Commons Sitting of 24 February 2003

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

    Police Pensions
    Mr. Tim Boswell: If he will make a statement on the cost of police pensions. [98756]
    The Minister for Policing, Crime Reduction and Community Safety (Mr. John Denham): Forces in England and Wales estimate that their police pension bill for 2002–03 will be around £1.2 billion. That has been matched by the £1.26 billion allocated for pensions in the total funding formula. However, the Government are aware that pension costs cause police authorities concern, and we are reviewing the way in which pensions are financed and whether the scheme could be modernised for future entrants.
    Mr. Boswell: I thank the Minister for that response. I acknowledge that Northamptonshire's settlement this year is less ungenerous than some recent settlements.
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    Does he accept, therefore, that it is disturbing that the police authority has had to put up its precept by more than 25 per cent. for the second successive year? The chief constable has said that a major contributory factor has been the cost of police pensions. Will the Minister assure the House of some future relief from this treadmill for hard-pressed council tax payers?
    Mr. Denham: We recognise that pension costs are a concern, but they represent the lifetime service of police officers in previous years, and we must honour that commitment. We should not reward forces—Northamptonshire is not one of them—that have been slack in their handling of early medical retirements in years past.
    The hon. Gentleman referred to precepts. Northamptonshire has chosen to employ additional police officers and community support officers over and above the increase in officer numbers funded centrally. It is for the police authority to decide what should be done to meet the needs of its local community. I hope that the hon. Gentleman will support his authority in doing that.
    Mr. David Kidney: The Government's pensions Green Paper makes many constructive statements about funded pension schemes. Why should there not be a fully funded police pension fund over time?
    Mr. Denham: If we were overnight to replace the existing pay-as-you-go pension scheme with a funded scheme, the Government would have to find about £25 billion to establish that. I suspect that Members would feel that there were more immediate policing priorities to which such money should be devoted.
    Mr. Elfyn Llwyd: Further to the question put by the hon. Member for Daventry (Mr. Boswell), is it not correct that between 50 and 60 per cent. of any annual allocation to police

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    authorities goes straight into pensions and salary increases that have been centrally agreed? Is not it time to review the whole position? There is a huge burden on council tax payers, and it is disingenuous of the Government to talk about percentage increases when most of the money goes overnight.
    Mr. Denham: I remind the hon. Gentleman that the Government have put more money into the system through the funding formula for police pensions than the total cost that we estimate was paid out on police pensions or will be paid out this year. There are two problems. The first is how individual forces could be better protected from short-term fluctuations in pensions if, for example, a large number of officers were all to retire in the same financial year. The second is to ensure that forces continue to bear down on unwarranted early ill-health retirement, which adds significantly to pensions bills and to the costs on local people.
    Mr. Lindsay Hoyle: Obviously, my right hon. Friend will be aware that council tax payers in Lancashire and in many of the northern police forces are subsidising police forces in the south because of the ceilings and floors on increases. Money is trapped, that is the problem. Will he hold discussions with other Departments to ensure that we get the funding that we should be allocated, instead of having to subsidise the south.
    Mr. Denham: In introducing the new funding formula, we have tried to be fair to all forces. That is why there is a ceiling on increases of 4.9 per cent. and a floor that ensures that no one gets less than 3 per cent., which is above inflation. We should not forget the background to this issue, which is that the police service received a 10 per cent. increase in funding in 2001–02 and a 7 per cent. increase for 2002–03, and had an overall rise of 6.2 per cent. in the coming year, and a 16 per cent. increase in the current spending review settlement. Whatever the detail of the formula, no one can claim that the Government are not putting significant extra resources into the police service. That is why we have record numbers of police officers, and those numbers will continue to rise.

    Asylum System
    Mr. Charles Hendry: What discussions he has had with his counterparts in other EU countries regarding the asylum system. [98757]
    The Minister for Citizenship and Immigration (Beverley Hughes): The UK continues to play a leading role in developing the asylum measures proposed by the treaty of Amsterdam. That represents an important step towards achieving a common European asylum system with our partners.
    We are also working bilaterally with the French, and in conjunction with other countries including Belgium and Holland, to continue to strengthen our borders and tackle abuse.
    Mr. Hendry: Can the Minister confirm that although the Sangatte asylum centre was closed and bulldozed in
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    December, the French Red Cross is now building another camp in Sangatte for 1,000 asylum seekers? Does that not make a mockery of the agreement reached by the Secretary of State with his French counterparts? Does it not also highlight the need for asylum seekers to be detained in secure accommodation until their applications have been processed?
    Beverley Hughes: I know that a number of newspapers have spread that story about an alternative camp. I have been contacted by a journalist who has been at Sangatte, as well as by our own officials, and I can tell the hon. Gentleman that the story is absolutely untrue.
    What the hon. Gentleman says about detention is rather outdated. It refers to an earlier variant of asylum policy than the one we have heard more about lately, in relation to quotas. There is certainly a place for detention—we apply it when appropriate, particularly to effect removals and to keep people where they are while we fast-track the processes—that has been very successful at Oakington—but the wholesale detention of every person would require a building programme that would not only be horrendously expensive, but would take five years to deliver. In the meantime, we have more effective measures to enable us to get to grips with the system.
    Angela Eagle: Will my hon. Friend draw attention to other inaccurate reports in the newspapers about the number of people coming into the country? We are constantly told that the United Kingdom takes more than its fair share of asylum seekers, but the figures show that we are about sixth or seventh in the European Union league per head of population.
    Beverley Hughes: My hon. Friend is right: the UK is in the middle of the EU range, per head of population. However, the picture has fluctuated over recent years in terms of the number of people we take relative to the number taken by other EU countries. That is why it is important for us to work towards a common European asylum system and to strengthen our borders with France, Belgium and Holland. It is also why we recently introduced robust legislative measures to deter people whose applications are unfounded.
    Dr. Brian Iddon: My office in Bolton has now dealt with about 75 single male asylum seekers from northern Iraq. They are, of course, Kurds. Most have become destitute; they are now sleeping rough in Queen's park in Bolton or overcrowding existing national asylum support scheme accommodation. That cannot be allowed to continue. What pressure are we putting on the Turkish Government to stop the trafficking of such people through Turkey, on Turkish lorries, to Dover? They are paying between £7,000 and £8,000 for the transit.
    Beverley Hughes: We are working closely with France, which is interested in working with us on the Turkish issue—not only in relation to the trafficking of people through Turkey, but, in particular, the negotiation of an agreement on readmission to Iraq via that route. My hon. Friend is right to draw attention to the growing problem in some of our communities

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    caused by people from northern Iraq who have been refused asylum, who are therefore not entitled to support, and whom we need to return as soon as we can. We shall do that as soon as the route is available.
    Mr. Peter Viggers: We are pleased that the Minister is discussing asylum with her European colleagues, and we welcome her undertaking to consult local people who are concerned about residence accommodation centres. We look forward to those meetings, which have not been possible so far.
    Will the Minister assure us that when the meetings do take place they will not be sanitised meetings in London involving tea and biscuits with civil servants, but will be genuine consultations initiated by the Minister? I invite her to walk up and down Lee high street and meet local residents. She will then quickly learn how strong and universal is the hostility to her proposal for a local accommodation centre in Daedalus.
    Beverley Hughes: There will be proper consultation. On the point about the two accommodation centres that are in the planning inquiry process, I visited those areas, had a meeting arranged by the local councils there and talked directly to local people. If we go ahead with the proposal, both I and officials in the Home Office will take it on ourselves to repeat that process in exactly the same way.
    I raise a more general point with the hon. Gentleman and other hon. Members. All hon. Members and the general public at large rightly expect us to get to grips with the asylum system, to reduce the intake, to return people when their claim is refused, and to do that more efficiently. That is what the Government are trying to do. Some of those measures depend fundamentally on having the facilities available—induction centres, accommodation centres and detention centres. We cannot locate those on clouds in the sky. They have to be somewhere in this country. Therefore, we have to have a mature approach that recognises that, if we are to be able to address the problem successfully, in some parts of the country we have to build those facilities.
    Simon Hughes: The Minister will know the figures for the last three quarters show that the largest national group seeking asylum in this country is the Iraqis. Given the Prime Minister has now said that the case for war against Saddam Hussein is a moral one, do the Home Office and the Government accept that we also have a moral responsibility to grant asylum to those fleeing from Saddam Hussein? If that is the case, does the Minister accept that the best way of dealing with public concern is for Britain to lead the case for a genuine European integrated asylum system in which responsibility is shared but not shirked?
    Beverley Hughes: The hon. Gentleman raised a number of points. On Iraq, most of the people claiming from Iraq are from the autonomous northern zone. There is no reason why those people should not be returned. As I said earlier, if we can negotiate a route through with Turkey, that is what we propose to do.
    I have discussed the hon. Gentleman's proposals for a common system with him. He knows that I do not think the detail of some of his ideas would work in
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    practice, but on two points I do agree with him. First, if one added up the contribution of all the asylum systems of the European Union countries, that would not make any significant contribution to the vast majority of refugees world wide. We certainly need to do more about that. Secondly, there is a need for international co-operation to be accelerated, to go further and to address some of the big questions about what we can do to protect people closer to source countries.
    Glenda Jackson: If, as my hon. Friend rightly says, we are not taking more than our fair share of asylum seekers, why is it taking the immigration and nationality directorate so long to process applications for appeals and for indefinite leave to remain and also to issue status letters? The Home Secretary has said that he wishes to see a step change in the IND and has devoted additional resources, both financial and human, to that process, but I am sorry to have to tell my hon. Friend that, certainly as far as my constituents are concerned, far from speeding up the steps they are becoming slower and slower and leaving many of my constituents in serious situations.
    Beverley Hughes: While I accept that there is a very long way to go until we make the IND into the effective and efficient public service that it should be, I cannot agree with my hon. Friend that things are getting slower and slower and worse and worse. Although there is a long way to go, things are improving substantially. Well over our target of 65 per cent. of new applications—in fact, over 75 per cent.—are being decided within the two-month target deadline. The process of appeals, which is the responsibility not of the IND but of the appellate authority, is reducing too, and we are coming close to the six-month target overall. There is still a problem with backlog cases, although that backlog has been reduced from an all-time high of 120,000 to fewer than 40,000, so we are working through the backlog. She is right to say that some of those cases are of long standing, but we are getting through them.
    Mr. Oliver Letwin: In the course of discussions with their EU counterparts, did the Minister and the Home Secretary offer any views on the achievability of the Prime Minister's target of halving the number of asylum seekers by September? In particular, did they guarantee to their EU counterparts, and will they now guarantee to the House, that they will not seek to achieve this target by statistical manipulation, through the issuing of work permits to people who would otherwise claim asylum?
    Beverley Hughes: That represents our firm commitment to our approach to the need to reduce the intake in this country—it is not something that we have discussed with European partners. It represents what we want to achieve here, and it reflects the overriding priority of reducing the intake in order to achieve our other aspirations of increasing removals, reducing support costs and getting order into the system. That is our fundamental objective.
    Mr. Letwin: I am not entirely clear whether the answer to my question was yes or no, but perhaps we can get a clearer answer to this question. In talking to their

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    EU counterparts, did the Home Secretary and the Minister discuss the Conservative proposal to scrap the current asylum system and replace it with a system of rational quotas for genuine refugees? Moreover, did they discuss the need to revise, or to withdraw from, the Dublin convention and the New York protocol in order to achieve that desirable result?
    Beverley Hughes: For the record, I did answer the right hon. Gentleman's previous question, and the answer was no. On his further question, I am pleased to note that he now supports the work that the Government have already done, and the discussions that we have already had, with the UNHCR and others on resettlement and safe havens. We have not discussed the right hon. Gentleman's fourth variant of Tory asylum policy on quotas—the fourth version that we have heard in as many weeks. A quota system is a fiction, in the sense of his suggestion that it will solve the current problem. First, it would do nothing to address the bigger problem of the total number of asylum seekers across Europe, which he talks of simply carving up in some way. Secondly, it would not of itself prevent or deter illegal immigration. There remains a need for all the measures that this Government are implementing to strengthen border controls, to deter illegal immigration, to negotiate readmission arrangements and to manage migration. So far, we have heard nothing from the Tories on those issues.
    Mr. Michael Jack: What estimate he has made of how many people will be seeking asylum in the UK in September 2003. [98759]
    The Secretary of State for the Home Department (Mr. David Blunkett): In the light of the proposals in the White Paper, which was published this time last year, and the Nationality, Immigration and Asylum Act 2002, which received Royal Assent in November, we are very confident indeed that we can achieve a dramatic reduction in the number of claims, compared with the number made before Royal Assent in November.
    Mr. Jack: I am disappointed in the Home Secretary's reply. My question asked what his estimate was of the number of people who will be seeking asylum in September of this year. He said that he hoped for a dramatic fall, but in the light of demonstrations against his reception centre policy, and of the courts' taking against his approach to finance and asylum seekers, can he spell out in much clearer terms why anybody should have any confidence in the Prime Minister's target of a 50 per cent. reduction? Also, what does the Home Secretary mean by "dramatic"?
    Mr. Blunkett: The answer to the last question—there were many questions in one—is that, as I said in my initial answer, we have a firm commitment to reducing the number of asylum claims to 50 per cent. of their level immediately before the 2002 Act received Royal Assent. Secondly, we believe that the measures that we have taken—including the closure of Sangatte, the new border controls moved to France, the new technological equipment at Calais, the securing of Frethun and Coquelles, and the way in which we now deal with those
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    who, having come into this country, claim late—will assist us in dramatically reducing the numbers claiming asylum.
    Mr. Jim Marshall: Does my right hon. Friend accept that not all his hon. Friends accept his statement last week in which he condemned the High Court judgment on section 55? Instead of appealing against that judgment, will he instruct immigration officials to interpret section 55 in terms of a reasonable period after entry into the United Kingdom, rather than on immediate entry?
    Mr. Blunkett: Anybody who immediately claims asylum at a port or airport will be entitled, under the rules we laid down in the legislation, to receive the support—housing, equipment and financial—that they require. I do not accept that I should withdraw the appeal, but I accept entirely that it is right for judges to be able to use judicial review to facilitate challenges to Government when it is thought that they have acted in an administratively inadequate fashion. I do not accept, however, that judges have the right to override the will of this House, our democracy, or the role of Members of Parliament in deciding the rules.
    Mr. John Wilkinson: Does the Home Secretary realise that a high proportion of asylum seekers enter the UK from EU countries that are, as my right hon. Friend the Member for West Dorset (Mr. Letwin) said, signatories to the Dublin convention? Why should we accept, prima facie, such individuals? Why does not the Home Secretary take to the European Court the EU nations that flagrantly abuse the convention? Is it because he has no confidence in that body to safeguard British interests?
    Mr. Blunkett: The European Court has nothing to do with the first, or second and recently approved, Dublin convention. In obtaining agreement with other countries, I must bear in mind the fact that it was his Government who abandoned the so-called gentlemen's agreement by saying that it would fall when Dublin 1 was introduced. If I am to obtain agreement across Europe, as I was being pressed to do a moment ago by the shadow Chancellor—[Interruption.] I am sorry, I nearly did a reshuffle for the Leader of the Opposition. No doubt that will happen shortly. The shadow Home Secretary suggested that we should be collaborating with our European partners, not taking them to court.

    Identity Cards
    Andy Burnham: What representations his Department has received on the consultation on compulsory identity cards. [98760]
    The Minister for Citizenship and Immigration (Beverley Hughes): The consultation paper on entitlement cards and identity fraud was published on 31 July 2002 and the deadline for submitting responses was 31 January 2003. However, we are keen to see the debate continue.

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    We have received more than 2,000 letters and e-mails from individuals and organisations on the consultation paper. Many of those arrived very close to the deadline for responses and are very detailed, and we will study them thoroughly over the coming weeks.
    Andy Burnham: I thank the Minister for that reply, but I would urge her to go further than the preferred option and consider introducing a compulsory identity card scheme, with a requirement to register and an expectation that cards should be carried. That would be necessary to unlock the full benefits of identity cards in fighting crime and, in these uncertain times, might help to give people a greater sense of security. Who knows, it might even be helpful to the Tory party, which seems to be going through another identity crisis.
    Beverley Hughes: My hon. Friend knows that the consultation paper ruled out introducing a card that it would be compulsory to carry at all times. I can reassure him that I do not believe that a compulsory scheme is necessary in order to reap the benefits. There is no point in having a card unless it is universal and, therefore, it will be compulsory to register and obtain a card if Parliament decides to introduce a scheme. I agree with my hon. Friend about the benefits of a scheme, because if we are really serious about tackling some of the problems that have been raised today, such as illegal immigration, illegal working and identity fraud, we need a very secure method of establishing identity.
    Mr. A. J. Beith: Does the Minister think that there is any reliable way to stop a supposedly voluntary card being required for an increasing number of purposes? How do Ministers intend, if they pursue this idea, to prevent the system failing to deliver the correct identity card to an individual? Do they have the Child Support Agency or the Criminal Records Bureau in mind as models?
    Beverley Hughes: We are still considering the responses to the consultation. The right hon. Gentleman raised the issue of how we can make sure that certain organisations do not start requiring a card. That would be a matter for the terms of the legislation. He is also right to imply that it is a long-term commitment; it would be a big enterprise—a big project. In determining our response—I mean the response of every Member, not just that of the Government—we need to think about how to address the issues and make the project a success, rather than using them as an argument for not entertaining its possibility. We need to think about where we need to be as a country, not now but in 10 years time, because it will take that long to set up the issuing equipment and to get every member of the population registered. We should not necessarily be thinking about whether we need the system now but about the future: where do we want to be in 10 years time?
    Mr. Bill Olner: Many responsible licensees and retailers with off-licences on their premises would welcome the speedy introduction of such an
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    identity card. It would also assist communities that are plagued by young hoodlums on drink-related offences. I urge her to address the matter more seriously.
    Beverley Hughes: One potential use of such a card for young people would be as a proof of age. It is interesting that in many of the discussions that I held during the consultation process and in some of the qualitative research that we have carried out with different groups, including young people, many young people themselves have told us, "This would be really good and would enable us to prove how old we are". They would thus not get into difficult situations with retailers and others.
    Mr. James Paice: Any system of identity cards, whether voluntary or compulsory, would work only if the information source on which they were based was accurate and up to date. The Minister for Policing, Crime Reduction and Community Safety recently conceded to me that, although there is a target of only three days from a court hearing for inputting data to the police national computer, in fact no police force achieves that in less than 11 days, more than four fifths of them take more than 20 days and some of them take more than a year. Given that for months the right hon. Gentleman denied that the statistics even existed, can the hon. Lady tell the House whether and when she will publish, in full, the Carter report into the Criminal Records Bureau so that we can then all judge—
    Mr. Speaker: Order. That is not about identity cards.
    David Winnick: Is it not the position that there has been a marked lack of enthusiasm for any form of identity card on the part of other Departments—namely, the Department for Work and Pensions and the Treasury? Why does not my right hon. Friend the Home Secretary understand that there is little evidence that any such card would deal with the abuses that have been mentioned or with terrorism? The idea is wrong and it should be dropped.
    Beverley Hughes: We have had an extensive consultation exercise in order to get the views of ordinary people and of organisations which, rightly, want to express a view about the way forward. Among the 2,000 responses from individuals and organisations to which I referred, there is—on a cursory glance—support in favour in the ratio of about 2:1. As I said, we shall look at all the responses in great detail and the decision on whether to bring forward proposals will be a Government decision— not simply a Home Office one—and will be endorsed by the Cabinet.
    Mr. Nick Gibb: What security measures will be in place in any Government ID card scheme to prevent unauthorised access to the vast array of personal and confidential information that will be stored on such cards?
    Beverley Hughes: I do not know whether the hon. Gentleman has actually read the consultation paper. If he has done so, he will realise that he has just mistakenly implied that the card itself will contain a whole range of data. The card itself would simply contain identifying

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    data, possibly including a biometric. Those data would be a gateway offering access to other databases, thus enabling the card to be used to access other information. The card itself would not hold a great deal of information about any individual.

    Nationality, Immigration and Asylum Act
    Mr. Andrew Dismore: When he expects to bring into force section 4 of the Nationality, Immigration and Asylum Act 2002; and if he will make a statement. [98761]
    The Minister for Citizenship and Immigration (Beverley Hughes): We hope to commence section 4 within a matter of weeks. Revised appeal procedures have to be put in place first. The Lord Chancellor's Department is currently consulting on a revised set of Special Immigration Appeals Commission procedure rules, which will be subject to Parliamentary approval.
    Mr. Dismore: May I remind my hon. Friend that section 4 empowers the Home Secretary to deprive a person of citizenship if he has done something seriously prejudicial to the vital interests of the United Kingdom? Abu Hamza continues to spread his message of hate against Jews, Hindus, the United States and Britain. He has seditiously abused the sanctity of Finsbury Park mosque to incite violence and race hatred. He has actively recruited among British Muslims for terrorism abroad and has fundraised for terrorist groups. He is wanted overseas for serious terrorism offences. Is there any reason why section 4 should not be used to deprive Abu Hamza of his citizenship of our country, which he so obviously despises? That should be followed swiftly by the deportation that the British people think is long overdue and richly deserved.
    Beverley Hughes: A month ago, my right hon. Friend the Home Secretary said that this matter was under close investigation. The activities of the person referred to, and of other people, are being closely monitored. The Government will initiate deprivation action if we consider that the facts of an individual case meet the tests that are set out in section 4. My hon. Friend will understand that the previous legislation—the British Nationality Act 1981—was weak. It is right that we should wait for the implementation of the new legislation to ensure that we have effective measures to deal with this issue properly.
    Mr. David Cameron: Is it not now clear that we have to go much further than the implementation of section 4 of the new Act? Is it not time to restore to the Home Secretary the ability to deport people who may threaten this country? Case law under article 3 of the European convention on human rights makes it impossible to do that, so is it not time that the Government saw sense, opted out of the ECHR, went back in with reservations, and gave the Home Secretary the power to protect this country from people who threaten it?
    Beverley Hughes: The Conservative party is perpetuating a myth about the mechanics of the ECHR. The hon. Gentleman's suggestion would require the
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    country to withdraw from the ECHR. We would then have to legislate in a way that was incompatible with article 3 and ask the Council of Europe if it would allow us to re-enter with a reservation. That would be a tortuous and difficult process. We have not ruled it out but it is fraught with uncertainty. No other country has done it. There is no certainty that the Council of Europe would allow us to re-enter with a reservation. Reservations have to be very specific and that has not been tested. We are not going down that route at the moment. However, the Prime Minister has made it clear that, if our measures to tackle such problems are not as effective as we want them to be, we will consider whether we need to revise our obligations under various treaties.

    Active Community Unit
    Ross Cranston: If he will make a statement on the work of his Department's active community unit. [98762]
    The Secretary of State for the Home Department (Mr. David Blunkett): We appointed a new director of the active community unit—Helen Edwards—at the beginning of last year. With Ministers, she has now undertaken a full review of our relationship with the voluntary and community sector and has identified four key principles—capacity and development at local level; community involvement; partnerships between Government and the voluntary and community sector; and a modern legal framework for the sector. Those matters are now being put in place.
    Ross Cranston: I commend my right hon. Friend the Home Secretary for his commitment to building and enhancing the capacity of communities—especially deprived or ethnic minority communities. However, notions such as "active community" can seem a bit highfalutin' unless they mean something on the ground. What will this particular programme mean to people in, for example, my constituency?
    Mr. Blunkett: First, the programme will mean an extra £93 million over the next three years, investing directly in those organisations that are engaged in volunteering. In my hon. Friend's constituency, that currently involves a Sikh project, gaining support in the community for work with young people to the tune of just under £50,000, and £133,000 from a major youth project in the west midlands is going into his constituency. That is the answer to the sedentary comment made by a Liberal Democrat who shouted, "And that is just in his constituency."
    Sir Sydney Chapman: With regard to the compact and codes of practice relating to bringing together the voluntary and community sectors, has the Home Secretary implemented the recommendation of the Treasury report last year that a senior official should be appointed in each Department to encourage their effective implementation?
    Mr. Blunkett: Yes, as part of a cross-cutting review agreed between the Treasury and ourselves and as part of the spending review, it was agreed, as the hon. Gentleman rightly says, that such individuals would be

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    designated. That has now been achieved, and we are intent on ensuring that that collaborative venture across Departments, including funding identified by Departments, should work effectively.

    Asylum Seekers
    Miss Ann Widdecombe: What target he has set for the removal of failed asylum seekers. [98763]
    The Secretary of State for the Home Department (Mr. David Blunkett): Within weeks of taking over as Home Secretary, I made it clear to the House that the original intention, the technical commitment that had been made in relation to the number of people who could be removed from the country was not feasible. I indicated then that it would be more sensible to have commitment related to a proportion of the intake and that we should switch our energies into preventing entry by strengthening our borders. That is precisely what I have done in the past 20 months.
    Miss Widdecombe: Is the Home Secretary aware that that answer is both evasive and pathetic? Will he please tell us why the much-trumpeted target of 30,000 removals a year was, in his own words, not feasible? Was it simply because his Department failed? Was it because he did not resource the immigration service properly? Or was it because the figure was never realistic, but a sham and grab for a headline? The Select Committee on Home Affairs was distinctly told that there never has been, and there is no immediate prospect of there being, sufficient detention space to support such a target. Was it not nonsense from the start?
    Mr. Blunkett: The answer to the first part of the question is no. The answer to the rest of the question is that I cannot match the right hon. Lady's breathtaking audacity. I cannot match the idea that someone who was in the Home Office who saw the number of staff cut and a failure to put in place the removal centre facilities, who had no programme for accommodation centres, who did not have induction centres, who failed to reach an accommodation with France in terms of moving border controls and who achieved less than half the number of removals that we are now achieving can actually stand up in the Chamber and suggest that we are failing compared with her pathetic efforts.
    Mr. Chris Mullin: I endorse everything that the Home Secretary said in relation to that previous answer, but may I caution him to avoid becoming impaled on any more unrealistic targets in relation to asylum and put it to him that, bearing in mind all the complexities that surround the subject, what is needed is clear and consistent progress, not a big bang, which will inevitably end in tears?
    Mr. Blunkett: I know that I am in favour of tougher sentences, but I have never been in favour of impaling, so I am okay on the first part of the question.
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    [Interruption.] But I have one or two people in my sights, in a manner of speaking. I take my hon. Friend's advice to heart and believe that his is a very wise counsel.
    Mr. Peter Lilley: Does the Home Secretary accept that if the process of deportation is put off until people have put down roots in this country, had children and become part of the community, deportation becomes inhumane? Should we not therefore resile from an agreement that gives every inhabitant of the globe who can find ways to this shore the right to claim asylum, appeal against being refused that claim, take out a judicial review and subsequently claim under human rights legislation—securing benefits all that time—until they have been here so many years that it is inhumane to deport them? Should we not resile from that agreement, as my right hon. Friend the Member for West Dorset (Mr. Letwin) suggests, if we cannot renegotiate it?
    Mr. Blunkett: On the first part of the hon. Gentleman's question, I have every sympathy. The longer that people are here, the more difficult it is to remove and uproot them. We should therefore seek to avoid that at all costs. On the second part of the question, a large number of the layers to which the right hon. Gentleman referred have been or will shortly be removed under the Nationality, Immigration and Asylum Act 2002. I am seeking, week by week, to implement an Act that we had to struggle to get through both this House and the other place because Conservative Members opposed us at every end and turn.
    Mr. Neil Gerrard: Will my right hon. Friend consider what can be done to improve the coordination between the various parts of the Home Office? Does he accept that it is very unsatisfactory when a decision is made and apparently nothing happens on enforcement? In fact, what happens is that the National Asylum Support Service will tell a provider to cut off someone's support. The provider therefore has the problem of dealing with that individual rather than the Home Office, which took the decision that the asylum claim should be rejected.
    Mr. Blunkett: Bearing in mind that there is a 28-day period in which support continues, I accept the thrust of my hon. Friend's question entirely. There must be a more efficient, more effective and seamless removals policy in which, when support is removed, advice, support and, when appropriate, removal takes place immediately. That is fair for the individuals and fair for the country.
    Mr. Simon Burns: Question 8.
    Mr. Humfrey Malins: I am not sure that the question was that good anyway. We might have done better without it. Does the Home Secretary believe—I would be grateful for a frank answer—that the Government will ever remove those 250,000 or more

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    failed asylum seekers, who, since Labour came to power five years ago, should have been removed but have not been?
    Mr. Blunkett: I am glad that the hon. Gentleman thought of a question, as we might have been waiting all afternoon otherwise. The truth, as he knows well, is that the figures that are plucked out of the air are hypothetical, and we know perfectly well, as per the earlier question, that there are real difficulties when people have remained in the country for a lengthy period. That is why preventing people from clandestinely entering our shores is the top priority. Ensuring that we turn them round and remove them when they are clandestine is the key. That is the answer to the question of how long is a piece of string—as long as the hon. Gentleman wishes to cut it.

