Commons Sitting of 24 October 2002

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

  COMMITTEE OF SELECTION
  Order read for resuming adjourned debate on Question [16 October],
  That Mr. John Hayes be discharged from the Committee of Selection and Mr. Peter Luff be added to the Committee.—[Mr. Jim Murphy.]
  Hon. Members: Object.
  Debate to be resumed on Monday next.

Oral Answers to Questions
  EDUCATION AND SKILLS
  The Secretary of State was asked—
  EDUCATION AND SKILLS

    Specialist Academy (Ramsgate)
    Dr. Stephen Ladyman: What provision he has set aside for the creation of a specialist academy in Ramsgate. [75264]
    The Minister for School Standards (Mr. David Miliband): Before I answer that question, it is right that I put on record the deep shock and sadness felt throughout the education world at the resignation yesterday of my right hon. Friend the Member for Birmingham, Yardley (Estelle Morris). Her contribution to education over the last five years has been immense. Pupils are taught better, in smaller classes, by better-paid, better-trained, better-supported teachers, thanks to her outstanding efforts. That is her legacy. She pioneered important reforms in our education system, but she did more that that. She acted at all times with complete integrity, total dedication and one goal—not her advancement but the advancement and achievement of pupils. Everybody with an interest in education will deeply regret her departure, and the world of politics is a much lesser place as a result of her absence from the top table. Politics needs people like my right hon. Friend.
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    The House will also have gathered, from the presence of my right hon. Friend the Member for Norwich, South (Mr. Clarke), that the Prime Minister has appointed him Secretary of State for Education and Skills. My right hon. Friend is not known as a quiet man, and the House will have many opportunities to question him in his new role. For the next hour, however, he will leave the questions to me and my more experienced ministerial colleagues.
    As for the question tabled by my hon. Friend the Member for South Thanet (Dr. Ladyman), the Department has offered development funding to a partnership between Roger De Haan and Kent local education authority to draw up detailed plans for a proposed academy to replace Ramsgate school in Kent. We are determined to do all that we can to help deeply disadvantaged pupils in that area. All local interests will be fully consulted on the proposals.
    Dr. Ladyman: May I say that I very much share the sentiments expressed about my right hon. Friend the Member for Birmingham, Yardley (Estelle Morris)? In view of the personal nature of her statement last night, may I ask on behalf of hon. Members, certainly on the Labour Benches, that our love and best wishes be passed on to her? I also congratulate my right hon. Friend the Member for Norwich, South (Mr. Clarke) on his appointment; it is an excellent choice.
    As for the Ramsgate school, the announcement by my hon. Friend the Minister for School Standards is potentially the most exciting prospect for education in my constituency in a generation. I say that not just as a Member of Parliament but as a father of a young girl who is keen—
    Mr. Speaker: Order. The hon. Gentleman must ask a supplementary question.
    Dr. Ladyman: Will my hon. Friend assure me that the creation of this new school will not simply displace the problems currently experienced by the Ramsgate school elsewhere in the constituency?
    Mr. Miliband: I can certainly assure my hon. Friend that the proposed academy is designed to be of benefit to many pupils in the area. The development funding is offered on the basis that the LEA and the sponsor will come forward with a proposal to help raise standards across the area with coherent provision across selective and non-selective schools in his constituency.
    Mr. Roger Gale: I, too, welcome the involvement of Roger de Haan in local education in Thanet. Will the Minister assure me, however, that the proposal will not in any way be allowed to override his Department's duty to meet the needs of my constituents living in Cliftonville, Dane Valley and other areas of North Thanet, for whom the Ramsgate school might as well be on the moon?
    Mr. Miliband: We are determined to do all that we can for all pupils in Kent. As the hon. Gentleman knows, funding has risen substantially in the area, which will lead to the provision of more teachers and more equipment. The academy initiative is designed to raise standards across the board.

    Refugee Children (Mainstream Schools)
    Alan Simpson: What assessment he has made of the impact of inclusion of refugee children in mainstream schools. [75265]
    The Parliamentary Under-Secretary of State for Education and Skills (Mr. Stephen Twigg): The Office for Standards in Education published a report in October 2001 entitled "Managing Support for the Attainment of Pupils from Minority Ethnic Groups", which included information on the impact and inclusion of refugee children in mainstream schools. Its main findings were that many needed extensive support to help them to acquire English, and some required additional home-school liaison and pastoral care support. Evidence exists, however, that once new bilingual learners overcome their lack of fluency in English, many go on to achieve high grades at school.
    Alan Simpson: May I add my regrets at the forced departure of the Secretary of State for Education and Skills yesterday? It is a sad day for Parliament when someone of transparent honesty and integrity is required to stand down.
    In respect of the education of refugee children, will the Minister bear in mind the overwhelming view of head teachers in my constituency who are the recipients of refugee children that they add enormously to the quality of education in schools? They have a hunger to learn and an enthusiasm to integrate, and that enthusiasm reflects the comments in the Department's joint document with the National Union of Teachers that
    "the acquisition of English will be most rapid if new pupils engage and work with other children in the class…The host children are central to this solution".
    If that is the case, can we reflect on the importance of integration in mainstream schools rather than on the creation of separate schools in accommodation centres?
    Mr. Twigg: I am grateful to my hon. Friend, and I certainly agree with him. It is my experience that, once settled, refugee children play a positive part in many of our schools. I see that in my constituency.
    The accommodation centres seek to deal with the turnover of new arrivals in schools. We are carefully considering our position following the vote in the other place, but we will seek to overturn the defeat that took place there. Nevertheless, there are great benefits from having in school children who have English as an additional language. Many of them do well and benefit the wider school community.
    Mr. Roy Beggs: I genuinely regret the fact that the previous Secretary of State is no longer in her place, but I welcome her successor.
    Does the Minister agree that, when refugee children or their parents have no command of English, the priority should be to provide individual tuition so that those children readily integrate into schools and their parents integrate into society?
    Mr. Twigg: I am grateful to the hon. Gentleman, and very much agree with him. Our Department is working on the plans for education services for the children in
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    accommodation centres. Learning English will be an absolutely top priority, as will delivering the rest of the national curriculum.

    Secondary Schools (Normanton)
    Mr. Bill O'Brien: What steps are being taken to ensure best value in educational standards in secondary schools in the Normanton constituency; and if he will make a statement. [75266]
    The Parliamentary Under-Secretary of State for Education and Skills (Mr. Stephen Twigg): Wakefield local education authority's educational development plan sets out the steps being taken to ensure best value in educational standards in the secondary schools in the Normanton constituency. In addition, the Ofsted inspection system also ensures that all LEAs and schools provide best value in educational standards.
    Mr. O'Brien: Does my hon. Friend accept that, for more than two years, I have been pressing the Department to consider the quality of secondary school buildings in Normanton and, particularly, the quality of buildings at Freeston high school? Does he accept that those buildings are dangerous, with falling masonry, narrow corridors and a lack of natural light? Their general condition is appalling. I have requested funding to help to rebuild the Freeston high school, and have also asked Ministers to visit it. The previous Under-Secretary of State for Education and Skills, my hon. Friend the Member for Wentworth (John Healey), agreed at column 453 on 25 April 2002 to visit the school. He gave that assurance to me as the Member of Parliament for Normanton and to the House. Will the Minister agree to follow up the promise and arrange for a visit to the school, and will he make arrangements to ensure that this dangerous building is replaced?
    Mr. Twigg: I am aware that my hon. Friend has made representations to my hon. Friend the Minister for School Standards as well as to previous Ministers. I am happy to give an undertaking that we are prepared to meet representatives from his consistituency and, if possible, will arrange for one of the ministerial team to visit that secondary school.

    Teacher Work load
    Linda Perham: What plans he has to reduce teacher work load in secondary schools. [75267]
    The Minister for School Standards (Mr. David Miliband): On Tuesday, the Department announced a series of far-reaching proposals, on which I am now seeking agreement with national partners, designed to create more time for teachers to teach. This includes proposals for contractual changes, reform of the role of support staff and a concerted attack on unnecessary bureaucracy. This will contribute both to reducing teacher work load and to raising standards for pupils.
    Linda Perham: I thank my hon. Friend for that reply, and I declare at the outset that I am married to a secondary school teacher. I welcome the package of

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    measures announced by my right hon. Friend the Member for Birmingham, Yardley (Estelle Morris), and join in the tributes paid to her.
    Given the importance of classroom assistants in reducing teacher work load, is my hon. Friend aware of a survey conducted by my union, Unison? It found that 80 per cent. of classroom assistants earn less than £8,000. Does my hon. Friend agree that they and other staff supporting the excellent teachers in my borough of Redbridge and throughout the country deserve better recognition in their pay and training for the work that they do?
    Mr. Miliband: I am happy to pay tribute to the excellent work that is done not just by teachers but by the support staff in Redbridge and elsewhere. Pay and conditions are a local matter and are negotiated locally, but I assure my hon. Friend that, as part of the package announced on Tuesday, the Government made it clear that a qualifications and training framework that recognises higher-level tasks will now be developed in partnership with the relevant authorities. That will recognise the higher-level tasks classroom assistants will now be asked to perform.
    Sir Patrick Cormack: In paying tribute to the frank, open and honest statement made by the former Secretary of State last night—a refreshing contrast to many other statements made by Ministers on both sides of the House in recent years—may I stress how essential it is that the paper load placed on teachers is reduced? Does the Minister agree that the amount of paperwork that teachers are expected to absorb and master is incompatible with devoting proper time to their teaching duties?
    Mr. Miliband: I think it is worth recording my thanks to the hon. Gentleman for his remarks, which some people may contrast with the comments made by other Conservative Members in the past 24 hours.
    I agree that we need a concerted attack on unnecessary bureaucracy. That is why on Tuesday we announced that a panel of 12 serving head teachers will have a unit of their own, reporting annually in public, with the power to summon Ministers and quango heads, to ensure that we tackle the processes as well as the symptoms of unnecessary bureaucracy.
    Mr. Barry Sheerman (Huddersfield): As Chairman of the Education and Skills Committee, I associate myself with the tribute to the former Secretary of State. Public life will be poorer for the exit of that young lady from the office. I also welcome my right hon. Friend the Member for Norwich, South (Mr. Clarke) to the Dispatch Box.
    Will my hon. Friend look closely at the Select Committee's report on early years education which tackles the problem of support staff? Those talented people come into schools to work and should be encouraged to train and upskill so that they become a new talented resource that allows teachers to teach and the quality of education to grow in the classroom.
    Mr. Miliband: My hon. Friend makes a good point. The importance of a career path for classroom assistants
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    so that they move up the ladder in schools, perhaps to become qualified teachers if they want to, is an important part of the proposals that we are developing. I assure him that we will take on board the comments in his Select Committee report.
    Mr. Damian Green: First, may I welcome the new Secretary of State to his post? I understand his uncharacteristic silence and look forward to a constructive exchange of views in future.
    I agree with the Minister for School Standards that the former Secretary of State has many admirable personal qualities. Policy failures caused her resignation and changing those policies is a key task for her successor. The root cause of that failure is set out on page 11 of the Government's document on teacher work load. It states:
    "high levels of prescription and intense scrutiny can create bureaucracy, stress and increased workloads."
    That is exactly right and a precise description of the Government's policy. Will the Minister admit that his Government have spent years tying teachers up in red tape and that until they stop that, the failures that caused the right hon. Lady to resign will continue under her successor?
    Mr. Miliband: Many parents and teachers watching today may draw a contrast between the dignified way in which my right hon. Friend spoke last night and the hon. Gentleman's churlish comments this morning. They may even ask themselves whether the right person ended up resigning.
    The hon. Gentleman knows that the amount of money delegated directly to the hands of head teachers has risen substantially under the Government by between 8 to 10 per cent. That stands in stark contrast to the position under the last Government. I am pleased that teachers and head teachers now have more power in their own hands, and we are going to add to that in the months ahead.
    Mr. Green: After that performance, the hon. Gentleman should learn not to write his answers before he hears the questions. If he does not agree that pointless form filling annoys teachers, perhaps he will agree with the remark later in the report that
    "Poor pupil behaviour is a major cause of teacher workload".
    In the spirit of generosity, I commend to the new Secretary of State our policies on home-school discipline contracts and the abolition of independent appeals panels. They would give power back to heads and teachers, remove much unnecessary work and give all children a chance to learn. Will the Government adopt those policies?
    Mr. Miliband: The hon. Gentleman should not write his questions before the sitting. He has just changed his policy again. Last week he said in the Chamber that the Opposition would not abolish independent appeals panels; they would bring in local education authority panels to countermand them. He has just said that he has reverted to the old position. He will have to do much better.
    Richard Burden: I know that as a former teacher herself, my right hon. Friend the

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    Member for Birmingham, Yardley (Estelle Morris) cared passionately about the work load of teachers and its importance in motivating them. She had several run-ins with teacher unions, but does it not speak volumes for her integrity that they greeted yesterday's announcement with shock and sadness? Does my hon. Friend agree that there are lessons for all of us in her message last night about the way we do politics and about the way in which the Opposition go about their business, and a message for the media as well? I take this opportunity, on behalf of my right hon. Friend's Labour colleagues in Birmingham, to pay tribute—
    Mr. Speaker: Order. That is not the purpose of a supplementary question. The hon. Gentleman should sit down. I, too, have the highest regard for the right hon. Member for Birmingham, Yardley (Estelle Morris), but we must go through the Order Paper. That is the purpose of our business here today.
    Mr. David Rendel: I hope none the less, Mr. Speaker, that you will allow me, on behalf of my colleagues, formally to welcome the Secretary of State to his new position, and to say that we regret the fact that the previous Secretary of State has become yet another victim of the Government's target culture.
    On secondary school work loads, does the Minister accept that there are already a very large number of unqualified people in charge of our classes? Do not his new policies simply mean that there will be yet more unqualified people in our secondary schools taking charge of classes in future?
    Mr. Miliband: I am pleased to say that the proposals announced on Tuesday complement the Government's commitment to have 10,000 more teachers in our schools during this Parliament. We are not at all ashamed of saying that language specialists, sports coaches and musicians should be coming into our schools, not to substitute for teachers, but to work under their direction and to supplement the invaluable work that they do.
    Mr. Chris Bryant: Teachers in Wales will consider that the announcements made by my right hon. Friend the Member for Birmingham, Yardley (Estelle Morris) this week were probably the most important thing that she contributed to their work, thanks to devolution. What conversations has my hon. Friend had with his colleagues in Wales to ensure that the full implementation of what was announced will apply to the whole of Wales?
    Mr. Miliband: I can reassure my hon. Friend that representatives of the National Assembly for Wales participate as full members in the forum that we have established with all interested parties to work through the package, and they will continue to do so.

    Student Support
    Matthew Green: If he will make a statement on student support for 2003–04. [75269]
    The Minister for Lifelong Learning and Higher Education (Margaret Hodge): We have no plans to make widespread changes to the financial support arrangements for students entering or continuing in higher education in 2003.
    Matthew Green: Given that students entering university now and perhaps going on to a public sector job would face at least 15 years of repaying their loans at 9 per cent. of their earnings above £10,000, will the Minister take this opportunity to state that the Government will never introduce commercial rates on loans, which would add another five or more years to the repayment of those loans for the average public sector worker?
    Margaret Hodge: I am not in the business of pre-empting the higher education strategy document that we will be publishing at the end of the month. However, our income-contingent loan scheme is far superior to the old mortgage-style loan scheme that the previous Government introduced, as it ensures that people repay their loan according to what they earn.
    Mr. David Lepper: As a member of the National Union of Teachers, may I associate myself with the comments that have been made from these Benches about our former Front-Bench colleague, my right hon. Friend the Member for Birmingham, Yardley (Estelle Morris)? Notwithstanding my hon. Friend's understandable comment about not pre-empting announcements which I am glad to hear are to be made later this month, will she take this opportunity to reaffirm what I understand has always been the Government's policy: their opposition to top-up tuition fees in universities?
    Margaret Hodge: My time is slightly ahead of me. We shall announce our higher education strategy document at the end of next month. I am not in a position today to make any statement about what will be incorporated in it. What I am happy to say is that we will ensure that debt and the fear of debt do not inhibit students from participating in higher education, and that we want to create not a social elite but an intellectual elite in which everyone, according to ability, is allowed to develop his or her full potential.
    Adam Price: The Minister will be aware of the Assembly learning grant which was introduced in Wales at the beginning of the current academic session. Can she tell me why grant awards to low-income students are being classed as income and therefore being clawed back by the Government from part-time students—a practice that I understand is not followed in the case of the English and Welsh universities access fund?
    Margaret Hodge: I understand that negotiations are proceeding as we speak between my colleagues in the Welsh Assembly and those in the Department for Work and Pensions over whether the new grants should be classed as income for benefit purposes. I look forward to learning the outcome.
    Ms Meg Munn: May I too associate myself with the tribute to the former Secretary

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    of State for Education and Skills, my right hon. Friend the Member for Birmingham, Yardley (Estelle Morris), and with the welcome to my right hon. Friend the Member for Norwich, South (Mr. Clarke)?
    Does my hon. Friend agree that one of the important aims of student support should be to ensure that children from worse-off backgrounds can go to university, as they currently cannot, and not to continue to give unwarranted support to children from better-off backgrounds?
    Margaret Hodge: I have often said in the House that I think that in future we will be judged, in relation to increasing participation in higher education, on whether we have managed to change the socio-economic profile of those who enter it. I have also said, and will reiterate, that we have set ourselves a complex challenge. We need to raise standards in our secondary schools to ensure that more young people from lower income groups stay at school, and we need to raise their aspirations so that they aim higher and see university as an option.

    Criminal Records Checks
    Mr. Jonathan Djanogly: What meetings he has had with the teaching unions to discuss criminal record checks on teaching staff. [75271]
    The Minister for School Standards (Mr. David Miliband): My right hon. Friend the Secretary of State met representatives of the Secondary Heads Association, the National Association of Teachers/Union of Women Teachers, the National Union of Teachers and the Association of Teachers and Lecturers on 4 September to discuss the matter.
    Mr. Djanogly: With thousands of applications still outstanding, Cambridgeshire county council alone still has some 40 checks outstanding, yet all the applications were put in before June. The situation is becoming serious. I have received a letter from the leader of the council, and the leaders of the Liberal and Labour groups, expressing deep concern about the new disclosure service. They complain about long delays in recruitment inevitably impacting on service users. They say that recruitment itself is problematic, and that existing staff are under increasing stress. Given that backlog of thousands, what will the Government do to sort out the shambles?
    Mr. Miliband: I share the hon. Gentleman's concern about this important issue. I am pleased to say that the processing system has undergone significant improvement in the last four to six weeks, and that the throughput of disclosures has risen over that time. One assurance I can give the hon. Gentleman is that the Department has agreed on a special fast-track procedure where particular problems exist, so that the Criminal Records Bureau can deal with the issues as quickly as possible.
    David Burnside: In maintaining the highest possible standards in relation to criminal records, will the Minister, on behalf of the Department, have discussions with his opposite number in the Northern Ireland Office to ensure that—at ministerial,
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    civil service and special policy adviser level—the Department of Education in Northern Ireland applies the same standards as we apply on the mainland in demanding no criminal record in the case of anyone involved in teaching, and in education generally, throughout the United Kingdom?
    Mr. Miliband: In the new circumstances, we will have discussions with colleagues, and I can certainly assure the hon. Gentleman that we will put that issue on to the agenda.
    Mr. Charles Hendry: The Minister will recall the debate on this subject in Westminster Hall in which the Under-Secretary of State for the Home Department, the hon. Member for Leeds, Central (Hilary Benn), said that the most effective way of getting a prompt record check was to use the telephone service provided by the CRB. In that case, why are almost no schools or voluntary organisations aware of the service, even though it could have saved them many weeks in getting a check processed? What plans does he have to make it better known? He will also be aware that those who have to fill in the forms—the people who know most about this subject—are frustrated that they were never consulted about either the nature or style of the form? How does he intend to simplify the form and involve schools, voluntary organisations and their advisers in that process?
    Mr. Miliband: We take seriously the need to tackle the roots of this problem. The special team sent in by the Home Secretary under Mr. Patrick Carter is looking at every stage of the CRB process. It will also have discussions with a wide range of colleagues and interests to ensure that the form is as processable as possible. On the hon. Gentleman's point about publicity, my understanding is that a number of people have been using the phone line and other mechanisms of getting in touch, but I shall look into the concern that he raised.

    Disruptive Pupils
    Mr. Chris Pond: What further measures he proposes to deal with the problems caused by disruptive pupils in schools. [75272]
    The Parliamentary Under-Secretary of State for Education and Skills (Mr. Stephen Twigg): We continue to invest in a range of measures to establish good behaviour and discipline in all schools. Teachers dealing with the most challenging behaviour have access to in-school support from learning mentors and others. We stand by the head teacher's right to exclude the most disruptive pupils in the best interests of the school community as a whole. Such pupils now have access to full-time education outside the school. We will set out shortly the next stages of our strategy to improve pupil behaviour, discipline and attendance.
    Mr. Pond: Will the Minister accept from me later a brief dossier from head teachers in Gravesham about the effects of disruptive pupils in their schools? The dossier includes a report of an incident yesterday in which a nine-year-old kicked his teacher, but could not be sent home because his parents refused to collect him.

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    Does my hon. Friend consider that we need special provision in primary schools for disruptive pupils and perhaps also wider use of parenting orders to ensure that parents take responsibility for their children's behaviour?
    Mr. Twigg: I will be very happy to receive the dossier from my hon. Friend, who highlights one example from a number of very disturbing cases. Much of the focus of the strategy has so far been on secondary schools, but he is right to emphasise that, tragically, many such cases are arising in primary schools. Staff in our schools have a right to work in an environment where they are not subject to violence, abuse and harassment, and parents have a duty to take responsibility for their children.
    Chris Grayling: Is the Minister aware that many head teachers find when they become caught up in issues of process in relation to appeals panels that they have no guidance about that process? When he modifies the appeals panel process this January, will he consider the guidance that head teachers are given about the specific processes that are needed to ensure that they are watertight in any legal discussions?
    Mr. Twigg: That is exactly what we are doing. We are saying that we want appeals panels to be more effective and want to ensure that somebody with practical classroom experience is included on every panel. We do not want the panels to overturn the decision made by a head teacher simply on the basis of a technicality. We want to balance the interests of the individual child who might appeal with the wider interests of the school community. We have listened to the concerns of head teachers and taken them on board, which is why we will issue the new proposals starting in January.
    John Mann: There is often a link between disruptive behaviour and experimentation with drugs. Can some changes be made to the guidelines on the national curriculum for secondary schools to ensure that every school has to have high-quality anti-drugs education?
    Mr. Twigg: I met my hon. Friend earlier this week, when he took the opportunity to present me with the report of his local inquiry into the use of heroin. The findings are extremely disturbing. I am considering the advice and guidance that is given to schools on drugs, alcohol and tobacco. We are listening to a range of people who work in the field and we will be looking to see that the curriculum meets those challenges.
    Mrs. Eleanor Laing: Does the Minister recognise that many children who are excluded from school have disruptive behavioural problems not by chance, but as a result of medical disabilities? Such children already have special educational needs, but when their schools can no longer cope with their disruptive behaviour and they have rightly to be excluded to protect the education of other children, current policy means that they receive only a few hours' education a week. I know one little boy, Michael, who has Simpson-Golabi-Behmel syndrome, which means
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    that he cannot help being disruptive. He has had almost no education for the last seven months. What will the Minister do to help children like him?
    Mr. Twigg: I want to ensure that people have full and equal access to education regardless of their disability or their special educational needs. That is why we legislated in the previous Parliament with the Special Educational Needs and Disability Act 2001. That is also why we have extended the Disability Discrimination Act 1995 to cover schools. I absolutely agree with the hon. Lady, however, that this is a big challenge: services are not universally good and a lot more work needs to be done. I am working with many of the organisations in the field to try to deliver a general improvement in the quality of service.

    Surplus School Places (Liverpool)
    Mrs. Louise Ellman: What assessment he has made of the proposals for the removal of surplus places from schools in Everton and Vauxhall in Liverpool. [75273]
    The Minister for School Standards (Mr. David Miliband): The Department does not assess statutory proposals for changes to schools, as I think my hon. Friend knows. Such proposals are decided by the local school organisation committee or, if it cannot agree, by the independent schools adjudicator. I understand that proposals for the removal of surplus places in Catholic primary schools in Liverpool originate with the archdiocese concerned, in partnership with the city council.
    Mrs. Ellman: I accept that Liverpool city council has prime responsibility for decisions on school closures, but does my hon. Friend share my concern that insufficient attention has been given to the link between regeneration opportunities and educational provision in this inner-city area? Is he aware of the work of the parents action group in this regard, and would he be willing to consider its views on the link between regeneration and educational attainment?
    Mr. Miliband: My hon. Friend will know that I visited her constituency in June, and I was very impressed not only by the tributes paid to her and her work on regeneration and education but by the work being done by the city council in tandem with voluntary organisations in the city and, specifically, in her constituency. If her parents action group wants to come to London, I will certainly meet it here, unless I get back to Liverpool before that.

    School Transport
    Mr. Mark Todd: When distance limits on school transport entitlement were last altered; and if he will make a statement. [75274]
    The Parliamentary Under-Secretary of State for Education and Skills (Mr. Stephen Twigg): The statutory maximum walking distances were set in 1944. Local education authorities have the power to consider

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    applications for help with transport costs that are not covered by the statutory criteria, using their discretionary powers.
    Mr. Todd: In 1944, there were about 1 million vehicles on British roads; there are now 24 million. In 1944, footpaths were heavily used by people walking to work, and provided a safe means of transit. They are now much less safe in areas such as mine. Is it perhaps time for us to review the limits?
    Mr. Twigg: As I said in my answer, local authorities have discretionary powers, and there are some good examples of authorities that have chosen to exercise them. My hon. Friend's own local authority does so in a number of respects. The social exclusion unit is conducting an inquiry into the links between poor transport and access to key services, including education, and work. We are awaiting the unit's full report, but officials in the Department for Education and Skills have been working with the unit, and that may well provide a basis for us to take this debate a little further forward.
    Mr. David Heath: Traffic conditions have changed, but so have the circumstances of the schools system: we now have specialist schools and the concept of parental choice, for example. All those changes militate against the system that was set up in 1944. When we add to that the fact that, in rural areas such as my own in the county of Somerset, a huge amount of money is spent on school transport without any recompense—thanks to a ridiculous formula system that does very poorly for us and many other areas of the country—it becomes clear that it is time for a fundamental review of the school transport system. Will the Minister please put that into place at the earliest possible opportunity, to coincide with the change in the local authority funding system that we shall discuss later today?
    Mr. Twigg: I cannot promise to make it coincide with the new funding formula. This is an immensely challenging area. I have been taking a look at the matter and I will continue to do so. If the hon. Gentleman has a scheme in mind that would be workable and that I can sell to colleagues and to the House, I would be delighted to consider it.
    Mr. Huw Edwards: Is my hon. Friend aware that the Education Act 1944 also allows bus companies to permit three children under the age of 15 to sit on a double seat? That leads to gross overcrowding on scheduled bus services taking children to school in my constituency, especially from the village of Llandogo. Will my hon. Friend seriously consider this issue, and get rid of this rule?
    Mr. Twigg: I am grateful to my hon. Friend. I must confess that I was not aware of that rule, but I will take a look at it, as requested.
    Mr. James Paice: In addition to the reasons given by two hon. Members for reviewing this legislation, will the Minister also take into account the fact that, because of deteriorating road
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    conditions and safety, young children often have to walk along verges—never mind pavements—and that countless parents are no longer prepared to let their children walk the statutory distance? Such parents have to use their cars to take their children to school, which causes immense congestion outside schools, and unnecessarily puts many extra vehicles on the road. Several of the Government's objectives could be met if they themselves were to take the lead. The discretion of local authorities is not adequate, because they are not funded and do not benefit from the environmental gain that could be achieved if the Government took action.
    Mr. Twigg: It makes a change for the Department for Education and Skills to be accused of not being centralist enough, but I will certainly look at the representations that the hon. Gentleman makes. It is clear that support exists in all parties for looking at this matter, but I repeat that any change would involve losers as well as winners, so I need to look very carefully at how such change would work. However, I certainly appreciate the hon. Gentleman's point about parents' concerns for their children's safety in the light of increased traffic volumes, pollution and the rate of crime.

    Higher Education
    Jane Griffiths: What plans he has to widen participation in higher education. [75276]
    The Minister for Lifelong Learning and Higher Education (Margaret Hodge): We are firmly committed to widening participation in higher education, so that all our brightest students, whatever their background, enjoy the full opportunity to develop their potential. Through our secondary school reform agenda, we want to raise attainment levels. Through the introduction of the education maintenance allowance, we want to encourage young people from low-income backgrounds to stay in full-time education; and through our "Excellence Challenge" programme, we want young people to aim higher.
    Jane Griffiths: Does my hon. Friend agree with me and the staff and students of Reading university that action is needed not only to widen participation, but to enable universities in constituencies such as mine with a high cost of living to have a student body with the widest possible background?
    Margaret Hodge: Every university is enhanced by having a broad-based student population, from which every student can learn.
    Mr. George Osborne: My constituent Katy Smith was one of the students who took part in yesterday's lobby of Parliament on student debt. She made the powerful case that student debt deters people from poorer backgrounds from applying to university. Before the last election, the then Education Secretary—the current Home Secretary—promised not to introduce top-up fees for students. Would the current education team like to inherit that promise as well?
    Margaret Hodge: I, too, saw the people from the National Union of Students who came to the House

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    yesterday. The point that I made to them was that they should see their contribution to the cost of their education as an investment. Over their lifetime, people who are graduates will earn £400,000 more than those who are not. In that context, if they incur costs of up to £10,000, that is a good investment, not a cost.
    Jonathan Shaw: Does my hon. Friend agree that debt is cyclical, and is it not time that we looked at the way that we pay students? They have the least experience and a small amount of money, so rather than giving them everything up front at the beginning of term, would it not be better to give them the choice of monthly payments? That would help them to manage their finances much better.
    Margaret Hodge: My hon. Friend has made that suggestion to me on several occasions, and I am delighted to inform him that I have asked the Student Loans Company whether that is a feasible option for the future payment of loans.

    Local Government Finance
    Mr. Anthony Steen: When he will decide on option 5 funding for education in Devon. [75277]
    The Minister for School Standards (Mr. David Miliband): The Government will carefully consider all the suggestions that are put to us in response to the consultation; indeed, we will be having a long debate on that this afternoon. We will announce decisions on the new funding system by early December, along with the provisional settlement for 2003–04.
    Mr. Steen: Of the four options for education funding proposed by the Government, none eliminates discrimination against Devon's children, who get a raw deal when compared with many of their county cousins. Will the Minister ensure that the new education funding formula, when it comes about, is egalitarian and eliminates the postcode lottery of funding for schools?
    Mr. Miliband: You will know, Mr. Speaker, that the hon. Gentleman and I had a good debate in Westminster Hall at which I learned a lot about the particular problems of education in Devon. He and I are corresponding on some of the facts underlying the matter. Labour Members of the House are always happy to commit ourselves to an egalitarian solution.

    Support Staff (Further Education)
    Mr. Colin Challen: What plans exist to improve the pay of support staff working in further education. [75278]
    The Minister for Lifelong Learning and Higher Education (Margaret Hodge): In September, I announced an extra £32 million for the teaching pay initiative in further education this year, including £12 million to allow colleges to extend the initiative to support staff.
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    Colleges have the flexibility to determine how they allocate their share of the £32 million between different groups of staff to meet local priorities. We have already announced that unit funding for colleges will rise by 1 per cent. a year in real terms over the next three years.
    Mr. Challen: I welcome that answer and thank my hon. Friend for it. I also welcome the new Secretary of State to his post and express the hope that his predecessor will return swiftly to the Government. One of her legacies is that there is more integration in the further education sector between colleges and schools and other institutions. However, we need more parity in the rewards that people get in those places. In my constituency, we have the Rothwell partnership, in which Joseph Priestley college is working with three high schools. The staff involved need parity. Will the Government look at that issue and reward them appropriately?
    Margaret Hodge: I welcome the activities in my hon. Friend's constituency between Joseph Priestley college and a number of schools. Such co-operation puts the individual at the heart of the learning process and ensures that institutional silos do not inhibit that. We have a manifesto commitment to ensure that we raise levels of pay in further education colleges so that we get equal funding between the two sectors. We remain committed to that.
    Mr. David Kidney: Will my hon. Friend confirm whether industrial action in further education is still planned for November? Will she confirm that the dispute is about pay and say what she is trying to do to avert it?
    Margaret Hodge: It is my view that industrial action is not necessary, given our announcement of the extra £32 million that we have made available to the employers to ensure that they can negotiate and reach agreement with all the unions. That £32 million is the same as 1 per cent. on the pay bill, which is sufficient to prevent industrial action next month.

    Primary Education Targets
    Richard Younger-Ross: What progress has been made towards meeting the targets set for his Department for 2004 relating to primary school education. [75279]
    The Minister for School Standards (Mr. David Miliband): Primary schools have made outstanding progress in raising standards over the last five years. This year, 75 per cent. of 11-year-olds achieved the expected level in English, and 73 per cent. did so in mathematics, maintaining world-leading standards of achievement. We believe that schools can achieve even higher standards, and have a challenging target of 85 per cent. by 2004. The hon. Gentleman will be pleased to know that we are already working closely with local education authorities and schools to ensure progress towards that.
    Richard Younger-Ross: It is clear that the previous Secretary of State had not met her targets. In 1999, the right hon. Lady said that if she did not meet her targets, she would resign. She also said at that time that her colleagues would resign as well. If her colleague who is now the Secretary of State followed what his predecessor promised, could this be the quickest resignation on record?
    Mr. Miliband: I think that we have probably had enough of that for one 24-hour period. I assure the hon. Gentleman that we will work closely with teachers, who have achieved outstanding improvement but can go further, notably in the primary education of boys, where there is a significant gap between them and girls. We are working on that already.

    Science and Engineering
    Michael Fabricant: What steps he is taking to promote the take-up of science and engineering places in further and higher education establishments. [75281]
    The Minister for Lifelong Learning and Higher Education (Margaret Hodge): The Government are strengthening science education in schools and helping careers advisers and teachers to explain how science and engineering offer challenging careers. The Government are also implementing the recommendations of Sir Gareth Roberts's review of the need for people with skills in science, technology and engineering.
    Michael Fabricant: The Minister may be aware that, over the last 10 years, there has been a significant decline in the number of students taking A-levels in physics and maths, with numbers falling by 30 per cent. In chemistry, the number has fallen by 20 per cent. What attempt will she make to encourage more people to study science subjects at A-level to enable them to do those subjects at university? Has she any plans to meet with the Engineering and Technology Board, which has been set up to promote that very end?
    Margaret Hodge: I frequently meet several professional organisations that represent engineering and science interests. I have to yet to receive a request from the organisation to which the hon. Gentleman referred and look forward to receiving that request. We have plans to try to encourage more young people, especially girls, to take science subjects through to A-level and on to university. The recent decline is very serious and we need to provide incentives and encouragement in the school system from the youngest age to try to reverse that long-term trend.

  SOLICITOR GENERAL
  The Solicitor-General was asked—
  SOLICITOR GENERAL

    Police Custody Deaths
    Syd Rapson: What criteria are applied in deciding to prosecute where a death in police custody occurs. [75299]
    Shona McIsaac: If she will make it her policy to allow the views of the family of victims be taken into account when deciding whether to prosecute following a death in police custody. [75300]
    The Solicitor-General (Ms Harriet Harman): In deciding whether to prosecute after a death in custody, the Crown Prosecution Service applies the code for crown prosecutors, as it does in all cases. First it considers whether there is sufficient evidence to provide a realistic prospect of a conviction and, if there is, whether a prosecution is in the public interest. As with all cases, the CPS will start or continue with a prosecution involving a death in custody only if both tests are met. The CPS considers any information provided by or on behalf of the family in deciding whether to prosecute.
    Syd Rapson: I thank my right hon. and learned Friend for that answer and congratulate her on the 20th anniversary of her election to this House. She seems so young.
    In cases of deaths in custody, it often appears that no one is held to account. How can we build the public's confidence that such tragic cases are properly investigated?
    The Solicitor-General: I thank my hon. Friend for his comments about my 20 years in the House. He makes an important point about relatives needing to have confidence that if a criminal act has been committed, people are held to account with no cover-ups behind closed doors. That is about good investigation and effective decision making in prosecution.
    Shona McIsaac: I thank my right hon. and learned Friend for her answer, but she will appreciate that families need to know that someone is on their side, otherwise they will suspect a cover-up. What does the CPS do to liaise with families and reassure them that their views are taken into account and that matters are properly investigated?
    The Solicitor-General: My hon. Friend is right that more needs to be done to reassure relatives that if a criminal act has taken place, someone is held to account for it. She may know that the Attorney-General, who takes these issues seriously, has issued a consultation paper that explores the prosecution of deaths in custody. In his consultation with the police, the Prison Service, relatives and the CPS, he has found that we have not done enough for relatives, and the CPS is well

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    aware of that. Prosecutions have to be public, not private, but that does not mean that relatives should be kept out of the picture and their views ignored.
    Mr. John Burnett: I hope that the Solicitor-General will acknowledge that her Department relies heavily on the work of coroners, who can refer deaths in custody cases to the Director of Public Prosecutions and to the CPS. Another review is taking place of coroners services. Does the Solicitor-General agree that it is in the public interest that coroners courts have greater power at inquests, for example, to seize documents, to summon witnesses throughout the UK and to insist on full disclosure to the coroner in due time?
    The Solicitor-General: The hon. Gentleman is right to remind the House that there is a wide overlap between the work of coroners and of criminal courts in cases of death in custody. We need to be certain that there is complete openness and full investigation. He raises these matters at an opportune time, as the Lord Chancellor is consulting on the powers and procedures in relation to coroners. The two reviews that I have mentioned need to be looked at side by side, as we must make sure that deaths in custody are fully investigated.
    Mr. Peter Pike: Does my right hon. and learned Friend believe that sufficient consideration has been given to the Christopher Alder case, in which the prosecution failed? Will the current review take account of all the circumstances of that case, so that the same problems do not arise in future?
    The Solicitor-General: I thank my hon. Friend for raising the question of the death in custody of Christopher Alder, of which the Attorney-General and I are well aware. The Attorney-General has been closely involved in the work of the Crown Prosecution Service and of the Director of Public Prosecutions in connection with the case.
    Publication of the findings of the Attorney-General's consultation paper on deaths in custody has been delayed precisely because the Alder case threw up more issues of concern that must be considered. We have taken into account the Alder family's views about their experience of the prosecution. It is awful for people who have lost a loved one to feel that they have suffered an injustice.
    The good news is that the number of deaths in custody has fallen from 65 in 1998 to 32 in 2000. Holding people to account and prosecuting them is about more than securing justice for people who have died. It is also about preventing deaths in the future, because people will know that they will be held to account.

