of Government policy on the steel industry. If that massive investment can go ahead, I feel confident that other investment will also go ahead.
Mr. Öpik: Will the Minister give way?
Mr. Hanson: Time is tight, so I am afraid that I shall have to carry on.
The good news is reflected in many Plaid Cymru Members' constituencies. For example, in the constituency of the right hon. Member for Caernarfon, unemployment has fallen by more than 400 and 800 people have started work under the new deal since the general election. In Ceredigion, unemployment has fallen and more than
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650 have started work under the new deal since the general election. In Meirionnydd Nant Conwy, unemployment has fallen by more than 500 since the general election. In Ynys Mon, unemployment has risen, but more than 1,000 people have benefited from the new deal since the general election.
As hon. Members have said, the resolution of such problems are not easy. The hon. Member for Brecon and Radnorshire mentioned the legacy of 18 years of Conservative rule, but I noticed that the hon. Member for Ribble Valley (Mr. Evans) did not apologise for many of the problems that have led to social exclusion. My hon. Friend the Member for Clwyd, South also made that point. The basic need of deprived communities in Wales and elsewhere is a strong and stable economy. The Government are not complacent about those communities. We are driving forward an active industrial policy, investing in skills, making the most of new technology and supporting industries for the future. We are supplying a platform of economic stability, by cutting public borrowing and ensuring low inflation.
As my hon. Friend the Member for Clwyd, South and other hon. Members have mentioned, we now have the lowest level of unemployment since the general election and for many years before. Some 1,000 new jobs are being created every month by the Government in Wales. Youth unemployment has fallen by 63 per cent and long-term unemployment has decreased by more than 12,000. On the basis of those sound economic policies, the Government, in partnership with the Assembly, can tackle social exclusion and begin to target special assistance on the communities that need it most.
The Government's generous settlement in the spending review—£8.5 billion in 2001, increasing to £10 billion in 2003–01— represents a real investment. The securing of objective 1 funding will bring wealth and prosperity to Wales and the country as a whole. My right hon. Friend the Member for Llanelli has asked on numerous occasions how those resources and objective 1 funding would be secured and matched if Wales were independent. That question has not been answered tonight; nor has it been explained to the Welsh Grand Committee or at any Welsh Question Time. I look forward to hearing the explanation at the general election because, without the strength of the Government behind Wales, those resources would not be invested and we would not be tackling social exclusion.
The hon. Member for Ribble Valley said that we should do this and that, but if he were in government after the general election, he would cut public spending. The nationalists could not afford, and the Conservative party would cut, the increases in state pensions and child benefit, the free television licences, the new deal, the working families tax credit and many of the policies that my right hon. and hon. Friends know benefit their constituencies and tackle social exclusion. On the impact of British Government policy, let no one in Wales forget that the Conservative party would cut public expenditure and the nationalists would not have the resources in Wales to make the fundamental shift involved in using the resources of the United Kingdom to ensure that people in the poorest communities in Wales secure a better deal.
The hon. Member for Ceredigion said in both the Welsh Grand Committee and in this debate that we have accomplished no real achievements in Wales. However,

715
as my hon. Friends have pointed out, we have created 40,000 new jobs since the general election. In addition, the number of jobs in Wales has increased by more than 29,000 in the past two years; 67,000 families benefit from the working families tax credit; 27,000 people are going through the new deal scheme; 100,000 workers benefit from the minimum wage; 100,000 pensioner income households benefit from the minimum income guarantee; and 500,000 pensioners benefit from increased winter fuel allowances. Those are the Government's real and genuine achievements in Wales.
The rural economy has also been mentioned, and all the measures that I have described benefit it as well. In addition, my right hon. Friend the Prime Minister's summit on 30 March last year meant that an extra £15 million of agriculture expenditure was made available for less-favoured areas in Wales; £2.2 million was provided for the dairy sector; £2.5 million for the beef sector; and £6 million for the sheep sector. They are important measures that impact on rural and urban areas.
The agenda on social exclusion has become clear from the debate and it is clear that there are issues that the Government need to deal with further. There are measures that we can and will take in our second term to increase inclusion in our society. However, if we follow the Conservative way, we shall have further cuts in public spending and, if we have an independent Wales, the country will not be able to afford the benefits that a Labour Government bring to Wales. I commend our amendment to the House.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 37, Noes 271.

Division No. 103]

[6.59 pm

AYES

Allan, Richard

Kennedy, Rt Hon Charles

Ballard, Jackie

(Ross Skye & Inverness W)

Berth, Rt Hon A J

Kirkwood, Archy

Bell, Martin (Tatton)

Livsey, Richard

Brand, Dr Peter

Moore, Michael

Breed, Colin

Oaten, Mark

Burnett, John

Öpik, Lembit

Burstow, Paul

Rendel, David

Campbell, Rt Hon Menzies

Russell, Bob (Colchester)

(NE Fife)

Sanders, Adrian

Cotter, Brian

Smyth, Rev Martin (Belfast S)

Fearn, Ronnie

Stunell, Andrew

Taylor, Matthew (Truro)

Foster, Don (Bath)

Tonge, Dr Jenny

George, Andrew (St Ives)

Tyler, Paul

Gorrie, Donald

Webb, Steve

Hancock, Mike

Wigley, Rt Hon Dafydd

Harvey, Nick

Willis, Phil

Heath, David (Somerton & Frome)

Hughes, Simon (Southwark N)

Tellers for the Ayes:

Jones, Ieuan Wyn (Ynys M ôn)

Mr. Elfyn Llwyd and Mr. Simon Thomas

Keetch, Paul

NOES

Abbott, Ms Diane

Bailey, Adrian

Adams, Mrs Irene (Paisley N)

Banks, Tony

Ainger, Nick

Barnes, Harry

Ainsworth, Robert (Cov'try NE)

Barron, Kevin

Allen, Graham

Bayley, Hugh

Anderson, Janet (Rossendale)

Bell, Stuart (Middlesbrough)

Armstrong, Rt Hon Ms Hilary

Benn, Rt Hon Tony (Chesterfield)

Ashton, Joe

Bennett, Andrew F

Atherton, Ms Candy

Benton, Joe

Austin, John

Bermingham, Gerald

716

Best, Harold

Gerrard, Neil

Betts, Clive

Gibson, Dr Ian

Blair, Rt Hon Tony

Gilroy, Mrs Linda

Blears, Ms Hazel

Godsiff, Roger

Blunkett, Rt Hon David

Goggins, Paul

Boateng, Rt Hon Paul

Golding, Mrs Llin

Borrow, David

Gordon, Mrs Eileen

Bradley, Keith (Withington)

Griffiths, Jane (Reading E)

Bradshaw, Ben

Griffiths, Nigel (Edinburgh S)

Brinton, Mrs Helen

Griffiths, Win (Bridgend)

Brown, Rt Hon Nick (Newcastle E)

Grocott, Bruce

Browne, Desmond

Grogan, John

Byers, Rt Hon Stephen

Hain, Peter

Hamilton, Fabian (Leeds NE)

Campbell, Alan (Tynemouth)

Hanson, David

Campbell, Ronnie (Blyth V)

Harman, Rt Hon Ms Harriet

Campbell-Savours, Dale

Healey, John

Cann, Jamie

Henderson, Doug (Newcastle N)

Caton, Martin

Hendrick, Mark

Cawsey, Ian

Hepburn, Stephen

Chapman, Ben (Wirral S)

Heppell, John

Chaytor, David

Hill, Keith

Clapham, Michael

Hinchliffe, David

Clark, Dr Lynda

Hodge, Ms Margaret

(Edinburgh Pentlands)

Hoey, Kate

Clark, Paul (Gillingham)

Hoon, Rt Hon Geoffrey

Clarke, Rt Hon Tom (Coatbridge)

Hope, Phil

Clelland, David

Hopkins, Kelvin

Coaker, Vernon

Howells, Dr Kim

Coffey, Ms Ann

Hughes, Ms Beverley (Stnetford)

Coleman, Iain

Hughes, Kevin (Doncaster N)

Colman, Tony

Hurst, Alan

Connarty, Michael

Hutton, John

Cooper, Yvette

Iddon, Dr Brian

Corbett, Robin

Ingram, Rt Hon Adam

Corston, Jean

Jackson, Ms Glenda (Hampstead)

Cox, Tom

Jackson, Helen (Hillsborough)

Jamieson, David

Crausby, David

Jenkins, Brian

Cryer, Mrs Ann (Keighley)

Johnson, Alan (Hull W & Hessle)

Cummings, John

Johnson, Miss Melanie

Dalyell, Tam

(Welwyn Hatfield)

Davey, Valerie (Bristol W)

Jones, Rt Hon Barry (Alyn)

Davidson, Ian

Jones, Helen (Warrington N)

Davies, Rt Hon Denzil (Llanelli)

Jones, Martyn (Clwyd S)

Davies, Geraint (Croydon C)

Jowell, Rt Hon Ms Tessa

Davis, Rt Hon Terry

Joyce, Eric

(B'ham Hodge H)

Kaufman, Rt Hon Gerald

Dean, Mrs Janet

Keen, Alan (Feltham & Heston)

Denham, John

Keen, Ann (Brentford & Isleworth)

Dismore, Andrew

Kemp, Fraser

Dobbin, Jim

Kennedy, Jane (Wavertree)

Doran, Frank

Kidney, David

Dowd, Jim

Kilfoyle, Peter

Dunwoody, Mrs Gwyneth

Ladyman, Dr Stephen

Eagle, Angela (Wallasey)

Lammy, David

Eagle, Maria (L'pool Garston)

Lawrence, Mrs Jackie

Edwards, Huw

Leslie, Christopher

Efford, Clive

Love, Andrew

Ellman, Mrs Louise

McAvoy, Thomas

Ennis, Jeff

McCafferty, Ms Chris

Etherington, Bill

McCartney, Rt Hon Ian

Field, Rt Hon Frank

(Makerfield)

Macdonald, Calum

Fisher, Mark

McDonnell, John

Fitzpatrick, Jim

McFall, John

Fitzsimons, Mrs Lorna

McGuire, Mrs Anne

Flint, Caroline

McKenna, Mrs Rosemary

Flynn, Paul

Mactaggart, Fiona

Follett, Barbara

McWalter, Tony

Foster, Rt Hon Derek

McWilliam, John

Foster, Michael J (Worcester)

Mahon, Mrs Alice

Foulkes, George

Mallaber, Judy

Galloway, George

Mandelson, Rt Hon Peter

Gapes, Mike

Marshall, Jim (Leicester S)

George, Rt Hon Bruce (Walsall S)

Marshall—Andrews, Robert

717

Maxton, John

Roy, Frank

Meacher, Rt Hon Michael

Ruane, Chris

Meale, Alan

Ruddock, Joan

Michael, Rt Hon Alun

Russell, Ms Christine (Chester)

Michie, Bill (Shef'ld Heeley)

Salter, Martin

Milburn, Rt Hon Alan

Sedgemore, Brian

Miller, Andrew

Sheldon, Rt Hon Robert

Mitchell, Austin

Short, Rt Hon Clare

Moffatt, Laura

Simpson, Alan (Nottingham S)

Moonie, Dr Lewis

Skinner, Dennis

Morgan, Ms Julie (Cardiff N)

Smith, Rt Hon Andrew (Oxford E)

Morgan, Rhodri (Cardiff W)

Smith, Angela (Basildon)

Morris, Rt Hon Ms Estelle

Smith, Miss Geraldine

(B'ham Yardley)

(Morecambe & Lunesdale)

Morris, Rt Hon Sir John

Smith, Jacqui (Redditch)

(Aberavon)

Smith, Llew (Blaenau Gwent)

Mountford, Kali

Snape, Peter

Mowlam, Rt Hon Marjorie

Soley, Clive

Mudie, George

Spellar, John

Mullin, Chris

Squire, Ms Rachel

Murphy, Rt Hon Paul (Torfaen)

Stevenson, George

Naysmith, Dr Doug

Stewart, David (Inverness E)

Norris, Dan

Stewart, Ian (Eccles)

O'Brien, Bill (Normanton)

Stoate, Dr Howard

O'Brien, Mike (N Warks)

Stringer, Graham

O'Hara, Eddie

Stuart, Ms Gisela

Olner, Bill

Sutcliffe, Gerry

Pearson, Ian

Taylor, Rt Hon Mrs Ann

Pickthall, Colin

(Dewsbury)

Pike, Peter L

Taylor, Ms Dari (Stockton S)

Pond, Chris

Temple—Morris, Peter

Pope, Greg

Thomas, Gareth (Clwyd W)

Pound, Stephen

Thomas, Gareth R (Harrow W)

Prentice, Ms Bridget (Lewisham E)

Timms, Stephen

Prentice, Gordon (Pendle)

Tipping, Paddy

Prescott, Rt Hon John

Todd, Mark

Primarolo, Dawn

Touhig, Don

Prosser, Gwyn

Trickett, Jon

Purchase, Ken

Truswell, Paul

Quin, Rt Hon Ms Joyce

Turner, Dennis (Wolverh'ton SE)

Quinn, Lawrie

Turner, Dr Desmond (Kemptown)

Radice, Rt Hon Giles

Turner, Neil (Wigan)

Rapson, Syd

Twigg, Derek (Halton)

Reed, Andrew (Loughborough)

Vis, Dr Rudi

Robertson, John

Ward, Ms Claire

(Glasgow Anniesland)

Wareing, Robert N

Robinson, Geoffrey (Cov'try NW)

Watts, David

Roche, Mrs Barbara

Whitehead, Dr Alan

Rogers, Allan

Williams, Rt Hon Alan

Rooker, Rt Hon Jeff

(Swansea W)

Rooney, Terry

Williams, Alan W (E Carmarthen)

Ross, Ernie (Dundee W)

Williams, Mrs Betty (Conwy)

718

Wilson, Brian

Wright, Tony (Cannock)

Winnick, David

Wyatt, Derek

Winterton, Ms Rosie (Doncaster C)

Wood, Mike

Tellers for the Noes:

Woodward, Shaun

Mr. Mike Hall and

Woolas, Phil

Mr. Tony McNulty

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.
MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House notes the Government's central aim is a fair and prosperous society that offers opportunity for all, and that both economic prosperity and social justice depend on people being able to achieve their full potential; endorses the Government's commitment to eradicating child poverty, to providing employment opportunities for all who can work, to rewarding saving, and to ensuring that older people live secure, active and fulfilling lives and to tackling the root causes of poverty and social exclusion; further notes and expresses concern at the announcement by Corus on 1st February 2001; believes that the Corus action is a short term solution which is damaging for the individuals affected and the communities concerned; and calls on the company to think again about the planned closures and redundancies and instead work with the trade unions, Government and the National Assembly for Wales to identify a better way forward.
Mr. Nicholas Soames: On a point of order, Mr. Deputy Speaker. You will be aware that the close friends and associates of the Deputy Prime Minister have today organised a tube strike that has caused the most appalling suffering and inconvenience to the travelling public. There have been scenes of complete carnage on the streets and the strike has been a grotesque inconvenience. Have you received an indication from any Minister, however lowly, of a wish to explain to the House what has happened and what has been done to try to restore the travelling privileges of the British public?
Mr. Deputy Speaker (Sir Alan Haselhurst): As the hon. Gentleman might suspect, no such information has been supplied to me. However, his remarks will have been heard.

Care for the Elderly
Mr. Deputy Speaker(Sir Alan Haselhurst): I should inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.
7.13 pm
Mr. Paul Burstow: I beg to move,
That this House welcomes the NHS Plan's commitment to a care system founded on the principles of equity and fairness; regrets that the Plan discriminates against older people with chronic and long-term illness by continuing to means-test them for their own care; believes that the Plan creates a fault-line between nursing and personal care; further believes that the Plan fails even to provide nursing care free on the basis of need, limiting the concession to registered nurse time; and calls on the Government to implement the Royal Commission's proposals for personal and nursing care to be provided on the basis of a person's assessed need instead of means.
Three and a half years ago, the Government established the royal commission on long-term care. Liberal Democrats welcomed the initiative, which offered the prospect of a fresh start and an end to the scandal of people being forced to sell their homes to pay for their care. The royal commission was asked to conduct its inquiry and report quickly, and it did so. In little more than a year, it published a detailed report that analysed the problems, offered a practical blueprint and set out how long-term care could be reformed for the future. The report was published in February 1999, and it is now more than three years since the commission's work was initiated. In those three years, a discredited and unfair system of means testing has remained in place, people's means have determined the care that they receive and more homes have been sold to pay for care.
The royal commission said that charges for personal and nursing care should be scrapped. Liberal Democrats agree. We recognise that charges
"increase the proportion of funding from the unhealthy, old and poor compared with the healthy, young and wealthy"
and that they
"discourage the use of necessary services."
Those are not my words, but those of the NHS plan. We should be mindful of them in this debate.
Those who argue for means-tested care say that personal care has always been means tested, but that is not true. This debate does not concern luxury goods and services that people choose to obtain, but essential and intimate care—tasks that frail, sick or disabled people would carry out for themselves if they had the necessary strength, will or knowledge. Long-term care is a contingency, not a probability. Its costs fall disproportionately on the sick, frail and disabled. That is why the royal commission said that personal care should be free, but on the basis of an assessment of need.
Care costs will not run out of control. As royal commission member Claire Rayner said in a letter published in The Times today, the tasks in question include
"intimate personal care such as washing, feeding and help with lavatory needs".
People will not demand to be washed more often or to be helped to be fed more regularly merely because the service has become free. Care costs will balloon only if the level of unmet need in this country is far greater than
720
the current Government or any previous one have been willing to admit. The royal commission did not say that all costs should be paid by the state. It made it clear that the board and lodging costs of care should be met by individuals and said that we should expect to need to meet our housing costs throughout our lives. Liberal Democrats believe that the costs of care are a risk that should be met collectively.
By rejecting the royal commission's central recommendation, the Government are continuing a means test that discriminates against older people with chronic and long-term illness. The Government's position is clear: wealth, not health, will determine what care a person receives. If one has lifetime savings of £18,000 in a bank account, a pension or a home, the Government's message is clear. They say, "Don't get frail, sick or old, because if you do, you'll be charged." Our care system should not be a substitute for our tax system. If the Government want to redistribute money from the wealthy people in this country, they should not use poor health as the criterion for accessing it. Our care system should transfer wealth from the well to the sick, with no ifs or buts along the way.
What are the Government doing in practice? They would like hon. Members and people outside the House to believe that they are acting on the royal commission's proposals for free nursing care, but that is not the case. They have chosen a very narrow definition of nursing care and their proposals do not even make all nursing procedures free at the point of delivery. Only the costs of registered nurse time that is spent providing, delegating or supervising care will be met by the NHS, which will not pay for the time of the health care assistant or care worker who carries out the bulk of long-term care work.
That most mean of definitions, which treats nursing as registered nurse time, is clearly provider based and is a long way from being people centred. How are the Government to disentangle the costs of nurse-provided care from those of nursing care that is provided by others? Care homes will find themselves forced to measure costs and to cost the amount of nursing time that somebody receives. That will produce a system that is not only costly and bureaucratic, but which rewards dependence and drives people into dependency.
Mr. Adrian Sanders: Is my hon. Friend aware that many people in residential care require more nursing support as they get older, but not enough to justify their being transferred to the nursing care sector? That is imposing on the residential care sector great cost burdens that are not reflected in the income that it receives.
Mr. Burstow: My hon. Friend makes a valid point. Indeed, in many cases it is entirely appropriate for people to continue to live in what they regard as their home, rather than to move to another place to receive nursing care, and for the care to be brought to them. There is a problem with the fees for many residential homes, which is one of the reasons why there has been a collapse in confidence in the residential and nursing home sectors—a collapse that has led to the closure of many nursing homes.
Mr. John Bercow: I am grateful to the hon. Gentleman for giving way because I think that he is making some sensible points. Does he agree that the