    Illegal Land Occupation
    Mr. Simon Burns: If he will make a statement on the powers of the police to move on people who illegally occupy land and open spaces. [98764]
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Bob Ainsworth): Section 61 of the Criminal Justice and Public Order Act 1994 gives the police, subject to certain conditions, the power to remove people who are trespassing with intent to take up residence, and who have been asked to leave by a landowner. We intend to legislate to strengthen further these powers. We will do so as soon as parliamentary time allows.
    Mr. Burns: I thank the Minister for that answer and assure him that my constituents living in the Cranham road and Little Waltham part of Chelmsford will warmly welcome that. Will he accept that there are individuals who are prepared to defy court injunctions, abuse the appeal procedures, string out defiance of planning law, and build on and occupy greenfield sites against the law? The quicker that something is done to empower local residents to be able to reclaim their land and their communities from those people, the better.
    Mr. Ainsworth: I completely agree that unauthorised camping, and the antisocial and criminal behaviour that is often linked with it, is a problem, and we intend to tackle it. The police need effective eviction powers to take prompt action against unauthorised sites, particularly those that create a nuisance such as the hon. Gentleman describes, and we intend to introduce such powers.
    Mr. Bill O'Brien: My hon. Friend is correct in suggesting that new legislation will strengthen the powers of the police, but there is another side to the equation. My constituents complain about the rubbish and mess left on sites after travellers have occupied them for a few days, but there are no powers of redress, so any cost falls on the local authority and becomes, in turn, a charge on council tax payers. Has my hon. Friend any
    16
    suggestions or ideas as to how people can be held responsible for the expense of clearing sites once they have left?
    Mr. Ainsworth: I am sure that my hon. Friend will agree that there are members of the travelling community who behave reasonably and appropriately, but nuisances such as those that he mentions are a great problem. We should expect the same standards from the travelling community that we expect from other people. As well as the power to evict, we need the ability to tackle antisocial behaviour by the travelling community, and we are considering that. It is possible to impose antisocial behaviour orders on travellers as well as other members of the community.
    Mr. Nick Hawkins: We welcome the Minister's announcement that he proposes to toughen up the powers still further. He is aware that when we were in government, we sought, in the Criminal Justice and Public Order Act 1994, to toughen the law. Does he accept, however, that unscrupulous travellers and gypsies have found loopholes in the legislation introduced by Governments of both parties, and that if they are to be closed it is necessary for Ministers such as himself to agree to meet Members from both sides of the House, leaders of local authorities and leading local authority officers to ensure that the new law, which we hope to help draft, will be effective? Does he recognise that in constituencies such as that of my hon. Friend the Member for West Chelmsford (Mr. Burns) and my own some travellers are trying to get round the law by buying land and then breaching planning laws?
    Mr. Ainsworth: The hon. Gentleman is right, and we must consider planning issues as well as police powers of eviction. He will know that the Office of the Deputy Prime Minister is looking at planning law. He is as entitled as anybody else to have an input into that process. I have always been prepared to consider his proposals on this matter as on any other, and if he has suggestions that relate to Home Office responsibilities in these matters, I will be happy to listen to him. I am sure that he is capable of making his own representations on the planning side of this question.
    Andrew Mackinlay: May I take the Minister back to his initial reply? He said that the police can evict travellers at the request of a landowner. Part of the problem is that sometimes the landowner will not make such a request because he wants planning permission, and he spitefully hopes that local authorities will give up and grant it in exasperation. Will my hon. Friend consider, as part of the review, introducing a power for local authorities to ask the police to evict people, in appropriate circumstances and in the absence of a reasonable request by the landowner?
    Mr. Ainsworth: I am sure my hon. Friend agrees that, in the first instance, we need adequate sites for the travelling public. I hope that that is not controversial. However, unauthorised camping is a problem and we need to ensure that the new powers bring not only swift relief, but effective relief. We are aware that people will

    17
    find various ways around them. Trying to plug all the loopholes will not be easy, but the new proposed powers will seek to deal with that problem.

    Polish Citizens (Deportation)
    Bob Russell: How many Polish citizens are due to be deported prior to the planned date for Poland's accession to membership of the European Union. [98765]
    The Parliamentary Under-Secretary of State for the Home Department (Hilary Benn): The number of Polish citizens we remove will be determined principally by the number who are refused entry or are found to be here in breach of our immigration laws.
    Bob Russell: From that answer, I suggest that the number will be very small. With Poland about to join the European Union, may I point out that it is a waste of time and money to uproot people who could legally return to this country in a year or two's time? In particular, why pick on a 63-year-old Polish-born widow, Mrs. Maria Puchrowicz, who lives in my constituency? Have we really got to the stage of deporting 63-year-old widows?
    Hilary Benn: I am not aware of the case that the hon. Gentleman raises, although I will gladly look into it. The answer to his substantive point is that we need to maintain the integrity of the asylum system. He is not correct to assume that the number removed has been very small. Since April 2002, 848 failed Polish asylum seekers have been removed on scheduled flights. On 14 January, 34 were removed using a charter flight. About the same number again of non-asylum removals have occurred as a result of enforcement action. In addition, 8,700 Polish nationals were refused entry to the country in 2001 and subsequently removed.
    Keith Vaz: The Minister will know that our Government's position is much more honourable than that of the German Government as far as Polish citizenship is concerned once Poland joins the European Union. Given the pressure on the immigration and nationality directorate, which is obvious from questions asked by hon. Members on both sides of the House, surely it would be sensible, in view of the fact that Poland will join on 1 May next year, to hold back on the removals until it is a full member. Is that not the most sensible and cost-effective means of dealing with the problem?
    Hilary Benn: I disagree with my hon. Friend for the simple reason that maintaining the integrity of the asylum system is the right approach for the reasons that I outlined, notwithstanding the fact that Poland will join the European Union on 1 May 2004.

    Antisocial Behaviour
    Mrs. Joan Humble: What steps he is taking to tackle antisocial behaviour. [98766]
    The Minister for Policing, Crime Reduction and Community Safety (Mr. John Denham): We will shortly be publishing a White Paper on antisocial behaviour which will be followed by an antisocial behaviour Bill. That will build on existing measures to ensure that we have legislation in place to tackle antisocial behaviour We have also established an antisocial behaviour unit in the Home Office to take the lead in ensuring that new and existing legislation is used to good effect.
    Mrs. Humble: I thank my right hon. Friend for that reply. He will be aware of the success achieved by Blackpool police in reducing the antisocial behaviour of young people by working closely with other agencies. When the individual support orders that are proposed in the Criminal Justice Bill are introduced, will he ensure that they lead to genuine collaborative work between the police and social services so that those young people do not reoffend?
    Mr. Denham: I congratulate the police in Blackpool for their use of the interim antisocial behaviour orders. They have obtained seven since the new powers came into effect at the beginning of December. It is certainly true that we have not always had the support that we would have liked from social services departments up and down the country for antisocial behaviour orders. The new individual support order is designed to address the causes of a young person's offending behaviour and, for that reason, social services departments should become more active and more supportive of the measure.
    Bob Spink: Why did the Government take away from police the power to remove unopened cans and bottles of alcohol from young people and children in public places? When will they reverse that decision?
    Mr. Denham: It is important that the police have the power to remove such alcohol from young people. The Licensing Bill, which is before Parliament, will give them that right.

    Unsolved Murders
    Mr. John Robertson: If he will make a statement on police procedure for investigating unsolved murders in cases where the original conviction has been overturned. [98768]
    The Minister for Policing, Crime Reduction and Community Safety (Mr. John Denham): The police will review the evidence available and any comments or findings made by the court in cases where convictions are overturned. As with other unsolved crimes, it is for the police to decide in individual cases whether the evidence justifies reopening the investigation.
    John Robertson: I thank my hon. Friend for his answer. He will be aware of the case of one of my constituents, Robert Brown, who spent more than 25 years in jail for a murder he did not commit. He was finally released in November. He will also be aware of the case of Stefan Kiszko, who was released from prison in 1992 on the basis of an unsafe conviction. He had

    19
    served 16 years in prison. It has recently been announced that in that case the original murder is being reinvestigated due to new DNA evidence.
    Will my hon. Friend tell me why it is that in cases such as the Birmingham Six and the Guildford Four, and the case involving one of my constituents, the police failed to find the real perpetrators and were all too ready to see convicted the people who were charged?
    Mr. Denham: We must take every miscarriage of justice extremely seriously. I think that in every instance
    20
    that my hon. Friend has mentioned, the cases were brought to court originally before the protections that now exist in the Police and Criminal Evidence Act 1984. Those protections have been important. If there is a case, however old, where a conviction is overturned and it becomes possible for the police to reinvestigate, and the evidence is there to enable a reinvestigation, I would hope that the police would take that course. That must he a matter for the police to decide in the light of the evidence that is available to them.

Business of the House
3.31 pm
The Leader of the House of Commons (Mr. Robin Cook): Mr. Speaker, with permission, I should like to make a short business statement. The business for Wednesday 26 February 2003 will now be:
Debate on Iraq on a Government motion.
The business for Thursday 27 February will be consideration of a motion to approve the Third Report of the Committee on Standards and Privileges followed by consideration of motions relating to the Draft Social Security Benefits Up-rating Order 2003 and the draft guaranteed Minimum Pensions Increase Order 2003.
The debate on Welsh Affairs is provisionally planned for the week commencing 10 March and I hope to make an announcement on an alternative date for the debate on flood and coastal defence policy in due course.
I will of course make my usual business statement on Thursday.
Mr. Eric Forth: I am grateful for that statement. When will the text of the motion for Wednesday be available to the House?
Mr. Cook: The motion will be available during the course of the evening, when it will be tabled. It will, of course, be available to all hon. Members in the Order Paper for tomorrow. Given that we have just returned from a recess, there is no quicker way of getting it on the Order Paper. I understand the interest of the House in this matter. Perhaps I can help the House by saying that Wednesday's motion will confirm the commitment of the Government and the House to our strategy of handling the Iraq crisis through the United Nations. It will repeat our support for resolution 1441, which the House overwhelmingly endorsed on 25 November.
The motion will not be a trap. No Member need fear that support for it will be interpreted as support for any specific action. The House will have other opportunities in future to debate Iraq, and if necessary another specific opportunity to vote on military action.
Mr. Paul Tyler: We warmly welcome this timely motion. We welcome also the assurance that the Leader of the House has just given us that the text of the motion will be available shortly. Further, we welcome the fact that this will be an opportunity not only for the House to debate in clear terms a substantive motion, but to vote in clear terms on that motion. We hope that there will be no fudge—no parliamentary subterfuge—so that we can see clearly that the House is representing considerable concern among the public at large at what is happening and what is being done in our name. We look to you, Mr. Speaker, to ensure that the division of opinion in the country can be fully reflected in the way in which the House votes on Wednesday night.
Mr. Cook: I have already given an assurance that the motion will not be a trap. Nor will it be a fudge. It is not an attempt to secure by subterfuge any approval for, military action.
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I think that it is right that the House should debate Iraq. It plainly is a matter of considerable political interest outside the House, and our constituents would be perplexed if this week went by without our setting aside a date to explore the matter. That is why I think that it was right for the Government to come forward and volunteer this time.
Mr. Tony Lloyd: My right hon. Friend always tries to be candid with the House. The House will welcome his assurance that the motion will not be a trap and that there will be a further opportunity to debate and, if necessary, to vote. Will he make it clear that it is his intention that there will be the opportunity for a substantive vote after any resolution goes to the United Nations and before this country goes to war? Can he advise the House now whether the motion to be debated on Wednesday will be amendable?
Mr. Cook: Any motion that goes on the Order Paper will be open to amendment. Whether an amendment is chosen is, I am grateful and thankful to say, not a matter for me. However, the motion will certainly be amendable. On the question of bringing a second resolution to the House, the House will recall that that is precisely what we did with the first resolution, 1441, and there would be obvious sense in our bringing to the House any further resolution and seeking the endorsement of the House for that resolution, in the same way as the House endorsed 1441.
Mr. Simon Thomas: It is right and proper that the traditional Welsh day debate should give way on this occasion to the important debate on Iraq. We hope that the motion to be tabled tonight will enable those of us who oppose war in the current circumstances to make our views clearly known. On the re-tabled Welsh day debate, events may require the House to debate Iraq another time and may not allow for an Adjournment debate on Welsh matters. As an alternative, will the Leader of the House consider allowing Welsh Members who wish to raise constituency matters to raise them on the Floor of the House or in a meeting of the Welsh Grand Committee before very long?
Mr. Cook: I am grateful to the hon. Gentleman for being understanding of the need to postpone the debate on Welsh affairs in the present circumstances. If I can carry him with me on that point, I am sure I will carry the rest of the House with me on it. Yes, we will consider whether any further action is required to make sure that the interests of Welsh electors are protected, and we will make sure that the debate on Welsh affairs proceeds.
I note what the hon. Gentleman said about wishing to oppose any military action. Let us be clear. At the present time, we are pursuing a strategy through the United Nations. We wish to see the matter resolved through that United Nations process. For it to be resolved will require the co-operation of Saddam Hussein, and require him to accept his obligation to disarm under the resolution that has already been passed by the United Nations and endorsed by the House.
Donald Anderson: Naturally, I accept the good faith of my right hon. Friend, but he will recall

23
that concern was expressed after the vote on 25 November—a vote that effectively only endorsed resolution 1441—that the Government were seeking to put too much weight on that general expression of opinion. Since he has properly said that this is only an interim stage and that there will be an opportunity for a substantive vote later, is there any reason at all to have a vote after the important debate on Wednesday?
Mr. Cook: Whenever I have proposed a debate on Iraq on a motion for the Adjournment, I have tended to he criticised in the House for not providing a substantive motion. I will take it rather ill if I am now criticised for bringing a substantive motion before the House. It is absolutely right that the House should debate the matter. People outside would find it rather strange if we debated it for a full day, with no product at the end. Therefore to assert the support of the House for the present strategy through the United Nations seems to me entirely appropriate in the present circumstances. Should it be necessary for that strategy to develop as a result of the failure of Saddam Hussein to co-operate, there will be another opportunity for the House to debate the matter and to express a view on it.
Mr. Jonathan Sayeed: Can the Leader of the House make it clear whether, if the Government decide that our troops should be committed to war, the House will be able to vote on that specific subject prior to their going to war?
Mr. Cook: When the Foreign Secretary spoke in the House on the matter, he said that he hoped it would be possible for us to have such a motion before there was any military action. That would certainly be our intention and our preference. Of course, as Ministers have repeatedly said, in any specific circumstances we have to weigh how we conduct the proceedings of the House against the safety of our troops who may be committed to action. That must be a proper consideration, and I do not think that any hon. Member would argue against it, but that should not be taken as some kind of underhand plan in order to proceed with action without the authority of the House. That would not be our wish and it is not my expectation of what will happen.
Mr. Tam Dalyell: Forgive my curiosity, but when the Leader of the House mentioned that there could be a trap—that was spontaneous—what trap did he have in mind?
Mr. Cook: I am happy to assure my hon. Friend that I said that there was no trap.
Mr. David Cameron: Given that the debate on Wednesday might be our last opportunity to discuss this matter before hostilities begin, and given the fact that many constituency MPs have had huge mailbags about this important subject and will want to question the Government as well as explain their own position, would it be possible to get rid of the 7 o'clock rule for the debate and to allow it to run on?
Mr. Cook: There will be a full day's debate, and it will commence earlier than it would have done before the
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change in the hours. I hope that it will therefore attract even more support from the Gallery above us. I can assure the hon. Gentleman that there will be as much time to debate this matter as there would have been under the previous hours. I also fully understand that Members will wish to question the Government—to use the hon. Gentleman's own phrase—as well as expressing their own views, and it is for that reason that the Prime Minister will be making a statement to the House tomorrow, in addition to the debate on Wednesday.
Glenda Jackson: But will a future substantive motion be on the issue of whether—not when, or if—British troops will be deployed? My right hon. Friend referred to the remarks of the Foreign Secretary, but if I remember correctly, the Foreign Secretary warned the House against such a substantive motion on the ground that it could put British troops in danger by taking away the element of surprise. I reiterate: is it now the Government's policy that decisions on whether to deploy British troops are taken by our Government, our House of Commons and our people? Two Cabinet Ministers have revoked the words of the Prime Minister on that issue.
Mr. Cook: I re-read the Foreign Secretary's speech only this morning, so it is quite fresh in my mind precisely what he said to the House. He has always been quite open with the House—and, if I recall rightly, with the Select Committee on Foreign Affairs—that it was the Government's wish that there should be a substantive vote in the House. I have often said, both in the House and outside it, that it is inconceivable that British troops could be committed into action without support from within the House of Commons. That would plainly not be politically acceptable, and it would not be something that this Government would contemplate.
On the question of timing, I have already said that the Foreign Secretary has said that his hope is that such a motion would take place before action, and that would certainly be our intention. As I said earlier to the House, however, we have to bear in mind the safety of our troops and not take any action in specific circumstances that would compromise that safety. I would hope that no hon. Member would disagree with that.
David Burnside: I welcome the statement by the Leader of the House, and I look forward to the Prime Minister's statement tomorrow and to the debate on Wednesday on an important subject on which we need as much public, parliamentary, governmental and national unity as possible if we are going to war. The Leader of the House will no doubt be aware that the Prime Minister's chief of staff has been in Ulster over the last week, informing people that the deadline for putting together a Belfast deal between the Provisional IRA, the British Government and other parties is the beginning of next week. Will the Leader of the House give the House a commitment that there will be a statement by the Prime Minister and a full day's debate if the deadline in Northern Ireland is indeed planned for the beginning of next week?
Mr. Cook: I am well aware of the interest in all quarters of the House—not simply from those who

25
represent Northern Ireland—in the peace process and in the efforts to restore it to sufficient health to re-establish the Northern Ireland Assembly. I can assure hon. Members that, if there are developments, we will ensure that the House is kept fully informed and has a full opportunity to ask Ministers questions and to pursue the matter.
Chris Grayling: The subject of Wednesday's debate is clearly a matter of critical importance both for the House and for the nation. Will the Leader of the House give us an assurance that the debate will be led by the Prime Minister, and that the Prime Minister will spend the full period of time in the Chamber, so that he can hear the views of hon. Members?
Mr. Cook: I am quite confident that my right hon. Friend the Prime Minister would welcome the opportunity to spend six hours in the Chamber or, indeed, on any other single activity, but it is in the nature of government at the best of times—and especially now—that the luxury of time is not available to him. I think that most mature Members would recognise that he may have more important things to do over six hours than simply to sit in this place.

Energy White Paper
3.44 pm
The Secretary of State for Trade and Industry (Ms Patricia Hewitt): With permission, Mr. Speaker, I should like to make a statement about the energy White Paper which I and my right hon. Friends the Secretary of State for Environment, Food, and Rural Affairs and the Secretary of State for Transport are publishing today. Copies are available in the Vote Office. At the same time, my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs is publishing the Government's response to the 22nd report of the royal commission on environmental pollution, "Energy—the Changing Climate". I should also like to draw the attention of the House to the written statement on British Energy that I made this morning.
Madam Deputy Speaker, I regret as much as I am sure that you do that drafts of the White Paper have been leaked to the press in the past few days. Such action is a discourtesy to the House and I deplore it wholeheartedly.
The White Paper sets out a new energy policy that is designed to deal with the three major challenges that confront our energy system. First, we face the challenge of climate change. CO2 levels, which have already risen by more than a third since the industrial revolution, are now rising faster than ever before. The scientific evidence makes it clear that the consequences of rising global temperatures could be devastating—not only in Britain, where floods and storms could cause billions of pounds worth of damage, but even more so in developing countries where millions of people could be exposed to disease, hunger and flooding.
Secondly, we face the challenge of our declining indigenous energy supplies. We already import nearly half the coal we use; by 2006 we will be a net importer of gas and, by 2010, of oil; and by 2020, we could be dependent on imported fuel for three quarters of our total primary energy needs. As we move from being an exporter to an importer of energy, we need new approaches to reduce the risk of price fluctuations and political instability or conflicts in other parts of the world.
Thirdly, we face the challenge of keeping our energy infrastructure up to date with changing technologies and needs. Much of our infrastructure will need to be updated over the next two decades, particularly to adapt to far higher levels of renewable electricity and to accommodate rising gas imports.
Our four new goals for energy policy are: first, to cut greenhouse gas emissions; secondly, to secure reliable energy supplies; thirdly, to maintain competitive energy markets in the UK and beyond; and fourthly, to ensure that every home is adequately and affordably heated.
The United Kingdom is already on course to achieve our Kyoto commitment to reduce greenhouse gas emissions by 12.5 per cent. below 1990 levels by 2008–12. Today, we are making a further commitment to cut UK CO2 emissions by 60 per cent. by about 2050, with real progress by 2020. That is the recommendation that was made by the royal commission on environmental pollution, and we have accepted it. Of course, our actions in the United Kingdom will affect

27
climate change globally only if they are part of a concerted international effort, so a key objective of British foreign policy in future will be to secure ambitious international commitments to cutting CO2 emissions world wide. At the heart of our new framework for energy policy will be a carbon trading system. A new Europe-wide system planned for 2005 will create a powerful incentive to producers and consumers to use less energy and to switch to lower or zero-carbon forms of electricity.
The cheapest way to tackle all our energy goals is simply to use less energy, but we will need to achieve far more on energy efficiency in the next 20 years than we have achieved in the past 20 years. Building on the climate change programme, we have therefore decided to consult on an expansion of the energy efficiency commitment to run from 2005 until at least 2008, at possibly twice its current level of activity, and to work with energy suppliers and Ofgem to create an effective market in energy services; to bring forward to 2005 the revision of building regulations, with higher standards for efficiency both in new buildings and in refurbishments; to work with our European partners to agree higher standards for consumer and industrial appliances; and to set an example within Government by improving energy efficiency in our own buildings and procurement.
Last year, we introduced a renewables obligation to help to deliver our target of generating 10 per cent. of electricity from renewables by 2010. By then, the renewables obligation and the exemption from the climate change levy will be worth some £1 billion a year to the renewables industry. We believe that renewable sources of energy will increasingly demonstrate that they can achieve our goals at an acceptable cost. Our further aspiration is therefore to double renewables' share of electricity from our 2010 target by 2020. The White Paper sets out policies to achieve that by investing £60 million in new money for renewable energy projects, bringing Government investment in renewable energy up to £348 million over four years; simplifying and streamlining the planning system; taking steps with Ofgem and others to improve access by renewable generators to the electricity network; and setting out a new strategic framework for offshore wind.
Nuclear power is an important source of carbon-free electricity, but its current economics make it an unattractive option, and important nuclear waste problems need to be resolved. The White Paper does not include proposals for new nuclear power stations. However, it does not rule out the possibility that, at some point in the future, new nuclear build might be needed to fulfil our carbon targets. Any further decision to proceed with building new nuclear power stations would be made only after full public consultation and publication of a further White Paper.
Transport accounts for approximately a third of final energy use and will also play its part. We shall continue to improve vehicles' fuel efficiency and cut carbon emissions through the successful European voluntary agreements with car makers. Vehicle taxation also now encourages and rewards consumers for choosing clean, low-carbon vehicles. We shall start to make substantial use of low-carbon biofuels. That builds on the strategy
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that we set out in "Powering Future Vehicles", and we welcome the engagement of industry and other partners through the new low-carbon vehicle partnership.
The White Paper sets out a package of measures to support new energy technologies, including a new industry network on fuel cells and further work on the transition to a hydrogen economy. I also welcome the Research Councils' proposal for a new energy research centre.
Becoming an energy importer does not necessarily make it harder to provide energy reliability. Most other leading industrial nations have achieved economic growth as energy importers. We can do the same. Securing reliable energy supplies will be an increasingly important part of our European and foreign policy.
Last year, we secured a commitment to European energy liberalisation for industrial customers by 2004, and overall by 2007. That will improve our access to different sources of supply and allow United Kingdom companies to compete in wider markets. As well as keeping prices affordable, competitive markets create the right environment for infrastructure investment that will increase our capacity to import gas through the existing interconnector. Renewables and smaller-scale distributed generation will also help to promote greater diversity and energy security.
Coal generation provides approximately a third of our electricity, increases flexibility and contributes to diversity of supplies. The future for coal electricity generation lies in cleaner coal technologies or carbon capture and storage. We already have a programme of support for cleaner technologies, and the White Paper includes proposals on capture and storage. We propose to introduce separately an investment aid scheme to help existing pits to develop new coal reserves, when they are economically viable, and to safeguard jobs. We have already negotiated the required flexibility at European level to enable us to achieve that.
Tackling fuel poverty remains a key priority. In 1996, 5.5 million households were in fuel poverty. Today, the figure is around 3 million. Of those, 2 million are vulnerable households, comprising older people, families with children or people who are disabled or have a long-term illness. In 2001, our fuel poverty strategy set out policies to end fuel poverty in vulnerable households by 2010. Our aim is that, as far as is practical, nobody in Britain will live in fuel poverty by 2016–18.
However, eradicating fuel poverty requires action in people's homes through better insulation and heating systems. We are tackling that through programmes such as warm front and the energy efficiency commitment. We shall publish our first annual report on the fuel poverty strategy shortly. It will give hon. Members more detail on our progress.
The White Paper establishes an energy policy for the long term. For the first time, such policy puts the environment at its heart. It will give energy producers and industry the long-term market framework that they need to invest and plan with confidence. It will ensure that consumers can continue to rely on safe, affordable energy for all their needs. It will help us to play a leading role in meeting the challenge of global climate change. I commend it to the House.
Mr. Tim Yeo: I am grateful to the Secretary of State for providing a timely copy of her statement and the White Paper this morning. I share her concern about leaks. As she wholeheartedly deplores these leaks, will she confirm that they came not from the Department of Trade and Industry, but from No. 10 Downing street, which made a late draft of the White Paper available to a certain Financial Times lobby journalist last Friday? The same day, her Department seemed unaware that the White Paper was to be published today. The timing was presumably chosen to suit the Prime Minister's presentational timetable.
Seldom has a document that was so widely trailed and so eagerly anticipated been so disappointing. The White Paper is long on aspiration and short on conclusions. It ducks all the hard decisions, and leaves Britain without a coherent energy strategy just when clarity and decisiveness are most needed. It is not as though the Government have not had time to think about the issues. It is a year since the performance and innovation unit's report was published, and two and a half years since the royal commission published its report, but all we get from Ministers is a series of targets watered down into aspirations, and bland statements that would scarcely rate a pass mark in a GCSE economics exam and which bear all the hallmarks of the cut-and-paste techniques now favoured by 10 Downing street.
The White Paper has had the gestation period of an elephant, and at the end of a lengthy labour the Secretary of State has delivered a mouse. It is a typical new Labour exercise, full of overblown prime ministerial rhetoric and claims, and its content is wholly inadequate to meet the challenges that Britain faces.
Governments have two responsibilities in relation to energy policy: first, to ensure security of supply, and secondly, to meet our environmental commitments. The White Paper fails abysmally on both counts at a time when Britain is moving from self-sufficiency in energy supply to being a net importer, and when the Government's failure to achieve reductions in carbon dioxide emissions is serious.
Incidentally, the Secretary of State's claim in her statement that the
"United Kingdom is already on course to achieve our Kyoto commitment to reduce greenhouse gas emissions"
is contradicted in her own White Paper. On page 25, footnote 6 states that carbon dioxide emissions in Britain increased in 2000 and 2001. Will the Secretary of State confirm that the Department for Environment, Food and Rural Affairs has just announced that carbon dioxide emissions have risen for the third year running? That is a fresh example of the Government's increasingly favoured technique: if they are missing the immediate targets by a big enough margin, their answer is to set much more demanding targets to be met at a much later date.
The Prime Minister, in his foreword, calls the White Paper
"a milestone in energy policy",
but the truth is that it is a millstone around the necks of the industry and the customers, who include every man, woman and child and every business in Britain. The price of ministerial dithering and incompetence will be paid by people and businesses for years to come.
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We welcome the references in the White Paper to the importance of improving energy efficiency. Nevertheless, experience shows that relying on greater energy efficiency to achieve half the carbon dioxide savings required is wishful thinking. Although the White Paper admits past failures, for example on condensing boilers, it does not provide any policies to deliver micro combined heat and power in the future, which could be an important contributor to greater energy efficiency and generating capacity.
The Conservative party fully supports Britain playing its part in meeting internationally agreed targets to tackle climate change. That process originated under the Conservative Government. Will the Secretary of State tell us whether she believes that other countries will now commit to a 60 per cent. target cut in carbon dioxide emissions by 2050? Will she confirm that it would be economically damaging for Britain to impose such a target unilaterally? What discussions have taken place recently with the world's largest emitter, the United States, about its commitment to reducing carbon dioxide emissions? Why are the Government persisting with the climate change levy as one of their primary instruments for achieving a reduction? Does not the Secretary of State recognise that the climate change levy is unfair, arbitrary and ineffective in its impact? Does she understand that a comprehensive emissions trading system would provide a fairer and more efficient way of cutting carbon dioxide emissions? Why does the White Paper not admit the failure of the climate change levy, and announce its immediate replacement?
Will the Secretary of State confirm that the Government's existing emissions trading system is incompatible with the European Union scheme, and that the EU scheme itself is not comprehensive?
I welcome the overdue signs of realism in Ministers' minds in relation to renewable energy. Will the Secretary of State admit that when the White Paper describes the target of 10 per cent. of Britain's energy being supplied from renewable sources by 2010 as "very challenging", what it really means is that the chances of meeting it are remote? Will she confirm that that target can be met only at huge cost to both consumers and taxpayers, giving the lie to the Government's claim that they are concerned about affordable energy and fuel poverty?
Does the Secretary of State recognise that onshore and offshore wind, the two sources identified in the White Paper as the largest contributors of renewable energy in 2010, are not reliable sources, in the sense that there is no guarantee that the wind will blow when electricity demand peaks?
Yet another example of the White Paper's failure is the lack of any new policy on combined heat and power. The Government are failing to meet their existing CHP targets, no new CHP arrangement is being constructed, and all the White Paper offers is
"review existing guidance … continue to emphasise the benefits of CHP … work with Ofgem to keep these developments under review"
—anything, in other words, except tangible action to promote CHP.
Will the Secretary of State explain why the Government have ducked any decision on nuclear power? Does that mean they believe that existing