    Financial Crime
    Mr. Bill O'Brien: If she will make a statement on the prosecution of financial crime. [75302]
    The Solicitor-General (Ms Harriet Harman): We consider the effective prosecution of financial crime to be very important. We cannot allow white-collar criminals to escape justice. The Serious Fraud Office and
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    the Crown Prosecution Service prosecute financial crime. The Proceeds of Crime Act 2002, which comes into effect in February 2003, will mean not only that financial crime will be prosecuted, but that the proceeds of such crime can be prosecuted more effectively.
    Mr. Bill O'Brien: Does my right hon. and learned Friend share my concern at the low number of prosecutions carried out by the Serious Fraud Office, especially given the additional resources that it received two years ago? Can something be done to ensure that more cases are brought to justice, in line with the comments that she made in her further response to the previous question?
    The Solicitor-General: As my hon. Friend may know, the Serious Fraud Office prosecutes only those cases in which more than £1 million is at stake. The difference between the SFO and the CPS is that the former investigates a fraud as well as prosecuting it. Financial crime is linked with money laundering, terrorism, drugs and human trafficking, and it is very important that we recognise that the problem must be sorted out internationally as well as nationally. A working party involving all Departments has looked into improving the response to fraud. As international fraud grows, we must be sure that we improve our performance in tackling it.
    Mr. Nick Hawkins: I add my congratulations to the Solicitor-General on the 20th anniversary of her service in Parliament.
    In the light of her answers to the hon. Member for Normanton (Mr. O'Brien) on the rather arbitrary limit on investigations by the SFO, will the right hon. and learned Lady say whether she proposes to encourage the SFO's excellent officers to make their skills available to other police forces? The SFO was set up by the previous Conservative Government, and such a move would enable its officers to share the expertise that they have developed over the years. The skills of SFO officers could then be used in smaller investigations. I hope that she will accept that even frauds below the limit of £1 million can have serious international implications, a point that was debated at length during the passage of the Proceeds of Crime Act 2002.
    The Solicitor-General: I thank the hon. Gentleman for his comments, and welcome him to the Dispatch Box in his new role. As I said, the SFO investigates fraud involving more than £1 million, and the CPS prosecutes frauds below that level. There is a close relationship between the CPS and the SFO. Other police forces that are investigating crimes involving less than £1 million certainly work closely with the Serious Fraud Office and draw on its expertise. It is not clear when they start the investigation whether the figure is more or less than £1 million. We are talking about large sums of money—about £14 billion is estimated to be lost through serious fraud, which affects victims both rich and not rich. It is not a victimless crime; it is also about poor people being ripped off. We feel very strongly about white-collar crime and not allowing fat cats to get away with it.

Business of the House
12.30 pm
Mr. Eric Forth: Will the Leader of the House give us the business for next week?
The Leader of the House of Commons (Mr. Robin Cook): The business for next week will be as follows:
MONDAY 28 OCTOBER—Opposition Day [20th]. Until 7 o'clock there will be a debate on implications of the Human Rights Act for UK law followed by a debate entitled "The Expulsion of Sinn Fein/IRA from the Palace of Westminster". Both debates arise on an Opposition motion.
TUESDAY 29 OCTOBER—Debate on motions relating to the Modernisation Committee Report on reforming the House of Commons and the Procedure Committee Report on Parliamentary questions.
WEDNESDAY 30 OCTOBER—Motion to approve a statutory instrument relating to the provisions of the Terrorism Act 2000 followed by consideration of Lords amendments to the Enterprise Bill
THURSDAY 31 OCTOBER—Debate on defence in the UK on a motion for the Adjournment of the House.
FRIDAY 1 NOVEMBER—The House will not be sitting.
The provisional business for the week after will be:
MONDAY 4 NOVEMBER—Consideration of Lords amendments to the Adoption and Children Bill.
TUESDAY 5 NOVEMBER—Consideration of Lords amendments to the Nationality, Immigration and Asylum Bill.
WEDNESDAY 6 NOVEMBER—Consideration of Lords amendments to the Animal Health Bill.
THURSDAY 7 NOVEMBER—The House will consider any Lords amendments which may be received.
The House will be prorogued when Royal Assent to all Acts has been signified
The House may also be asked to consider any Lords messages which may be received.
Mr. Forth: I thank the right hon. Gentleman for letting us have the future business. Will he give a firm undertaking that the forthcoming report on foot and mouth will be given a full day's debate in its own right in the House early in the new Session? The Leader of the House knows very well the importance that everybody attaches to the report and the House will have to be given every opportunity to examine it thoroughly and completely. I hope that the right hon. Gentleman will be able to give us that assurance so that we can look ahead with confidence to dealing with that matter in the proper way.
The Animal Health Bill, to be considered on 6 November, has been almost completely redrafted in another place. Therefore, it will come to us with a large number of new clauses and schedules. Will the right hon. Gentleman guarantee that the House will be given adequate time to consider the measure? In fact, I would prefer an undertaking that there will be no time limit on its consideration at all. I would undertake that the official Opposition would treat it in a proper and responsible way. We would not want it to be the case—
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and neither would you, Mr. Speaker—that the large number of changes that have been made quite properly to this important Bill in another place were somehow not considered in this place and were ever to be sent back to another place, voted on in some peremptory way without having been properly considered or debated. I hope that the Leader of the House will accept that our role in this House, complementary as it is to the other place, requires that we spend a proper amount of time on that Bill in these circumstances.
The Deputy Prime Minister said on 22 October with regard to the firefighters dispute:
The House can be assured that I will, at every opportunity, keep it fully informed.—[Official Report, 22 October 2002; Vol. 391, c. 127.]
Given the exchange between my right hon. Friend the Leader of the Opposition and the Prime Minister yesterday and the almost complete confusion that seems to be emerging from various sources in the Labour party, the Government and elsewhere, when does the Leader of the House next expect the Deputy Prime Minister to report to the House on such matters as whether picket lines will be crossed, and military personnel or other temporary personnel given access to the most modern equipment in fire stations in the pursuance of fighting fires? Just as important is whether military personnel who are required to act as firefighters during any strike will be properly covered, insured and protected in every way from hazard and from liability claims when we ask them to do this most hazardous and difficult job.
Those are just some of the questions that I hope the Deputy Prime Minister will come to the House early—ideally, before any dispute even starts—to answer, to reassure us and the people of this country that these matters will be dealt with properly and not brushed under the carpet, which is what the Prime Minister tried rather ineptly to do yesterday.
On Monday evening, one of my colleagues found a little note on the Treasury Bench. It looks as though it was written by a Government Whip—their writing is very distinctive, Mr. Speaker, as you know. It says:
"Hazel, Please speak AT LENGTH."—
the "at length" is underlined—
"We need this debate to run past 7.15."
In the spirit of modernisation, I ask whether the Leader of the House believes that that is a proper way for the Government and Ministers to conduct themselves. Does the right hon. Gentleman take any responsibility for that note from one Government Minister to another? Is he prepared to plead guilty on behalf of the Government to wasting the time of the House? I can only assume—perhaps he can confirm this—that the aforesaid Hazel was none other than the Under-Secretary of State for Health, the hon. Member for Salford (Ms Blears), who was dealing with the debate at the time and appears in Hansard at some modest length. I hope that we will receive assurances from the Leader of the House that he will get a grip on his Whips and on Ministers and stop wasting the time of the House.
Mr. Cook: May I first say what a delight it is to see the right hon. Gentleman back in his place. It was a source of great disappointment to Labour Members that he was not in his place for Prime Minister's questions

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yesterday. I want him to understand that a large part of the fun of those questions for us is watching his face while his leader is speaking. I hope that he will not deprive us of that treat on future occasions.
On foot and mouth, we fully understand the importance of that. We set up the inquiry, we want a result, we shall give a response and there will be a statement to the House as soon as the result is available. I understand the interest of the House in wishing to debate that matter and it will be considered for future scheduling. I stress, however, that immediately after the debate on the Queen's Speech we will have a busy period in the House, with Second Readings of the many excellent Bills that will be announced then.
On the Animal Health Bill, I am well aware of the importance of giving adequate consideration to the amendments carried in the other place and we will ensure that there is a full day of debate for consideration of that Bill. I do not think that it will be necessary or desirable to go late into the middle of the night. I have done so on many occasions in my time in the House and, by and large, the House does not do itself sufficient justice in passing important legislation in the middle of the night when sensible people are in bed.
The right hon. Gentleman was not in his place for Prime Minister's questions yesterday, as I said—[Interruption.] If he was here, he will be aware that my right hon. Friend more than adequately answered all the questions put to him by the Opposition. While I recognise the right hon. Gentleman's anxiety to ensure that he stays on the good side of his leader by repeating the questions that he asked yesterday, the answers are precisely the same. We will not want to inflame the dispute, but at the same time we will not let any doctrinaire ideology stand in the way of doing what is necessary to protect the public. The right hon. Gentleman cannot in one breath ask for consideration for the financial security of the service men by asking them to be clear of liability—of course we will ensure that they have no personal liability—and also that they should have access to the equipment and fire engines, without training in their use. Access without training would seriously endanger our service men and we are not prepared to engage in that sort of irresponsible act.
Lastly, as regards the note that an Opposition Member apparently retrieved, I am interested to know that someone from the Opposition crossed the Floor and wants to join us on the Treasury Bench. If he or she would like to make that application formally, we shall certainly consider it. The Under-Secretary of State for Health, my hon. Friend the Member for Salford (Ms Blears) cannot speak at too great length for my pleasure. She always does very well when she comes to the House and is well worth listening to, so I can fully understand why there may be demands from this side for her to speak at even greater length.
Mr. Paul Tyler: On behalf of my colleagues, may I endorse the representations made both about the foot and mouth investigations—there is not just one investigation but a whole series, including one by the European Parliament—and about proper scrutiny of the considerable number of outstanding matters on the Animal Health Bill?
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Had the Leader of the House been with us during the whole of the previous hour, he would have been aware that there is considerable concern about the implications for education policy of the resignation of the Secretary of State for Education and Skills. Members on both sides of the House are concerned that important issues may be at stake, not least the frustration that the right hon. Lady appeared to express in interviews last night at intervention from both No. 10 and No. 11 in education policy. Given that the new Secretary of State was not able to contribute, for understandable reasons, this afternoon, will the Leader of the House give us an assurance that there will be an early opportunity for a full debate on education policy, if not before the Queen's Speech at least on one of the full days of debate on the Speech?
Both you, Mr. Speaker, and the Leader of the House have expressed concern in the past about the arrangements for making statements to the House and for choosing which subjects deserve statements. May I draw the right hon. Gentleman's attention to a remarkable occurrence earlier this week, when the Secretary of State for Environment, Food and Rural Affairs was apparently prevented from making a proper statement on the outcome of the Johannesburg summit and instead produced an extraordinarily long answer to a planted written question? I refer to column 898W in Monday's Hansard, where the answer runs to three and a half columns. Is that not an abuse of the written answers system, because the House was unable to cross-examine the Secretary of State on what was clearly a statement? It was not really an answer to a written question.
May I also draw the right hon. Gentleman's attention to the fact that a similar question about Johannesburg, put earlier by the hon. Member for Ceredigion (Mr. Thomas), was not answered by the Secretary of State? There was only a brief answer from the Minister of State. Is that not another abuse of the system? Will the Leader of the House look carefully at those arrangements, and may I have his assurance that the proposals from the Modernisation Committee will address that problem?
Mr. Cook: First, I shall take the hon. Gentleman's question about the resignation of the former Secretary of State for Education and Skills, my right hon. Friend the Member for Birmingham, Yardley (Estelle Morris).
My right hon. Friend is a decent, straight Member of the House and was a decent, straight and committed Minister. She was committed to the improvement of an education system in which she had a lot of professional experience. Many parents and teachers will regret the fact that such a sincere Education Minister was hounded out of office. I think that Members on the Opposition Benches will go quiet about their part in hounding her from office.
There was no reference whatever to No. 10 in my right hon. Friend's resignation letter. On the contrary, in the final paragraph she paid tribute to the support that she had received from the Prime Minister throughout. The hon. Gentleman asked for a debate. I have full confidence that my right hon. Friend the Member for Norwich, South (Mr. Clarke) will want to address the House on his stewardship of education at an early date. Indeed, given my confidence in my right hon. Friend,

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I am sure that I would be unable to keep him from coming to the Dispatch Box to do so even were I so minded. However, I am keen that the House should hear from him fully as soon as possible.
We discussed Johannesburg last Thursday. That issue takes us back to the long absence of the House during the prolonged summer and autumn recess. Had we met in September, as we shall be proposing when the House meets on Tuesday, there would definitely have been an oral statement on Johannesburg. In the event, we met a long time after Johannesburg. There were three very full and urgent statements on our first day back—indeed, there were complaints about the consequences of that for other business on that day. It was simply not feasible to contemplate yet another oral statement on a major matter.
I have some sympathy with the hon. Gentleman's point about the rather odd device answering the planted question. As he is aware, part of the package that we shall be putting to the House next Tuesday is that we do away with the curious requirement that somebody has to ask a question before a statement can be made. After Tuesday, I hope that we will print such written answers in a separate section of Hansard, clearly labelled "Written Statements from Ministers"—[Interruption.] Opposition Members may vote against that if they want to do so, but it would be in the interests of everybody else that we should clearly identify what is a written statement; that we should be open and transparent about it; and that we should not pretend that it was an answer to a question asked by a Member.
Mr. Graham Allen: Will the Leader of the House confirm that one of Parliament's key roles is to defend the rule of law and ensure that legality is adhered to by the House and the Executive? In that context, will he look again at the Attorney-General's habit—it is not even a convention—of giving advice to Her Majesty's Government and not allowing that advice to be published? I am obviously referring to the advice given on the legality or otherwise of declaring war on Iraq or any other country. Will my right hon. Friend discuss that matter with the Attorney-General and, in this instance, allow that advice to be put on the public record, so that the House can debate the matter in the full knowledge of the legal advice available to the Government?
Mr. Cook: No, I will not. It is very important that the Government's Law Officers should be free to give frank, open advice without weighing every sentence against the consequences of that advice entering the public domain. It is very important that the Government should be able to function with frank, open advice from our Law Officers, and I would not wish to do anything to inhibit that. However, I find it inconceivable that a democratic British Government would go to war in any circumstances if their Law Officers advised them that they would be acting illegally.
Sir George YoungFurther to the right hon. Gentleman's wish to bring more certainty to the parliamentary calendar, will he tell us
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when the Chancellor will make his pre-Budget statement? Will he also tell us what statements Ministers are planning now for next week?
Mr. Cook: On the question of the pre-Budget report, no date has been finalised, but I would broadly expect this year's statement to be made at a similar time of year to last year's statement. At present, I do not have a final list of statements for next week, but I do not disagree with the right hon. Gentleman that it would be helpful to the House if statements, where planned, could be announced in advance. Of course, there will always be statements that necessarily respond to events and, therefore, are not planned.
Mr. David Chaytor: The Government have announced their intention to publish an energy White Paper early in the new year, but they did so before the recent crisis at British Energy, which has enormous implications for future energy policy. Notwithstanding the fact that the Liberal Democrats chose British energy as the topic for their Opposition day debate earlier this week, does my right hon. Friend accept that, as we are considering energy policy over the next 50 years, it is essential that there is the widest possible discussion in the House about all aspects of energy policy before the publication of the White Paper?
Mr. Cook: I fully understand that there is great interest in the House in energy matters. The issue has been raised several times at business questions during the past year. Indeed, we arranged for a debate on energy precisely because it might inform the preparation of the White Paper. I would be reluctant, therefore, to agree to a further debate before the White Paper is published, but intense discussions on the White Paper continue apace, and I am sure that the House will wish to consider it fully and that my hon. Friend will wish to support it entirely.
Mr. Alex Salmond: Will the Leader of the House provide time next week for a statement by the Fisheries Minister? As the right hon. Gentleman will know, the advisory committee to the European Commission is proposing the closure of the North sea, west of Scotland and the Irish sea to the total white fishery. Such a move would cost thousands of jobs in Scotland and dismantle the fabric of entire communities. As the Fisheries Minister knows a great deal about the subject, I am confident that he would think that such an approach—closing an entire fishery in pursuit of saving a single species, however important—was lunacy. Will the Leader of the House give him the opportunity to spell out the Government's policy next week?
Mr. Cook: I fully understand the importance of that issue to the hon. Gentleman's constituents and to many other fishing communities around the country. I am sure that he will accept that we respect the scientific community's advice about the very dangerous level of stocks, particularly cod, in those areas. Nothing is more important to the long-term health of the fishing industry than that we conserve the fishing stocks so that they are there in the long term. The present position is that we are waiting for a Commission decision in response to that

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scientific advice, and I am sure that my colleague, in whom I have much confidence even more confidence—than the hon. Gentleman—will wish to keep the House fully informed of our response.
Mr. Tom Watson: In the aftermath of the Opposition day debate on sustainable energy, will my right hon. Friend consider allowing time for a specific debate on wind power? I am sure that Members on both sides of the House would like to establish whether there is a single wind power project in the United Kingdom that is not opposed by the Liberal Democrats—[Interruption.]
Mr. Cook: I will sit out this particular contest. The Government are thoroughly committed to developing renewable energy as a component of our energy strategy and that will feature largely in the forthcoming White Paper, which I am sure my hon. Friend will welcome and support. We will certainly look to the response of the Liberal Democrats and other parties to see whether they back the commitment in general that they so often oppose in the particular.
Sir Patrick Cormack: Does the right hon. Gentleman agree that if the firefighters' strike goes ahead —we all hope that it will not—it is important that this House has the opportunity to debate it? Would he, therefore, be prepared to consider rearranging the business set down for next Thursday or even arranging for the House to sit next Friday so that a debate can take place?
Mr. Cook: No; I have only just announced the business for next week. Next Thursday's business is the fifth day that we usually give to a debate on defence and the Ministry of Defence. Indeed, it is warmly welcomed by many of the right hon. Gentleman's colleagues. Therefore, I would not propose to disturb the arrangements that I have announced. The Government are fully seized of the gravity and importance of the situation with the firefighters dispute. I am sure that my right hon. Friend the Deputy Prime Minister will wish to keep the House informed of our response and of developments in relation to it.
Mr. Tony Lloyd: May I refer my right hon. Friend to the recent 20-plus earthquakes in the city of Manchester? While I do not ask him to take direct responsibility for them, there is one issue that I wish to raise with him. I wanted advice and spent considerable time ringing round Ministries, only to be told by each one that it did not consider the matter to have anything to do with it. It may well be that the advice from individual Departments was accurate—that others are better placed to give advice. Indeed, the best advice came from the British Geological Survey in Edinburgh, which said that there was little to worry about. Should there not be a one-stop access point for Members of Parliament and the public so that good quality advice on natural disasters can be available without having to chase round the whole system of Government?
Mr. Cook: I am immensely relieved that my hon. Friend does not lay ministerial responsibility for
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earthquakes at my door—[Interruption.] It is very kind of the House, but if hon. Members will forgive me I shall side-step that responsibility. In the first instance. the response to earthquakes rests with the local authority. I understand what has led my hon. Friend to ring round Whitehall and I concede that in the light of recent events we are faced with a development that we have not had to contemplate for many decades. It may be appropriate for the Government machine to consider whether there is any way that it can usefully meet the point that he raises. I will certainly consult my colleagues on it.
Mr. Douglas Hogg: Will the right hon. Gentleman arrange for an early debate or statement on the position of the alleged terrorists held by the United States Government in Cuba, especially United Kingdom citizens, of whom there are a number? The House needs to know by what authority they are held, what their legal rights are and to what extent they have been afforded those rights, and what steps the Government have taken to ensure that UK citizens will either be charged soon or rapidly released.
Mr. Cook: The right hon. and learned Gentleman will be aware that the British embassy in Washington has maintained consular interest in this matter and closely followed the case of British subjects at Guatanamo bay. Those who want to see progress will presumably welcome what has been decided in the past 24 hours in relation to the release of some of those there—[Interruption.] They happen not to be British citizens, but it is to miss the point not to recognise that there is movement, which should be welcome to all those concerned about the welfare of any of those in Guatanamo bay. Our position throughout has been and continues to be that if there are valid grounds on which those detained should be charged, they should be charged and brought to trial; if not, we expect them to be released.
Julie Morgan: I know that my right hon. Friend is aware that a very important debate is taking place this afternoon in Westminster Hall on the United Nations charter on the rights of the child. I am sure that he will be pleased to know that six children from Wales will be coming to the debate and will be meeting Welsh MPs to discuss their views on the charter. Does he agree that it is very important that Parliament is as accessible and as relevant to young people as possible? Will he undertake to do all that he can, as part of modernisation progress, to make sure that young people understand and freely come to Parliament?
Mr. Cook: I am very interested to hear of the events taking place in the precincts to which my hon. Friend refers. In the report of the Modernisation Committee, we deliberately put at the front of it our commitment to making Parliament more accessible to the public. In particular, we need to get across the message that this is not simply an interesting, historic building, but the functioning heart of British democracy. It is particularly important that we carry that message to young people at the present time, given the opportunity that is presented to us by citizenship education in schools, and given our

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need as Members of Parliament to make sure that turnout among young people improves at the next general election.
Andrew George: Will the Leader of the House find time for a debate on the Government's proposals for devolution of power to the regions? A written answer to me last week from the Office of the Deputy Prime Minister, which appeared at column 875W of Hansard, clearly demonstrated that there were many more responses to the Government's White Paper in favour of a Cornish regional assembly than there were for the whole of the rest of the country. I am sure that the Leader of the House will understand from his distinguished involvement in devolution issues that it would be wrong for the Government to feel that they can devolve to synthetic places created for bureaucratic convenience rather than to do so with the identity of the people of such regions clearly in mind.
Mr. Cook: If the hon. Gentleman will forgive me, I will not step into the minefield of where we draw the boundaries on the map. The whole point of the regional White Paper was to leave it to regions to decide voluntarily whether they wish to proceed down the road of regional government. It sounds from what the hon. Gentleman says as though many of his constituents would wish to respond enthusiastically to the offers that we are making to them, from which they can develop regional government for their area. I am confident—I hope that this pleases him—that there will be opportunities in the next Session to debate this matter at some length.
John Cryer: My right hon. Friend will be aware that, since 11 September, one of the consequences of that terrible day has been a sharp increase in insurance premiums across the world. Recently, I have been made aware by several construction firms in my constituency that their insurance premiums—especially for personal injury insurance—have gone through the roof. In the case of one personal injury policy for which a firm applied, the premium per annum increased from £19,000 to more than £100,000. The events of 11 September have been given as an excuse but, to me, this sounds like profiteering by the insurance industry. Can we have a debate on the matter or, failing that, a statement from a Treasury Minister, so that we can examine what the insurance industry is up to and what measures can be taken to make sure that firms are not put out of business by such actions?
Mr. Cook: I understand the concern of the businesses in my hon. Friend's constituency. The Government have always placed great stress on the importance of making sure that there is free and transparent competition as a means of keeping down prices and avoiding excessive profiteering. I am sure that my colleagues in the Department of Trade and Industry will be very interested in discussing with him the experience in his constituency to consider whether, in this case, the market is operating in a way that protects the consumer.
Mr. Roy Beggs: When the Leader of the House arranges future business, will he bear in mind the
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fact that the Northern Ireland Assembly is no longer functioning, and endeavour to arrange more sittings of the Northern Ireland Grand Committee than we have had in the past year, perhaps including a session of questions before the main debate, and allowing provision for an Adjournment debate at the end? I hope, too, that he will arrange at least one sitting in Northern Ireland.
Mr. Cook: I would not wish to commit myself on how we might arrange the internal business of the Grand Committee, but I accept fully the hon. Gentleman's point that the cessation of the Northern Ireland Assembly means that we will be required to make sure that adequate opportunity is provided for Northern Ireland Office Ministers to be held to account for the exercise of the functions and duties that we have imposed on them. We will, of course, keep that under review. I very much hope that we will be able to restore the peace process and ensure that the current situation is a temporary interlude and not a new permanent arrangement.
Mr. Graham Stringer: Does my right hon. Friend agree that the person charged with running the 2001 census should be able to count and that, to that end, Mr. Len Cook has failed miserably to get his sums his right? To take just one example, there are more people in Manchester who are registered to vote and who are registered to pay council tax and council rents than Mr. Cook counted when he carried out the census. That has profound implications for the planning of public services beyond those that will be considered in the next debate. Will my right hon. Friend find time for the House to debate this important matter?
Mr. Cook: I am always distressed to hear that any namesake of mine has not satisfactorily mastered his arithmetic and mathematics. My hon. Friend has made his point, but I understand that the figures to which he referred relate to an interim stage of the process. I am quite sure that, before the final version comes out, both the points that he has made and others will he fully taken on board.
Mr. Henry Bellingham: The right hon. Gentleman will be aware that the situation in Zimbabwe is catastrophic and getting worse. We heard yesterday the tragic news that Learnmore Jongwe, a sitting Member of Parliament and spokesman for the Movement for Democratic Change, died in custody at the age of 28. More than 200 MDC officials, including a number of MPs, are still in custody. We heard today that, in order to appease the Mugabe regime, the EU has been bullied into moving a meeting with the Southern African Development Community from Copenhagen to Mozambique. Do the Government care about the tragic situation in Zimbabwe? If so, surely we should have a statement very soon.
Mr. Cook: Of course, the Government are fully seized of the deep gravity of the situation in Zimbabwe, about which my right hon. Friend the Foreign Secretary and I have, on many occasions, addressed the House. We have imposed all the sanctions that we readily can without deepening the suffering of the ordinary people of

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Zimbabwe. Indeed, only last Tuesday, I presided over a meeting of the Privy Council in which we added another 57 names to those from Zimbabwe on the banned travel list. I am not familiar with the EU meeting to which the hon. Gentleman referred, but I do not see anything particularly sinister in a development meeting being held in a region where development is discussed.
Mrs. Louise Ellman: Does my right hon. Friend consider that the House should debate the growing anti-semitism coming from official Arab publications, some of which are available in this country? I refer to issues such as holocaust denial, the repetition of blood libels and the comparison of recent difficulties in Bethlehem with the crucifixion. Does he consider that this poses great dangers to civil liberties and has implications for our foreign policy?
Mr. Cook: I fully agree with my hon. Friend that we must condemn anti-semitism wherever it occurs and, wherever it occurs within British jurisdiction, we must make sure that the law is upheld and that no group has to witness statements that could inflame racial hatred or that might be an incitement to racial violence. I entirely concur that no such statement—whether it is against the Jewish or any other community—should be tolerated.
Mr. Nigel Dodds: In view of the suspension of devolution in Northern Ireland, how do the Government see Northern Ireland legislation being dealt with in the House? Such legislation would previously have gone through the Northern Ireland Assembly, so will he undertake that proper time will be given for due and adequate scrutiny and debate of such legislation? On Question Time, will he undertake that the amount of time allowed for questions to the Northern Ireland Office will be reconsidered so that we have more time to call Ministers in that Department to account?
Mr. Cook: If domestic legislation for Northern Ireland of the kind that previously went through the
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Assembly is required, we must make sure that it is fully scrutinised in accordance with the procedures and customs of the House. However, the House cannot pretend that it can fully replicate the length and depth of scrutiny that is available through the Assembly. Therefore, the sooner we get back on track and get the Assembly back into being, the better for all.
Dr. Julian Lewis: May we have a statement from the Chancellor of the Exchequer on the widely trailed suggestion that the Government are proposing to abolish the higher rate tax relief on pensions, which is over and above the annual £4 billion to £5 billion raid on pensions that has been under way for several years? We have heard much in recent days about the way in which the Government have failed young people—school students—at the start of their careers. Perhaps we need to hear more about what they are doing to pensioners at the end of their careers.
Mr. Cook: It is always good to end on the last question asked by the Opposition by trying to make an hon. Member happy, and I think I can relieve the hon. Gentleman of his anxieties. Treasury Ministers have made no decision on, and are not even considering, such a proposal. The hon. Gentleman should not believe all he reads in the Conservative newspapers.
Mr. Dennis Skinner: Is my right hon. Friend aware that although the Northern Ireland Assembly is suspended, its Members are being paid £29,000 for not going to work? Does he think that the firefighters should get the money instead?
Mr. Cook: There are serious issues relating to the firefighters' dispute, which is why we have urged them to go to a review that will consider pay and conditions together. As for those who are suspended and being paid, the same rule applies to Assembly Members as to firefighters: we are anxious to get back on track and end the dispute. The Government would not wish to take any action that we would inflame either situation.

Point of Order
1.6 pm
Mr. Simon Thomas: On a point of order, Mr. Speaker. You will have heard what the hon. Member for North Cornwall (Mr. Tyler) said about the refusal by the Secretary of State for Environment, Food and Rural Affairs to make a statement on the Johannesburg world summit in response to my oral question last Thursday. She chose instead to make the statement in a written answer to a planted question on Monday. Is it in order for the Secretary of State to turn down the earliest opportunity to give a statement to the House and to take advantage of a planted opportunity initiated by a Labour Back Bencher? What advice can you give Back Benchers who were in Johannesburg and want to hold the Government to account on what they said and did there, on how we can debate the matter in the House or Westminster Hall?
Mr. Speaker: The Minister was in order. The hon. Gentleman could apply for an Adjournment debate.

Local Government Finance
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Woolas.]
1.7 pm
The Minister for Local Government and the Regions (Mr. Nick Raynsford): I am pleased that it has been possible to arrange more time to discuss the complex and important subject of grant distribution to local government. I look forward to a lively debate and we will listen carefully to all that is said. I must apologise to the House that in the light of other pressing responsibilities, I will not be present for the entire debate, but the Under-Secretary, my hon. Friend the Member for Shipley (Mr. Leslie), will be here throughout.
1.8 pm
Mr. Don Foster: In the words of Magnus Magnusson, I have started so I will finish. In our earlier debate, I stressed that although we cannot remain with the current local government funding system and some changes are urgently needed, the full-blown changes should be delayed for a year to allow more time for reflection and consultation. I acknowledge that the consultation paper contains some good ideas. The willingness at least to change the area cost adjustment is welcome, as is the idea of minimum entitlement for funding per pupil or per head of the population. The Liberal Democrats have proposed that for a long time and we welcome the fact that the Government have embraced the idea, although they should go further.
We also welcome the greater recognition that is given to sparsity, but as my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) argued strongly and cogently, the sparsity element should be extended to apply to all service areas, not just to district council funding for environmental, protective and cultural services, for example.
The proposals raise many concerns. The options for change in the review paper were as complex as the old system. They were backed by scant information as to how weightings and other figures had been calculated. That was hardly conducive to good consultation. The various proposals have thrown up numerous anomalies in Government thinking, some of which are quite bizarre. For example, it seems that for the first time since Sir Robert Walpole and his excise Bill of 1733, we have a Government who are advocating the redistribution of resources away from the rural poor to the City of London.
There are already huge disparities in funding between one authority and another, yet in many cases the options will widen inequalities, not close the gaps. My local authority, Bath and North East Somerset council, for example, languishes almost at the bottom of the league table of funding for education. It rightly and rather mildly comments in its response:
"It therefore seems strange that the suggested options would increase the disparity between the lowest and highest funded LEAs even further than it is now."
There are many other examples. Newham currently receives three times the funding of Kingston and more than double the funds given to Richmond or Sutton,

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yet the review options generally leave those low-funded authorities with no extra resources, but will provide Newham with an extra £24 million for education alone.
Mr. Nick Hawkins: With reference to penalising the rural poor, penalising some areas and widening disparities, does the hon. Gentleman agree that in certain areas, especially in my county of Surrey, there will be particular problems where success is penalised? We have one of the most efficient police forces in the country and an extremely successful county council, yet under the Government's proposals, that success will be penalised further, to the advantage of inefficient Labour-run local authorities in inner cities. The Government are helping their friends in the north.
Mr. Foster: The hon. Gentleman has made the case for his constituents well. The redistribution that is taking place is a matter of great concern to many people. The Minister will say, of course, that the floors and ceilings mechanisms will provide a degree of protection, but we have still to hear from the Government how those arrangements will operate and for how long.
Many other examples exist. Gloucestershire is about 130th down the league table of funding for education, yet it looks set to lose about £8.5 million—the equivalent of £100 per pupil. It appears that, as the hon. Gentleman said, the worst-funded authorities are being set up to be the hardest hit. Those that are successful and provide high-quality services will also be penalised.
Mr. David Drew rose—
Mr. Foster: I hope the hon. Gentleman will accept that earlier, in less than 10 minutes, I gave five opportunities for intervention. I know that many other hon. Members want to speak, so if the hon. Gentleman will forgive me, I shall make rapid progress.
Other examples relating to the area cost adjustment show strange anomalies. Kingston, Merton and Sutton councils, for example, could not begin to figure out why they would be so badly hit by the proposals. It turns out that the Government had got their location on the map wrong and thought that they were in east London, when clearly they are not. I am delighted that, following representations, the Minister has acknowledged that there is a problem with the proposals, and I assume that he will agree to rectify them.
Mr. Edward Davey: I am grateful to my hon. Friend for making that point. In a private conversation after one of his excellent seminars, the Minister assured me that he was examining the matter. Will my hon. Friend take it from me that our labour market and labour costs in the borough of Kingston, and also in Merton and Sutton, are similar to those in west London? The simplest solution would be to place those three boroughs with the grouping in west London.
Mr. Foster: My hon. Friend has made his point admirably, so to save time I shall delete from my speech the remarks that I intended to make in relation to his
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local authority, and turn to my own to demonstrating how the Government seem to be giving with one hand and taking away with the other.
The Avon and Somerset police authority calculates that under the current proposals it will lose about £5.5 million, or 180 police officers. That contrasts oddly with the additional money—almost exactly the same amount—that it has been given through the crimefighting fund.
Other problems with the current formula are not being addressed. Deprivation, for instance, has not been dealt with as thoroughly as it should have been. As many hon. Members will know, the way in which the Government do their calculations means that pockets of deprivation in particular areas are not covered under the present mechanism, and will not be covered under these proposals.
Councils containing a mixed rural and urban community will often lose out as well. Kent county council is a good example. On the list of the 148 most deprived authorities, it is ranked 99th. It stands to lose between £10 million and £100 million, while other much less deprived authorities will gain.
Other anomalies are not being addressed. Of course we all welcome educational support for children from ethnic minorities, but according to the formula, it will be based on the total number of pupils whose first language is not English. In practice, the total number matters less than the number of languages spoken.
Many organisations and individual councils have expressed concern, including the Rural Services Partnership, the Most Sparsely Populated Councils Group and the f40 group, comprising the lowest-funded local education authorities. That last group is particularly concerned, and urges that the element of funding per pupil be greatly increased. I agree.
The real problem is that we are discussing equalisation arrangements relating to, on average, 80 per cent. of the money that councils will spend. Surely we all acknowledge that if the amount provided by Government were a smaller proportion, we would be less worried. If we want to reconnect the British people with their councils, and make them more interested and more involved in what their councils do, we must make them genuinely believe that their local councils are capable of meeting local needs. That surely means that we should increase the amount of councils' spending money that is raised locally, with a corresponding reduction in local income tax.
Dr. Evan Harris: Will my hon. Friend give way?
Mr. Foster: No, I want to make progress and finish my speech as quickly as possible.
The review has not even begun to address a number of other issues. One set of anomalies looks set to be replaced by another, and key issues such as local accountability, making the funding of services more transparent and making local taxation more progressive have been omitted from the agenda. The Government's proposals will lead to huge shifts of resources from rural to surburban areas. They are bound to raise the suspicion of pork -barrel politics.