721
Government's arbitrary and capricious distinction between nursing and personal care is rejected not only by the Liberal Democrats, as he made clear, and the official Opposition but, at least as importantly, by the Royal College of Nursing and the Patients Association?
Mr. Burstow: It is certainly rejected by a long list of organisations, including the RCN, Age Concern and Help the Aged. However, perhaps the speech of the Conservative spokesman, the hon. Member for Meriden (Mrs. Spelman), will establish whether the Opposition view the distinction between the two items as capricious. We need a clearer idea of the Conservatives' policy on long-term care.
Mr. Bercow: Our policy is very clear.
Mr. Burstow: I have seen the future of care, and it is a barcode. In the USA, a definition similar to that proposed by the Government has resulted in a barcode system being used so that care homes can electronically account for the time spent by members of staff, and residents can be billed accordingly. In some states, care staff carry hand-held barcode readers and laminated sheets of barcodes for residents' names, each task that is performed and the start and finish times.
A health care assistant will arrive to help Mrs. Smith, for example, to get up in the morning. She will scan the barcode for Mrs. Smith, the barcode for the start time for the job, the barcode for dressing and the barcode for the finish time. At the end of her shift, she will go to the desktop computer and download the data from her scanner so that, task by task, the care that Mrs. Smith receives can be itemised, analysed and charged. In America, that was described as a pioneering system for managing nursing time in care homes. I think that it simply turns care homes into supermarkets and care into a commodity.
Mr. David Heath: My hon. Friend is describing an absolute dystopia. With conditions such as dementia, is there any realistic distinction between nursing care and personal care? They seem to me to be exactly the same in many instances.
Mr. Burstow: My hon. Friend is absolutely right. Earlier today, Methodist Homes came to Portcullis House and staged a short play to demonstrate that if we are serious about people-centred care and about removing the divide between health and social care, we need to focus on individual needs. Unfortunately, maintaining a charging system for personal care makes it impossible to provide seamless care to the individual, and the result is discrimination against people with dementia, Parkinson's disease and many other chronic, long-term conditions. That undermines the Government's claim that they want a seamless service, because until they deal with the issue that the royal commission was asked to address, they will not achieve that seamless service.
Following the intervention by the hon. Member for Buckingham (Mr. Bercow), I want to tackle the Conservatives' policy, which he said is clear.
Mrs. Caroline Spelman rose—
Mr. Burstow: I will happily take the hon. Lady's intervention because I am interested to hear precisely what
722
the Conservatives' policy is and whether they will be sticking to the Government's spending plans for social services.
Mrs. Spelman: I can probably save the House a great deal of time by pointing out that during the Second Reading of the Health and Social Care Bill, my hon. Friend the Member for Woodspring (Dr. Fox) made it perfectly clear that we would match the Government on personal care and NHS funding. We share the hon. Gentleman' s concern about the definition of nursing care.
Mr. Burstow: That is why I felt that the policy was not clear. What the hon. Lady said is as clear as mud. Taking their classic position, the Conservatives want it both ways; they want to be concerned about the definitions, and we share that concern, but they want to stick up for the Government's position on financing care rather than committing themselves to the necessary finance. Are they prepared to find the extra resources to deliver free personal care?
Mrs. Spelman: We may be taking things out of sequence. I shall make our position perfectly clear. I repeat that we will match NHS spending, as we said on Second Reading of the Health and Social Care Bill. My hon. Friend made it clear that we will match the Government's spending on the provision of nursing care, as more accurately defined, which I shall come on to later. When I make my speech, I will explain the reasons for that position.
Mr. Burstow: I am grateful for the hon. Lady's further clarification. She has told the House that she and her Front-Bench colleagues wish to sustain the capricious separation of definitions to which the hon. Member for Buckingham referred. By taking the position outlined by the hon. Lady, the Conservatives will stick with the definition, which the Government are introducing, of registered nurse time only and the costings for that. The hon. Lady has well and truly buried the Conservatives' policy on free personal care. The Government's proposals mean that there is no money in the system to provide free personal care, so the Conservatives will not deliver that if they stick to the Government's spending plans, unless they make lots of cuts to other services. I shall come on to that point later.
Until the hon. Lady intervened, it was unclear whether the Conservatives supported the status quo, an insurance-based system, which seems to be their preference for other parts of the NHS, or the Government's position. We now understand that, for the moment at least, their position is the same as that of the Government.
Where do the Conservatives stand on what I regard, using their language, as a stealth tax on the elderly and the sick? We have a tax that penalises people for being sick and disabled. It is clear from reading speeches in this House, the Lords and elsewhere that the Conservatives are all over the place, as we have seen this evening. Despite the hon. Lady's comments, it is hard to find a definitive statement by a Conservative Front Bencher that clearly sets out the party's position on the royal commission's proposals. Even during the Second Reading of the Health and Social Care Bill, the exchanges about the

723
Conservatives' commitment to social services spending made it clear that they were not prepared even to match the Government.
Dr. Jenny Tonge: My hon. Friend is being very generous in giving way. Does he agree that it is interesting that the Conservatives' policy, announced today, to make tax free any income from savings for older people, contrasts rather badly with the continuing idea that older people must sell their home, which may be the bulk of their savings, to get personal care?
Mr. Burstow: My hon. Friend highlights another inconsistency in the Conservatives' health policy.
Speaking of inconsistencies, the shadow Health Secretary, the hon. Member for Woodspring (Dr. Fox), complained that Labour now has two policies on long-term care and talks of a two-tier health system, but he forgot to mention that a two-tier system is exactly the policy that his party now espouses. In Scotland, the Conservatives have supported the Liberal Democrats and backed the royal commission in full. They will play a part, with the Liberal Democrats and others, in securing free personal care in Scotland.
Until tonight, to find out the position of the Conservatives in England, one had to look to their lordships House for a definitive statement. We should thank Earl Howe, the Conservative health spokesman in the Lords, for setting out that policy. He confirmed that the Conservative party would stick with the Government and implement the same policy.
Mr. Patrick Nicholls: The hon. Gentleman is characteristically generous. He seems to think that there is something slightly strange about the fact that there might be a difference of emphasis between Conservatives in Scotland and Conservatives here. In the other two Parliaments in this country, the Liberals keep the Labour party in power, but they are pretending today to be opposed to Labour.
Mr. Burstow: The hon. Gentleman should take up that point with the hon. Member for Meriden, who has effectively attacked his colleagues in Scotland for allowing the creation of a two-tier system. He should check his lines before delivering them in the House.
It is hardly surprising that Conservative Members are all over the place on the subject of our debate—they caused the mess. They closed long-stay wards in the 1980s and 1990s without a thought for the thousands of older people who would have received free NHS care, but were confronted with means-tested care. It was a cost-cutting measure that was dressed up, with warm words, as community care. During their 18 years in government, the Conservatives drew the boundaries of state-funded care ever tighter. Thank God they were not re-elected at the last general election; otherwise, the fate of the public sector would have been to act as the 21st century administrators of a new poor law.
Before the election, the Conservatives set out plans for a private, insurance-based solution to the problem of long-term care. They were complex and, as the royal
724
commission pointed out, it was difficult to perceive the benefits and to whom they would apply. The American experience of similar schemes shows that their take-up is low and that, in practice, many pensioners would be too old, too poor or too great a risk to qualify for immediate private cover.
Those who oppose the royal commission's recommendation to scrap charges for personal care say that it would do nothing to improve services. They are wrong; they have accepted the Treasury mantra hook, line and sinker. Let us consider the report of the Scottish Parliament's Health and Community Care Committee, which undertook a comprehensive inquiry into the royal commission's proposals. It found evidence that convinced all its members that for health and social care to form a genuinely seamless service, the two systems of charging and assessment—indeed, the multiplicity of assessment systems around the country—should be brought together.
The Royal College of General Practitioners presented evidence to the Health and Community Care Committee's inquiry to show that people had refused the most appropriate care in the most appropriate setting because they would be charged. Removing the obstacle of charging would therefore ensure that people received the most appropriate care. That means a better outcome for them and their families.
The Government found money to pay for free television licences for the over-75s. No means test was used. Collective responsibility led to the provision of a welcome universal benefit. They also found the money for a winter fuel allowance. Again, no means test was employed. A universal benefit was provided and collective responsibility acknowledged. If the Government can find approximately £2 billion to fund those initiatives, it must find the political will to take responsibility for the chronically sick and disabled in this country.
When the Select Committee on Health considered long-term care in 1999, it quoted the royal commission chairman, Sir Stewart Sutherland, who said:
"We need to change. The status quo is not acceptable."
That was in April 1999. The Committee's report stated that it supported the royal commission's approach. It issued a warning:
"Failure by the Government to act urgently would be a serious dereliction of duty."
That view was formed two years ago.
Liberal Democrats believe that the royal commission offers a fair, sustainable and workable basis for organising and funding long-term care in the United Kingdom. Instead, the Government, with Conservative support, are imposing an unfair, unsustainable and unworkable system. The message is simple: those who get sick had better get well quickly. Those who do not get better, those who suffer from a chronic disease, dementia or Parkinson's will have their life savings bled away before the state offers a helping hand.
For a Labour Government to do nothing to end such injustice and to take a Parliament in which to do it is a serious dereliction of duty. Liberal Democrats will campaign throughout the country to make people aware of that and to ensure change.
7.34 pm
The Minister of State, Department of Health(Mr. John Hutton): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
"welcomes the NHS Plan's commitments to a care system founded on the principles of equity and fairness; welcomes the measures the Government has announced to reform the funding of long term care and to invest in new health and social care services for older people; notes that this matches the extra spending on long term care recommended by the Royal Commission; believes that the implementation of free nursing care on the basis of need and not ability to pay will bring an end to a major injustice affecting tens of thousands of older people in nursing homes; welcomes the new investment announced in the NHS Plan of £900 million annually by 2003–04 in new intermediate care services for older people; supports the priority the Government has rightly attached to improving front line services for older people; and calls on the Liberal Democrats to set out what services they would cut in order to fund their proposals."
It is common knowledge that we live in an ageing society. The hon. Member for Sutton and Cheam (Mr. Burstow) acknowledged that. Today, one member in five of the population is over 60, and the trend is upwards. Many people are living much longer. Between 1995 and 2025, we expect the number of people over 80 to increase by almost half, and the number of those over 90 to double. That reflects the achievements of organisations such as the national health service, social services and the voluntary sector. It is something to celebrate. However, it also poses real challenges and choices.
As the primary user of long-term health and social care services, older people account for approximately 50 per cent. of the resources that are consumed in health and social care services in England. They occupy approximately two thirds of general hospital beds and are responsible for at least 50 per cent. of the recent increase in emergency hospital admissions.
As a society, we face the challenge of ensuring that, in future, health and social care services better meet the needs of older people to lead healthy independent lives, thus avoiding unnecessary institutional care and the costs associated with it. We must find a fairer way of funding long-term care for older people. It should strike the right balance between what the state should fund and the responsibility of the individual, ensure that people are not forced to sell their homes to pay for their long-term care costs, and that older people lead healthier lives for longer.
All that obviously requires major new investment and the redesigning of our care services—I am sure that the hon. Member for Sutton and Cheam accepts that—and the Government are committed to doing it. That is why the NHS plan outlined a major expansion in care services for older people: £900 million by 2003–04 and a further £360 million a year on making the funding of long-term care fairer. It will not be possible to achieve those objectives if we divert spending elsewhere.
Mr. David Hinchliffe: My hon. Friend mentions fairness. I accept that the Government have inherited a problem that the previous Conservative Government created by withdrawing free long-term nursing care from the health service and introducing privatised social and nursing care in care and nursing homes. Is it fair or right that people who have paid all
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their lives and expect to receive free NHS long-term nursing care have to pay for it again because of the previous Government's withdrawal of free NHS care?
Mr. Hutton: The answer is no, it is not fair.
Mr. Burstow: Change it.
Mr. Hutton: The hon. Gentleman must be patient. I will tackle that shortly, but I have only just started my remarks. I intend to deal with continuing long-term, NHS-funded care later.
Dr. Peter Brand: The royal commission correctly pointed out that there is no prospect of a demographic time bomb and that most of the expenditure on health and personal care happens during the last six months of people's lives, irrespective of age. That weakens the Minister's argument about the awful prospect that the Government cannot cope without extraordinarily high expenditure.
Mr. Hutton: The hon. Gentleman knows that I have a lot of respect for him. I do not mind repeating that tonight, even if it embarrasses him. However, I was not making the argument that the hon. Gentleman suggested. If he will bear with me, he will follow my comments more clearly.
There is no demographic time bomb; that is not the heart of the Government's response to the royal commission. I shall return to that point shortly. However, I am sure that the hon. Gentleman knows from his practice that the health and social care needs of frail older people in our ageing society are becoming more intense. People often require nursing and residential care much later and their needs are more intensive and extensive.
Priorities lie at the heart of our debate. There are no easy choices, and it is foolish to pretend otherwise. Those difficult choices have been recognised by the Scottish Executive, and they include the impact on other spending priorities and the benefits system, to which the hon. Member for Sutton and Cheam did not refer. However, the hon. Gentleman, in an otherwise characteristically good speech, fell into the trap. Liberal Democrat Members try to pretend that there are no difficult choices. The system that the hon. Gentleman advocates, as he rightly said, would still involve a means test, and the difficulty of defining personal care would remain. He will need to spell out his proposals in more detail in future.
Making personal care free does not avoid boundary issues between what is free and what should be means-tested. It simply shifts the boundary. If food preparation, which is a daily cost that everyone has to bear, were charged for under the hon. Gentleman's proposals—as I think he would say that it should be—but help with eating were free because that might be considered to be personal care, he must say at what stage help with eating would become free. Would it be when the care worker lifted the food on to a fork or spoon, or when he or she put the food into a liquidiser?
The hon. Gentleman will need to be able to devise an accurate way of distinguishing between food preparation that he thinks should be treated as personal care and food preparation that should not. I look forward to hearing his answer. It is inevitable that his system would be based on

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a list of tasks. Any such list would generate controversy and argument about what should be included and what should be left off.
Mr. Burstow: The Minister is developing an important point about definitions. Does he agree, however, that the Government have ducked the debate about definitions by saying that the registered nurse's time will be free and that the decision will depend on what the registered nurse does? For example, if the nurse put the food into the liquidiser, the service would be free, but if a care assistant did so, it would not be.
Mr. Hutton: The hon. Gentleman has put forward such arguments before, and he is wrong. I shall explain why in a second.
Given the simplistic way in which the hon. Gentleman has presented some of the choices, it strikes me that his arguments are more opportunistic than principled. That is made even clearer when we consider the record of the hon. Gentleman's party on the matter. The Liberal Democrats' manifesto at the previous election contained no hint that they believed that personal care should be free. Exactly the opposite was the case. It might be a long time since the hon. Gentleman has looked at his manifesto, and it might be inconvenient for him and his right hon. and hon. Friends to do so.
Mr. Archy Kirkwood: We have taken the royal commission's recommendations into account.
Mr. Hutton: I shall come to that point in a second, if the hon. Gentleman will bear with me.
I quote from page 39 of the Liberal Democrats' manifesto:
"We will introduce national charging and eligibility guidelines to ensure a 'level playing field' of provision and charges … We will, as resources allow, raise the threshold at which older people are required to make a contribution to their long-term care."
There is no suggestion that personal care should be universally free. I wonder whether the U-turn that the Liberal Democrats have undergone has anything to do with a calculation about perceived political gain. It is not just the Tories who like to leap on bandwagons.
When the hon. Gentleman was a Liberal councillor in Sutton—
Mr. Burstow: I wondered when we would get to this.
Mr. Hutton: Indeed; I think that it is worth getting to. When the hon. Gentleman was a councillor, I understand that it was his party that first introduced means-tested charges for home care services. A little less posturing from him on the subject would, therefore, be advisable. No one has a monopoly on compassion—certainly not the hon. Gentleman and his party.
Mr. Burstow: I wondered when the Minister would get to that part of his speech, because I had heard that his officials had been busy winding up council officers in Sutton on Friday to provide him with a brief for this debate. His facts are incorrect. The charging policy was first introduced by the council in the early 1980s, when the Conservatives were still running the borough.
Mr. Hutton: I am aware of that. However, the hon. Gentleman and his party introduced a means-tested
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charging regime. Before that, the policy introduced by the Conservatives provided for a flat rate. The hon. Gentleman and his party changed the system. They did not decide not to charge; they introduced a different charging policy.
It is also worth bearing in mind that in Wales, the hon. Gentleman's party supports the view that we have taken in England on these issues, which is that the right priority at present is to invest in better NHS and social care services for older people and to end the unfairness of means-testing people for their nursing care in care homes. There are, therefore, disagreements between and within political parties on the issues. It might have been better if the hon. Gentleman had referred to that in his remarks.
Of course, the funding of long-term care must be fair and reasonable. No one disputes that. However, the acid test that we should use in deciding to increase public spending, given what we know about the existing range of services for older people that are on offer, is whether any option leads to improved and better health care for older people. We should also ask whether more older people would receive the help that they need at home to remain independent for longer, surrounded by their friends and family in the community, where they want to be. We need to ask who would benefit from any extra spending and why, because—as my right hon. Friend the Prime Minister made clear last week—we cannot spend the same resources twice. That is how we should judge the proposal that personal care should be universally free.
Mr. Mike Hancock: Does the Minister agree that three significant things have happened since the previous election? First, there has been a recognition that more resources are available, and that we can, therefore, do more; secondly, there has been a royal commission that supports that view; and thirdly, when people come into care now, they do so with greater needs than they did five or six years ago—a point to which the Minister has already agreed. We have not changed; we have simply moved on.
Mr. Hutton: I am tempted to offer some comment on the hon. Gentleman's last point. Of course his party has changed its position; he should not worry about that.
Mr. Hancock: We have moved on.
Mr. Hutton: The Liberal Democrats have moved on, and they have changed their position. They have moved from a position in which they believed in charging for personal care at all levels—at home and in residential care—to one in which they no longer believe in so doing. We are entitled to ask, when a party changes its position like that, precisely why it has done so.
Mr. Phil Willis: Will the Minister give way?
Mr. Hutton: No, I will not.
I understand that the point made by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) was that the royal commission has subsequently reported. That is a perfectly fair argument. However, we have to consider not only the rhetoric of the hon. Member for Sutton and

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Cheam, but his record in local government, where Liberal Democrat councils did not refuse to operate charging regimes. We must consider all the issues in the round.
Mr. Burstow: Will the Minister give way?
Mr. Hutton: No, I will not.
The NHS plan sets out how the Government intend to rise to the challenges. It starts with a vision for improving the health and well-being of older people and of those who care for them. It goes on to spell out a comprehensive programme of service modernisation backed by an investment of £1.4 billion of additional spending by 2003–04. That new investment will fundamentally change the way in which our care system supports older people. In future, we want NHS and social care services to provide a wider range of more flexible care options for older people that will actively promote better health, encourage faster recovery from illness, support independence and avoid unnecessary institutional care or hospital admission.
New services will provide new choices and opportunities that will better meet the needs of older people and their carers. They will also help us to address the many criticisms that older people have made of the NHS and social services and to lay the foundations for a healthier older age. By 2004, that new investment will help an extra 130,000 people a year. By that year, there will be a 50 per cent. increase in the number of people benefiting from community equipment services that will help more people to stay at home safely for longer. Through additional home care support, 50,000 more older people will be enabled to live more independently at home. For many, the new services will prevent or delay admission into costly long-term care. The new intermediate care services will be free at the point of use, whether they involve residential or home-based care. We envisage that the services will typically last for six weeks.
If we are to succeed in refashioning those vital services, we need to ensure that standards of care are universally high and consistently observed. We want older people to have greater confidence in the ability of health and social services to meet their needs more effectively. We want them to have confidence that, in the future, the focus will be on maintaining their independence and preventing unnecessary ill health, and confidence that the care system will be there to support them properly when and where help is needed. We want them to have confidence that care agencies will treat them fairly and view their carers as equal partners. That is why we are doubling the carers special grant from £50 million this year to £100 million by 2003–04, allowing more carers to take a break from their caring responsibilities, and why my right hon. Friend the Secretary of State for Social Security recently announced a £500 million package of extra financial support for carers, which will benefit up to 300,000 carers over the next three years.
The national service framework will back up that investment and modernisation for older people, which will set new national standards for the care and treatment of older people, including those with mental health problems such as dementia.
The Care Standards Act 2000 provided for a new National Care Standards Commission, which will start work next year and operate to standards consistent with
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the national service framework. In creating a single National Care Standards Commission and broadening its role beyond regulation, the Government responded to the royal commission's unanimous call for a national care commission to take a strategic overview of long-term care to represent the interests of older people.
Those new standards will be sensible and realistic and care home providers will be given sufficient time to prepare for their introduction. Our main priority is to ensure that there is enough capacity across all care sectors, including residential care, to enable older people and their carers to receive the care and support that they need. We are working closely with the independent sector to ensure that that happens.
The NHS plan also commits substantial investment to develop services that will promote older people's independence and respond to an ageing population with more chronic disease. The system of care across the NHS and social services must work together much more effectively as getting older and frailer becomes more common. Partnership is one of the keys to success. I am sure that the hon. Member for Sutton and Cheam will agree that, all too often, older people find themselves in an accident and emergency department or a busy ward at their local hospital not always because they need to be there and not because there is no real alternative, but because there is simply nowhere else for them to go.
The investment that we are making in intermediate care will help to provide a new range of services, which can offer a new alternative. Intermediate care is about providing the right services in the right places and at the right time to meet patient needs—services as close to patients' homes as possible; services in patients' homes where that is appropriate; services that avoid, in some cases, the need for people to enter residential care; services that genuinely promote independence. None of those services will be able to develop if those resources are diverted—for example, to make more personal care free for some people who are charged for it as the hon. Gentleman suggests.
The hon. Gentleman spoke at length about free personal care. Let us be absolutely crystal clear about that. At present, most personal care is provided on a means-tested basis and three quarters of care home residents already receive some or all their personal care free. Those in greatest need of help with care costs receive that help. Of course, we could have chosen to spend the £1.4 billion that we are making available under the NHS plan on implementing the royal commission's recommendation that all personal care, as well as nursing care, should be free irrespective of a person's wealth. That would not have improved front-line services in any way, shape or form. I disagree with the hon. Gentleman strongly on that. Under his proposals, not one extra older person would receive any extra care or any additional support to remain independent for as long as possible.
Dr. Brand: Will the Minister give way?
Mr. Hutton: No.
Nor would the proposals of the hon. Member for Sutton and Cheam benefit the least well off as seven out of 10 people in residential care already have all or some of their personal care paid for. Instead, his proposals would lock in place the existing range of often inadequate