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nuclear power stations, which provide more than a fifth of current energy supplies, do not need to be replaced? What more do the Government need to know about nuclear technology or public attitudes before making up their mind?
Given that the lead time for planning, approving and building nuclear power stations is very long indeed, does the Secretary of State agree that by requiring both the fullest public consultation and the publication of yet another White Paper before any decision can be made, the Government are effectively trying to kill off Britain's nuclear industry? Does she agree that in doing so she has made Britain even more dependent on imported gas? Are the Government content to make Britain's electricity depend on gas supplies from countries such as Russia and Algeria? Does the Secretary of State believe that in the event of a future energy crisis, Britain—at the western end of a gas pipeline that passes alongside Russia's biggest gas customer, Germany—could rely on that source of supply? Does she agree that, at the very least, the situation would require the construction of huge new gas storage facilities? Where will those be, and who will pay for them?
We waited a long time for this White Paper, but judging by its content I think it would have been better for us to wait a bit longer so that the gaps in the policy could be filled in and the uncertainties that it perpetuates could be resolved. The long lead times in the energy industry, and the fact that Britain faces the most acute energy challenges for a generation, mean that the Government's actions and, more particularly, inactions now will have effects in years to come which consumers will still be suffering, and paying for, long after the Secretary of State has begun to draw her pension.
This White Paper represents a missed opportunity that could have disastrous results. Dodging the difficult decisions today may mean that the lights will go off tomorrow, and will certainly mean that the bills will be higher the day after that.
Ms Hewitt: That was a bit rich, coming from the spokesman for a party that was responsible, in government, for the discredited pool system that gave us artificially high electricity prices for years, which encouraged massive over-investment in electricity generating capacity—over-investment that is still unwinding itself. That Government's only energy policy was to have no policy whatsoever.
The hon. Gentleman began by referring to carbon dioxide reductions and our Kyoto targets. I can confirm that we are indeed on course to meet not just those targets but, we believe, the more challenging domestic target that we set of a 20 per cent. reduction by 2010. It is true that for the last two years there has been a small increase in carbon dioxide emissions, but we expect to see a fall again this year when we have the new figures. We also expect a continuing downward trend that will not only meet the Kyoto commitments, but go beyond that.
As for the commitments of other countries, today, my right hon. Friend the Prime Minister announced that he and the Swedish Prime Minister have written to the Greek Prime Minister as President of the European Union to urge all our European partners to sign up to the target of 60 per cent. reductions by 2050.
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The hon. Gentleman complained about the climate change levy, but that levy and the climate change agreements made under it, which deliver an 80 per cent. discount on the levy, are proving to be an extremely effective incentive for much greater energy efficiency and cleaner electricity within our industry, just as we thought that they would be. Britain pioneered voluntary emissions trading and it is already using that trading scheme to enable a number of companies to meet the commitments that they have entered into under the climate change agreements. As we say in the White Paper, as we move towards the new carbon trading system in 2005, we will look at how people move from the existing emissions trading scheme to the new trading scheme, and how the climate change levy fits in with that.
The hon. Gentleman complained about progress on renewables. Yes, it is a challenging target for 2010, and I mean precisely that. We put in place the renewables obligation only last year, so it is not surprising that it has not had much effect recently. We know very well, and we say in the White Paper, that we need to do far more year on year to ensure that we get the renewables electricity that we need, but the renewables obligation will build up to an enormous level of support for the renewables industry. It will be backed by the capital grants programme that I have just announced over the next four years and it will be reinforced from 2005 by the emissions trading scheme.
Let us recognise that, in Britain, we have one third of the entire wind resources of the European Union. Just as we used the coal reserves of our country to build our industrial wealth, so we can use our wind and wave resources to build the energy systems that we need for the future.
As for combined heat and power, we are already halfway towards the 2010 target and we have set out in the White Paper sensible, practical steps that will enable us to go the rest of the way.
The hon. Gentleman complained about the announcement that I have made today on nuclear energy. Let me make it plain that, although nuclear energy is a carbon-free source of energy, as I said, its economics are not attractive at the moment. The problem of radioactive waste rightly causes great concern to the public. The Secretary of State for Environment, Food and Rural Affairs is working on that issue at the moment.
It would have been foolish to announce, as the hon. Gentleman apparently wanted us to do, that we would embark on a new generation of nuclear power stations because that would have guaranteed that we would not make the necessary investment and effort in both energy efficiency and in renewables. That is why we are not going to build a new generation of nuclear power stations now. We are going to put all the priority on energy efficiency and on renewables, but we have not ruled out the possibility of needing some further nuclear capacity to meet our carbon targets.
On the issue of energy security, I disagree with every assertion that the hon. Gentleman made. We have access, potentially and already, to the extensive gas fields of Norway, with which we are working on a new treaty. Not only Britain but western Europe as a whole have been buying gas from Russia for the past 30 years

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without interruption. Already the industry is investing in liquefied natural gas facilities and in storage that, in a new world of much greater dependence on imported gas, will enable us to ensure that we continue to meet our energy security targets as well as our environmental targets.
Dr. Vincent Cable: I am not sure whether to thank the Secretary of State or the Prime Minister for the advance leaked copy that I received but perhaps she will pass on my appreciation to whoever it was. Having had a chance to read the report, I believe that it contains a great deal that is very welcome, in particular its emphasis on putting the environment at the centre of energy policy. However, there are some specific issues and questions that I want to deal with.
First, I welcome the emphasis on energy efficiency and conservation, but how can we take seriously the Government's commitment to energy conservation and fuel poverty, given that the Chancellor of the Exchequer is going to cut the warm front budget—the main practical instrument through which funding for energy conservation is delivered—by 15 per cent. from April? Why have the Government not come forward with proposals to replace those in the excellent private Member's Bill that was tabled by the hon. Member for Brighton, Kemptown (Dr. Turner) but sabotaged in the previous parliamentary Session?
Secondly, I welcome the emphasis on renewables, but can the Secretary of State confirm that—as I believe is correct—of the £1 billion of funding that she is discussing, not one penny is additional money? All of it constitutes funding already committed to support for renewable power, and the only funding outside that budget that will be made available is an additional £60 million. That contrasts with the hundreds of millions of pounds that her Department is throwing at the failed energy company British Energy.
Thirdly, on CHP, I welcome the Prime Minister's lending his authority to the White Paper this morning, but I wonder whether the Secretary of State remembers that four years ago, the Prime Minister launched the Whitehall CHP project—a project that now runs for only four hours a day. In the light of the Conservative spokesman's comments, what concrete action is the Secretary of State taking to deal with the immediate problems associated with CHP, given that output has fallen by 17 per cent. in the past year, and that three quarters of all capacity is currently under-utilised?
I congratulate the Secretary of State on standing up to the pressure that she was undoubtedly under to commit herself to new nuclear power in the White Paper. That is to be commended, but given that, in addition to the well-known security and environmental difficulties, the economics of new nuclear power are hopelessly unattractive, why do the Government feel that waiting another few years before producing the definitive view on this issue will add any new information whatever? Does she not accept that further procrastination both blights investment by the nuclear power industry, and makes it much more difficult for new investment to take place in renewables and other sources?
Finally, I also welcome the very sane and balanced way in which the White Paper deals with energy imports, particularly gas. However, does the Secretary of State
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acknowledge that the main threat to this country comes not from dastardly foreigners such as the Norwegians, but from the serious problem that is building up in the industry of large-scale underinvestment in infrastructure such as storage, terminals for liquefied natural gas, and pipelines? When are the Government going to address this very serious and imminent problem?
Ms Hewitt: I am grateful to the hon. Gentleman for his overall welcome for the White Paper, and for his especial welcome for its emphasis on the environment. As for energy efficiency, I must warn him—leaks or no leaks—not to believe everything that he reads in the press. The warm homes programme has already been a considerable success. No decision has yet been made on the next stage of its funding, but I stress again—as I did in my statement—the importance of the energy efficiency commitment, and our intention to extend and increase it. Indeed, we shall also consult on its possible extension to the business sector, to ensure that the benefits already brought to the domestic sector are extended to business.
The hon. Gentleman mentioned investment in renewables, and he began by saying that there is no new money at all. I can confirm that there is indeed new funding of £60 million, which comes from the non-fossil fuel obligation, and a further allocation of £38 million that was part of last year's spending review settlement. That was allocated generally for energy, but I have now allocated it specifically to capital grants for the renewables programme. I stress to the hon. Gentleman that support for renewables does not, of course, come only from the taxpayer. It will come, in even more sizeable form, from the renewables obligation and from the carbon trading system.
The hon. Gentleman also mentioned CHP. We all know that it is difficult at the moment to make the economics of CHP work, with gas prices high and electricity prices low. That price situation will not exist for ever and, indeed, we spell out in the White Paper how we see electricity and other energy prices rising in the future, especially under the impact of the carbon emissions trading scheme. We are also taking action with the regulator, Ofgem, to ensure that the regulatory framework is properly suited to the needs of CHP and more generally distributed small-scale renewable sources. We are also proposing to put a statutory duty on the regulator to assess all regulatory proposals on their environmental impact. That will help to ensure that we get the regulatory climate right and obtain the investment that is needed in new distribution and storage infrastructure.
I know that the Liberal Democrats would like to rule out nuclear power forever, and preferably close it all down today—although that may not be the hon. Gentleman's personal view. The Tories would like us to commit to an entire new fleet of nuclear power stations today. Both are wrong. We have taken the responsible course that will meet this country's energy security needs and deliver our environmental targets.
Several hon. Members rose—
Madam Deputy Speaker (Sylvia Heal): Order. I ask hon. Members to be concise in their remarks to the Secretary of State, so that more may be fortunate enough to catch my eye.
Mr. Martin O'Neill: I welcome my right hon. Friend's statement and the White Paper. In particular, I welcome the incorporation of the timetable of the royal commission on environmental protection, which is more realistic than those we have had in the past. The royal commission placed some emphasis on a nuclear contribution, but—like my right hon. Friend—I think that it is unrealistic to discuss that at the moment, given the financial problems faced by the industry.
My right hon. Friend mentioned the importance of the co-ordination of the research contribution. Can she assure us that the Department will be more aware of the special pleadings that can come from research scientists? In the past, the old Central Electricity Generating Board researchers bedevilled the progress of investment in generation schemes by wanting a few dollars more, and more bells and whistles. We ended up being years behind with most of our major programmes. That meant that prices rose, although no one will be under any illusion that prices will not rise in future as a consequence of the programme of measures that my right hon. Friend has laid out.
Will my right hon. Friend bear in mind that there are still 2.5 million people, by her figures, in fuel poverty, most of whom live in hard-to-heat homes and are not necessarily helped by social security changes? It will be essential that she and her team fight and defend the budgets, which some see as inadequate now but which are under threat as a consequence of the costs of the foot and mouth epidemic and their effect on the budgets of the Department for Environment, Food and Rural Affairs.
Ms Hewitt: My hon. Friend is right to offer those warnings about the temptation to try to develop a uniquely British solution to technological problems. That was a trap into which the British nuclear industry fell in the past. I am sure that he will welcome the announcement today by the Engineering and Physical Sciences Research Council that it will invest more than £11 million in new research into renewable power generation, drawing upon some of the outstanding science that has been done in that area in the UK.
My hon. Friend is also right to draw attention to the need to ensure that vulnerable households, and people living in inadequately heated houses, are able to meet their energy needs. The White Paper has the balance right between ensuring that we do not price those people out of being able to heat their homes, and ensuring that we obtain private sector investment, and retain public sector investment, in energy efficiency.
Mr. John Horam: May I thank the Secretary of State for publishing alongside her White Paper the Government's response to the Environmental Audit Committee's report on sustainable energy? I welcome the remarks made in the White Paper about renewables and the emphasis on the environment. However, now that the right hon. Lady has got her White Paper out of the way, will she inject some urgency and decisiveness into this snail-like policy-making
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process? It is especially disappointing that a White Paper published now includes a plan for an implementation document in 12 months' time. Are we not in danger of paralysis by analysis?
Ms Hewitt: I think that it was worth spending some months looking at, in particular, the recommendations of last year's report from the strategy unit, and conducting the largest-ever public consultation on energy policy and doing very extensive and detailed economic modelling to ensure that we have a soundly based policy. Of course, I agree with the hon. Gentleman that we now need to ensure that we implement it. By bringing together all the Departments with an interest in and a responsibility for energy policy under the direction of a new ministerial Committee, which my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and I will chair together, we shall have the right framework not only to make policy but, above all, to implement it.
Dr. Jack Cunningham: I welcome my right hon. Friend's White Paper and hope that its important aspirations for renewable energy can be achieved. I also applaud the clear commitment to retain the option of using nuclear power in the future.
Is it not clear that carbon trading, unlike the climate change levy, will enhance the economic position and thus the potential contribution from nuclear power in future? I am in no doubt that we shall need that contribution. While my right hon. Friend places much emphasis on energy efficiency and energy conservation, does she recognise that experience tells us that all those millions of disaggregated decisions, taken 24 hours a day, seven days a week, will never be changed simply by exhortation? Does she recognise that she will have to legislate to regulate and that, in doing so, she will also have to ensure that fuel poverty issues are carefully taken into account?
Ms Hewitt: I think that I am right in saying that my right hon. Friend was the first ever Minister for energy conservation. He is right: exhortation simply does not work. It certainly does not work in my family when it comes to persuading teenagers to turn the lights off and not to leave the television on standby. We need to build energy efficiency into our homes, offices, factories and appliances. We shall do that through the building regulations, through stricter product regulations in Europe and through voluntary agreements with industry. We shall also do it through this much stronger energy efficiency commitment and through the development of an energy services market. My right hon. Friend is right to say that the new carbon trading system that will apply in 2005 will apply to all sources of electricity.
Sir Sydney Chapman: Can the Secretary of State tell the House what proportion of electricity production is met by renewables at present? If, as I think, the figure is about 3 per cent., will it not be very difficult to increase it by 1 per cent. year on year? As she has already said that she hopes that the whole programme will gather momentum, is that not even more reason for a detailed strategy setting out the contribution that each part of renewables—whether

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wind and wave or solar—can make. To get the support of the British people to achieve the policy, we need to capture their imagination.
Ms Hewitt: As we say in the White Paper, renewables account for less than 3 per cent. of Britain's electricity. That is certainly less than a number of other European countries have achieved. It is not for the Government to say that so much must come from onshore wind, so much from offshore wind, so much from waves and so on. That is for investors to decide. We stand ready, with the increased capital grants programme that I announced today, to ensure that there is backing from the taxpayer for renewable energy projects. By working with the regulator, we are also ensuring that we get the distribution infrastructure right so that those renewable generators can get their electricity to market. In the White Paper, we are setting exactly the investment and market framework that the energy companies and their investors are seeking and I am confident that they will respond.
Mr. David Borrow: I want to discuss the poor position of the UK in regard to solar energy. What discussions has my right hon. Friend had with her right hon. Friend the Deputy Prime Minister on improvements to planning regulations and grants towards social housing? We have to promote the use of solar energy in social housing and public buildings.
Ms Hewitt: My hon. Friend raises an important point. I have talked to my right hon. Friend the Deputy Prime Minister about how we can use the early review of building regulations to ensure that, in setting much higher energy efficiency standards for new build and such things as the refurbishment of roofs, we can massively increase investment in solar energy and similarly energy efficient systems. That will require changes to the planning system and, as is said in the White Paper, we will make changes to the planning system for energy. I am glad that, in the new communities programme that my right hon. Friend announced recently, he made it clear that we will set high standards of energy efficiency in new homes.
Mr. Robert Key: It is disappointing that the White Paper contains just six sentences on future research needs. There are no announcements that the Chancellor of the Exchequer intends to put any new money into research. Does the Secretary of State agree that, if we are to get optimum performance from existing nuclear plant, we will need more research into nuclear fission and we will certainly need more research into nuclear fusion? At Culham and elsewhere we should ensure that we at least match the investment in research of the rest of the European Union. If we are to take advantage of the hydrogen revolution, we will need a great deal more research across the board. I hope that the Government will address that issue.
Ms Hewitt: In the White Paper, we set out clearly our support for the energy research group's research priorities. I refer the hon. Gentleman to paragraph 7.32, in which we set out that the research priorities include energy efficiency, nuclear power, hydrogen production and storage, carbon dioxide sequestration, solar
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photovoltaic energy, and wave and tidal power. The funding for those priorities is available from the enormous increase in the research council's budget that we announced last year as a direct result of the spending review. I hope that the hon. Gentleman will welcome not only that commitment but the fact that the EPSRC is already calling for bids for its new programme of renewable energy research.
Mr. Michael Clapham: I welcome the White Paper, with its emphasis on renewables and its focus on reducing greenhouse gases. I listened with interest to what my right hon. Friend said about investment in clean coal technology. Will she review the investment into that technology with a view to considering how clean coal technology—such as that of the integrated gasification combine cycle unit—could boost British manufacturing and help in the transfer of technology to tackle pollution worldwide?
Ms Hewitt: As my hon. Friend will be aware, we are already working on that. We are talking to the industry about how we can help to develop that particular clean coal technology. I know that he will welcome the fact that we are investing some £25 million over three years in the cleaner coal technology programme
Mr. Michael Weir: In her statement, the Secretary of State made a commitment to cut UK carbon dioxide emissions by 60 per cent. by about 2050, with real progress by 2020. How does she define "real progress"? Would it not be better to have a specific target for 2020?
Ms Hewitt: As I said in my statement, we have set out very clearly that, by 2020, we hope to double the contribution that we have set from renewable energy sources, compared with the target of 10 per cent. by 2010. That is one of the ways in which we will measure the progress that we need to reach the overall 2050 target. As I said earlier, we are on course to meet our 2010 Kyoto targets and, we believe, our more challenging domestic targets. However, in about 2005, we will enter the discussions for Kyoto 2, which will expire in about 2012. At that point, we will be able to see what further commitments we need to make internationally for the period ahead. That, too, will be part of the benchmark that we use to assess whether we are staying on track for the commitment that we are making today of 60 per cent. by 2050.
Mr. Gareth Thomas: I, too, warmly welcome the White Paper, particularly its accelerated focus on renewables, but does my right hon. Friend accept that many people in the energy industry think that 25 per cent., or even 30 per cent., of our energy needs is perfectly achievable from renewable sources by 2020? Does she also recognise that, given the way that Ofgem has introduced the new electricity trading arrangements, it is possible that there might be concern about whether it has understood the White Paper and, indeed, is capable of delivering in a helpful way the objectives for Ofgem that are contained in it?
Ms Hewitt: My hon. Friend is right to say that some people, particularly in the green movement, believe that

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a 25 to 30 per cent. share of electricity from renewable sources is perfectly achievable. We considered whether that should be our policy aim, but, on present information, the costs of achieving that would be very substantial indeed, and if we go above 20 per cent., the costs to the consumer increase much faster. I believe that it is important to get on the right course with the practical policies that I have outlined, including the renewables obligation.
My hon. Friend refers to Ofgem. Let me stress again that we will put Ofgem under a duty to conduct and publish an environmental impact assessment of all its regulatory proposals. We will also revise and strengthen the environmental guidance that we give to Ofgem under the Utilities Act 2000, in the light of the White Paper, but Ofgem is already consulting on the proposals for the British electricity trading system—the Electricity (Trading and Transmission) Bill—and that will give it a further chance to ensure that the regulatory framework meets the emphasis on renewables that we have set out in the White Paper.
Richard Ottaway: I welcome the Secretary of State's environmental aspirations, even though I share other hon. Members' scepticism about whether they are achievable. She has made it clear today that there is a future for coal-fired generation, provided that it uses clean coal technology. Given that coal-fired generation, without clean coal technology, is uneconomic and power stations are closing down, how does she propose that clean coal technology should be financed? I refer not to her research programme, but to how the investment in clean coal technology will be paid for at present market levels.
Ms Hewitt: The hon. Gentleman raises an extremely important and interesting issue. The important feature of the White Paper, as I have tried to stress, is that we are giving long-term signals to the market. We have set out very clearly our own assessment, on current information, of what we think will happen to electricity prices. That assessment and the policies that we have announced today set the climate and the framework in which investors will make their decisions on investing in coal and, indeed, other generating plants, but we also know—I reflected on this in my statement—that coal-fired electricity generation has a very important contribution to make because it is so flexible. Of course, that is an important factor, and investors and energy companies will take it into account when they make those decisions.
Paddy Tipping: I welcome the White Paper proposals for improved energy efficiency, the growth in renewables and, of course, clean coal technology and sequestration, but taken together, even if we achieve that more environmentally sensitive energy policy, does the Secretary of State accept her own Department's figures showing that, by 2020 at the outside, 80 per cent. of our energy needs could be met from gas, 90 per cent. of which will be imported? Is that really a secure, reliable and sustainable energy policy? If that is the case, will she keep that matter under review?
Ms Hewitt: I have already outlined to the House why I believe that we can achieve our energy security goals,
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as well as our other energy goals, with much greater dependence on imported energy, particularly gas, than we have at the moment, but of course we will keep that under review. As the White Paper says, we will strengthen the arrangements for jointly monitoring, particularly with Ofgem, security of supply considerations, and we will ensure that Ofgem regularly reports on the security of supply and on the implications of its decisions for future security.
Hugh Robertson: A number of farmers in my constituency are excited by the potential—I put it no more strongly than that—of biofuels. What discussions has the Secretary of State had with the Chancellor about the duty cut necessary to kick-start the industry, and what part does she think biofuels could play in meeting our future energy needs?
Ms Hewitt: Like the hon. Gentleman, I think that bio-energy has a contribution to make to our future energy needs, particularly in light of the need for our agricultural communities to diversify and the need to reform the common agricultural policy, and this is a thoroughly timely opportunity. My right hon. Friend the Chancellor, who has led the way in ensuring that we have an environmentally sensitive tax system, said in the pre-Budget report that he wants to consult further on fiscal incentives and I am sure that that will take into account the need further to encourage the development of biofuels.
Mr. Dennis Skinner: Is the Secretary of State aware that it is not a good idea to rely on so much imported energy in future? The situation is bad enough now. At the last count, the trade deficit was about £34 billion, which is the highest figure that we have experienced. In that context, would it not be a good idea to concentrate on renewables? I accept that they will make little inroad into the problem, but we must concentrate on industries that supply energy. If it is possible for a few hundred miners in south Wales to take over Tower colliery as a co-operative and to keep it going against the odds for seven or eight years, yet the giant UK Coal can close down Selby, would not it make more sense for the Government to take over Selby, as they took over Railtrack, to offset the trade deficit and to ensure that those massive supplies of coal, from a field that we did not start using until 1988, keep coming?
Ms Hewitt: I hate to disappoint my hon. Friend, but I do not propose to renationalise Selby. My hon. Friend the Minister for Energy and Construction and I have been working on an investment aid scheme that will bring hope to hundreds of our miners. It will also help to ensure that the extensive coal reserves that this country still enjoys are properly used for the future.
Mr. Andrew Lansley: The Secretary of State must be aware that even if we achieved 20 per cent. generation from renewables by 2020, if at the same time the nuclear plant, which is carbon free and provides 20 per cent. of our requirements, closed down, our ability to meet our carbon emissions targets would be severely compromised. In that respect the right hon. Member for Copeland (Dr. Cunningham) is right to say that the

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carbon emissions trading scheme is integral to the economics of future nuclear generation and to our meeting our carbon emissions targets. Will the Secretary of State say that in January 2005, when a carbon emissions trading scheme that includes electricity generation is to be introduced, the climate change levy will be disapplied from the electricity generating industry?
Ms Hewitt: As the hon. Gentleman knows, decisions on taxation, and therefore on the climate change levy, are a matter for the Chancellor. However, as the White Paper says, the climate change levy will of course be reviewed in light of the introduction of the carbon emissions trading system.
Mr. Kevin Hughes: Although I welcome the announcement of an investment aid scheme for the coal industry, it has to be said that the White Paper goes out of its way to ram home the message that the indigenous coal industry has only a short-term future, despite the fact that this island is built on coal. We know that coal is a reliable fuel and, with modern IGCC technology, not only can we generate electricity with virtually zero toxic emissions, we can capture nitrates, carbon and hydrogen. Instead of seizing an opportunity to plan for our energy needs, however, the Government have left it to be decided by market forces. It beggars belief that they are planning to be a net importer of energy.
Ms Hewitt: As my hon. Friend knows, over the past three years we have put £160 million of coal aid into the British coal mining industry. Indeed, my hon. Friend the Minister for Energy and Construction has done everything possible to help to ensure that the Hatfield colliery in my hon. Friend's constituency has a viable future. My hon. Friend knows the industry well. I am sure he understands and accepts that in a mature coal industry, geology is against us. That, I am afraid, was clear from the near-tragic flooding and closure of Longannet just a year or so ago. We are doing what we can, but we should not delude ourselves that British coal will have the same role in our energy system that it had over the past 100 years.
Mr. Nick Gibb: What is the Secretary of State's estimate of the additional costs of electricity generation as a result of meeting her new 20 per cent. renewables target?
Ms Hewitt: We spell out in the White Paper the best estimates that we can offer of the increase in electricity and gas prices for domestic consumers and industry over the next 15 to 20 years. Let me stress that because electricity prices are at such a low point, prices for most consumers will still be below what they have been paying for the past 20 years or so even if they rise to the highest anticipated level of the estimates. I believe that we have the balance right between setting incentives for energy efficiency and cleaner electricity, and ensuring that our businesses stay competitive and our vulnerable consumers are protected.
Mr. Tom Levitt: I welcome my right hon. Friend's statement, in particular her reference to the
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contribution that energy conservation and the reduction of energy use can make. May I make a modest suggestion about the warm front scheme? It is my constituents' experience that warm front grants for central heating boilers are only available to replace on a like-for-like basis. I am sure she will agree that it would make more sense for the best available technology to be used in the warm front scheme because new boilers for domestic use are cleaner, cheaper and greener in every respect, both to install and to run, than the old-fashioned systems. Will she support a review of the warm front grant in that respect?
Ms Hewitt: My hon. Friend raises an important point. The review of building regulations will consider the need to move towards condensing boilers so that they become the standard for replacements and new installations. I was not aware of that problem with the warm front grant and shall draw it to the attention of my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs.
Mr. Jonathan Djanogly: Is it the case that we are not being offered the radical alternatives that were promised? We seem to be maintaining the existing policy of following whatever the market dictates on traditional fuels while superimposing an unproven wish list on renewable energy with no analysis of the structural changes that will be required to put it in place.
Ms Hewitt: The hon. Gentleman is quite wrong. We have set out a clear strategy for ensuring that we have the right market framework, with the right set of incentives, backed up, where necessary, by regulation and public sector investment to meet the overall targets for CO2 reductions by 2020 and 2050 in a way that preserves security of supply and competitive markets.
Mr. Geoffrey Robinson: Is my right hon. Friend aware that the measures on renewables and energy efficiency which lie at the heart of her policy should be welcomed by hon. Members on both sides of the House? She should not be criticised for the ambitiousness of her targets providing that if they are not reached—she states in the White Paper that they are highly uncertain by their very nature—she has an alternative plan, be it coal or, indeed, nuclear energy. In the latter respect, will my right hon. Friend ensure that, as a minimum, we retain a skills base that will enable us to use this technology should it prove necessary?
Ms Hewitt: My hon. Friend raises an important point. We say in the White Paper that we need to ensure that we have nuclear engineers and scientists available for the future, not only for possible new nuclear build but to manage the ongoing waste issue. I am glad to say that the trade unions that represent the work force in this area have said today that they welcome the White Paper and believe that it offers the right way forward on skills.
Mr. Bob Blizzard: I welcome the emphasis that the White Paper places on wind energy, and especially offshore wind energy. My right hon. Friend knows that I represent the most easterly part of the country. I believe that it is the windiest part of the