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There is certainly a lack of confidence in the options for change with which we are being presented. They are patch-and-mend proposals. Surely, even at this late stage, some modest changes could be made immediately. Surely the Minister could put off by one year the full-blown implementation of whatever proposals will follow.
The Minister knows of my high regard for the former Secretary of State for Education and Skills, who resigned last night. In terms of personal and political honesty, she knocks spots off many of us. Only a week ago, she told the House clearly that she accepted what Mike Tomlinson had said about the A-level fiasco, namely that there should have been a one-year delay in implementation. Had there been such a delay, many of the problems need not have occurred She went on to say that one of the reasons why she had not delayed implementation for a year was that she received no representations from any quarter asking her to do so. If things go wrong in a year's time, as I predict they will, I hope that the Minister will acknowledge that at least we on the Liberal Democrat Benches gave him the opportunity to take action and warned him what would happen. One year's delay on the majority of the proposals would make a great deal of sense.
1.20 pm
Andrew Bennett: It is said that to have loved and lost is better than never to have loved at all. I am not sure whether the Minister will feel that having attempted to reform local government finance—and, I am afraid, having failed to do so—is better than not having tried at all. The cynic in me says that what he has done so far is unite almost the whole House in anxiety and worry about the proposals, so that they will be a little less bad than we expected and we will be relieved. However, I hope that he will consider the fundamental problem. I pay tribute to him for the huge effort that he has put into the seminars, the consultation and everything else. That is great, but I think that he is looking at the wrong position. He has considered the distribution of the grant, but I think that he must deal much more fundamentally with local government finance.
The trouble is that local councils have been starved of resources. It is that which starts the problem and explains why local government is now held in disrepute. Social workers are now rationers rather than helpers. There are problems of boredom among young people in almost all our constituencies, but the youth service is terribly underfunded. On recycling, we have the poorest record in Europe, again because of underfunding. Local authority spending is also pretty bad on roads, highways and rights of way. Too many parks are now icons of neglect rather than of civic pride. That has happened because almost all local government finance is now obtained from a grant and there is no opportunity to raise the money locally. It is that inability to raise money locally that people feel to be unfair.
I invite the Minister to come to the Bull's Head in my constituency. It is located just inside Stockport, but Tameside is visible from the front door and Manchester from the side door. If he could visit the Bull's Head and explain to my constituents and those of my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) how the system is now fair, I would
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think that he was wonderful. I am afraid, however, that he will find it very difficult to do so. When he considers the different amounts that people sitting next to each other pay—most in the area will come from band A properties—and sees the disparity between Stockport, Manchester and Tameside, he will understand why there is a feeling that things are not fair. The differences between those three authorities are not huge, but when local people find that people in Wandsworth pay half the amount that they are paying, they begin to think that something is going fundamentally wrong.
People then ask how much is being spent. They find that there are significant differences between the three local schools, which are situated within a mile of each other, but are located in each of the different authority areas. At primary level, £2,206 per pupil is spent in Stockport, £2,360 in Tameside and £2,623 in Manchester. That puzzles people, but when they find that a lot more is spent on schools in Wandsworth, they think that it is fundamentally unfair. At secondary level, the difference between pupils in Manchester and Stockport is more than £800 per pupil. Even worse, if pupils come from Manchester to Stockport for their education, they get mugged at the border because they do not bring that full £800 with them to a Stockport school, but will get only the expenditure in that school. I hope that that little anomaly can be altered.
Mr. Patrick McLoughlin: Will the hon. Gentleman give way?
Andrew Bennett: I shall not do so; with only eight minutes, it(is hard to get my points across.
I have to say to the Government that the present system is unfair and very difficult to understand, but we have to recognise that it is a legacy of the poll tax. That is when the spending started to come down, and when local authority control of spending changed so dramatically: local government finance changed from about 50 per cent. coming from local funds down to a very small proportion.
I pay tribute to the work done by Coventry in demonstrating that, of the extra money that has been going to London for education, about half seems to be spent on schools—which is great—but the other half is being spent on bringing down the council tax in London. That is grossly unfair.
My plea to the Minister is for a new, buoyant source of local government funding, and, until we have one, we will be in difficulty. I know that we have the business improvement areas, but that is earmarked money. It might also be possible to put a tourist tax in place, but if the Government cannot come up with a new form of funding, let them at least return the business rate to local authorities.
I also make a very strong plea for the Government to look at the council tax bands. I know that, if we have lots and lots of bands, we shall be going back to the old rates system, but the old system was far fairer than the present council tax system in areas such as mine. We need at least to have bands A, A-and A* at one end of the range, and we probably need more bands at the higher end as well. We need more frequent valuations, and we need to question how much money is going to the Audit Commission. There is no point in having huge numbers

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of inspections if local authorities have not got the money to deliver good services. The Audit Commission is getting far too expensive.
I would also make a plea for us to think about taking education funding out of local government finance. It seems sad that we should have such a complicated mechanism, rather than a much simpler per capita payment. If we have a class of 30 children, for example, we need a substantial amount of money for that. The variations for particular education needs should be much smaller.
I would simply plead with the Government in these terms. We need to take a much more fundamental look at local government finance. We need to restore local government, as opposed to local administration. Only if we can get a full, fundamental review in place will we restore people's confidence in local democracy. I applaud the efforts that the Minister has made, but I fear that, so far, he has lost.
1.27 pm
Sir Paul Beresford: It is delightful that we have longer for this debate than we anticipated, but it is sad that it is still so short. This could have been an opportunity to explain to the Chairman of the Select Committee, the hon. Member for Denton and Reddish (Andrew Bennett), that competent authorities can get their expenditure down and the quality of their services up, and that that might be reflected in the differences in council tax.
The final figures will tell us whether the scheme works, and the final figures will be the real test over time. I hope that, after what he has said today, the Select Committee Chairman will agree that we need to launch an inquiry, presumably mid-way through next year after the grants have been confirmed and the council taxes settled, but before Ministers' minds are set on the following year.
Many Conservative Members smiled sweetly and knowingly when the Minister said that he was setting out on this venture. He has told us repeatedly that standard spending assessments were terrible, complicated and unfair, and he promised us a better, simpler system that would be more intelligible and based on formulae. Last week at the seminar, the brave man repeated that. I have not yet found a council treasurer, even a tame one, who agrees with him. Of course, the Minister will say that we need to wait for the result, and there is a measure of truth in that.
The Minister has made some personal progress. His bravado has diminished a little, and he said at the seminar that he recognised that not every council would be pleased; in fact, he said that it was possible that not a single council would be pleased. As many of us know, under the standard spending assessment method, the winners kept exceptionally quiet—except for the occasional moan to save face and set markers for the following years—and the losers complained. They said that the system was unfair, too complicated, and so on. That is exactly what we have been hearing from the Liberal Democrat Front-Bench spokesman this afternoon.
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The Minister has accepted, however, that the basis of distribution must be ascertained using some form of need factors and, promisingly, he has assured us that there will be a reduction in the enormous proportion of subjective grants that have grown up under his Government. At least there is a veneer of needs, but it looks a little thin when we inspect the environmental protection and cultural services block that is so vital to district councils. It used to have an at least plausible link to expenditure, but not now. In this and several other areas, any link seems to have been abandoned in favour of subjective judgment—otherwise known as ministerial whim.
The Minister has almost always promised simplicity. That is a bold gesture, but as we heard from the Liberal Democrats, the problem is that, with so many variations nationwide, simplicity results in crude, ineffective and in some cases unfair decisions and judgments. However, as the Minister said last week, some rough justice is inevitable. Rough justice can be removed and fairness introduced only through more complexity. A scheme involving the division of funding by needs factors is either simple—with areas of perceived and perhaps genuine injustice—or fairer but consequently more complicated.
The Minister has more complications to deal with than we had when in government, because he has lost control of many of the levers to many other Departments: the Department for Education and Skills, the Department of Health, the Department for Environment, Food and Rural Affairs, and goodness knows which others at the rate things are progressing. Each has its own indicators, and each, seemingly, its own floors. None appears to have any relationship to the other Departments; and sometimes there is not much relationship to the local area.
As everybody will know, many councils are panic-stricken by the options. Some anticipate huge—really huge—council tax rises, just to stand still. The Minister has helped. His promise that nobody will lose formed the basis for his reintroduction of the use of floors. That promise has brought some relief, but it is also viewed with some cynicism. Many are worried about whether specific grants will be taken into account. Last Wednesday, under pressure, the Minister helpfully explained that he expects the floors to be high enough next year to at least cover such losses. I hope that he is right. If this promise is not fulfilled, Surrey councils, the south-east and London will be hit hard. A floor involving a zero increase in grant to Surrey could mean a nigh-on 20 per cent. increase in council tax. That estimate ignores any little events such as the firefighters' pay rise.
Even though he has not been a councillor, the Minister will doubtless recognise that cutting budgets and adjusting services, especially through efficiencies, takes considerable time. This year, local authorities have been left at sea; they have been given absolutely no indication of floor levels, even when the Minister was pressed on the matter last week. However, the fact remains that, if his formula is as accurate as he says, the floor that protects loser councils this year will be progressively lowered. In some cases, potentially great pain will be caused to their residents and businesses. I accept that there are huge possibilities in terms of efficiency savings in local government expenditure, and

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as a taxpayer and an ex-councillor, I wish that the Government and local government would exercise their minds much more in this direction. I am sick and tired of standards in public services being judged on the amount of other people's money that is spent on them.
The Minister had many complaints about SSAs, but they are coming back through his scheme. It is based on factors of doubtful definition, multiplied by weightings of dubious origins. It is further complicated by floors and ceilings, and although it is not called an SSA, it is rapidly looking like a sibling or twin.
1.33 pm
Mr. Neil Turner: My right hon. Friend the Minister rightly stressed the importance of getting the formula right. If we do not, the Government will not achieve their aim of tackling and eradicating the inequalities to which deprivation and social class give rise. I want to concentrate my remarks on the education block, not just because it is such a high priority, or because it constitutes a large amount of local authority expenditure, but because, if we do not get it right, we will deny the opportunities that a good education can give to all our children in terms of breaking the cycle of deprivation that scars so many of our communities.
The excellent Department for Education and Skills document "Investment for Reform" sets out the problems starkly:
"We continue to have one of the greatest class divides in education in the industrialised world. A socio-economic attainment gap is evident as early as 22 months and widens. In English, schools with under 8 per cent. of pupils eligible for free school meals see nearly 81 per cent. of their pupils achieve the expected level at key stage 3. The equivalent figure for schools with over 50 per cent. of disadvantaged pupils is 39per cent."
Later, it states that
"the stubborn link between social class and educational achievement persists. 70 per cent. of children whose parents are in unskilled occupations fail to achieve five good GCSEs, compared to 31 per cent. of children whose parents are from professional or managerial occupations."
Those quotes are apt descriptions of Wigan, and they are apt descriptions of many towns and boroughs in the north-west, the north-east and the midlands, where heavy industries have declined or vanished. But they could equally describe towns in the south-east, the south-west and London. This is not some sterile and divisive debate about town versus country or north versus south; it is about trying to make sure that we eradicate deprivation throughout the country and achieve a fair society for all our children.
Wigan has high levels of deprivation; 90 per cent. of its wards are included in the 20 per cent. most deprived in the country. We have low staying-on rates for pupils moving into further education. Crucially, we have had low levels of funding over many years under the existing standard spending assessment formula. The council and the local education authority have not used that as an excuse for poor performance. They have risen to the challenge, managing to produce better results than the socio-economic make-up of the borough would lead one to expect. The council has intervened successfully where schools have been seen to be failing, such as Kingsdown high school where support from the LEA, other schools and the council has resulted in a 400 per cent.
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improvement in just two years in its GCSE results. It is small wonder that the authority achieved a three-star rating from Ofsted.
The solutions to such deprivation that are proposed in the consultation paper are all detrimental to Wigan, and to the north-west as a whole. How can one of the most deprived boroughs, which already spends £6 million more on education than the current SSA level to correct the faults inherent in that system, be deemed to be in need of less? It is bizarre, and it is perverse. The application of a simple "reality test" would have shown that each of the options failed to achieve the targets that the Government had set out to achieve, and therefore contained fundamental flaws.
We need to be absolutely certain that the proportions within the overall additional educational needs block accurately reflect the need to spend on those elements, and I would hope that serious questions will be asked about that and the possible consequences of getting it wrong. More specifically, I believe that that there are three areas where changes need to be made if we are to get a positive result to the application of that reality test.
First, we need a broader and more accurate definition of deprivation. The use of income support and working families tax credit alone does not pick up many of those in need. The Department for Work and Pensions investigations indicate that there are large regional variations in those claiming income support, as those on incapacity benefit and disability living allowance do not claim that benefit. The DWP basket of key benefits—including jobseeker's allowance, incapacity benefit, disability living allowance and severe disablement allowance—has a 95 per cent. correlation with child poverty, a much higher correlation than any other measure. The use of that as the basis—or a measure of the economically inactive—will pass the "reality test", as it will achieve what the Government set out to achieve.
Secondly, a radical rethink of the area cost adjustment is needed. Nobody doubts that there is an extra cost involved in employing people in certain parts of the country, or denies that those authorities need additional money to reflect that extra cost. The proposal in the initial consultation to use house prices would be wholly wrong; they are far too volatile and, in any event, people do not pay mortgage on the increase in value of their property. More importantly, fuelling the demand side of the equation without tackling the supply side merely adds to price increases, thereby leading to demands for more ACA money; and so the spiral goes on and up. Surely it would be more effective to use public and private sector pay, capped at the public service level, to ensure that the area cost adjustment bore much more relation to the amount required by the authorities, so satisfying the reality test better.
Thirdly, we need to factor in an element that affects the current lack of adult literacy and numeracy skills. I know the argument against this—that we need to have a measure of the problems of the children, not those of the parents—but that is an academic, angels-on-a-pinhead type of argument. Of course, there are children from working-class backgrounds who manage to break out and go to universities—many of my hon. Friends have done so—but we should remember what the

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"Investment for Reform" document said about the link between social class and lack of educational achievement. It can be broken, but in most cases it is not.
The child from a home that is without books because the parents have weak literacy skills will always be at a disadvantage. We should set aside the intellectual argument and recognise the reality of life in many homes. Far too often, teachers have to start from scratch with children from such backgrounds and despite their best endeavours they never catch up. If the formula does not recognise that simple, self-evident fact, so well described by the Department for Education and Skills document, we will not achieve our objective of closing that great class divide.
The current options fail to deliver what the Government want. If the specific changes that I have outlined were incorporated—widening the definition of deprivation, ensuring the ACA properly reflects real costs, and recognising that parents with poor literacy skills will have children with poor literacy skills—we would give local authorities a fairer distribution and allow them to tackle the problems of despair, crime, and lack of ambition and opportunity that come from deprivation.
1.41 pm
Mr. Michael Portillo: I join the hon. Member for Denton and Reddish (Andrew Bennett) and my hon. Friend the Member for Mole Valley (Sir P. Beresford) in saying that I think the Minister of State is very brave to search for a simpler and fairer system, albeit one that is not very wise and unlikely to be successful. As one who once held the same office, may I say that I hope he emerges from the process without being suspected of being merely partisan?
Today, however, I wish to make a narrower speech on behalf of my constituency, including the Royal Borough of Kensington and Chelsea, which I share with the hon. Member for Regent's Park and Kensington, North (Ms Buck), who is in her place. No authority is more at risk from the Government's proposals. The Government's review puts 20 per cent. of the royal borough's grant funding at risk. In all, £39 million is at stake, which is the equivalent of 70 per cent. on the council tax or cuts in services.
For that reason, I have pressed the Minister of State on the question of floors and ceilings. He has said clearly that the floor will apply without any compensation for inflation for the first year. However, while there will be floors and ceilings in subsequent years, there are no guarantees about the level at which they will operate. One can expect a transition from the present position to the new position at a considerably higher rate than the effect of inflation year to year. That is why it is right for us to say how much is at stake and express our anxieties, and to refuse to take any great reassurance from what the Minister of State has told us so far.
The Royal Borough of Kensington and Chelsea has lost £13 million from its grant entitlement over the past two years thanks to the operation of a ceiling that is already in place. I thought that it would be right for the Minister of State to discuss that matter with me, as a Member of Parliament who represents a borough that
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has been greatly disadvantaged. I am sorry indeed that it is the Minister of State's policy not to discuss those questions with Members of Parliament. When I held his office, that was regarded as one of the most basic courtesies. It was my principle—widely shared among those in the Government—that if Ministers were doing things that made life very difficult for our citizens, they had a duty to listen to the likely results of the policy. I learned much from that process, and the Minister of State would learn much if he followed that practice—not least, better inter-personal skills than he at present possesses.
Mr. Adrian Bailey: Will the right hon. Gentleman in give way?
Mr. Portillo: No, because I only have eight minutes. Otherwise I would love to do so.
My borough has received some huge accolades with which I am delighted, and I pay tribute to all those who have worked so hard to achieve them. For example, the Ofsted report on Kensington and Chelsea's education system said that the borough spends a lot of money very effectively. The hon. Member for Denton and Reddish thought that some areas might use standard spending assessment money to reduce council tax, but we do not: we use the money to improve education.
The problems in central London are very difficult. Of our primary school teachers, 32 per cent.—very nearly one third—move on each academic year. That is not because we are a poor education authority. We are doing well, but mobility among teachers remains very high. That definitely needs to be recognised.
The hon. Member for Bath (Mr. Foster) mentioned the need to recognise the number of languages spoken in schools. In Kensington and Chelsea's schools, 97 different languages are spoken, 46 per cent. of pupils have English as a second language, and 35 per cent. of pupils are entitled to free school meals. We must maintain measures of our school population that relate to that population and which are not broader measures of economic deprivation. We need to focus on the schoolchildren themselves, and on the difficulties that they face. Pupil mobility in some of the borough's schools is as high as 40 per cent. That problem has been recognised by Ofsted, and should be covered by any future formula.
Kensington and Chelsea has the highest population density in England, and the borough receives 32 million visitors annually. There is a net inflow of 35,000 commuters a day, which places high demands on our services. For example, given its population, the borough has six times the usual amount of non-household rubbish, and traffic congestion makes rubbish collection much more expensive. The borough receives almost six times the normal number of noise complaints, because people live side by side with businesses.
The borough's social services gained a three-star assessment, a success achieved by only seven other local authorities in the country. Moreover, the borough was said to be serving people well, and to have excellent prospects for the future. Only two authorities in the country received that accolade. In other words, the borough is performing well, and using its resources well. It has been successful, and I echo the sentiment,

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expressed earlier by the hon. Member for Bath, that success should be reinforced and not penalised. However, despite the borough's successes, the Government's options could cause it to lose up to £19 million for environmental protective and cultural services, £8 million for social services, and £3 million for education.
I shall close by saying that those problems could be dwarfed by the difficulties that arose with the census—a matter raised at business questions by the hon. Member for Manchester, Blackley (Mr. Stringer). There were extraordinary problems with this year's census. I consider them to be palpable errors, and believe that they will feed through into cuts in services for the borough's population.
I shall quote from a letter about the census written by the hon. Member for Regent's Park and Kensington, North to Mr. Len Cook at the Office for National Statistics. The hon. Lady states:
"Given the extremely poor performance of the census enumeration process in my constituency, I was not in the least surprised that the returns were so low."
In Kensington and Chelsea, the response rate was only 64 per cent. The error rate was nearly 5 per cent., and 31,000 inhabitants disappeared from the total suggested by the recent mid-year estimates. That is simply preposterous.
In her letter, the hon. Member for Regent's Park and Kensington, North went on to ask:
"Why would the Mid-Year estimates be accurate in Hackney, for example, but not in Westminster, Kensington and a few other areas, unless the root of the problem is the absurdly low initial contact rate, leading to an impossible challenge for the imputation process?"
I entirely agree with that. There has been an extraordinary amount of difficulty with what the Government propose in their formula changes. That has been compounded by what appear to be very substantial errors, which can only be put right with great difficulty, in the census enumeration process.
1.49 pm
Mrs. Janet Dean: I welcome the Government's commitment to reviewing the local government funding formula, but I recognise that it will be difficult to achieve a solution that will satisfy a majority of authorities. Nevertheless, it is vitally important to use the one-off opportunity presented by the increased amount of finance available for local government to address the problems inherent in the current SSA system.
As a Staffordshire Member of Parliament who was previously a county and borough councillor, I know that there have been grave concerns about the relatively poor funding in Staffordshire for many years. Those concerns are not about education funding alone, but it is the perceived unfairness in the amount of money available for educating our children that has so outraged parents, governors and teachers in areas such as Staffordshire. That unfairness was clearly demonstrated by one head teacher in my constituency who, in response to the recent consultation, said:
"Until a year ago, I was a headteacher in a similar size comprehensive school in Sutton Coldfield and received £500.000 more per year than I do in Staffordshire."
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Neither parents and teachers in Staffordshire nor I understand the reason for that difference in funding. We do not accept that there should be such a large gap between the amount of money available to educate our children in Staffordshire and that in some other authorities.
Along with the dozens of my constituents who have responded to the consultation, I support the option 5 proposal put forward by f40. I pay tribute to my colleague from Staffordshire, my hon. Friend the Member for Stafford (Mr. Kidney) for the work that he has done in this respect. Of the four options put forward in the consultation document, only option 2 begins to address fair funding. The other three options would leave Staffordshire worse off.
Sir Patrick Cormack: I am extremely grateful to the hon. Lady for giving way—of course, there is a little injury time. I should like to underline her comments regarding the tribute to our colleague the hon. Member for Stafford (Mr. Kidney) and the widespread feeling throughout Staffordshire, which crosses all party boundaries.
Mrs. Dean: I thank the hon. Gentleman.
On the specific points in the consultation, I believe that it is right that working families tax credit or its replacement should be used to recognise deprivation, not just in the education funding formula but in areas such as social services and EPCS. With the drive to get people into work, it is logical to use the working families tax credit as a measure of need to reflect the fact that those on low incomes have similar requirements to those who are unemployed.
With regard to the area cost adjustment, I support Staffordshire county council's view that to base the education area cost adjustment on house price variations would not accurately reflect increased living costs. It would also be unwise to base any adjustments on such a variable factor. Although I support ACA2, I am disappointed that all the options for the area cost adjustment are based on the general labour market theory. I believe that it would be better to recognise the average wages in the public sector, especially since large groups of local authority employees such as teachers, police officers and firefighters are on national pay scales. It has been said that it is difficult to use specific costs because of the difficulties for some authorities in recruiting and retaining staff. However, it should be recognised that the wage bills in authorities such as Staffordshire can be high because of the low turnover of staff. Some 72 per cent. of classroom teachers in Staffordshire are on the top of the main scale or have progressed through the upper pay spine.
The disadvantages faced by Staffordshire schools are demonstrated by the authority's pupil-teacher ratios. The average figure in primary schools in Staffordshire is 23.2, compared with 22.5 for England. Secondary schools are similarly disadvantaged, with pupil-teacher ratios of 17.3 compared with 16.9 for England.
I have grave concerns about the proposals for resource equalisation if the result is to reward authorities which have traditionally been high spenders and which have spent above the standard spending assessment. Others, such as Staffordshire, which have stuck to the rules in the past should not be penalised. We should be looking at need rather than historical spend.

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I cannot overstate the strength of feeling in Staffordshire, particularly with regard to education funding. Many parents recognise the extra funding for schools; indeed, it is important to recognise that the above-inflation increases that we have received in recent years are reflected in improvements in our classrooms. Between 1992 and 1995, Staffordshire's teaching force fell by about 5 per cent., while pupil numbers rose by about 4.7 per cent. That situation was completely reversed between 1999 and 2002, with pupil numbers falling by 0.8 per cent., while teaching staff increased by 4.1 per cent. However, the gap between other shire counties in the south-east and authorities such as Staffordshire remains totally unacceptable. I hope that the strength of the arguments made by the f40 group, the northern alliance and authorities such as Staffordshire will be recognised and acted upon by Ministers.
Briefly, on the options for change for other services, I support the response of Staffordshire county council to the consultation regarding social services, fire and highway maintenance, as well as option 3 for EPCS, which is supported by both the county council and East Staffordshire borough council.
There is concern in Staffordshire that the great strides that have been made in recent months in improving policing may be jeopardised by several of the options put forward. Staffordshire police authority could lose more than £5 million in the worst-case scenario. While I recognise that any changes to the formula would be phased in, I hope that Staffordshire is not disadvantaged by a new formula. Therefore, I support police formula 1 and believe that the sparcity component weight should be increased to at least 1.4 per cent. to avoid losses to rural police authorities with the incorporation of the rural police fund into the main formula.
I hope that in their forthcoming consideration of the representations that have been made to them, Ministers will take into account the concerns of residents of Staffordshire.
1.56 pm
Sir George Young: Many of the contributions to this debate will understandably focus on the problems of individual constituencies, as we have heard from the hon. Member for Burton (Mrs. Dean) and my right hon. Friend the Member for Kensington and Chelsea (Mr. Portillo). I will make some generic points that, I hope, have a wider application, illustrating them by reference to the impact on Hampshire, which will be deeply unpalatable. I see that my hon. Friends the Members for Aldershot (Mr. Howarth) and for Gosport (Mr. Viggers) are in their places.
My first point concerns the council tax. In the past 10 years, there has been a consensus that that tax is an acceptable way to fund local government. A similar consensus used to exist in relation to rates, but it evaporated when too much weight was put on them, and there was never any consensus for their successor. The council tax is rather like the rates—it is bridge with a weight limit. It can cope with a certain volume of traffic, but when some of the loads get big it begins to crumble. Although people accept that the council tax is fair at the
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moment, it is a regressive tax. People on lower incomes pay a far higher share of what they earn than the better off, and the relationship between ability to pay and the value of the property in which one lives is imperfect. That does not matter as long as the sums involved are relatively small and there is broad confidence in the revenue support grant, but if these changes bring about major increases in the council tax in many parts of the country, and those changes are perceived to be unfair, the Government may find themselves confronted with a much wider debate. The genie may be out of the bottle and the consensus broken. The Government will then have to find a new way to fund local government.
Secondly, the Government have made it clear that they have a commitment to drive up standards in public service, particularly in education, but the impact of the more radical proposals for redistribution would make a nonsense of the Government's ambition not only in my Hampshire constituency but across huge swathes of the south-east. What the Chancellor bestoweth in his Budget, the Deputy Prime Minister taketh away in the revenue support grant settlement. Hampshire could be £80 million worse off, which is the equivalent of two teachers in every school. There is no way that Hampshire can invest in education and social services as the Government want if its financial foundations are eroded in that way. The Budget speech and the comprehensive spending review would be exposed as empty rhetoric.
Thirdly, it is not only the Deputy Prime Minister who plans to redistribute resources away from my constituency. The Secretary of State for Health is doing exactly the same. For every £100 spent by the NHS on the average constituent, my constituents get £83. The areas that stand to lose under these proposals are the same ones—all around London—where health trusts are struggling to balance their books. That means that in the key sector of community care where social services and the NHS meet, both are looking for economies. Health and education, the Government's top priorities, face a grim outlook in Hampshire and elsewhere.
Fourthly, what is proposed in the consultation document is a sensational redistribution of resources with the minimum of scrutiny and debate. The RSG is larger than the budget of many Departments and, indeed, larger than the budget of some countries. By changing the formula and presenting some of the changes as technical adjustments, a major and ill-targeted redistribution of wealth is taking place on the basis of the slenderest of intellectual justifications.
More than £304 million is being taken from a group of people who happen to live in one part of the country and given to a group who happen to live in another. Furthermore, that second group already lives in areas where spending levels are way above average. Public spending per head in the north-east of England is £1,148 more than in Hampshire. A Hampshire teacher will contribute towards 47 per cent. of the county council budget whereas a teacher in Durham will contribute towards 20 to 25 per cent. That is a geographical stealth tax.
Fifthly, the proposals will exacerbate the problems of public sector recruitment in the south-east, where it is essential to meet the Government's targets. Local authorities will be unable to afford competitive wages for the staff they need, in areas where it is already

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difficult to recruit, and the public servants who are recruited, who already face high housing costs, will have to pay higher council tax bills. Yes, deprivation is one side of the coin and must be recognised, but the cost of service delivery is the other side and should have equal recognition if we are to have a fair system.
Chris Grayling: Will my right hon. Friend give way?
Sir George Young: Briefly—there is a cap on my speech.
Chris Grayling: I am sure that head teachers in my right hon. Friend's constituency will share the concern of the head teacher in my constituency who wrote to me this morning. She told me that substantial council tax increases would have a "disastrous effect" on standards and morale and would make a difficult recruitment situation much worse. I suspect those sentiments are shared by people throughout the home counties.
Sir George Young: Indeed. Teachers in many constituencies could have written that letter.
Sixthly, the implications for police authorities have not been mentioned much in the debate but they will have a serious impact in Hampshire. We could lose £10.4 million, which would mean a tax increase of about 22 per cent. to compensate. That would make a mockery of the Home Secretary's ambitions on the law and order front. The chairman of the police authority wrote to me:
"There would be little or no chance of any increase in the provision of the policing service across the two counties"—
Hampshire and the Isle of Wight—
"next year…We fear that this will reverse many of the initiatives funded from the crime fighting fund and the rural policing fund."
I should like the Minister to answer this question: whichever option is chosen, does he expect Hampshire to put up council tax to compensate for the loss of grant entitlement, or does he expect the authority to hold the increase to 6.2 per cent. and cut services?
May I make some helpful suggestions? First, the Government should validate current spending where the SSA is unrealistic—as in social services where everyone agrees that it is inaccurate. Secondly, they should fund the extra area cost adjustment from Government funds, instead of making the home counties pay for it. Thirdly, as far as possible, they should allocate grant by examining basic entitlements to standard services, instead of tweaking the formula with a whole lot of subjective judgments. Fourthly, they should remove the double counting of deprivation. Finally and crucially, they should leave the system as it is and reconsider it during the next year.
In conclusion, I have deep sympathy for any Labour candidate for a Hampshire seat at next year's local elections or at a more distant general election. These proposals are a serious mistake, which the Government may live to regret.
2.4 pm
Mr. Paul Truswell: I have listened with great interest to some of the contributions from Opposition Members, but the message that should come from the review is "The party's over." For those of us looking from the north at the current system it seemed that its architects, the previous Conservative Government, had told their civil servants, "Here are the results, now go away and come up with the formulas." That gerrymandering jamboree has been paid for, in my area of Leeds, with higher council taxes and fewer services.
It is tempting to cherry-pick the options in the consultation paper for the benefit of one's own authority. Leeds has resisted that temptation and has thrown its weight behind the proposals made by SIGOMA—the special interest group of municipal authorities outside London. Those proposals do not maximise the advantages for Leeds, but they are based on a sustainable series of arguments. The concern in Leeds is that it could gain about £12 million —a mere £18 per head in the best-case scenario—but lose up to £18 million in the worst.
The SSA system has long been riddled with flaws and anomalies. For example, we in Leeds find it amazing that some London authorities receive up to £2,000 more in education SSA per pupil than we do, yet Leeds has seven of the most deprived wards in the country. Indeed, its SSA is currently £79 per head less than the average for its class of authority.
SIGOMA has produced some cogent proposals and responses to the consultation paper and has made some sound arguments about how the system should he changed., and I wish to speak in favour of them.
On education, Leeds welcomes the proposal for unmet as well as met need to be included in the calculation. We certainly share SIGOMA's regret at the lack of a more sophisticated measurement of need, and support the arguments in favour of including the index of multiple deprivation.
On social services, large increases in SSAs were promised in the 2002 spending review, but unfortunately, under the consultation document, the benefit will be largely lost to Leeds. The Government will be only too aware that an increasing number of care homes in many areas—Leeds is a perfect example—are closing clown because of insufficient income, putting massive additional pressure on local authority services and finances. That, coupled with the Government's proposal to penalise local authorities in connection with bed blocking, puts local authorities in an increasingly difficult position. It is crucial, therefore, that the Government address that issue and do not simply give with one hand and take with the other.
There are other anomalies. For example, the present formula uses the proportion of children living in flats as a good measure of deprivation in working out social services SSA, but that indicator gives implausibly large sums of money to authorities in London. In fact, it gives Westminster £206 for every child but Leeds a mere £9 a child. Where is the factor that takes account of the large number of back-to-back and terraced homes in Leeds? It simply does not exist.
On highways maintenance, the Government have 10-year plan targets to halt the deterioration in the condition of the roads by 2004, and to eliminate the

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maintenance backlog by the end of 2010. The resources available to authorities such as Leeds are insufficient to deal with the backlog of road maintenance. I am afraid to tell my hon. Friend the Minister that the consultation proposals will simply deepen the problem and the potholes. The new formula clearly needs to reflect population density. The cost of maintaining a densely populated area is demonstrably greater than the general cost of maintaining urban areas and is totally independent of traffic volume. SIGOMA, backed by Leeds, also believes that the threshold on traffic flows should be retained. Heavy vehicles clearly cause the greatest damage, and the more there are, the greater the damage.
The Government's fixed costs option—top slicing £300,000 for the cost of simply being in business and allocating that sum across the board to local authorities—is simply unjust and unfair. Unless the mechanisms by which it is calculated can be rationally weighted, the idea should be rejected outright.
Resource equalisation is another crucial element of the debate from the Leeds and SIGOMA point of view. The gap between local authority current needs assessment—SSA—and actual spending amounts to £3 billion, which has to be met locally from council tax. This year, Leeds will spend more than £10 million above SSA on education and £18 million more on social services.
We therefore support the measures required to introduce some equalisation into the system. We believe that the most appropriate way of updating is by using a fixed percentage increase to eliminate the gap between notional spending and actual spending. That is reflected in the consultation document's first resource equalisation option—RE1. However, specific funding is needed from outside the system to achieve fair equalisation; it cannot be achieved with the existing elements.
A number of colleagues have mentioned the area cost adjustment. That probably represents the single greatest cause of injustice and anger in the present system. [HON. MEMBERS: "Hear, hear."] ACA—I am sure that this message will come from everyone, except perhaps the authorities that currently benefit from the system—needs to be clearly linked to real circumstances experienced by real local authorities living in the real world. It cannot continue to be based on a convenient mythology, which is the hallmark of the present system. It is extremely disappointing that such an option has not been included in the consultation document.
The ACA factor has been demonstrated through research to overcompensate authorities in terms of actual costs. Additional resources, despite protestations across the House, have been used to keep council tax down rather than to meet needs and improve services. Any new ACA option should take account of wage pressures not only in the south-east but on a regional basis. In addition, the present approach makes far too many assumptions about the impact of private or general market pay levels on what local authorities have to pay.
Options that include only private sector pay information are totally implausible and unacceptable. It is patently absurd that the calculations should include
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all private sector pay up to the highest level. There must be a rational cap. London councils are not in a market competing for the services of people like the Governor of the Bank of England, Knightsbridge grocers, millionaire novelists, whether in or out of prison, or even novelists who are in or out of bed with certain people.
In conclusion, the message must be that the party is over. It is time to call it a day on a system that has cheated so many people and authorities for so long.
2.12 pm
Mr. John Burnett: I join other Members who paid tribute to the hon. Member for Stafford (Mr. Kidney) for his sterling work on the f40 group. I commend to the Minister, if I can catch his eye, a work entitled "The Fiscal Crisis in the United Kingdom" by Professor Iain McLean and Alistair McMillan of Nuffield college, Oxford. It is an independent and extremely well-researched paper. It shows conclusively how badly the west country is treated in the apportionment of Government investment within the United Kingdom. I endorse, also, the comments made by the hon. Member for Wigan (Mr. Turner) on area cost adjustment and by the hon. Member for Burton (Mrs. Dean) on the matter of resource equalisation.
On 15 October we had an Adjournment debate on option 5 funding for Devon. We put forward the points raised by the f40 group. The Minister for School Standards, set out the additional expenditure that Devon and other local authorities have received. I recognise that. It is quite apparent in my constitutency, especially capital expenditure on the fabric of school buildings. Yes, there have been significant improvements. After 30 years of neglect our school buildings are getting better and there has been additional expenditure on education. However, I remind the Minister that Devon is one of the few local authorities with an expanding population. The funding review of local government finance is the most important for over a decade. It is of critical importance to the services that Devon county council provides, to the council tax payers of Devon and to the buoyancy of the Devon economy.
In the time available I want to cover some of the major points. On education funding, as the hon. Member for Totnes (Mr. Steen) said in his Adjournment debate, we in Devon receive about £195 per pupil per year less than the national average. Devon county council has to spend about £19 million a year on school transport. Effectively all four of the options in the Government paper leave us substantially worse off. We end up worse off than we are now.
There is a huge head of steam building up in Devon on this matter. I, like most other Devon Members, have received more letters from constituents on this than on any other matter. On 16 July I and other Devon Members took a delegation of head teachers, governors and others to 10 Downing street to present a petition to the Prime Minister. He listened to our points. I and hundreds of thousands of people in Devon hope that he acts on the evidence that we presented.
We support option 5 which is being proposed by the f40 group. There is a powerful all-party consensus of a great many Members who are promoting this option.

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I believe some 200 Members are behind it. In a nutshell we want, first, to maximise the amount per pupil. Secondly, if the formula is to provide for deprivation, not just for education, but also for other services, working families tax credit should be included as a measure, as well as income support. The Government have indicated that they are predisposed to allow this change. The case is compelling. Working families tax credit in conjunction with income support is a far better measure of deprivation and should be used throughout the formula. Income support measures unemployment. Working families tax credit measures those on low pay. Deprivation affects those on low pay as well as the unemployed.
Mr. Hugo Swire: Is it worth pointing out that average wages in Devon are 20 per cent. below national average?
Mr. Burnett: That is an extremely good point and the hon. Gentleman will not be surprised to know that I am going to make it. Low pay in Devon arises from seasonal work and poorly paid employment.
The use of working families tax credit within the grant distribution formula reinforces the Government's objectives of getting people into work and supporting those on low pay. The inclusion of working families tax credit also reflects the fact that low-income families are likely to have similar needs to those of the unemployed. Therefore, local authorities with a high number of working families tax credit claimants will have increased levels of deprivation.
In addition, there is the crucial matter of school transport and sparsity. A substantial amount of Devon county council's budget is devoted to school transport. In the schools block, which is over 80 per cent. of the education block, there is provision for primary school transport. I can assure the Minister that that is simply not enough. The vast majority of those travelling to secondary schools in my constituency and others qualify for school transport. That must be recognised in the formula. I see a great many heads nodding. I am delighted that there is a large degree of consensus.
Any changes in the distribution mechanism for social services must be seen in the context of the inadequacy of the quantum of resources available for those services. The Local Government Association and the Association of Directors of Social Services consistently state that nationally authorities are annually budgeting some £1 billion above social services standard spending assessments. As the Minister knows, many parts of the budget are demand led. Devon county council spends more than 10 per cent. above the social services standard spending assessments. Devon has two major concerns regarding the social services formula. Because of the concern about continuing reliance on past spending levels within the younger adults formula, we would welcome a separate formula for mental health within the younger adults sub-block. Secondly, we acknowledge that the distinction between residential and domiciliary care is becoming very blurred. That would point to the need for a combined formula in future. Devon has campaigned for several years for a total resident population rather than a household population to be used as the client group, and for a degree of weight to be given to sparsity in domiciliary care cases.
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On police funding, the police options in the consultation paper show Devon and Cornwall losing some £2.1 million to £5.3 million. To give an example, £5 million is equivalent to 12 per cent. of our entire council tax receipts or the cost of 200 police officers—
Madam Deputy Speaker: Order. I call the hon. Member for Stafford (Mr. Kidney).
2.20 pm
Mr. David Kidney: There is a keen interest in this subject around the House and among the public and councillors in our English constituencies, for very good reasons. First, local government is responsible for a quarter of all public spending. Secondly, we have waited 10 years for this change, and people reasonably fear that this will be a once-in-a-decade operation, so they are anxious to have their say now. Thirdly, local government depends on money that comes from the Government for 75 per cent. of its spending, so this is a vital subject.
I am a friend of the Government, and I want to point out that some of the criticisms of their position are unfair. First, on the criticism that there has not been enough effort to try to change the existing system, in 1997, the first year of the Labour Government, there were 35 changes to the existing formulae. What we found, however, was that the system was so complex that to change one piece in one place had unexpected consequences in other places. The Government therefore concluded that a totally new system was needed, and I approve of that decision. The Government then gave local government the opportunity to agree that new system—what could be better than a system to which everybody agrees and signs up? Because of the all the vested interests, which we are rehearsing today, it was not possible for those authorities to agree that system. When they complain about the effect of the new system on their finances, I hope that the Deputy Prime Minister asks them what their position was when they had the opportunity to agree the system for themselves.
The Government also deserve credit for the extra funding that they have put into local government overall. I give special praise to the decision by the Chancellor of the Exchequer and the then Secretary of State for Education to introduce flat-rate payments to every school in the country in response to our complaints about the unfairness of the distribution system. As has already been mentioned, the Government deserve credit, too, for the thoroughly open way in which the process has proceeded—the Green Paper, the consultation document, the seminars for Members, and the meetings and delegations that have been seen.
The Government hope that the new approach will be simpler, easier to understand and easier to explain, of which we all approve. When we see the possible consequences for our local authority, however, we find a credible measure that we would like to insert into that simple system to benefit our area. People put up many different arguments, which was a fault of the previous system—It was overloaded with credible but partial systems that bent it to suit different authorities' areas, which made it complex and difficult to understand.