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services that have frequently been criticised by many older people. They would not allow us to develop a wider range of services much more effectively to meet the health and social care needs of older and disabled people.
Dr. Brand: The Minister clearly recognises that personal care is very much part of keeping someone at home, hence the teamwork of an integrated intermediate care package. If that would work for a short-term intervention under his new proposals, does he believe that lots more people could be kept at home by taking away the main barrier to them accepting help, which is usually personal care rather than nursing care—their fear of means-testing?
Mr. Hutton: I have tried to deal with that point, but it strikes me that the hon. Gentleman and his party have a simple choice. They have not made themselves clear, however. In response to the royal commission, we are making £1.4 billion worth of extra money available to improve long-term health and social care services for older people, including £360 million that will go to address the unfairness of the means test. As I understand it, his party wants all that and another £1 billion. That is the position of the hon. Gentleman and his hon. Friends. They have not said that tonight, but that is absolutely their bottom line.
The Liberal Democrats want to accept all our proposals and then say to the Government, "Can we have another £1 billion as well?" We have been round that course many, many times. All Labour Members and some Opposition Members will be aware of the argument that the Liberal Democrats have an uncanny ability to spend the same billion pounds in about 14 different directions, while saying to people, "We won't have to put up your taxes." Well, I have to say to the hon. Member for Sutton and Cheam that he and his hon. Friends have to grow up on such issues in politics. It is all right to blame everyone else—they are good at that—but they have to take responsibility for their own decisions. He should say clearly that they want the £1.4 billion and another £1 billion. That, at least, would be progress. I suspect that that is their real position, although he did not say so. Perhaps the hon. Member for North Devon (Mr. Harvey) will make that clear later.
We are investing £360 million in a full year—by 2003–04—to make the funding of long-term care fairer. We shall extend free nursing care to all settings, and I shall discuss that in a moment. We shall take action to ease the burden of residential care costs. We shall act to prevent people from having to sell their homes against their wishes on admission to care or during their lifetime. We shall tackle the unacceptable variations in charges for home care.
My hon. Friend the Member for Wakefield (Mr. Hinchliffe) will be interested to hear that new guidance is being prepared on NHS continuing care responsibilities, which will help to deal with concerns being expressed about the needs of those with chronic illness.
People often feel rushed into selling their homes when they enter care. That adds to the stress of what is certain to be a difficult time. It can also remove the possibility of returning home if the situation improves. That is why, from April, for the first three months after admission to a
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care home, the value of a person's home will be disregarded from the means test. That will allow valuable time for the person and the family to take stock and keep their options open. A person who goes into care owning a house, but with few other assets, will save between £2,000 and £2,500 during the first three months of the stay and we estimate that about 30,000 older people will benefit from that change.
From October, councils will be given an additional £85 million over three years to encourage them to offer deferred payment arrangements for those entering care. That will mean that, following admission, people will not be forced to sell their homes during their lifetimes against their wishes. In addition, our proposals to extend free nursing care to all settings recognise the need to remove the major anomaly whereby people in nursing homes are charged for care from nurses while those in all other settings receive it free on the NHS.
Subject to the passage of the Health and Social Care Bill, which is before Parliament, from October everyone who needs the care of a registered nurse will have it paid for by the NHS. That will include registered nurse time spent on providing, planning, delegating or supervising and monitoring care and meeting the costs of specialist equipment used by those nurses.
Mr. Mark Todd rose—
Mr. Nicholls rose—
Mr. Hutton: I give way to my hon. Friend the Member for South Derbyshire (Mr. Todd).
Mr. Todd: My hon. Friend is making a powerful and cogent speech, but one thing has been lost on him. I know of no other example in the NHS of the definition of whether a service is free being based on whether the person involved is a registered nurse.
Mr. Hutton: I shall come to that, but I reassure my hon. Friend that that is precisely what the royal commission asked us to consider. In contrast with the points made by the hon. Member for Sutton and Cheam, we have in no way departed from what the royal commission said about nursing care.
Mr. Nicholls: I appreciate the Minister's dilemma and he appears to be doing his level best to address it, but surely it comes down to the fact that there is no watertight acceptable definition of the distinction between nursing and personal care. If he tries to base what he considers to be an improvement on the system of finding a workable watertight definition, either he or his successor will be dragged back to the Dispatch Box to justify that for as long as the Government are in office. Is not now the time to take a deep breath and say that both will have to be funded? Is not that where his logic will take him?
Mr. Hutton: That is an interesting argument from a Conservative Back Bencher. Perhaps the hon. Gentleman ought to discuss the proposal with the hon. Member for Meriden (Mrs. Spelman), who sits on the Front Bench, as I understand that that is not the view of his party. I disagree with him, as does the royal commission, and he might like to refresh his memory by reading paragraph 6.26 of the report.

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Of course, the royal commission recommended free personal care—that was its main recommendation—but it made it clear that if we decided not to proceed, introducing free nursing care was none the less still feasible and practicable. The royal commission considered the issues carefully. On that one, it takes a different view from the hon. Member for Sutton and Cheam. It believes, and I agree, that it is possible for the distinction between nursing and personal care to be made and made in the way that we propose in the Health and Social Care Bill.
The hon. Member for Teignbridge (Mr. Nicholls) has made a good point, but we should consider home care services. For example, community district nurses—NHS nurses—can arrive at the home of a frail older person to make decisions about what is necessary for that person's nursing care. Alongside that, social workers make assessments about what is personal care.
To the hon. Gentleman and those who say that it is impossible to make this distinction, I say that it is not. It happens and it can be made to work. I accept the wider point that the hon. Gentleman makes—that, ultimately, the argument about being unable to make a distinction is made by those who favour free personal care. However, it is a fundamentally dishonest argument because, as I said earlier, the argument about free universal personal care does not avoid those boundary issues and disputes coming to the surface. There would be just as many difficulties surrounding the definition of free personal care and the hon. Member for Sutton and Cheam has tried to gloss over those. I do not believe that those boundary issues disappear simply by making all personal care free alongside nursing care.
The changes that we are making to free nursing care will save a person up to £5,000 of the annual fees for a year's stay in a nursing home. That means that residents in nursing homes will, in the future, be treated in the same way as people who are being cared for at home—with NHS services and equipment being provided according to need, not according to their ability to pay.
That major reform is long overdue. The hon. Member for Sutton and Cheam could not find it within himself to say anything positive about the reform. He shakes his head; he thinks that there is nothing positive about it. That speaks volumes about his attitude to this whole debate tonight. It is not principle that he is pursuing, but political point scoring—once a Liberal Democrat, always a Liberal Democrat. [HON. MEMBERS: "Hear, hear."' What I am trying to say is that leopards do not change their spots.
The assessment of an individual's current and future nursing care needs will be undertaken by NHS staff using a standard approach, which will ensure that people with the same level of need receive the same level of care. As I said to the hon. Member for Teignbridge, I do not believe that it is impossible to develop a fair system of assessing nursing needs. The royal commission accepted, at paragraph 6.26 of its report, that even if we rejected its recommendation on personal care, making nursing care free should still be pursued. That is what we intend to do. We are working with the Royal College of Nursing and others to ensure that the assessment process will be able to take into account the particular needs of individuals.
It is wrong to suggest, as the hon. Member for Sutton and Cheam again tried to do, that the reforms will not be needs-led. They will be. No artificial limit or ceiling will
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be placed on how much nursing care a person needs. The hon. Gentleman expressed concern about how we have defined nursing care, implying that we have chosen a deliberately narrow concept of nursing for these purposes. That is absolutely not the case. The only suggested definition of nursing care was put forward in the minority report. We have taken that considerably further in clause 48 of the Health and Social Care Bill. It is very clear from the majority report that it, too, was concerned about people being charged for the services of a registered nurse. The hon. Gentleman should look at paragraph 6.22 if he has any doubts about that.
The hon. Gentleman referred to the Tory Opposition. It has all gone very quiet over there. They are the ones who devised the present unfair system of funding long-term care. They cut 40,000 beds from the NHS, many of them long-term care beds for the elderly. They charged people for their nursing care. They had 18 years to devise solutions, but failed spectacularly to do so. Their only suggestion was to extend long-term care insurance, which was rejected by the royal commission in one sentence as being
"complex and difficult to see where the benefits lay and to whom."
In our last debate on this subject on 2 December 1999, the hon. Members for Meriden and for Runnymede and Weybridge (Mr. Hammond) mentioned the detailed policy work they were doing on long-term care. The hon. Member for Meriden said:
"We are working on our own policy for long-term care which will go much wider than the terms of reference given to the royal commission."—[Official Report, 2 December 1999; Vol. 340, c. 519.]
The Conservative research department provided a helpful briefing for its Back Benchers on 2 December, which said:
"Over the next few months the Party will develop new areas of policy which will be ready well before the next general election".
There is no sign of them so far, and no one should hold their breath. We heard from the hon. Member for Meriden one of the most disastrous attempts that I have ever heard from a Front-Bencher to explain her party's position. It would have left everyone who heard her remarks slightly the worse for wear. She did not explain her position. The one commitment that we have waited for from the Tory Opposition is a commitment to match our spending on social services. They have spectacularly failed to make that commitment. Anyone with an understanding of Tory social policy knows that, when they are looking around for cuts in public spending, they will punish those who use social services.
At the beginning of my remarks, I said that this debate was about choices. For us, the choices are about where best to invest the extra resources that are now becoming available to improve the health and well-being of older people.
Mr. Burstow: Will the Minister give way?
Mr. Hutton: No. I have already given way twice to the hon. Gentleman.
It is not easy to strike the right balance between assuring standards of care, extending access to new services, promoting independence in old age and ensuring fairness in what people are asked to contribute and what the state itself should assume responsibility for. However, I strongly believe that, within the resources available to

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us, we have made the right choices: to invest more in better front-line services that will give older people greater care and improved health, avoiding institutional care wherever possible, while making the funding of long-term care fairer at the same time; to give carers more support; and to get health and social services working more closely together. I do not believe that making personal care universally free would help us in achieving any of those objectives. In fact, it could be provided only at the expense of these more pressing objectives.
We are intent on making fundamental changes to health and social care services for older people, whose lives will be significantly better as a result of the decisions that we have taken.
I hope that my right hon. and hon. Friends will reject this motion tonight.
8.6 pm
Mrs. Caroline Spelman: It has been an odd evening because various alliances have formed and then dissolved. I suppose that I should feel vaguely flattered that the hon. Member for Sutton and Cheam (Mr. Burstow), the Liberal Democrat spokesman, chose to use 80 per cent. of his speech to attack the Conservative party. I suppose that that is a veiled form of flattery.
I found myself in agreement with much of the Minister's speech. It was only towards the end of it that a partisan element crept in. Perhaps the House should not be surprised that it is occasionally possible for the official Opposition and the Government, who have a much stronger possibility of, and closer responsibility for, government than the Liberal Democrats have, to weigh up matters carefully and come to similar conclusions.
I certainly did not know that a Liberal Opposition day meant a day when the Government were hardly mentioned at all as a target of analysis. It was literally in the last minute of his speech that the hon. Member for Sutton and Cheam made some analysis of Government policy. Given the brevity and lightweight nature of his speech, I should have thought that some of it might have been devoted to analysing the policy of the Government of the day.
The Minister stole some of my best lines when he looked into the Liberal Democrats' record in local government, where they get a little closer to real power. I need not repeat the damning analysis of what in practice Liberal Democrats decide to do with limited resources when they get into a position where they are able to decide how to spend them.
Dr. Brand: Will the hon. Lady give way?
Mrs. Spelman: No, I should like to make a little progress.
The important issue underlying this debate is that of funding care for the elderly. I remember saying, when we were debating a statement on the royal commission, that it is rather like a big hole in the ground around which the major parties are circling. The big issues are how to spend this kind of money and what are the wise decisions for the future.
We should not be surprised that there is a minority report within the royal commission report. It may be for the benefit of this debate and that of the Liberal Democrats who skirted over the note of dissent struck by
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Joel Joffe and David Lipsey if I repeat what those two people said. They state some important truths that should be read into the record of this debate. The dissenting note makes it clear that
"To make personal care free for all those who are assessed as needing it would"
aggravate the financial situation considerably. They continued:
"In essence, it would transfer initially at least £1.1 billion"—
it is a while since the royal commission reported, so we should use the Minister's figure of £1.4 billion, which is likely to be more accurate—
"rising to at least £6 billion in 2051 from the private to the public purse. This huge addition to the burden on public expenditure would not, however, increase spending on services for elderly people by a single penny."
The Minister is nodding: we agree on that analysis. The two continued:
"Because it would make personal care free for those who qualify for it, it would add to the demand for such care, imposing an additional cost on top of that driven by demographics."
The hon. Member for Sutton and Cheam disputes the demographic argument. I do not know his exact age, but I think he belongs to the generation that constitutes a considerable bulge. When he and I reach retirement age, we will put pressure on the system for the provision of services. If we have the good fortune to live to 100—which is not beyond the realms of possibility, given our increasing life expectancy—we will be one of the statistics in 2051 leading to the estimated cost of £6 billion. We are not talking about small sums of money, so we should not be surprised at the significant minority report.
Mr. Hinchliffe: I shall be dead by 2051, so I take a dispassionate view on this issue. My concern about the figures that the hon. Lady quotes from the minority report is that they assume that by 2051 we will be sticking to what I regard as expensive, outmoded, institutional models of care that other countries have moved away from. I am anxious to know what assumptions she is making. Perhaps she will clarify her earlier intervention, because it baffled me. What assumptions is she making about the future of institutional care? Will we be like Denmark and move away from care homes and nursing homes to support for people in the community or care with housing schemes?
Mrs. Spelman: For once I am grateful to the hon. Gentleman for his intervention, because it brings us on to a helpful point. Changes in society have led to the position that we are in today. Grandparents increasingly rarely live with their children. The hon. Gentleman was quick to condemn the previous Conservative Government. He said that it was entirely their responsibility that we were in this position, but that is factually not true. During the 18 years that the Conservatives were in government, there was a significant shift in our society. Job mobility increased, so people moved away from where their parents live. That is a simple social and cultural change.
I cannot stare into a crystal ball and tell the hon. Gentleman that in 2051—or even 2021, which is a bit more realistic—one of my three children will be prepared for me, as an old lady, to live in their home. They might be living anywhere on the planet. Job mobility and the nature of

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business today make it difficult to assume that the clock will be rolled back to a time when grandparents once again live with their children, desirable though that may be in the family context. Therefore, we must consider the placement of a significant proportion of the elderly population in nursing or residential care when they need it.
All the health trends show that life expectancy has increased, and a deterioration in health comes towards the end of our lives. What used to be the end of our lives has been pushed back further, and the acuity of care in nursing homes has risen. People in nursing homes and residential homes are sicker than they were, but may not be in those homes for as long as they used to be because the level of care in the community to sustain the elderly until such time as they need that extra shelter of residential accommodation—
Mr. Hinchliffe: Will the hon. Lady give way?
Mrs. Spelman: No, because I have dealt with the hon. Gentleman's point in detail.
This is an important issue, and it difficult to see how the figure in the minority report is an overestimate—quite the reverse. The £6 billion may prove to be an underestimate by that time. It is difficult for any of us to say accurately what that figure will be in 20 years' time. What we can say with more confidence is that such care will cost the state a great deal of money, and the hon. Member for Sutton and Cheam gave no indication of where the Liberal Democrats would find that money. It has to be found, and any utterance about an extra penny on income tax providing the sums involved is unrealistic.
It is interesting to consider how this matter was approached in the Scottish Parliament. As confidently predicted, under devolution different models are emerging. The Scottish Parliament has chosen to go in a different direction. Some Labour Members have gone out on a limb and have supported taking a different direction. Now the Scottish Parliament must find where to make the savings to provide that care. The Liberal Democrats need to do that work, and should have done so before bringing this matter before the House.
It will not be easy to find £1.4 billion. Even if it can be found now, the consequences some way down the road in 2021 or 2051 would alarm any party with a responsible attitude to its role in government. In fairness, the Government have tried to do that. We should not ignore what the Prime Minister had to say on this matter. He said:
"We believe that the money would be better spent elsewhere in the national health service."—[Official Report, 31 January 2001; Vol. 362, c. 300.]
That was the position taken by the Minister, and we agree with it. The Government have chosen their priorities—that is their prerogative. We would also set our priorities if we were the Government, whereas the Liberal Democrats have abrogated their responsibility for setting priorities.
Mr. Hutton: The hon. Lady said that she agrees with the Government's response to the royal commission. An important element of that is the additional spending on intermediate care services, approximately half of which
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will come from social services spending. I understand that she will not match our social services spending, which is funded through the standard spending assessments. Will she give a commitment to match the rise in the social services SSAs that the Government have made?
Mrs. Spelman: I shall come on to that, if the Minister does not mind. I shall deal with it in some detail, rather than as a response to an intervention.
This is a Liberal Democrat Opposition day, so for their benefit we should bring to their attention matters that may alter their view, and perhaps make them do a 360 deg turn—who knows. The NHS Confederation has said clearly:
"We do not support making personal care free as this would consume a significant amount of additional resources without any noticeable improvement in the quality of services."
I suggest that the Liberal Democrats put that in their pipe and smoke it before they finalise their policy on this subject.
Behind this debate is the problem of how to make services for the elderly sustainable in the long term. We think that the Government, in their Health and Social Care Bill, could have done more to address the longer-term perspective. If the Government and the official Opposition are agreed that the Liberal Democrats are wrong and that the provision of free personal care in England is not the best use of NHS resources, we must find a way to deal with the state's inability to pay.
How do we encourage future generations to make provision for themselves and their loved ones? Not in the way the Liberal Democrats have suggested. If free personal care were extended to England, it would disincentivise those affected and their relatives from taking on that responsibility. It would also lead to disappointment. We are led to believe that free personal services are a panacea, but they are not. They are only a portion of what it costs to provide adequate services for the elderly. The accommodation either in nursing homes or in a residential setting is a significant part—if not the largest part—of the cost of providing care for the elderly.
Mr. Nicholas Winterton: My hon. Friend will know of my long and deep interest in this subject. Does she agree that the problem arose for two reasons? First, there was the need to provide the elderly with better nursing and social care; secondly, over a period, Government dramatically reduced, by thousands, the number of geriatric beds. No one was asked whether they wanted that to happen. Government made a decision as a result of which many elderly people, whatever their position in life, feel that they are being unfairly treated.
What discussions has my hon. Friend had with groups representing the elderly, and how do those groups feel that the current injustice can be put right? I think that the Government have gone some way down the path, but as yet many elderly people do not consider the proposed solutions to be truly fair.
Mrs. Spelman: My hon. Friend's intervention is relevant, despite straying a little beyond the strict title of the debate.
As I am sure my hon. Friend recalls, a year ago those on the official Opposition Front Bench held an "age summit" with all charities concerned with the provision