43
country as well. Is my right hon. Friend aware that we are keen to see something that used to be seen as a negative turned into an asset for the country?
We are also keen to grasp the economic opportunities of developing a wind energy industry. I am talking about manufacturing the machinery that will generate the wind power. Will my right hon. Friend support that and ensure that the Regional Development Agency and other bodies that her Department funds fully recognise that this is a commercial opportunity and that they will need to act quickly if we are to gain jobs from it?
Ms Hewitt: I am grateful to my appropriately named hon. Friend for his support. I entirely agree with him about the huge potential of the wind energy industry. That is why we are backing Renewables UK in ensuring that we build a United Kingdom supply chain, to make sure, for instance, that the sort of skills, expertise and jobs that we developed for the offshore oil industry are now developed in the wind industry, to generate more jobs and more prosperity not only for my hon. Friend's constituents but for many others.
Mrs. Joan Humble: I am pleased to follow on from my hon. Friend the Member for Waveney (Mr. Blizzard). My right hon. Friend will know that there are plans for not just one wind farm but three new farms off the shores of my constituency. Will she bear in mind the time scale that is involved in giving the planning consents that are necessary for such development? Although there has been a lot of consultation with the fishing industry in Fleetwood, there are concerns about how long people will have to wait until decisions are made. Clearly they need to plan for the future, depending on what the decision will be.
Ms Hewitt: My hon. Friend is absolutely right. Current planning time scales are much too long. That is why I have said in the White Paper that we will apply to energy infrastructure projects, including wind farms, the same planning reforms that my right hon. Friend the Prime Minister is introducing generally. I hope that without in any way compromising the need to engage
44
local people in these decisions, we can ensure that we make such decisions much more quickly and thus reduce the uncertainty and costs to industry.
Paul Flynn: Should we be giving more attention to the virtually untapped indigenous source of power, which is tidal power? We know that one scheme can provide 5 per cent. of our electricity needs. Many small schemes, such as tidal islands, could be built at low cost and provide renewable electricity which is not seasonal, not intermittent, but continuous. It could provide a base load of electricity with the tides sweeping round our coasts at different times. Is it not right that we should invest in that form of electricity, which is non-polluting, benign, British and inexhaustible?
Ms Hewitt: My hon. Friend is absolutely right. The potential for tidal power is extremely great. He will be aware that we have already contributed about £1.6 million to a scheme in the Severn, which my hon. Friend the Minister for Energy and Construction assures me operates on the inverted windmill principle. It is not the only tidal wave power scheme that we are supporting. Like my hon. Friend the Member for Newport, West (Paul Flynn), I feel that there is great potential there to be fulfilled.
Jon Trickett: Will my right hon. Friend state clearly that she sees a long-term future for coal that has been mined in this country rather than imported? If so, will she finally get a grip on a company whose corporate strategy seems to involve the closure of mines, thereby sterilising proven stocks and at the same time making my constituents and others redundant?
Ms Hewitt: I am clear about the fact that there is a long-term future for coal generation. As regards British coal, we are in a constructive dialogue with UK Coal. My hon. Friend the Minister for Energy and Construction is in talks with UK Coal to ensure that, with the help of the investment aid scheme on which we are working, there will indeed be a long-term future for a number of British coal mines.
Several hon. Members rose—
Madam Deputy Speaker (Sylvia Heal): Order. We must now move on to the main business.

Points of Order
4.50 pm
Mr. Peter Kilfoyle: On a point of order, Madam Deputy Speaker. Since we last debated Iraq, we have been presented with a risible, plagiarised dossier on weapons of mass destruction. We have also seen huge demonstrations in London and Glasgow and elsewhere round the world. We have had the Archbishop of Canterbury, the Cardinal Archbishop and His Holiness the Pope repudiating the assertion of some kind of moral justification for war on Iraq. We are now told that there will be a debate on Wednesday, and we are given every indication that it will be a broad motion, to which we can all sign up. Many of us believe that this is make-your-mind-up time on a critical issue of our times. May I seek your advice as to the circumstances in which a Back-Bench amendment to the Government motion might be acceptable?
Madam Deputy Speaker (Sylvia Heal): If I recall correctly, the Leader of the House said earlier that the Government motion would be tabled today. Perhaps when the hon. Gentleman and his colleagues see that, they may decide whether they wish to table an amendment, which will enable the Speaker to make a decision whether to select it.
Mr. Tony Lloyd: Further to that point of order, Madam Deputy Speaker. The Leader of the House said that the selection of an amendment is a matter for the Speaker, which the House recognises, of course. Some would say that the country was not divided, with only a small measure of support for the Government. Could you impress on the Speaker the view from the Back Benches that any amendment that is selected should accurately reflect the simple
46
argument that the Government have not yet made their case for war? It is important that the House and the country should know that Parliament is debating these matters in a way that most accurately reflects national sentiments.
Madam Deputy Speaker: I understand the gravity of the situation, but we must first see the motion as tabled, and hon. Members can then decide the most appropriate amendment. As I said earlier, it will be for the Speaker to make his decision.
David Davis: On a point of order, Madam Deputy Speaker. During the recess, the Deputy Prime Minister wrote to me notifying me that a statement was being made in the House of Lords about funding to local authorities for the first year's supporting people programme. He wrote:
"I regret it has not proven possible to make this announcement while the House of Commons was sitting."
He provides no explanation for that.
The programme affects the housing of a million elderly people and has a £50 million effect on local government funding. At the same time, £400 million is being taken off that funding through the abolition of social housing grant, about which local authorities have not been notified. This Friday, the local authorities must, by law, set their budgets. This is a shambolic and incompetent way to run local government finance. Have you had any indication of a statement from the Deputy Prime Minister this week, so that the matter can be sorted out as soon as possible?
Madam Deputy Speaker: I have had no indication from any Minister that they wish to make a statement to the House, but I am sure that a note will have been made of the right hon. Gentleman's comments.

Orders of the Day

  Industrial Development (Financial Assistance) Bill
  Madam Deputy Speaker (Sylvia Heal): I inform the House that Mr. Speaker has selected for discussion the amendment in the name of the Leader of the Opposition.
  4.54 pm
  The Minister for Employment Relations, Industry and the Regions (Alan Johnson): I beg to move, That the Bill be now read a Second time.
  The purpose of the Bill is to increase the cumulative limit on financial assistance that may be provided under section 8 of the Industrial Development Act 1982. A useful starting point would be to explain what the section 8 power is and what it can be used for. Section 7 of the 1982 Act allows financial assistance to be offered in the assisted areas of the UK if it is likely to provide, maintain or safeguard employment. Section 8 has much broader scope and provides the legislative basis for financial assistance, both inside and outside the assisted areas. It gives wide discretion to provide financial assistance to industry if, in the opinion of the Secretary of State, it is
  "likely to benefit the economy of the United Kingdom, or of any part or area of the United Kingdom".
  That can be a geographical area as well as a sector of the economy. Assistance can also be provided if it is "in the national interest" and if it cannot be provided in any other way.
  The precise purposes for which assistance may be offered are set out in section 7(2) of the 1982 Act. They include promoting the development, modernisation or efficiency of an industry; the creation, expansion or sustaining of productive capacity in an industry; promoting the reconstruction, reorganisation or conversion of an industry; encouraging the growth of an industry; and encouraging the arrangements for ensuring an orderly contraction of an industry. The legislation is drafted in such a way as to permit other Secretaries of State, as well as the Secretary of State for Trade and Industry, to use the section 8 power. Following devolution, Ministers in the devolved Administrations are also able to use the powers of section 8 to fund their own activities. If they do so, their expenditure counts towards the cumulative limit.
  Assistance using section 8 as the legislative basis has been subject to a statutory limit since the Industry Act 1972. In calculating the cumulative spend under section 8, it is necessary to take account of all expenditure since then. More than 60 measures of financial assistance to industry have been established using the section 8 power since 1972. Of those, 15 are currently open, which I will return to shortly. The 1972 Act contained a limit of £150 million on section 8 expenditure, but provided for that limit to be raised by a sum not exceeding £100 million on not more than four occasions, by order made with the consent of the Treasury. The Act stated that an order should be contained in a statutory instrument and that a draft order should be approved by a Commons resolution. The limit was reset by the
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  Industry (Amendment) Act 1976 to £600 million, with provision for up to four increases, by order, of up to £250 million each.
  The Industry Act 1982, which the Industrial Development Act 1982 consolidated, raised the ceiling to £1.9 billion. The system of affirmative orders was retained and section 8(5) of the Industrial Development Act 1982 allows the limit to be increased four times by up to £200 million on each occasion. This provides for a maximum ceiling of £2.7 billion. The Government have sought parliamentary approval to increase the limit on three occasions to date, most recently in January 2002. The current limit is £2.5 billion. As this is likely to be reached by the end of the current financial year, a fourth and final order under existing legislation is needed before the Bill completes its passage through Parliament. A draft order raising the limit to £2.7 billion was laid in the House on 30 January and will be debated in Committee next week.
  At the end of March 2002, the cumulative expenditure for all section 8 schemes since 1972 was almost £2.35 billion. For the current financial year, the forecast is that a further £167 million will be spent, with a further £208 million for the financial year 2003–04. Based on current levels of spend, the maximum amount allowable under existing legislation—£2.7 billion—is expected to he reached early next year.
  It may be helpful if I explain what contributes to the cumulative limit. The 1982 Act states that the aggregate of sums paid, plus liabilities under any guarantees given, less any sum received by way of repayment of a loan or of sums paid to meet a guarantee, count towards the cumulative limit.
  Mr. Andrew Lansley: Before the Minister moves on to the schemes that fall within section 8 expenditure, I am interested in the build-up of total commitments. I may have missed something, but I looked in vain in annual reports on the Industrial Development Act 1982 for a cumulative total, building up year on year, of section 8 expenditure. Can the Minister give some indication of the pace at which those commitments have built up over the past five years in comparison with the preceding years?
  Alan Johnson: I shall come to that in due course when I explain how we have had to come back to the well, so to speak, to replenish stocks. I am surprised that that information has not been in the annual reports—it should have been.
  This small Bill of just two clauses is essential to enable the section 8 power to continue to be used by the Department of Trade and Industry, other Departments and the devolved Administrations to give financial assistance to industry. Without an increase in the limit, the legislative basis for the various schemes set up using section 8 would be exceeded when the absolute limit of £2.7 billion is reached, rendering unlawful Ministers' further use of that power. The Bill raises the financial ceiling in section 8(5) of the Industrial Development Act 1982. It retains the structure of tranches in the existing legislation but replaces the numerical ceilings with new, higher ones.
  Clause 1 replaces section 8(5) of the 1982 Act by increasing the initial ceiling from £1.9 billion to £3.7 billion and the subsequent four tranches from up

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  to £200 million to up to £600 million each. Clause 2 gives the short title of the Bill. The other provisions of section 8 remain unaltered.
  Mr. Michael Fallon: The Minister seems rather coy about what he is actually doing. Will he confirm the arithmetic? Is his position that he inherited a total ceiling of £2.1 billion when the Government took office because the cap had been increased once. and that he now proposes to increase the total ceiling available to £6.1 billion—in other words, trebling it?
  Alan Johnson: For the sake of clarity, the financial ceiling that has existed since 1982 is £1.9 billion. I believe that we had been to the well twice for £200 million by the time we came into government in 1997. We went back to the well again last year, so we have been three times and there is one more time left. We have reached a situation whereby we have spent £2.5 billion and there is another £200 million left. We are now suggesting, 20 years after the 1982 Act, that we replenish the stocks. While maintaining the four tranches, we want to increase the ceiling on those tranches—as, indeed, did the previous Government in 1982—to £6.1 billion.
  There are no plans to change the threshold at which individual offers of assistance under section 8 are subject to the approval of the House of Commons. That threshold, fixed by section 8(8), remains at £10 million. The aim of subsection (8) is to give Parliament the opportunity to consider larger cases of assistance to industry. As there have only been a couple of occasions in recent years on which that has been required, there seems to be no reason to raise the threshold at this time.
  The new limits in the Bill were chosen to provide more regular parliamentary consideration of the section 8 power. If we consider existing legislation, 14 years elapsed before the first order was needed, and there were subsequently only four years, two years and one year between orders. Based on the average spend forecast for the next four years of £185 million per annum, the new initial ceiling is expected to last for approximately six years before the first order is needed. Increases through affirmative order will be required every three years after that until the new ultimate limit of £6.1 billion is reached. On that basis, the proposed new limits are expected to provide legislative cover to enable assistance under section 8 to continue for almost 20 years.
  Section 8 is an enabling power. The Bill provides the statutory authority to continue expenditure on measures that have already been announced and enables the introduction of new measures as appropriate. However, I am not announcing new measures today. The Bill has no regulatory impact on business and a copy of the regulatory impact assessment was placed in the Library today.
  Section 8 is not the only legislative base on which to enable financial assistance to be offered to industry. Section 5 of the Science and Technology Act 1965 and other sections of the 1982 Act also provide for that. Section 7 of the 1982 Act provides for the regional selective assistance scheme, the main regional policy instrument. Some industrial sectors such as aerospace are covered by specific legislation.
  Mr. Lansley: I appreciate that the Minister is not announcing any new schemes under section 8 today, but
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  the explanatory notes to the Bill specifically refer to the urban post office network reinvention programme, which costs approximately £450 million. Am I correct that that money has not yet been spent and that, for three years, it creates a much higher rate of expenditure under section 8 than in the recent past?
  Alan Johnson: The hon. Gentleman is right. The money, which Parliament authorised in November, has not yet been spent.
  When assistance under section 8 is regarded as state aid, it must be compatible with European Community state aid rules. The European Commission will need to be notified of and approve any new scheme under section 8 that constitutes state aid before it can be introduced. However, if one of the block exemptions covers it, simpler notification procedures can be adopted and the aid can be granted immediately. The Commission has been informed of our intention to raise the limits.
  The Small Business Service, which was established in April 2000 to meet the needs of small businesses, administers eight of the current assistance schemes. The Government acknowledge that there were weaknesses in the market's provision of finance to small and medium-sized businesses. The SBS was established partly to ensure that Government support programmes for small firms dealt with their needs at all stages of their development and helped to bridge the funding gap that many companies face. One of the main SBS programmes is the enterprise fund that was announced in the competitiveness White Paper in 1998. It aims to stimulate more finance for small businesses and tackle marked weaknesses in the provision of the finance.
  Four elements of the enterprise fund use section 8 as their legislative basis. First, the small firms loan guarantee scheme, which was set up in 1981, is the oldest section 8 scheme. It offers guarantees on loans to small firms with viable business proposals that are unable to obtain conventional finance because they lack assets as security against the loan. By providing a guarantee against default, the scheme encourages lenders to lend when they would not otherwise do so.
  Secondly, regional venture capital funds were established to tackle the equity gap experienced by SMEs that seek investment of up to £500,000.
  Thirdly, the UK high technology fund was set up to encourage institutions to invest in early-stage. high-technology businesses and to increase the amount of finance available for investment in technology-based businesses.
  Fourthly, the early growth funding initiative seeks to stimulate small amounts of risk capital for start-ups and growing businesses that are usually too risky for the banks or too small for venture capital. The first of those, the London seed capital fund, was formally launched in December 2002. The Small Business Service also administers the enterprise grant scheme, which is a discretionary scheme for SMEs in areas of special need. Enterprise grants are given to businesses to finance capital investment projects.
  Another main SBS activity is the Phoenix fund to promote entrepreneurship among disadvantaged groups. Two elements of the Phoenix fund use section 8. The first is support for community development finance

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  institutions, which are organisations that lend to enterprises that the banks consider too risky. The second is the Government's investment, in parallel with private sector investors, in the bridges fund, which is a community development venture capital fund that makes equity investments in growing businesses in disadvantaged communities that tend to be overlooked by established venture capital funds. There is also the business incubation fund, which helps to improve the chances of survival and growth of start-ups and early-stage SMEs through increasing availability and access to business incubation.
  Section 8 has also been used for schemes that address the needs of particular industrial sectors. The UK coal operating aid scheme, which was set up to help the coal industry through a period of transition, closed at the end of December. It was established to prevent the premature closure of viable mines owing to short-term market problems. The Government are in negotiation with the European Commission over our intention to use section 8 to support redundancy payments arising from the closure of UK Coal's Selby complex. Section 8 was also used last year to support supplementary redundancy payments to those who lost their jobs following the sudden and catastrophic flooding of Longannet colliery, which was the last deep coal mine in Scotland.
  Section 8 is also used to enable the Government to make payments to redundant steelworkers through the iron and steel employees readaptation benefits scheme. Most recently, section 8 has been used for the urban post office reinvention programme, which the hon. Member for South Cambridgeshire (Mr. Lansley) mentioned, to enable the Post Office to carry out its programme to restructure the urban post office network, and to ensure that sub-postmasters whose offices close are adequately compensated for the loss of value of their business, and that those who remain can benefit from investment grants. The House debated and approved that funding on 15 October 2002.
  Part of the assistance offered through the Rover taskforce programme uses the section 8 power. The funding is to enable the regional development agency, Advantage West Midlands, working with business link operators, to help businesses in the region to modernise and diversify.
  Section 8 is also used by the National Assembly for Wales to operate that country's regional innovation grants scheme and the Assembly's investment grant scheme. Those initiatives are funded by the Assembly, but the expenditure counts towards the cumulative section 8 limit.
  Those are the 15 current schemes under section 8.
  Mr. Michael Weir: I note what the Minister said about funding from the National Assembly for Wales. Is it additional funding that is made available to devolved Administrations for these schemes or does it come out of their existing block grant, even though it counts towards the cumulative total under the Act?
  Alan Johnson: No, it comes out of the settlement for the Welsh Assembly. Unlike English schemes, the schemes in Wales do not require Treasury approval and they count towards the cumulative total.
  Having gone through the 15 schemes, I am aware that only three years ago, during the debate in Standing Committee on the second order, we estimated that replacement legislation would not be needed until 2010. In true confession mode, I shall try to pre-empt any comments from Opposition Members about the increase in the number of financial assistance to industry schemes set up using the section 8 power, and the acceleration in section 8 expenditure over the last three years. This issue should be considered against the DTI's total spend on business support, which has remained at around £1 billion per annum in recent years.
  A fundamental change is taking place in the DTI's business support activities. The Secretary of State unveiled a complete overhaul of the DTI's business support programmes in November, following a comprehensive review. The problem that we identified—initiative overload—was partly symptomatic of enthusiasm in the DTI for assisting business. The purpose of the review is to channel that energy in a more strategic direction. Businesses said that they were confused by the plethora of DTI schemes, and found them difficult to understand and access. The aim of the review is to sort out the muddle, cut out inefficiency and focus on our strategic priority, which is to drive up UK productivity.
  Mr. Lansley: When the Secretary of State appeared before the Trade and Industry Committee on 29 October, she said that there were 183 schemes within the DTI's ambit, and that she proposed a major simplification of those schemes. As far as I am aware, the Select Committee has not been told the outcome, although the Secretary of State said that it would happen "certainly by Christmas". It did not happen by Christmas, and we have seen nothing since. Perhaps the Minister can enlighten us on when we will see something.
  Alan Johnson: It did not happen by Christmas because it took longer than we had thought to do a thorough job. We are hoping to launch this stage of business support simplification in April, and I am sure that the Select Committee will be among the first to know about it.
  To ensure that DTI business support is both strategically targeted and simple for business to access and use, all existing schemes are being closed. New business support offerings, some of which will incorporate the best elements of existing schemes, will be produced under a new mechanism approved by the business support review, and will focus on the drivers of improved productivity. We are not cutting the amount that we spend on business support, but we will greatly reduce the number of business support products that we offer. The new approach will ensure that funds are allocated to activities that offer the best value for money.
  Mr. Fallon: I am grateful to the Minister for giving way yet again. I certainly support the streamlining that

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  the Secretary of State announced, of which the Minister is now giving more details. I understand that an American business woman, Mrs. Fields Wicker-Miurin, will chair the new investment committee that will make all the decisions on the various support schemes. Will they include some of the schemes covered by section 8?
  Alan Johnson: As the hon. Gentleman will understand, I am not yet in a position to announce the outcome of the review, but I am sure that many of the schemes governed by section 8—after "year zero", when the schemes have been closed and then incorporated in a much simpler structure—will be there, although perhaps under different titles and accessed in a different way. But this is not a debate about the DTI review of business support; it is a debate about section 8 of the Act.
  Mr. Lansley: Will the Minister give way?
  Alan Johnson: I will give way to the hon. Gentleman one last time.
  Mr. Lansley: Is it not surprising that the Minister should present us, in late February, with legislation designed to increase substantially the amount to be spent on these schemes, while proposing to tell us in early April what the product will look like? Is he not asking the House to pay for the product when he will not tell us what we are buying until a few weeks down the line?
  Alan Johnson: No, I am not. We are not talking about the DTI review; we are talking about 15 schemes funded under section 8. As the hon. Gentleman said, there are a good many more schemes—about 160. That is part of the problem for people who are confused by the process of gaining access to DTI support. Moreover, if the Bill is not passed now we shall not be in a position to finance some very important schemes—some introduced by the last Administration—later this year.
  Mr. John Bercow: Will the Minister give way?
  Alan Johnson: I will give way just once, because the hon. Gentleman is so utterly charming.
  Mr. Bercow: I thank the Minister, who is better able than most to make sound reasonable that which on closer inspection may prove not to be so.
  The Bill's very title has a certain 1960s or 1970s ring. In what circumstances does the Minister think that it would be appropriate—in this century, or this decade—for the Government to expend resources to create
  "productive capacity in an industry"?
  Alan Johnson: The Bill may look from its title as though it is wearing flares and tank tops. If we go back to the early 1970s, the legislation was used originally, to use the parlance of the time, to bolster lame-duck industries. That changed completely. I am not sure I am equipped to answer the hon. Gentleman's precise point, but I remember one scheme from, I believe, November 2001. Customers of Atlantic Telecom in Scotland were
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  faced with losing their telecommunications systems overnight because the company went bust. The use of funding in co-operation with Scottish Enterprise enabled those business customers to continue to have a telephone system until they were able to find a new one. These days there are many varied reasons why the scheme is used. They might differ from the reasons in the 1970s but they are still valid.
  As I said, we are not cutting the funding that we spend on business, to draw a line under the DTI review of business support. I provide this information as background. This short Bill is not about the quality of the business support offered by successive Governments. It is before the House today because, before the Government can incur any expenditure on such schemes, there has to be an appropriate statutory power. Section 8 of the Industrial Development Act 1982 provides that power. The Bill allows for the continued use of section 8 as the enabling power for financial assistance to be given to business inside and outside the assisted areas. On that basis, I commend the Bill to the House.
  5.21 pm
  Mr. Henry Bellingham: I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:
  "this House declines to give a Second Reading to the Industrial Development (Financial Assistance) Bill because it amends section 8(5) of the Industrial Development Act 1982 in a way that diminishes accountability to Parliament on the levels of future financial assistance to industry."
  I declare my interests, which are in the Register of Members' Interests. I will come to the amendment in a moment, but first I thank the Minister for the full explanation that he has given. I make it clear that we support many of the principles behind the Bill. After all, it was a Conservative Government who introduced the original Act in 1982. We certainly strongly support some of the section 8 schemes.
  Some of our concerns relate to parliamentary scrutiny and accountability as well as the lack of detail in the Bill. On scrutiny, as the Minister explained clearly, the Bill amends the cumulative limit in section 8(5) of the 1982 Act and sets a new higher figure of £3.7 billion as the initial ceiling. It then sets a new figure for the four tranches, which go up from £200 million to a pretty hefty £600 million each.
  I understand from the Minister that the new limits were chosen by a 20-year roll-forward of the existing limit of £2.7 billion in real terms, using a 2.5 per cent. gross domestic product deflator. The Minister pointed out earlier that, based on current spending, and assuming that the rate remains constant, the new ceiling will last for six years before the first order is needed, with increases by order every four years after that.
  To my surprise, I see that the Department of Trade and Industry's briefing note says that the DTI believes that the new regime will lead to more parliamentary scrutiny. It bases that conclusion on the premise that it was 14 years before the first order was needed in 1996, but the 1982 Act was a new initiative setting a new ceiling of £1.9 billion. The previous Government would have had to spend at a furious rate to reach the ceiling before 1996.