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The Government must therefore be brave, resist all those blandishments and arguments and keep the system simple.
Of course, the new approach will not be an objective exercise that speaks for itself. The Government will make political decisions. They will decide where to draw the line between basic amounts and top-ups. They will decide what measures to use for the top-ups. They will even decide what evidence to use for those measures. We must recognise that those political decisions are the ones that we want to influence as Members of Parliament.
Some overarching aspects of the new system need to be pointed out because of their effect on the whole, such as the promise of no losers and the system of floors and ceilings. Between them, their operation means that there is significant loss of room for manoeuvre in the overall settlement. Nevertheless, it is a fair attempt to provide stability and security for those who worry about losing grant.
The next overarching issue that is worrying for areas such as mine in Staffordshire is the operation of area cost adjustment in the new system, and the proposal for resource equalisation, both of which threaten to overwhelm completely all the good work done for individual formulae for the service blocks. The final issue is the modern expansion by a Labour Government of the use of special grants and specific grants, all of which will be taken out of the money that is available through the system to distribute to local authorities equally.
I do not have much longer to speak, but I want to mention briefly the f40 campaign, with which I have been associated. First, the campaign relates only to education funding, but we are debating the whole of local government finance, which is an important distinction to draw. The campaign grew out of a collection of only seven or eight shire counties that, under the present system, constantly found themselves at the bottom of the funding league table, year after year. They wanted change, and they argued for it, but nobody listened because they did not have a big enough influence. A strategic decision was therefore taken that drawing a line at the bottom 40 authorities in the lowest-funded league table would provide some clout. The good thing about f40 authorities is that they represent all parts of the country, all kinds of councils—shires, metropolitans and unitaries—and all kinds of political control. The campaign therefore has a sensible balance. I hope that we are able to persuade the Government to listen to our non-partisan view—I admit that we come from a particular position, but it is the one at the bottom of the pile.
As for Staffordshire—and the reason why I feel so strongly about this subject—we are poorly funded. This year, the local education authority was inspected jointly by Ofsted and the Audit Commission. First, they found that our education attainment is at or above the national level, which is a tremendous tribute to the hard work of the teachers, governors, school staff, parents and the students themselves. They also found, however, that we are funded at a level that is 12 per cent. below the average for local authorities, which, given what we have achieved, is an incredible amount. We are 33rd out of 34
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English shire counties in the funding table, the local authority spends above its SSA to try to compensate, and we are not eligible for major funding streams such as excellence in cities and education action zones.
My recent experiences demonstrate why I feel so strongly: a first school has asked two experienced teachers to leave because it cannot afford their salaries; an Ofsted report told me that a primary school had to choose between office staff and a special educational needs co-ordinator; and a high school had to ask four teachers to leave because the budget did not add up at the end of the financial year. Politically, I find that, whatever the good news about educational achievement or funding—I would hope that a Labour Government would be interested in this point—whenever I mention it, everyone says, "Yes, but what about the unfair funding system?" All the good news is lost to the area.
F40 supports option 5 because we thought that the Government were interested in closing the league table gap between the best-funded authority and the lowest-funded authority, and option 5 seeks to do that. I want a system that has the maximum proportion in the basic amounts and the least possible in the top-ups. I want the top-ups to be based as closely as possible on actual additional costs presently incurred. I want no major distortion of the new settlement by wholesale resource equalisation. I want a closing of the gap between the best and worst funded authorities. Finally, I want a reduction in the use of special and specific grants to pay for improving the finances of the lowest-funded authorities while keeping the Government's commitment to no losers and a fair system of floors and ceilings.
2.28 pm
Mr. Patrick McLoughlin: It is a pleasure to follow the hon. Member for Stafford (Mr. Kidney). I shall make some of the points that he has made in my own way.
One of the problems that the Government have found, whether they like it or not, is the build-up of the expectation—for which they are responsible—that once the new system was introduced everybody would be satisfied and happy. As we have found today, however, several concerns exist about the options that the Government have put forward in their consultation proposals. The expectation has been building up over five and a half years; in fact, it has been building up for longer. As the hon. Member for Stafford said, the original eight local authorities, which called themselves a G8, have grown into the f40 campaign. I shall comment further on that later.
I regret that we find ourselves today with very little time to debate something that will probably be in place for the next 10 years. We are talking about 25 per cent. of public expenditure and putting into operation the framework for local services for some years to come. It is a great pity that many of the people who want to speak today will not be able to do so because of the time allocated.
Sir Patrick Cormack: It should have been a two-day debate.
Mr. McLoughlin: As my hon. Friend says, a subject of this magnitude warrants not a four-hour debate on a Thursday afternoon but a full two-day debate.

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I have heard people speak about the way in which local authority expenditure has been vastly increased, but the Government placed on Derbyshire county council the lowest cap on a local authority in the history of capping. Therefore, it is with a sense of irony that I listen to other people's perceptions of the changes made to local government.
There is no doubt that the system has become far too complex, with far too many grants dependent on local councils meeting Government targets and on the will and wish of Ministers. That is not perceived to be fair and we desperately need a system that is so perceived. I would be the first to accept that the system has fallen into serious disrepute. For example, when I was a member of the governing party, I never felt able to explain fully to my constituents the logic behind, and the fairness of, area cost adjustments. I am not sure that the new system will be that much easier for us to understand. Indeed, the former Secretary of State for Education and Skills, when speaking in Derbyshire, described the system as "indefensible". If it was indefensible, one wonders why the Government have taken five and half years to come up with new proposals and are now rushing us in this way. Time is short.
I have heard the cries from the Liberal Democrats and others that we should delay the proposed changes for a year. I am not sure that that would be the best approach. It would certainly lead to much disappointment. For example, in Derbyshire in September 2001, the National Union of Schoolmasters/Union of Women Teachers said:
"We were hopeful that the issue of Fair Funding was finally to be addressed by the present Government. We had hopes of a settlement at least bringing Derbyshire up to a median figure for this current academic year. We were disappointed that this did not happen and that we were to be left further behind again this year. We remained hopeful though that the issue would at last be tackled for April 2002. We are now angered to learn that yet again there is to be a delay in implementing the policy—until at least April 2003—with no obvious valid reasons given for the delay."
A further delay, as asked for by the Liberal Democrats, would not go down well in my constituency and in my county, and that is probably true elsewhere.
The Government have introduced four options, but allowed for a truncated period of consultation. To start consultation on education funding on 9 July and to end it on 31 December does not provide people with a great opportunity to participate fully in the consultation exercise. That might have been what was in the Government's mind.
I should like there to be a far greater shift of resources into the basic pupil allowance. That is what the f40 campaign wants, so that educational funding can be understandable and transparent. I agree with much of what the hon. Member for Denton and Reddish (Andrew Bennett) said about local authority funding. Local authorities provide such a huge service that our constituents have a right to know, and to see, that they are treated fairly by the Government.
As the hon. Member for Stafford rightly said, the f40 group is a large organisation that has considered all the options for education. I accept that it has considered only education and that, when the Government make their recommendations, they will have to consider the whole sphere of services for local authorities. However, f40 has come up with option 5, which has a great deal of
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support in my constituency. I should like to be able to tell my constituents that the Government have addressed what was a difficult formula to understand and that the new formula can be easily understood. That would mean that there would be no excuse for services that we look to local authorities to provide not being provided.
We need a much greater shift of resources into the basic allowance per pupil and a move away from the system calculated according to additional education needs. As the hon. Member for Denton and Reddish said, elements of the proposals are so awful to local authorities such as Derbyshire, which would lose under some of them, that I am pretty sure the Government came up with them on the basis that they would draw back from the worst of them and that everyone would be relieved as a result. However, if the changes are to result in long-term benefits for local government and in increased understanding by our constituents, the more transparent the system, the better.
2.35 pm
Paul Farrelly: Given your former constituency, Madam Deputy Speaker, and the contributions of my hon. Friend the Member for Stafford (Mr. Kidney) and the hon. Member for South Staffordshire (Sir P. Cormack), I hope that the House does not feel that a Staffordshire mafia is in operation.
Like everyone else and on behalf of my constituents in Newcastle-under-Lyme, I welcome Ministers' commitments that no area will lose out from the review. I agree with my hon. Friend the Member for Stafford that we should give praise where it is clearly due. The Government have been able to make the commitment because of the Chancellor of the Exchequer's generous spending review this year.
In Staffordshire, we have no quibble with the extra resources that the Government have put into education and vital public services. We have no quibble with the extra ring-fenced resources that the Government are targeting where need is greatest. Newcastle-under-Lyme, which has some of the most deprived wards in the country, has benefited from sure start, neighbourhood management initiatives and, most recently, a massive pilot scheme for housing renewals.
Like many former mining and traditional industrial areas, Newcastle-under-Lyme faces particular challenges in education—in ambition, aspiration, achievement and staying-on rates after 16. We can therefore have no quibble with the Government's educational maintenance allowance scheme to encourage less-well-off children to stay on in further education. I called for an extension of that scheme in my maiden speech a year ago, and I am glad that we have had it in Newcastle from September, through the Newcastle achievement scheme. No fair-minded person could take issue with such worthy initiatives.
However, as my hon. Friends have already said, we take issue with the proposals for fair funding for Staffordshire and our relative position compared to other counties and areas. Whichever way one looks at it, Staffordshire loses out across the board under the current system. The needs in areas such as mine are equal to, if not greater than, those in areas that always do relatively well.

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Let us consider education as an example. In 2001–02, out of 150 LEAs, Staffordshire ranked 146th in primary school and 144th in secondary school funding per pupil. I do not want to bandy about the names of better-off counties—I would certainly invite guerrilla interventions from the right hon. and hon. Members representing Hertfordshire if I did—but it cannot be right that schoolchildren in my constituency, where schools face great challenges, should be worth more than £300 less each per annum than pupils in many better-off areas. It cannot be right that primary schools in the most deprived areas in my constituency are £30,000 or more worse off than schools in more privileged areas in the south. It cannot be right that secondary schools, such as my old school of Wolstanton high where I am still a governor, are £400,000 worse off than schools in areas that do not have mountains of achievement to climb. That is why I add my voice in support of option 5 advocated by the f40 group for education.
I have received hundreds of letters from constituents following the f40 campaign, which has been so ably co-ordinated in Parliament by my hon. Friend the Member for Stafford. I dare not think how many letters my hon. Friend the Minister has been deluged with. I hope that he will agree that f40 is an impressive and persuasive campaign, as is the campaign on issues across the board of the northern alliance group of councils.
I could go through a list of public services in Staffordshire one by one—police, highways, fire and environment—and show how badly we do across the board, but time is short, and the House will be glad to learn that I will not do that. However, I should like to refer briefly to social services, which is perhaps the most precarious service of all. Historically, the mining, pottery, iron and steel and industrial legacy of north Staffordshire has meant great challenges for health. Not before time, they are being addressed by the construction of a new £250 million hospital to replace crumbling old Victorian buildings and by investment in intermediate care and our community hospitals. However, we cannot fully meet those challenges when social services—the community side of the health equation—remain so stretched. That is especially the case when care for the elderly is transferred into the community, which is happening increasingly in Newcastle-under-Lyme and north Staffordshire.
While facing those challenges in personal social care, Staffordshire ranks 124th out of 150 for elderly domiciliary care and 118th for elderly residential care. Despite the best efforts of the education service, our low relative position in education makes it more difficult to address special needs for the most vulnerable children in our communities. Those difficulties are compounded by Staffordshire ranking 133rd out of 150 in children's social services, which rubs salt in the wounds. I welcome the recent speech by my right hon. Friend the Secretary of State for Health heralding a radical shake up of social services for elderly care.
Sir Patrick Cormack: Will the hon. Gentleman underline the fact that, throughout my 32 years in the House, Staffordshire has always had a prudent county
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council, whether under a Conservative or Labour administration? Our cry is from hon. Members on both sides of House and from all parties.
Paul Farrelly: That is a valuable point.
We want a formula that better addresses need and deprivation so that counties such as Staffordshire and regions such as my own do not lose out time and time again. I will not repeat the points so ably made by my hon. Friend the Member for Stafford, but having overwhelmingly elected a Labour Government in 1997 and 2001, my constituents and the people of Staffordshire want them to be bold in redressing the balance. To coin a recent phrase, we are at our best when we are bold. Like many areas represented in the House, we want fairer funding. I realise that the Minister is in an invidious position; he cannot satisfy everyone, but we call on him to be bold. Our constituents have spent a long time waiting for a change, and a change that changes nothing will not be good enough.
2.42 pm
Mr. Andrew Lansley: Days before the 1997 general election, the Prime Minister, then leader of the Opposition, said:
"We will review the area cost adjustment in time for the next financial year".
The first debate that I secured was in July 1997, in the previous Parliament, and it was on the area cost adjustment. Responding to that debate, the Minister for Local Government and the Regions told me:
"we shall study the further surveys carefully and discuss them, as a matter of urgency, with the local government associations. We shall not be precluded from taking decisions at the earliest opportunity". —[Official Report, 18 July 1997; Vol. 298, c. 670.]
Five years and three months later reform of the area cost adjustment is long overdue. What the Government propose in their options could have been done five years ago because it is substantially based on the Elliott review methodology produced before the 1997 election.
If implemented, the five area cost adjustment options would increase Cambridgeshire's standard spending assessment total by anything from 2.5 to 6 per cent. During the past five financial years, Cambridgeshire may have lost £100 million from the Government's failure to act, and fairness delayed is fairness denied. Cambridgeshire has the lowest SSA—£647 per head—of any county, and schools suffer most, with a gap of about £270 per pupil between he school funding in my constituency and funding over the border in Hertfordshire. Although the Cambridgeshire police area has an average amount of crime, we have 250 fewer police than average. It is time for fairness.
Step one is to implement reform of the area cost adjustment. Only options 4 and 5 would provide an area cost adjustment factor for each county. I would go further and provide that for each authority. The labour market pressures in South Cambridgeshire and the constituency of the hon. Member for Cambridge (Mrs. Campbell) are substantially different from those in the fenlands in the north of the county. I would use option 5, which more accurately reflects underlying labour market pressures in the longer term, to which local authority services have to respond, particularly if district level authorities are involved. The same area cost

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adjustment approach should be used for education. House prices are too volatile, too closely related to interest rate movements and too much of a current preoccupation rather than a long-term indicator.
Step two must be to reform the education grant. Many people have said that the capitation level—the basic entitlement per pupil—should be higher. That is true not only because it would deliver fairness in funding, but because the education funding strategy group is trying to build an activity-based level of funding so that we accurately fund the cost of providing the national curriculum to pupils. I am disappointed that the Government did not work with that group to produce an option on that basis. Likewise, as the formula does not provide for so many unmet needs, how can they be included in relation to additional educational needs? Additional educational needs factors apply in every authority to some extent, so it must be right to have a high threshold of 50 local education authorities. In addition, sparsity is inadequately reflected and should be included for secondary schools and the under-fives.
Step three must be to reject the proposed resource equalisation options proposed in the consultation. Those would reintroduce past spending into the formula, which the Government said they would not do. Worst of all, they would be based on validating high spending and penalising thrift. I do not suggest that we can do without resource equalisation and I accept that we may have to rely on the current system for the time being while we look for something better. However, perhaps the Minister should consider not using council tax and standard spending under the current system, but look instead to the median level of council tax as a proper intermediate measure on which to base our resource equalisation.
Step four is to take proper account of population growth. Those areas with a declining population are already compensated because of the lag between population data and grant calculation. Those areas with a large growth in population, such as Cambridgeshire, need a factor in the grant which is based on excess population growth. I was surprised that the consultation suggests £65 for a shire district. Although a shire unitary authority would receive £675, shire counties and districts would get only £560 when added together. The Greater London Assembly and an outer London borough would get £1,000 when added together.
Step five is to take proper account of sparsity. For example, a 1 per cent. weighting in the police service calculation is woefully inadequate.
The Government's proposals could be turned into a fairer system. It would mean kicking out the resource equalisation proposals and the idea that the business rate should be treated as a Government grant. The system would benefit from major changes in the education options, which other hon. Members and I have proposed, and, in the longer term, from using more direct and relevant data that relate to pupils' additional needs. I hope that on that basis we will see a much improved result later in the year. It is time for fairness and I look forward to that happening in the next financial year.
2.48 pm
Mr. Tony Banks: I have sat through many such debates on local government finance and have participated in them for the 20 years or so since I became a Member of Parliament. They always reveal the problems that arise from an overcentralised Government system. It was the same under the Conservatives. I remember Margaret Thatcher extending to us the promise that she would take Whitehall off the back of the town halls. Of course she did precisely the opposite. Hearing various blasts from the past, such as the former leader of Wandsworth council, the hon. Member for Mole Valley (Sir P. Beresford), complaining about the proposals, I am reminded of the way in which the Tories used formulas to give an advantage to their sweetheart authorities, such as 'Westminster and Wandsworth.
Things have got better under this Government. One still gets the feeling, however, that local authority finance is like the infamous Schleswig-Holstein question. Most do not understand the question, no one knows the answer, but everyone is affected by the outcome.
This is a whingers' debate. I have not heard anyone do anything other than whinge, and rightly so. That is the problem with local authority finance: we all come to the Chamber to complain about our own local authority being skint. No one is likely to come and say, "We have done very well." Those hon. Members who are not present are probably not interested, or prefer to read the collected works of Kim Il Sung, which are slightly more interesting, or their local authorities have done extraordinarily well out of the settlement, though I doubt it.
We know that very few people turn up to say thank you. There is little gratitude in politics, as we will all find out eventually. All our political careers are doomed to end in failure, as someone said. Mine just ended a bit sooner than others. However, I want to prove to the Minister that I am not wholly a whinging ingrate. Newham, my borough, has received much Government support, but mostly in the form of special programme measures, schemes and Government initiatives, all of which are time-limited. What we want in Newham, as all local authorities want, as a number of hon. Members have said, is a predictable core of Government funding, and much greater powers to raise our own revenue streams. We want to be able to use those revenue streams to spend on our locally determined priorities.
Government provide 75 per cent. of all local authority finance, but there cannot be effective local democracy with the Treasury controlling the purse strings to this extent. The Government have announced and implemented a genuine programme of devolution, but without greater financial independence, devolution will ultimately fail. It will not produce the local successes that people expect from it. That might be one of the reasons for the low turnout in the recent local elections, particularly those for local mayors.
It is an open secret that I hope to become Labour's candidate for London mayor. I am grateful for the support of a number of my colleagues. Why should I not be? I was the first to propose a directly elected mayor for London in 1990. The idea did not meet with universal acclaim or, as I recall, any acclaim whatever, at the time,

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but it is now a fact and it was brave of the Government to introduce the office. However, they are holding back from making that office truly effective.
We in London must have our own revenue streams, free from the dead hand of Treasury control. I have made a number of suggestions recently, which I shall put to the young and handsome Minister. [Interruption.] He is young and handsome. It is quite scary, really. One suggestion is that city hall should be able to raise a bond issue for transport infrastructure investment in London, unless Treasury Ministers will give us all the money that we need for vital schemes such as crossrail 1 and 2, Thameslink and the river crossings. We know that they will not, yet they are preventing us from raising our own money.
I have suggested that London should be able to receive all the income from the airport tax, which would then be hypothecated for transport infrastructure projects. That could be done, if Gordon is prepared to let us do it. I notice that the Government propose to change the legislation relating to gambling. Why not have municipal casinos in London? That is an excellent idea. It is done in other parts of the world and raises large amounts of money, which could be used to improve services for London.
My hon. Friend the Member for Denton and Reddish (Andrew Bennett) mentioned a tourist tax. We could have a hotel bed tax in London. What about a London lottery? I throw these ideas before the House so that they may be considered and discussed. A London lottery would be an excellent way of raising money. We do not want to rely on sticking the precept up more and more, as that simply impacts on the local authorities and borough councils, and we want to find independent ways of raising our own money in London. My hon. Friend also suggested that business rates should come back to local authorities. Absolutely correct. That would be of great benefit to London.
I know that when we call for more resources for London, there are many who say that London is already getting too much. That is not a fact. London is not just Mayfair, Westminster, Kensington and Chelsea., where Opposition Members go for their enjoyment; it is also places such as Plaistow, Tottenham and Peckham. We have some of the most deprived local authority areas in the entire country.
I conclude with an extract from a speech made by the Chancellor on 11 October, in which he said:
"So we are introducing a range of new financial freedoms—new powers for local authorities to retain fines, develop new services and decide council tax exemptions and discounts, allowing responsible councils to innovate and respond to local needs.
We are making councils themselves responsible for deciding how much they can prudently borrow, providing greater freedom for councils to invest in local services."
I hope that when the Minister replies, he will dress that out a little more. It sounds very interesting and promising. We need some delivery.
2.55 pm
Mr. Nigel Waterson: It is always a great pleasure to follow the hon. Member for West Ham (Mr. Banks). Who says the music hall is dead? I thought that I had blundered into some Labour party mayoral hustings.
Mr. Banks: You have.
Mr. Waterson: The hon. Gentleman confirms that. He must be crossing his fingers and hoping against hope that he does not have a monkey running against him.
In Eastbourne, my constituents are facing a council tax calamity of mammoth proportions. In fairness, though, it is not all the Government's fault; the Liberal Democrats have made their contribution. In record time, even by their standards, since taking control of the borough council earlier this year they have produced a black hole in the council's finances and are speaking of an increase of up to 30 per cent. in council tax under their regime. Of course, we must allow for a certain amount of spin in that figure. I assume that they will end up with a figure rather less than 30 per cent. in the coming year and then claim some sort of success.
I shall deal with the likely effect, beyond those effects on my council tax payers, of the Government's proposals. It is impossible to escape the conclusion that the Deputy Prime Minister has got it in for taxpayers in the south-east and, as was said earlier, is trying to give money to his friends in the north. In the immortal words of Kenneth Williams, "Infamy, infamy, they've all got it in for me!" That is the attitude of many councils in the south-east.
We have already had the formula fiddled once, so it no longer recognises sufficiently the number of older people living in East Sussex and in my constituency. Despite that, the new Conservative-controlled county council has made enormous strides in bringing the budget under control after the chaos of the Liberal Democrat years, and has finally scrapped the 800-people waiting list for social services care under the previous regime. Potentially, East Sussex is the worst hit of all county councils, yet it has the third lowest gross domestic product per head among all areas in the UK. It is not full of rich toffs of the sort that the hon. Member for West Ham mentioned in the London context. On any of the proposals, East Sussex will lose between £4 million and £44 million in a full year. In real terms, that equates to some 900 teachers, or it means social services being unable to give care to over 2,000 vulnerable elderly people. That would dwarf the problems that the current county council inherited from the Liberal Democrats when it took control.
As we have heard from speaker after speaker this afternoon, the net result of all this is a massive shift in resources from the south, particularly the south-east, to the north and the midlands. I have a copy of a letter to the Secretary of State for Health from Councillor Keith Glazier.
Mr. Andy Reed rose—
Mr. Waterson: I am not giving way, as time is short, as the hon. Gentleman knows.

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Councillor Keith Glazier, the lead cabinet member for social services, refers to the promise of 6 per cent. real growth above inflation over the next three years for social services, but even taking the mid-point of all the options set out by the Government, he states:
"A loss of this scale would more than wipe out any gain from the growth in resources signalled in the recent Comprehensive Spending Review."
The changes, however, would affect spending throughout the county. I have also had a letter from the chief constable, Ken Jones, who says that according to the calculations Sussex police face
"a potential loss of grant of up to £17 million in a single year… we will need to recruit in the region of 250 new officers over the next three years, just to replace those that are due to retire."
The force is trying to reach it
"target of 3,100 police officers by the end of this financial year".
Incidentally, that is more or less the figure that the Government inherited in 1997. The chief constable goes on to say
"any standstill in our funding would be extremely damaging and set back the gains that we have made as a Force over the past year."
The area cost adjustment has been discussed. East Sussex is relatively close to London, and costs are high compared with those in other parts of the country; so some form of adjustment is obviously necessary. Many Members probably do not know, however, that East Sussex is one of the poorest counties. I have already given the GDP figures, but there are substantial areas of deprivation in my constituency and in the county as a whole. The effect of all the existing pressures—increasing school rolls, increasing numbers of old people and, in some areas, increasing deprivation—on county council expenditure is considerable.
There is, however, a double whammy. We have the highest proportion of people over 85 in the country. That puts enormous pressure on social services, as such people are likely to need residential or other care. Moreover, they are the people who will be asked to pay the mammoth council tax increases. Let us leave aside for a moment the incompetence of the Liberal Democrats in Eastbourne itself, and consider the enormous increases—dwarfing even those increases—that the Government's proposals are likely to bring about. The pressure on social services will be matched by extra pressure on the budgets of vulnerable people who do not have large disposable incomes.
I urge the Minister to address the concerns of my county council, and of many people throughout the county and certainly throughout my constituency, about the disastrous effects that the proposals are likely to have on my council tax payers, and the even more disastrous effects that they are likely to have on the services provided for my constituents.
3.3 pm
Mrs. Anne Campbell (Cambridge): I have considerable sympathy for my right hon. Friend the Minister for Local Government and the Regions, who has had to disentangle the mess left by the Tories when the poll tax was axed 12 years ago. Having said that, I must add that I wish the review could have been completed earlier, although I am very glad that it has been completed now. I was appalled to hear the hon.
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Member for Bath (Mr. Foster) ask for a further year's delay, which in my constituency, and probably in all Cambridgeshire, would almost certainly ensure that the Liberal Democrats remained out of office for many years. It would be extremely unpopular.
The hon. Member for South Cambridgeshire (Mr. Lansley) calculated that Cambridgeshire had lost £100 million under the present Government. On the basis of his calculation, during the years in which the Conservatives failed to reform their system the county would have lost £140 million. If I were the hon. Gentleman, I would keep quiet.
Mr. Lansley: Will the hon. Lady give way?
Mrs. Campbell: No. I have only eight minutes, and the hon. Gentleman has already had an opportunity to speak.
As my hon. Friend the Member for Stafford (Mr. Kidney) pointed out, one of the problems created by the current system is the creation of huge disparities between authorities. That is bound to make people feel that the system is unfair. As the hon. Member for South Cambridgeshire said, we in Cambridgeshire tend to compare ourselves with those in Hertfordshire, with whom we share a boundary. Education funding differences amounting to hundreds of pounds exist between pupils. In Cambridgeshire the funding for each secondary school pupil is £3,225, while in Hertfordshire it is £3,503. In a school with 1,000 pupils, the difference in funding between the two counties is £278,000. Ninety per cent. of that would be enough for six or more teachers to be employed over and above the allocation for a similar school in Cambridgeshire. Hertfordshire has always had a much more generous settlement under the current system, which is difficult—indeed, nigh-on impossible—to justify to parents, teachers and governors in my constituency.
I do not underestimate the difficult task faced by my right hon. and hon. Friends. During a debate on 15 October, I asked whether my right hon. Friend the Minister for Local Government and the Regions considered reducing the disparities between authorities to be one of his criteria for success. He implied that he did not. I urge Ministers to think again. There will be continuing flak if those disparities are not reduced, although it may mean some reshuffling of cards. They are perceived to be extremely unfair, and I think that reducing them should be a priority.
I want to discuss two specific aspects of the proposals, the area cost adjustment and resource equalisation. I shall begin with the area cost adjustment, as I find it easier to understand. Cambridgeshire has argued long and hard that it should be able to benefit, in the grant distribution system, from allowances for higher costs, including wage rates, property and bought-in services. I was pleased to note that the review supports the county council's argument that counties outside the south-east also face high operating costs. It is interesting to compare house prices, for instance. I have a list from the Land Registry of the average prices involved in residential property sales between April and June this year. The average price in Cambridgeshire was £139,678, whereas the averages in Hertfordshire and Bedfordshire were £131,263 and £136,541—both

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lower than the Cambridgeshire average. Unlike Cambridgeshire, Hertfordshire and Bedfordshire receive area cost adjustments. My hon. Friend the Member for Wigan (Mr. Turner) said that house prices should not be a factor. I must tell him that they severely affect recruitment of teachers and other low-paid workers who cannot afford to buy houses in my constituency.
Data taken from the new earnings survey of full-time employees on adult rates in 2001 support the evidence that Cambridgeshire should benefit from the higher costs allowance. Average gross weekly earnings in Cambridgeshire were £453.40 in Cambridgeshire, higher than those in Essex, Oxfordshire and West Sussex. Cambridgeshire and Cheshire are the only counties in the top 10 in relation to average earnings not to receive the area cost adjustment.
The analysis in the consultation paper suggests that Cambridgeshire has been underfunded relative to other counties for the past 11 years, which has had a major impact on services. Cambridgeshire is spending £80 million over standard spending assessment on social services, but there are still significant pressures, especially on the provision of care for elderly people. That is largely because costs are on a par with those of authorities surrounding London. It is more expensive to provide home care and nursing or residential accommodation in Cambridgeshire than in neighbouring authorities, yet they receive significantly more cash per potential client than Cambridgeshire does. Hertfordshire, for instance, receives £2,360 more than Cambridgeshire for every elderly person who might need support. I do not see how that can possibly be fair. The criteria for deciding which authorities receive area cost adjustment should be based on evidence of relative input costs and not on an authority's geographical position in relation to London.
I want also to express my support for education option 2, which is the best approach. It recognises that deprivation includes not only people on income support, but children in families on low incomes who receive the working families tax credit. I believe that both groups are likely to have similar needs, so working families tax credit recipients should not be excluded from the calculation.
I am also attracted by option 5, which was so well expounded by my hon. Friend the Member for Stafford. It was proposed by the f40 group, which comprises the 40 lowest-funded education authorities, and I understand that it would use the same basis for calculating top-ups as option 2, but make the basic allowance per pupil greater and the top-up smaller. I say to the Minister that the great advantage of that option is that it would reduce disparities and therefore the perceived unfairness, so I hope that he will seriously consider it.
Madam Deputy Speaker: Order.
3.11 pm
Mrs. Annette L. Brooke: Much has been made of the strange name of my constituency. This diverse area contains one unitary
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council, one county council and two district councils, one of which is part of the small group that does not receive any revenue support. In passing, may I say that I hope that the Minister is reconsidering the proposed merger of the revenue support grant and the redistributed non-domestic rate. The authorities, common factor is low funding, historically among the lowest in the south-west. To put that into context, the SSA per capita for the south-west is the lowest for any region. At £876, it is 12 per cent. below the English average of £995. As the lowest of the low, it is not surprising that the councils initially welcomed the idea of simplicity, transparency and ease of understanding. Obviously, there was a strong belief that the history of underfunding would at last be addressed.
I am heartened by the number of hon. Members who have mentioned the f40 group. The areas that it includes are situated throughout the country and the fact that so many people are talking about the issue represents the strength of feeling that exists. Not surprisingly, I support option 5. Poole unitary authority has the sixth lowest education funding in the country. Dorset is also well towards the bottom of the list of the lowest 40, although that is not reflected in its results. In the past few weeks, I have received hundreds of letters about the issue. Parents cannot understand why their children are allocated £100 less per head than those in Hampshire schools, for example. We have been hearing that they were not doing so well, but as many other hon. Members have said, the main issue is the size of the discrepancy between the highest and lowest funding, which causes great concern among parents.
Bob Spink: Does the hon. Lady share my curiosity about the Government's proposal to remove more money from education in counties where the results are good—the best in the country—and use it to reward counties where the results are much lower?
Mrs. Brooke: I shall move on, as I do not think that that is the main issue.
I was saying that we have excellent teachers despite the low funding, although I am afraid that we have been very disadvantaged in terms of physical resources. The basic allowance per pupil simply must be higher.
On social services in the south-west, a recent analysis shows that there is a £70 million care gap. Local authorities are warning that the social care safety net is not adequate for children, the elderly and the vulnerable. Poole is an especially small unitary authority. In the past few years, it has seen unbudgeted overspending on children's services. I do not think that anybody wants to address that issue. We cannot easily do so; children are at risk. The difficulty is that just one expensive placement throws the whole budget. I urge the Minister to take on board the fact that those are significant problems and that it does not matter how good the councils are or what their political flavour is.
This will be my third effort to speak about waste management. I keep getting the phrase, "Nobody wants more ring fencing" thrown back at me, but I have received many representations from all the major organisations involved, including the Local Government Association, saying that they would like an extra waste block to be established—I should call it a

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separate waste block, in view of the merger within EPCS. I am not referring to targeted funding that is clearly identified—I want the resources to be identified for the much-needed recycling that we are all going to do provided that the funding is available. It is vital that those resources are clearly provided. That does not mean ring fencing; it means giving local councils the tools to do the job that they want to do and which out constituents want them to do.
Matthew Green: Is it not strange that while waste is in the large EPCS block, it should be affected by deprivation indices? It is hard to see why deprived areas need more money to collect waste. I would have thought that the waste should be accounted for on a per head basis—
Madam Deputy Speaker: Order. That is rather long for an intervention.
Mrs. Brooke: I thank my hon. Friend for his intervention.
I should like to add my comments on resource equalisation, on which my feelings are very much the same as those already expressed. The proposed mechanism seems very crude. If it takes effect, it will reward historically high-spending authorities at the expense of those with a more buoyant tax base. I believe that it would direct funding from the south-west, which is already the lowest-funded area, to the north-east and north-west. In this case, enough is enough.
I share the concern expressed by an earlier speaker about what might happen to the police budget. There is great fear about the issue in my constituency. Dorset police authority is the second lowest funded in England and Wales, and predicts a shortfall of between £5 million and £8 million. On the other hand, I am receiving letters saying that people do not want more police as they cannot afford to pay the council tax increase.
We need more police and services, but wherever people live, the basic pension is the same. If some of the changes go ahead, resulting in massive cuts, the impact will be felt through that very unfair tax, the council tax. Year after year, pensioners in my constituency are seeing their pensions eroded. It is not the council's fault that there are large percentage increases in council tax. It is the wrong type of tax for funding local services. Some of the proposals in the new models for finance cannot seriously be considered without our addressing the fact that local authorities will have to raise the money for any extra burden that is imposed on them.
3.18 pm
Mr. David Watts: I am very pleased to take part in this important debate. As other hon. Members have said, we are talking about how 25 per cent. of public expenditure will be allocated. That has a major impact on all our constituents, so I am pleased to see so many hon. Members present.
I should like to be as brief as possible, and to begin by dispelling some of the myths that have featured in the debate. I understand the difficulty that the Government will have in making their decisions, as there will be some winners and some losers. Some authorities have got used to very low council taxes and high-quality services, while
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others, such as my own and many members of SIGOMA, have had low-quality services and high council taxes. It was amazing to hear the right hon. Member for Kensington and Chelsea (Mr. Portillo) say that tax rates were high in his constituency. He ought to compare them with the rates in some of the authorities that we represent; he would see the massive differences between one authority and another.
Mr. George Howarth: Does my hon. Friend agree that, if there is to be a retention of the area cost adjustment, it should be based on real costs rather than notional costs? Part of the problem that he is describing is precisely the result of notional costs being used.
Mr. Watts: I agree with my hon. Friend and I shall come to that important issue later.
I want to set out some of the present problems, because we need to think about where we are today. I would' also like to consider some of the Government's options and to offer some brief ideas about how we can move forward. It is important to understand the present system. It is not a fair one. It was introduced by the last Tory Government in 1981 to target funds to Tory councils, to allow those councils to set very low council tax rates, and to give the impression that Tory authorities were more efficient and effective than Labour ones.
During that process, we saw millions of pounds being transferred overnight from Labour local authorities to Tory local authorities. In my authority, that involved a £10 million cut overnigh—within 24 hours, it had lost £10 million. That led to cuts in basic services, and has meant that, for the past few years, we have had to increase our council tax rates at well above the rate of inflation. It was Robin Hood in reverse: the system took money from the poorest communities and gave it to the richest members of our society.
The system transferred huge amounts of money from Labour authorities to Tory councils, and cut millions of pounds from the budgets of Labour authorities. It introduced a Tory tax on poverty and meant that many local authorities such as mine had to cut their budgets for vital services such as youth clubs, leisure centres, street lighting, roads and parks. Those services are crucial to my community.
I want to talk about the winners and losers. I understand that my hon. Friend the Minister would have major problems if he transferred large amounts of money from one local authority to another. Because of the ineffectiveness of the Opposition, many of those areas are now controlled by Labour councils and I understand the political problems that would arise. The councils would be faced with the double whammy—as my local authority has been—of having to increase council taxes at the same time as cutting public services. That is a difficult task. I am pleased that the Government have not done what the Conservatives did, and will instead introduce a cushioning mechanism to ensure that budgets are not cut overnight as they were before. We shall take no lessons from the Opposition about how any changes should be introduced.
Many hon. Members—even Labour Members—would like to see only minimal change. They argue that, whatever change we make, we lose friends, and that that