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of services for the elderly. It was interesting for us to hear what elderly people would like. Certainly, we heard that they had been led to believe that there would be cradle-to-grave provision, and had found that that was not the case in practice. We also heard, however, that they wanted dignity in old age, and we have a responsibility to try to provide that.
Those requirements must be weighed in the context of the Government's overall responsibility to decide the right priorities for health care, but one thing came over very strongly: people wanted to remain in their own homes for as long as possible, because their own homes tended to be full of memories of raising a family. To maintain them safely in their own homes, however, requires considerable support, and sometimes a difficult decision must be made, often involving medical staff. Although an elderly person would prefer to remain in his or her own home rather than going into institutional care, it may become unsafe for that person to do so.
It is precisely such sensitivities that my party is trying to take on board in crafting its own solution to the problem of long-term care, which we shall present before the election. Of course, if we had the Government's advantage of knowing when the election might be, we should be able to choose the moment much more judiciously.
My hon. Friend the Member for Macclesfield (Mr. Winterton) has reminded me of what Age Concern said to us at the age summit. The Liberal Democrat call for free personal care involves a terrible inconsistency. The provision of free personal care would leave other aspects of essential health care for elderly persons uncovered: chiropody and physiotherapy, for instance, might have to be paid for separately. Even necessities of later life such as incontinence pads are still charged for in nursing homes.
My hon. Friend the Member for Teignbridge (Mr. Nicholls) made a good point. It is sometimes very difficult to find free personal care, or free personal services. For an elderly person with incontinence problems, products such as incontinence pads are essential, and anyone who has had to pay for them will know that they are not cheap.
Moreover, the practice of GPs' charging for call-outs to nursing and residential homes is not covered by this definition. Where do we draw the line in defining what constitutes a personal service provided for an elderly person in care?
Mr. Tom Clarke: I listened with interest to the hon. Lady's response to what I considered to be a comprehensive and convincing speech by my hon. Friend the Minister. She and the House seem to accept that great progress has been made in Scotland. That is marvellous, as the House decided to devolve such matters to Scotland. What the hon. Lady has not yet done, however, is address—as my hon. Friend did—the issue of carers. Will she tell us what commitments her party gave in the consultations that she mentioned earlier to the millions of carers in this country?
Mrs. Spelman: With respect, I did not say that great progress had been made in Scotland. I said that Scottish Members of Parliament had chosen to go out on a limb and make a different decision; they would have to weigh
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up the financial consequences themselves, and establish where they would find the money to pay for a decision that they were free to make.
The role of carers is very important, and is catered for in our comprehensive policy on long-term care. I have already spoken for 20 minutes, and do not want to go into the issue in detail; suffice it to say that carers often bear the burden of providing personal services. Even those not covered by the present definition may have to wait for a registered nurse, but if a member of the family is involved the relative concerned will be more likely to provide personal services, because account must be taken of close family members.
The present definition is shot through with inconsistencies. The Royal College of Nursing is right to say that, owing to those inconsistencies, discrimination is likely. The example has been given of a demented patient who may not require personal services from a registered nurse—but is that patient to be discriminated against in favour of a person suffering from cancer because both happen to be in a health setting in which such services are provided by a registered nurse?
Mr. Burstow: Will the hon. Lady give way?
Mrs. Spelman: No, I am about to finish my speech.
There are terrible inconsistencies, which need to be resolved as the Government work out the practical implementation of their commitment to making free nursing care available.
Mr. Paul Goggins: Will the hon. Lady give way?
Mrs. Spelman: No; I am about to finish my speech, and a number of Members wish to speak. This is, after all, a Liberal Democrat Opposition day, and I do not think that the Liberal Democrats would be too grateful if the Minister and the official Opposition spokesman took up most of the available time between them.
Let us return to the people who are at the end of the system, as it were. I have a 92-year-old father and an 88-year-old aunt, both in residential care. They had to use all their capital to pay for their nursing care. I, as a relative, had to explain why that was—why 1, with a demanding job, could not care for them in my home. That is not an unusual situation: that is Britain today.
We need a fresh look at the way we care for the elderly in this country. The provision of free nursing care is like a sticking plaster over a substantial problem that needs to be resolved. It would be straying outside the framework of the debate to go into the whole question of why the care home industry is in crisis, why there are bedblockers in our hospitals, and why insufficient funding from central Government has forced local authorities to means-test and constrain elderly people who need services.
The terms of the debate were to look specifically at the Liberal Democrats' pledge, which will no doubt be in their election manifesto, to provide free personal care throughout England. If they want to put that in their manifesto, they will have to be able to say how on earth they will fund it. Nothing I have heard tonight gives any clue as to how they would realistically achieve that. A party that cannot realistically say how it intends to foot such a substantial bill is not fit to govern.
8.29 pm
Ms Ann Coffey: I am no wiser about the Conservative party's policy now than I was 20 minutes ago.
The Liberal Democrat motion arises, I am sure, out of a genuine wish to consider again the recommendations of the Sutherland report on long-term care, which was published in March 1999, nearly two years ago. I am equally sure that the timing of the debate arises out of the Liberal Democrats' concern for elderly people, not from any opportunist motive on their part. After all, they keep telling us that they are the party committed to raising standards in public life and that the dividing line between them and the Tories is that they are not bandwagon politicians.
The report by the royal commission on long-term care comprehensively examined issues around providing services to support older people in both the community and residential care. The report was thought provoking, particularly in examining existing standards in both domiciliary and residential care, which vary considerably throughout the country.
The royal commission's main task was to look at the provision of care for the elderly at home and in residential care and to recommend how the cost of that care should be sustainably and affordably apportioned between public funds and individuals. "With Respect to Old Age: Long Term Care—Rights and Responsibilities" was the title of the report. I am sure that all of us would want to achieve the objective of dignity and respect for older people. How we treat older people today will determine how we as older people are treated tomorrow.
I welcome the implementation by the Government of the royal commission's recommendation to set up a national care commission, the introduction of the Care Standards Act 2000, which will improve standards of care, the increased investment in prevention and rehabilitation, and the introduction of free nursing care, which deals with a major injustice, where nursing care was free at home or in hospital, but not in nursing homes—a legacy of the previous Government.
Another major impact on improving services will be brought about by the closer co-operation between health and social services through section 31 agreements or new health and social care trusts. The delivery of services by different agencies with different priorities has been a major contributor to bureaucracy and to frustration among many elderly people and their families. It does not make sense to be assessed first for health care and then for social care by different people working in different agencies, often having no communication with each other.
Under the system in Stockport, a social worker based in casualty at Stepping Hill hospital will, when an elderly person is admitted to casualty, assess with medical and nursing staff the need for social care. The result is that the person goes home with a proper package of care that recognises that social and health care are inextricably linked and important for that person's recovery.
Mr. Nicholas Winterton: The hon. Lady is making a rational speech. When elderly people have had a stroke and are discharged from hospital either back to their home or to a residential home, will physiotherapy be available? Is that a social care treatment, or a medical nursing care treatment? The one thing that worries me is the scarcity
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of physiotherapy, which can dramatically improve the quality of life of elderly people, whether they be in their own home or a residential or nursing home.
Ms Coffey: I am sure that, like me, the hon. Gentleman looks forward to continuing Government investment in the NHS, which will make the provision not only of health care but of associated services more widely available. As he will be aware, the legacy that the Government have to deal with is one of years of underfunding by the Government of which he was a member.
The royal commission accepted that care in old age must be a partnership between the individual and public funds. I am not convinced that its main recommendation to make personal care free and to continue means testing for other services, including cleaning, housework, laundry, shopping services, transport to day centres and sitting services, necessarily achieves fairness or justice in that partnership.
Fairness must take account of income. To each according to their need, from each according to their means, is the basis of our tax system and public spending. It should also form the basis of redistributing wealth. Everyone should share fairly in the wealth of the country, but in that fair share account must be taken of the individual's wealth and the share that they have already had, which has provided assets and savings for them in retirement and also for their children, who will inherit those assets.
The commission, supported by Liberal Democrat Members, proposes redistributing public money to those who already have private means. I cannot see the argument for social justice in that. It may be an emotionally attractive argument, and in certain Liberal Democrat constituencies it may even be a politically attractive argument, but it is not a just argument. Of course the state must take its fair share of responsibility for care of the elderly, especially for those who cannot provide for themselves, but it is also fair that some account be taken of the private means of the person concerned.
It is right that the state should provide free care in homes for the 70 per cent. of elderly people who have not had the advantage in their working lives of accumulating assets in the form of savings or income. In my local authority, it is about the same percentage for domiciliary care. It is absolutely right that no one should be denied a service that they need because they have no money for it.
The state also provides a non-means-tested, non-taxable benefit in the shape of the attendance allowance, which recognises the extra cost of disability in old age and therefore provides a basic benefit to those in need to help with the costs of care, regardless of income. The proposal supported by Liberal Democrat Members, to give free personal care, would not give one extra penny or provide one extra service for my less well-off constituents. Indeed, it would provide no extra services for those who were well off. Where is the social justice in that?
There may be legitimate arguments about what private assets and what income and capital should be taken into account in an individual's contribution to personal care. I am therefore pleased about the changes on that matter that my hon. Friend the Minister announced earlier. There has to be a fair partnership between the individual and the state in which people do not perceive that they are

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unjustly disadvantaged for saving; in which options are available to people to plan for their financial future; and in which the state, in return, as part of that partnership, ensures that the care that individuals are offered in old age provides both dignity and respect, and the same quality of care for those who cannot afford to pay for their own care.
If we put on one side the arguments about whether universal provision in a society of unequal incomes is fair, the question becomes one of whether making personal care free would end injustices in provision. We have spent a long time arguing in the United Kingdom about the dividing lines between health and social care, for one is free and one is not, and the unfairnesses that are perceived to arise because of those definitions. However, how much more difficult are the dividing lines between personal care and non-personal care?
Under the commission's proposals, which are supported by Liberal Democrat Members, the provision of meals is a living cost and is therefore not free, whereas help with eating is personal care and is free. Where should we draw the line? If an elderly person needs personal help to eat, that is fairly straightforward—it is personal care. Let us suppose, however, that an elderly person needed more help than just the delivery and serving of a meal—for which they would be charged and which directly involved touching the person, which is the commission's definition of personal care. People may, for example, need propping up with a cushion, or, if they are blind, help with finding a plate or utensil; but otherwise they may be perfectly capable of eating by themselves. Are they receiving personal care or a service that one would expect from a meals on wheels delivery? Is it a mixture of both? If so, how much of it is chargeable?
The hon. Member for Sutton and Cheam (Mr. Burstow) described a system in America that entails metering and clocking on and off. He is simply transferring the problem of defining social and health care to that of defining personal and non-personal care. Staff in care homes will be clocking on regardless of whether care is regarded as personal and free or is not so regarded and is charged for.
I would not like to have to make such an assessment. I worked as a social worker for 20 years, and earlier in my career I did make assessments of the need for services. Assessments are not easy to make because the criteria are not simple or straightforward. It is difficult, not simple, to assess whether to provide personal care. I would also not like to have to explain to an elderly person, or to his or her relatives, the dividing line in the example that I have quoted. What would they say? The comment "this is ridiculous" comes to mind.
Mr. Burstow: The hon. Lady's comment about its being ridiculous is surely the very comment that elderly people will make to a nurse who assesses their nursing care needs and tells them that, on this occasion, a care assistant will undertake the task and that they will therefore have to pay.
Ms Coffey: The motion concerns a proposal that personal care should be free. The hon. Gentleman is simply transferring the difficulty of defining social care and health care to definitions of personal and non-personal care. He does not seem to understand that.
The definitions become even more difficult, as sitting services are excluded from personal care. If, during the sitting services, the person suddenly needs help with the
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toilet, does that turn into personal care? Also, we have not mentioned the definitions of "enabling and psychological support" from a "knowledgable and skilled professional" which the commission and the Liberal Democrats say should be free. That is personal care, but the work of a volunteer who is working for an agency with a blind person, but who is also providing psychological support, would not be defined as personal care; that would not be free. We are now in the realms of the wholly ridiculous.
Unfortunately, the royal commission was not a lot of help in unravelling this problem; it preferred to stick to the big picture. Nor have the Liberal Democrats been a lot of help. If they had tried a bit of unravelling, they might have come to the conclusion that such a system did not offer, after all, a logical, workable and above all just approach to the issue of funding. Such a system would be quickly bogged down in definitions which would be incomprehensible to the people who are being assessed, and it would be seen as unfair. Definitions would vary from authority to authority, as obtaining universally agreed definitions would be almost impossible. Discontent would be high, as people would see their neighbours getting something for free that they were having to pay for. That is not a good recipe for justice.
Nor am I sure how the funding for free personal care would work. Would local authorities total up the cost of the assessments of need and then submit the bill to the Government? If they did, it would be an extraordinary departure. I cannot imagine even the Liberal Democrats advocating that. Are they advocating something similar to what happens at the moment: an assessment of needs through the SSA, with local authorities having a sum to spend on personal care? I rather suspect that the result of all that would be an assessment judged not by service, but by affordability of service within the inevitable limitations.
The result could be that the services that my less well-off pensioners are now getting free would not be provided to them at all because of tighter criteria owing to an increased demand for a free service; whereas their better-off neighbours might get their personal care free, while buying extra services with the money that they have saved. Is that fair?
Dr. Brand: If the hon. Lady is so concerned about a social services budget closed to any extension to free personal care, is it her understanding that the nursing budget given to health authorities is to be open-ended? Will the Government's definition of nursing care not also have its restrictions?
Ms Coffey: I would have thought it self-evident that all budgets had restrictions. The debate here is about the setting of priorities within a given budget. As the Minister of State said earlier, if we decide to spend money on one area, we cannot spend it on another. However, I am glad that the Liberal Democrats have recognised that budgets are limited.
What will happen under the Liberal Democrat proposal to the attendance allowance, which benefits 1.3 million pensioners and is given to people to help them buy personal care? Is that to be abolished? Is there no longer to be any direct payment system? If personal care is to be free, the allowance becomes unnecessary. That would be extremely unpopular with my constituents, as the

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allowance gives them the freedom to make decisions about priorities in their own lives and to decide what care they need. It also enables them to pay for informal care from relatives and friends. I do not think that they will be too pleased to find out the Liberals are planning to deprive them of the allowance.
What would be the result of this cynical motion? The expectations of the public would not be fulfilled; their perception is that they would get for free what they now pay for. Try telling care home residents or their families that, contrary to their expectations, not all care in a home is personal care, that they will still be required to pay hotel charges and for some services, and that, if they stay there long enough, their capital will still be exhausted. The fact that some people feel that their houses as capital assets should not be included in any assessment of means will not be dealt with under the Liberal Democrat proposals for hotel and living charges.
The proposals in the motion include no extra investment in services for the elderly, which is what we need above all. We need year-on-year investment. Instead, we would get endless assessments, open to challenge, about what constitutes personal care. The only people who would marginally benefit are richer people.
A system that, in arriving at a fair partnership between the individual and public funding, takes into account the assets that people have accumulated is clearer and more transparent for those who are planning ahead than a system that relies on vague delineations of personal and non-personal care.
Instead of going down a road that is unfair and unworkable and has no basis in social justice, we should ensure that the money that the Government will continue to make available goes into improving the range and quality of domiciliary and residential care services and into making them more responsive to the needs of elderly people and their carers.
That is the ultimate fairness, because rich and poor will have access to equality of services in their old age. The dignity and respect that we accord old people is surely defined, above all, by that.
8.46 pm
Mr. Patrick Nicholls: I thoroughly enjoyed the speech by the hon. Member for Stockport (Ms Coffey). I was getting quite worried towards the end, because I thought that it would cause us both considerable embarrassment if I had to say that I accepted everything that she said. Luckily, she finally came to the heart of the matter, where there is clear disagreement between us—so let us state it, to reassure us both, and then move on.
I have a great deal of trouble with the idea that, because people have accumulated assets over a lifetime, they should be means-tested in their twilight years. People who have worked all their lives will have contributed in taxes, all the more so if they paid tax at the higher rate. Even with the higher rate tax inherited by the Government from their Conservative predecessors—the top rate is still effectively 50 per cent.—that is a substantial contribution for people of perhaps 85 or 90 to have made during their working lives. On that, if on nothing else, I disagree with the hon. Lady.
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The debate has been useful in concentrating on an issue that comes up in all our constituencies. I deliberately said issue, rather than problem. Sometimes, when elderly people listen to these debates—I am thoroughly in favour of elderly people, because I fully intend to be one in due course—they ask why they are regarded as a problem, when in fact they are a success story.
The elderly—if they make it—are indeed a success story. Doing some research for another speech some time ago, I found that the male who was around at the age of 65 to claim the five-bob pension introduced by Lloyd George would, at the time of his birth, have had an actuarial life expectancy of somewhere in his late 40s. Today, people are living to ages unimaginable to our grandparents and great-grandparents. Once upon a time, people would draw their pension only if they lived 20 years beyond their actuarial life expectancy, but these days one can claim one's pension 20 years before it. We have to think through the implications. At times, that may mean some new thinking, which may be extremely expensive.
Even if, in part, I come to a conclusion not dissimilar to that of the Liberals, I hope that it will be accepted that I got there by a different route. I recognise cynicism when I see it. The Minister did an effective hatchet job, in simply doing what any young party worker will have done: anyone who has ever followed a Liberal canvasser down the road and said, "The chap who was in here just now—what did he say?" knows that the answer, in summary, is: anything that people wanted him to say.
Whatever view one may take of the Liberals' conclusions, let us not for one moment mislead ourselves, or let them mislead themselves, into thinking that they come to it from a point of principle. One does not get a point of principle from the political equivalent of what happens when one lifts up a flat stone. As kindly as we can, therefore, let us put the Liberals to one side.
Some members of my party, from what one might call the sado-monetarist wing, might ask how we can justify giving free nursing home care to someone who is very wealthy. What would be the point of allowing someone to preserve assets for their children? If they have the money, they should not be a burden to the state. I accept the logic of that argument to the hilt, but it is no longer accepted by those to whom it must be applied.
Something in excess of 50 years of socialised medicine lie behind us. We cannot put the clock back. People do not think it right that they should, in their twilight years, see the assets that they have built up—modest or otherwise—being used up for care in their old age. We can give them the fiscal logic, but they will not accept it. Eighteen years in the House have taught me that one can, to some extent, lead one's constituents over a five-year Parliament. However, when those for whom one is trying to care, in one's own way as a parliamentary representative, simply say that one is wrong, it is wise, for one's own salvation if nothing else, to listen to them. One may even think that they are right. Over and over, I hear from my constituents that the idea that their assets will have to be used up in their twilight years is not acceptable. We must move away from that idea.
I always enjoy debate with the Minister. He is not at his best when he is trying to be horrid. I, on the other hand, am at my best when trying to be horrid, so perhaps there is no problem. I appreciate his dilemma. To give