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  Three orders came hard on the heels of the one in 1996. There was one in 2000 and one in 2002. We were going to have a fourth one tomorrow but I gather that it has been postponed until next week. Since the first ceiling was reached, Parliament has had the chance to scrutinise the Act and the relevant section 8 schemes every 20 months. That compares favourably with the 4.5 years or 54 months anticipated by the new Bill's regime.
  We are talking about much bigger sums, as my hon. Friend the Member for Sevenoaks (Mr. Fallon) made clear. The urban post office network reinvention scheme alone will take up a very large amount of money. Furthermore, the Secretary of State has made it clear that she wants significant consolidation of the plethora of section 8 schemes, which is why we welcome and support her business support review. However, that is surely a very good reason for initial scrutiny to take place well before 2009.
  As my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) pointed out, it would surely have made much sense for the Secretary of State to complete her business support review before Second Reading. Either next week or the following week, the statutory instrument extending the original phase 1 will be introduced. That will give the Government considerable leeway, so Second Reading could easily have been postponed, thereby enabling the business support review to be launched at the same time. That surely would have constituted more joined-up, grown-up and sensible government.
  On scrutiny, we will look at some constructive suggestions in Committee, and we shall certainly consider including in the Bill a requirement for the Minister to come to the House every two years. That is not unreasonable, given that, on average, Ministers have come to the House every 20 months for the past seven years, and that debates on delegated legislation in Committee are short and hardly onerous. In 1996, when my former colleague Phillip Oppenheim was taking such legislation through, the debate lasted 14 minutes. The then Opposition did not provide much scrutiny, but in 2000, scrutiny increased to 18 minutes, in 2002 to 55 minutes, and perhaps next week we can crack the one-hour mark. It is to enhance the scrutiny available to this House that we intend to table constructive amendments in Committee.
  The different schemes can be found on the DTI website. Alternatively, one can refer to the annual reports relating to the Industrial Development Act 1982, the last of which was published on 27 June 2002—my hon. Friend the Member for South Cambridgeshire referred to it—and covers the year to the end of March 2002. It would have made good sense to advance this year's report to, say, 1 April—not a very difficult task—so that it could be combined with Second Reading. That way, at least we would have had more detail on what is happening with these different schemes. My hon. Friend and I have had a close look at last year's report. Much of it is already out of date, and new schemes are to be launched. We are being asked to vote for very significant extra resources for Her Majesty's Government without having up-to-date information before us.
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  I do not propose to go through all the schemes in detail. The Minister has already covered many of them—I am grateful to him for that—and in his inimitable, lucid way he explained exactly what they do. In the main, we are happy with how they are operated on the ground. They are efficiently managed and run, and I pay particular tribute to the tireless work of the Small Business Service in running the bulk of them. We support the enterprise grant scheme and, in particular, the small firms loan guarantee scheme, to which I shall return. However, we are cautious about the business incubation fund, which was announced to a terrific fanfare in 2001. Is it true that no loans have so far been agreed under its terms?
  We are also concerned about a number of aspects of the Phoenix fund—the somewhat appropriately named initiative launched by the right hon. Member for Tyneside, North (Mr. Byers). We applaud attempts to encourage enterprise, small business and entrepreneurship in the most disadvantaged areas, and within disadvantaged groups. Such an initiative will undoubtedly appeal to my hon. Friend the Member for Buckingham (Mr. Bercow), and we must try to help these people. I am sceptical—as, I am sure, is he—about community loan funds or not-for-profit funds that focus on non-profit-making social enterprise. They may be laudable, but is it appropriate for the DTI to be involved? I want to see real evidence of success and achievement before we can support community development finance institutions.
  Mr. Bercow: My hon. Friend correctly anticipates my mindset on the subject. Does he accept that, as a working premise for the Opposition, it is important to distinguish between funds that can legitimately be spent from time to time as a palliative or cushion in the event of the breakdown or destruction of a whole industry, and a generalised largesse on the part of a Government who mistakenly believe that they can run industry?
  Mr. Bellingham: My hon. Friend is right, and I shall give an example that shows up some of the flaws of section 8. The mini-schemes may be laudable, but should such work be done by the DTI under that budget?
  I am not very impressed by the UK high technology fund, which—according to the DTI's briefing paper—is
  "a 'fund of funds' providing finance for existing venture capital funds that specialise in financing early stage small and medium sized high-technology firms. The Funds have received investment from the UK High Technology Fund and also receive funding from many other … sources. As a result, businesses do not necessarily know that they have received funding from the Fund."
  That is bizarre. Should the DTI be hunting round the country for high-tech success stories? Should the Department be in the business of trying to back technology sector winners, when we have one of the most sophisticated and vibrant venture capital sectors anywhere in the world? We submit that the DTI should not do that, and that the money would be better saved or reallocated to the small firms loan guarantee scheme.
  The Minister mentioned Atlantic Telecom. Hon. Members may recall that Atlantic Telecom was a stock market darling whose share price went up to about £13, but which went spectacularly bust in October 2001. Most of its operations were sold as going concerns

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  by the administrators. However, they could not find a buyer for a fixed radio network, which led to a risk that some business customers, who had switched carriers from—in the main—BT, would have been without a telephone service temporarily. Atlantic Telecom's customers were given extra time to switch back, at a cost of £550,000, shared, as the Minister pointed out, between the DTI and the Scottish Executive. That was not a good use of money. I suggest that the Scottish Executive put pressure on the DTI and, to make the Department look good in Scotland, it agreed to go along with it.
  Mr. Weir rose—
  Mr. Bellingham: I shall give way to the hon. Gentleman, because he probably knows much more about the situation than I do.
  Mr. Weir: There was a serious danger that many businesses, especially in the north-east of Scotland, would have been without a telephone service for some time. In Aberdeen and Dundee especially, many businesses had gone over to that private operator and found that when it went down the tubes, BT would not reconnect them for many weeks, if not months. I do not often support the Government, but it was a good use of money to ensure that business disruption did not occur. Otherwise, Atlantic Telecom's collapse could have been disastrous.
  Mr. Bellingham: I am grateful to the hon. Gentleman, who obviously knows much about the subject. That fly-by-night operator conned a lot of businesses by offering them much lower rates than BT, and the Minister's time would have been better spent talking to BT and urging it to reconnect the businesses affected. Surely in this day and age it does not take more than a few days to reconnect a fixed line system.
  The loan guarantee scheme has achieved significant success since its launch in 1981. To a large extent, it was the brainchild of my hon. Friend the Member for South-West Hertfordshire (Mr. Page). I am sorry that he is not in the Chamber this afternoon to hear my praise for him.
  As the Minister pointed out, from June 1981 until March 2002, 79,900 loans were guaranteed. The average loan is £37,000 and the total value of the loans is well over £3 billion. Since the scheme has been finessed and improved, it has been a significant success.
  I shall give the House some examples of companies that have benefited considerably from the scheme. During 1999, a biotech company had secured providers of new equity capital but was struggling to fund working capital. The projects undertaken by the business were not suitable for bank security, but the bank was able to offer £100,000 under the loan guarantee scheme. The injection of equity was dependent on that loan agreement, as were the jobs of 23 employees. Two years later the business was sold to a plc for £4 million and the loan was repaid.
  Another success story comes from a steel fabricating company that was struggling to finance working capital during turnover growth from £0 to £4 million over a three-year period. The banks agreed to an initial £100,000 and recently provided a second tranche of
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  £150,000 under the small firms loan guarantee scheme. As a result of that growth, 20 new jobs have been created and the business is making a net profit of nearly £500,000 a year.
  There are many similar examples. I urge the Minister to reinforce that success. Will he remove some of the sector restrictions? For example, the scheme cannot apply to education, medical health services or motor vehicle repairs and servicing—something that many of our constituents would resent—and nor can it apply to retail or transport.
  Will the Minister also look into the turnover limits for manufacturing businesses? Currently, the limit is £5 million and it has not been raised for some years. It should be raised because it is too restrictive.
  We should try to make the scheme more flexible. As an example of its inflexibility, a business that needed funding to cope with increased orders was excluded from securing £250,000 because although it had been in existence for two years, its parent had gone into receivership. The management team bought the company from the receiver and continued to trade with the same staff, premises and customers as well as a continuing order book, yet the small firms loan guarantee scheme interpreted the change in ownership as a cessation of business. Surely that was a mistake. Let us try to make the scheme more versatile and reinforce success.
  Will the Minister tell the House how much the scheme costs every year? I have studied the report in vain. It gives the number and amount of loans and the global totals, but it does not actually give the write-off figures. Obviously, most of the money is paid back to the banks because the businesses are successful, so the Government's guarantee is not called in. However, will the Minister give us the annual figures for the last four years and the global figure for the bad debts that the Government have had to guarantee and which have been a cost under section 8 of the report?
  We have debated important concerns for our industrial and manufacturing base, but we need to set the Bill in the wider business and economic context. The Government are right to take credit for the recent falls in unemployment and inflation, but serious storm clouds are gathering. Manufacturing is already in severe recession; 600,000 jobs have been lost since 1997.
  The Confederation of British Industry predicts that 40,000 more jobs will be lost in the sector by April this year. Its recent monthly survey was very gloomy indeed. It suggested that the cloud of misery engulfing manufacturers showed no sign of lifting and that output was expected to continue to stagnate, with order books remaining below their normal level. The CBI's conclusion is not surprising, given that industrial output has fallen every month for the past two years.
  In terms of market capitalisation, Invensys was once Britain's seventh largest company. It changed its name from BTR Siebe, which probably cost a large amount of money. In spite of the gallant efforts of the new chief executive officer, Rick Haythornthwaite, the company has been in a downward spiral ever since. Four years ago, its shares were worth £4; a year ago, they were worth £1; and they closed on Friday at 15.5p, threatening many further job losses. That is just one example.

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  It is little wonder that the outlook is grim. In 2002, 16,500 businesses went to the wall, which is a 10 per cent. increase on the previous year. Our trade balance in goods is worse than at any time for over 300 years. Britain's net foreign assets of £5.5 billion in 1992 have turned to net liabilities of £114 billion in 2002. Those figures are staggering.
  The Chancellor of the Exchequer has a real problem with public finances as a result of undershooting his growth targets and the fall in tax revenues. The Chancellor was rebuked last week by fellow European Finance Ministers. He was told that his optimistic assumptions on growth could lead to a breach of Brussels rules on public finances, and that
  "The Council considers that the macro-economic forecasts now appear to be optimistic in the short term and that there are downside risks to growth."
  That is not me speaking but the judgment of the Council of Ministers on the Chancellor's control of public finances.
  We cannot ignore the fall in the stock market and the crisis in pensions, which certainly do not help. Smaller pensions lead to less tax, lower share prices, less tax from the City and less stamp duty revenue. Quietly tucked away in one of the many volumes of the previous Budget was the Chancellor's assumption on the stock market. He assumed that it would go up in line with money gross domestic product—that is, by 4 per cent. In fact, it has fallen by 25 per cent. We all have a vested interest in that, and no one will take great pleasure from that fall.
  In conclusion, there are real problems in manufacturing, and many problems in other areas as well. At least the Secretary of State acknowledges those problems in manufacturing. At Labour's spring conference, she said:
  "We also all know our manufacturing is hurting and manufacturing workers are losing their jobs."
  If she knows that, why are the Government about to hit businesses large and small with a large national insurance tax increase? Why is she piling more and more red tape on business?
  A survey in today's report by the British Chambers of Commerce shows that the total extra burden—excluding the minimum wage is £22 billion. David Frost of the BCC has said:
  "Red tape is strangling British productivity and it is threatening to combine with other blocks on business to create critical mass that will destroy jobs through a dramatic loss of competitiveness."
  If the Government are serious about business—
  The Deputy Speaker (Sir Michael Lord): I appreciate that the Bill is about the financing of businesses, but I do not want the debate to develop into a general debate on the economy as a whole.
  Mr. Bellingham: I apologise, Mr. Deputy Speaker—but, with respect, I thought that it was important to set the Bill in its wider economic context.
  The Opposition feel strongly that, if the Government are to listen to business—as they say that they will—they will have to consider the burdens on business. They will have to reconsider their work-life balance agenda. They
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  will have to consider carefully the agency workers directive and the equal treatment at work directive. Above all, the Government should start to listen to business. It is time to stop the avalanche of burdens. It is time for the Government to take business seriously.
  5.44 pm
  Mr. Kelvin Hopkins: I wish to express my very strong support for my hon. Friend the Minister and his Bill, and I urge all hon. Members to vote for it later this evening.
  I speak because I have some knowledge of these matters from my previous employment. In the 1970s, I worked in the TUC's economic department and was responsible for regional policy. During that time, I undertook some modest research to show the effect of regional policy over economic cycles, and with and without regional selective assistance, and I concluded that it had a very beneficial effect, particularly in reducing regional inequalities. Although we are talking about selective assistance to certain firms, perhaps helping them through difficult times, such policies have a very beneficial macroeconomic effect. However, they are no substitute for developing a growing economy and reducing unemployment.
  It is rather surprising that that measure of intervention has survived through some decades of attachment to the neo-liberal dogma—I do not share it myself—that the free market is all and Government intervention is to be eschewed. I very strongly support such measures and am glad that they have survived; and they have done so for historical reasons. Even as far back as Sir Edward Heath's Government in the early 1970s, there were attempts to promote the rigorous free market agenda. Most hon. Members are probably too young to remember Selsdon man, but I remember Selsdon man very well in the form of Sir Nicholas Ridley, Sir John Eden and various others.
  That Conservative Government panicked when there was great resistance to those policies and reverted to an interventionist approach, which was a very wise thing to do. Indeed, Sir Edward Heath was negotiating Britain's membership of the European Union and it was known that, if we wanted to get into the EU, we would need some regional policy measures as a counterbalance to the very unfair burden of the common agricultural policy, which would have had no benefit whatever to Britain. Even with a regional policy approach and with the later structural funds, we still had to negotiate a rebate, and I am glad that we still have it in place today.
  In 1979, Mrs. Thatcher's Government had a very rigorous approach to the economy, which led to unemployment rising to 3 million in two years. No doubt, many people thought that a splendid idea—a bit of rigour and the cold draught of competition. I thought it disastrous, and eventually even Mrs. Thatcher thought it slightly worrying, because her Government introduced the 1982 legislation to which reference has already been made.
  I remember that time extremely well, and Labour had an enormous public opinion lead shortly before the Falklands war, which rather changed the balance of public support. Nevertheless, there was a reaction to the initial period of rigorous free market policies, part of which involved the 1982 legislation. So we carried on with that approach for a long period.

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  We cannot solve the macroeconomic problems of low growth and investment and high unemployment simply by such selective measures, but they are still absolutely vital to underpin development in the regions, especially those that are more vulnerable—unlike the south-east—where older industries have declined and we have needed to help small companies to sustain employment. That has been very successful, and I very much welcome the fact that the Government have chosen to increase the amount of money that will be available. It is possible that we are running into some serious economic difficulties now, which are not necessarily of our making, and the world economy will be in difficulty. especially if there is a war. In such times, the Government will need to keep as much of a measure of intervention as they can to assist our industries to survive through difficult times to emerge on the other side, when we can all breathe again in a growing economy.
  At the end of the last period of serious economic decline, between 1990 and 1992 —the disastrous period of the exchange rate mechanism, the failure of which I predicted and wrote about before it started—unemployment had risen to enormous levels. Everyone who supported that policy said that depreciation and getting out of the ERM would cause massive inflation, would not bring down unemployment and would be economically disastrous. In fact, what happened was that there was a substantial depreciation straight after the ERM collapse, unemployment started to fall, and the inflationary surge did not happen until considerably later.
  I hope that we will keep such measures as part of the Government's armoury for running the economy for the foreseeable future and that we will raise the amounts available to appropriate levels as time goes on. I would like more vigorous intervention in the economy to assist our manufacturing sector in particular. Without doubt, the manufacturing sector is currently suffering, to which Opposition Members have drawn attention. A major factor in that is the overvaluation of the pound, which cannot be solved by these measures. The pound has depreciated somewhat in recent weeks and months, and that is very welcome, but there is still a competitive disadvantage for Britain in the manufacturing sector. The balance of trade deficit is evidence of that. We must consider macroeconomic measures as well as supply side measures to solve our economic problems, and particularly to bring manufacturing back to the strength that we should expect.
  We still have major economic problems to solve, our investment levels are still too low, and measures in which the Government get involved directly in the economy to promote investment are precisely what we want. I am very happy to support the Bill and I look forward to voting for it later this evening.
  5.53 pm
  Dr. Vincent Cable: The Minister introduced the Bill with his usual flair and clarity, but I am not persuaded. I share many of the concerns of the Conservative spokesman, both in respect of the necessity of this legislation and in relation to the issue of parliamentary accountability.
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  First, we are talking about very large sums of money, as the intervention by the hon. Member for Sevenoaks (Mr. Fallon) made clear. We are progressing at one step from a commitment to £2.7 billion, which is the current total, to £6.1 billion. An increased commitment of £3.4 billion is very substantial, even if, as the Government say, it is spread over a 20-year time horizon. Is it really necessary? In 2001–02, which is the last year on which we have any kind of report on section 8, there was spending of £113 million. At that level of expenditure, it would take 30 years to use up the proposed sum. In addition, many of the schemes that have absorbed substantial amounts in the past—for shipbuilding and coal—have been brought to an end. That raises the question of what this funding is for.
  Clearly, there are occasional useful and necessary purposes, of which Atlantic Telecom, as the hon. Member for Angus (Mr. Weir) reminded us, was a very good example. As I recall, however, that intervention was very small—it involved only £500,000. Concerns exist about the enormous imbalance between very small, very useful activities and the enormous sums of money for which provision has been made. To my mind, the two do not gel, unless there is a clear statement about how accountability will be provided for the big jumps that will no doubt take place.
  A great danger exists that if there is a giant slush fund of this kind—essentially, that is what we are talking about—means will be found of spending it. If we look at some of the recent initiatives to spend section 8 money, we find that that raises some awkward questions about what the Government are trying to do. The biggest, latest initiative is the urban reinvention programme in the Post Office. That has nothing to do with industry or innovation—we have debated the Post Office frequently on the Floor of the House. Of course, some of us welcome some elements of the reinvention programme—there is a necessary consolidation—but it essentially provides emergency funding for redundancy money for a lot of postmasters who have been forced to close down as a result of the automated credit transfer programme. It has nothing whatever to do with industrial restructuring. I suspect that schemes of that kind, which are far removed from the original purposes of the Bill, may be wheeled in to use up the funding that is provided.
  I would feel more reassured if there were a little more evidence and more of an attempt to explain to us how productive the funding was. I am prepared to believe that all these schemes for small business are brilliant and enormously useful, but we have no evidence to show whether they are. The only document that I have found—I may be missing something—is the annual report, the latest of which ends in March 2002. Those reports largely provide a description of what is being spent and are not presented on any kind of comparable basis. There is no explanation of the costs and benefits of the different schemes or of the cost-effectiveness from the taxpayer's point of view. Those are legitimate questions that we need to put.
  Let us take the most important of these schemes—the small firm loan guarantee scheme. The Conservative spokesman gave that a rousing endorsement, and he may be right. I am sure that many small businesses find it very useful. There are certain questions, however, that I would ask. How many of the companies that have been

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  helped under the scheme are still in business? How many have expanded their business? How does their performance compare with companies in the same sector and the same region that have not had the benefit of that assistance? Those are the kinds of questions to ask to judge whether the scheme has been a success. It may be a brilliant success, but no attempt whatever is being made to justify it, explain it or give its history.
  Similarly, many of us would want to know how much of every £1 that is allocated to this and other small business schemes actually reaches the small business. Many of the costs are absorbed in overheads, and we need an evaluation of that simply to provide accountability.
  Mr. Lansley: Of course, the fact that evaluations are not presented in the annual report does not mean that they do not occur. I have no recollection of recent evaluations but I know that they occurred in the later part of the 1980s. It is important to get the evaluation into the public domain, however, as a scheme in which everybody succeeds is probably not necessary because the loans were probably going to be successful in any case, and the additional benefit of the guarantee is probably limited. A scheme in which too many fail, however, is probably equally misjudged. Somewhere in the Department of Trade and Industry, there will probably be a target for the proportion of guarantees to such loans that fail. The point is that it is not in the public domain or in the annual report.
  Dr. Cable: I am sure that the hon. Gentleman is right. It ought to be in the public domain, and there are different mechanisms for ensuring that. The Trade and Industry Committee, on which he sits, may be one forum in which these programmes can be analysed properly, and the National Audit Office is another. However it is done, it should be done. I remember seeing some of the evaluations of the wool textile assistance schemes, going back to the 1970s, which were very sophisticated economic evaluations justifying the substantial amount of public money put into the industry. We have nothing comparable in this case; if it does exist, it is bottled up in the DTI, as the hon. Gentleman points out, and we are not privy to it, which is clearly wrong.
  My next point is on the same theme. A lot of the funding has gone into what one might call adjustment assistance schemes for redundant steel workers and coal miners and for Rover. In principle, that is admirable. It is surely right to provide funding to help workers to adjust to other activities and to assist the process of change, rather than simply to provide open-ended subsidies. If agriculture had been helped in the same way as industry, many of the problems with the CAP would no longer be with us. However, I have questions about accountability and about where the money went, and I have no idea what the answers will be.
  I notice, for example, that one of the big schemes provided for under section 8 was the £129 million programme of adjustment assistance for Rover. That was one of the big schemes launched by the former Secretary of State for Trade and Industry at a time of crisis for the company. As far as I can tell from the last
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  annual report, in 2001–02 only £1 million of that £129 million was spent. What happened to the other £128 million? Was it not spent? Could not the company find a use for it? Perhaps I have missed it somewhere. Can we have an explanation of what happened to the Rover package?
  Similarly, in the coal industry, about £76 million was spent up to the last financial year for which accounts are available, and then another £62 million was made available, so the industry has received about £138 million of special help. I do not want to criticise that. I am sure that after the battering that the industry has had, help with adjustment must be welcome. However, I question how much of that money has gone to the coal miners to help them to adjust and how much has simply provided an open-ended subsidy to UK Coal, which subsequently closed those mines. We need an economic evaluation of where that money has gone and what value the community has got from it.
  Mr.Bellingham: I think that I can provide the hon. Gentleman with an answer. When the Government announced that £129 million, it was provided as regional selective assistance, under section 7. However, it took some work to discover that because it was not clear, and the hon. Gentleman is right to make the point about accountability.
  Dr. Cable: That is my closing point. I am willing to be persuaded that most of this funding is useful, that it is welcomed in industry and that it raises productivity, but I have no proof of that. There appears to have been precious little effort to provide us with evidence to help us to support what the Government are doing.
  When the Minister sums up, will he tell us how the Government intend to account for the money that is spent and to ensure that that is done on a rigorous and consistent basis? Do they intend to report to the NAO, the Trade and Industry Committee or to another forum where we can judge the usefulness of the funding? I support the proposal that Parliament should be asked to review these measures every couple of years. Providing open-ended funding for long periods in large sums for which there is no identified use seems to me very dangerous in principle, and this process should be subject to a good deal more parliamentary scrutiny.
  6.3 pm
  Mr. Michael Fallon: I am grateful for the chance to speak on the Bill, and I declare the business interests recorded in the register. I welcome the chance to follow the hon. Member for Twickenham (Dr. Cable). I assume from what he said that he will support our amendment in the Lobby, because he shares some of our reservations about accountability.
  This is a short Bill, but it is substantial and it has something of a history. The Minister referred to its origins in the Industry Act 1972. It is always good to hear a Labour Minister taking forward progressive Conservative legislation. There is no reason that he should know that the Act was one of the great tipping points of the Heath Government. It was one of the events that led to the resignation of a junior Industry Minister, and he may care to bear that in mind as the Bill unfolds.

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  The Bill cannot simply be dated to what the Minister called the period of tank tops and flares—it goes further back. It comes almost exactly 70 years after John Maynard Keynes wrote his famous four articles for The Times on "The Means to Prosperity". In the first, "An Argument for Action", he set out the current basis for industrial development policy. He made the case for state expenditure, including loans, to promote industrial and commercial activity, and he rested that case on the indirect employment benefits of subsidised employment on the higher yield in taxation that resulted and on the consequently reduced expenditure on the dole. That was a locus classicus of industrial development policy, and it was the first time that it was set out.
  Those arguments were followed a year later by a further series of articles in The Times entitled "Places With No Future", which called attention to the plight of the Durham coalfields and the problems of south Lanarkshire, south Wales and Cumbria. Those in turn were the origin of Baldwin's special areas and the foundation of regional development policy, which is covered by a different section of the Industrial Development Act 1982.
  Here we are, some 70 years after modern industrial development policy, as run by the Government, was launched. This is an appropriate time to take stock. We could first reflect, as the hon. Member for Luton, North (Mr. Hopkins) did, that there are regions that still require the assistance available under the Act. It is ironic, and I ask the Minister and Labour Members to reflect on the fact that 70 years after that Government action started, almost exactly the same areas still require special assistance—the north-east, parts of Scotland, south Wales and Cumbria. Indeed, with this Bill, it is the legacy of the same old industries of steel, shipbuilding and coal that we are assisting. We cannot argue that industrial development policy, whatever else it is, has been a dynamic force for modernising our economy.
  Mr. Hopkins: The hon. Gentleman seems to be making a case that such assistance may be a necessary condition for solving those problems, but not a sufficient one. Would not the situation be much worse if there had been no assistance?
  Mr. Fallon: It might have been. That is the argument that is always put forward when state expenditure is involved. I shall try to answer that question a little later. It is perfectly reasonable for the hon. Gentleman to pursue it. On regional employment, the doctrine according to Keynes has been followed by all Governments since the '30s, some with more success than others, and as 1 shall explain, some of these instruments have been more successful than others. I simply ask the hon. Gentleman to reflect on the point that 70 years on we are still looking after the same areas. We do not seem to have cracked the problem of regional industrial regeneration in the way that other countries have.
  Keynes fatally over-estimated Governments' ability, as did the Governments themselves, to pick out the particular schemes that are likely to be effective and to promote the necessary change within a region or an industrial sector. Too many schemes had precisely the opposite effect; they fossilised innovation and they continued to subsidise unproductive, inefficient
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  practices. They prevented the kind of change that a more market-oriented economy, without any intervention, might, with great pain—the hon. Gentleman was right to draw attention to the pain, such as rapid increases in unemployment—have delivered by a different route. I suggest that there were follies in regional aid, and in the most extreme cases it got captured by political lobbies in the regions. Some of those cases of regional selective assistance are well documented. However, the failures of national selective assistance, with which the Bill is concerned, are equally profound. Time and again. Ministers have backed the older industries rather than promoting the newer ones. There were no schemes in the '70s or '80s to promote the new technologies as there were to subsidise the old technologies.
  Governments have inevitably seen aid in quantitative terms, as we have discussed. Ministers like to take credit for the total—the millions, the hundreds of millions, the billions—rather than the value that is added in the regions or in particular industrial sectors. In addition, successive Governments and Ministers have deployed aid according to the most perverse criteria. When we came into office back in 1979, aid was capital intensive. Huge grants went to industry. Well known national companies—the BPs and ICIs of this world—received grants to build their massive petro or oil complexes. They might have employed only a handful of extra men, but they qualified for grants under section 8.
  We changed the balance a little in the mid-1980s by making the criteria specifically job intensive. That sounded more reasonable. Surely the object of industrial development policy should be to reduce unemployment, but that carried with it its own internal fallacy because head count became all. Someone only had to show that a project would create new jobs to get a grant or loan. Almost immediately, of course, the job test was corrupted. Jobs were defined not simply as jobs created but, as they still are today, as jobs created or safeguarded. Even today, no inward investment project is complete without at least four or five different local agencies trumpeting in their press releases how the money has safeguarded x number of jobs. I have never seen a rigorous analysis of whether jobs that are claimed to be safeguarded by a Government grant actually have been safeguarded; nor do I know how long they have been safeguarded or how the risk to those jobs was measured in the first place.
  Conservative Governments were no better at that than Labour Governments. Indeed, sometimes they were worse. We had our aluminium smelters in curious parts of the country and our politically sited steelworks. We paid good money for unreliable Celtic votes just as the Minister may have done with Atlantic Telecom. But the object of industrial development policy should not be to increase either capital or jobs, although both of those are important. In the end, the test should be whether that money stimulates enterprise and wealth creation, and that should always be measured against the other instruments available at the Government's disposal, some of which were mentioned by my hon. Friend the Member for North-West Norfolk (Mr. Bellingham), notably lower taxes and less regulation.