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is not worth doing politically. I would like to make it clear that I and other SIGOMA Members who represent many of the heartland areas believe that that is unacceptable. We want a fair and transparent system that allocates resources on the basis of need. There is consensus that we need to look at what base services should be provided and how much those services should cost. We then need to determine how we allocate extra resources when it can be demonstrated that there is a real need for them.
I am pleased that my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth) made the point that, unfortunately, at present, many of the deprivation factors are not transparent. We do not know why a particular resource is allocated in the way it is; it is not based on any real cost and does not relate to the services that are provided in an area. In many cases, some of those resources are being used to undercut the council tax.
Mr. Reed: Does my hon. Friend accept that people in Leicestershire, which already has the worst-funded education authority, will look at the four options and see that they take us backwards? We would see further cuts under each of them. It is difficult to explain need as a concept, when people see that they would be worse off in cash terms not only now, but under the formulae that are being proposed.
Mr. Watts: I understand my hon. Friend's problem. I would not support some of the options that have been put forward by the Government; there are so me real difficulties there. There is a need for more transparency in the system. The Government should set up an independent review body to consider all the different factors relating to the need for local councils to spend extra resources.
Mr. Burnett: There is a paper, to which I have already referred—Professor McLean's study—that makes it quite clear that the south-west is very seriously disadvantaged.
Mr. Watts: With respect, there are a number of reports knocking around, all arguing in favour of the different systems that the Members who commissioned those reports want to promote. I would not accept that that is the right one, but I would accept the need for a review to consider which factors determine the need for local authorities to spend more than the average amount. It should also consider the linkage between those factors. We have not yet talked today about the weighting that is given to each of the deprivation factors. For example, in relation to the ethnicity factor, £448 million—I think—is distributed to 12 per cent. of deprived children. That may be right, but in some cases it is not allocated according to need, and there seems to be no logical reason for that money being transferred to those children rather than to other local authorities with equal levels of deprivation, whose children are underperforming in schools, but which have no, chance of getting the level of resources that other areas receive. It is important to have a transparent system and that funding can be linked to the need to spend.
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Let us consider some of the other deprivation factors. There are three areas in Great Britain that have objective 1 status—Cornwall, Merseyside and South Yorkshire—yet, ironically, each of those local authorities is disadvantaged by the system. There is something fundamentally wrong with a system in which Europe can allocate to areas massive resources that are not matched by the allocations for services by the Government. That is one of the reasons why we need a review.
I am not arguing that there should be no change this time. If we accept that there should be no change to the present system, that would mean that my local authority and many others—
Madam Deputy Speaker: Order. I call Mr. Gregory Barker.
3.27 pm
Gregory Barker: At the outset of the debate, the Government insisted that the touchstone for their proposals for the reform of local government finance was, as they stated in their White Paper, to create a mechanism that would be
"simpler, more stable, more robust and fairer than the present arrangement for SSAs."
Few could dissent from such a sensible and reasonable ambition. Unfortunately, however, the practical effect on my county of East Sussex could not be further from their stated goal. Instead of simplicity, the proposed new formula offers complexity; instead of stability, it offers uncertainty; instead of creating a system that is robust, it will create a regime that is open to challenge and acrimony; and instead of fairness, it will create division and inequality.
The reality of the proposals is that the new formula would rob East Sussex of £4.1 million on a best-case scenario, and on a worst-case scenario the county council would lose £43 million. In a letter to all East Sussex Members of Parliament, the county chief executive described the proposals as "damaging and drastic". It is, therefore, rather a shame that neither the hon. Member for Lewes (Norman Baker) nor the hon. Member for Hastings and Rye (Mr. Foster) is here this afternoon to fight the county's corner.
The negative effects of this reform will be particularly bizarre, given the Government's focus on creating a fairer system, and particularly perverse when we bear in mind that East Sussex is the poorest of the 34 English shire counties. Gross domestic product per head is, at just £7,847 a year, comparable to that of Tyne and Wear and Middlesbrough, which—unsurprisingly, and perhaps rightly—are net beneficiaries under these reform proposals. In April 2000, average full-time weekly earnings in East Sussex were £377.40—more than 10 per cent. lower than the average for Great Britain and 15 per cent. lower than the south-east regional average. Yet despite these low incomes, the property market in East Sussex remains in the orbit of outer London's. So although the average wage in East Sussex may compare unfavourably with that for London, its house prices are three times higher than those in the north-east.
East Sussex also has much higher levels of deprivation than any other shire county. With 25.7 per cent. of its population being over the age of retirement, it has the

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second highest proportion of elderly people of any English county. Elderly people are predominantly dependent on fixed incomes, and it is they who feel the council tax increase most keenly. For many of my elderly constituents, the council tax is the largest single item in their household budget.
I have already mentioned that East Sussex stands to lose up to £43 million. That is the worst-case scenario, but let us consider the mid-point. Even a loss of £26 million would be equivalent to a 23 per cent. tax rise, or the loss of 900 teachers across the county. As a proportion of our current funding, ours stands to be the worst affected county council in the country. Indeed, even taking into account all 148 principal local authorities in England—county councils, metropolitan councils and unitary councils—we are still the second worst affected.
The loss of £26 million may sound paltry in comparison with a Government budget of £418 billion for this year, but it would eat up more than 80 per cent. of the entire road maintenance budget for a county that already suffers from the worst transport links in the south-east. Such a loss is equivalent to the cost of nearly 1,000 teachers, out of a total county teacher headcount of 3,700. Put another way, that loss is more than the budget of all the primary schools, secondary schools and special needs schools in my constituency. It would wipe out entirely the county's budget for both residential and nursing home care for the elderly. Of the 2,395 places currently provided for the elderly, all would have to go, and further savings would still have to be made. A figure of £26 million is more than three times the total budget for our entire library service, which is already facing significant pressure.
Given that it is the worst affected county council in the country, it is no surprise that East Sussex is not seeking to endorse any of the Government's proposals. However, there are three areas, accounting for 90 per cent. of its funding, that are of particular concern: education, area cost adjustment and resource equalisation. I do not have time to discuss them in detail, but I ask the Minister to look at the county's submissions to him. I cannot believe that a better and more equitable solution cannot be found to the problem with which the Minister is wrestling.
It is not just the county council and the essential public services that it provides that stand to lose out through these reforms. The effect of these changes on Sussex police could be catastrophic, involving the potential loss of up to £70 million, or 9 per cent. of its total funding, in a single year. Ministers have said that the changes may be achieved by effectively freezing grant at its current level, but the consequence of that to Sussex police would be substantial. It would mean a steady reduction in levels of service, or a massive increase in council tax.
Mr. Michael Jabez Foster: Will the hon. Gentleman give way?
Gregory Barker: No, I am afraid that I do not have the time. The hon. Gentleman has only just come into the Chamber. [Interruption.] He has only just entered the Chamber and has not been here for the debate.
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Both the Prime Minister and the Home Secretary like to talk tough on crime. How can they possibly square their tabloid rhetoric—
Mr. Foster: Will the hon. Gentleman give way?
Gregory Barker: No, I am afraid I will not.
Mr. Foster: On a point of order, Mr. Deputy Speaker. Is it proper for an hon. Member to name another hon. Member and then refuse to allow him to intervene? The hon. Gentleman selectively named Members and criticised them for their non-attendance, failing to note that there are Conservative Members who are not present, but who have not been similarly criticised.
Mr. Deputy Speaker (Sir Michael Lord): The conduct of Members in their speeches is entirely a matter for them. It is not a matter for the Chair.
Gregory Barker: What puzzles me is that the Government are not totally blind to the problems in East Sussex. We have a special taskforce—on which I sit, along with the hon. Member for Hastings and Rye—because our county contains some of the most deprived wards. The Government have recognised that fact, and I am grateful for that, but it makes no sense then to cut away the legs of the county council, which is the essential provider of transport and education.
I implore the Minister, who I am sure is setting out to be fair, to look again at the practical effect that the proposal will have on East Sussex. It cannot be right and it cannot be fair—please, please look again at the treatment of East Sussex.
3.35 pm
Mr. Frank Field: When we go into the next election, we will reflect on two entire periods of Labour government. Although Governments have to do many things, there are few opportunities and initiatives that they can seize to make a real difference to the country in which we live—particularly if we are interested in making it more equal and fairer. The reason why so many Members—particularly those on the Labour Benches—wish to catch your eye in today's debate, Mr. Deputy Speaker, is that they realise that we have reached one of those points when the Government have within their grasp the opportunity to make a real difference to the life chances of many of our constituents.
I therefore thought it almost eccentric of the right hon. M ember for North-West Hampshire (Sir G. Young) to say that he would survey the Olympian heights, rather than indulge in the foothills of the interests that most of us will follow. Indeed, no sooner had he made that comment than, quite properly, he was making the best case that he could for his own constituency. So although I may not mention Birkenhead in my speech, I will, quite properly, represent the interests of my constituents to the best of my abilities.
In addition to the presentation made by other northern Members for the SIGOMA members—I know that the Government have looked at the document, and that they realise how robust the analysis is—I wish to

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develop four themes. First, given that, this time, the Government are trying to make a fairer settlement, I ask them to look at the total budget at their disposal. It is limited, and we cannot expect Governments to keep pushing up the taxpayer's contribution. Members have spoken of "the Government's money", but the Government have no money—it is our constituents' money that we are talking about.
Once the size of the taxpayer's contribution to local authorities has been decided, I beg the Government to reconsider the amount that they pay out generally, and the amount that they keep back, to make good the unfairnesses in the system. I do not believe that we have got that total balance right. We should not be fighting one another, saying, "It is unfair that they get additional resources, because we have different circumstances that should be met." We have an opportunity to explain why our own local authorities may be unique in some instances, and hopefully to make that plea sufficiently effectively to persuade the Government to follow through with additional funds.
On the formula for compensating for inequalities and disadvantage, my first plea to Ministers is to consider whether they have got the balance right between the weight given to deprivation and to race. It is clear that local authorities with many immigrants, or with many first or second-generation black Britons, face costs over and above those incurred by the richer areas that have not had the advantage of receiving new arrivals to this country. My plea concerns whether the weighting for that is right when compared with that given to deprivation. I represent a constituency that contains the poorest area in the country. I doubt whether I have seen six black faces in my constituency since being elected. Examination of the way in which the formula operates shows that our budgets are far lower than those for areas that suffer equally from deprivation but are compensated both on race and deprivation. I am not arguing that the race element should be taken out of the formula, but that the deprivation weighting is wrong.
I also make a plea about how we calculate the deprivation index. I am pleased that the Government are moving towards a wider spread of benefits to work out whether they can devise a more sensitive way of measuring poverty. While it is true that most people on income-related benefits are genuine, some are not. I make a plea to the Government: if they cannot do so now, I ask them to consider later in the cycle the weighting of health as well as income deprivation in the overall deprivation index. People do not die early or have low birth-weight babies so that they can get on to tables to show that they live in an area of extreme deprivation. Health is a far more accurate way of measuring whether areas are poor than income figures alone.
My next plea is about the area cost adjustment, although I am not pleading for it to be abolished. Clearly, there are differences in costs for different local authorities. My plea is that the area cost adjustment should be based on reality, rather than on fiction. The Government ought to look at the excellent work of the Coventry authority, which shows that, for many authorities, a substantial part of the area cost adjustment goes not on services but on reducing the
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council tax. That is not a tenable position. By all means there should be an area cost adjustment, but it should be based on reality.
The third area on which I shall touch is the additional costs suffered by areas with declining populations. There is a myth among some Members that it is an advantage to represent an area from which people are leaving, since at least costs fall in proportion to the numbers of those leaving. Those of us who represent such areas will know a different story. Not only is the infrastructure of those areas older, more decrepit and more decayed—therefore requiring greater investment and replacement—but many of the people who are leaving are the bushy-tailed ones; the people with abilities who have to go elsewhere to look for jobs.
The areas from which people are leaving are areas with higher dependency ratios; they have people who are dependent not in any wrong sense, but in a dignified sense. They have grown old and need looking after. They cannot always follow their offspring to areas of economic advantage. Far from our costs falling, they rise disproportionately My plea, adding to the overall case made by SIGOMA, relates to how we fine-tune the formulas that have been put forward.
I want to end with a note of thanks. The Government have opened up the debate—
Mr. Deputy Speaker: Order. Time is up.
3.43 pm
Mr. Andrew Turner: The Isle of Wight, which I am proud to represent, has much to be proud of. Vectians are robustly independent and provide a loyal and hard-working work force. However, we suffer, as do many constituencies, from relatively high and seasonal unemployment. Our gross domestic product is creeping above 75 per cent. of the national average. Some 25 per cent. of jobs are in tourism and 40 per cent. are dependent upon it. There are a huge number of small businesses that defy the classic small and medium-sized enterprise definition because a SME nationally is large in Isle of Wight terms. Some 26 per cent. of the population are pensioners who live on fixed or declining incomes.
The economy is looking up. Despite a recent halving of jobs at Westland, there are new jobs and new contracts at AMS, SP Systems, NEG Micon and GBR Challenge, which builds the United Kingdom's official entry for the Americas Cup, which is taking place now. I congratulate GBR Challenge on how well it is doing.
My constituents and local authority are greatly concerned at the Government's review of local government funding, because the proposals, in the worst-case scenario, will lead to a loss of 10 per cent. of Government grant, which is equivalent to a 30 per cent. rise in council tax. To a band D council tax payer, that would put an extra £366 a year on top of what they pay normally. Such an increase is unaffordable to many residents, whether or not it is dampened in the short term by floors or ceilings. The council has said that such a proposal would lead to impossible cuts in services.
There are two important issues that I would like to raise today. The first is the methodology for calculating the area cost adjustment and the second is my heartfelt wish that the Government would recognise the essential additional costs of providing services on an island.

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The Isle of Wight is concerned that the data used for the area cost adjustment are not valid for the size of population of the island. At present we are aggregated with Hampshire to produce a robust enough earnings sample but, of course, Hampshire is a wealthy area and the Isle of Wight is a less wealthy area. The small size of the sample produces greater opportunity for error. This is not the basis of a fair distribution of grant or a basis that can be justified to my constituents.
On the island, we have a relatively low-skilled work force. That means that we need to recruit from a wider area than the island for many occupations. When we recruit one employee to the council, we often have a difficulty, in that they have to move and their spouse or partner can then be put out of a job, as we do not necessarily have two equivalent jobs available on the island or within easy travelling distance. We need the area cost adjustment to be calculated on a fair statistical basis and not built up from a hand-sized sample that is sub-divided, further reduced, weighted and reworked, as happens at present.
On the costs of providing council services on an island, the Minister will know that the Elliot review in 1996—the local government finance review of the area cost adjustment by Professor Elliot—recommended that a study be undertaken into the differences in non-labour costs affecting two councils only, those being the Isle of Wight and the Isles of Scilly. Such a study was recently undertaken by PricewaterhouseCoopers and has been sent to the Minister's officials. It evaluates the costs solely attributable to separation by sea at £4.2 million, or almost 4 per cent. of the council's budget.
The report's terms of reference were to examine how the Isle of Wight council's costs of service provision were affected by severance by sea and to analyse and quantify the additional costs incurred. When the Minister sees the report, I am sure he will agree that it is robust and does not exaggerate. I have been through the report with a fine-toothed comb and it does not over-egg the pudding or exaggerate the case. Its robustness may be measured by the fact that it refers to a reduction in the estimated cost of severance by sea from £5.6 million in an earlier report in 1996 to £4.2 million today.
PricewaterhouseCoopers excluded many factors that result in higher costs but are not directly and wholly attributable to severance by sea, such as the cost of discretionary services; diseconomies of scale—because the island is a small authority—costs that arise from demographic factors such as the high population of elderly people; the costs of supporting or maintaining the economy of the island; and costs that are attributable to the physical geography of the island, such as the cost of coastal protection.
Even that robust report and its robust definitions came up with additional costs of £580,000 a year for special education, £827,000 a year for fire services, £400,000 a year for waste management, £655,000 a year for construction and £1.2 million a year for social services residential care.
I shall deal with one or two of those areas in more detail. In social services, the council pays for 1,750 residential care placements a year—not many for a large council, but quite a lot for a small one—and 350 nursing home places. The council must keep enough nursing and
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residential care homes in business to ensure that places are available on the island. It is unacceptable to place elderly people on the mainland, because a journey by public transport from Ventnor to Basingstoke to visit an elderly person, or anyone else, would cost £27 for the round trip and take most of the day. PricewaterhouseCoopers concluded that prices were higher because of less competition—it compared the island with Hampshire, Portsmouth and Southampton—with additional costs to the tune of £1.24 million.
We use residential places for 40 children with special educational needs, for services that it is not cost-effective to provide on the island. Some non-residential places are available in south Hampshire, but the additional time and cost of perhaps accompanied travel must also be taken into account. Such places sometimes cannot be taken up because of the disruption that weather conditions cause to travel. An additional £580,000 annual cost is incurred providing those residential places.
The fact that islands face additional costs has been recognised and reflected in grant systems in this country and elsewhere. The Scottish special island needs allowance is one example and the Danish grant distribution system is another—
Mr. Deputy Speaker: Order.
3.51 pm
Mr. Harry Barnes: In one sense, I have waited 15 years for this debate, and I nearly missed it because I was dragged out to maintain the quorum in the Northern Ireland Grand Committee. Luckily, I have been able to return. The first Standing Committee on which I served dealt with the Local Government Finance Act 1989, which is the measure that got us into the situation we face today. It has caused the massive problems to which we need to respond. It might have been better if we had moved more quickly, so that fresh legislation could be put in place, but I am glad that we are now tackling the issue.
The 1989 Act introduced the poll tax, but that is the only element that has really changed since. The poll tax became the council tax, but that was only a minor shift in the Act's functioning and operation. It was, and still is, a flawed, fiddled funding formula that has created massive difficulties in many parts of the country. We need to adjust it to a more reasonable approach, but some councils have been granted moneys that they have spent and we cannot just automatically transfer funds from one area to another. Serious efforts have to be made to tackle the massive problems.
Since 1997, the Labour Government have taken several steps. They have increased the total percentage of revenue support, so that areas that were deprived have received money from the pot. Formula adjustments have been made, but some of those adjustments have been upwards and some have been downwards, resulting in great confusion. Some money has come from other sources to assist areas badly done to, such as the range of grants provided by the Department for Education and Skills for areas in greater need. Those have helped to adjust the picture slightly.

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The overall picture can be hard to understand fully. If moneys come in from sources other than SSA provision, the Government should undertake research to show who gets what. That information is important to help us understand where we are going.
The consultation paper mentions top-up provisions. We must ensure that top-ups for some do not become take-offs for others. In one sense, any top-up in one area will be a take-off in another area, because top-ups will come from the general amounts available. However, in some cases under the present legislation, top-ups have been deliberately linked with take-offs. The enhanced population figure, which especially affects district council figures, creates problems in many areas.
In North-East Derbyshire, 4.8 per cent. of the SSA is lost because of that figure. People have moved out to work in Sheffield and other areas, or are only day visitors to the area for entertainment and other purposes. There is nothing wrong with some money being moved to cater for that, but the weighting given to the various factors needs to be revised. In practice, more than 4.8 per cent. of the SSA is lost, because the enhanced population figure—or reduced population, as it is in North-East Derbyshire—is used to calculate other factors, leading to further losses.
Under the EPCS provisions in option EPC3, North-East Derbyshire would gain a £1.7 million increase. It is difficult to understand all the provisions in the document, because although it tells us what factors were considered in drawing up the options, it does not tell us what weighting is given to them. We cannot calculate for ourselves the effect of the changes. It would be helpful if we knew what weight has been attached to what factor, because we could then detect any strange anomalies in the provisions.
Mr. David Heath: Will the hon. Gentleman give way?
Mr. Barnes: I shall carry on for the moment, but I may give way later if I have time.
Another element that I wish to stress is the area cost adjustment. It accounted for 1.8 per cent. of SSA in 1989–90, but now accounts for 4 per cent. That shows the excessive weighting given to the ACA, which needs to be taken seriously into account. If it is intended that no one area should lose in cash terms, that will seriously limit the gains that other areas should make.
We need to change council tax banding. The argument has already been made for extra bands at the lower and top ends of the scale. Extra bands at the top end would allow more money to be raised locally through taxation, and that could be taken into account when considering allocation of funds under the ACA. The value of properties at the top of the bottom band is eight times lower than that of properties at the bottom of the top band, but the taxation figure is only three times lower. That should be changed, as what was known as the Mates amendment sought to change the same problem with regard to the poll tax. Only a limited change has been made so far.
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Fundamental review is necessary, and quickly. It would have been helpful to examine many other areas, such as education and police funding, but time has caught up with me. I was allowed only half a minute for every one of those 15 years.
3.59 pm
Mr. James Clappison: In the brief time available to me, I shall endeavour to correct the misapprehension that some people have about Hertfordshire, and about my constituency in particular. Labour Members should know that, although my constituency and Hertfordshire as a whole contain some areas that are affluent by national standards, they also contain poor areas. At least four wards in my constituency qualify for funding from the single regeneration budget. People there receive local government services as well, and they pay taxes. My fear is that the overall effect of the proposals for them and for my other constituents will either be a reduction in services for the same level of funding, or a very big increase in council tax bills.
Ministers have condemned the existing SSA system for failing to deliver a standard of level of service for a standard tax. However, from the outset it is clear that the funding to be made available for Hertfordshire will not provide a standard level of service—not least as far as the police are concerned.
The police service is one of the most vital social services. The effect of the proposals on policing in Hertfordshire is clear cut and stark. Hertfordshire loses out significantly under each of the five options set out for consultation.
In response to the formula grant distribution paper, the chairman of the Hertfordshire police authority wrote to Ministers to express his concern at
"the damaging effect that the proposals in the Formula Grant Distribution Paper will have on policing in Hertfordshire. In the worst case, Hertfordshire could lose some £8.8 million, or 7.2 per cent. of funding, which is equivalent to over 300 Police Officers. This would have a dramatic impact on our ability to meet local and national policing priorities."
My constituents share that concern about the results of the proposed formula. They emphatically do not believe that law and order problems deserve lower priority, in Hertfordshire, than elsewhere. My constituents who live in some of the areas that I described are the ones most strongly in favour of having more, rather than fewer, bobbies on the beat, and of achieving faster police reaction times in emergencies. They have full confidence in the Hertfordshire force, but they are increasingly aware of the recruitment problems that the force is experiencing, given that the neighbouring Metropolitan police force can offer a substantially higher allowance to recruits.
Moreover, police numbers in Hertfordshire have fallen since the last general election. They have barely risen since 1997, even though the Hertfordshire force has assumed responsibility for a much larger area. The last thing my constituents want is a reduction in the resources available to the police in Hertfordshire.
The same picture applies to other vital public services. Some hon. Members have described an overall shift of resources away from the south-east and counties such as Hertfordshire, and they are right to do so.

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Ministers respond by saying that there will be a system of floors and ceilings, but the only guarantee given so far is that no authority will face a cut in grant. Account must be taken of the pressures of inflation and of the pay pressures that will be inevitable. The latter will include the effects of the increase in local authority employers' national insurance contributions. We shall wait and see whether the floor will be higher than has been set out, but the Hertfordshire local authority fears that if it is anything like what it forecasts residents will face a substantial council tax increase.
My right hon. Friend the Member for North-West Hampshire (Sir G. Young) mentioned previous systems of local taxation. I well remember what was said about the implications of having floors and ceilings when the community charge was introduced. I was a parliamentary candidate in a by-election in the part of the world that the right hon. Member for Birkenhead (Mr. Field) represents at the time when the poll tax was introduced. I tried to argue that the effects of the poll tax would be mitigated by the provision of a floor. If Ministers and their parliamentary election candidates want to go down that road, I wish them more luck than I enjoyed on Merseyside.
The hon. Member for Bath (Mr. Foster) took us back to 1734 for an example of the outcry that he thinks could arise as a result of the proposals, and he mentioned the excise tax. I hesitate to say so, but that tax was introduced by Sir Robert Walpole, one of the hon. Gentleman's spiritual predecessors. It was opposed by the Tories of the time, but the example shows what local outcry could go up as a result of local taxation changes. In its own way, this set of proposals could produce a similar outcry when its implications are realised by people in the worst affected counties.
One of those counties is Hertfordshire. A very substantial shift in resources is taking place. My constituents, and others, are faced with the prospect either of reduced services or of a considerable increase in council tax bills to provide a standard level of service. I warn Ministers that those people will be very interested in Ministers' view of the proposals. They will want to see how Ministers respond to the considered and proper concerns expressed by the Hertfordshire local authorities, including Hertfordshire county council.
4.5 pm
Ms Karen Buck: I am from London. Although meetings of London Labour MPs might as well begin with a few rousing chants of the Millwall football supporters' chorus "Everybody hates us and we don't care". I promise the House that we do care. It is very important that there is some mutual understanding of the pressures facing local authorities in different parts of the country. I have always had huge sympathy for those local authorities in the north and elsewhere that faced great pressure in trying to deal with the devastating economic collapse as a consequence of Conservative policy. Those authorities have had to deal also with the effects of falling populations. All I and my colleagues in London ask is that there is a similar degree of recognition of the pressures and demands that face us.
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I do not believe that the formula as currently structured gives us what we are looking for, which is a closer reflection in Government grant allocations of the need to spend. It is very hard to see how the need to spend is reflected in the options under consideration, essentially in the formula's personal social services and environmental services block. The reasons for that are many and diverse, but they are rooted in the impact of deprivation.
I hope that the House will accept certain facts. London has the highest level of child poverty in Britain, and the reduction in child poverty that has taken place in London is smaller than in any other region. More households are without work in London than in any other region. A quarter of the country's problem drug users are in London, and two thirds of all the homeless people in the country are concentrated in London. Local authorities in the city support 40,000 destitute asylum seekers. Twice as many children in inner London are eligible for free school dinners as in any other area of the country. My constituency of Regent's Park and Kensington, North sounds like an elysian paradise, but it has the seventh highest eligibility for free school dinners in the country. Those levels of deprivation need to be understood in the formula, and I hope that they gain some degree of recognition among colleagues in the House.
It is also extremely important that the complex pressures of ethnicity and deprivation, and their interaction, are understood My right hon. Friend the Member for Birkenhead (Mr. Field) spoke about that balance. I accept that ethnicity is not necessarily and always a proxy for disadvantage, but the complex ethnicity now appearing in London and elsewhere—including Slough—is completely different from the simple presence of an ethnic minority population. I hope that my right hon. Friend will accept that. There are 300 languages spoken in London's schools. That creates a demand for spending and support that is not recognised by deprivation indicators in general.
I turn now to personal social services. The education formula gives considerable recognition to the costs of meeting ethnicity, but that requirement is not always properly reflected in other service areas. Personal social services in London are overstretched precisely because they have to deal with 300 different languages, and with the related issue of high turnover and mobility. High turnover is a huge pressure on schools. In many primary schools in London, no pupil at key stage 2 was in the school for key stage 1, but high turnover also places huge demands and pressures on personal social services. London also has twice the rate of mental health admissions of other parts of the country. Many of these factors are related.
London is changing at a rate probably not seen by any western city in the past century. We are now absorbing 100,000 international migrants a year. Although that is exciting, challenging and probably necessary, it places a demand on all our health and local authority services. If we do not meet that demand properly, there will be serious consequences. Yet under the proposed formula, London councils, which spend £356 million above their standard spending assessment at present, could lose between £38 million and £140 million. I do not see that that is in any way a reflection of the need to spend. That is why I am arguing, as my colleagues would have done

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if we had had more time, for London authorities to get a fair deal. I also want a fair deal for other communities. These are the ways in which I believe the Government could provide that.
Andrew Bennett: Does my hon. Friend recognise that almost all Labour Members accept that she should get a fair deal, but we are concerned that an awful lot of people in London still pay a lot less in council tax than people in other parts of the country?
Ms Buck: I accept that there are disparities which have historical roots, and that there is a need to change them. I am most concerned about the fact that the majority of London councils are Labour controlled and levy a high council tax. If we allow for the fact that there are fewer band A and B properties in London than anywhere else, our council tax levels are higher than elsewhere.
Mr. David Chaytor: Will my hon. Friend give way? It is on this point.
Ms Buck: I cannot give way any more; only two London Members have been called to speak from the Labour Benches, and I am sure that other people will have an opportunity to make their point.
We in London are asking for a fair deal; the floor that many authorities are likely to be on should be set at a level that ensures that services are protected. Secondly, we want all the options in the personal social services proposals to be reconsidered. I believe them to be technically deficient—they were designed to reflect higher levels of need yet, perversely, they seem to do the opposite. We do not believe that any of the options in the personal social services formulae are reasonable.
Thirdly, we need to ensure that the environmental services proposals reflect London's needs. Last year, more abandoned cars were removed in Merton, in the constituency of my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), than in the whole of Manchester. That is the scale of the environmental pressure in London. It should also be recognised that in the streets of the west end there are more visitors at 3 o'clock in the morning than at 3 o'clock in the afternoon, yet there is no specific weighting for this huge number of night-time visitors and the pressure that they put on services. We need an option in the environmental services block that allows us to provide a quality environment right across London. That effectively means the fourth option in the environmental services block, but weighted for visitors and commuters.
We also need the Government to recognise the impact of high population turnover and mobility, particularly on social services and education. It is correlated largely, but not entirely, with ethnicity. We need local education services to be funded on the basis of the school, not the resident, population. They are entirely different in London, although not necessarily in other parts of the country.
In my view, we need to be wary about the working families tax credit—
Mr. Deputy Speaker: Order.
4.13 pm
Matthew Green: I welcome this review, because we have waited a long time in Shropshire. During the past decade we saw services slashed year on year and large council tax rises as a result of the changes that the Conservative Government made to local government finance. As has already been mentioned, we are in with the f40 group and with the northern alliance. I pay tribute to both campaigns.
I want to be constructive in my approach to the problems. Resource equalisation is the almost invisible problem; I do not think that its implications have always been thought out fully. All the proposals equalisation would create quite perverse outcomes as they would take resources away from low-spending authorities with relatively buoyant local tax bases—largely shire counties—and direct them towards traditionally overspending authorities in areas of lower council tax value. The proposal would remove grant funding from shire areas that are already funding services above SSA to London authorities that are spending below SSA. The result would be to create massive turbulence in the funding of local government services. The revised funding formula already provides a system of resource equalisation. There should be no changes to the current methodology of resource equalisation.
The problems with resource equalisation are that the options are based on past spending patterns which the Government have stated that they wish to move away from as a matter of principle. High spending is rewarded, taking no account of policy decisions underlying such spending or the quality of service provided. The provision for deprivation in urban areas, already addressed in the needs-based formula, are double-counted. No detailed research has been undertaken into the case for any of the options.
If the Government accept higher needs to spend, they should make their own contribution and not leave council tax payers to foot the bill. The redistribution effect is anomalous and cannot easily be justified when compared with the pattern of existing budget and SSA variations.
We have heard a fair amount about the area cost adjustment, in the past decade, which grew from £500 million to around £2 billion. The increase has been twice that in local government funding as a whole. That has meant that in the past decade, money has been moving away from the areas outside the area cost adjustment.
Sparsity has also been mentioned. It has been recognised in the schools blocks for primary and for the local education authority block for transport. However, it has not been recognised for early years settings, the private, voluntary and LEA-maintained settings that are often on an even more geographically spread basis than primary schools. It has not been recognised for secondary schools nor for the additional costs of providing support services such as special educational needs specialist services or information and communications technology networks over sparsely populated areas.
Department for Education and Skills officials went on record at the Local Government Association education finance conference to say that they had been given no evidence of a need for sparsity beyond the levels in the

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consultation model. However, I know that work done separately by Professor Ros Levacic and Rita Hale Consultants has come to different conclusions. A copy of the Institute of Education, University of London research outlining many of these matters was forwarded to officials at the Department for Education and Skills and the Office of the Deputy Prime Minister during the consultation period.
The work of Professor Ros Levacic and Antonia Simon highlights a number of recommendations. For example, SSA for sparsity in the schools blocks should be revised upwards to ensure that LEAs are adequately compensated for the additional costs of small schools owing to sparsity. The increase required in the SSA is in the region of £74.8 million in this year's costs. LEAs should be funded for the greater costs of small secondary schools due to sparsity as well as the primary sub-block.
The formula proposed by the education funding strategy group for funding home to school transport should be reviewed to ensure that it correctly reflects the relationship between sparsity and expenditure on school transport.
I wish to add my voice to the calls for the inclusion of working families tax credit in the arrangements for recognising deprivation. Incorporating working families tax credit recognises the effect that low pay within the family can have on education needs. Ignoring working families tax credit excludes recognition of needs in low-income economy areas. Introducing working families tax credit would reduce the economy-related volatility in the distribution of deprivation funding.
Mr. Edward Davey: Does my hon. Friend realise that the working families tax credit is not taken up in London anywhere near as much as it could be compared with other regions? If WFTC is to be included, it should be on the basis of eligibility and not take-up.
Matthew Green: I agree. That is a fair point. The key is that real deprivation must be recognised—including people with low pay and with no pay. We need to find a proper way to recognise that.
The roads block has not been mentioned. The formula is being based on previous spend on roads. This has been raised in the seminars and I realise that Ministers have rightly said that they have struggled to find another formula that works properly for roads. I would like some more to be work done on the subject, however. In Shropshire and in many other rural counties in the past decade, county councils have rightly preserved their education and social services spending, but cut their roads spending. They did so because one can always repair a road later but one cannot repair a child's education or the results of a lack of care by social services.
If road spending is to be based on that of previous years, those areas in which such spending has suffered in the past and which have a huge backlog of repairs will not receive fair funding to maintain their road network.
4.21 pm
Dr. Desmond Turner: I recognise that there is a perception that local authorities in the south enjoy an unfair advantage over those north
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of Watford. That is not a universal truth, however, and I ask my right hon. Friend the Secretary of State to be careful to ensure that in the process of rectifying perceived injustices he does not, even unintentionally, produce new ones.
I note, for instance, that one of the greatest perceived injustices has been the treatment of Wandsworth and Westminster. They are hardly touched by this review, so it has almost failed at the first fence if one uses that marker. There are authorities in the south-east where any external impression of prosperity masks areas of considerable deprivation, with consequent extra demand on council services, but which are set in a high-cost area. My own unitary authority, Brighton and Hove, is just such a case. My hon. Friend the Member for Pudsey (Mr. Truswell) wanted some justification for the existing area cost adjustment. My authority will give him that. I can show him the devastating effect that withdrawing such support as the authority has got under the formula would have.
I am not simply pleading for Brighton and Hove to be a special case, or having a good whinge as my hon. Friend the Member for West Ham (Mr. Banks) might say. If I did not have a bit of a whinge, however, I would be failing my constituents. My authority strikingly illustrates the problems that will also apply to a greater or lesser extent to some other authorities in the south-east.
Ms Julia Drown: This issue does not affect the south-east alone. As my hon. Friend will know, in Swindon, which is the worst-funded unitary authority and one of the four of the f40 group that fails to gain on any of the education funding formulas, high costs are a real issue. That area suffers similar deprivation problems to Brighton. Does my hon. Friend agree that the area cost adjustment formula needs to be changed so that the likes of Swindon are taken into account as well as Brighton?
Dr. Turner: I have great sympathy with my hon. Friend. I want us to come up with a just solution and I do not think that we have got there yet in the proposals that are out for consultation.
Brighton and Hove have some of the most deprived wards in the country—sufficiently so for two of them to have been selected as a pathfinder for the new deal for communities. There are 17 pathfinders in the country and only the most deprived areas have been selected. Of the rest of the wards, approximately two thirds are among the top 20 for deprivation. Those hon. Members who come to Brighton, look at the sea front and think, "This is great, I like it," might not like it if they lived in some of the more deprived parts of the city. They would see a very different side of Brighton and Hove there.
Judy Mallaber: Will my hon. Friend give way?
Dr. Turner: I cannot give way too often.
We also have extremely high housing costs in my area—some of the highest in the country, and among the fastest rising prices at present. In that respect, we are no different from most of London. Some of our key statistical indicators, such as the number of children in

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care or on the at-risk register, could be superimposed on those for inner London boroughs. Our unemployment is 50 per cent. above the national average. We have grave difficulty in recruiting and retaining key workers in public services. For example, we have a 25 per cent. vacancy rate for social workers in child protection, which is a grave issue in Brighton as we have had some serious cases. That shortage is the last thing we want.
We have a general difficulty with recruiting to local government posts. Often, we get only one qualified applicant, if any. Some posts have to be readvertised. In common with the health service in the locality, the council has to spend more on recruitment and retention packages to get anyone. All those problems are a result of very high housing costs. A reasonably qualified and experienced teacher's salary will not finance the purchase of the cheapest one-bedroom flat in Brighton and Hove.
The council has been stuck for some time in a vicious circle of spending cuts and large council tax rises. Under the proposals as set out in the consultation paper, even allowing for the floor, Brighton and Hove will be dealt a devastating blow. It has some of the same characteristics as a London borough, but it is being treated much worse than the London boroughs under the options set out in the consultative document. When one reads the document that fact is glaring. We are listed next to Bristol and we always feel that we have a great deal in common with that city, but it is treated quite well and we are treated appallingly. There is thus a dramatic difference in the way in which two similar authorities are treated under the proposals.
Some of my hon. Friends have been highly amused when Conservative Members have pleaded poverty on behalf of East Sussex. I must tell my hon. Friends that, for once, those Conservative Members were right. I served my time on East Sussex county council as a Brighton member before local government reorganisation. I know the county well and I know its problems. There is much deprivation. It used to be a low-spending Tory-controlled authority, which has not helped it, as it started from a low base. Also, given the GDP per capita, the area would qualify for objective 1 status under European funding. That is another area that could be badly hit by the proposals because it already has some very under-supported services.
We are expecting an increase in the number of policemen in Sussex. The Home Secretary has promised that increase, but a 9 per cent. cut in funding for the Sussex police will clearly make that impossible. We suffer from the problem of being next door to the Metropolitan police who are poaching officers by offering them £5,000 a year extra and free travel. The Sussex police will not do well out of this proposal.
We are nowhere near getting this formula right. We must get a true picture of deprivation, but we must mix it with a real definition of the actual costs of providing a reasonable level of service in all authorities throughout the country. The proposals that are before us do not just need a little tweaking, they need rather a lot, and I hope that my right hon. Friend the Secretary of State will do that.
4.30 pm
Mr. Geoffrey Clifton-Brown: It is a privilege to wind up on behalf of the Opposition in this highly important debate continued from 15 October. There have been about 27 speeches, in addition to the two or three on 15 October, which shows the widespread interest in this extremely important subject. There were probably as many people on the two days who did not manage to catch your eye because of time, Mr. Deputy Speaker, and I must therefore protest to the Government that we should have had more time—in fact, a full day's debate—for these highly important proposals. As they cover 25 per cent. of all public spending, it is essential that we get them right.
The Government made the reform of local government spending a manifesto commitment in 1997. They have spent the last five years thinking hard about what to do and in July they came up with the big tome that we are discussing, yet they have given us and the general public only three months to consult on it, and two of those months were part of the summer recess when many people were on holiday. The Government have not given experts in the field or the general public much time to express their views on the subject, so I hope that Ministers will continue to receive representations sympathetically. I was especially touched by the comment of my right hon. Friend the Member for Kensington and Chelsea (Mr. Portillo) that the Minister for Local Government and the Regions had refused to discuss the matter with him. I hope that that will be put right.
The debate is important because only once every 10 years do we have the chance to effect changes to local government finance. The matter is highly complex. The present system covers 120 measures, many of which involve complicated maths, including regression analysis. As my hon. Friend the Member for Mole Valley (Sir P. Beresford) pointed out, if it is simple, it is not fair; and if it is fair, it is certainly not simple. Whatever Ministers say, the new system will not be simple.
The hon. Member for Bath (Mr. Foster) said that we should delay the whole matter for a further year, but I cannot agree. I congratulate the hon. Gentleman on his new post. I gather that he has been promoted to the transport brief, but I am sorry that we shall lose him on local government matters. As my hon. Friend the Member for West Derbyshire (Mr. McLoughlin) pointed out, the NAS/UWT believes that implementation should take place in the forthcoming financial year, and I have a great deal of sympathy with that view.
I cannot refer to all 27 speeches, but I shall take up some of the more significant points. The speech of the hon. Member for Denton and Reddish (Andrew Bennett), the Chairman of the Select Committee, was especially interesting His comments, like those of many of his hon. Friends, were almost universally critical of the Government's proposals. I was particularly impressed by his observation that there should be more discretion on local spending. We all say amen to that. My hon. Friend the Member for Mole Valley made the same point: there should be less specific and general grant, less top-ups, less ring fencing and more discretion for local authorities to spend as they please. I wholly agreed with him.