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him his due, he is dealing with what may be the major part of the issue. Nursing care will be paid for, he says, and that will reassure some people, since it will account, probably, for the lion's share of the cost. The Minister is acting in a fiscally responsible way, saying that if he goes further it will cost a great deal of money. Full marks to him for that: it would indeed cost a great deal.
Ultimately, however, how can the Minister or his successors deal with this issue? He began to start snarling and trying to be horrid because, being an honest man, he realised where the weaker point of his argument lay. The definitions that he offered simply will not work. He need not take my word for that—indeed, I am certain that he would not. He quoted the royal commission at me, selectively, just as I could selectively quote it back at him. However, it may be more useful to consider the remarks of Claire Rayner, who works at the practical end of the issue. I do not mean to disparage the Minister by saying that; she simply knows more about the practical end than he or I do. Claire Rayner said:
"If you need someone to wash you, if you need someone to feed you, if you need"
help in using a lavatory,
"then you are ill. Nobody in good health would want a stranger to do it. It's only when you are so helpless that it is necessary that you need someone to do it, and if that isn't nursing then I don't know what is. Yet the government has decided in its wisdom that it is not and they are wrong."
Frankly, that sums it up: one need not be a humble country lawyer, as I am, to know the fun that can be had with definitions when we try to work out the difference between nursing and personal care. I am almost tempted to give the Minister the benefit of the doubt by saying: let us try to do that. Let us try to hone the definitions to create some rational way of deciding what is nursing and what personal care. However, I do not think that that will work. At some stage, some Minister will stand at the Dispatch Box—sooner rather than later, I suspect—trying to get to grips with the definition.
On the Scottish experience, I speak with all the insincerity I can command in saying that I sympathise with the Minister over the jam into which the Government have got themselves. The difficulty over this issue illustrates the way in which devolution is causing unfinished business. The Labour Administration in Scotland, presumably because they believed it right—and a case can be made—defended to the last ditch the idea that they would not make personal care free. They then realised, however, what happens when one lives in a ditch, and the sort of people with whom one must share one's principles. At that point, they suddenly decided to change their policy.
A remarkable situation will arise. Edinburgh, once the Athens of the north, is set to be the Florida of the north. A marvellous trade in elderly people will be carted over the border.
Mr. Tom Clarke: Will the hon. Gentleman give way?
Mr. Nicholls: I want to hear an interest being declared here, as I give way to the right hon. Gentleman.
Mr. Clarke: I enjoy many of the hon. Gentleman's comments—especially those on the film industry. On Edinburgh, does he not agree that a consensus
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emerged in the Scottish Parliament and that it produced good policies? I am sure that he does not want to sound envious, so does he not accept the argument that we in the House should try to raise the standard of provision?
Mr. Nicholls: Bearing in mind the fact that the Labour party and the Liberal party are already in alliance in Scotland—I can see that the right hon. Gentleman hankers after a time when they can be allied in this place as well—I do not think that consensus emerged in Scotland; cop-out emerged. The Labour Administration took an honest view, although I do not agree with it, that that was not the right way to order their priorities. They then found that, if they did not do a deal with Liberal Members, they could not continue their Administration. I greatly respect the right hon. Gentleman and always enjoy debating with him. However, I do not think that such deals produce good government or good policy.
Mr. Nicholas Winterton: My hon. Friend advances a strong and positive case. Does he not agree, however, that infirmity and dementia should be treated in the same way throughout the United Kingdom, even in its devolved areas? The taxpayers of the UK as a whole continue to pay for the vast majority of the resources used throughout the country—whether in England, in Scotland, which has its own Parliament, or in Wales and Northern Ireland with their Assemblies. When dealing with what are clearly illnesses—whether on the borderline of social or personal care, or medical care—is there not a need for justice to be perceived?
Mr. Nicholls: The honest answer is yes, I largely agree—except that sometimes we cannot put the clock back. Scotland has its own real Parliament; we cannot put that scrambled egg back into the eggshell. The Scottish Parliament cannot be unmade—it is real. We must draw a harsher conclusion. If the Scots want to pursue that course, as clearly they do, there really is unfinished business. At present, the Barnett formula—I do not want to digress too much, Mr. Deputy Speaker, but Barnett is about resources and that is what we are debating—ensures that Scotland receives disproportionately more money from the English taxpayer; indeed, it enshrines that. How long will the English taxpayer put up with that? If, ultimately, the Scots really do want to go their own way, they will have to raise their own revenue as well. However, I entirely agree with my hon. Friend that the matter will give rise to great bitterness and division.
The Minister expresses great confidence—or does his best to—that the definitions are workable. However, many of the organisations working in the field do not agree. Organisations that the Minister would usually be able to pray in aid are extremely concerned about what has happened in the light of the Scottish experience. I will not list them all, but in a press release issued after the Scottish debacle, Age Concern states:
"Of course we now have a vastly iniquitous situation with older people north of the border enjoying peace of mind when it comes to the costs of care, while in England and Wales older people will still be faced with a complex system which forces them to pay. A significant number of members of the Government and their parents will now enjoy a system which they are unwilling to extend to the rest of us."
That neatly sums up the dilemma. It is why I come to the following conclusion on the first limb of the problem: sooner or later, it will be realised that the definition does

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not work, so the state will have to pick up the tab. So far, so good—but that conclusion would make any Treasury Minister shudder.
The important point about the policy that the Conservatives have been developing—there is no secret about it—is that we are saying, in effect, that we cannot go on in such a way. That is why our policy is right. I pointed out that we have had socialised medicine for more than 50 years. People of my age assumed that we would be looked after from the cradle to the grave, but no one in the House could honestly tell our children that, in due course, at the end of their life, the state will be able to provide them with a standard of care or of residential care with which they would feel comfortable.
I have two children at university and one taking A-levels. I do not pretend for a moment that they can rely on the state's resources in their twilight years. The Conservative party has therefore rightly told young people, who still have ample time, to provide for their twilight years; it is an extremely good idea. We talk about having to pick up the tab now, but we are not talking about doing so for ever; we are saying that the state cannot now go back on the arrangement or understanding that it has entered into with people of a certain age. It would be completely unreasonable to ask hon. Members here today suddenly to make realistic arrangements for their nursing home care, but it should be possible to encourage young people to do so.
In the end, such matters come down to sheer practicalities. If we try to temper principle with definitions, that simply will not work—it will lead to no fate other than the grizzly fate of belonging to the Liberal Democrat party. In the end, it is better to face up to the fact that there are opportunities as well as problems and to say that, between us, we have bitten the bullet on nursing care. I suspect that, in early due course, we shall have to do the same thing on personal care as well.
9.1 pm
Mr. David Hinchliffe: I welcome the debate, but I am disappointed that, although the Liberal Democrats initiated it, they have focused too narrowly on institutional care. That has been a weakness in the social policy of successive Governments. We have tended to determine our policies on long-term care according to the demands of the private institutional care sector. I was sad that the hon. Member for Sutton and Cheam (Mr. Burstow) referred to home closures. In many instances, home closures arise from effective alternative policies that enable people to remain independently in the community. I agree with much of what he said, but he focused on the wrong tack.
I agree with the hon. Gentleman that the mess that the Government are trying to clear up arises entirely and directly from the previous Conservative Government's policies on long-term care. I carefully listened to the hon. Member for Teignbridge (Mr. Nicholls), who made some important points in interventions and in his speech. He said that Conservative policy is right. I listened to the hon. Member for Meriden (Mrs. Spelman), who spoke for nearly half an hour, but I have not got a clue about the Conservative party's policy. I intend to send copies of her speech to the elderly people in my constituency who ask
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me about Government policy and the alternatives. If they can work out what the Conservatives stand for, they have obviously more insight into her thoughts and ideas than I have.
The current difficulties are the direct result of what happened during the previous Government's 18 years. First, they deliberately removed long-term care from the NHS, as the Minister of State, my hon. Friend the Member for Barrow and Furness (Mr. Hutton), outlined. Some 40,000 beds, many of which were long-term care beds, were removed from the NHS. My constituency lost two hospitals that specifically offered long-term and intermediate care for elderly people. One of those hospitals has long been demolished, and the irony is that its site is now occupied by a private nursing home, where people pay for the care that was provided free in the original hospital. Under the previous Government, while free NHS long-term care was being run down, the private care nursing home market was being stimulated through huge public subsidies.
People forget that the private care home industry has been produced not simply by the market; the taxpayer has subsidised its expansion. When I covered community care for the then Opposition Front-Bench team, I calculated that between 1981, when the then Government decided to extend supplementary benefit to top-up fees in private care and nursing homes, and 1993, when they attempted to unravel the mess that community care had become, £10 billion of public funds was spent on pumping money into the creation and extension of the private home care market. That was nonsense. During that time I dealt with numerous individual cases and found that people desperately wanted a small amount of money to stay in their own homes and to remain independent, but they could not get it. Once they had made up their minds to give up the ghost and to go into institutional care, the public money flowed. The policy was absolute nonsense and resulted in the mess that we are trying to unravel now. The previous Government were prepared to support private institutional care but not the preventive alternatives that everyone needed.
I am sorry that the hon. Member for Meriden has disappeared, but I heard her speech so I should not be surprised by that. I do not like talking about hon. Members when they are not present. It is a pity when they cannot remain to listen to the responses to their contributions. The hon. Lady referred to the horrendous costs that people like myself will cause for the state when we are ga-ga in a few years' time. However, her assumptions are based on the most expensive models. She is making all the mistakes that the previous Conservative Government made in their 18 years in power.
The consequence of the privatisation of care of the elderly that took place under the previous Government is that older people pay for care that they have already paid for and that they assumed would be free when they paid for it. As I pointed out to my hon. Friend the Minister, it is wrong in principle and profoundly unfair that people should find themselves in that position. In effect, they are paying twice.
A number of developments have taken place recently. I had a little bit to do with the royal commission, because the Labour party came up with the idea when I was the Opposition spokesman on community care. I claim no credit, because the idea came from my hon. Friend the Member for Sheffield, Hillsborough (Helen Jackson) in

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about 1994. It was a sensible way to attempt to unravel the shambles that we had got into because of Conservative policy.
The Sutherland report made some sensible suggestions and, to be fair to the Government, they are implementing many of them. The one issue on which I differ from them is personal care. I thought that the definition of anything involving touch was a sensible way round the nonsense that we have debated for generations on what is nursing care and what is social care. That is an impossible distinction to make. Like my hon. Friend the Member for Stockport (Ms Coffey), I worked in social services so I have experience of assessing people. I know that one cannot draw such a dividing line; it simply does not exist. It is wrong for us to attempt a definition.
The Sutherland report talked about free nursing consistent with that on offer outside in the community. It made sensible proposals on capital limits and property ownership and I welcome the fact that, through the national plan, the Government have acceded to the proposals on free nursing care, capital limits and property.
I was particularly interested in the idea of deferred payments that my hon. Friend the Minister mentioned. They are a sensible way of dealing with circumstances in which people in a care home do not know whether they want to remain there. They should not have just three or six months to make up their minds about giving up the home in which they lived most of their lives. That is intolerable. Deferred payments are a sensible alternative, and I commend the Government on that suggestion.
The issue about which I am most concerned is one that I mentioned in the debate on the Second Reading of the Health and Social Care Bill. Personal care is still to be means-tested. I understand the Government's point that, if they have to decide between offering preventive measures in the community or supporting people in their own homes and only one package of money is available, it makes sense to invest it in preventive measures. If that is the dilemma that they face, I support them in their decision. However, my concern is that it is impossible to offer a sensible distinction between nursing care and personal care.
The Government's definition that nursing care is anything that qualified nurses do will lead to a huge amount of contention and controversy. The definition is open to different and wide-ranging interpretations. I am worried about the pressure that will be placed on nursing staff to accede to requests to undertake functions that are not required of qualified nurses.
Dr. Brand: The hon. Gentleman is making a great deal of sense. Does he not agree that the Government's definition would undermine desirable team working between nurses and nursing assistants? They all have high status and do a proper job. However, once nursing actions are carried out by non-registered nurses and people are charged for them, those members of the teams will be treated as second-class citizens.
Mr. Hinchliffe: I agree that that problem will arise.
We must recognise the importance of holistic care. It makes no sense to carve up people's care. People cannot be helped to the toilet in the morning, only then to be told that their hair cannot be combed. I am worried by a further inconsistency in that respect. If the division between
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social and nursing care is to be pared down with regard to people in care homes, will the same principle apply in the national health service? Will people in long-term NHS beds be charged for the personal care element of their hospital care? We need a consistency that has not so far been evident.
I am critical of that aspect of Government policy, but I strongly welcome the £900 million that they are offering for intermediate care. That contrasts with the Tory tax cuts announced today. When people consider Conservative party policy and its promised tax cuts, which will attract elderly voters, they must think through the consequences: cuts in personal social services and more means-testing on care for older people.
I make a plea for us to think radically about preventive measures. I am worried that the debate has been far too concentrated on institutional and permanent care settings. I ask hon. Members to consider what sort of care they want when they can no longer care for themselves. Do they want to end up as my mother did, and sit locked up in a home full of incontinent, deranged people? Is that the best that we can do for elderly people? I want us to move away from such a model.
We now have the opportunities, through developments such as those in communications technology, to maintain elderly people in their homes. We should extend the care-link schemes that apply in so many areas and provide an instant response to requests for home adaptations. People should not have to wait six months to get a ramp, or encounter all the other such nonsense about which hon. Members occasionally hear. Housing-with-care schemes have been introduced in Denmark as an alternative to institutional care. Why cannot we use the equity that elderly people have in their houses to make available intensive care packages that allow them to remain in their homes? More investment is needed in day-care and warden schemes.
Mr. Nicholas Winterton: The hon. Gentleman is, of course, the distinguished Chairman of the Select Committee on Health, which I, too, chaired for a limited time. Will he join me and other hon. Members in different political parties in making representations to the Government on expanding criteria relating to the personal and social medical conditions that qualify for free treatment? He made a good point: providing treatment and care today can prevent worse illness in future. If care is provided now, it can save the health service a great deal of money in due course. Will he join me in making an all-party representation on that issue?
Mr. Hinchliffe: There is more cross-party consensus on the issue to which the hon. Gentleman refers than on many others. Of course, I shall be happy to make appropriate representations. In my surgery on Friday evening, I spent the best part of an hour with a lady who was probably in her early 60s and whose husband has senile dementia. It was extremely difficult to try to distinguish between personal and nursing care in respect of her husband. The woman was dealing with a tragic situation. We must consider the practicalities of the Government's policy, and I shall certainly be happy to support any representations along the lines that he suggests.
Other hon. Members want to contribute, so I shall conclude my remarks shortly. I believe that the Government have taken many positive steps. I shall

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support their amendment because I believe that they are heading in broadly the right direction. I am critical about the difficulty to which I have referred, but I hope that it will be resolved in a positive manner.
I hope that the Under-Secretary of State for Health, my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart), will pick up my plea. To me, care of the elderly is essentially a matter of human rights. My human rights are about my independence and my ability to choose what sort of care I want. Care should not be given to me because the private market thinks that the best thing for me when I am ga-ga is to be incarcerated with a number of other ga-ga people in some sort of lock-up establishment. We can do better than that, and I have every confidence that the Government will do so. I wish them well in applying their thoughts to the royal commission recommendations, but I hope that we might go that little bit further in due course.
9.15 pm
Mr. Archy Kirkwood: I am pleased to be able to make a short contribution to what has been a good debate. It is a privilege and a pleasure to follow my hon. Friend, if I may call him that, the hon. Member for Wakefield (Mr. Hinchliffe), a fellow Select Committee Chairman, whose distinguished knowledge has greatly added to the debate. He is absolutely right to say that we should not concentrate solely on residential and institutional care. Community and domiciliary care are an essential part of the package of measures that we must implement. He is right also to talk about the need for prevention. The Government have done a great deal about that, and I shall return to the matter in a moment.
The heartening thing for me is that, apart from the hon. Member for Stockport (Ms Coffey), who made a powerful speech, there are not many people who are intrinsically opposed to the principle of personal care provision. The hon. Lady was slightly unfair in accusing us of being cynical in initiating the debate at this time. You will know, Mr. Deputy Speaker, that we receive only three Opposition days a year, and we rightly gave a half-day to the Welsh nationalists. We do not control when we will get these opportunities, but our desire to have this debate was certainly driven by the importance that we attach to the subject.
Not enough consideration was given to the work done by Sir Stewart Sutherland and his royal commission. The report was a seminal contribution to the debate. Some might say that the Government's initial response was grudging. The hon. Member for Sheffield, Hillsborough (Helen Jackson) came up with the idea; it was right to pursue that idea, and the Government seemed to be absolutely committed to it. They then seemed to go very cool when the report was published, and we have had only one debate on the subject, in December 1999. The Liberal Democrats need therefore make no apologies for initiating this debate, which has been very good so far.
The Government are right to claim that they have made progress. Compared with the previous Government, they have made enormous progress. Our motion sets out substantial differences in the directions that we are taking, but ours is a perfectly proper position and we will argue our case eloquently, as the royal commission argued its
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case. We are right to support its recommendations. The Conservatives have a lot to answer for, and if I had more time at my disposal, I could expand that proposition almost infinitely. Like the hon. Member for Wakefield, I watched with dismay the evolution of policy under the stewardship of the previous Conservative Administration.
Having said that, I remember the Prime Minister, then the Leader of the Opposition, making a powerful speech in 1996 at the party conference before the last general election. He said that he was ashamed to live in a country where people had to sell their house to pay for their long-term care. That gave me a lift. I watched his speech on the television, and that was a powerful point well made. Like me, many people had their expectations raised by that statement by the head of the incoming Government and by the establishment of the royal commission. We were right to be disappointed that it took the Government almost as long to read and respond to the report as the royal commission had taken to write it.
The Minister of State, the hon. Member for Barrow and Furness (Mr. Hutton), rightly ribbed us about past changes in Liberal Democrat policy. However, for me at least, the royal commission changed everything. There are six volumes of research evidence, and I did not read them all, but those that I read certainly demonstrated that the commission's work changed people's perspectives on this important subject.
The Government have not done enough to consider the options in detail and to debate them in the House. They took the line of least resistance and they split the difference. As I said, they have made progress, and it would be churlish to quibble about that, but they took fright at the amounts of money that they thought, wrongly, were involved. North of the border, research will continue between now and August into the implications and the delivery of the policy of paying for people's personal care. I am deeply disappointed that the Government took fright.
The royal commission showed that providing solutions on an individual basis was not viable. Individual solutions, whether through independent insurance or under other schemes, would not make the necessary provision. Sir Stewart rightly said that the only solution was to pull the risks and cover the costs through general taxation. That is the fairest, long-term solution.
Dan Norris: Will the hon. Gentleman give way?
Mr. Kirkwood: I am sorry, but I have no time. Other hon. Members want to speak and I am trying to be as quick as I can.
Sir Stewart's point is crucial, and I hope that hon. Members from all parties will consider it. The Government will struggle to deal with fairness in future if their policy continues in the same direction. We have had some exchanges about people's treatment and whether they consider it to be fair when compared with that of others.
Problems of definition will always exist. I respect the hon. Member for Stockport, who knows a great deal about social services from her professional experience. However, it diminished the argument to mention some of the issues that she raised. Boundary problems will always exist, and Sir Stewart Sutherland and the royal commission report recognised that. There are ways round the problem if we act in good faith and with good will.