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  It was also true that the head-count approach to job creation was flawed by a terrible bias towards bigger industry. Some £1 million given in grant to create 100 jobs in one place was always more appealing to Ministers and local Members of Parliament than 10 times £10,000 to create 10 jobs in 10 places. One might argue that it is odd to have a policy that constantly pitches the Department of Trade and Industry against the Treasury. It seems that the DTI gives companies money for creating as many jobs as possible while the Treasury encourages the same companies to be as productive as possible with as few jobs as possible.
  All the schemes over the years have been biased towards the older technologies, declining businesses, labour-intensive processes and, with one or two exceptions, larger, medium-sized or established companies. The newer processes, the smaller companies and, above all, the processes that add value have been neglected. It is no accident that the best schemes are those that have helped the self-employed or very small businesses. My hon. Friend mentioned the small business loan guarantee scheme, which continues to flourish. It was introduced a little earlier than he suggested and filled a serious gap when the banks had a poor record on backing small new companies, both regionally and by sector. However, that small scheme also needs the critical analysis that is so lacking in the Department.
  Mr. Lansley: The small firms loan guarantee has of necessity been successful at various times and to varying degrees. After the recessionary effects of the early 1990s, it was clear that the retrenchment of lending by banks without security made that scheme more necessary. However, if the Cruickshank report were implemented in a way that was successful in stimulating genuine competitiveness on the part of banks lending to small businesses, one of the corollaries would be the reduction of the desirability of large-scale funding through the small firms loan guarantee scheme.
  Mr. Fallon: My hon. Friend may want to catch your eye, Mr. Deputy Speaker, to advocate the abolition of the small business loan guarantee. Perhaps he is more of a moderniser than I am. It is sometimes hard to keep up with the development of Conservative industrial policy. However, he is right to say that the small firms loan guarantee scheme has performed a useful service at different times. There have been successes and I would not advocate its immediate abolition, but perhaps my hon. Friend will make a case for further revolution so that it is redirected more efficiently into certain parts of the economy.
  On the detail of the Bill. the Minister and others have well described what it does. The Industrial Development Act 1982 set a ceiling of £1,900 million which could be raised four times. We only raised it once in 1996 after 14 years in government. When the Minister came into office, he inherited a ceiling of £2,100 million. He and his hon. Friends were soon at the pot. They have increased the limit three times, the third of which we are discussing tonight. As he confessed, the limit is going to be breached shortly when it reaches £2,700 million.
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  However, the proposed increase is enormous. The individual tranches will increase not by £200 million, but by £600 million, giving the Minister a total of £6,100 million. I know he will forgive us if we take with a pinch of salt his qualification that the final limit might not be reached for another 20 years, because, as he candidly confessed, he was wrong about the last limit. Money seems to trickle out a little faster when Labour Ministers get their hands on it.
  We must consider where all the money is going. The increase is huge. Given its size, it might have been better for the Government to introduce a new piece of legislation. The original formulation of this Bill is old and no longer appropriate to the ragbag of schemes that it covers. There is nothing in it to increase the parliamentary scrutiny that such large sums warrant. It would be absurd to have only an hour and a half in a Committee Upstairs to authorise another £600 million of industrial assistance, ranging over 15 to 20 different schemes.
  It is clear that the Minister and his colleagues are rethinking their policy. As he confessed, the Secretary of State announced that all 183 of her business support schemes are being lumped together under a review and will be administered by an American business woman, Mrs. Fields Wicker-Miurin. I do not doubt her qualifications for the task. She is described in the Department's press release as
  '"having more degrees than a compass'".
  Apparently she speaks fluent French and Italian. That is all fine. However, those of us who are concerned about the accountability of this expenditure and the need for greater scrutiny of it would like to see a little more detail of the investment committed that will support Mrs. Fields Wicker-Miurin when she comes to allocate more than £1 billion in total. I am still not quite clear—I think that the Minister tried to answer my question on this point—whether all the 15 schemes under the Bill will come under the 183 that have been brought together for Mrs. Fields Wicker-Miurin's personal supervision. Perhaps the Minister will clarify that when he replies.
  When we turn to the detail of the schemes that are covered by the Bill, it is clear that there is a ragbag of schemes that well qualify for the streamlining that the Minister has spoken about. Too many of them are trying to do almost exactly the same thing. There is the help that is given to businesses to start up. There is the business incubation fund. We have the phoenix fund. The community development venture capital fund sits alongside the regional venture capital fund. There is a huge amount of overlap. If the Minister and his colleagues are serious about streamlining all this stuff, with all the separate application procedures and investment committee processes, he will certainly have my support. It seems to me that too many of these schemes are chasing too few worthwhile investment opportunities.
  The proposal is a ragbag. There is no binding theme to any of the 15 schemes that are covered by the Bill, nor is there any consistent rationale for them. Some clearly derive from history, such as the steel and coal schemes. Some simply derive from faction—for example, the film scheme. Some have obviously been dumped on the Department of Trade and Industry by the Treasury. I notice that some of the schemes have been rather slow to

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  show results. Some schemes were announced in 2000 or 2001, but they have yet to make substantial allocations. I share the doubts that have been expressed about the regional venture capital funds in particular. These schemes have been set up by the Government in conjunction with the banks. I suspect that the major banks were rather arm-twisted into providing the equity capital. I remain to be convinced that there is a gap in the market.
  Ten or 15 years ago there was generally a shortage of venture capital in this country. Now, however, with more sophisticated small business banking and an explosion of private equity, I would need to be convinced that there is a gap that requires a host of Government bureaucrats and others round the regional development agencies to be involved in the venture capital business.
  I take the point of my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) that had the Cruickshank report been followed through properly, some seedcorn schemes, including the regional venture capital scheme, might not have been necessary. We know now, of course, that Cruickshank was not followed through. The Government chose the price control route, slapping price controls on the banks and making it more difficult for new banks to enter the small business lending market. The ragbag of often overlapping schemes seems continually to be involved in trying to support the same type of business in different ways. I certainly welcome streamlining.
  The Bill does a little more than the Minister made out. It trebles the amount of industrial selective assistance from £2,100 million to £6,100 million. That is a massive amount of money. It will certainly be used quite significantly before 2020. Secondly, this legislation is very out of date—it is almost archaic—and needs revision. Thirdly, as the Minister admitted towards the end of his speech, everything is up for grabs in the sense of the business support review, the idea of which may have been announced in principle. However, the conclusions have yet to he agreed with Ministers. It is a little presumptuous to come forward with the Bill for Second Reading and to ask for another £4,000 million of taxpayers' money before the Minister makes clear exactly how it will be spent and before he makes clear exactly how it will be accountable to Parliament.
  6.25 pm
  Mr. Mark Field: I never cease to be amazed at the fundamental lack of understanding that government in general has of the essential economic engine of wealth creation. I must confess that in Department of Trade and Industry-speak, I suppose I am a keen proponent of initiative underload, if such a thing exists. It is a pleasure to speak after my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) and the hon. Member for Twickenham (Dr. Cable). There was a lot of sense in much that the hon. Gentleman said. It is also a pleasure to speak after my hon. Friend the Member for Sevenoaks (Mr. Fallon), who presented a tour de force of some of the historical underpinnings involving financial assistance.
  It is probably the case that the Government have formerly had some hostility towards the engine of wealth creation to which I have referred. However, it is
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  now recognised that the DTI talks the language, but I suspect that all too often in its actions its ignorance is betrayed.
  My background before coming to this place was in business. I know that that is increasingly unusual, even on the Opposition Benches. The Bill recognises the importance, in the Government's mind, of regional development outside assisted areas, which are tightly drawn on a geographical basis. Therefore, for example, objective 1 funding areas would not be included in this context.
  One or two examples include the British Film Commission, whose affairs have been subject to tightening up within the Finance Act 2002. As my hon. Friend the Member for Sevenoaks rightly said, perhaps all too often there is something of a conflict between the DTI and the Treasury in the operation of much of this type of legislation. Although the film business is primarily based within my constituency, there is a fundamental question to ask: is it really the business of government to interfere in any way in these matters?
  As has been mentioned already, the increase in the total budget is more than threefold, from a figure of £1.9 billion rising to £3.7 billion. Thereon, we have the option of four additional tranches of £600 million apiece, up to a total of £6,100 million. As my hon. Friend the Member for North-West Norfolk pointed out, there has to be a large question mark over such expenditure. Where is the accountability for that vast envisaged expenditure?
  The tradition of financial assistance has been referred to by my hon. Friend the Member for Sevenoaks. I shall look back even further in history to the chambers of commerce that existed. It all began with the London chamber of commerce in my constituency as long ago as 1882. It was led by my predecessor, Sir Robert Fowler, who lobbied for foreign policy to be geared primarily towards business and the global expansion of trade. That is an important lesson today. There is an understandable fear of parochialism rather than an appreciation of global trade in much of what is put forward regarding the financing and the assistance that is proposed in the Bill.
  One only has to look at parochialism within the European Union, for example. It is often said that 57 per cent, of our trade is with the EU, which means by definition that 43 per cent. is outside that area. Very often that trade is with some of the fastest growing global nations. Some of those nations will be the key global trading partners of future decades. We should always remember that.
  In my view, there are too many smaller pots of locally oriented government cash assistance, and much of this lacks focus.
  Prior to entering this place, I was a local councillor in the Royal Borough of Kensington and Chelsea. In that role, I was the director of a local business centre. There was little doubt, as the hon. Member for Twickenham pointed out, that much good work was done in that micro-context of Government funding, but it was not clear how many businesses funded in that way remained in business over a period of time. Notwithstanding the weekly, monthly and quarterly statistics that were published, one had to ask whether a number of those businesses would have thrived without such aid. I hope

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  that we will be able to examine the issue of accountability, and that the Minister will take on board the concerns that consideration by a Standing Committee on Statutory Instruments on a variable basis will not provide the sort of accountability that we need to ensure that moneys are not wasted.
  There is little doubt that the concept of regional aid in this country is based on the historical wealth and political power of London and the south-east, as the hon. Member for Luton, North (Mr. Hopkins) noted. That is partly due to the climatic advantages of the south-east, compared to the far north of Scotland. Since the industrial revolution, political and economic strength has tended to be based in London and the south-east. The political implications of the north-south divide have enabled the Government at times to play to the gallery. They were happy to play to the gallery while in opposition, but now that they are in government, with such a large majority, their marginal seats are no longer in the Lancashire mill towns, but in the southern England new towns, and it is less easy for them to play the deprived northern card.
  I am concerned that all the proposals for new layers of government, whether through expanded regional development agencies or more formal regional autonomy, will not be the answer. We wait to see what will happen, and whether we are to have referendums. That may be successful in the north-east of England, but one of the grave concerns is that it will lead to ever more demand for power in the hands of RDAs and for further financial assistance arising from the Bill and through various other means.[Interruption.] The hon. Member for East Carmarthen and Dinefwr (Adam Price) suggests from a sedentary position that the City of London may qualify. It may qualify all too soon for regional development assistance, but that is another matter.
  In recent speeches, the Deputy Prime Minister has espoused the cause of sustainable communities. That seems to me to be a superficial absurdity. After decades of Government interference, as my hon. Friend the Member for Sevenoaks rightly said, why will more initiatives now lead to the nirvana of no regional divide in the future? The Deputy Prime Minister's view is that we must tackle the fundamental problem of high demand in the south and the collapse of housing demand in some of our most deprived communities. One is tempted to point out that if central Government relocated to the north, we might see some progress, [HON. MEMBERS: "Hear, hear"] but until that occurs, it is merely words. I am glad to hear that my fan club from Wales and Scotland is present.
  Under DTI policy as a whole, regulation is slowly but surely and perceptibly drowning business. Many of the regulations may seem superficially designed to protect consumers and employers, but the risk is that the regulations will be subject to the law of unintended consequences. There have been huge additional costs, which make business uneconomic and kill innovation, creativity and originality. If small businesses are to thrive, innovation must be encouraged, not discouraged. I fear that all too often, aid will have the opposite result to that which was intended.
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  Regulation of all types leads to a lowest common denominator mentality, which in a global marketplace is potentially fatal. Hon. Members will understand that during the recent constituency week, I would want to escape from my constituency. I escaped briefly to Germany, where I was on a lecture tour. It was very interesting to speak to individuals who were leading lights in political circles or local chambers of commerce in cities in the old East Germany, particularly Leipzig and Schwerin. Notwithstanding the enormous sums that have been pumped into those regions in the 12 years since German reunification, employment opportunities are getting worse, the economy is diminishing, and the young and innovative are voting with their feet by moving from the east to the west, or getting out of Germany all together.
  Mr. Hopkins: The hon. Gentleman mentions East Germany. I hoped that he would mention West Germany, which in the post-war era had the strongest and most successful economy, and the most managed economy, in western Europe.
  Mr. Field: I am glad that the hon. Gentleman raises that matter. Indeed, I also spent a day in Essen and a day in Bonn. Bonn was, of course, the home town of Konrad Adenauer, whose Finance Minister in the first few years of the history of West Germany was Ludwig Erhard. He realised that one of the reasons why Germany thrived and why the economic miracle of the 1950s occurred was that planning did not work. That was the key insight of Ludwig Erhard and the CDU in Germany during that period.
  The economy may have been managed at a macro level, but not at a micro level. I expect that that comes to a number of the points that the hon. Gentleman made. Planning was not the way forward. That was the lesson of West Germany, which has largely been forgotten in dealing with large-scale expansion of that territory following reunification. I fear that it is one of the reasons why that country now has 4.6 million unemployed which, as I am sure the Minister will be happy to confirm, compares unfavourably, even in proportional terms, with the UK.
  The Bill is a further, albeit small, example of a trend towards market distortion and political interference by means of political risk. Every business man in the UK, especially in the areas likely to be affected by the money, will have to second-guess before making investment decisions. Stamp duty rises and exemptions, a refusal to end stamp duty on shares as a whole, caps on stakeholder pensions, and windfall taxes on the oil industry and pension funds are all examples of large-scale and high-profile distortions, but the Bill will introduce a range of other distortions and political interference. Trade associations, chambers of commerce and regulators will need to have an eye not just to the market, but to the super-regulator in the form of the Minister and his right hon. Friend the Chancellor of the Exchequer. That will lead to uncertainty, above all, and to ever more form-filling and second-guessing, which will affect business growth and confidence today and have a negative effect on profits tomorrow.
  6.38 pm
  Mr. Michael Weir: In introducing the debate, the Minister gave a thorough and useful exposition of the various sections of the Bill and the parent measure. On the face of it, the Bill should be unreservedly welcomed—after all, any measure that gives financial assistance to industry and, hopefully, prevents job losses or increases employment would be wholly welcome. However, we in the Scottish National party and Plaid Cymru have some reservations about what the Bill will achieve, as we believe, contrary to the argument of the hon. Member for Cities of London and Westminster (Mr. Field), that it will have the effect of widening the already apparent north-south divide.
  As has been pointed out, the Bill will raise the ceiling on the limit of selective financial assistance from £1.9 billion to £3.7 billion, in effect doubling it, although as the Minister observed, the original ceiling has long since been overtaken, and will raise the maximum amount of each increase from £200 million to £600 million, in effect trebling it.
  On the face of it that is welcome, but I remind hon. Members of the wording of section 8 (1) of the original act, which states:
  "For the purposes set out in subsection (2) of section 7 above the Secretary of State may, with the consent of the Treasury, provide financial assistance where, in his opinion—
  (a) the financial assistance is likely to benefit the economy of the United Kingdom, or any part or area of the United Kingdom".
  That word "may" could become very important indeed as the economy enters choppy waters and a great many calls are made on the funds, as the Treasury could be unwilling—despite having what the hon. Member for Twickenham described as a slush fund—to pass money out to many of the industries that may be forced to seek it.
  Section 7 of the 1982 Act—which we are not discussing today—deals with region-specific financial assistance. That has been referred to many times in this debate, as though the two kinds of assistance were interchangeable. They are not. Section 8 was originally intended to provide general selective assistance on a national or industry-specific basis. That is where we perceive a problem. The danger of the Bill is that, by granting increases in overall national assistance funds, it will consolidate a shift that is already evident from specific regional assistance of the type referred to by the hon. Member for Luton, North to a system of more national assistance.
  My hon. Friend the Member for East Carmarthen and Dinefwr (Adam Price) has asked a series of questions about the payment of regional selective assistance between 1990 and 2001. Indeed, such questions were regularly asked by the present Chancellor when he was in opposition. The figures revealed that, in present-day cash terms, there has been a dramatic decline in the amount paid during that period. In Scotland, the figure has fallen from £150.9 million—in today's terms—in 1990–91 to £71.5 million in 2001–02. In effect, the amount has halved during the period. If we look at the figures for Wales, we see a similar picture, with a drop from £72.4 million to just £38.1 million—again, effectively half the amount. The total amount of regional selective
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  assistance payments in 1997–98, when Labour came to power, was £295 million—two and a half times the amount estimated for 2002–03.
  Adam Price: If we turn the clock back even further, to the last year of the last Labour Government—1978–79—we see that the figure for regional selective assistance was more than £3 billion in today's terms. That is more than 15 times the £200 million total. Notwithstanding the scepticism expressed by the hon. Member for Sevenoaks (Mr. Fallon), that was a period of significant convergence in the growth rates of the regions of the UK, compared with the divergence that we have seen over the last six years.
  Mr. Weir: That is very true. The hon. Member for Sevenoaks, who is not here at the moment, could well be haunted—as could the Scottish Conservatives—by his quip about unreliable Celtic boats. He may remember that, after the work-in at Upper Clyde Shipbuilders, the assistance given to the company resulted in the survival of the shipbuilding industry on the Clyde. It would not be there to build aircraft carriers today, had it not been for the assistance that it received back in the 1970s.
  Getting back to my point about the decline of regional selective assistance, and to show that I am not being entirely parochial, I should point out that the figures for England also show a marked decrease, from £214.5 million to £112.6 million. The clear message from all these figures is that there has been a steady move away from regional selective assistance during the time of the previous Conservative Government and of the present Government. As I said earlier, the total regional selective assistance payments in 1997–98, when Labour came to power, was £295 million—two and a half times the amount estimated for the current year.
  The whole purpose of the concept of regional selective assistance was to create a level playing field. There has been a move away from that, however, and the effect of the Bill will increase that, since, if the intention is to give the same assistance to all areas, it will intensify and increase the already apparent divide between the north and south. The present Chancellor has in the past been a strong supporter of regional policy. We believe that aid should be redirected towards the areas that require assistance, rather than being provided in the form of blanket coverage. I was interested to note that the Minister said that the powers could be exercised by Scottish Ministers or Ministers in the National Assembly for Wales, but that the money would come out of the settlement for those areas. We have to wonder exactly what the benefit is of having the operation of those powers in Scotland and Wales, if there is no increase in the funds available. I would be interested to hear what the Minister has to say about that.
  It is also interesting to note how section 8 has been used to provide assistance, because there seem to be cases in which, in the words of the section, it has been used to assist specific areas. Mention has been made—and the research paper from the Library gives details—of the example of the Rover taskforce set up when BMW announced the closure of the Longbridge plant. There was some discussion about the difficulty of finding out where the money for that came from, but page 18 of the research paper makes it clear that the Government

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  converted promised regional selective assistance of £129 million into more general relief under the auspices of section 8. So it can be used for specific areas, and, as the Minister has confirmed, those can be geographical areas in the UK as well as being industry-based areas.
  This is of particular interest to many of us who represent areas with strong fishing links. The Minister will be aware that, in the north-east of Scotland, we have been hit by a crisis in the fishing and fish-processing industries, which are immensely important to the economy of Scotland, and in particular of the north-east of Scotland. These are not assisted areas. The Scottish Executive have come up with a package worth up to £50 million, but it is specifically targeted at the catching sector. In this House and in the Scottish Parliament, however, Ministers have said that any onshore aid would be provided through the regional development agencies. In Scotland, that is the Scottish Enterprise network. I appreciate that direct aid to the fishing industry is complicated by European considerations, but I would like the Minister to clarify whether it would be permissible to provide assistance similar to that given to the Rover taskforce for general work in the Longbridge area, or to the UK coal operating aid scheme, which provided Government support for the UK coal industry that was designed to allow mines with viable futures to overcome short-term market problems. Those conditions apply equally in the onshore fish-processing industry and other associated industries. If the political will existed, could some of the extra funds being proposed in the Bill be utilised for a specific aid package to assist onshore industries in getting through this difficult time? It would be interesting to see where the money for that would come from, in the case of Scotland.
  I would like to take up some of the points made about the use of section 8. It has uses in many areas. The hon. Member for North-West Norfolk (Mr. Bellingham) mentioned Atlantic Telecom, and I intervened on him to explain some of the difficulties involved in it. I am surprised that the Conservatives made this point, because Atlantic Telecom's circumstances illustrate how relatively small amounts of money can be used to make a real difference. In my constituency—and in the Dundee and Aberdeen areas in particular—the collapse of Atlantic Telecom caused huge problems for many small businesses, because they were threatened with the loss of their telephone service.
  It is a feature of the modern economy that many small businesses rely a great deal on business received over the telephone. They rely on contact by telephone, and by email and other forms of electronic communication. One of the difficulties associated with the collapse of Atlantic Telecom was that many of those businesses had produced leaflets and had entries in Yellow Pages, and their only means of contact with their customers was by telephone. If assistance had not been given to allow the continuation, for a relatively short period, of their Atlantic Telecom telephone numbers, many of those businesses would have been uncontactable by their customers, because they would not have had the time or, perhaps, the money quickly to change all their promotional material, such as their entries in Yellow Pages.
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  That is a small example, but it is a good example of how even small amounts of assistance can make a great deal of difference. The Minister said that he was not going to announce any new schemes, but if he is thinking about it I should like to put in a bid for the fisheries. According to the Library research paper, in 1993 specific aid was given to areas that lost assisted area status when the aid map was redrawn. That is not a one-off problem, in that when the aid map was redrawn again in 2000, many other areas lost assisted area status, including Arbroath in my constituency, which was just recovering from a serious economic downturn. At the time, that withdrawal of assisted area status was graphically described as being a bit like driving a lawnmower over the green shoots of economic recovery. If the assistance had been in place when the fishing crisis hit our town, we might not be faced with our current difficulties, having to scramble around trying to find out where assistance might be available. When I had a meeting with the Scottish Enterprise Network, it was clear that although it can give minimal assistance no new money is available.
  The Department, in conjunction with the devolved Administration, needs to consider how to deliver the money through the regional development agencies in England, and the Scottish Enterprise Network in Scotland, so as to ensure that it makes a real difference. We are talking about huge sums of money, but many areas are seeing little benefit from it at the moment. If the Government are, as we suspect, moving away from specific regional selective assistance to more general assistance, they must give serious thought to how that is to be delivered on the ground in Scotland, in Wales and in areas of north-east England.
  6.51 pm
  Mr. Andrew Lansley: I am glad to have the opportunity to contribute to the debate and to follow the hon. Member for Angus (Mr. Weir). Although it has been a short debate on a short Bill, it has had some substance. I hope that I can add a little more in its latter stages, although I fear that other hon. Members have already had the better of the arguments.
  I do not want to take the hon. Member for Angus to task too much, but as he recited the statistics on the decline over time in the amounts that have been spent by way of regional selective assistance, or regionally differentiated Government grants, I felt that it was a case of "never mind the quality, feel the width"—that what mattered was how much was spent. not whether it was spent effectively.
  My hon. Friend the Member for Sevenoaks (Mr. Fallon) referred to a change in the shape of regional assistance that took place many years ago. It makes me feel rather old to say so. but I was there at the time, sitting in an office of the part of the Department of Trade and Industry that administered the regional development grant scheme. In late 1981 or early 1982, the cheque to BP was signed BP for Sullum Voe. We handed over £110 million—if my memory serves me right—to pay BP for doing something that we knew it had to do and that it knew it had no choice about doing. My hon. Friend was right to say that that is how the jobs test first arose; I worked on precisely those issues. I am afraid that the whole experience jaundiced me in relation to the continuing efforts by Departments—the

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  DTI in particular—to seek to influence outcomes by ever more sophisticated mechanisms for intervention. The more sophisticated those mechanisms become, the more complicated become the ways in which markets are distorted as a result.
  Adam Price: I am following the hon. Gentleman's argument with interest. We are of course aware of the problems of dead weight in relation to the regional development grant, but does he accept that many companies are deterred from applying for regional selective assistance because of its discretionary nature and the amount of time that they have to take to go through the application process with no guarantee of getting any funds at the end of it?
  Mr. Lansley: Yes, but I do not want to go too far down that track because, as I freely confess to the hon. Gentleman and to the House, it is some time since I have been involved in assessing such matters. The last time would have been in 1987 or thereabouts, when I was secretary to, if my memory serves me correctly, the science and technology advisory board, and we were trying to assess additionality. The hon. Gentleman is right that the dead-weight issue was key to that, in that we were trying to assess the additionality of the schemes that were presented to us, which is precisely the mechanism that is applied to regional selective assistance. At least in theory, if a project cannot demonstrate additionality it should not receive support. I was only too painfully aware of the inadequacy of our scrutiny mechanisms for trying to determine what was genuinely additional.
  As soon as I left the Department of Trade and Industry for the industry side, I began to talk to business men who were willing to tell me about the ways in which they had, in effect, made assumptions about the availability of Government support. Some companies—no names, no pack drill—had a portfolio of schemes at the margin of their capital investment programme, which, although they did not regard them as having any particular economic justification, they reckoned they could put to the Department of Trade and Industry so that one or two would get through and add to their capital investment programme in such a way that the cost was reduced. In that case, technically speaking, additionality is met. Funding projects the economic viability of which has not satisfied the internal analysis of the companies concerned raises questions about the overall economic value of such projects. The money that funds them is not cost-free—it comes from the pockets of taxpayers and from the business contributions that my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) talked about. The £47 billion of extra taxes that business pays is partly directed to the pockets of the DTI for it to put into projects that are sometimes of dubious economic viability.
  It is therefore terribly important to have an underlying rationale for what one is doing as opposed to having some spurious theoretical justification and trusting in the scrutiny mechanisms of the industrial development advisory board, the investment committee, or whatever grand title it will have within the Department of Trade and Industry. People of great weight and merit will consider the issues, but they will not always get it right—too often, they will get it wrong. The question is, "What
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  are we trying to achieve?" We should not be in the business of simply trying to identify areas that could be the subject of financial assistance, then adding to the capacity of industry by the application of subsidies—there must be a rationale. When my hon. Friend the Member for Sevenoaks talked about underlying theoretical justifications for such assistance, he missed out what I understand to have been—if not in 1982, shortly after 1982—the intellectual justification for such assistance schemes: that we are trying to remedy market failures. As I understand it, that was the basis on which matters proceeded after 1982. One might say that, in individual cases, an assistance scheme can remedy any market imperfection in the sense of saying, "Here is a scheme with economic justification that is not going ahead because there is not sufficient capital available to support it." However, it is not the Government's role to be that specific at the micro level, but to identify systematic market failures and to seek to remedy them. The shape of the Department of Trade and Industry's programme should properly be directed towards the stimulation of competitive intensity and competition. Other Bills—we shall discuss one tomorrow on communications—are designed to stimulate that kind of competitive intensity. The risk of rolling forward section 8 is that competitive intensity will be undermined if the schemes that are supported under it do not clearly address some form of market failure. That brings me to the point that my hon. Friend the Member for Sevenoaks and I have discussed in relation to the small firms loan guarantee scheme. The SFLGS is justified only if a market failure remains in the provision of small-scale finance to unsecured businesses. That varies over time and it should not be assumed that such a failure will continue for ever. The Bill's underlying assumption is that such matters simply roll forward into the future and that we must take the same actions for ever.
  Evaluation is therefore important. We should evaluate the measure continually to ascertain the justification for continuing a scheme such as the SFLGS. The small business lobby's support for its maintenance—we all support it in principle—is not a justification. With great respect to the small business lobby, of which I was a member, it will always say, "Here's a jolly good scheme for helping our members." Nobody will say, "Get rid of it." However, a scheme is justified by objective evidence, not lobbying. We should not respond to the lobby rather than the evidence.
  The hon. Member for Twickenham (Dr. Cable) and I had an exchange about the SFLGS. We may have done the Department a disservice when we emphasised the importance of the evaluation of the scheme being in the public domain. The hon. Gentleman wondered whether the evaluation had been undertaken. I do not know how recently the scheme was evaluated, but the results should be made public—and, indeed, I find that the figures for the defaults are in the public domain.
  Figure 6.2 in the Department's annual report covers the information and tells us that approximately between £34 million and £40 million in respective years has been lost through the value of demands against the guarantee. If £250 million-worth of loan guarantees are being offered in a year, one in six—perhaps slightly more—loans default. I have no basis on which to judge whether the figure is correct. For the reasons that I outlined earlier, if all loans succeed, one is probably

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  taking insufficient risk whereas if too many default, one is probably taking excessive risk. I have no means of judging where the balance should be struck; serious academic work is necessary to get that right.
  I have tried to show the importance of objectively understanding the market failure that we are trying to resolve. When one compares receipts by way of interest for the SFLGS with defaults, it is apparent that the scheme costs money. It is not like bank lending. Clearly, there is a level of lending to specific small firms that banks and financial institutions would not undertake on the same basis. The receipts suggest premiums of 2 per cent, or 3 per cent. rather than the 0.5 per cent. or 1 per cent. premiums that currently have to be charged.
  The scheme means a substantial benefit to business in the context of a proper market failure. It prompts the question whether businesses that are that risky should be willing to pay so great a premium to justify the level of borrowing. Perhaps that point is too detailed to consider now. It is certainly too late in our proceedings for hon. Members other than the Minister to respond to it, so I shall simply leave it hanging.
  It is important to bear in mind the purpose of section 8. It should not be used to engage in the politically driven restructuring of companies or industries, but should be narrowly confined to operations that are necessary to fulfil some significant social need, such as the employee redundancy support for the coal industry. We have argued about the Post Office reinvention programme, which would be more properly titled the Post Office closures programme. We have debated its extent and nature elsewhere, but there is no doubt about the likely reduction in the number of post offices in urban areas and financial assistance may be required for that.
  The debate shows how things have moved on. If we go back 15 years, when I prepared the budget for the Department of Trade and Industry, we would calculate the Post Office's negative external financing limit and its contribution to the Department's finances and associated nationalised industries. Nowadays we consider ways in which the Department can find mechanisms for recovering money and paying it through section 8 assistance to the Post Office. That is a worrying change, and a large part of the justification in the next couple of years for the additional financing availability.
  Earlier today, the Secretary of State tabled a written statement, to which she referred in the Chamber, on the affairs of British Energy after the agreement with shareholders that was concluded a week ago. I am not clear whether the continuation of the loan to British Energy will be achieved legally by statutory cover under section 8. Clearly, it relates directly to the reorganisation of an undertaking in an industry and therefore appears to have the appropriate statutory cover. That has not been necessary until now, because the loan has been from the contingency fund and is to be repaid before the end of the financial year. It is therefore not necessary for section 8 to cover it. However, a longer-term loan is different. Perhaps the Bill is necessary to deal with the affairs of British Energy, provide loans to it or meet its
  80
  liabilities. I would be interested to learn whether that constitutes one of the undisclosed reasons for the further limit.
  Let us consider regional development agencies. The Minister spoke earlier about the availability of section 8 assistance to the Welsh Assembly through the block grant. That does not require the Treasury's consent. We have created a mechanism whereby, despite the cumulative total that is allowed for expenditure under section 8, the Treasury does not have fingertip control over precise amounts. In so far as it is confined to the Welsh Assembly, perhaps the amounts are not large and it does not have a great impact on the overall totals.]However, I am not sure whether the Government have substantially changed their mind about the greater freedoms to regional development agencies or assemblies.
  If we already have a single pot for RDAs, which effectively control the budgets for some purposes, including the Small Business Service, I presume that part of section 8 assistance can be spent through RDAs. To what extent are section 8 powers available to RDAs? To what extent can RDAs transfer money from budgets that were previously under a statutory provision different from section 8? There may be much greater variations in the amounts being spent on section 8 through action by RDAs without the Treasury's consent. I do not believe that they are required to have the Treasury's consent to move money between different budgets in their single pot.
  Mr. Weir: The Scottish Executive have powers under the Scotland Act 1998 and the National Assembly for Wales have similar powers under the National Assembly for Wales (Transfer of Functions) Order 1999. Those powers were specifically given to the devolved Administrations. They do not apply to English regional development agencies. As I understand it, if the devolved Administrations use this power, there is no extra money to fund that. The position may be slightly different with the regional development agencies.
  Mr. Lansley: I understand the point that the hon. Gentleman makes. I am sure that that is right. I am not clear whether the consent of the Treasury is required for regional development agencies to vire money within the single pot that is available to them, which is a bit like a block grant, if they want to use section 8 powers. If it is not, there is the administrative problem of how to monitor and report on the extent to which they are bumping up against the limit. Perhaps that is one of the reasons why the Government are proposing such big steps of between £200 million and £600 million. If they require the Treasury's consent to move money within a single pot, that undermines the sense of freedom that regional development agencies in England are supposed to have to be able to spend this money. The Minister may be able to enlighten me on that. Perhaps my concerns are not justified.
  Back in 1982, the legislation envisaged a limit to restrict previous largesse by Government that had led to intervention in industry, and a system of scrutiny such that if the limit was hit there would be frequent scrutiny by Parliament of that extension of financial intervention in industry. It is astonishing that the Government are now turning that into something that involves big steps:

  81
  from £2.7 billion to £3.7 billion in one step, on the basis that several years may go by before Parliament needs to reconsider the use of this money, and thereafter up to four steps of £600 million, which if spending is at the current rate may require two or three years between each reconsideration.
  My hon. Friend the Member for Sevenoaks is right. On the face of it, the further we move from the 1982 legislation in time, in philosophy and in approach to industry, the more important it is for parliamentary scrutiny to be systematic and frequent. We must decide whether expenditure using these powers is justified. The Government are breaking with the intention of the 1982 legislation—although it may not have been expressed in these terms. It was envisaged that the time would come when the level of financial commitment would be reached, but it should not be breached, or only by small amounts and subject to frequent recall to Parliament. We are going away from that. My hon. Friend is right that we should reconsider the whole structure of the legislation and the basis on which we now approach this issue, because we have come a long way since 1982.
  Before this debate, I was aware of a particular absurdity, but my concerns were not assuaged by the Minister's responses. The Secretary of State came before the Select Committee on Trade and Industry and told us about the desirability of rationalising grant schemes in the Department of Trade and Industry. She said that they would be managed under specific portfolios. She came before us again on 29 October last year, and spoke in glowing terms. She said:
  "The team that I have got working on this have been making fantastic progress and, again, I expect to make an announcement on that certainly before Christmas."
  Well, the fantastic progress has not progressed fantastically. It was not before Christmas, and it will not be before the end of the financial year.
  I am not naïve. I know that it is difficult to get rid of schemes. Various parts of the Department may be involved in a substantial fighting retreat on what should be kept and what should be scrapped, so it may take longer than was thought. Even if it takes longer, it is absurd to bring before Parliament legislation on a substantial number of these schemes. I presume that the majority of the 15 schemes will form part of the review, even if the post office programme does not. It is absurd to propose that year zero for the design of Government grant schemes should be April, but to say to Parliament now, "Fine, we'll spend another £3.7 billion on some of these schemes, but you don't know what they will look like, because we haven't told you yet. We'll tell you a couple of weeks after the legislation has passed through the House." That is deeply undesirable, and completely at odds with the scrutiny which the House demands and which is called for by our reasoned amendment. I shall support my hon. Friend the Member for North-West Norfolk.
  7.16 pm
  Mr. Bellingham: With the leave of the House, I should like to reply to the debate. I am grateful to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), because he succinctly summed up the difficulties that we have with this legislation. A substantial review is taking place, so why on earth could not Second Reading be delayed until it was completed and the Secretary of State had made a statement?
  82
  We have had an interesting, albeit short, debate. I am glad that the hon. Member for Luton, North (Mr. Hopkins) recognises the plight of manufacturing and the difficulties over investment levels. I note that he wholeheartedly supports the rationale behind the original Act and this Bill. The hon. Member for Twickenham (Dr. Cable) talked about accountability, and I hope that, in the light of that, he will support our reasoned amendment. He mentioned the purple report, and the need for statistics and comparable studies. He is right, because we need to know the administrative costs incurred for every pound that goes into these schemes. That point had not been raised before, and I hope that the Minister will comment on it.
  On the Rover taskforce scheme, I think that I am right in saying that the £129 million was under regional selective assistance. So far, £12 million has been allocated under section 8, and perhaps the Minister can tell us how much of that has been spent.
  The speech of my hon. Friend the Member for Sevenoaks (Mr. Fallon) was a fascinating philosophical tour de force. He considered the genesis of this policy, going back to Keynes's famous four articles, and he fast-forwarded 70 years. He rightly said that it was time to take stock. He made a valid point when he said that Ministers should be looking for value added, not just the headline millions. He made an amusing quip. He talked about good money paid for unreliable Celtic votes. I wish that he had seen the expression on the face of the hon. Member for Angus (Mr. Weir). Questions need to be asked. Does the money stimulate wealth creation and enterprise? My hon. Friend was spot on when he said that the timing of Second Reading is completely awry. We need to know exactly what schemes will be kept.
  I was interested in what my hon. Friend the Member for Cities of London and Westminster (Mr. Field) said about the film industry. I had a quick look at one of the DTI briefs. The British Film Commission was launched in 1991, and one of its aims is to encourage film and production units from abroad to use UK-based facilities. It also helps to co-ordinate the work of other national and local film bodies. The commission now comes under the Department for Culture, Media and Sport. Were the grants paid out up to 31 March 2002, which totalled about £7 million, provided by the DTI or did they come out of the DCMS budget? Would the Minister elaborate on that?
  My hon. Friend reinforced what had been said about some of the mini-micro-schemes, in regard to which there has been a total loss of focus. The reason we cannot go along with some of these schemes is indeed the lack of sufficient focus and accountability. I am glad that he also mentioned the red tape burden on business and the law of unintended consequences. He gave a fascinating example from East Germany, following his visit last week to some of his more far-flung constituents.
  I will accept the rap over the knuckles administered by the hon. Member for Angus in connection with Atlantic Telecom because he obviously knows quite a lot about it, but I stick to my guns nevertheless. Most of those small business men will have had mobile phones, and I do not believe that, had the Minister contacted the chairman and chief executive of British Telecom, it would not have been possible to sort something out at a cost amounting to much less than over half a million pounds.

  83
  My hon. Friend the Member for South Cambridgeshire drew on extensive DTI civil service experience. He gave a riveting example involving BP and Sullom Voe, and made the interesting point that the more sophisticated intervention mechanisms became, the greater the distortions that resulted. That must return us to the inadequacy of the scrutiny mechanism set out in the Bill. Moreover, my hon. Friend's point about the loan guarantee scheme was spot on. Apart from the broad statistics relating to the small firms guarantee scheme, we see nothing about failure rates or the net cost. I hope that the Minister will respond on that, and also to the point about the money dispensed by the regional development agencies and the influence that they will have.
  The Secretary of State recently promised to drive up UK productivity and competitiveness in order to deliver prosperity to all. We will hold her to account. The five key tests will relate to business investment, which is falling faster than it has for 36 years; to manufacturing jobs, 600,000 of which have gone since 1997; to the trade deficit, which is at its worst since 1967; to productivity, which is growing at half the rate at which it grew under the last Government; and to strikes, to which more than 1 million working days have been lost.
  We shall continue to take every opportunity to hold the Secretary of State to account, but for the moment I ask hon. Members to support our amendment, because what we need above all else is proper scrutiny of the Bill and the workings of section 8 of the 1982 Act.
  7. 22 pm
  Alan Johnson: With the leave of the House, I shall reply to what has been a thoughtful debate on this short Bill, featuring excellent contributions from Opposition Members—although the best came from our side. What we lacked in quantity, we gained in quality.
  I was deeply hurt by the comments of the hon. Member for North-West Norfolk (Mr. Bellingham), and by the lack of a political consensus. I had thought that we would sail through this with a fair amount of agreement between the various parties—only to find that our motives were being questioned, particularly in regard to the formula.
  There is no getting away from one aspect. It took 14 years, from 1982 to 1996, to produce just one tranche, and the money has been spent more quickly since 1997. I do not argue with that. The problem is that we are talking about schemes that may have existed in the past, and about the use of taxpayers' money, which should of course be used properly, in the absence of any analysis of the payback for the Government.
  We inherited one scheme: the small business loan guarantee scheme. The hon. Gentleman was scathing about some of the schemes that we have introduced, but very complimentary about the one that was left over from past Governments. We have introduced 14 schemes. It was right for hon. Members to question some of them and for me to defend them, but we must look at the Bill on the basis of what is happening now, not what was happening in the 1970s or 1980s.
  In fact, it could well be argued that Governments in the 1970s and 1980s should have used such provisions. Especially in the 1980s, constituencies such as mine were
  84
  crying out for just a bit of assistance so that one industry could diversify into others. In my case, the problem was the collapse of distant-water fishing, and very little help was forthcoming. That is all in the past, however.
  The rationale of our formula was to roll forward the existing limit of £2.7 billion—which we have almost reached—in real terms, using 2.5 per cent. as a proxy for the long-term gross domestic product deflator, for 20 years. The figures produced at the time, in co-operation with the Treasury, did not satisfy us: they would have meant a £4.5 billion new ceiling, and our returning four times to ask for £400 million in each tranche. We felt that the first hurdle should be reduced, enabling us to return to Parliament more quickly. We therefore reduced it to £3.7 billion. To reach the £6.1 billion figure, the other tranches were £600 million more than £400 million.
  Mr. Lansley: I understand that the Minister has produced an arithmetical approximation to the way in which things were done in 1982, but our point is that the original 14-year period after 1982 at least followed carefully considered legislation setting out a framework of support for industry. Following the meeting of that limit, is it not time for a reconsideration of the framework, and for the framework to be established for a period rather than being rolled forward?
  Alan Johnson: In a sense we are doing that, but let me develop the argument.
  The accusation, reflected in the amendment, is that we want somehow to avoid parliamentary scrutiny. Let me say in all honesty—I suppose that anyone should speak in all honesty from the Dispatch Box—that we have tried hard to do the opposite. We looked at the figures and said, "No, we want to return to Parliament earlier." We have proposed the same four tranches. There was an argument that we should return to Parliament two or three times rather than four, but we did not accept it. There is no change in the £10 million limit requiring parliamentary scrutiny, despite the argument—given that the limit was set in 1982, if not 1972—that it should change because of the increased cost of living. There is still an annual report, however inadequate it may be. We reached for the Kleenex when we were accused of trying to avoid returning to Parliament, for that was far from being our rationale.
  The hon. Member for North-West Norfolk praised the Small Business Service. I was pleased about that, because I had understood that the Conservatives had pledged to abolish it. We may be witnessing the determination of policy here, and I can think of no better shadow Minister for the job.
  The Small Business Service administers eight of the current schemes. Those eight schemes—this answers a question raised by, particularly, the hon. Member for South Cambridgeshire (Mr. Lansley)—are the ones that are in the pot for the review of DTI business support, as opposed to the industry-specific schemes relating to coal, steel and the post office network. So eight out of 15 are in the pot, along with another 175—the total number of DTI business support schemes being 183. Only those eight will be carried over from section 8 of the 1982 Act.
  Two schemes were criticised by the hon. Member for North-West Norfolk. I pull in also his point about Scotland. There is an issue about Conservative

  85
  Members, perhaps because of the constituencies that they represent and because after 1997 they were true one nation Tories—they did not represent anyone in Scotland and Wales; they represented one nation and that was England—not realising how important the Phoenix fund is in deprived areas, particularly among ethnic minorities. The whole basis of this approach is to encourage people to be entrepreneurial and to help them to start up their own businesses. Every bit of feedback that we get from the Phoenix fund shows that it is one of the most beneficial.
  It is right that no money has been paid out of the incubation fund thus far. I am told that that is because the very nature of the fund means that it takes a while for the applications to be processed. It is hoped that any problems will be ironed out. We are still expecting to spend a projected £65 million by the end of the scheme in 2004–05.
  The other point that I make in relation to the contribution by the hon. Member for North-West Norfolk concerns the small firms loan guarantee scheme and what it costs per year. I will write to him, and probably to all hon. Members who will sit on the Committee, before the Committee stage, so that they receive a proper analysis of how the schemes are working. That analysis exists but it is all over the place. It is in documents that are published at different frequencies. I understand that it is not all in the annual report, which surprises me.
  I am told that since the small firms loan guarantee scheme began in June 1981, the net cost up to the end of October 2002 has been £460.39 million. In all, over 82,000 loans have been guaranteed. The guarantees provided on loans so far total £3.1 billion, but I will write to the hon. Gentleman on the other points that he raised and on the point raised by the hon. Member for Twickenham (Dr. Cable) about whether there has been any comparison between companies that did not access the loan scheme and those that did. That is a valid question.
  I am not going to be drawn into a debate on the economy, particularly as my right hon. Friend the Chancellor of the Exchequer made mincemeat of the Opposition just two weeks ago on that subject.
  My hon. Friend the Member for Luton, North (Mr. Hopkins) is a strong supporter of these measures. He seems to have disappeared, but he was the only Labour Member to attend the whole debate and I am grateful for his support, which was welcome.
  The hon. Member for Twickenham talked about post office network funding and questioned the use of section 8 for the urban post office network. I do not think that it should be questioned. I mentioned at the beginning the criteria set down originally in the 1972 Act and carried into the 1982 Act, which were about development, modernisation and efficiency. In terms of the post office network, that is necessary. The debate in the House last October threw up a number of issues that need to be addressed, difficult though they are. They probably should have been addressed many years ago.
  The hon. Gentleman mentioned the Rover taskforce. The hon. Member for North-West Norfolk was right that most of that money was a regional selective
  86
  assistance grant that had already been applied for by BMW Rover when the problems occurred. Nevertheless, £12 million was set aside, as he rightly said. A total of £7.4 million has been paid up to now, but only £1 million of that relates to section 8 and the issue under scrutiny in this debate.
  The hon. Member for Sevenoaks (Mr. Fallon) made a thoughtful contribution. I was fascinated by the light that it shone on what was happening in the 1970s. I was particularly interested to know that the legislation caused the resignation of a junior DTI Minister. That made me sit up and take close notice of how we should deal with this fresh Bill.
  The hon. Gentleman said that we have never helped new and emerging industry. The eight support schemes administered by the Small Business Service—there is an argument about whether there is any duplication there—focus on new emerging businesses, particularly in sectors such as biotechnology, so it is unfair to say that we are sticking to the credo of the 1970s and looking only at failing industries.
  Nevertheless, as the hon. Gentleman accepted, the scheme has united all parties. There needs to be assistance when traditional industries come up against problems, in particular iron and steel and coal; there are two specific schemes, one for Selby and one in Scotland. They need that assistance. The question is whether other industries should have had similar assistance. I have mentioned distant-water trawling in my constituency, where 5,000 people lost their jobs and did not receive any help because they were classified as casual workers. There was a case for some assistance under the scheme. It was not provided under the previous Government.
  It is important to mention that there is full agreement on the Labour Benches about the rigorous analysis that the hon. Member for Sevenoaks spoke about. We abolished the shipbuilding intervention fund three years ago, with the support of the trade unions and the industry itself, because it was having no effect on our competitiveness or productivity. That was an important point.
  The hon. Member for Cities of London and Westminster (Mr. Field) made some important points, particularly about the City of London, which may be next in the queue for financial assistance. We will look at that claim with interest. He mentioned Conservative Members' experience of business and made the rather dated accusation that Labour Members did not really understand business. A back-handed compliment was paid to Labour by a business person whom I met recently. He said that the problem with the previous Government was that, because they had all had a directorship or two and all thought that they knew how to run businesses, they did not listen. He said, "The thing about you lot is that you know absolutely nothing about business and as a result you listen," which I thought was as good a compliment as we can expect in the circumstances.
  The hon. Member for Angus (Mr. Weir) made a number of important points. He asked about RSA and in particular about the money that goes to Scotland and Wales. RSA is covered by section 7, not section 8. It is demand driven: companies have to apply for it. In

  87
  circumstances where we have the highest number of people in employment ever and the lowest period of unemployment since the Beatles released "Abbey Road", we will probably find that there is less cause for people to apply for RSA than previously. Also, the assisted areas map has changed and reduced. While we fought the good fight in Europe, we were unable to secure all the money we wanted.
  Another important point was raised about RSA. The Secretary of State has power under the Regional Development Agencies Act 1998 to require the regional development agencies to administer funds under section 8. That power has never been used, but we have asked them to administer powers under section 7 because they now allocate all RDA applications up to £2 million, which is about 95 per cent. of RSA.
  The hon. Member for South Cambridgeshire has detailed knowledge of how the DTI works, which may or may not be helpful in his current capacity. His was an important and interesting contribution. He spoke of the need to be remorseless in trying to achieve a root-and-branch examination of the 183 support schemes. That is what we intend to do, and although it may take us a little longer, we will end up with money that is better directed.
  In the light of a helpful nudge from the Whips, I conclude by saying that the Government need the legislative means to operate their business support activities. We can debate what those activities should be, but there is little doubt that such support is needed. I commend the Bill to the House, and I look forward to making good progress in Committee.
  Question put, hat the amendment be made:—
  The House divided: Ayes 156, Noes 301.

  Division No. 92]

  [7:40 pm

  AYES

  Amess, David

  Cash, William

  Arbuthnot, rh James

  Chapman, Sir Sydney(Chipping Barnet)

  Atkinson, David(Bour'mth E)

  Atkinson, Peter(Hexham)

  Chidgey, David

  Bacon, Richard

  Clappison, James

  Barker, Gregory

  Clifton-Brown, Geoffrey

  Baron, John(Billericay)

  Collins, Tim

  Barrett, John

  Conway, Derek

  Beith, rh A. J.

  Cormack, Sir Patrick

  Bellingham, Henry

  Davey, Edward(Kingston)

  Bercow, John

  Davis, rh David(Haltemprice & Howden)

  Beresford, Sir Paul

  Blunt, Crispin

  Djanogly, Jonathan

  Boswell, Tim

  Dorrell, rh Stephen

  Bottomley, Peter(Worthing W)

  Doughty, Sue

  Bottomley, rh Virginia(SW Surrey)

  Evans, Nigel

  Fabricant, Michael

  Brady, Graham

  Fallon, Michael

  Breed, Colin

  Field, Mark(Cities of London & Westminster)

  Brooke, Mrs Annette L.

  Browning, Mrs Angela

  Flight, Howard

  Burnett, John

  Flook, Adrian

  Burns, Simon

  Foster, Don(Bath)

  Burnside, David

  Fox, Dr. Liam

  Burstow, Paul

  Francois, Mark

  Burt, Alistair

  Gale, Roger(N Thanet)

  Cable, Dr. Vincent

  Garnier, Edward

  Calton, Mrs Patsy

  Gibb, Nick(Bognor Regis)

  Cameron, David

  Gidley, Sandra

  88

  Gillan, Mrs Cheryl

  Osborne, George(Tatton)

  Goodman, Paul

  Page, Richard

  Gray, James(N Wilts)

  Paice, James

  Grayling, Chris

  Paterson, Owen

  Greenway, John

  Prisk, Mark(Hertford)

  Grieve, Dominic

  Pugh, Dr. John

  Gummer, rh John

  Randall, John

  Hague, rh William

  Redwood, rh John

  Hammond, Philip

  Rendel, David

  Harvey, Nick

  Robathan, Andrew

  Hawkins, Nick

  Robertson, Laurence(Tewk'b'ry)

  Hayes, John(S Holland)

  Roe, Mrs Marion

  Heald, Oliver

  Rosindell, Andrew

  Heath, David

  Ruffley, David

  Hendry, Charles

  Russell, Bob(Colchester)

  Hoban, Mark(Fareham)

  Sanders, Adrian

  Horam, John(Orpington)

  Sayeed, Jonathan

  Howarth, Gerald(Aldershot)

  Selous, Andrew

  Hunter, Andrew

  Shepherd, Richard

  Jack, rh Michael

  Simmonds, Mark

  Jackson, Robert(Wantage)

  Simpson, Keith(M-Norfolk)

  Jenkin, Bernard

  Soames, Nicholas

  Keetch Paul

  Spelman, Mrs Caroline

  Kennedy, rh Charles(Ross Skye & Inverness)

  Spicer, Sir Michael

  Spink, Bob(Castle Point)

  Key, Robert(Salisbury)

  Spring, Richard

  Laing, Mrs Eleanor

  Stanley, rh Sir John

  Lamb, Norman

  Steen, Anthony

  Streeter, Gay

  Lansley Andrew

  Stunell, Andrew

  Laws, David(Yeovil)

  Syms, Robert

  Leigh, Edward

  Taylor, Ian(Esher)

  Liddell-Grainger, Ian

  Taylor John(Solihull)

  Lidington, David

  Taylor, Matthew(Truro)

  Loughton, Tim

  Taylor, Sir Teddy

  Luff, Peter(M-Worcs)

  Tonge, Dr. Jenny

  McIntosh, Miss Anne

  Turner Andrew(lsle of wight)

  Mackay, rh Andrew

  Tyler Paul(N Cornwall)

  Maclean, rh David

  Tyrie, Andrew

  McLoughlin, Patrick

  Walter, Robert

  Malins, Humfrey

  Waterson, Nigel

  Maples, John

  Watkinson, Angela

  Marsden, Paul(Shrewsbury & Atcham)

  Webb, Steve(Northavon)

  Whittingdale, John

  Maude, rh Francis

  Widdecombe, rh Miss Ann

  Mawhinney, rh Sir Brian

  Wiggin, Bill

  May, Mrs Theresa

  Wilkinson, John

  Mercer, Patrick

  Williams, Roger(Brecon)

  Mitchell, Andrew(Sutton

  Wilshire, David

  Coldfield)

  Yeo, Tim(S Suffolk)

  Moore, Michael

  Young, rh Sir George

  Moss, Malcolm

  Murrison, Dr. Andrew

  Tellers for the Ayes:

  Norman, Archie

  Hugh Robertson and

  O'Brien, Stephen(Eddisbury)

  Mr. Desmond Swayne

  NOES

  Ainger, Nick

  Benton, Joe(Bootle)

  Ainsworth, Bob(Cov'try NE)

  Berry, Roger

  Alexander, Douglas

  Best, Harold

  Allen, Graham

  Blackman, Liz

  Anderson, rh Donald(Swansea E)

  Blizzard, Bob

  Armstrong, rh Ms Hilary

  Borrow, David

  Atherton, Ms Candy

  Bradley, rh Keith(Withington)

  Atkins, Charlotte

  Bradley, Peter(The Wrekin)

  Austin, John

  Bradshaw, Ben

  Baird, Vera

  Brown, rh Nicholas(Newcastle E Wallsend)

  Banks, Tony

  Barron, rh Kevin

  Brown, Russell(Dumfries)

  Battle, John

  Bryant, Chris

  Beard, Nigel

  Buck, Ms Karen

  Beckett, rh Margaret

  Burden, Richard

  Begg, Miss Anne

  Burgon, Colin

  Bell, Stuart

  Burnham, Andy

  Benn, Hilary

  Cairns, David

  Bennett, Andrew

  Campbell, Alan(Tynemouth)

  89

  Campbell, Mrs Anne(C'bridge)

  Grogan, John

  Campbell, Ronnie(Blyth V)

  Hain, rh Peter

  Caplin, Ivor

  Hall, Mike(Weaver Vale)

  Casale, Roger

  Hall, Patrick(Bedford)

  Caton, Martin

  Hamilton, Fabian(Leeds NE)

  Cawsey, Ian(Brigg)

  Hanson, David

  Challen, Colin

  Havard, Dai(Merthyr Tydfil &

  Chapman, Ben(Wirral S)

  Rhymney)

  Chaytor, David

  Healey, John

  Clapham, Michael

  Henderson, Doug(Newcastle N)

  Clark, Mrs Helen(Peterborough)

  Henderson, Ivan(Harwich)

  Clark, Dr. Lynda(Edinburgh Pentlands)

  Hendrick, Mark

  Hepburn, Stephen

  Clarke, rh Charles(Norwich S)

  Heppell, John

  Clarke, rh Tom(Coatbridge & Chryston)

  Heyes, David

  Hill, Keith(Streatham)

  Clelland, David

  Hoey, Kate(Vauxhall)

  Coaker, Vernon

  Hood, Jimmy(Clydesdale)

  Coffey, Ms Ann

  Hope, Phil(Corby)

  Coleman, Iain

  Hopkins, Kelvin

  Connarty, Michael

  Howarth, rh Alan(Newport E)

  Cook, rh Robin(Livingston)

  Howarth, George(Knowsley N & Sefton E)

  Cooper, Yvette

  Corbyn, Jeremy

  Hoyle, Lindsay

  Corston, Jean

  Hughes, Beverley(Stretford & Urmston)

  Cousins, Jim

  Cruddas, Jon

  Hughes, Kevin(Doncaster N)

  Cryer, Ann(Keighley)

  Humble, Mrs Joan

  Cryer, John(Hornchurch)

  Hutton, rh John

  Cummings, John

  Iddon, Dr. Brian

  Cunningham, rh Dr. Jack

  Illsley, Eric

  (Copeland)

  Ingram, rh Adam

  Cunningham, Jim(Coventry S)

  Irranca-Davies, Huw

  Cunningham, Tony(Workington)

  Jackson, Glenda(Hampstead &

  Dalyell, Tarn

  Highgate)

  Darling, rh Alistair

  Jamieson, David

  Davey, Valerie(Bristol W)

  Jenkins, Brian

  David, Wayne

  Johnson, Alan(Hull W)

  Davies, rh Denzil(Llanelli)

  Jones, Kevan(N Durham)

  Davies, Geraint(Croydon C)

  Jones, Lynne(Selly Oak)

  Davis, rh Terry(B'ham Hodge H)

  Jones, Martyn(Clwyd S)

  Dawson, Hilton

  Joyce, Eric(Falkirk W)

  Dean, Mrs Janet

  Kaufman, rh Gerald

  Denham, rh John

  Keeble, Ms Sally

  Dismore, Andrew

  Keen, Alan(Feltham)

  Dobbin, Jim(Heywood)

  Keen, Ann(Brentford)

  Dobson, rh Frank

  Kennedy, Jane(Wavertree)

  Donohoe, Brian H.

  Khabra, Piara S.