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We heard an erudite and articulate speech from my right hon. Friend the Member for Kensington and Chelsea, who made an interesting point about floors and ceilings, which amplified an intervention that I made on 15 October. Will the Minister give us a reassurance on that point? Will he guarantee that no authority will lose out in either cash terms or real terms in any of its expenditure blocks in this year's settlement under the new system compared with the present system? The consultation paper already gives that guarantee for education, but will the Minister extend it to all the other expenditure blocks? As the annual rate of local authority inflation, including pay settlements, is running at between 5 and 6 per cent., and I am asking the Minister for a real-terms guarantee in years one, two and three of the current rate of inflation of 2.5 per cent., perhaps he will be able to accede to my request.
The paper is highly complex. It covers all seven local authority expenditure blocks, each of which has between two and five options. It also deals with resource equalisation, fixed costs, sluggish costs and declining populations. We are dealing with a complicated subject, but my hon. Friends have made some telling points.
My right hon. Friend, like the hon. Member for Regent's Park and Kensington, North (Ms Buck), referred to the real difficulties posed by changes in London, not the least of which is the large number of commuters and visitors who come into London every day.
My right hon. Friend the Member for North-West Hampshire (Sir G. Young) made some perceptive remarks. He set out the fears of Opposition Members and of many people in local government that the proposals are a mechanism to transfer money from smaller, efficient and low-spending rural and shire counties to the profligate and less efficient northern and high-spending councils. He pointed out that as much as £80 million might be lost in Hampshire, which amounted to two teachers in every school.
My right hon. Friend also explained that if core funding is withdrawn by the Government, any increase will have to be borne by council tax payers. In my authority, Gloucestershire, the ratio of core funding to council tax is about three to one, so £3 has to be raised locally to make up for every £1 lost from central Government. My right hon. Friend pointed out that only a very imperfect system would rely on council tax increases, because property values do not necessarily reflect spending patterns, especially those of pensioners and people on fixed incomes. Such a system would act regressively on poorer and less advantaged groups in society. I hope that the Government will not take the line of forcing some local authorities to impose council tax increases that are greatly in excess of inflation. That would hit disadvantaged groups very hard indeed.
Judy Mallaber: The hon. Gentleman referred to the possibility that money might be transferred to other parts of the country. I come from a rural coalfields area, which the Government want to help, and we cannot understand how some of the southern counties receive so much extra per pupil than our area? Can he explain
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that? Does he agree that there should at least be a floor and that the lowest-funded authorities should reach that level?
Mr. Clifton-Brown: The hon. Lady makes her points in her own way. I can only regret that she had no chance to speak in the debate. If her Government had provided more time for the debate, she might have had that chance. May I suggest that her points could be made in an Adjournment debate?
other Members spoke tellingly. I was especially struck by the contribution made by the hon. Member for Stafford (Mr. Kidney). I cannot discuss the contributions of every Member who has spoken about the f40 group, but I pay tribute to the hon. Gentleman for his work on the group. He has led an effective campaign, in which Gloucestershire was included. It would be wrong to introduce changes in this grant distribution formula that affect councils like Gloucestershire, which is likely to lose funding of as much as £135 per pupil, yet is already one of the lowest-spending authorities.
I also pay tribute to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) who said that fairness delayed was fairness denied. He rightly pointed out that schools in Cambridgeshire already receive £270 less per pupil than those in neighbouring Hertfordshire.
The real joker in the pack was the hon. Member for West Ham (Mr. Banks). I think he was issuing his new manifesto as putative Mayor of London. I always knew that old Labour was a gamble, but I had not realised that its supporters had a gambling policy and that they wanted to introduce municipal casinos. No doubt that will be part of the hon. Gentleman's manifesto, so the people of London can judge whether the proposal is a good one.
My hon. Friend the Member for Eastbourne (Mr. Waterson) made the perceptive point that his constituency has a particular problem owing to the high percentage of elderly people. Indeed, as I represent a constituency that has the third highest number of people aged over 85, I have a great deal of sympathy with my hon. Friend. Personal social services will be especially affected in local authorities such as my hon. Friend's. Like other hon. Members, he pointed out that in his area health spending will also be affected, so the combined nutcracker effect of cuts in health and social services spending will be misery. There will be more bed blocking and more people waiting for treatment. Throughout the country, more people will suffer.
The new Member for Mid-Dorset and North Poole (Mrs. Brooke) made an interesting contribution. She said that she has received representations saying that there should be no more police in Dorset because the people there could not afford the council tax increases. That is a sort of sideswipe at the Government, but, in my experience of elderly and vulnerable people, they will spend more if they feel that they can obtain more police and feel more secure in their own homes, so I am not sure whether I entirely agree with the Lady on that matter.
My hon. Friend the Member for Bexhill and Battle (Gregory Barker) made the telling point that his county council could be the worst affected in the country. He

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gave some fairly horrendous figures—a wide band of between £4.1 million and £43 million—and said that that would particularly affect the police force in his constituency. I hope to return to the police if I have time, because that issue is of particular concern.
The right hon. Member for Birkenhead (Mr. Field) spoke very sensibly, as always, and made some telling points about the methodology used in the proposals. I should like to quote quickly the Rural Services Partnership's views on that because the methodology is very important, and I hope that it will be rigorous and soundly based when finally introduced. It says that
"relatively little independent research has been carried out into the factors that influence the need for or the cost of providing local government services."
It goes on:
"In addition, the RSP's technical case asserts that the work that has been carried out has been compressed into a short timescale and some of it appears to be lacking in rigour."
I hope that the Government will be able to attend to that. It concludes:
"All of this will result in a system, which is instable and could be subject to political interference in the future."
I have little doubt that it could be subject to political interference in the future.
My hon. Friend the Member for Isle of Wight (Mr. Turner) made the telling point that the island obviously has costs because of its geographical position. My hon. Friend the Member for Hertsmere (Mr. Clappison) said that his local authority could lose 300 police officers, and he is not alone in the shire authorities. In particular, the proposals on the police are very worrying.
I think that I have covered the contributions of all my hon. Friends. There were telling contributions from Labour and Liberal Democrat Members, but I do not have time to deal with all of them.
I am concerned—my hon. Friend the Member for Mole Valley touched on this—that the Government have increasingly proscribed the way in which local authorities can spend their money with special and specific grants, top-ups and so on. There are also legal obligations as to the services that local authorities have to supply—for example, in education and personal social services. So if there is a shortage of money because of the Government's proposals, the areas of discretionary expenditure that remain—for example, highways—are likely to be particularly badly hit. That must be a real worry.
As I have said, there are seven blocks in the discretionary paper, and there are some worrying proposals. Most worrying of all is the resource equalisation proposal. As always, the devil is in the detail, and the resource equalisation proposals are right at the back in chapter 11. If hon. Members did not reach chapter 11 in this huge tome, they should look at the proposals in option RE2, which show that the shire counties and district councils could lose a staggering £328 million. Indeed, the south-east and south-west alone could lose a staggering £128 million.
It must be wrong that efficient low-spending councils' money is being redistributed, because of their tax base, to high-spending, often highly indebted, highly
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inefficient, northern Labour councils. That cannot be fair and it cannot be right. Councils that have been prudent over the years should be allowed to provide a reasonable level of service.
The next particularly worrying block is that for the police, under which, for example, Devon stands to lose 200 police officers.
The third particularly worrying block is that for environmental, protective and cultural services. Again, my right hon. Friend the Member for Kensington and Chelsea will be interested in the fact that one of the proposals—EPC3—does not allow for commuters and day visitors, so London would lose £272 million under that proposal. Under EPC4, the shires and districts would lose a staggering £259 million because the weighting for deprivation, commuters and visitors would be removed.
As my hon. Friends have said, this proposal is one of Labour's redistributive measures. It is unfair and unfounded, and the Labour party should take it back to the drawing board. When the people of this country realise that the Labour Government, with their tired brand, are delivering an unfair system, they will vote in the ballot box to remove the Government because of what they have done.
4.45 pm
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Christopher Leslie): This has been a lively, interesting and detailed debate. There has not necessarily been the consensus that we usually achieve in the House, although I would not necessarily agree with the view of my hon. Friend the Member for West Ham (Mr. Banks) that this was a whingers' debate. That is not true; it was not a whingers' debate, and it has been well-mannered and well-argued in content.
Before I continue, I should like to say that my right hon. Friend the Minister for Local Government and the Regions has asked me to apologise for the fact that he is unable to attend the debate to hear the winding-up speeches.
We are considering a very significant issue today—the formula grant review. We are talking about local authorities in England that currently receive grant via the SSA system. As many hon. Members have said, some 25 per cent. of public spending goes through local government, most of which comes from central Government, with the balance raised locally via council tax. For some time, the Government have been reviewing the fundamentals of how those resources are divided between authorities. Although it might be an obvious thing to say, we do not have limitless funds. A finite pot of grant is shared by reference to an authority's circumstances and to its ability to raise council tax.
As my hon. Friend the Member for Stafford (Mr. Kidney) recognised in his contribution, three basic factors form the foundation of the system: the basic amount per head of population, an appropriate emphasis on the need to tackle deprivation and reflections of the variations in pay costs between areas. Of course there are other components.
Richard Burden: Will my hon. Friend comment on two things? First, in relation

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to deprivation, the PricewaterhouseCoopers report referred to unmet need as real need that should be addressed. Will that be given full weight in the Government's response? Secondly, I hope that my hon. Friend will understand that the fact that there was no contribution today from the west midlands conurbation, which includes England's largest local authority, Birmingham, indicates not a lack of interest, but a lack of time. May I draw his attention to the letter that has been written on behalf of Birmingham MPs to our right hon. Friend the Deputy Prime Minister?
Mr. Leslie: I very much appreciate my hon. Friend's contribution. I am certainly not taking the weight of contributions as a measure of how to make a judgment on this matter. There has been a long and extremely thorough consultation process.
Mr. Mark Todd: I thank my hon. Friend for commenting on the issue of how to adjust for variable costs in local government. Of the various formulae presented, surely the one that commends itself most obviously is that used in the national health service, which avoids the cliff edge, is already in place and is clearly a tried model used across the country?
Mr. Leslie: I shall come in a moment to issues in respect of area cost adjustments. I understand that there is a weight of differences of opinion. Today I want to underline the guarantee that we have been able to give so far about a no cuts arrangement in terms of authorities on a like for like basis for next year. Obviously, we wish to move further on that issue, but that is the state of play before we get into the details and the final decisions.
Mr. Clifton-Brown: May I challenge the Minister again to say whether it is cash for all seven blocks or, as the consultation paper says, in real terms for education? Can he confirm that it will be in real terms for education and all the other blocks? Will his cash guarantee apply for years one, two and three?
Mr. Leslie: The hon. Gentleman will have to wait and see when we come to the final decisions about the grant allocation. All I am saying is that at this particular time we can give that undertaking about no cash loss for any particular authority. Obviously, we hope to do more. The hon. Gentlemant seems to be making spending commitments on behalf of the Opposition. I welcome his conversion to a real terms commitment to growth for local government spending and I shall have to remember hat for a later date.
Several hon. Members rose—
Mr. Leslie: I do not have much time. I should like to make some progress and then I may give way later.
The hon. Member for Bath (Mr. Foster) suggested that it would be better to postpone the change in the system for a year or so, although on 15 October he said:
"We have waited in vain for five long years for a new formula to replace the current discredited one."
I am not sure that there is necessarily consistency in the Liberal Democrat arguments. I am glad that the hon. Members for West Derbyshire (Mr. McLoughlin), for
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South-East Cambridgeshire (Mr. Paice) and for Cambridge (Mrs. Campbell) urged the Government to make progress in terms of implementing the results of the review. There is never a right time, but I think that we should make progress straight away.
Clearly, many hon. Members are concerned about deprivation, and rightly so. The factors reflecting deprivation need to be relevant in the particular services that are provided. They need to be relevant and applicable to all authorities. We need to avoid perverse incentives in the formula. For example, it would not make sense if we had a formula that rewarded school absenteeism. We need to reflect genuine need. Those are important issues. How much weight we give to those issues is of particular concern. My hon. Friends the Members for Wigan (Mr. Turner), for Pudsey (Mr. Truswell) and for St. Helens, North (Mr. Watts), and my right hon. Friend the Member for Birkenhead (Mr. Field) raised important issues in respect of deprivation, as did the hon. Member for Torridge and West Devon (Mr. Burnett) in terms of whether working families tax credit and income support come into the deprivation calculation.
Mr. Swire: The Minister referred to Devon county council's plea that working families tax credit be taken into account in an area that has a lot of low paid workers but is not too bad on unemployment. Will he give that his utmost consideration because it is a serious factor that will affect the outcome for Devon?
Mr. Leslie: I hear what the hon. Gentleman says. We shall have to weigh up those factors in the process of reaching final decisions. A number of options look at incorporating working families tax credit into the calculations on deprivation.
A number of hon. Members raised the education allocations. Clearly, those are significant proportions of funding. The document for consultation had four cross-cutting blocks, including variables reflecting deprivation issues, additional educational needs, area cost adjustment and so on. The f40 group of authorities was well represented in the debate by my hon. Friends the Members for Stafford and for Newcastle-under-Lyme (Paul Farrelly), the hon. Member for Mid-Dorset and North Poole (Mrs. Brooke), and many others. The Government will consider option 5 as submitted and the other suggestions. I understand the strength of feeling, but there is a need to balance the desire of f40 authorities for a high basic entitlement with the need adequately to tackle deprivation and educational under-achievement in certain areas.
Judy Mallaber: Will the Minister also consider a suggestion that I put in my submission but was unable to make today, which is that there is a floor, perhaps at the lower quartile level once the calculations have been done, so that the lowest funded education authorities do not fall below that level?
Mr. Leslie: My hon. Friend helpfully moves the issue forward to floors and ceilings in general, and the guarantee that I mentioned earlier in terms of no cash cuts at this particular stage is relevant to her point. The hon. Member for Mole Valley (Sir P. Beresford), and the right hon. Member for Kensington and Chelsea

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(Mr. Portillo) questioned the guarantee. Of course we hope that we can do better than the commitment so far. Decisions on the levels of floors and ceilings are the next stage in the deliberations. We want to set those at realistic levels, taking into account the grant available and the range of outcomes for individual authorities. We hope that announcements will be made before early December—[Laughter.]
Sir Paul Beresford: I apologise for my levity. Does the guarantee apply to police authorities?
Mr. Leslie: No authority receiving grant will incur a cash loss. That is the guarantee that we have been able to give at this stage. Clearly, we hope to do better.
The right hon. Member for Kensington and Chelsea—who has left in his taxi, unfortunately, although the hon. Member for Cotswold (Mr. Clifton-Brown) mentioned him frequently, which was interesting and perhaps I will analyse that later—and my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) also touched on the issue of the census. I understand the issue to which they refer, and, while we will use census information as the best available data, it will be covered by the floor guarantee that I mentioned.
Area cost adjustment is a big issue, which is very significant, and most Members accept that there are greater pay costs in different places, which is a difficult issue to address. My hon. Friend the Member for Stroud (Mr. Drew), the hon. Members for Brentwood and Ongar (Mr. Pickles) and for South Cambridgeshire (Mr. Lansley), and my hon. Friend the Member for Brighton, Kemptown argued that greater consideration needed to be given to area cost. My hon. Friends the Members for Normanton (Mr. O'Brien), for Pudsey and for North-East Derbyshire (Mr. Barnes), along with other hon. Members, were of a slightly different opinion. Whether area cost adjustment can reflect the true costs involved is an extremely important issue, and we need to make sure that we are as fair as we can be about such options.
Resource equalisation is another extremely technical issue, which is very difficult to address. My hon. Friend the Member for Stafford, the hon. Member for South Cambridgeshire and the hon. Member for Ludlow (Matthew Green) all raised the issue. Basically, it is about taking account of an authority's ability to raise council tax when distributing the grant. The argument is whether it is fairer to take more account of an authority's relative council tax base. Again, I have listened carefully to the views expressed, and I hope that we will be able to take these matters into account.
Clearly, the grant distribution system is one of the most important issues affecting public services. Getting it right is absolutely vital. We have therefore taken great care to talk to local councillors, Members of Parliament and other local government representative bodies over recent months. Much of the work is extremely detailed and technical, and I would like to place on record my thanks for the efforts and energies put in to responding to the consultation process. In trying hard to secure the widest possible involvement of all stakeholders, we hope
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that the eventual results prove more robust, reliable and authoritative. It has not always been possible to exploit every single avenue proposed, and we cannot promise that everyone will he ecstatic about the results. In my view, however, it is better to have approached the issue with an open mind, listening to concerns and basing decisions on the evidence before us, than to stick with the status quo or take the easy option of inaction and no change.
My hon. Friend the Member for Denton and Reddish (Andrew Bennett) hit the nail on the head when he invited me to go to Bull's Head public house in his constituency to try to explain the formula—that might take an extra pint or two. In respect of the points made by the hon. Member for West Derbyshire, who urged greater transparency, those familiar with the intricacies of local government finance—they are few and far between—will have an instinctive desire for a simplification of the formula used to distribute grant. One of the reasons why we embarked on the review was to try to clear away the mass of complications and complexities that has tied up the system so much.
Mr. Mark Francois rose—
Richard Younger-Ross rose—
Mr. Leslie: We intend to simplify where we can, but if there are clear reasons why options need to be improved or made less crude, we will have to face up to those decisions. We do not want to oversimplify, but we do want to strike the right note to deliver confidence and understanding in the system.
Mr. Don Foster: Will the Minister give way?
Mr. Leslie: I am afraid that I do not have time.
Transparency must be our ultimate goal. If aspects of the formula can be seen as logical and rational, and based on clear reasons, that will be a major step forward.
Many former local government Ministers have participated in the debate this afternoon. At this moment, I feel a great deal of respect and affinity with what they endured during their tenure. My right hon. Friend the Minister for Local Government and the Regions and I have met countless representatives, and we will try our best to strike the right balance in all these matters. What we see is a move forward from—and the demise of—the standard spending assessment. It failed because it tried to dictate centrally what local councils should be spending. That cannot be done by the Government. This Government want to invest more in local government services. Unlike the Conservatives, who cut council spending by 7 per cent. in real terms, we want to make sure that extra spending goes in. We have put in an extra 20 per cent. on top of inflation since we came to power, and a massive 5 per cent. real terms rise for the next financial year. Investing in local democracy and building quality public services is vital. We want a serious boost in services and a boost in investment. Giving councils a decent grant matters. That is the approach that we intend—
It being Five o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Asbestos
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ainger.]
5 pm
The Minister for Work (Mr. Nicholas Brown): We have an opportunity in Government time, at the request of the Leader of the Opposition, to discuss important matters concerning health and safety. Three sets of regulations are relevant: the Control of Substances Hazardous to Health Regulations 1999, the Control of Lead at Work Regulations 1998, and the Control of Asbestos at Work Regulations 2002. All three sets of regulations amend existing legislation that was originally made in the 1980s, and which carried the full support of both sides of the House.
The Government are effectively doing two things. First, we are implementing a number of European directives, including the health element of the chemical agents directive that lays down minimum standards for the protection of workers from health and safety risks caused by chemical agents. The directive largely reflects the approach already taken by the three sets of health-based regulations, which since the 1980s have set out a systematic approach to the control of substances hazardous to health, including lead and asbestos, in the workplace. The directive and existing legislation require employers to assess risks, prevent or control exposure, provide information and training for employees and, in some circumstances, monitor employees' exposure to hazardous substances and place them under health surveillance.
Although the more prescriptive requirements of the directive have meant making many amendments to our existing regulations, the changes largely involve making explicit what is already implicit in our current regulations or their approved codes of practice. In transposing the requirements of the directive, the Health and Safety Commission has made every effort to make only those changes that are essential. It has taken care to produce a legislative package that will deliver high compliance while minimising the additional costs to industry.
The second thing that we are doing is addressing the Control of Asbestos at Work Regulations 2002, which will be amended to introduce a new legal duty to manage asbestos in non-domestic premises. Asbestos is the most serious occupational health problem in terms of fatal disease that the country faces.
Mr. David Laws (Yeovil): Has the Minister heard the concerns that many people have expressed about whether there is a difference between the health risks of white asbestos and those of the more dangerous blue and brown asbestos? Does he have evidence that suggests that white asbestos is as much a danger as the other forms of asbestos?
Mr. Brown: I shall come to that point but, if the hon. Gentleman allows me, I will deal with it in the order in which it appears in my speech.
In the 30 years between 1968 and 1998, 50,000 people died in the United Kingdom from asbestos-related diseases. The human suffering and misery behind those terrible figures continue today, and there is nothing that
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we can do about those already exposed. However, we can certainly do a great deal to prevent exposures today and so prevent painful and prolonged illness and death in the future.
Andy Burnham (Leigh): My right hon. Friend refers to people who have contracted asbestos-related diseases, such as mesothelioma. Many people in my constituency—former employees of Turner and Newall—still have outstanding claims against the company, but they are currently stalled because the owner, Federal Mogul, has gone into administration in the United States. Something could be done for people who contracted mesothelioma in the past if the Government could unlock the injustice of the situation in which those people currently find themselves.
Mr. Brown: The situation is complex and goes slightly beyond the regulations under discussion. However, it is serious. My colleagues and I met a Treasury Minister to see what we could do to make progress on a range of issues relating to legal actions that appear to be stalled. I have no announcement to make on that, but we are working across the Government, with the Treasury and the Department of Trade and Industry, to determine what more can be done. The situation is serious, as my hon. Friend said.
Since coming into office in 1997, the Government have progressively done much to strengthen the laws on asbestos in the workplace. We have widened the range of work that requires a licence from the Health and Safety Executive to ensure that asbestos removal work is carried out safely. Those measures have certainly had an effect on reducing the risks of asbestos. However, I share the concerns of the Health and Safety Commission that one issue remains to be addressed, and that is why a new proposal is before the House.
Research shows that more than 25 per cent. of those currently dying from asbestos-related diseases worked in building and maintenance operations. Although virtually all exposure routes have been effectively controlled by, for example, banning the use of asbestos products, it is estimated that something like 500,000 commercial and public buildings across the country still have materials in them that contain asbestos. In many cases, no one is consistently managing the risks from the thousand; of tonnes of asbestos in those premises. People working on those buildings, such as plumbers, electricians and other maintenance workers, often do not know that they are at risk from disturbing the material or whether their work is putting other users in the building at risk.
On the issue rightly raised by the hon. Member for Yeovil (Mr. Laws), although the different forms of asbestos are often referred to by colour—blue, brown or white—in reality the colour of a material gives no indication of the type of asbestos it contains. It is not possible to detect asbestos by simply looking at material, which must be analysed to establish with any certainty whether it contains asbestos. The Health and Safety Executive is aware of numerous incidents in which workers have been exposed to asbestos. Those have often resulted in the construction projects being stopped and the premises evacuated, as well as in producing potentially serious consequences for the

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workers involved. It is to deal with that unsatisfactory situation that the Government have proposed new legislation.
The new duty to manage asbestos will require those who have responsibilities for maintenance activities in non-domestic premises to assess whether there is any asbestos in their premises. If asbestos is present, they must decide either to remove it or to manage it, depending on its condition, while ensuring that subsequent maintenance activities do not expose the workers to avoidable risk.
Mr. Andrew Lansley: Perhaps the right hon. Gentleman can help me with something. I thought he would mention the date on which a building was constructed. In my constituency, Eternit, which as he knows produces roofing materials and so on, incorporated white asbestos into cement and roof tiles from 1980 onwards until the practice was stopped in 1997 or thereabouts. The date of a building could give considerable guidance on what materials were used and compliance costs could be reduced on later buildings.
Mr. Brown: I thought that as well but I will go on to refute it. It was common practice in the industry to mix brown and blue asbestos with white asbestos to get what was thought to be a better product.
Tim Loughton: The right hon. Gentleman mentioned the difficulty of identifying the asbestos, which might be a mixture of the different types, from its colour, but surely it would be fairly easy to analyse whether an asbestos was white, blue or brown. Blue and brown asbestos are made up of iron silicates whereas white asbestos is based on a magnesium silicate. It would not be a difficult scientific test to detect the absence or presence of either type.
Mr. Brown: Perhaps it would be better if I dealt with the matter where it occurs in my address to the House. We are trying to get the duty to manage the problem to be carried out in a proportionate and easily handled way. The advice to me is that to require distinctions to be drawn between brown, blue and white asbestos on the basis of analysis is a rather cumbersome way forward. In any event, there would still be a remaining problem from white asbestos although, as I will tell the House, it is a problem of a lesser order albeit a real one.
Mr. Michael Clapham: On the distinction mentioned by the hon. Member for East Worthing and Shoreham (Tim Loughton) between an iron silicate and a magnesium silicate, it is not so much the chemistry as the structure of the fibre that matters. Does my right hon. Friend agree?
Mr. Brown: There is a range of uncertainties about the matter, and the Government must make their decisions on the best advice available to them. There is a risk from white asbestos. It is not a safe product.
Mr. Tom Watson: Does my right hon. Friend accept that there is a certain amount
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of mythology about the colour of asbestos? Exposure to white asbestos still gives one 150 more chances of contracting mesothelioma than not being exposed to it.
Mr. Brown: Mesothelioma is a terrible way to die. There are risks connected with white asbestos, even if it is pure white asbestos and not mixed with brown or blue asbestos. Those risks are real and present and the Government want to safeguard against them. I hope that the House will accept that the Government's position is proportionate. It is certainly based on professional advice.
Mr. Alex Salmond rose—
Mr. Brown: I shall take the intervention, then perhaps I can make progress.
Mr. Salmond: I refer to the backlog of claimants. I suspect that all hon. Members have constituents who are affected. In Scotland there are 500 cases waiting at the Court of Session, and another 700 have not even reached the Court of Session, and we know that there is a similar situation south of the border. In the discussions between Departments, have the reasons for the backlog been identified? Is it merely a matter of appointing more judges, in which case why cannot that be done? Or is there some other blockage in the system, both in the Court of Session in Scotland and in the High Court south of the border?
Mr. Brown: I am not sufficiently familiar with the Scottish legal system to give the hon. Gentleman a definitive answer, but if it helps him, I will make inquiries of those who are able to give such an answer and write to him. However, the regulations that we are discussing today are designed to protect for the future, rather than deal with the tragic backlog of what are essentially common law cases seeking compensation for something that has already happened. As the hon. Gentleman knows, the Government have done their best in this area. We are looking at what more can be done. If the responsibility lies on anybody, it lies on those who caused the injury to the worker and on their insurers. It is there that some of the difficulties in law lie. I will write to the hon. Gentleman and try to get a more professional clarification of the point from someone more familiar with the Scottish legal system than I am.
The duty to remove or manage the problem is designed to make sure that maintenance activities are carried out safely and that workers are not subsequently exposed to avoidable risk. There is an obligation to ensure that information on the location and condition of these materials is given to anyone who is likely to disturb them.
The Government are not alone in wishing to legislate to protect building and maintenance workers from asbestos in buildings. A similar duty is likely to be imposed by the asbestos worker protection directive currently under negotiation. However, the United Kingdom legislation will go further than that required by Europe in one important aspect. The legislation in the UK will not be triggered by the maintenance works starting, but will require that those responsible for maintenance work in premises assess the risk in advance

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and properly plan how best to deal with it. Such an approach is essential if we are to prevent maintenance workers from being exposed to lethal asbestos fibres.
The regulations have been designed to be flexible, allowing a proportionate approach to be taken towards compliance. They require significant expenditure only when the risk justifies it. They are based on the sound business practice of establishing and managing risks efficiently, and closely follow current good practice in the workplace.
As the duty will apply to all non-domestic premises, sufficient time needs to be allowed for duty holders to comply, particularly those with many properties. The draft regulation allows an 18-month lead-in before the duty comes into force, but duty holders will be advised to start planning how best to comply as soon as possible.
Responses to consultation exercises on the duty to manage have been overwhelmingly positive. Those who responded positively include the Confederation of British Industry, the Trades Union Congress, the British Property Federation, the Federation of Small Businesses, Government Departments with major property portfolios such as the Ministry of Defence and the Department of Health, local authorities, national health service trusts, charities, trade unions such as the GMB, the Union of Shop, Distributive and Allied Workers and the National Union of Teachers, retailers, banks, universities, building and allied trade associations, utilities providers and asbestos specialists.
The CBI welcomed the clear indication in the latest proposals that the resolution of asbestos risks is a team effort. The British Property Federation confirmed that the Health and Safety Executive had a good understanding of the operational requirements of landlords and managing agents, which is crucial to maximising the health benefits of the regulations. The Federation of Small Businesses indicated that the notion of a duty to manage was acceptable. The TUC supported the commission's proposals. A major property owner and leaseholder, the Royal Bank of Scotland—which now owns NatWest—agreed that any proposal involving removal of an unknown hazard would benefit workers.
Mr. Mark Francois: So far the Minister has not mentioned the National Farmers Union, although he may be about to do so. I have received a number of representations from farmers in my constituency whose barns contain white asbestos and who fear they could face a collective bill amounting to several millions of pounds. I hope that common sense will be used, that the regulations will not be policed too zealously, and that my farmers will not be financially disadvantaged because of a problem that some believe does not exist.
Mr. Brown: No one from the National Farmers Union has approached me directly. I would be unlikely to overlook any representations that had been made; I think I would have remembered.
Those most at risk from asbestos on farms are the workers, the farmers themselves and their families. It is in their interests that the risks, if risks there be, are properly managed. If the asbestos is stable, one way of managing it properly might be just to leave it alone.
Mr. David Heath: I have received a fax from the National Farmers Union. It says
"The NFU is encouraging its members to comply fully with these regulations and urging them to realise the importance of workplace protection from exposure to asbestos."
I think the Minister has the NFU on his side.
Mr. Brown: Not for the first time! I thank the hon. Gentleman for making a helpful intervention. I am sure that that was not for the first time either.
The list of supporters is pretty comprehensive, but let me now deal with our critics. The Government are aware of concerns expressed in some quarters about the need for a duty to manage asbestos on premises, including views expressed by a small but vociferous minority who claim that the inclusion of white asbestos—chrysotile—is unnecessary because it is no more dangerous than other commonly used materials such as talcum powder. That is dangerous nonsense. The experts are unanimous in saying that all asbestos types can cause cancer. All asbestos types are unequivocally classified as carcinogens by the World Health Organisation's international agency for research on cancer, and by regulatory bodies throughout the developed world.
It is true that most experts believe that the blue and brown varieties are more dangerous than the white, and the most recent review of the relevant evidence suggests that the difference is substantial; but there is a wide range of scientific opinion and a good deal of uncertainty. The vociferous and, I have to say, commercially interested minority take a position at one extreme of the scientifically arguable range, and then behave as though the uncertainty did not exist.
Mr. Desmond Swayne: Does the right hon. Gentleman accept that although there may be a commercial interest in saying that white asbestos is not dangerous, commercial interests are lined up that will profit greatly from zealous policing in relation to a white asbestos risk? Therefore, the balance of commercial interests is not all on one side.
Mr. Brown: The Government's concern is to protect our fellow citizens in the workplace and act proportionately in dealing with the risk. I was asked earlier about the risk from white asbestos, and there is such a risk. I am being candid about the ratio of risk in relation to blue, brown and white asbestos. All the advice says that the risks are different. Although a range of assessments has been made, the risk is still there.
Mr. Laws: I am grateful to the Minister for giving way again. He acknowledged that there was some uncertainty about the issue. Although it is obviously wise for the Government to act preventively in respect of uncertainty and err on the side of greater health protection, is he now planning to take any action to reduce the uncertainty about health risk?
Mr. Brown: A research programme is in place, but there are obvious difficulties in getting absolute evidence of the relationship of risk between white, blue and brown asbestos. It would not be right to wait 30 years until the evidence shows up in people's ill health.