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If the Government's proposals are accepted, we will have a two-tier system. However good it is, it will be unstable in the long term. The Minister was wrong to say that the royal commission had devised the narrow definition of long-term care that he described. Dr. Chi Patel contributed to the minority report. I have talked to Sir Stewart and it is wrong to say that he had such a narrow definition in mind when he considered the proposition for gatekeeping.
If the Government considered the fact that the state already pays 75 per cent. of the costs, there is at least an argument for saying that, as pensioner provision improves in future and people retire with larger occupational pensions, the money available to pay hotel costs may generate more money than was perhaps anticipated five years ago when research for the royal commission report began. I hope that the Under-Secretary of State for Health, the hon. Member for Birmingham, Edgbaston (Ms Stuart), will be able to deal with that point in her winding-up speech. Slide rules should be applied to some of the figures and an option for personal care sometime in future should be kept open. That is all I ask of the Government this evening. If they are prepared to consider that, I will be content with the results of our debate.
9.23 pm
Mr. Paul Goggins: I thank the previous two speakers for creating space for me to squeeze into before the winding-up speeches. The debate is important and I am happy to have the opportunity to contribute to it. My hon. Friend the Member for Stockport (Ms Coffey) spoke eloquently about the way in which our treatment of older people is a sign of our society's values. It should reflect the way in which we expect to be treated when we are old.
I acknowledge the huge progress in the care of some of my older constituents in the past three or four years. When I was elected as a Member of Parliament, the first issue to hit me was delayed discharges. I remember the letters that I received, the tearful relatives and the patients, whom I visited in Wythenshawe hospital. It was dreadful for them to be trapped in an inappropriate setting. It also prevented others who desperately needed operations from being treated. It was demoralising for the staff because they were not able to give appropriate care in such a setting.
In August 1997, there were 200 delayed discharge patients in Manchester, and there was just £500 a week of new money with which to fund care packages and placements for them. I am pleased to say that, with better management, more cash from the Government and more partnership working, there is now between £6,000 and £7,000 a week of new money in the kitty, and there are only one or two delayed discharge patients. That is an immense step forward, and it has also been repeated in the Trafford area of my constituency.
My hon. Friend the Member for Wakefield (Mr. Hinchliffe) always speaks passionately about the need for prevention in the care of the elderly, in terms of the prevention of the use of the residential care and hospital care options. I concur wholeheartedly with him on that. All our efforts should go into trying to prevent admissions into residential care and hospital care whenever possible. That means more neighbourliness and
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better care in the community. It also means good, professional social work care and nursing care in the community.
When people need to go into the hospital, as the majority of older people will at some stage, the care available needs to be of a high quality. When the treatment is over, the patient then needs to be placed appropriately in the right kind of setting. That might involve residential care or nursing care, but it is to be hoped that the patient will be back home sooner rather than later.
On that issue, I have some good news for my hon. Friend the Member for Wakefield. The Southwold nursing home in my constituency would, in the past, have received patients from hospital who would have stayed there almost for ever. Now, it is sending one in three patients—even some who are quite dependent—home into their own community with a care package. That is an encouraging development in nursing care.
The main focus of the debate is the decision not to provide free personal care to all. It has been made clear from the debate that that is a serious and controversial issue. There are no perfect solutions to such questions. In politics, there are only priorities and hard choices, and I shall briefly cover some of them.
First, the initial cost of the proposal would be more than £1 billion, as my hon. Friend the Minister said. That is a similar investment to the one that the Government are making in the intermediate care package, which will provide 5,000 places by 2003. The first hard question to answer is whether we should provide existing services more cheaply for some, mainly better-off, people or fund new and extended provision for all. As has been said, we cannot spend the same money twice.
Secondly, the £1 billion cost would not remain at that level. The royal commission made it clear that by 2050, the figure would have risen to at least £6 billion. The second question is, therefore, whether such costs would be sustainable. Reference has been made to the negative impact of having a funding regime that would not be sustainable in the long run. That would be totally disruptive to the care of elderly people, and we should shun such an option.
Thirdly, expectations change. That powerful point was made by the authors of the note of dissent to the royal commission's report. Older people will not now accept the care packages that were on offer in the 1960s. Equally, older people in 2050 will not accept the kind of care packages that are available now. The third question, therefore, is whether we should risk putting a cap on quality and variety by enshrining into our system a principle that would never provide enough of the right kind of care in the long run.
The issue is controversial. Difficult choices have to be made, and there will undoubtedly be all kinds of teething problems with the provisions. I acknowledge and accept that there is now a new settlement between the individual and the state in relation to pensions and other matters. It is a settlement that protects the poorest as a first priority, which is just. It asks the better-off to make a bigger contribution, which is fair, and it guarantees quality for everyone, which we all expect. Those principles are reflected in the new arrangements for personal care, and I fully support them.
9.29 pm
Mr. Nick Harvey: It is a pleasure to participate in the debate, which has been useful to explore the issues involved and to identify where the political parties will position themselves in the run-in to the general election.
As my hon. Friend the Member for Sutton and Cheam (Mr. Burstow) said, the Liberal Democrats do not control the timetable for when we get the chance to raise matters on Opposition Supply days. Nevertheless, events in Scotland are, for Liberal Democrats, a cause for celebration. We celebrate the success of devolution, because those events represent devolution working, and working well, and the fact that people in Scotland will be able to use the long-term free personal care that the Scottish Executive and, in the end, all parties in the Scottish Parliament recognised that it was right to offer. That does not mean that we have to offer free personal care in England, but it does mean that those of us who believe in that have a duty to argue for it in England. That is what we are doing.
It is wrong for people such as the hon. Member for Woodspring (Dr. Fox), who is the Conservatives' key spokesman on these matters, to appear on television to say that it is an absolute scandal that different things will happen in Scotland and in England, only for it to creep out that that is their position as well. The Conservatives in Scotland believe in free personal care, but it has emerged in today's debate, as it has before, that the Conservatives at Westminster do not support it. Small wonder that the hon. Member for Buckingham (Mr. Bercow), who was bouncing up and down enthusiastically at the beginning of the debate, left the Chamber on hearing what his Front-Bench spokesman had to say. I am not surprised by his attitude because he would have been gravely disappointed to discover that that was the position.
Mr. Hinchliffe: Where is she?
Mr. Harvey: Where indeed is the hon. Member for Meriden (Mrs. Spelman)? She could have returned to listen to the conclusion of the debate.
The task for those of us in England who believe in free personal care is to campaign and argue for it, and that is what we are doing tonight. I shall address a few remarks to the Minister, who defended the Government's position and said that our proposals are not the right way forward in England.
On the demographic time bomb, my hon. Friend the Member for Isle of Wight (Dr. Brand) made a stout defence. As the Minister said, as time goes on there will be more people of retirement age and in their eighties, but it is equally true, as my hon. Friend pointed out, that the greater part of the expenditure on such care services occurs in the last six weeks of life. Unless the population is bound to expand in some unrecognisable way, the basic costs involved will remain broadly the same.
The hon. Member for Wythenshawe and Sale, East (Mr. Goggins) said that, over time, the original estimate would, in cash terms, reach a sum six times that estimated by the royal commission. Of course it would. Sums increase as time goes on and inflation makes figures rise, but the estimate will remain broadly stable as a proportion of gross domestic product. The idea that there is a
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demographic time bomb and that we will not be able to afford our proposals was comprehensively dismissed by the royal commission, which went into those matters in great detail.
The Government say that they have introduced a comprehensive package of intermediate care and that, somehow, it is an alternative because in this world it is possible to do only one thing or the other—it is not possible to do both, nor should one have the ambition to do so. Let me make it perfectly clear that the Liberal Democrats support the new priority that the Government want to give to intermediate care. We welcomed that on the day that it was announced and we have welcomed it in the House since.
The hon. Member for Wakefield (Mr. Hinchliffe), the Chairman of the Health Committee, was right to say that we do not want hon. Members to get into the cul-de-sac of thinking that all care has to be residential. The more intermediate, short-term care and longer-term care that we can offer to enable people to be cared for in their own homes, the better that will be for everybody concerned and for society as a whole. We welcome the Government's intermediate care package. We recognise, however, that free personal care involves expenditure over and above that. It certainly does not involve the original £1 billion that the royal commission estimated.
If one was to proceed on that basis, one would be assuming that the free nursing care that the Government are introducing would achieve nothing and that the intermediate care package itself would achieve nothing. Yet the Government's own brief about intermediate care specifies that one of their objectives is to reduce the number of people going into long-term residential care. The Government are clearly confident that that will succeed, and so are we. The cost of introducing a policy of free personal care falls as a result.
Dan Norris: Exactly how much will it cost for the additional strategy that the Liberal Democrats propose? How will they raise the money, given that one of their proposals is to have a higher rate of income tax for people earning more than £100,000 a year? I calculate that that has been spent 11 times over, given what the hon. Member for Sutton and Cheam (Mr. Burstow) has said. Putting that to one side, how much will the proposal cost the taxpayer?
Mr. Harvey: If one starts with the original royal commission estimate and nets out of that what will be spent on nursing care, taking account of the extent to which intermediate care will relieve some of the pressure on that, the cost will be about £750 million a year. The hon. Gentleman refers to our separate policy of putting a 50p tax rate on incomes above £100,000. Let me point out that that would raise £3.5 billion in a year. He may have counted the money as being spent 11 times over, but even at that rate it can be spent almost five times over and it will pay for a great deal more than that. Nevertheless, I thank the hon. Gentleman for his question.
Both the Minister and the hon. Member for Stockport (Ms Coffey) made some spurious arguments to the effect that it is impossible to draw up a definition of personal care. That is simply not true. The royal commission report had a good stab at doing so. As the hon. Member for Wakefield said, it used as its basic principle the fact that

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the person being cared for had to be touched. If hon. Members think that that sounds vague, they should look at the report, which lists exactly what would be provided.
I am not saying that a trouble-free list can be drawn up, but it is nonsense to say that a definition cannot be made. Equally, it is nonsense to say that a distinction between nursing care and personal care cannot be made. That does not mean that no difficulties arise. In practice, it will prove very difficult. As my hon. Friend the Member for Sutton and Cheam stressed in his speech, where the Government choose to draw the lines in establishing that definition is not what the royal commission had in mind in its report.
All those involved in this sector, including the Royal College of Nursing and the British Medical Association, in an announcement that it made yesterday, have arrived at the same conclusion: that the Government have opted for a mean and narrow definition. It is based not on the tasks that will be carried out or on the condition of the patient but, bizarrely, on who will carry out the care. It is a most unsatisfactory definition, which will cause many difficulties in practice. However, it is a definition, which proves that a definition can be made.
The Minister made a completely ludicrous point about the activities of the London borough of Sutton in the middle of the Thatcher regime. For goodness sake, a council trying to run its services in the middle of the Thatcher regime when some 85 per cent. of its budget was determined for it by the Government—[Interruption.] As if problems were not bad enough, Lady Olga Maitland was the local Member of Parliament. The Minister cannot suggest that the Liberal Democrats, in proposing an election manifesto, would try to do exactly the same as we did in the 1980s in the London borough of Sutton when Mrs. Thatcher was controlling the budget. The two are not remotely comparable. In any sane country, an organisation as big as a London borough would determine its own policies and raise its own taxes to pay for them. However, Britain does not work like that; everything has to be spoon fed from above. Matters have improved slightly over the years, but not an awful lot.
While we are on the subject of local government finance, the Minister was right to ask the Conservative party whether it would match Government spending on social services. It is worth taking a moment to look at what the Government are doing with social services funding. This year, all. social services departments have budgets above the standard spending assessment. Despite that, as of last week they were collectively overspent by £205 million. The settlement for next year will be insufficient to cover repayment of the debt and to cope with the increased demand on social services.
The Government have estimated that their new four-year plan to end bed blocking will cost £900,000. Much of that will have to be paid for out of social services budgets, and no extra is provided for it in this year's budget. Therefore, there is a great gap, so the Conservatives should be able at least to match the Government's proposals. The hon. Member for Meriden (Mrs. Spelman) said that the whole thing comes down to funding. She was right when she said that there is a big hole, but she contrived to dig an even bigger hole and jumped into it. She said that the solution to the funding hole was not provided by the Government's proposals or by the Liberal Democrats' suggestion, because that would "disincentivise" people from making provision on their own account. When we sat on the edge of our seats
760
waiting to hear her solution, there came absolutely nothing. We were told that the Conservative proposal would appear in due course, and we would have to contain ourselves.
It was all too much—or rather too little—for the hon. Member for Buckingham, who fled into the night. The hon. Member for Teignbridge (Mr. Nicholls) is made of stouter stuff. He told us what he thinks the policy should be. It was remarkably similar to the Liberal Democrat policy that we have enunciated this evening. It will be interesting to see whether, come the election, he stands on the Conservative or the Liberal Democrat policy.
Mr. Nicholls: I would not want the hon. Gentleman to go round the west country claiming that he and I are allies. If I came to a similar conclusion, it was because mine was based on principle.
Mr. Harvey: I thought that the bulk of the hon. Gentleman's rather intemperate remarks about the Liberal Democrats were based on the fact that his majority over the Liberal Democrat candidate at the last election was all of 281.
The hon. Member for Stockport irresponsibly set alarms bells ringing by suggesting that Liberal Democrats were arguing for the removal of existing attendance allowances. That is certainly not part of our policy, and it is not how we would propose to pay for these provisions.
The hon. Member for Teignbridge said that his argument was born out of principle. The royal commission went into this matter in great detail, and explored the principles involved. It considered the practical implications and the costings, and plotted those forward over a period of time. It made a recommendation, which we have supported consistently, and I welcome the fact that the hon. Gentleman does so, too. I listened to a couple of interventions from the hon. Member for Macclesfield (Mr. Winterton), and I got the impression that he also supported that recommendation as an issue of principle.
Liberal Democrats have argued this case in England and in Scotland because it is right in principle. It is completely unjust for someone suffering from a long-term, chronic condition, such as dementia or Parkinson's disease, who is in need of personal help with bathing, dressing, their toilet and other necessities, to have to pay for those services. By any common-sense, layman's definition such chronic conditions would ordinarily be viewed as a health problem. All those who have paid national insurance contributions have believed that they have been buying care from the cradle to the grave. It is an injustice and it is wrong in principle that they should be penalised and asked to pay for personal care.
I welcome the commitments made by the British Medical Association. It believes that the Government's definition of nursing care is too limited. Dr. Dearden, the chairman of its community care committee, said:
"We are pressing politicians to make changes to the Bill so that free care includes personal care as well as nursing care. If someone is unable to wash themselves, use the bathroom or get dressed on their own because of their medical condition, we believe help with these basic things should be free of charge. If individuals have to pay for this increased level of personal care it is akin to a tax on being sick. This goes against the ethos of the NHS."
That is right, and that is why Liberal Democrats believe that personal care should, in principle, be free. We will argue that proudly and strongly at the forthcoming election.
9.45 pm
The Parliamentary Under-Secretary of State for Health (Ms Gisela Stuart): This has been, mostly, a thoughtful and well-informed debate, and I congratulate those who have taken part. It has been a debate about the challenges we face, and the choices we have to make.
It is clear that we live in an ageing society. Many more people live longer: that is to be welcomed, but the challenge we face is to ensure that our health and social services meet the needs of older people. Older people want to lead healthy and independent lives; they do not want to be in institutions. As a Government, we need to find a fair way of funding long-term care that strikes the right balance—between what the state should provide and fund and what should be the responsibility of the individual, and ensuring that the money, when it is spent, provides better care.
The status quo was clearly unacceptable. We needed to expand services for the care of older people, we needed to make major new investment in those services and we needed to redesign services. We are doing just that. We are providing extra funds—an additional £900 million by 2003–04—for intermediate care and new services, and a further £360 million year on year to finance nursing care costs. We are thinking about expansion and redesign. That is why we have developed national service frameworks for older people, that is why we established the National Care Standards Commission and that is why we are developing intermediate care.
The hon. Member for Sutton and Cheam (Mr. Burstow) rightly described the previous system as discredited and unfair, but I could not agree with much that he said subsequently, other than his expressed desire for a fair and sustainable system. I certainly do not agree with his analysis of the solution. Essentially, he said that he supported everything the Government were doing but wanted more. In a sense I would have been surprised if he had not said that, but it would have been helpful had he recognised that some considerable advances are being made.
I am still deeply puzzled by the contribution of the hon. Member for Meriden (Mrs. Spelman). She described the problem as a big black hole around which we were trying to navigate, and I sense that many of us are trying to navigate around a big black hole following her speech. In fact, she probably fell into the black hole, and we all know what happens when someone disappears into one: it is difficult to get out.
Not the least of the hon. Lady's problems is her continued refusal to clarify the Opposition's policy. She said that she wanted to clarify what her colleague the hon. Member for Woodspring (Dr. Fox) had said about personal care. The hon. Gentleman, however, gave no such confirmation. He said:
"I welcome the Government's decision to make all nursing care free".—[Official Report, 10 January 2001; Vol. 360, c. 1100.]
It appears that the hon. Lady herself is not terribly clear about what the policy is.
The hon. Lady offered no solution, other than saying, "We support what the Government are doing, until we come up with our own comprehensive policy." That is a policy that we were promised as long ago as December 1999, but we still have not heard anything. We wait with bated breath, but, given that social services are such a
762
vital component, it would be helpful if, for a start, we could hear whether the Opposition will match NHS and social services funding.
Mrs. Spelman: I am sure that, as a professional politician, the Minister understands that tactically it was worth waiting to see whether the Government would have a knee-jerk reaction, as they did in Scotland.
Ms Stuart: Unlike the Liberals, who are now jumping on every bandwagon that comes their way, the Conservatives will sit on the fence to see which way the wind blows, and will then decide in which direction to jump. We all look forward to that.
I congratulate my hon. Friend the Member for Stockport (Ms Coffey) on her thoughtful speech. She gave strong support to what the Government are doing. I particularly appreciate her support, which she gave not because of political allegiances but because of her experience of working on the ground. She acknowledged the difficulties with definition and that it was not straightforward, but she made it clear that no alternative was offered—someone who has worked on the ground recognised that that was the right way forward.
I was fascinated by the contribution of the hon. Member for Teignbridge (Mr. Nicholls), who told us that his was a principled statement. If I understood the principled statement correctly, he was arguing along the lines not of justice but of the right of inheritance for the wealthier, and, if that did not work, insurance would be a way forward. In many ways, it did not add up.
I welcome what my hon. Friend the Member for Wakefield (Mr. Hinchliffe) said. He has tremendous experience and is a highly respected Chairman of the Select Committee on Health. He made a powerful point about the failure to invest in alternative provisions for care. He acknowledges the difficulties. We know that we have some differences, but he is broadly in support. Just because it is difficult to make that distinction does not mean that it is impossible.
My hon. Friend specifically requested that we move away from institutional settings and look radically at the matter, recognising people's human rights and supporting their right to live independently. I hope that, when he looks at what we have done, he will realise that we have taken that on board. I am grateful for his contribution.
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood)—as a former member of the Select Committee on Social Security, which he chairs, I almost called him my hon. Friend—suggests that what is happening in Scotland indicates a two-tier system. That is a fundamental misunderstanding of the driving force behind what we are doing. We decided to take that route in England because it delivers better care and addresses some of the inequalities of the previous arrangement.
Mr. Kirkwood: I was not making myself clear. I was talking about the two tiers between personal and nursing care, not between north and south. I apologise.
Ms Stuart: I am grateful for that intervention.
The hon. Gentleman welcomed the royal commission, but we rejected the proposal on personal care not because of cost, but to deliver better care. May I briefly come back to Scotland? Different solutions for funding will not

763
provide one extra nurse, one extra doctor or one extra provision north of the border, so it is not logical to conclude that there will be better care.
Mr. Donald Gorrie: Does the Minister accept that all the six parties represented in the Scottish Parliament support the proposition and that all the people who gave evidence, who really know about the subject, to the Scottish Parliament's Committee all favoured the policy? Therefore, the policy is not as insane as she makes out.
Ms Stuart: I was not for one moment suggesting that. I am simply saying that that is a logical conclusion of devolution: different choices are made. The debate is about making choices, but I am still somewhat puzzled about why the Liberal Democrats support the proposal in Scotland, but have different views in Wales and are not sure about England. There may be some inconsistency there. [Interruption.] Hon. Members may not like it, but may I make a little progress?
My hon. Friend the Member for Wythenshawe and Sale, East (Mr. Goggins) described powerfully the changes that he has seen on the ground and the benefits to his constituents as a result of bringing in the new models of service, which deal with such things as delayed discharges. He has seen what home care packages are doing for people on the ground.
The hon. Member for North Devon (Mr. Harvey) made an interesting observation about what the debate was really all about: it was about political positioning. He made that clear. I am grateful for that honesty. I am delighted that he has put on the record his support for the royal commission because, in 1999, when we had the previous debate, the Liberal Democrat spokesperson would not be drawn on whether the Liberal Democrats supported it. Again, it was a case of sitting on the fence, seeing how it played and suddenly saying, "We fully support it."
The hon. Gentleman questioned the arguments about the demographic time bomb. There is a whole line of arguments to be made, but what he does not deal with is the fact that what we are putting forward is based not on cost, but on better services that provide a better response.
Extraordinarily, the hon. Gentleman questioned the £1 billion cost figure. Underlying his assertion that the change would not cost that sum was the good old Liberal Democrat approach of accepting everything that the Government are doing and our extra investment and asking for more. He said that the change would not cost £1 billion, but would be much cheaper, because of all the Government's action in intermediate care. That is the bottom line.
Mr. Harvey indicated assent.
Ms Stuart: I am glad that we have put that on record.
Nothing that we have heard today has shed any light on the Opposition's policies or on how they would fund them. It is very easy to make proposals without saying where the money will come from. Liberal Democrat Members say that extra tax on those making more than £100,000 would fund both their care proposals and their education proposals, but I would like to see the calculations. Liberal Democrat Members want more money, but they do not say where they will find it.
764
Conservative Members broadly agree with the Government and will probably do so until they have developed their own comprehensive policies. However, they have still not said whether they will match our vital social services funding. The Opposition might therefore find it helpful—I always try to be helpful—if I outline the real action that the Government have taken using real money, not sweet aspirations and empty words.
The NHS plan outlines a vision of health and well-being for older people and for those who care for them. I do not think that we have said enough today about carers. That vision is backed by real investment of an extra £1.4 billion by 2003–04. With that investment, we will promote better health, encourage faster recovery from illness, support independence, avoid the increasing institutionalisation of the elderly and deal with hospital admissions. We offer not only new choices and new opportunities, but the money necessary to realise those opportunities.
By 2004, the new investment will help an extra 130,000 people annually. By 2004, the number of people benefiting from community equipment services will increase by 50 per cent., helping people to stay at home safely for longer. Although all hon. Members want that outcome, we are actually achieving it. Not only will 50,000 people be able to live more independently at home, but we will support the carers.
Opposition Members asked the interesting question what will happen when we are 90 and our children have to look after us. I remind them that, by then, our children themselves may well be 70 and require support. We are therefore supporting carers by doubling the carers' special grant from £50 million to £100 million. My right hon. Friend the Secretary of State for Social Security has also announced a package worth £500 million to back up our words. That money will benefit 300,000 carers in the next three years. The national service framework will back up those investments and support older people with mental health problems and dementia sufferers.
Those measures were created to deal with the individual concerns of people whom we need to support. It is also essential that those services are reconfigured. As my hon. Friend the Member for Wakefield said, simply doing more of the same is not a long-term strategy. We are therefore providing money to reconfigure services and to provide essential independence. We are extending free nursing care to all settings to promote independence.
It would have been gracious of the hon. Member for North Devon to acknowledge that some progress is being made, and that the Government will be preventing people from having to sell their homes against their wishes. As the Prime Minister said, such a situation is disgraceful. I wish that Opposition Members would even partly recognise that we are moving in the right direction. We are tackling unacceptable variations in charges for home care. We are also providing guidance on the NHS continued care responsibilities.
The Government are taking action to provide a fair and sustainable way forward. Opposition Members have a long way to go to convince anyone that they have any credible policy and funding options that anyone could accept. What we have heard today will convince no one, either in the Chamber or outside it. It has been an entirely missed opportunity.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 41, Noes 271.