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We know that there is a risk and it would exist even if the white product could be separated from the mix that was commonly used in the building trade. It is a risk from which the Government have a responsibility to protect their citizens. We must take a decision in the presence of that uncertainty, in the knowledge that the results of a wrong decision would not be apparent for 30 years or more. We also know that a wrong decision would involve death from a particularly nasty disease. The Government's best estimate is that exposure of maintenance workers exclusively to chrysotile fibres—this relates to white asbestos—would give rise to an uncertain but actual risk of cancer.
In addition, excluding chrysotile from the duty to manage would make no practical sense. As recently as the 1970s, blue and brown asbestos were routinely added to white asbestos products during manufacture. In particular, that was done to improve the drying characteristics of the product. Applying different measures to the different fibre types could increase the costs of the duty to manage, as more analysis of the products in place would be needed to determine which regime should be applied. Even if the exclusion of white asbestos were desirable—it is firmly the Government's view that it is not—it would not be a practical way forward.
Concern has also been expressed by small businesses that some surveyors and asbestos removal contractors will use the legislation to oversell their services. We need to prevent that from happening. We have embarked on a five-year implementation programme, working closely with a number of organisations, including the Federation of Small Businesses and the Royal Institution of Chartered Surveyors, to ensure that the duty is properly understood and complied with. A crucial element in the campaign will be the need to advise duty holders to take a proportionate approach. In particular, that will involve leaving asbestos materials in place rather than having them removed when they are in good condition and are unlikely to be disturbed.
I seek to encourage the support of hon. Members in all parts of the House in ensuring that asbestos risks are properly managed without unnecessary expense. While extravagant claims have been made in the media about the cost of the proposals, the Health and Safety Executive calculates that the cost of full compliance with the duty will be about £1.5 billion discounted—in other words, at current values—over 50 years. Although that is a significant sum, it should be borne in mind that the costs will be spread among an extremely large number of duty holders whose individual costs will be significant only when the risks to health justify it. The Health and Safety Executive also calculates that the cost of completely eliminating all current risks from exposure to asbestos, including that of fully complying with all other asbestos regulation, would be £3 billion—a level that is again discounted. The elimination of this risk, together with savings arising from the better planning of maintenance and demolition work which will follow the introduction of the duty, is equivalent to total benefits exceeding £3.3 billion.
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If current levels of exposure to asbestos are allowed to continue over the next 50 years, nearly 5,000 people will die from asbestos-related disease. These regulations should go a long way towards preventing that human suffering and misery, and they deserve the full support of the House.
Mr. Lansley: I am grateful to the right hon. Gentleman for giving way to me again. He was talking about practice in the 1970s, but I am not sure that he has answered my earlier question. The burden of my point to him was that there was a time—from memory it was 1980, but one could be more precise—when known manufacturers, such as Eternit in my constituency, were not including blue or brown asbestos in the mix. They were using white asbestos in concrete for roof tiling, and so on. Why is it not possible to reduce the burden of compliance costs on those who own and manage buildings that were constructed after that date?
Mr. Brown: We are proposing a practical way forward. The risk has to be assessed by the person who owns or manages the building, and the best way of managing the risk—or what is assessed to be the risk, as it may not be necessary to test the materials for their composition—might be to manage the material where it is, if it is inert. It would be necessary to ensure that people coming in to perform maintenance tasks, who might disturb the material in some way, understood what the risks were. I do not think that it is possible to draw a distinction between white asbestos and the more dangerous forms of asbestos—although I accept that scientific theory suggests that such a distinction exists—in the clear-cut, practical way in which the hon. Gentleman is urging me to do. Moreover, if it were possible and less burdensome to do as he suggests—I do not accept that it is—there would still be a risk. It is a mistake to say that there is no risk from white asbestos. Although we can argue about the proportion of risk between blue and brown asbestos on the one hand and white on the other, we know that the risk is there, and the Government have a duty to protect against it.
Mr. Lansley: I was not suggesting that there was no risk associated with white asbestos, but I think that the right hon. Gentleman is admitting that there is a lesser risk. If that risk is substantially less, but the costs imposed on the owners of buildings containing only white asbestos is likely to be similar to that imposed on other buildings, the balance of costs and benefits in relation to that part of our property estate is different from the risk that applies to the property estate countrywide. The purpose of the risk assessment is to ensure that we focus on dealing with the greater risk, and do so in a way that is proportionate to the cost.
Mr. Brown: I think that the proposal that I have put before the House is proportionate. These issues have always commanded consensus in the House until now, and I hope that they will continue to do so. Way back in 1983, when the then Minister, the right hon. Member

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for Suffolk, Coastal (Mr. Gummer), had responsibility for these matters, he said this to the House:
"It is not a substance for which one can set a level below which there is no risk but a substance about which we do not know the lowest level of risk. We must therefore assume that a single fibre could do real damage which may not be seen for 20 years or more."—[Official Report, 28 July 1983; Vol. 46, c. 1411.]
That is what the official Conservative spokesman said, when in government. Those are his words, not mine. I do not think that the House should wait for 20 or 30 years to make a more balanced assessment of the proportion of risk between white, brown or blue asbestos. With that, I shall bring my remarks to a conclusion.
5.29 pm
Mr. John Bercow: I welcome this debate, and I begin on a consensual note. The Minister for Work is a person of unimpeachable integrity, and I have the highest regard for him. He wants to protect the public, and we all have a responsibility to do so; indeed, I take mine every bit as seriously as he takes his. However, to discharge that responsibility, and to ensure that only necessary costs are incurred, regulation must be based on sound science and on credible assessments of risk. It would be a grave dereliction of parliamentary duty if regulation based on flawed science were forced through this House without adequate scrutiny, and at the cost of billions of pounds.
It is because a fear exists that the Government might be about to make a colossal blunder that it is my responsibility to flag up legitimate concerns. To that end, I should like to look at the root of the problem—the different types of asbestos—to consider the merits of the statistics bandied about, to focus on the commercial interests that are lobbying for these regulations, and to highlight some of the problems contained in them and in the code of practice. I should also like to ask the House at least to consider, for that must be our purpose today, an alternative way forward to that which the right hon. Gentleman—entirely sincerely, and on the basis of advice from others—is proposing.
First, let us consider the root of the problem. It is nearly 50 years since scientists first established that exposure to the sharp metallic fibres of blue and brown asbestos—amphiboles made from iron silicate—were a serious cause of lung disease, including the form of cancer known as mesothelioma. The reality is that many participants in the public debate have in recent times blurred the distinction between those metallic amphiboles and the much commoner white form of asbestos. The latter is a wholly different mineral—magnesium silicate. The fibres of white asbestos are soft, silky and biodegradable. Theoretically, intense long term exposure to these fibres, which occur naturally in the air—typically, each of us inhales 20,000 of them a day—can cause health damage, just as intense exposure to any form of dust can injure healthy lung tissue.
However, the only hard evidence of which I am aware for such damage derives from studies of workers who were heavily exposed to white asbestos in its raw state—for example, in a large and unregulated asbestos mine in China. My concern is that the Health and Safety Executive—which originally proposed a glitzy publicity launch for these new regulations on 3 October, but hastily cancelled the event upon the legitimate complaint of my right hon. Friend the Leader of the
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Opposition—is basing the proposed regulations on research into asbestos undertaken by Professor Julian Peto in 1985. That research was conducted on workers in a Rochdale asbestos factory that was owned by Turner and Newall, to which reference has been made, and subsequently bought by Eternit. The study appeared to show that exposure to white asbestos had caused mesothelioma. That came as a bombshell, for until then no one had suspected that white asbestos might be dangerous.
A decade later, in 1995, Professor Peto's evidence was re-examined by other scientists—in a study, commissioned by the Health and Safety Executive itself, by Dr. Alan Gibbs and Professor Fred Pooley. The lung tissue of the exposed workers studied by Professor Peto unmistakeably showed damage by amphiboles, but the lung damage that the professor was examining had been caused not by white asbestos, but by residues from blue and brown asbestos. Furthermore, I am advised that at least 19 other scientific research projects concluded that white asbestos is a low-risk substance. As the Minister will be fair enough to concede, most of these studies have apparently been commissioned by the HSE. Indeed, the HSE reported to the World Trade Organisation less than a decade ago that white asbestos had a risk to health
"too small to be measured."
As recently as June 2000, the HSE published a report, by John Hodgson and Andrew Darnton, about the risks to health from asbestos exposure. They concluded that the risk from white asbestos was theoretically zero, yet they were criticised by some scientists for exaggerating its risks.
The House will be aware—and if it is not, it should be—of the US court decision in 1991 that overturned the 1989 total ban in the United States on all asbestos. The judge in that case said that
"more people would die of the inhalation of toothpicks in the United States than they would from asbestos fibres".
Both the Health and Safety Executive and the European Union have—
Mr. Clapham: Will the hon. Gentleman give way?
Mr. Bercow: I say to the hon. Gentleman, whom I like and respect, that I will give way to him once, but this side of the argument and the concerns that it embodies need to be heard. I am keen to hear his case later. I shall give way once, because I am a generous and a public-spirited fellow, but no more.
Mr. Clapham: I am grateful to the hon. Gentleman. He is right that the proposed ban in America was overturned. The situation today is that corporate America is facing an enormous problem from asbestos, and many of the section 11 cases—those companies seeking administration—have been caused because of asbestos liabilities. Had the law in America been retained, corporate America might be in a different position.
Mr. Bercow: I am interested in the hon. Gentleman's observation, but it does not cohere with the professional judgment of the Environmental Health Agency in the United States, to which he has tempted me to return in

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a matter of moments. If he is able to contain himself, I will say something further about that matter of legitimate and academic debate.
Both the Health and Safety Executive and the European Union describe white asbestos as a class 1 carcinogen. However, as I am sure Members know, oral contraceptives, alcohol and nickel compounds all fall into the same category. Furthermore, I understand that the only tests conducted on white asbestos show its carcinogenic potential for humans to be about 160 years at levels of exposure approximately 200 times those at which the Health and Safety Executive recommends regulatory action.
The advice that I have received is that most raw materials, including so-called safer alternatives to asbestos, are all carcinogenic, but that the finished products containing the fibres are not. All of the above findings are significant and, under the Health and Safety at Work, &c. Act 1974, the Health and Safety Executive is statutorily obliged to take full account of conflicting scientific opinion and new evidence as they become available. Yet despite the apparent evidence of its own scientists that the Peto study was fatally flawed and what I gather to be private intimations from Health and Safety Executive experts to this effect, the HSE has never changed its public line, but rather continues the campaign to demonise white asbestos.
The House should also know that the recent UK representation briefing to Members of the European Parliament referring to proposed amendments to the asbestos regulation observed that they are
"likely to incur significant costs for British businesses in remedial measures, including possible liability for compulsory building surveys of 'all' commercial property in the UK."
Significantly, it goes on to add that
"similar proposals were rejected in the USA as 'unnecessary'. There is also strong evidence that both EC directives and Health and Safety Executive regulations on this issue are based on flawed research."
I wish to refer to the statistics. The Health and Safety Executive and opponents of white asbestos claim that it causes deaths from mesothelioma. This is extremely questionable, and the conclusion appears to have been reached by a scarcely credible three-stage process.
First, the HSE took the total number of deaths each year attributed to mesothelioma. Then, because it had been established that exposure to blue or brown asbestos was a cause of mesothelioma, it took an arbitrary percentage of that figure and ascribed it to asbestos in general. Finally, because of its belief—apparently without evidence to support it—that some of these deaths must have been due to white asbestos, it went on to make the fanciful and, some would say, intellectually disreputable assumption that 10 per cent. of asbestos-related deaths must have been caused by exposure to white asbestos.
Since Health and Safety Executive officials began citing these figures, they have been supplied with extensive evidence by Dr. Gibbs and others showing that white asbestos cannot be identified as a cause of any mesothelioma death in the United Kingdom. However, all that actual evidence—as opposed to guesswork—has been ignored by the HSE, apparently in breach of its
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statutory obligation to take account of such evidence. Its fictitious figures have become a mantra that continues to be solemnly intoned by the anti-asbestos lobby on every occasion—Labour Members will no doubt prove my point conclusively this afternoon even though in reality there appears to be no evidential basis for them.
What about the commercial interests? The campaign for the new regulations has been actively promoted, at a cost of millions of pounds, by the two major multinational companies, Eternit and Saint-Gobain, that are now the market leaders in providing asbestos-substitute materials. Those materials have never been subjected to proper safety tests despite recent evidence from Edinburgh university that one of them—cellulose—may be carcinogenic. Hon. Members cannot have it both ways. In Britain those companies have carried out their lobbying through such bodies as the Association of Manufacturers against Asbestos and Westminster Advisers.
Since 1999, when the HSE finally dropped the clear regulatory distinction it had earlier made between blue or brown asbestos and white asbestos, the HSE has generally spoken of all forms of asbestos as if they were interchangeable. In that way, the anti-asbestos campaign has created the potential for immense public alarm. No one has been in a better position to exploit the resulting confusion than a new class of some 800 specialist contractors, called into being by the HSE to carry out asbestos-related work under a special HSE licence.
Mr. Lansley: Lest my hon. Friend continue further on that line of argument, perhaps he could tell me what evidence he has for a lobbying campaign by Eternit. I have an Eternit plant in my constituency, and I have approached the company for its advice. It has at no time sought to initiate contact with me or taken the line that my hon. Friend suggests. I find it curious that he should ascribe such lobbying to that company.
Mr. Bercow: As my hon. Friend knows, I invariably understate my case, and today is no exception. My distinct understanding is that that company has made representations—as it is entitled to do—to the HSE. Certainly, the people with whom I have been in contact have the distinct impression that the company is a leading advocate of the regulation that the Minister is commending to the House today. I would imagine that my hon. Friend will hear in due course from the company or part of it. We shall have to see.
Most of the contractors to which I refer belong to ARCA—the Asbestos Removal Contractors Association. In recent months, a nationwide investigation, involving more than 700 examples, has shown that those contractors and surveyors, who often work in close collaboration, have been using their privileged position to tell property occupiers of every type, including farmers, small shopkeepers, householders—to whom the regulations are not supposed to apply—residents of blocks of flats, local authorities and NHS hospital trusts, that their premises contain asbestos which the law requires to be removed and which can be done only by a licensed contractor at an exorbitant cost. However, when the details have been checked by independent experts, it has turned out in

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almost every case that the work is either not necessary at all or can be carried out legally and safely for a fraction of the cost quoted by the contractors.
Chris Grayling: My hon. Friend is probably aware that banks and building societies are now using that as an excuse not to grant mortgages, especially on flats in affected blocks. Does my hon. Friend agree that financial institutions are acting irresponsibly in the matter?
Mr. Bercow: I am as alarmed as my hon. Friend by that phenomenon, to which I intended to refer. It compounds difficulties, increases anxieties and threatens ballooning costs, and both the Government and the Opposition have a responsibility to take it into consideration.
Cases are legion in which companies have been told that asbestos is contained in their premises and that removal will cost a large sum of money. In those cases, it has subsequently transpired either that there is no problem at all or that it can be satisfactorily tackled for a fraction of the cost. There is a well known case in south Wales, and an extremely alarming one in west London, into which investigations continue. There is another case at Dulverton in Somerset. I am anxious about them.
In fairness to the Minister—this is another rare note of consensus, and I propose that we all enjoy it—he did refer to such cases. However, I should have preferred greater evidence of real and steely determination to crack down on the cowboy contractors who take citizens for a ride and risk bringing the Government into disrepute.
Mr. Nicholas Brown: The hon. Gentleman is right, that we can make common cause on this matter. If he gives me a list of the cowboy contractors who are behaving as he alleges, I shall report them immediately to their professional association. It has a disciplinary procedure to deal with such matters. I shall personally make sure that it is enforced.
Mr. Bercow: I am grateful to the Minister for that. I undertake to provide the details that he needs. He has increased my work load, but that does not matter as I can now increase his.
However, the Minister should not be so coy. The Health and Safety Executive, for which his Department is responsible, has all the ammunition it needs. It is aware of the facts and details involved, and mutters its irritation, but it has failed to deal with recalcitrants. If the HSE is not robust enough, I hope that the Minister is.
The cases described all occurred before the new regulations requiring all workplaces to carry out a full asbestos survey, risk assessment and monitoring programme were considered. On the evidence of confusion and sharp practice that is now available, the risk is that regulations that are not soundly based will merely provide the more unscrupulous surveyors and contractors with a field day. They will be unwittingly aided and abetted by the Health and Safety Executive at
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a cost to the UK economy that is far greater than the HSE's estimate of the cost of compliance with the proposed new regime.
Rob Marris: I have heard the hon. Gentleman suggest, in the Chamber and elsewhere, that business is burdened with too much red tape. Is he now suggesting that there should be statutory regulation of contractors who remove asbestos?
Mr. Bercow: I am not arguing for that. I am saying that there is a problem with a number of members of ARCA that are behaving irresponsibly and costing innocent citizens and businesses a great deal of money. I am critical of excessive regulation but, equally, it is important to emphasise that regulation to protect the public is necessary in a civilised society. I am glad that there has not been too much moralising in the debate so far, although I do not expect that that will continue. I care about safety as much as the hon. Gentleman does, but a legitimate democratic debate should take place about the level of regulation that is required, based on scientific assessment and not emotive theorising.
Mr. Kevan Jones: Will the hon. Gentleman give way?
Mr. Bercow: I shall give way for the last time to the hon. Gentleman, who has been patient.
Mr. Jones: All hon. Members will sympathise with any business that has been unscrupulously hoodwinked into contracting for unnecessary work, but would not the right approach be to regulate those errant contractors, or to track them down and expose them? Would not that be better than attacking regulations that would be welcomed by good businesses that manage their properties to a high standard?
Mr. Bercow: I fear that the hon. Gentleman is conflating and confusing two issues. One issue concerns whether there is scientific and intellectual justification for the regulatory regime that the Government propose. Opposition Members are raising legitimate questions about that, on our own account and on behalf of others. We are not clear that there is such a justification. If a regulatory regime for white asbestos is needed, and we are not persuaded that it is, there is a separate issue that concerns the behaviour of individual contractors.
I am certainly sympathetic to a policy of naming and shaming those who use privileged status and corporate power to make other people's lives more difficult and expensive than would otherwise be the case. I am on the side of the underdogs, of whom there are a great many around the country. If the hon. Member for North Durham (Mr. Jones) wants to join me in championing the cause of the downtrodden, the underdog, the oppressed and the unduly burdened, I will welcome him to the campaign.
Mr. Nicholas Brown: We can make common cause on this. I have a letter from Terry Jago, the chief executive of ARCA, who says:
"We are extremely concerned about these allegations, particularly since at no time has any contact been made with the Association with regard to them."

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I really think it important that the hon. Gentleman gives us the names and enables me to pursue the matter, probably on behalf of the whole House.
Mr. Bercow: I am genuinely flabbergasted that despite the profuse material supplied on the cases to the Health and Safety Executive, the right hon. Gentleman, whose Department is responsible for and effectively the parent of the Health and Safety Executive, is woefully ignorant of the substantive arguments that are being advanced against those contractors. Is the right hon. Gentleman semi-detached within his Department?
Mr. Brown: Actually, I think that "semi-detached" was a term of abuse used against a former Conservative Minister by his own side. The person making the allegations, according to ARCA, is the hon. Gentleman. The letter says:
"We would there fore suggest that in your response to Mr. Bercow, it may be appropriate for you to ask him to provide details to the Association, giving the names of the member companies about which the allegations are made, to enable these complaints to be investigated."
The hon. Gentleman is making the accusation—give us the names and we can investigate them.
Mr. Bercow: This is extraordinary. I said that I have a high regard for the right hon. Gentleman. He really deserves a better status in life than that merely of unrewarded and unappreciated lackey of ARCA. That will not do at all. The right hon. Gentleman should have some regard for his own status. It is not his job to go taking from me material that is requested by a third party. The material has been provided to the Health and Safety Executive, the cases have been well publicised and the individual victims are well known. I am not proposing to go through all the detailed cases now for the simple reason that other right hon. and hon. Members wish to contribute to the debate. I have already referred to the examples. I stand by them, I will elaborate on them, further and better particulars will be provided, the details will be given to the Minister and the hon. Member for North Durham, who is chuntering from a sedentary position, will have nothing about which to complain. He will be the first to complain if a detailed dilation on those cases causes me to take longer and to stop him making a contribution to the debate. I am a just fellow, and I do not propose to subject the hon. Gentleman to that disadvantage. It is simply not fair.
I want to focus on the cost of the regulations, because the right hon. Gentleman made an important point. He talked about a cost of £1.5 billion over a 50-year period. I thought that he had the figures the wrong way round and had misread his text. Previously, the Health and Safety Executive said that its estimate was not £1.5 billion but £5.1 billion. It then came up with a lesser figure of £3.4 billion, but the TUC, upon which the right hon. Gentleman is happy to rely when it suits him, previously suggested a potential cost of £80 billion.
Mr. Brown: I appreciate the hon. Gentleman's generosity in giving way. The figure of £80 billion that is attributed to the TUC is simply wrong. I contacted the TUC because I wanted to get to the truth. It says that
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this is not a TUC figure, it never has been and the TUC has never worked out the cost. I do not know where the figure comes from, but it is nothing whatever to do with the Health and Safety Executive or the TUC.
Mr. Bercow: On this occasion, on the Floor of the House, as I do not have the paper in front of me, I note what the right hon. Gentleman says.
Tony Worthington: Will the hon. Gentleman give way?
Mr. Bercow: No, I will not.
Tony Worthington: Will the hon. Gentleman give way?
Mr. Bercow: No, I have made the point clear to the hon. Gentleman and I do not intend to dilate on it further.
I emphasise that the Health and Safety Executive's previous estimate of £5.1 billion represented the largest cost compliance assessment ever given for a new law. Even if we exclude temporarily and in the name of cordiality on the Floor of the House the figure of £80 billion, that earlier proposed by the Health and Safety Executive was the largest ever cost compliance assessment given for a new law. Now we are told that the figure is £1.5 billion; previously we were told that it was £3.4 billion. I believe that there is a serious concern that the regulations could prove much more expensive, and the Minister is not in a position conclusively to rebut that suggestion for the simple reason that the only figures that he has to go on are those supplied to him by the Health and Safety Executive. If the HSE has changed its mind twice, what is to stop it changing its mind a third time when the regulations have been given effect, the cost is being borne and it is too late to reverse or mitigate some of the damage thereby inflicted?
As if that were not bad enough, there are other potential scandals to consider. There is the evidence to which my hon. Friend the Member for Bridgwater (Mr. Liddell-Grainger) referred that surveyors, estate agents and building societies are erroneously advising homeowners or prospective purchasers of the damage to the properties that has been sustained and their reduced value. Also, the alarm generated over asbestos is provoking an ever-rising tide of insurance claims. So large are the sums involved in this sort of compensation that it has now become the fastest growing area of liability.
The reality is that in those circumstances we have a legitimate reason to raise our concerns. I hope that Labour Members will not be gleeful at the thought of multinational insurance companies such as Sun Alliance having to make such massive and unjustified payouts. That company is already proposing to put aside £385 million as a contingency, principally to cover asbestos-related claims. We have to remember that ultimately everyone, including ourselves, will pay the bill in higher premiums.
Ministers, Labour Members of Parliament and trade unions must take care not to allow themselves to become front men and cheerleaders for what could turn out to be one of the most shameless public rackets of our time.

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In the first five substantive pages of the regulations I saw no fewer than 25 areas of ambiguity. A colleague has seen no fewer than 45 areas of potential error and uncertainty in the first 15 pages. So, there are real grievances. Questions need to be posed and answered in relation to the proposed code of practice as well as the regulations. The Government are seeking to ram through the House highly detailed and controversial regulations, which hon. Members are not equipped technically to evaluate and upon which, plainly, there is not a scientific consensus.
In the end, it seems obvious that in these circumstances we cannot just rest content with the view of the Government. We have to take account of what the environmental experts in the United States think, and of the fact that the World Health Organisation remains of the view that the controlled use of white asbestos is appropriate. It maintains that asbestos cement products are totally safe. We should also consider that the health and safety and risk management policy spokesperson for the Federation of Small Businesses, Dr. Jacqueline Jeynes, has stressed that
"white asbestos cement based and hard encapsulated products pose a negligible risk, and do not need to be treated in the same way"
as blue or brown asbestos.
The FSB has called for a Select Committee inquiry into the subject. John Bridle, an experienced south Wales surveyor, qualified chemist and unpaid consultant to the Asbestos Cement Product Producers Association, believes that such a study is essential and that a judicial review is likely without it.
The most important point of all is that these regulations appear to take no account of the disposal of the removed asbestos material. The waste regulations are even more ridiculous than the HSE's control of asbestos at work and approved code of practice may prove to be. The total results could be a gold-plated set of bureaucratic impositions that will promote an epidemic of illegal tipping and removal that could create a health hazard where none previously existed.
The HSE has neither the manpower nor the expertise to police these new regulations. The Minister wants to protect public health. Members on both sides of the Chamber share that objective. No one has a monopoly on concern for safety. I yield to no one in my determination that we and our fellow citizens in the workplace should be free of avoidable risks. Equally, however, there is not the slightest merit in legislating on the basis of science that we should not believe at a cost that need not be faced. The public interest demands a thorough debate and the readiness to consider alternative opinion, which the HSE has heard but which it currently chooses to ignore rather than to answer.
The Minister has set out his case. My responsibility is not to parrot the Government in the interests of a quiet life, but to give voice to the concerns of others and to raise questions that Ministers must address. There is still time for a Select Committee inquiry speedily but effectively to hear all the evidence before Parliament acts. That is the right course. To legislate hastily, ignorantly and expensively only to repent when it is too late would be the wrong course. I appeal to the House to endorse the case for expert debate and to resist the temptation to press the panic button.
Several hon. Members rose—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. May I point out to the House that 60 minutes are left for the debate and that there are nine hon. Members seeking to occupy it, including one Front-Bench spokesman? I hope that hon. Members will feel good will one to the other.
6 pm
Mr. Michael Clapham: My right hon. Friend the Minister approached the matter in a balanced way. He explained that regulation was necessary to give people protection in the workplace. The record should be put straight.
The hon. Member for Buckingham (Mr. Bercow) referred to the ILO—[HON. MEMBERS: "WHO"]. Indeed. The hon. Gentleman said that the WHO had produced no evidence that white asbestos posed a danger. I refer to a recent statement issued by the WHO. Its latest review of the health risks from chrysotile asbestos states as one of its conclusions:
"Exposure to chrysotile asbestos poses increased risks for asbestosis, lung cancer and mesothelioma in a dose dependent manner. No threshold has been identified for carcinogenic risks."
That statement is based on the scrutiny of studies carried out throughout the world, from Japan to France and the UK. The hon. Gentleman will be aware that about two years ago the HSE commissioned a study from Leicester university. After that study concluded that there was a carcinogenic risk from white asbestos, the HSE began to address the matter.
There have been two consultation exercises over a four-year period.
Tim Loughton: The hon. Gentleman could have made an identical statement in which the WHO referred not to white asbestos but to hot alcoholic beverages, contamination by nickel-based coins or contraceptives—a point made by my hon. Friend the Member for Buckingham (Mr. Bercow). If no threshold is given, such statements are almost meaningless.
Mr. Clapham: The statement referred to chrysotile asbestos. As the debate proceeds, the hon. Gentleman will hear evidence presented by my hon. Friends, some of whom in another life were personal injury lawyers. They will explain that they have dealt with cases of mesothelioma caused by white asbestos.
The record needs to be put straight. Last year, 5,000 deaths in the UK resulted from exposure to asbestos, and there were 1,700 new diagnoses of mesothelioma. Many of those cases were probably caused by white asbestos.
Mr. Ian Liddell-Grainger: Will the hon. Gentleman give way?
Mr. Clapham: I cannot give way at this point.
The hon. Member for Buckingham should also be aware that when chrysotile is mined, a dangerous and carcinogenic form of asbestos—tremolite—can become

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mixed with it. The two cannot be separated, so mined white asbestos is highly polluted. Tremolite is even more dangerous than blue or brown asbestos.
Tim Loughton: Will the hon. Gentleman give way?
Mr. Clapham: No, I have let the hon. Gentleman intervene once, and I want to make a little progress.
Given the figures that I have cited for the number of deaths and mesothelioma diagnoses in the past year, it is obvious why we need the regulations: we need to be able to reduce the number of deaths in the workplace. Unless we take action now, we are likely to face the kind of situation in the future that we are facing now, which stems in many ways from the workplaces of the 1960s, when blue and brown asbestos was used without any real consideration for the health problems caused. As a result, we are picking up many of the mesothelioma cases that were caused by exposure in those times.
Let me give the House an idea of the incubation period using a case that I dealt with personally. One of my constituents—a miner—was exposed to asbestos. I represented him at a tribunal and obtained a mining engineer's report. It was proved that there was asbestos in brake linings that that man had used in the latter part of the 1950s. In other words, it took from 1958 or 1959 until 1997 for the tumour to develop. The asbestos had been in his lungs for all that time. So there is a long incubation period, and the fact that we are now dealing with dangers from the 1960s shows that it is necessary to take action now to prevent problems in the future.
Mr. Francois rose—
Tim Loughton: Will the hon. Gentleman give way?
Mr. Clapham: No, I shall not give way now; many of my hon. Friends want to intervene.
We are saying that the regulations are necessary because we need to reduce the number of deaths in the workplace. Under the regulations, employers simply have to identify the deadly material and work out a plan to deal with it. That is all we are requesting.
The hon. Member for Buckingham said that the present situation in America results from massive asbestos claims, which are causing multinational companies to face going into liquidation. I understand that, at present, the majority of chapter 11 bankruptcies in America are being caused by the asbestos problem. For example, Federal Mogul, which took over Turner and Newall, has gone for administration under chapter 11. We are now faced with an enormous problem.
SunAlliance has been mentioned, and I understand that it is to appear in court next January in connection with the Turner and Newall cases. There is an argument which says that, although it provided employer's liability insurance, it tried to exempt asbestos cases, and it will be proven in the courts whether it was correct to do that.
Mr. Bercow: The hon. Gentleman is being a trifle gullible and credulous in relation to the behaviour,
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in the United States and our own country, of insurance provokers on one hand and lawyers on the other. He is a little unwise to take all that at face value. I simply ask him this question: if he is going to slate the record in the United States and to talk about companies going bankrupt because of asbestos, will he identify a single case of company in the United States facing a successful claim because of an incidence involving white asbestos? Name, date and details, please.
Mr. Clapham: I will have experts provide the hon. Gentleman with the information that he requires. I cannot give that information now. We know that white asbestos was widely used in the United States, so many of the claims being lodged against companies will be for exposure to white asbestos. I now come to the reason why the hon. Gentleman has objected to the regulation. He referred to Mr. Bridle of Bridle Associates, who is an apologist for the asbestos industry. The hon. Gentleman said that this man was not in receipt of payment, but I refer him to the "British Asbestos Newsletter". I ask him to read it carefully and follow through Mr. Bridle's linkage to the Canadian asbestos industry. The hon. Gentleman may well find that his statement proves to be untrue. He could contact the editor of the newsletter who will provide him with a great deal of information about Mr. Bridle. It appears that the hon. Gentleman has based much of his case on expertise provided from that direction. I advise caution, if that is what he has done.
Mr. Bercow: My thesis was based on evidence from a number of sources, to which I referred in some detail, and individuals were named. If the hon. Gentleman thinks his case is so strong, why has he refused to debate these issues with John Bridle? Mr. Bridle is not scared of the hon. Gentleman, so why is the hon. Gentleman scared of Mr. Bridle?
Mr. Clapham: I can assure the House that this hon. Gentleman is not afraid of Mr. Bridle or of many other people. Mr. Bridle has made certain accusations in writing that are wholly untrue. He alleged that my colleague and hon. Friend the Member for Tooting (Mr. Cox) and I are in the pay of groups who would benefit by manufacturing substitutes for asbestos. No such payment has been made to me, and I think I can speak with honesty for Tom Cox when I say that no such payments have been received.
Mr. Deputy Speaker: Order. The hon. Gentleman knows that he should refer to colleagues by their constituency and not by name.
Mr. Clapham: In conclusion, information shows clearly that white asbestos is a carcinogen.
Several hon. Members rose—
Mr. Clapham: No, I am not giving way. There are 5,000 deaths a year in this country, and the number is increasing year on year as a result of exposure to asbestos. Dr. Peto's work suggests that the number may well reach 10,000 by 2015. We must take the action set out in the regulation now if we are to protect people in the workplace for the future.
6 13 pm
Mr. David Heath: This is an interesting and, I hope, useful, debate despite its rather curious provenance. Apart from anything else, it gives us an opportunity to address matters of health and safety which have newly become the province of the Minister for Work. Under normal circumstances it might have been a good opportunity for him to dilate further on exactly what that means in terms of his work load and responsibilities in the Department. I am aware of the small industry that comes along with the Health and Safety Commission and the Health and Safety Executive, and the wide range of interests that run from dangerous pathogens to nuclear installations, railways and so on. At some stage, probably not today, perhaps the right hon. Gentleman would be kind enough to set out exactly what he is responsible for, and whether next time there is a rail crash—I hope that this does not apply—he will come to the Dispatch Box to explain the circumstances.
I also hope that the move to the Department for Work and Pensions will enable the Government to pursue two areas more actively. One is a single inspectorate for many of the purposes of health and safety and other matters that fall within the Government's province, as we have urged for a long time. The other is the role of rehabilitation, as, clearly, the Minister is in a good position now to examine the responsibilities of employers in terms of rehabilitation after health and safety events and seeing that through to a conclusion that gets an individual back into work.
The genesis of the debate has been referred to by the hon. Member for Barnsley, West and Penistone (Mr. Clapham)—it is the dichotomy between the experience in the United States and in North America generally and what is happening in the United Kingdom. Largely, it is a legal differentiation. As hon. Members know, the Fairchild, Fox and Matthews case has come to the House of Lords, and a helpful interpretation has been given of the rules of causation in this country. In America, the reverse is happening—there is a move away from responsibility. For instance, Patrick Leahy, the chairman of the Senate Judiciary Committee, has made a very unhelpful comment suggesting new legislation to reduce the liability of companies in the United States for asbestos-related injuries.
Part of the reason for that change of attitude may be the differences in scale in judicial terms. I note that, last month, a jury in the United States awarded damages of $53 million. That is a colossal amount of money, albeit in a case based originally on 8,000 claims against 250 defendant companies. Nevertheless, it is a huge award. In comparison, the United Kingdom average award is about £100,000. The legal situation and the parameters are therefore totally different.
We also know, however, that the number of claims in this country is growing—1,500 claims per year and rising—and is likely to go on increasing. That alarm, coloured by the United States experience, has transferred itself to some hon. Members and some people outside the House, who are trying to influence the legislative framework on asbestos within which we work. It is a complicated matter, as the latency of the disease—30 or 40 years—means that it is very difficult to establish the causative factors. Often, it is very difficult
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to identify the particular companies in question, especially when someone has been employed by a series of companies or when companies have simply changed their corporate structure or disappeared completely. The legal position is therefore murky.
Having listened at length to the hon. Member for Buckingham (Mr. Bercow), I think his argument boils down to three points. First, he maintains, on the basis of his judgment, that there is no risk from white asbestos—chrysotile. Secondly, he argues that, in the absence of risk, the regulation is excessive and would involve excessive cost. Thirdly, he adduces the existence of unscrupulous operators who are profiting from a situation that he believes is contestable. I shall deal with those points in turn.
I am not sure that the hon. Gentleman's science training is adequate to support some of the comments that he made in terms of the nature of iron silicate and magnesium silicate—[Interruption.] The hon. Gentleman says from a sedentary position that mine is not either. I do not claim to be a top scientist, but I do claim to have a science degree. I have a degree in physiological sciences, as it happens, but no matter—[Interruption.] I have no problem with the hon. Gentleman making fun of my background and training. I simply adduce the fact that he seems to think that one salt, iron silicate, is metallic and that another salt, magnesium silicate, is not. That suggests that he has not understood the evidence before him.
The hon. Gentleman also referred to the carcinogenic effect of various substances. He said that other carcinogens, such as nickel and alcohol, should be dealt with in the same way. I challenge him to name a single mesothelioma that has as its causative agent anything other than asbestos or a similar fibrous material. If he can find someone who has a mesothelioma that is caused by nickel, alcohol or contraceptive pills, I will yield to him on that point. However, I do not think that he will be able to do that, because mesothelioma is exclusively the result of a particular type of fibrous substance.
Tim Loughton: Perhaps I can turn the hon. Gentleman's question round. In response to my question, the Minister previously responsible for this issue said:
"Individual cases of mesothelioma or of lung cancer caused by asbestos are not pathologically or clinically distinguishable from those due to other causes…Since every member of the population has been exposed to asbestos from multiple sources, the definitive linkage of individual cases to a particular source is not possible."—[Official Report, 18 March 2002; Vol. 382, c. 33W.]
The hon. Gentleman said that that is rubbish, but a Minister made that statement in a written answer.
Mr. Heath: I have not seen the context in which that Minister made that statement. He may have been misled. However, the way in which the hon. Gentleman uses that quote now is grossly misleading. Mesothelioma is not caused by the ingestion of nickel or contraceptive pills. It is caused by the inhalation of fibrous material. That exclusively causes cancers of the pleura and the mesothelium. He must accept that.
No one contests the fact that chrysotile is a less effective agency for the disease than others, and thank goodness for that. Nevertheless, we have already heard