Division No. 104]

[9.59 pm

AYES

Allan, Richard

Jones, Nigel (Cheltenham)

Baker, Norman

Keetch, Paul

Ballard, Jackie

Kennedy, Rt Hon Charles

Berth, Rt Hon A J

(Ross Stye & Inverness W)

Bell, Martin (Tatton)

Kirkwood, Archy

Brake, Tom

Livsey, Richard

Brand, Dr Peter

Llwyd, Elfyn

Breed, Colin

Michie, Mrs Ray (Argyll & Bute)

Burnett, John

Moore, Michael

Burstow, Paul

Oaten, Mark

Campbell, Rt Hon Menzies

Öpik, Lembit

(NE Fife)

Rendel, David

Russell, Bob (Colchester)

Cotter, Brian

Sanders, Adrian

Davey, Edward (Kingston)

Taylor, Matthew (Truro)

Fearn, Ronnie

Thomas, Simon (Ceredigion)

Foster, Don (Bath)

Tonge, Dr Jenny

George, Andrew (St Ives)

Tyler, Paul

Gidley, Sandra

Webb, Steve

Hancock, Mike

Willis, Phil

Harris, Dr Evan

Harvey, Nick

Tellers for the Ayes:

Heath, David (Somerton & Frome)

Mr. Andrew Stunell and

Hughes, Simon (Southwark N)

Mr. Donald Gorrie.

NOES

Abbott, Ms Diane

Clapham, Michael

Adams, Mrs Irene (Paisley N)

Clark, Dr Lynda

Ainger, Nick

(Edinburgh Pentlands)

Ainsworth, Robert (Cov'try NE)

Clark, Paul (Gillingham)

Armstrong, Rt Hon Ms Hilary

Clarke, Rt Hon Tom (Coatbridge)

Ashton, Joe

Clelland, David

Atherton, Ms Candy

Coffey, Ms Ann

Austin, John

Coleman, Iain

Colman Tony

Bailey, Adrian

Connarty, Michael

Banks, Tony

Cooper, Yvette

Barnes, Harry

Corbett, Robin

Barron, Kevin

Corbyn, Jeremy

Battle, John

Corston, Jean

Bayley, Hugh

Cox, Tom

Bell, Stuart (Middlesbrough)

Crausby, David

Benn, Rt Hon Tony (Chesterfield)

Cryer, Mrs Ann (Keighley)

Bennett, Andrew F

Cummings, John

Benton, Joe

Darling, Rt Hon Alistair

Bermingham, Gerald

Davey, Valerie (Bristol W)

Best, Harold

Davidson, Ian

Betts, Clive

Davies, Rt Hon Denzil (Llanelli)

Blears, Ms Hazel

Davies, Geraint (Croydon C)

Boateng, Rt Hon Paul

Davis, Rt Hon Terry

Borrow, David

(B'ham Hodge H)

Bradley, Keith (Withington)

Dawson, Hilton

Bradshaw, Ben

Dean, Mrs Janet

Brinton, Mrs Helen

Denham, John

Browne, Desmond

Dismore, Andrew

Burden, Richard

Dobbin, Jim

Dobson, Rt Hon Frank

Butler, Mrs Christine

Doran, Frank

Byers, Rt Hon Stephen

Dowd, Jim

Campbell, Alan (Tynemouth)

Eagle, Angela (Wallasey)

Campbell-Savours, Dale

Eagle, Maria (L'pool Garston)

Cann, Jamie

Edwards, Huw

Caton, Martin

Efford, Clive

Cawsey, Ian

Ellman, Mrs Louise

Chapman, Ben (Wirral S)

Ennis, Jeff

Chaytor, David

Etherington, Bill

766

Field, Rt Hon Frank

Lloyd, Tony (Manchester C)

Fisher, Mark

Love, Andrew

Fitzpatrick, Jim

McAvoy, Thomas

Fitzsimons, Mrs Lorna

McCabe, Steve

Flint, Caroline

McCafferty, Ms Chris

Flynn, Paul

McCartney, Rt Hon Ian

Follett, Barbara

(Makerfield)

Foster, Rt Hon Derek

Macdonald, Calum

Foster, Michael J (Worcester)

McDonnell, John

Foulkes, George

McFall, John

Galloway, George

McGuire, Mrs Anne

Gapes, Mike

McKenna, Mrs Rosemary

George, Rt Hon Bruce (Walsall S)

McNulty, Tony

Gerard, Neil

Mactaggart, Fiona

Gibson, Dr Ian

McWalter, Tony

Gilroy, Mrs Linda

McWilliam, John

Godsiff, Roger

Mahon, Mrs Alice

Goggins, Paul

Mallaber, Judy

Golding, Mrs Llin

Mandelson, Rt Hon Peter

Gordon, Mrs Eileen

Marshall, Jim (Leicester S)

Griffiths, Jane (Reading E)

Maxton, John

Griffiths, Nigel (Edinburgh S)

Meacher, Rt Hon Michael

Griffiths, Win (Bridgend)

Meale, Alan

Grocott, Bruce

Michael, Rt Hon Alun

Grogan, John

Michie, Bill (Shef'ld Heeley)

Hain, Peter

Milburn, Rt Hon Alan

Hall, Mike (Weaver Vale)

Miller, Andrew

Hamilton, Fabian (Leeds NE)

Mitchell, Austin

Hanson, David

Moffatt, Laura

Harman, Rt Hon Ms Harriet

Moonie, Dr Lewis

Healey, John

Morgan, Ms Julie (Cardiff N)

Henderson, Doug (Newcastle N)

Morley, Elliot

Hendrick, Mark

Morris, Rt Hon Ms Estelle

Hepburn, Stephen

(B'ham Yardley)

Heppell, John

Morris, Rt Hon Sir John

Hewitt, Ms Patricia

(Aberavon)

Hill, Keith

Mountford, Kali

Hinchliffe, David

Mullin, Chris

Hodge, Ms Margaret

Murphy, Rt Hon Paul (Torfaen)

Hoey, Kate

Naysmith, Dr Doug

Hoon, Rt Hon Geoffrey

Norris, Dan

Hope, Phil

O'Brien, Bill (Normanton)

Hopkins, Kelvin

O'Brien, Mike (N Warks)

Howarth, Rt Hon Alan (Newport E)

O'Hara, Eddie

Howells, Dr Kim

Pickthall, Colin

Hughes, Ms Beverley (Stretford)

Pike, Peter L

Hughes, Kevin (Doncaster N)

Pond, Chris

Hurst, Alan

Pope, Greg

Hutton, John

Pound, Stephen

Iddon, Dr Brian

Powell, Sir Raymond

Jackson, Helen (Hillsborough)

Prentice, Ms Bridget (Lewisham E)

Jamieson, David

Prentice, Gordon (Pendle)

Jenkins, Brian

Prescott, Rt Hon John

Johnson, Alan (Hull W& Hessle)

Primarolo, Dawn

Johnson, Miss Melanie

Prosser, Gwyn

(Welwyn Hatfield)

Purchase, Ken

Jones, Rt Hon Barry (Alyn)

Quinn, Lawrie

Jones, Helen (Warrington N)

Rapson, Syd

Jones, Dr Lynne (Selly Oak)

Reed, Andrew (Loughborough)

Jones, Martyn (Clwyd S)

Robertson, John

Jowell, Rt Hon Ms Tessa

(Glasgow Anniesland)

Joyce, Eric

Robinson, Geoffrey (Cov'try NW)

Kaufman, Rt Hon Gerald

Roche, Mrs Barbara

Keeble, Ms Sally

Rogers, Allan

Keen, Alan (Feltham & Heston)

Rooker, Rt Hon Jeff

Keen, Ann (Brentford & Isleworth)

Rooney, Terry

Kemp, Fraser

Ross, Ernie (Dundee W)

Kennedy, Jane (Wavertree)

Roy, Frank

Kidney, David

Ruane, Chris

Kilfoyle, Peter

Ruddock, Joan

King, Andy (Rugby & Kenilworth)

Russell, Ms Christine (Chester)

Ladyman, Dr Stephen

Salter, Martin

Lammy, David

Sarwar, Mohammad

Lawrence, Mrs Jackie

Savidge, Malcolm

Leslie, Christopher

Sedgemore, Brian

Lewis, Ivan (Bury S)

Sheldon, Rt Hon Robert

767

Short, Rt Hon Clare

Tipping, Paddy

Simpson, Alan (Nottingham S)

Todd, Mark

Skinner, Dennis

Trickett Jon

Smith, Rt Hon Andrew (Oxford E)

Truswell, Paul

Smith, Angela (Basildon)

Turner, Dennis (Wolverh'ton SE)

Smith, Miss Geraldine

Turner, Dr Desmond (Kemptown)

(Morecambe & Lunesdale)

Turner, Neil (Wigan)

Smith, Jacqui (Redditch)

Twigg, Derek (Halton)

Smith, Llew (Blaenau Gwent)

Vis, Dr Rudi

Snape, Peter

Ward, Ms Claire

Soley, Clive

Wareing, Robert N

Spellar, John

Watts, David

Squire, Ms Rachel

Whitehead, Dr Alan

Stevenson, George

Williams, Alan W (E Carmarthen)

Stewart, David (Inverness E)

Williams, Mrs Betty (Conwy)

Stewart, Ian (Eccles)

Wilson, Brian

Stoate, Dr Howard

Winntek, David

Stringer, Graham

Winterton, Ms Rosie (Doncaster C)

Stuart, Ms Gisela

Wood, Mike

Sutcliffe, Gerry

Woodward, Shaun

Taylor, Rt Hon Mrs Ann

Wray, James

(Dewsbury)

Wright, Tony (Cannock)

Taylor, Ms Dari (Stockton S)

Wyatt, Derek

Temple—Morris, Peter

Thomas, Gareth (Clwyd W)

Tellers for the Noes:

Thomas, Gareth R (Harrow W)

Mr. Graham Allen and

Timms, Stephen

Mr. Ian Pearson.

Question accordingly nagatived.
Question, that the proposed words be there added, put forthwith, pursuant to Standing Order NO. 31 (Questions on amendments): —
The House divided: Ayes 270,Noes 41.

Division No. 105]

[10.13 pm

AYES

Abbott, Ms Diane

Clapham, Michael

Adams, Mrs Irene (Paisley N)

Clark, Dr Lynda

Ainger, Nick

(Edinburgh Pentlands)

Ainsworth, Robert (Cov'try NE)

Clark, Paul (Gillingham)

Armstrong, Rt Hon Ms Hilary

Clarke, Rt Hon Tom (Coatbridge)

Ashton, Joe

Clelland, David

Atherton, Ms Candy

Coffey, Ms Ann

Austin, John

Coleman, Iain

Bailey, Adrian

Colman, Tony

Banks, Tony

Connarty, Michael

Barnes, Harry

Cooper, Yvette

Barron, Kevin

Corbett, Robin

Battle, John

Corston, Jean

Bayley, Hugh

Cox, Tom

Benn, Rt Hon Tony (Chesterfield)

Crausby, David

Bennett, Andrew F

Cryer, Mrs Ann (Keighley)

Benton, Joe

Cummings, John

Bermingham, Gerald

Darling, Rt Hon Alistair

Best, Harold

Davey, Valerie (Bristol W)

Betts, Clive

Davidson, Ian

Blears, Ms Hazel

Davies, Rt Hon Denzil (Llanelli)

Boateng, Rt Hon Paul

Davies, Geraint (Croydon C)

Borrow, David

Davis, Rt Hon Terry

Bradley, Keith (Withington)

(B'ham Hodge H)

Bradshaw, Ben

Dawson, Hilton

Brinton, Mrs Helen

Dean, Mrs Janet

Browne, Desmond

Denham, John

Burden, Richard

Dismore, Andrew

Butler, Mrs Christine

Dobbin, Jim

Byers, Rt Hon Stephen

Dobson, Rt Hon Frank

Campbell, Alan (Tynemouth)

Doran, Frank

Campbell-Savours, Dale

Dowd, Jim

Cann, Jamie

Eagle, Angela (Wallasey)

Caton, Martin

Eagle, Maria (L 'pool Garston)

Cawsey, Ian

Edwards, Huw

Chapman, Ben (Wirral S)

Efford, Clive

Chaytor, David

Ellman, Mrs Louise

768

Ennis, Jeff

Leslie, Christopher

Etherington, Bill

Lewis, Ivan (Bury S)

Field, Rt Hon Frank

Uoyd, Tony (Manchester C)

Fisher, Mark

Love, Andrew

Fitzpatrick, Jim

McAvoy, Thomas

Fitzsimons, Mrs Lorna

McCabe, Steve

Flint, Caroline

McCafferty, Ms Chris

Flynn, Paul

McCartney, Rt Hon Ian

Follett, Barbara

(Makerfield)

Foster, Rt Hon Derek

Macdonald, Calum

Foster, Michael J (Worcester)

McDonnell, John

Foulkes, George

McFall, John

Galloway, George

McGuire, Mrs Anne

Gapes, Mike

McKenna, Mrs Rosemary

George, Rt Hon Bruce (Walsall S)

McNulty, Tony

Gerrard, Neil

Mactaggart, Fiona

Gibson, Dr Ian

McWalter, Tony

Gilroy, Mrs Linda

McWilliam, John

Godsiff, Roger

Mahon, Mrs Alice

Goggins, Paul

Mallaber, Judy

Golding, Mrs Llin

Mandelson, Rt Hon Peter

Gordon, Mrs Eileen

Marshall, Jim (Leicester S)

Griffiths, Jane (Reading E)

Marshall-Andrews, Robert

Griffiths, Nigel (Edinburgh S)

Maxton, John

Griffiths, Win (Bridgend)

Meacher, Rt Hon Michael

Grocott, Bruce

Meale, Alan

Grogan, John

Michael, Rt Hon Alun

Hain, Peter

Michie, Bill (Shef'ld Heeley)

Hall, Mike (Weaver Vale)

Milburn, Rt Hon Alan

Hamilton, Fabian (Leeds NE)

Miller, Andrew

Hanson, David

Mitchell, Austin

Harman, Rt Hon Ms Harriet

Moffatt, Laura

Healey, John

Moonie, Dr Lewis

Henderson, Doug (Newcastle N)

Morgan, Ms Julie (Cardiff N)

Hendrick, Mark

Morley, Elliot

Hepburn, Stephen

Morris, Rt Hon Ms Estelle

Heppell, John

(B'ham Yardley)

Hewitt, Ms Patricia

Morris, Rt Hon Sir John

Hill, Keith

(Aberavon)

Hinchliffe, David

Mountford, Kali

Hodge, Ms Margaret

Mullin, Chris

Hoey, Kate

Murphy, Rt Hon Paul (Torfaen)

Hoon, Rt Hon Geoffrey

Naysmith, Dr Doug

Hope, Phil

Norris, Dan

Hopkins, Kelvin

O'Brien, Bill (Normanton)

Howarth, Rt Hon Alan (Newport E)

O'Brien, Mike (N Warks)

Howells, Dr Kim

O'Hara, Eddie

Hughes, Ms Beverley (Stretford)

Pickthall, Colin

Hughes, Kevin (Doncaster N)

Pike, Peter L

Hurst Alan

Pond, Chris

Hutton, John

Pope, Greg

Iddon, Dr Brian

Pound, Stephen

Jackson, Helen (Hillsborough)

Powell, Sir Raymond

Jamieson, David

Prentice, Ms Bridget (Lewisham E)

Jenkins, Brian

Prentice, Gordon (Pendle)

Johnson, Alan (Hull W& Hessle)

Prescott, Rt Hon John

Johnson, Miss Melanie

Primarob, Dawn

(Welwyn Hatfield)

Prosser, Gwyn

Jones, Rt Hon Barry (Alyn)

Purchase, Ken

Jones, Helen (Warrington N)

Quinn, Lawrie

Jones, Dr Lynne (Selly Oak)

Rapson, Syd

Jones, Martyn (Clwyd S)

Reed, Andrew (Loughborough)

Jowell, Fit Hon Ms Tessa

Robertson, John

Joyce, Eric

(Glasgow Anniesland)

Kaufman, Rt Hon Gerald

Robinson, Geoffrey (Cov'try NW)

Keeble, Ms Sally

Roche, Mrs Barbara

Keen, Alan (Feltham & Heston)

Rogers, Allan

Keen, Ann (Brentford & Isleworth)

Rooker, Rt Hon Jeff

Kemp, Fraser

Rooney, Terry

Kennedy, Jane (Wavertree)

Ross, Ernie (Dundee W)

Kidney, David

Roy, Frank

Kilfoyle, Peter

Ruane, Chris

King, Andy (Rugby & Kenilworth)

Ruddock, Joan

Ladyman, Dr Stephen

Russell, Ms Christine (Chester)

Lammy, David

Salter, Martin

Lawrence, Mrs Jackie

Sarwar, Mohammad

769

Savidge, Malcolm

Thomas, Gareth R (Harrow W)

Sedgemore, Brian

Timms, Stephen

Sheldon, Rt Hon Robert

Tipping, Paddy

Short, Rt Hon Clare

Todd, Mark

Simpson, Alan (Nottingham S)

Trickett, Jon

Skinner, Dennis

Truswell, Paul

Smith, Rt Hon Andrew (Oxford E)

Turner, Dennis (Wolverh'ton SE)

Smith, Angela (Basildon)

Turner, Dr Desmond (Kemptown)

Smith, Miss Geraldine

Turner, Neil (Wigan)

(Morecambe & Lunesdale)

Twigg, Derek (Halton)

Smith, Jacqui (Redditch)

Vis, Dr Rudi

Smith, Llew (Blaenau Gwent)

Ward, Ms Claire

Snape, Peter

Wareing, Robert N

Soley, Clive

Watts, David

Spellar, John

Whitehead, Dr Alan

Squire, Ms Rachel

Williams, Alan W (E Carmarthen)

Williams, Mrs Betty (Conwy)

Stevenson, George

Wilson, Brian

Stewart, David (Inverness E)

Winnick, David

Stewart, Ian (Eccles)

Winterton, Ms Rosie (Doncaster C)

Stoate, Dr Howard

Wood, Mike

Stringer, Graham

Woodward, Shaun

Stuart, Ms Gisela

Wray, James

Sutclitfe, Gerry

Wright, Tony (Cannock)

Taylor, Rt Hon Mrs Ann

Wyatt, Derek

(Dewsbury)

Taylor, Ms Dari (Stockton S)

Tellers for the Ayes:

Temple-Morris, Peter

Mr. Ian Pearson and

Thomas, Gareth (Clwyd W)

Mr. Graham Allen.

NOES

Allan, Richard

Jones, Nigel (Cheltenham)

Baker, Norman

Keetch, Paul

Ballard, Jackie

Kennedy, Rt Hon Charles

Berth, Rt Hon A J

(Ross Skye & Inverness W)

Bell, Martin (Tatton)

Kirkwood, Archy

Brake, Tom

Livsey, Richard

Brand, Dr Peter

Uwyd, Elfyn

Breed, Colin

Michie, Mrs Ray (Argyll & Bute)

Burnett, John

Moore, Michael

Burstow, Paul

Oaten, Mark

Campbell, Rt Hon Menzies

Öpik, Lembit

(NE Fife)

Rendel, David

Russell, Bob (Colchester)

Cotter, Brian

Sanders, Adrian

Davey, Edward (Kingston)

Taylor, Matthew (Truro)

Fearn, Ronnie

Thomas, Simon (Ceredigion)

George, Andrew (St Ives)

Tonge, Dr Jenny

Gidley, Sandra

Tyler, Paul

Gorrie, Donald

Webb, Steve

Hancock, Mike

Willis, Phil

Harris, Dr Evan

Harvey, Nick

Tellers for the Noes:

Heath, David (Somerton & Frome)

Mr. Andrew Stunell and

Hughes, Simon (Southwark N)

Mr. Don Foster.

Question accordingly agreed to.
MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House welcomes the NHS Plan's commitments to a care system founded on the principles of equity and fairness; welcomes the measures the Government has announced to reform the funding of long term care and to invest in new health and social care services for older people; notes that this matches the extra spending on long term care recommended by the Royal Commission; believes that the implementation of free nursing care on the basis of need and not ability to pay will bring an end to a major injustice affecting tens of thousands of older people in nursing homes; welcomes the new investment announced in the NHS Plan of £900 million annually by 2003–04 in new intermediate care services for older people; supports the priority the Government has rightly attached to improving front line services for older people; and calls on the Liberal Democrats to set out what services they would cut in order to fund their proposals.

DELEGATED LEGISLATION
Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),
DELEGATED LEGISLATION

  SUPREME COURT OF NORTHERN IRELAND
  That the draft Maximum Number of Judges (Northern Ireland) Order 2001, which was laid before this House on 11 th December, be approved.—[Mr. Dowd.]
  Question agreed to.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

  REPRESENTATION OF THE PEOPLE
  That the draft Representation of the People (Northern Ireland) Regulations 2001, which were laid before this House on 16th January, be approved.—[Mr. Dowd.]
  Question agreed to.

  ADJOURNMENT
  Ordered,
  That this House, at its rising on Thursday 15th February, do adjourn till Monday 26th February 2001.—[Mr. Dowd.]

  SCIENCE AND TECHNOLOGY COMMITTEE
  Order read for resuming adjourned debate on Question [31 January],
  That the Select Committee on Science and Technology shall have leave to meet concurrently with any committee of the Lords on science and technology or any sub-committee thereof, for the purpose of deliberating or taking evidence, and to communicate to any such committee its evidence or any other documents relating to matters of common interest—[Mr. Dowd.]
  Hon. Members: Object.

  SELECT COMMITTEES (JOINT MEETINGS)
  Motion made,
  That, for the current Session of Parliament, Standing Order No. 152 (Select committees related to government departments) be amended as follows:

  Line 40, before the word 'European' insert the words `Environmental Audit Committee or with the'.

  Line 50, before the word 'European' insert the words `Environmental Audit Committee or with the'.

  Line 52, at the end insert the words:—

  '(4A) notwithstanding paragraphs (2) and (4) above, where more than two committees or sub-committees appointed under this order meet concurrently in accordance with paragraph (4)(e) above, the quorum of each such committee or sub-committee shall be two.'—[Mr. Dowd.]

  Hon. Members: Object.

  SITTINGS IN WESTMINSTER HALL
  Order read for resuming adjourned debate on Question [23 January],
  That, following the Order [20th November 2000], Mr. Nicholas Winterton, Mr. John Mc William, Mr. Barry Jones and Frank Cook be appointed to act as additional Deputy Speakers at sittings in Westminster Hall during this Session.—[Mr. Dowd.]
  Hon. Members: Object.

  LANGUAGE OF PARLIAMENTARY PROCEEDINGS
  Motion made,
  That—

  (1) this House approves the First Report from the Procedure Committee, Session 2000–01 (HC 47); and

  (2) the Resolution of 5th June 1996 on the Language of Parliamentary Proceedings be amended accordingly by inserting, after the word 'Wales:, the words 'and at Westminster in respect of Select Committees'.—[Mr. Dowd.]

  Hon. Members: Object.

  Unsolicited Mail
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dowd.]
  10.25 pm
  Mr. David Heath: I am grateful to have this opportunity to raise the important matter of unsolicited mail. Members of political parties—that is most of us in the House—may have occasion to use unsolicited mail over the next few months, but I wish to refer to something that has a rather more malign intent than most of the material that is produced by political parties.
  It may seem to most of us that 8 February will be an ordinary parliamentary day. We will discuss the Children's Commissioner for Wales Bill—which has its merits, but it is certainly nothing out of the ordinary. However, anyone in the position of my constituent, Mr. K. Bond of Castle Cary, who received a letter some weeks ago from an Eva Damus, clairvoyant, medium and astrologer, might take a much more serious view about the prospects for that day. That is the date on which Mrs. Eva Damus believes that she needs to undertake a grand mystic ceremony on behalf of Mr. Bond and the many thousands of other people to whom she has written. She must do that because those people are
  "born under the disastrous influence of a very harmful lunar coil which has kept you imprisoned in a negative circle".
  Curiously enough, that negative circle can be lifted by the application of a mere £20 to the account of Eva Damus and the placing of a few magnets around the home. It is curious that not only has she discovered that dark secret by extensive work on a person's birth and personality chart, but has managed to do so without knowing the date of birth of the person involved. One is requested to send that information with the £20 should one be foolish enough to respond to the request.
  The subject would be funny if it were not so serious. Many people take the receipt of such a letter extremely seriously; they would consider it a genuine threat. The letters are all the more insidious because they are so carefully personalised. The recipient is named throughout the letter, and the letter's heading states:
  "What I have just discovered about you has left me speechless."
  It leaves me speechless that people can prey on vulnerable people in the way that the organisations that send out such letters do. Mr. Bond was absolutely right to draw this letter to my attention, and it was one of the reasons—if not the only one—why I sought this debate.
  Once I had secured this debate, I was overwhelmed by colleagues who have told me that their constituents have received similar material through their letter boxes. To give one example, a letter from a constituent of my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) purports to be a payment validation for a sum of £200,000. It appears on an official looking form that is clearly designed to mimic a Government document; it looks very like a pension slip. It asks only for the recipient to send what it calls an actuation fee of £16. The money can be sent as cash, or by cheque or postal order. It is only when we turn over the document and read the small print that we realise that all that is on offer is a draw, albeit one with a £16 entry fee. Even if the letter is not a criminal deception, it is certainly a scam that it is intended to deceive and is something that we could do without.

  773
  My hon. Friend the Member for Taunton (Jackie Ballard) gave me another bundle of letters this morning. By coincidence, she received the letters today from a constituent of hers, Mrs. Margaret Treacher, to whom they have been sent during the past week or so from places throughout the world. They come from Australia, Singapore, Canada and other places. Some of them appear to originate in Britain. All of them purportedly bear the good news that their recipient has won a cash prize, but they are junk mail that is designed to extract money under false pretences. If the letters do not ask for a cheque by return of post for so-called validation, they request that recipients ring a premium number that will keep them on the line for a number of minutes, very expensively, in order to receive a paltry prize such as a Biro. Curiously, some people seem to be identified as potential victims of such material and receive not one or two such requests, but dozens.
  Other scams have been conducted through the post. A favourite is the letters originating in west Africa. They come principally from Nigeria and ask people for money to unlock supposed capital that would, they claim, otherwise be held in trust or in a west African company. They are, of course, nonsense and if one were foolish enough to send the money, it would never be seen again.
  I believe that such scams are a serious problem for all our constituents and that the House and the Government would do well to deal with them. I have corresponded on the matter with the Post Office and with the Office of Fair Trading. The Post Office supports the mailing preference system and has what it calls the door-to-door scheme, which enables people to opt out of unwanted material by ensuring that it is taken by the postman. However, I believe that the Post Office could do a lot more to deal with letters that originate from outside this country, pass through the Mailsort system and often use London post office box numbers—a practice that appears to give them a vestige of respectability.
  I am, however, disappointed by some of the responses that I have received. There is a clear suggestion that the marketing exercise in question is fairly profitable for the Post Office, and that it is not anxious to intervene if it can help it. Although Royal Mail accepts the need to deal with mailing that infringes legislation or advertising codes, it states in its letter to me that it
  "would not be aware of this as we have no prior knowledge of the contents of mailings; we would instead rely on law enforcement agencies to bring such mailings to our attention."
  Fair enough; I do not expect Royal Mail to be aware of the contents of every letter that passes through the mail system.
  However, some of the mailings can be clearly identified from previous experience. What action is taken if such mail is identified or brought to Royal Mail's attention? It states:
  "In such an instance we would of course stop the mailing, if we were able to do so."
  However, it goes on to state that it would
  "work with the overseas company to ensure that future mailings are acceptable to a UK audience."
  It further states:
  "In the unlikely event of a third such incident we would withdraw mailing discounts and use of a UK PO box from that company for a specified period of time."
  774
  I think that three strikes are a little too many before people are out in respect of the sort of letters to which I am referring. It is not unintentional infringement of advertising regulations but a deliberate attempt to deceive, and the Post Office should treat it seriously.
  Mr. Harry Barnes: I do not know whether the hon. Gentleman is aware of a leaflet published by Royal Mail, entitled "Fair Play. Making the most of competitions—a guide to winning", which has a photograph on the front of two young people who are enthusiastic about letters that they have received. Although the leaflet refers to the Advertising Standards Authority and the Office of Fair Trading in relation to scams, it tells the reader:
  "How to get more of what you want",
  saying:
  "If you're fed up with hearing about how everyone is winning something these days except you, you may have to think about increasing your chances by upping the number of competitions that you enter."
  That can be interpreted as clearly encouraging action that relates to some of the scams that the hon. Gentleman is describing.
  Mr. Heath: I am grateful for the hon. Gentleman's intervention. I know that he has taken up the matter, most recently in the Whitsun Adjournment debate last year. I am amazed that Royal Mail's advice is couched in those terms. It is not appropriate, and I hope that the Minister will have something to say about that.
  The Minister may also have something to say about whether it is possible to work within the international postal system to deal with these occurrences, because it clearly cannot be done entirely within the United Kingdom or the European Union, as many of the countries of origin are outside the EU. I wonder whether the Universal Postal Union, for example, could be a vehicle for at least discussing these matters and drawing up concordats with Commonwealth countries that are involved, if nowhere else.
  The information that the Office of Fair Trading has sent me shows that it takes a rather more robust line. I applaud its press release last August which drew attention to the so-called psychic scam that I have mentioned. However, the legal apparatus within which the OFT works is also limited. There are the Control of Misleading Advertisement Regulations 1988, but if those are to be activated, there must be a complaint
  "in connection with a trade, business, craft or profession in order to promote the supply or transfer of goods or services".
  That is all right if the courts will accept that it is a trade or profession to try to defraud innocent members of the public, but otherwise it is a worrying limitation.
  The OFT's great problem is getting court orders to act overseas. That is where the injunctions directive comes in. I understood that it was to have taken effect from 1 January, but it has not done so and there are still problems with it. That directive is crucial if we are to take effective action against such material, at least within the European Union. What has happened to that directive? Can it be extended beyond the EU, if and when it sees the light of day? How does the Minister expect it to be used?
  The last legal sanction available is the Malicious Communications Act 1988, which makes it an offence to convey information that is known or believed to be false

  775
  with the intention to cause distress and anxiety. The material that I have mentioned is clearly false information that is intended to cause distress and anxiety with the purpose of extracting money from people. I should like the Minister to tell the House how many times that law has been used recently, and whether it will be used more extensively in future, as I hope it will.
  This is a short debate and it is impossible to cover the whole subject, but I want to mention two other concerns before I ask the Minister to respond. The first concerns communications sent not by post but by fax. We are all victims of this. The fax machine goes off in the middle of the night and a fax emerges from an unknown source, which is a waste of paper and wakes one up, if one happens to have a fax machine in the house, to no good effect. That is a nuisance, rather than an attempt to extract money under false pretences such as those that I have described, but it is a costly nuisance. It is often used to support fallacious opinion polls of no statistical value. People sometimes feel constrained to answer those faxes on premium lines if they want to make their point.
  Such faxes are often received by junior members of companies who feel obliged to respond, for example, to a request to maintain an entry in a non-existent directory. That is a common form of exploitation. What can be done about it?
  My final point is about unsolicited e-mail, which is infamously known as spam. I applaud British internet service providers for taking the subject seriously. However, 30 per cent. of all e-mails are unsolicited, and research by Nortel suggests that tens of millions of pounds are wasted in the United Kingdom and Ireland on dealing with them. In America, it is estimated that 10 per cent. to 15 per cent. of internet service providers' disk space is filled with spam. If nothing else, that shows that spam and chips are not compatible. The issue should be tackled through international action.
  We have a problem about which most hon. Members and, I am sure, the Government are aware. I have several questions to ask the Minister. How many prosecutions or court orders have been made in the past year or so to tackle the matter? When will the injunctions directive be operational so that jurisdiction can be extended throughout the European Union? Can Royal Mail take a more aggressive and more responsible stance on the abuse? Can international action be taken through the Universal Postal Union or any other organisation to achieve a concordat at least between Commonwealth countries and perhaps the wider community? Can the Government take effective action on nuisance faxes? Clearly, concerted international action needs to be taken, especially in conjunction with the American Administration, so that nuisances that clog up the e-mail and internet systems and are detrimental to businesses and private users throughout the world can be tackled. When can that be done?
  I am grateful for the opportunity to make those points. I look forward with interest to the Minister's reply.
  10.42 pm
  The Minister for Competition and Consumer Affairs (Dr. Kim Howells): I thank the hon. Member for Somerton and Frome (Mr. Heath) for raising an important matter. He is right to say that many hon. Members have approached him and me about it. I share the anxiety of
  776
  many people about mailings sent to British consumers which, in many cases, are designed to frighten them into parting with their money. I shall try to answer some of the hon. Gentleman's questions, although I could not write them all down fast enough.
  More often than not, the mailings come from so-called clairvoyants who are based overseas. They allege that they have had a mystic revelation about the individual to whom they are writing. A common theme is that the author has an insight into potential problems that will affect consumers' well-being—either a threat from someone else or the fact that some unidentified bad luck will befall them. He or she offers to provide the solution to those difficulties in return for a payment. As the hon. Gentleman said, payments are typically of £20 or more. The Welsh Rugby Union paid a great deal more than £20 to try to avert identifiable bad luck. However, judging from the way Wales played last Saturday, it seems that the WRU might as well have paid £20 to Peter the Magician. The result would probably have been far better.
  The approaches are clearly designed to prey on people's vulnerability and are, by definition, unacceptable. Another theme is that some good fortune awaits the recipient, whether through lottery winnings or some other life-enhancing event, and that the key to success is available at a price. I have seem many such letters in my postbag, from people rejoicing in such names as Eva du Maurier, Paula Zikorski and Peter the Magician. I know a Pete the chemist in Pontypridd, but he has five children and is clearly no magician.
  From time to time, unfortunately, the mailings are sent to the deceased, which must surely throw considerable doubt on the psychic skills of their authors. The advice from the Office of Fair Trading, which I would commend to anyone who is concerned about the practices, is never to send money, and to pass the correspondence to the local trading standards department so that appropriate action can be taken. I hope that the hon. Gentleman will pass that suggestion on to his constituents.
  The hon. Gentleman asked what action could be taken on behalf of consumers. Two pieces of legislation may be applicable: the Control of Misleading Advertisements Regulations 1988 and the Malicious Communications Act 1988. At present, action can be taken against operators based in this country by the Advertising Standards Authority or the Director General of Fair Trading using those two pieces of legislation.
  The Advertising Standards Authority can also arrange for the investigation of overseas operators with the help of other members of the European Advertising Standards Alliance. The alliance has 28 members, including all the EU member states, and comprises the national bodies responsible for administering the states' self-regulation systems and codes of advertising practice, based on those put in place by International Chamber of Commerce principles. Recently the ASA, with the backing of Royal Mail, has begun intervening directly in complaints about mailings originating outside the alliance's sphere of operations, and has made encouraging progress. I hope that that provides some kind of an answer to the hon. Gentleman's questions on how many successful prosecutions or enforcements have been conducted.
  We are also aiming for the earliest possible implementation of the European injunctions directive—we are almost there now—which will empower the

  777
  Director General of Fair Trading to take cross-border action. The hon. Gentleman was keen on such action being taken, and I agree with him. The action will be taken in conjunction with counterparts across the European Union to impose "stop now" orders, which are an additional enforcement mechanism for use when the collective interests of consumers are threatened.
  For operators based further afield, the Office of Fair Trading works closely with its counterparts in the 30 or so Organisation for Economic Co-operation and Development countries, through the international marketing supervision network. The member bodies have had some success in stopping some of the worst cases targeting UK consumers. I assure the House that I shall continue to monitor the matter with a view to reducing consumer detriment arising from these undesirable practices.
  The hon. Gentleman spoke about Royal Mail and about his dissatisfaction with some of the efforts that it has made to try to deal with the delivery of unsolicited mail. Royal Mail is contractually obliged to deliver items posted at home or abroad, unless it is established that the contents contravene EU or UK laws. If a mailing breaches EU or UK regulations, Royal Mail can refuse to carry it, but it has to be notified first. The bodies or groups that can notify Royal Mail are the ASA, the police, trading standards officers and magistrates. That brings me back to a point I made earlier, when I suggested to the hon. Gentleman that, whenever such a case as this arises, it is imperative that notification is made to trading standards officers.
  Mr. Heath: I understand that Royal Mail has to carry what it is given, unless there is a direction to the contrary. Surely, however, it must enter into some sort of contractual arrangement when it provides a PO box number. Given the hoops through which we all have to jump to get material distributed by Royal Mail, is there some control that Royal Mail could exercise when giving an organisation a PO box number?
  Dr. Howells: Yes. I shall deal with that now. If any UK PO box is used illegally or for fraudulent purposes or if customers break the service terms and conditions, which they must sign, that PO box can be withdrawn. Once that happens, all subsequent mail addressed to the box is returned to sender. Royal Mail is not permitted to intercept or open mail that quotes or is addressed to a PO box, but if permission for the box is withdrawn, all mail sent to it is returned to sender. The majority of mailings from abroad conform with UK legislation and the British codes of advertising and sales promotion.
  Mr. Barnes: For Royal Mail, that is not just a matter of PO box numbers. It also offers HQ code provision, which allows a HQ number and "Royal Mail" to be added to the front of an envelope. That contractual arrangement enables cheap delivery of post from all over the world to people in this country. Such scams are being operated under HQ code provision and surely action can be taken. Royal Mail should be shown what is in such envelopes. That would stop the arrangement for such companies.
  Dr. Howells: That is a good point and I shall try to deal with it. Should a mailing infringe either legislation
  778
  or advertising codes, Royal Mail would rely on law enforcement agencies to bring that mailing to its attention and stop it if able to do so. That is where those contractual obligations are so important. If a company was working within the law, but not complying with the British codes of advertising and sales promotion, Royal Mail would work with the overseas company to ensure that future mailings were acceptable to UK customers. Further failures to comply would result in withdrawal of both mailing discounts—as my hon. Friend said, boxes are cheaper in such circumstances—and the use of a UK PO box for a specified period. The problem can be approached from both those angles.
  On the distance selling directive, some protection can be offered. The Consumer Protection (Distance Selling) Regulations 2000 do not specifically implement article 10 of European directive 97/7 on the protection of consumers in respect of distance contracts, which of course relates to unsolicited commercial communications from a business to consumers by phone, fax, mail or e-mail. On phone and fax communications, implementation has already been achieved by means of the Telecommunications (Data Protection and Privacy) Regulations 1999.
  I return to the point that I have made twice already about making sure that such incidents are notified to the authorities. All too often they are not. People receive mail and grumble about it, but do not take action. On mail and e-mail, my Department considers that the self-regulatory schemes that are in place provide a degree of necessary protection. That approach accords with article 11.4 of the directive, which provides for voluntary supervision by self-regulating bodies.
  I return briefly to the important point that my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) made about Royal Mail's "Fair Play" leaflet, which he drew to my attention some months ago. Since then, my officials have discussed with Royal Mail whether the leaflet gives the most appropriate advice. I tend to agree with my hon. Friend—I do not think that it does. There is too much ambiguity and it leads people on, especially in view of the consequences for consumers of falling victim to the numerous scams in operation.
  Unsolicited direct marketing faxes are banned under the Telecommunications (Data Protection and Privacy) Regulations 1999, unless the individual has given prior consent. For the purposes of the regulations, the term "individual" refers to both private individuals and sole traders anywhere in the United Kingdom as well as the partnerships in England, Wales and Northern Ireland. We could add MPs to that, because we probably receive as many of those communications as any firm.
  The regulations introduced an opt-out scheme primarily for corporate subscribers who do not want to receive unsolicited direct marketing faxes. The Direct Marketing Association was appointed by the Office of Telecommunications to run the opt-out scheme, which is called the fax preference service. Under the regulations, no one can send a direct marketing fax—
  The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at five minutes to Eleven o'clock.