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that pollution from white and other forms of asbestos cause the same effects, which are, in any event, an innate effect of asbestos in the first instance. The hon. Member for Buckingham rubbished the work of Professor Peto, and he did not mention his collaborator, Sir Richard Doll, who happened to be the regius professor of medicine when I studied under him. Professor Doll was the greatest clinical epidemiologist not only of his time, but possibly of all time. I prefer to take his word rather than that of the hon. Gentleman in assessing the evidence before me.
Mr. Liddell-Grainger rose—
Mr. Heath: I give way to the hon. Gentleman, who is clearly an expert on the subject.
Mr. Liddell-Grainger: I do not claim to be an expert, but my hon. Friend the Member for Buckingham (Mr. Bercow) made the point that at least 19 other studies have been carried out. He is not the only one to have examined the issue.
Mr. Heath: There is a great deal of scientific evidence on both sides of the argument, and some hon. Members fail to understand that one cannot establish the absence of risk. It is part of the scientific illiteracy of this place that people want to have it proved that there is no risk. If there is evidence of risk adduced by proper scientific experimentation—which there is—the Government are right to take it seriously. They are there to protect the population. It would be a dereliction of duty to assume that there is no risk from white asbestos when the evidence clearly suggests that there is.
The next question is whether the regulations are excessive. I have considered the draft regulations—we have not had an opportunity to do more—and my judgment is that it is not excessive to ask people in a workplace to identify the areas of potential risk. That is not asking for a full structural survey or asking anyone to remove anything. It is merely asking people to identify where there is asbestos in a building. That has been accepted by the CBI, the Federation of Small Businesses, the TUC and the National Farmers Union. All of them have sensibly been consulted and think that the regulation is about right. The argument that it is excessive cannot be sustained.
The hon. Member for Buckingham has one point. He was right to raise cases where asbestos is encapsulated, such as concretised asbestos. A case can be made for further study of that to determine under what circumstances such substances pose a risk. We should reconsider the fact that there is no requirement to remove such a substance that is in place and intact.
The hon. Gentleman also made a good point about cellulose, which is an alternative to asbestos and a potential carcinogen. We know that it causes farmer's lung, which often makes Joe Grundy cough in Ambridge. That disease is a result of cellulose getting into the lungs. There is an argument that more work should be done on that product.
The hon. Gentleman also mentioned unscrupulous operators. If he is right—I am sure he is—that people are abusing the fact that the regulation will be
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introduced and the lack of knowledge about it, the Government should act to deal with that. They need to ensure that everyone knows the circumstances behind the regulation and what they must do and have no need to do.
The hon. Gentleman's argument about the companies involved was seriously damaged by the hon. Member for South Cambridgeshire (Mr. Lansley). His comments in respect of ARCA and its members lacked courtesy. The leader of his party managed to pick up a phone and call the Fire Brigades Union. Why did the hon. Gentleman not call ARCA to explain that unscrupulous operators were at large and to ask what action it was taking?
Mr. Bercow: I would not want the hon. Gentleman to be misinformed. It is not a state secret. The evidence is available. The cases have been publicised. ARCA cannot claim nescience in the matter. It is well aware of the facts and has a responsibility to study them.
Mr. Heath: The hon. Gentleman is, as always, sesquipedalian in his tone. He is really saying that he did not get in touch with ARCA. That is clear from its letter, which states that it is extremely concerned that the allegations were not put to it, as the Minister pointed out. ARCA has a disciplinary committee to consider complaints. However, it appears that no complaints were received so it could not take action. I find that extraordinary, especially as the hon. Gentleman also mentioned members of the Royal Institution of Chartered Surveyors. Chartered surveyors have a professional standing and a duty of care. They should not abuse the trust of their clients and evidence of that should be put before the responsible authorities at the earliest opportunity.
I have four points to put to the Minister. First, he did not address the decision to leave out the previous provision of due diligence. That is interesting. If a company can show that it has acted with due diligence in attempting to identify asbestos within the workplace, that should be an appropriate defence. It is not in the new regulations and there is a strong argument to suggest that it should be.
Secondly, clear guidance from the Health and Safety Executive is essential to determine what is and what is not needed so that people do not spend money unnecessarily removing parts of buildings or on complicated and expensive surveys. Such surveys are not needed when it is possible to identify parts of a building that clearly pose a risk or that give rise to a reasonable suspicion that there is asbestos in the fabric of the building.
Thirdly, the Minister, the commission and the executive need to work with responsible undertakers to make sure that they are not taking steps that are excessive and will involve extra costs to industry.
Finally, I should like the Minister to commission more work on encapsulated or concretised asbestos and on the potential dangers of other fibrous materials being used as asbestos substitutes. I would hate our successors in 30 years' time to be making the same arguments about a different scare, the latency of which is such that people are now inhaling the fibres that will cause them horrible illness and potential death at a later stage in their life.
6.30 pm
Mr. Stephen Hepburn: I welcome the opportunity to speak in the debate, which was initiated by the Opposition. It allows us to expose a crime that has been perpetrated on thousands and thousands of workers in the UK by unscrupulous employers. The extent of the problem of asbestosis-related deaths is revealed by the area that I come from, Tyneside, where two people die each week from that illness.
Tyneside has a history of heavy industry and shipbuilding, so we have a legacy of workers who have used asbestos in the past, largely through ignorance, and who now have asbestosis, which is causing their death. In Jarrow, 109 men are waiting for compensation through the compensation courts. Those are basically 109 dead men walking. They ain't going to recover. They ain't going to get any better. Even though they will die in agony, all they want is to get their compensation. But the problem will not go away once those men have got their compensation and, unfortunately, died. The problem will get worse. It has been estimated that it will not peak until 2010.
The men who have been suffering from asbestosis have had to worry not only about the illness and the fact that they have had to live through the illness with their family, but about the compensation. I have raised the issue twice in Parliament—and I will be brief and take your guidance on the length of speeches, Mr. Deputy Speaker. However, I am reminded once again of the unfairness of the way in which those men have been treated, of the scandal of those rogues at Chester Street Holdings, who potentially robbed 10,000 people on Tyneside of their compensation, and of the ludicrous Fairchild judgment, whereby the person suffering from asbestosis had to prove which employer at which time and in which place was the source of the single fibre that caused his illness. That is an absolute nonsense. I had a constituent, William Cuskin, whom I have mentioned in Parliament before. He was a painter who worked for numerous employers up and down the Tyne throughout his career. How on earth could he say which single employer gave him the disease?
Mr. Kevan Jones: Does my hon. Friend agree that many of his constituents, and many of the people whom I dealt with when I handled asbestos claims at the GMB union, were told when they were working with asbestos that it was safe? Many of them are now dying a horrible and cruel death. The hon. Member for Buckingham (Mr. Bercow) also spoke of a safe type of asbestos.
Mr. Hepburn: I agree with my hon. Friend. We must realise that we cannot save those people who are dying of asbestosis. We can do nothing about the people who will get the illness in years to come because of their past exposure to asbestos. We can do nothing to relieve the stress caused by Chester Street Holdings and the Fairchild judgment. What we can do is reduce, if not eradicate, the risk of people getting asbestosis in the future. That is exactly what the asbestos in the workplace regulations are about. They are commonsense measures. All they say is that an employer must identify where the asbestos is in his workplace so that if any contractor comes to do any sort of work, the contractors and workmen are protected.
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I have heard the arguments about white asbestos. One Opposition Member said that it was no more dangerous than talc. If it is no more dangerous than talc, let him put it under his arms for the next 12 months after he has had a wash. I hope he will not contract the disease from which people are dying a terrible death week in, week out in my constituency.
It does not matter what colour the asbestos is. It does not matter whether it is white, blue or brown. It is a killer. Yes, it is a killer to varying extents, but would we ask a person whether he would rather be run over by a mini or by a 10-ton truck? At the end of the day, the person will die; it is only a question of how long it will take.
I welcome the regulations, which I hope will be introduced sooner rather than later to protect people in the workplace.
6.35 pm
Mr. Liddell-Grainger: Having been in the building trade in the area where the hon. Member for Jarrow (Mr. Hepburn) lives, I know that one of the first things to look for when entering a building is where the asbestos is. If someone finds asbestos, they must do something about it. I saw more building projects held up because asbestos had been found than for any other reason, and they were held up for longer than any other projects. As a result, sub-contractors went bust. That happened many times on Tyneside.
The regulations refer to a duty to
"identify…where asbestos may be present in buildings".
That is fine, if the asbestos can be found.
The hon. Member for Barnsley, West and Penistone (Mr. Clapham) mentioned Federal Mogul, which is included in chapter 11. It is in my constituency, and it is a big employer. It may continue to be; we will see what happens in a month's time. I know that the factory has major problems, but I also know that whoever goes in to change things will have a problem with asbestos. It will take a long time to clear the site.
Bridgwater is 100 acres short of industrial land. We desperately need land. If the regulations are introduced and we have to explore every part of every building to make them watertight, building and regeneration will be held up. That applies to other areas as well as mine. especially parts of the north-east, which is still changing from a heavy-industry to a light-industry area.
Another problem is the requirement to keep records of location and condition. "Condition" means condition today. Buildings are intended to have a considerable lifespan. Many factors may change their condition, such as water or air. Will it be necessary to re-regulate every five years because checks have to be made again? How will it be possible to make certain that part of a building has not deteriorated to the extent that it must be removed earlier?
Then there is the risk to workers. Those exploring a building to establish where asbestos is must take samples, which disturbs the asbestos. Someone carrying out such a process for a surveyor's report, through the Institution of Chartered Surveyors or any other organisation, might cause a problem while trying to find out where the asbestos is, and the material might have

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to be removed anyway. I may be putting this in a rather longwinded way. What I mean is that the regulations may result in more problems than positive results.
I do not dispute the fact that we must know where asbestos is, but most buildings are that sort of age. White asbestos in particular dates from a time when there was a massive amount of industrial building, and mostly concrete, tin and asbestos were used for the roofs.
The regulations prescribe a duty to establish where premises are, and their condition, before any maintenance work is begun. How will those going into the building know about its condition? Someone examining lengths of piping covered in asbestos will have to establish whether a percentage, or the whole amount, is damaged, whether it can be re-used and whether it can be left. I do not understand how the regulations will regulate that. It must be in the interests of specialist firms to have the stuff pulled out if any of it is not in good condition before rebuilding starts.
If such matters are not addressed, the regulations may be unenforceable. As the Minister knows, there are one or two cowboys in the building industry. We do not want to create a problem because they are looking for ways of getting around the rules.
6.39 pm
Tony Worthington: I welcome the regulations, which should have been implemented many years ago. I also very much welcome the contribution of my hon. Friend the Member for Jarrow (Mr. Hepburn), who treated the issues under discussion with the seriousness that they deserve. They are a serious concern in our constituencies.
Clydebank in my constituency has had the highest rate of asbestos deaths in the country for many years because of the shipbuilding and ship repairing industry and Turners asbestos factory. These are serious matters. People have died because of the material and the regulations seek to prevent people from dying in future. Anyone who turns this place into a public school debating chamber in which we make party political points when deaths are involved is not doing anyone a service.
We all anticipated that the main objection would be made in terms of white asbestos. In such circumstances, we can only look at what scientists have said. Asbestos is one of the most investigated materials ever and it is very difficult to investigate whether something causes disease over a period of 30, 40 or 50 years. In 1998, the World Health Organisation concluded that white asbestos caused asbestosis, lung cancer and mesothelioma, so it is clear that this is not only about mesothelioma. Many diseases, including lung cancer, are affected by asbestos. In 2002, the United Nations ruled that all forms of asbestos should be added to an international list of chemicals subject to trade controls. The international chemical review committee said that such controls were another big step towards eliminating the risks associated with asbestos. A prestigious scientific body concerned with occupational health, the Collegium Ramazzini, called for an international ban on all mining and use of asbestos, including chrysotile, and concluded that it causes cancer.
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The International Programme on Chemical Safety, which is sponsored by the United Nations Environment Programme, the International Labour Organisation and the World Health Organisation, concluded that exposure to chrysotile posed increased risks for asbestosis, lung cancer and mesothelioma. The French medical research council established that all asbestos fibres are carcinogenic. The World Trade Organisation, adjudicating on a trade war between France and Canada on the issue, concluded that chrysotile was an established carcinogen and that there was no safe threshold.
Those judgments are not from Select Committees. but from controlling bodies, and they are based on research such as that of Smith and Wright, which says that chrysotile is the main cause of pleural mesotheliomas in humans. Research conducted by Mancuso found that chrysotile is far more hazardous in the induction of mesotheliomas and asbestos cancer risk much higher than was previously thought. The findings of Yano and others show that heavy exposure to white asbestos alone can cause lung cancer and malignant mesothelioma in exposed workers. The conclusion of Chaturvedi and Chaturvedi is that chrysotile asbestos cannot be used without risk.
I am very grateful to Robin Howie, a distinguished Scottish scientist, for writing to me about the issue. He said that the critical study on the effects of chrysotile on health was that initiated in 1966 by the McDonalds and co-workers on Quebec white asbestos miners—people working only with white asbestos. By 1992, those authors had observed 108 deaths from pneumoconiosis, 657 lung cancer deaths and 38 mesothelioma deaths. There were 174 more lung cancer deaths than one would have expected in such a population. Robin Howie tells me that the critical fact is that Canada exports more than 95 per cent. of the chrysotile that it produces. If chrysotile is so safe, why do the Canadians not use more of it?
Many people have pointed out that we should also take into account the evidence heard in courts across the continents. Court after court around the world has concluded that all forms of asbestos have caused thousands of deaths. An article in the Financial Times this week showed that ABB was going down because of asbestos claims. Two hundred and fifty of the largest firms in the world are now approaching the United States Supreme Court because they, in turn, are being killed by asbestos. They have been found guilty over and over again, and white asbestos has been involved in those judgments. If they believed that white asbestos was harmless, surely they would have mounted an intensive collective research project to prove it, so that they could win in court. They have not done so because they could not. Now, they are protesting about the level of damages.
There is very little time left, and I am sorry that I shall be unable to respond to any questions about any of those pieces of research. On white asbestos, I would simply say to the hon. Member for Buckingharn (Mr. Bercow): "Don't stay in Buckingham. I do not know what the rate of asbestos-related death is there. Come to Clydebank and see what misery and death tins substance has caused." The regulations will prevent further deaths, and that is rather more important than the points that the hon. Gentleman was making.
6.46 pm
Angela Watkinson: The important thing about this debate is that it is taking place before the Government have signed the statutory instrument relating to the new regulations, which are likely to involve organisations throughout the country in costs exceeding £5 billion. The new regulations encompass all types of asbestos—blue, white and brown—and treat them in the same way. That is why they are fundamentally flawed.
The use of blue and brown asbestos was finally made illegal in 1985, but a study in the same year marked the onset of the confusion that lies at the root of all our present problems. Scientists, lobbyists and, finally, legislators began—through what originally stemmed from a misreading of the scientific evidence—to blur the distinction between the different types of asbestos. The encapsulation of the fibres of white asbestos in cement is by far the most common use of the material. Asbestos cement is used in such products as roofing slates, and accounts for 85 per cent. of all asbestos in use in the United Kingdom. It presents no risk to human health at all. Not a single case of health damage has ever been scientifically ascribed to exposure to asbestos cement products. There is simply no mechanism whereby such damage could occur.
Only a decade later, when Dr. Peto's evidence was re-examined by other scientists, did it emerge that he had made a fundamental error. If there is one point of consensus in the Chamber this evening, it is that there is a plethora of contradictory scientific research evidence, and I endorse the request by my hon. Friend the Member for Buckingham (Mr. Bercow) that that evidence should be heard in Select Committee. Determined attempts have been made to find fresh evidence for the dangers of white asbestos. Further studies have emerged, based on workers exposed to raw asbestos in China, Italy and elsewhere, which seem to indicate that there is a very slight risk from prolonged and intensive industrial exposure.
In recent years, we have seen a deliberate policy to blur any distinction between the different types of asbestos and their uses, and to suggest that all types of asbestos material can be equally dangerous. In this way, the Health and Safety Executive has helped to create the potential for immense unnecessary public alarm, not least because by far the most widely used form of asbestos in the United Kingdom is asbestos cement, which poses no risk to human health.
Mr. Kevan Jones: Will the hon. Lady give way?
Angela Watkinson: If the hon. Gentleman will forgive me, I will not, because I am short of time.
Millions of commercial and domestic properties in the United Kingdom include some form of asbestos in their construction. The commonest of all is white asbestos cement used in roofing materials. No one has been in a better position to exploit the confusion and alarm resulting from the blurring of the differences between the various forms of asbestos than the specialist contractors licensed by the Health and Safety Executive to carry out asbestos-related work. A recent nationwide investigation has shown that property occupiers ranging from farmers, householders and shopkeepers to local
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authorities and NHS hospital trusts are vulnerable to commercially motivated advice, and can become involved in unnecessarily costly asbestos removal that could be carried out at a fraction of the cost by an unlicensed building contractor.
The HSE's proposed new regulations increase the likelihood that the public will continue to be exploited in this way. The chief purpose of the new law will be to impose on all workplaces—some 1.5 million collectively—the duty to carry out a written risk assessment of all asbestos materials on the premises, combined with a continuing programme for their safe management. According to the consultation paper published by the HSE earlier this year, the new requirements alone will cost the organisations involved £5.1 billion. Other sums have been quoted today, but this figure takes no account of the fact that hundreds of thousands of organisations, bewildered by confusion over the dangers of asbestos, will be reluctant to take responsibility themselves for assessment of the risks posed by asbestos, and will therefore call in the HSE's licensed contractors.
There is too much doubt about the integrity of the scientific research on which new regulations on the control of asbestos have been based for any confidence to be placed in them. I urge the Minister to re-examine the evidence.
6.51 pm
Rob Marris: I should begin by declaring an interest as a member of the Transport and General Workers Union. Also, as has been registered, I was formerly employed by Thompson's, the trade union solicitors, which gives money to my constituency Labour party. I should further inform the House that I am a Canadian citizen, so I have some idea of the asbestos industry in Canada.
As my hon. Friend the Member for Clydebank and Milngavie (Tony Worthington) said, white asbestos is produced in Quebec. In 1988, Thomas Mancuso concluded a study on American railway machinists of the steam locomotive era, which was published in the "American Journal of Industrial Medicine". The machinists used white asbestos, or chrysotile. According to the study, one mesothelioma occurred for every 13 machinists hired. Chrysotile kills people. I accept that there is a scientific dispute as to whether it is as deadly as brown or blue asbestos. From what we know, it probably is not, but it certainly kills through the inhalation of fibres.
The World Trade Organisation—a body not easily swayed, as my hon. Friend said—dealt with a case brought by Canada, against France, relating to the introduction of a ban on white asbestos. That case was lost, as was the subsequent appeal. The WTO does not readily restrict trade, but it will do so when there are health and safety implications. It did so in respect of the chrysotile from Canada because it is dangerous and kills people. Conservative Members should move on in respect of this issue. Enough scientific evidence has been published to justify moving on and supporting measures such as the Government's proposed draft regulations.
According to Library note SN/SC/1641, dated 5 February, there were two consultations on the draft regulations, not one. The first ended on 20 October

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2000, and the second was published a year later, on 21 November 2001. The critical comments arising from the first consultation related to two areas: clarification of the phrase "duty holder"—relating to the occupier of premises and the question of who has the duty in respect of asbestos—and widening the scope of the 1987 regulations. Nothing in the Library document suggests that either consultation raised the question of the non-dangerousness of white asbestos at that stage. It is being raised very late in the day, which seems strange.
The draft regulations themselves do not place a great burden on occupiers of premises in which people are employed. Such an occupier simply has to make an assessment of the risk of those premises based on whether there is asbestos in there and, if so, what, if anything, the occupier proposes to do about it at that stage or in the future. It does not put an obligation upon the occupier at that stage to do anything; it depends on the nature of the findings. Regulation 4 is quite clear on that.
On the compliance costs of the regulations, the hon. Member for Bridgwater (Mr. Liddell-Grainger) talked about building works being held up when asbestos is found. However, the regulations will stop that. If the regulations come in, we will know whether asbestos is in a building, so if a development is proposed five years later, it will not catch people by surprise when the building is pulled down.
Mr. Bercow: Why has the Health and Safety Executive already changed twice its estimate of the prospective cost of the regulations and, in the circumstances, what is to prevent it from doing so a third, a fourth, a fifth or even a sixth time?
Rob Marris: The hon. Gentleman knows that estimates are estimates and are open to change. The fact that a body changes its estimates does not automatically mean that the underlying regulation is wrong. The hon. Gentleman and his colleagues talk about contractors. He spent about a minute and half in a short debate saying why he would not do what he urged be done—name and shame. He is protected by absolute privilege in the Chamber, but he would not name and shame any of these unscrupulous contractors.
The hon. Gentleman suggested that the Select Committee should look into these matters. However, as a member of the Committee, I can tell him that when we discussed a programme of work in October, no member of the Committee said anything about looking at the regulations or at asbestos, even though the matter now comes under the remit of the Committee. That seems contradictory and reinforces my view that action is always taken late in the day.
It is too late. Let us move on from this debate. White asbestos kills people; let us regulate.
6.57 pm
Mr. Nicholas Brown: With the leave of the House, Mr. Deputy Speaker, I shall reply. This debate, in Government time, must come to a conclusion at seven o'clock, so I shall keep my remarks brief.
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The debate, perfectly properly, has concentrated on the dangers of white asbestos, chrysotile, and the hon. Member for Buckingham (Mr. Bercow) is entitled to his doubts. As the Minister, I must listen to the debate and the views of Members on both sides of the House, but I must also take careful note of the advice available to the Government. That advice is that the best estimate is that exposure exclusively to chrysotile fibres by maintenance workers would give rise to an uncertain but actual—and so unacceptable—risk of cancer. The Health and Safety Executive believes that all types of asbestos present a degree of risk, and, therefore, all are included in the regulations as part of a precautionary approach.
Hon. Members are entitled to make points about uncertainty. I acknowledge that there is uncertainty, but I cannot accept—this is not the advice available to the Government—that there is zero risk. It would be something like 20 or 30 years before we were able to gel. to the truth of this as far as maintenance workers were concerned. My hon. Friends the Member for Barnsley, West and Penistone (Mr. Clapham), for Jarrow (Mr. Hepburn), for Clydebank and Milngavie (Tony Worthington) and for Wolverhampton, South West (Rob Marris) have spoken movingly about the impact of this terrible disease on their constituents.
The hon. Member for Buckingham made the same point in a slightly different way. He spoke about the massive payments that are paid in compensation in asbestosis cases and the dangers of the insurance institutions being put under severe pressure if they continually make these massive payments.
Surely the rational thing to do, as a united House, is to bring in regulations that work on a proportionate and precautionary basis to prevent such massive cases from ever coming about for future generations. It is a terrible thing, but there is nothing we can do for those who already have this condition, except to look to financial compensation. But surely, for future generations and those who might be affected in the future, we should prevent such cases from happening. It is the Government's contention that the propositions before the House are proportionate. Incidentally, there is a defence of due diligence—
It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.

BUSINESS OF THE HOUSE
Ordered
That at the sitting on Monday 28th October, the Speaker shall not adjourn the House until any messages from the Lords relating to the Enterprise Bill shall have been received.—[Mr. Caplin.]

PETITIONS

  Post Office Closures
  7 pm
  Mrs. Cheryl Gillan: This petition is from the residents of Chesham and Amersham, and in particular the residents of Chesham Bois. The petition is presented by more than 500 people from Chesham Bois.

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  The petition states:
  The Petition of the residents of Chesham Bois and others declares that the post office in Chesham Bois is in the process of being closed thereby resulting in considerable hardship to the elderly, infirm and mothers with children who wish to use their local post office and not a post office one mile down the road.
  The Petitioners therefore request that the House of Commons urge the Secretary of State for Trade and Industry to take appropriate action to ensure the continued operation of this vital service.
  And the Petitioners remain, etc.
  To lie upon the Table.

  Health Choices
  Mrs. Gillan: I wish to present a petition from more than 300 constituents in Chesham and Amersham about the health choices of consumers in the constituency.
  The petition states:
  The Petition of Consumers for Health Choice and its supporters from Chesham and Amersham and others,
  Declares that consumers in the United Kingdom have for many years maintained good health by choosing to take safe vitamin and mineral supplements and herbal remedies; and fears that the European Food Supplements Directive and the proposed European Directive on Traditional Herbal Medicinal Products would severely restrict the number and the range of such products on general retail sale in the future.
  The Petitioners therefore request that the House of Commons urge the Secretary of State for Health to do all in his power to protect the rights of UK consumers by ensuring that such European legislation does not unnecessarily and unacceptably restrict the availability of natural health products.
  And the Petitioners remain. etc.
  To lie upon the Table.

  Indonesia (Detention of Dr Lesley McCulloch)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Caplin.]
  7.2 pm
  Mr. Alan Reid: I wish to start by thanking Mr. Speaker for selecting the important issue of the detention of Lesley McCulloch in Indonesia as the subject for this Adjournment debate. Lesley's parents are also grateful to Mr. Speaker and are present in the Public Gallery tonight. I would also like to thank the Minister for responding to the debate tonight and for agreeing to meet Lesley's parents later.
  Lesley has been held in detention in the province of Aceh since 10 September. The only charge brought so far has been one of visa violation. Six weeks detention in terrible conditions is out of all proportion to the charge.
  Aceh was an independent state for centuries prior to the Dutch invasion of 1873, and its people fiercely resisted the Dutch forces. When the Dutch left in 1945, the province was incorporated into the Indonesian state. Since then, the Acehnese people have suffered terribly at the hands of the Indonesian army and police, and that has served to reinforce their demand for the restoration of their independence. There is an armed conflict going on between the GAM—the Acehnese independence movement—and the Indonesian army and police.
  Dr. Lesley McCulloch works at the University of Tasmania. She is an academic specialising in the politics of the province of Aceh. She currently holds the position of principal researcher for a project on Aceh sponsored by the Honolulu-based East-West Centre as part of its series on internal conflicts in Asia. Her articles on the situation in Aceh have been published extensively in the Australian press. The articles have attracted extreme criticism from the Indonesian Government. In part, that was caused by a public seminar that Lesley gave at the Australian national university on 24 July. As part of the presentation, Lesley showed a map that revealed all the military checkpoints in Aceh and explained how they were used by the military for the purpose of extortion.
  The Indonesian embassy officials at the seminar were furious. In particular, their chargé d'affaires in Australia has made a number of public statements condemning Lesley and her work. Lesley, an American nurse named Joy Lee Sadler and an Acehnese student acting as their interpreter were detained at a military checkpoint in south Aceh on 10 September. They were originally held by the military. During that time, they were beaten and subjected to sexual harassment and to long interrogations, during which a knife was held at Lesley's throat. The purpose of that treatment was to try to coerce them into signing false confessions.
  I have been told by Lesley's friends that they informed the Foreign Office of her arrest on 12 September. They also provided contact numbers for the police station where Lesley was being held and information about her whereabouts as she was moved. Despite that, no British consular official visited Lesley until 17 September. I hope that the Minister will explain to the House why there was that long delay while Lesley was being held in very dangerous circumstances. Also, what actions were the Government taking during that time to make contact with Lesley and to make known their concerns for her safety to the Indonesian Government?

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  Lesley's parents live in my constituency. They telephoned the Foreign Office repeatedly over the weekend of 13 to 15 September to try to speak to an official who had knowledge of Lesley's case. However, although they left their telephone number with the duty officer, no contact was made with them over that weekend.
  The Foreign Office switchboard played a recorded message saying that it was only open from 9.30 am to 4 pm on Mondays to Fridays. When Mrs. McCulloch called on the morning of Monday 16 September, all the lines were engaged—presumably because everyone who tried to call over the weekend was trying to get through at the same time. Eventually, Mrs. McCulloch got through and was given some information, but will the Minister explain why no attempt was made to give her information over the previous weekend?
  Subsequently, Lesley and Joy were transferred to police custody in Banda Aceh. On 16 September they were charged with misuse of a tourist visa, allegedly through carrying out research. That charge carries a penalty of up to five years' imprisonment or a fine of £2,000. Lesley and Joy maintain that they are innocent of the charge. All the research and academic materials found on Lesley's laptop computer were from previous trips, which had been carried out under an appropriate research visa. Much more worrying than the visa violation charges are statements from the Indonesian military that they want Lesley and Joy to be charged with espionage. That is clearly ludicrous, as there is absolutely no evidence for it.
  Lesley is in poor health. She suffers from acute back pain, but the only exercise that she is allowed is in a small courtyard. The Indonesian authorities are not giving her enough food, but perhaps most difficult to bear is the psychological pressure. Lesley has been subjected to long interrogations. On a daily basis, she has to listen to the screams of local Acehnese prisoners being tortured for confessions. Lesley's lawyers in Jakarta raised the possibility of requesting house arrest for her and Joy, but decided not to go through with the request as the police were concerned that the military would try to assassinate the pair if they were out of police custody.
  Lesley received a consular visit on 17 and 18 September, and another two-day visit in early October. However, that compares very poorly with the actions of the US embassy, which has sent consular officials to see their citizen on four occasions, and for up to four days at a time. The contrast between what our consular staff are doing for Lesley and what the US consular staff are doing for their citizen is striking. While in Banda Aceh, US consular officials have lobbied the police commander for their citizen's immediate release. They have brought medical supplies and food. They have arranged for all of Joy Sadler's personal luggage to be sent home. Much more importantly, however, they have helped to arrange for adequate legal representation. UK consular officials have lagged far behind. On his last visit on 10 October, a consular official brought medication for Lesley's back pain but it only lasted a fortnight. The fortnight is now up, Lesley has run out of medication, and we do not know how she will get any more because no other consular visit has been scheduled.
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  Even more worrying is the lack of help with legal assistance. The British Foreign Office appears to take the view that it is unable to recommend lawyers and perform checks on any lawyers to verify their competence or independence from the Indonesian Government. Can the Minister tell the House why the UK Government take this view? If one is imprisoned in a foreign country, surely access to competent and reliable legal advice is of extreme importance. Surely our Government should help their citizens in foreign jails to get legal assistance instead of leaving it up to the prisoner and her friends to arrange it. The lack of consular advice is also sending the wrong signal to Lesley's jailers. The soldiers guarding Lesley keep telling her that they can do what they like to her because the lack of consular visits indicates that her Government do not care.
  Lesley's life is clearly in danger. The Indonesian army clearly regard her as a supporter of the Aceh rebel movement and could at any time take the law into their own hands and have her assassinated. In view of that, I ask the Minister to ensure that Lesley receives more consular visits in future and is given the same level of support that the US Government are giving to their citizen.
  Lesley managed to send out some text messages giving brief details of the abuse to which she has been subjected and the conditions in which she is confined. However, I am concerned that our consular officials in Jakarta rely too much on the word of Lesley's lawyers and interpreters in Aceh, who tell them that the conditions are not as bad as she claims. Those local lawyers and interpreters cannot be considered independent; they have to live in Aceh and could well be scared of the consequences if they tell the truth.
  Many reports have circulated about the abuse that Lesley has suffered and the poor conditions in which she is being held. Friends of hers are naturally concerned when they hear these reports. It is clearly difficult for her friends to find out whether the reports are true or exaggerated. They naturally get in touch with the Foreign Office, but are rebuffed with a statement along the lines of, "Sorry, we can't tell you anything, it's all confidential." I understand that the Foreign Office has to work within the data protection legislation, in the same way as everybody else, but surely the details of the conditions in which Lesley is being held are not confidential. By not revealing accurate information, the Foreign Office has caused Lesley's friends to believe that the worst rumours are true. I think that the Foreign Office needs to revise its policy and give out more information to friends and relatives of detained persons about the conditions under which they are being held. A lot of stress and worry could be avoided if they did.
  I hope that the Minister will take advantage of this debate to tell us about the conditions of Lesley's confinement that the consular staff found when they visited her earlier this month. What protests have the Government made to the Indonesian Government about Lesley's treatment, particularly concerning the beatings that she received in the early days of her imprisonment? What are the Government doing to try to persuade the Indonesian Government to improve these conditions?

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  The Foreign Office's standard response to requests from Lesley's parents that it should be doing more to persuade the Indonesian authorities to release Lesley is generally a bland statement that the British Government cannot interfere in the legal process of another country. However, it is patently obvious that the rules of independence of government and judiciary which apply in the UK do not apply in Indonesia.
  A fair trial is clearly impossible. The Indonesian Government have already issued press releases stating that Lesley is guilty. These can be found on Indonesian Government websites. It is clear that any trial will be a political show trial. How can it be otherwise, when the Indonesian Government have already declared Lesley guilty? I hope that the Government will put in the strongest protest about the Indonesian Government finding Lesley guilty without a trial. It is clear that the Indonesian Government want to punish Lesley not for any alleged visa violation, but for the earlier articles that she wrote for the Australian press about the Indonesian suppression of the people of Aceh.
  I have noted that the website of our Department for International Development contains a paper stating that the Indonesian judiciary is corrupt. As any trial will be political, political pressure is needed from the United Kingdom Government to help Lesley. If our Government show no interest, the Indonesian authorities, like their soldiers in Aceh, will assume that the British Government do not care about Lesley and that they can do what they like to her. British Government pressure is Lesley's only hope of an early release. Our Government should be making it clear to the Indonesian Government that if Indonesia wants to be part of the international community certain standards of behaviour are expected, and those do not include beating up suspects and declaring them guilty before the trial.
  I do not understand why the Government have taken the attitude that they cannot exert pressure on the Indonesian Government. Certain people have suggested to me that the Government are soft-pedalling because they want to maintain good trade relations with Indonesia, particularly with regard to arms sales. I sincerely hope that that is not the case and that the Minister will take the opportunity to refute such suggestions.
  I hope that now the Minister is fully aware of Lesley's dire situation he will tonight commit the Government to exert pressure on the Indonesian Government, first, to improve the conditions of Lesley's detention; secondly, to ensure her safety; and thirdly, to release her quickly and allow her to return home. I hope that the Government will act promptly and decisively. Lesley's life may well depend on it.
  7.17 pm
  The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mike O'Brien): I congratulate the hon. Member for Argyll and Bute (Mr. Reid) on securing this Adjournment debate and bringing this important matter to the attention of the House.
  I welcome the opportunity to set out the assistance that the Foreign and Commonwealth Office has provided to Dr. Lesley McCulloch and her family and to explain what consular assistance we can provide to her and other British nationals detained abroad.
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  On 12 September, the consular division of the Foreign and Commonwealth Office was first advised by Lord Avebury of Dr. McCulloch's arrest the day before. We immediately informed our embassy in Jakarta by e-mail. Consular staff in Jakarta tried to contact Dr. McCulloch on 13 September at the police station at Tapak Tuan. They were refused permission to speak to her without the consent of the head of the station, who was apparently unavailable. Consular staff spent considerable time trying to follow that up with the head of the provincial police headquarters and other senior staff, but continued to be refused contact.
  Our honorary consul in Medan managed to speak briefly to Dr. McCulloch on 14 September. I understand that details of her arrest were relayed to her mother on 14 September, which was a Saturday. After repeated requests, on 17 September, FCO officials were able to see Dr. McCulloch. We have continued to update Mrs. McCulloch regularly and, more recently, consular staff have spoken to her on a daily basis. Since the initial difficulties in contacting Dr. McCulloch, our consular staff have had better access and have visited her on four occasions, not two—17 and 18 September and 7 and 8 October—and remain in weekly telephone contact with her.
  Banda Aceh is the capital of a dangerous Indonesian province where a separatist movement is active and where we advise against travel. There is a four-hour flight service to Banda Aceh, but despite that, British consular officials have visited Dr. McCulloch on more occasions than any other British prisoner in Indonesia.
  We are also aware that Dr. McCulloch is experiencing problems with her back and will eventually need an operation. When our consul visited her on 7 and 8 October, he raised her back problems with the police commandant. I am told that medication for her back has been obtained, and that she is able to take it.
  I am aware that Dr. McCulloch is a vegan and I am told that it has been possible to purchase locally the foodstuffs she requires. We understand that she is not being denied access to food of her choice.
  The hon. Gentleman suggested that Dr. McCulloch was arrested on 10 September. We need to confirm that, as my information is that her arrest was on 11 September. At the time of her arrest, Dr. McCulloch is said to have been carrying out research. She travelled on a short-visit visa in an area where a special permit is required. Dr. McCulloch stated that she had applied for a social-cultural visa—a research visa—from the Indonesian embassy in Australia but had not collected it as research visas are single entry and she favoured a short-visit visa.
  At the time of her detention, Dr. McCulloch is alleged to have had in her possession details of military installations within a restricted area. She reportedly explained that a colleague had written the article in question and that she had been asked to edit it, which explained why it was in her possession.
  On 17 September, Dr. McCulloch was charged with violating Indonesian immigration regulations. She is currently being held in a room in the police station at Banda Aceh, where she sleeps on a mattress and has access to her own bathroom. I am told that the door to the room is unlocked. She can walk freely and has access

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  to a courtyard where she can exercise. Unlike other prisoners, including British prisoners, Dr. McCulloch is not being held in a cell.
  On 30 September, Dr. McCulloch's case was handed to the district prosecutor, who, on 2 October, passed the case back to the police, requesting further evidence. I understand that the police have 40 days before the case must be handed back to the district prosecutor. Dr. McCulloch's lawyers believe that the first trial date is likely to be in November, and consular staff hope to visit Dr. McCulloch at the time of the trial. We hope to be able to be present during some or all of the trial.
  I must point out to the hon. Gentleman that, since January, our travel advice has advised against all travel to Aceh. A separatist movement is active in Aceh, and shootings and mortar attacks happen almost daily. As from 27 August, the same travel information advised British nationals who were working in the province to review their need to stay; in other words, the advice was that British nationals should leave if they could do so.
  From the events of the past week, the hon. Gentleman will be aware that the terrorist bombing in Bali has caused us again to revise our advice. We are advising against all travel to Indonesia, and that all British nationals in Indonesia should consider leaving.
  My right hon. Friend the Foreign Secretary has also authorised the withdrawal of some dependants and non-essential staff from the British embassy in Jakarta, but remaining consular staff will continue to monitor Dr. McCulloch's welfare closely and will try to provide all proper consular assistance.
  Dr. McCulloch has further stated that, after her arrest, she was threatened, sexually harassed and made to sign a document with which she did not agree. We have raised those matters with Indonesian officials, as we are of course extremely concerned by them. Our ambassador and our consular staff in Jakarta have also raised their concerns about Dr. McCulloch's allegations of ill-treatment and the problems experienced in contacting her soon after her arrest. Those concerns have been raised with the head of provincial police in Aceh and with the head of criminal intelligence in the national police and the Ministry of Foreign Affairs in Indonesia. They have undertaken to investigate the allegations and we await a response.
  Dr. McCulloch's case has also been raised with the Indonesian embassy in London. Furthermore, on 19 October, during her visit to Indonesia after the devastating events in Bali, my noble Friend Baroness Amos raised Dr. McCulloch's case with the Indonesian Foreign Minister Mr. Wirayuda. Baroness Scotland, my noble Friend in the Lord Chancellor's Department, has also raised concerns about Dr. McCulloch's treatment with the Minister of Justice and Human Rights during a recent visit to Jakarta.
  Dr. McCulloch was given a list of lawyers when we were able to see her for the first time on 17 September. It is not possible for consular officials to advise on particular lawyers, but we have been able to provide a list of lawyers who, as far as we are aware, can deal with this sort of case. It is clearly not possible for consular staff to travel around Indonesia—or, indeed, all the many countries in which we deal with consular cases—
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  to identify which lawyers are good and which are not. It simply is not possible or feasible for us to do that on that scale.
  Obviously, if the case were in Jakarta, we would have had dealings with certain lawyers and might have been able to advise on particular ones, but Aceh is not the capital. It would simply be very difficult for consular officials to provide detailed advice on which criminal lawyer is the best to deal with a particular case in towns such as Aceh. However, we were able to provide a list of some lawyers on the first visit on 17 September.
  Under international law, we cannot interfere in the. judicial process of another sovereign country, but we. have urged the Indonesian authorities to deal with Dr. McCulloch's case as quickly as possible. Dr. McCulloch also has English-speaking legal representation and an interpreter, and our consular staff are in contact with her legal representatives. I understand that Dr. McCulloch has had direct contact with friends and family. No doubt, the hon. Gentleman will know about that, so I will not go into it now; we can deal with that issue when we speak with the family afterwards.
  In a recent telephone conversation with our honorary consul in Medan, Dr. McCulloch asked that we let friends and family know that she is fine and well, and that they should not worry about her.
  There is a clear discrepancy between the allegations made by the hon. Gentleman tonight and what I have been told. I am very concerned by that, and I want to investigate those discrepancies. If Dr. McCulloch is telling us one thing and the hon. Gentleman is presenting the case as being entirely different, I shall be seriously concerned about that matter. I am told that Dr. McCulloch is saying something entirely different to us, and I will make investigations to ascertain whether the hon. Gentleman's version of events is true or whether what I am being told is correct.
  I was frankly flabbergasted by the allegation, which the hon. Gentleman made during his speech, that the Government are soft pedalling on Dr. McCulloch's case because we wish to maintain good trade relations Indonesia, especially to sell arms. That is frankly the worst sort of cheap shop party politics on a serious issue. I flatly deny the allegation. I am very angered by it. If the hon. Gentleman wants to be taken seriously he should stop pandering to such conspiratorial nonsense. We deal with a lot of consular cases across the world every day.
  Mr. Reid: Will the Minister give way?
  Mr. O'Brien: No, I will not.
  I regret to say that the detention of British subjects is far from unique. The officials in the Foreign Office—civil servants, who do their job with utmost dedication and integrity—do not deserve to have that sort of allegation made against them. We certainly would not make that sort of instruction to officials. Indeed, they would not accept it if that sort of instruction were given.

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  We pursue such cases in a proper manner and will continue to do so. We cannot force the Indonesian Government to free Dr. McCulloch. We need to monitor the legal procedure and negotiate with them. Seeking to frighten relatives with untrue allegations, such as the hon. Gentleman's, is simply very wrong. We
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  will continue to provide all proper consular assistance to Dr. McCulloch and will ensure that her family are kept informed of any developments.
  Question put and agreed to.
  Adjourned accordingly at twenty-nine minutes past Seven o'clock.