  Doran, Frank

  Kidney, David

  Dowd, Jim(Lewisham W)

  Kilfoyle, Peter

  Eagle, Angela(Wallasey)

  King, Andy(Rugby)

  Eagle, Maria(L'pool Garston)

  King, Ms Oona(Bethnal Green & Bow)

  Edwards, Huw

  Ellman, Mrs Louise

  Ladyman, Dr. Stephen

  Ennis, Jeff(Barnsley E)

  Lammy, David

  Ewing, Annabelle

  Lawrence, Mrs Jackie

  Farrelly, Paul

  Laxton, Bob(Derby N)

  Fitzpatrick, Jim

  Lazarowicz, Mark

  Flint, Caroline

  Leslie, Christopher

  Flynn, Paul(Newport W)

  Levitt, Tom(High Peak)

  Follett, Barbara

  Lewis, Terry(Worsley)

  Foster, Michael(Worcester)

  Linton, Martin

  Foster, Michael Jabez(Hastings & Rye)

  Lloyd, Tony(Manchester C)

  Llwyd, Elfyn

  Foulkes, rh George

  Love, Andrew

  Francis, Dr. Hywel

  Lucas, Ian(Wrexham)

  Galloway, George

  Lyons, John(Strathkelvin)

  Gardiner, Barry

  McAvoy, Thomas

  George, rh Bruce(Walsall S)

  McCafferty, Chris

  Gerrard, Neil

  McCartney, rh Ian

  Gibson, Dr. Ian

  McDonagh, Siobhain

  Gilroy, Linda

  MacDonald, Calum

  Godsiff, Roger

  McDonnell, John

  Goggins, Paul

  MacDougall, John

  Griffiths, Jane(Reading E)

  McFall, John

  Griffiths, Win(Bridgend)

  McIsaac, Shona

  90

  McKechin, Ann

  Ryan, Joan(Enfield N)

  McKenna, Rosemary

  Salter, Martin

  Mackinlay, Andrew

  Savidge, Malcolm

  McNamara, Kevin

  Sedgemore, Brian

  McNulty, Tony

  Shaw, Jonathan

  MacShane, Denis

  Shipley, Ms Debra

  Mahmood, Khalid

  Simpson, Alan(Nottingham S)

  Mahon, Mrs Alice

  Singh, Marsha

  Mallaber, Judy

  Skinner, Dennis

  Mandelson, rh Peter

  Smith, Geraldine(Morecambe & Lunesdale)

  Mann, John(Bassetlaw)

  Marris, Rob(Wolverh'ton SW)

  Smith, Jacqui(Redditch)

  Marsden, Gordon(Blackpool S)

  Smith, John(Glamorgan)

  Marshall, David(Glasgow

  Smith, Llew(Blaenau Gwent)

  Shettleston)

  Squire, Rachel

  Marshall, Jim(Leicester S)

  Starkey, Dr. Phyllis

  Marshall-Andrews, Robert

  Steinberg, Gerry

  Martlew, Eric

  Stewart, Ian(Eccles)

  Meacher, rh Michael

  Stinchcombe, Paul

  Meale, Alan(Mansfield)

  Strang, rh Dr. Gavin

  Merron, Gillian

  Straw, rh Jack

  Michael, rh Alun

  Stringer, Graham

  Miller, Andrew

  Stuart, Ms Gisela

  Moffatt, Laura

  Taylor, rh Ann(Dewsbury)

  Mole, Chris

  Taylor, Dari(Stockton S)

  Moonie, Dr. Lewis

  Taylor' David(NW Leics)

  Morley Elliot

  Thomas, Gareth(Harrow W)

  Mountford, Kali

  Thomas, Simon(Ceredigion)

  Mullin, Chris

  Timms, Stephen

  Munn, Ms Meg

  Tipping, Paddy

  Murphy, Denis(Wansbeck)

  Todd, Mark(S Derbyshire)

  Naysmith, Dr. Doug

  Touhig, Don(Islwyn)

  Norris, Dan(Wansdyke)

  Trickett, Jon

  O'Brien, Bill(Normanton)

  Truswell Paul

  O'Brien, Mike(N Warks)

  Turner, Dennis(Wolverh'ton SE)

  O'Hara, Edward

  Turner, Dr. Desmond(Brighton Kemptown)

  Olner, Bill

  O'Neill, Martin

  Twigg, Stephen(Enfield)

  Organ, Diana

  Tynan, Bill(Hamilton S)

  Vaz, keith(Leicester E)

  Osborne Sandra(Ayr)

  vis, Dr. Rudi

  Owen, Albert

  Ward, Claire

  Perham, Linda

  Wareing, Robert N.

  Pickthall, Colin

  Watts, David

  Pike, Peter(Burnley)

  Weir, Michael

  Plaskitt, James

  white, Brian

  Pollard, Kerry

  Whitehead, Dr. Alan

  Pond, Chris(Gravesham)

  wicks, Malcolm

  Prentice, Gordon(Pendle)

  Williams, rh Alan(Swansea W)

  Prescott, rh John

  Williams, Betty(Conwy)

  Price, Adam(E Carmarthen & Dinefwr)

  Williams, Hywel(Caernarfon)

  Winnick, David

  Prosser, Gwyn

  Winterton, Ms Rosie(Doncaster C)

  Purchase, Ken

  Quin, rh Joyce

  Wishart, Pete

  Rapson, Syd(Portsmouth N)

  Woodward, Shaun

  Raynsford, rh Nick

  Woolas, Phil

  Reed, Andy(Loughborough)

  Worthington, Tony

  Robertson, John(Glasgow Anniesland)

  Wray, James(Glasgow Baillieston)

  Robinson, Geoffrey(Coventry NW)

  Wright, Anthony D.(Gt Yarmouth)

  Roche, Mrs Barbara

  Wright, David(Telford)

  Ross, Ernie(Dundee W)

  Wyatt, Derek

  Roy, Frank(Motherwell)

  Ruddock, Joan

  Tellers for the Noes:

  Russell, Ms Christine(City of Chester)

  Mr. Jim Murphy and

  Mr. Gerry Sutcliffe

  Question accordingly negatived.
  Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on second or third reading), and agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of bills)

  Industrial Development (Financial Assistance) Bill

    INDUSTRIAL DEVELOPMENT (FINANCIAL ASSISTANCE) BILL [MONEY]
    Queen's recommendation having been signified—
    Motion made, and Question put forthwith, pursuant to Standing Order No. 53 (1)(a) (Money resolutions and ways and means resolutions in connection with bills),
    That, for the purposes of any Act resulting from the Industrial Development (Financial Assistance) Bill, it is expedient to authorise any increase in sums paid out of money provided by Parliament attributable to provisions of the Act—

    (a)increasing the sum of £1,900 million specified in section 8(5) of the Industrial Development Act 1982 to £3,700 million, and

    (b)increasing the sum of £200 million so specified to £600 million.—[Gillian Merron.]

    Question agreed to.
    Mr. Deputy Speaker (Sir Michael Lord): With permission, I shall put together the motions relating to European Community documents.

    EUROPEAN COMMUNITY DOCUMENTS
    Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),
    IMPROVING SAFETY AT SEA
    That this House takes note of European Union Documents No. 15301/02, Commission Communication on improving safety at sea, and No. 5111/03, draft Regulation on the accelerated phasing in of double hull or equivalent design requirements for single hull oil tankers; and supports the Government's continuing commitment to working within the European Union and the International Maritime Organisation to that end.

    COMBATING CORRUPTION IN THE PRIVATE SECTOR
    That this House takes note of European Union Document No. 12249/2/02, on Combating Corruption in the Private Sector; considers it to be an acceptable replacement for the Joint Action on Corruption in the Private Sector of 22 December 1998; and supports the Government's efforts to secure agreement to this Framework Decision.—[Gillian Merron.]
    Question agreed to.
    Mr. Deputy Speaker: With permission, I shall put together the motions relating to delegated legislation.

    DELEGATED LEGISLATION
    Motion made, and Question put forthwith, pursuant to Standing Order No. 118 (6)(Standing Committees on Delegated Legislation),
    That the draft Housing (Northern Ireland) Order 2003, which was laid before this House on 20th January, be approved.

    LIBRARIES
    That the draft Public Lending Right (Increase of Limit) Order 2003, which was laid before this House on 28th January, be approved.—[Gillian Merron.]
    Question agreed to.

    DELEGATED LEGISLATION
    Ordered,
    That the following Statutory Instruments be referred to Standing Committees on Delegated Legislation: the Education (Determination of Admission Arrangements) (Amendment) (England) Regulations (S.I., 2002. No. 2896), the Education (School Information) (England) Regulations (S.I., 2002, No. 2897), the Education (Variation of Admission Arrangements) (England) Regulations (S.I., 2002, No. 2898), the Education (Admissions Appeals Arrangements) (England) Regulations (S.I., 2002, No. 2899), the Education (Admission Forums) (England) Regulations (S.I., 2002, No. 2900), the Education (Objection to Admission Arrangements) (Amendment) (England) Regulations (S.I., 2002, No. 2901), the Education (Co-ordination of Admission Arrangements) (Primary Schools) (England) Regulations (S.I., 2002, No. 2903), the Education (Co-ordination of Admission Arrangements) (Secondary Schools) (England) Regulations (S.I., 2002, No. 2904) and the Education (Modification of Provisions) (No. 2) (England) Regulations (S.I., 2002, No. 2953).—[Gillian Merron.]

    PETITION

      Wiltshire Probation Service
      7.58 pm
      Mr. James Gray: I have the honour of presenting a petition on behalf of 5,775 of my constituents from the towns of Chippenham, Malmesbury, Wootton Bassett, Corsham, and the villages in between, who are—not unreasonably—concerned about the proposal by Wiltshire probation service to site a probation office next door to the Ivy Lane primary school. My constituents are very concerned about the consequences of doing so.
      The petition states:
      The Petition of The Friends of Ivy Lane School, Chippenham
      Declares that proposals by Wiltshire Probation Service to use an office building immediately adjacent to Ivy Lane Primary School are not in keeping with their statutory duty to protect the public.
      The Petitioners therefore request that the House of Commons prevents Wiltshire Probation Service from using the Ivy Road site immediately adjacent to Ivy Lane Primary School.
      And the Petitioners remain, etc.
      To lie upon the Table.

  Law and Order (Hertfordshire)
  Motion made, and Question proposed, That this House do now adjourn.—[Gillian Merron.]
  7.59 pm
  Mr. James Clappison: There are few, if any, subjects more important to my constituents and the residents of Hertfordshire, and many other parts of the country, than the maintenance of law and order. I am pleased to have this opportunity to express what I perceive to be my constituents' serious and growing concern on the issue, which is also felt in many other parts of Hertfordshire.
  I wish to make it clear that in my remarks I make no criticism of the Hertfordshire police force or the Hertfordshire police authority. They do a good job in often difficult circumstances and I pay tribute to the way in which senior officers are prepared to respond to the concerns of the community. I recognise the strenuous efforts that they have made to tackle the difficult problem of recruitment and retention of police officers in Hertfordshire, and I pay tribute to the dedication of individual police officers of all ranks in the area. I make no criticism of the Hertfordshire force: indeed, I look for more support for it. I am sure that the force and my constituents would welcome such support.
  According to the most recent figures supplied to me in a written answer on 12 February, the total crime figure for Hertfordshire is rising. Total crime has risen in the two years for which like-for-like comparisons can be made, after taking into account boundary changes and revised counting rules. There have been particularly worrying increases in offences of robbery and burglary, the second of which I still regard as a serious offence, whatever others may feel.
  While crime has gone up in Hertfordshire, the thin blue line has been stretched thinner. Ministers seem to be unaware of the true picture of the number of police in Hertfordshire. In the recent debate on police funding, the Minister for Policing, Crime Reduction and Community Safety, who will reply to this debate, told us that Hertfordshire Members should acknowledge that
  "in March 1997 there w ere 1,759 police officers in Hertfordshire, whereas in March last year there were 1,825—so the policies introduced by the Government have led to an increase in the number of police officers in Hertfordshire."—[Official Report, 5 February 2003; Vol. 399, c. 308.]
  That statement unfortunately overlooks the fact that in April 2000 the area served by the Hertfordshire constabulary grew by a fifth when areas formerly policed by the Metropolitan force, including the whole of my Hertsmere constituency and other places, were added to Hertfordshire. Since then, the picture for police numbers in Hertfordshire in general, and for Hertsmere in particular, has not been as rosy as Ministers apparently believe, although I stress that that is no fault of the Hertfordshire force.
  According to another parliamentary answer that I received on 5 February, the police strength of the Hertfordshire force stood at 1,954 on 31 January 2001. According to that same answer, the figure had gone down to 1,825 by March 2002. That was the figure given by the Minister in the debate to which I referred earlier, and was lower than that for a year earlier. Since then, there has been some recovery. According to figures
  94
  supplied by the Hertfordshire police force, police strength stood at 1,946 at the end of last month. Although that is an improvement on the figure given by the Minister, it is still lower than the figure two years ago and must also be set against the substantially increased responsibilities of the Hertfordshire force.
  As I pointed out, the position for Hertsmere appears to be starker still. The figures supplied by the Hertfordshire force show that in Hertsmere the thin blue line is being stretched very thin indeed. Two years ago, Hertsmere was policed by 36 officers from the Hertfordshire force and 97 officers on secondment from the Metropolitan force while the transfer was taking effect. Two years ago, Hertsmere was policed by a total of 133 officers. One year ago, the total number of officers serving Hertsmere was 116. Today, I am told that the total number of officers is 108—all from the Hertfordshire force—down from 133, which is a reduction of almost 20 per cent.
  Mr. Mark Prisk: I share my hon. Friend's concern about the overall loss. Is he aware that in Bishop's Stortford in my constituency there is a parallel problem? Many officers have been drawn across to serve the new area and the result, on which he may want to comment, is that in Bishop's Stortford—a town of 31,000 people—the average shift on a Friday evening can be as few as seven officers.
  Mr. Clappison: My hon. Friend makes a good point. I am sure that his constituents in Bishop's Stortford will be rightly concerned about that problem. The position that he describes is not the fault of the Hertfordshire force, which has done its best to spread officers throughout the whole area. However, the increased responsibilities for the force, of which the Minister seems unaware, have meant that officers have been taken from other parts of the county in order to police the new areas, such as Hertsmere, that have come under Hertfordshire.
  Mr. Richard Page: I congratulate my hon. Friend on obtaining the debate. In fact, there are plenty of police officers in Hertfordshire—we are knee-deep in them. The problem is that they go to work in London because they get thousands of pounds more, as well as support for travel and other things, so my constituency, like those of my hon. Friends in Hertfordshire, is short of policemen. Until the Government address that problem we shall not have enough officers. Is my hon. Friend aware that in a recent survey conducted in my constituency crime was the No. 1 concern?
  Mr. Clappison: My hon. Friend is right. The situation is similar in my constituency. Many police officers live in Hertsmere, but many of them commute to London to serve in the Metropolitan force.
  Mr. Oliver Heald: Does my hon. Friend agree that in the north-eastern corner of the county the situation is the same? The force is spread very thin indeed. In small rural communities such as Buntingford and Royston, there is genuine concern that there is no longer the visible police presence that is needed to maintain law and order.
  Mr. Clappison: My hon. Friend's constituents and mine may be suffering from the same problem—a rising

  95
  tide of antisocial behaviour. They want to see more officers on the streets. They know that the Hertfordshire force is doing its best to provide those officers, but that it suffers from funding constraints and the relativity problem in respect of London. They have problems in recruiting and retaining enough officers. I shall deal with that important point later.
  I am sure that my hon. Friends share my concern and that of other people in Hertfordshire, including my local authority, about the settlement under the Government's new funding arrangements. The problems that we have been describing are hardly likely to be solved by the new arrangements.
  There have been questions about the communications between the Hertfordshire police authority and the Government. The Minister may be able to clear up some of the issues this evening. However, the police authority leaves me in no doubt as to the strength of its concern about the funding settlement. On 6 December, the chairman of the police authority and the chief constable wrote to me about the present settlement. They said:
  "We are sure … that you will share our extreme disappointment and concern at the funding levels announced yesterday … it is transparent that Hertfordshire will need to find at least £5 million from Council Tax just to maintain the current level of policing services."
  On 20 December the same two gentlemen wrote to me again to confirm the analysis of
  "a very difficult funding situation",
  and to point out that council tax payers faced big increases. Since then, we have discovered that Hertfordshire council tax payers face an increase of 21 per cent. in the council tax element for policing simply in order to deliver the same standard of service. They are being asked to pay more to uphold the forces of law and order in Hertfordshire. At the same time, they are suffering from the problems that I have described.
  On 23 January, the leaders of all three parties in Hertsmere borough council wrote to the Home Secretary to express their concerns about the constraints on Hertfordshire police. They acknowledged the work of the Hertfordshire constabulary in seeking to provide an effective service with a limited number of men. I will quote their letter to the Minister to show the Hertsmere point of view on policing and police resources. It said that they wanted to
  "voice the strength of our feelings regarding the inadequate level of policing in our Borough. Our residents tell us that crime and disorder is a priority issue for them. Sadly, there is a widespread lack of confidence in the ability of the police to respond speedily to 999 calls or to provide a sufficient presence on the streets to deter crime and anti-social behaviour."
  Those council group leaders, from the three political parties, are certainly in touch with local opinion in Hertsmere; and it sounds as if they are in touch with local opinion in the rest of Hertfordshire. They are right. Local residents are concerned about crime and a rising tide of antisocial behaviour.
  As the Member of Parliament for Hertsmere, I am besieged by the complaints of constituents in different communities in the constituency. For example, two weeks ago I attended a meeting of concerned residents
  96
  in Farriers way in Boreham Wood, who were addressing the problems of antisocial behaviour caused by youths, as well as responding to a murder inquiry that arose out of the death of a local man in tragic and appalling circumstances. I pay tribute to the courageous and public-spirited way in which local councillors and residents are facing up to such issues in Boreham Wood.
  Three weeks ago, I attended a meeting at a synagogue in Bushy. The meeting was called as result of an incident in Bushy Heath on a Friday night not long before, when a small group of boys who were making their way home from Friday evening prayers were set upon by a much larger group of youths and abused in a very unpleasant way. That incident seems to be part of a pattern of antisocial behaviour in Bushy Heath, with youths roaming around and abusing shopkeepers and members of the public. On one occasion, the local vicar was prompted to call for police assistance after abuse was hurled at his parishioners as they made their way into church.
  Similar stories of antisocial behaviour were ventilated at another public meeting that I attended in a different part of Bushy—the Hertford road area. Again I pay tribute to the members of the public and the councillors of all parties who are trying to tackle such problems. Likewise, in Potters Bar, I have been contacted by members of the public who are worried by crime and antisocial behaviour in different parts of the town. Among other things, they are worried by recent thefts and robberies from shops in the town. I have also met one group of residents who were worried by the prevalence of robberies of individuals and their families in their own homes. I believe that "aggravated burglary" is the correct term. It is a despicable crime when somebody's home is invaded by desperate men and the householder and his family are set upon and their property stolen. It is a serious offence that should be distinguished from the generality of burglaries. It has left a group of my constituents living in some fear.
  My constituents as a whole are deeply concerned by what they perceive to be a serious and growing problem. I hope that the Minister will acknowledge their well-founded concerns and respond to them. One way in which the Government could begin to respond—and my hon. Friends have anticipated this point in their interventions—would be by reconsidering the pay and differentials that make it much easier for the Metropolitan police to recruit than it is for the Hertfordshire force. That point is made by the Hertsmere group leaders in the letter to which I have already referred. I accept that the Government have partly addressed the issue with the introduction two years ago of a new allowance of £2,000 for forces in the south-east. However, the fact remains that Metropolitan police officers still receive an additional £4,000, as well as generous travel concessions. The difference between the forces is significant and it is widely believed to disadvantage Hertfordshire. As the group leaders say in their letter to the Minister:
  "Until something is done to address the marked pay inequality between the two forces, it seems likely that there will always be a high percentage of vacancies in our local force. We would therefore urge you to address this issue as a priority and thus demonstrate your commitment to community safety."
  Mr. Page: I apologise for having to leave: I have to address a meeting in a few short moments over in

  97
  Parliament street. Will my hon. Friend consider the role of the specials? They put in a great number of hours in Hertfordshire. I believe that it is policing on the cheap. but it is a good recruiting source for the police force. Perhaps the Minister, when he responds to my hon. Friend, will tell us what he intends to do to encourage more people to become specials. There are many already in Hertfordshire, but we could encourage more volunteers, and therefore get a cadre from which to strengthen the numbers in our police force.
  Mr. Clappison: My hon. Friend makes an important point and I am sure that the Minister will want to address it. We would all, on behalf of our constituents, want the Government to take a constructive approach towards special constables, who undoubtedly have an important role.
  There is a problem with full-time police officers. I have already explained Hertfordshire's disadvantages when it comes to recruiting officers, but the same issues of pay and conditions create problems in retaining those officers. Hertfordshire constabulary has written to me about a growing concern
  "at the rising number of experienced officers who are leaving the Constabulary—either for the Metropolitan Police Service who are allowed to pay higher allowances or to parts of the country where the cost of housing is cheaper."
  The letter continues:
  "The continued loss of experienced staff is debilitating and compromises our ability to provide the services we want our public to receive".
  Although many excellent people are joining the police force, it is a fact that the proportion of officers who are probationary staff is increasing. That may be a result of the loss of those experienced officers.
  The Hertfordshire force faces serious problems. I believe that the police authority and the constabulary are facing up to those problems, but they need more help than they are receiving at the moment if they are to be successful. They need more support, and I look to the Minister for a constructive response to the problems of law and order that the constabulary faces.
  We know that the inner cities and the great metropolitan areas have problems with law and order, but communities in Hertfordshire and other shire counties have problems as well. In many cases, those problems are getting worse. Leave those problems to fester and our constituents will pay a heavy price. We need the Minister to acknowledge the depth of concern in those communities and to make at least a start in addressing them.
  8.17 pm
  Mr. Oliver Heald: I will say a few words, as we have time available. I start by congratulating my hon. Friend the Member for Hertsmere (Mr. Clappison) on obtaining this Adjournment debate. It could not be more timely, as the effects of the settlement from the Government become known.
  My hon. Friend the Member for South-West Hertfordshire (Mr. Page) mentioned the specials. On Saturday, I was in Royston with the specials, trying to advertise the work that they do as part of "specials week". I pay tribute to the eight officers in Royston and
  98
  district who do such a fantastic job in supporting the regular officers. They enable operations such as the bike marking that I saw on Saturday, and they allow patrols on the streets of Royston, Baldock and Letchworth to take place. Without the specials, it would be a sorry picture. They help to provide a much more visible police presence than would be possible if we were to rely solely on the regular officers.
  In the paper this week, I noticed that the leader of the Labour group on North Hertfordshire district council Councillor David Kearns—was outlining his concerns about antisocial behaviour in the Grange estate in Letchworth. Elsewhere in the constituency—in Royston and Baldock—concerns are regularly expressed to me about antisocial behaviour. Recently, in Buntingford, the deputy manager of the Co-op was assaulted when he refused to serve alcohol to youngsters. His mother attended my surgery on Friday to express how worried she was that a small market town such as Buntingford suffered from such incidents. She expressed concerns about law and order and the behaviour of young people, and made the point that there is not an adequate police presence in our area.
  I have the highest regard for our local constabulary. I have spoken to Chief Superintendent Andy Wright about the incident over the new year in which Mr. Llewellyn was assaulted. The chief superintendent is doing his best, with extra patrols, to try to reinforce the sense of public safety and order in Buntingford. However, such problems are not new: during the past four or five years. I have received regular complaints about the lack of officers in that rural division of Hertfordshire. It is not good enough that we have such vacancy levels, which are not caused by a lack of recruitment; retention is the real problem in Hertfordshire.
  I have made the point to Ministers over and again that, because of the railway or the good transport links that we have with London, officers live in Hertfordshire and work for the Metropolitan police in London. Many officers go over the border into the Met area because of the incentive to do so—the extra £6,000 makes such a difference.
  I should also like to point out that rural areas are often discounted. It is often said that they are very safe and that the area that I am talking about is the safest part of one of the safest counties, but when burglaries occur in remote rural areas, the feeling of vulnerability is extreme for those who live there. They are a long way from help; it is not like the situation in a town, which is bad enough. Burglary is a very serious invasion of privacy, but it is really very worrying in rural areas.
  Mr. Prisk: I am sure that my hon. Friend will be familiar with the village of Hunsden, which is further south in east Hertfordshire, and those who live there share that sense of vulnerability. Every week for the past six months, the parish council has reported to me different incidents, some involving people coming from Harlow. That sense of vulnerability is underscored by the fact that the elderly often suffer the most.
  Mr. Heald: It is particularly sad that elderly people, many of whom have been through the conflicts of the 20th century and survived, should now he worrying,

  99
  in their 80s and 90s, about going out of the door early in the evening. The only way to tackle that is with a combination of the sort of targeted, intelligence-led policing that I am sure the Minister supports. Of course we need that, but we also need an adequate, visible police presence on the streets. The fact is that Hertfordshire is 200 special constables short. I did my bit to try to recruit a few more, but we could do with more. We have often been 200 regular officers short. Although figures are given for the police force's strength, we are always down on those figures because we lose officers at such a rate.
  We in North-East Hertfordshire face another particularly rural problem: illegal hare coursing. Gangs of up 50 men have often come up to the area in the past to gamble on illegal hare coursing, which creates huge public order problems. Policing something like that takes a large number of officers. After a campaign in the early 1990s, it was possible to put much more police effort into tackling illegal hare coursing in the Royston and Buntingford area, and the problem pretty well subsided. However, in the past year or so, there have been about 90 incidents involving illegal hare coursing and it is becoming more of a problem.
  Those policing illegal hare coursing need four-wheel drive vehicles, as well as a considerable number of officers skilled in dealing with what is a difficult public order problem. When working against a background where recruitment and retention is difficult, the officers coming through are still new and learning what they should do, and where resources are thinly stretched because there are not enough officers in the county and because the Government have provided a hopelessly inadequate settlement, it becomes difficult to deal with some of those peculiar rural problems, such as illegal hare coursing.
  I should like to end my speech by saying how much I support my hon. Friend the Member for Hertsmere in raising this issue, by paying tribute to the work of the chief constable, Paul Acres, and the chairman of the police authority, Peter Holland, who is about to retire after many years excellent service in that role and by telling the Minister that it is sometimes necessary, even in a peaceable county like Hertfordshire, to have enough money to do the job properly, and we really did not get what we needed in the latest police settlement.
  8.25 pm
  The Minister for Policing, Crime Reduction and Community Safety (Mr. John Denham): I congratulate the hon. Member for Hertsmere (Mr. Clappison) on securing a debate, not for the first time, on crime and policing issues in his constituency and the other hon. Members who have spoken on taking the opportunity of slightly less pressure on parliamentary time than normal to contribute to the debate. Some very important issues have been raised, and I shall try to address as many of them as possible.
  It is always important in such debates, without any suggestion of complacency, to put the overall crime picture into context. The best measure that we have of crime in this country comes from the British crime survey, which shows that overall levels of crime have
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  fallen by some 27 per cent. since 1997, including significant falls in vehicle crime, burglary and so on. In fact, according to the BCS, the chance of being the victim of crime is at its lowest level since the survey began under the previous Government in the early 1980s.
  Those figures are generally regarded as being more reliable because they do not require individuals to report the crime to the police or, indeed, for the police to have recorded it. Recorded crime figures need to be followed carefully—particularly at police force level, as the BCS has insufficient coverage to give force-by-force data—but we need to be a little cautious about drawing to much from the month-by-month or year-by-year recorded crime figures at force level, not least when forces have been introducing new crime recording standards.
  To say all that is, yes, to undercut the idea that crime is running out of control across the country—there is no evidence that it is. There is rising public concern about certain types of crime, such as street robbery and antisocial behaviour, which the hon. Member for Hertsmere mentioned, and we have worked very hard to get on top of them. Having said all that and put things in context, of course we are committed to continuing our efforts to reduce crime, which must include Hertfordshire, Hertsmere and every other community.
  I am glad that the hon. Member for Hertsmere paid tribute to the Hertfordshire constabulary, and he will have been pleased—as will the chief constable and the members of his force—when we published the police performance monitors for the first time last week. Although they do not cover everything, they give a rounded assessment of police performance. Hertfordshire was compared, as it should be, with the most similar police forces: Suffolk, Sussex, Thames Valley, Kent and Avon and Somerset, all of which contain a mixture of urban areas, deprived community problems and rural communities that may have both prosperous and deprived areas. Hertfordshire did very well in comparison with its most similar forces. It had higher levels of crime detection and offenders brought to justice and lower levels of crimes such as robbery, vehicle crime and burglary, as well as somewhat higher levels of citizen satisfaction with the police. I therefore think that it is worth building on what the hon. Gentleman said to congratulate Hertfordshire on what it has done. Some specific issues remain, however, with which we need to deal.
  First, in relation to the overall picture on resources, the casual listener to the debate might have got the impression that the Government had set out to starve the police service in England and Wales of resources. The reality is that, in the past three years, including the new financial year, the overall funding increases for the police service have been 6.2 per cent., 7 per cent, and 10 per cent. The increase in cash terms in funding over the spending review period will be 16 per cent. That is why, across the country as whole, we have record numbers of police officers, and we have a target to reach 132,500 in 2004. There are particular issues in Hertfordshire, to which I shall refer, but that is clearly evidence that the investment that we have been making in the police service is making a direct difference in police numbers.

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  The hon. Gentleman is right that examining the pattern in Hertfordshire over recent years is made more complex by the fact that his constituency used to be covered by the Metropolitan police service and others, it was transferred into Hertfordshire, and a secondment took place of officers from the Metropolitan police to Hertfordshire, many of whom have now made their way back to the Met. I entirely accept that, but let me say two things. First, Hertfordshire has not been immune from the benefits of the increased Government investment in the police service over the past couple of years, in which numbers have been rising. Hertfordshire has a particularly impressive record on recruitment—I shall refer to retention in a moment. In the April-December period 2002, 223 officers were recruited, and the force plans to recruit another 60 officers in the January-March period this year. That would give recruitment figures for 2002–03, if achieved, of 283, compared with 183 officers recruited in 2001–02. That is a significant achievement by the Hertfordshire police force.
  I understand that Hertsmere is now part of the central area basic command unit in Hertfordshire. On 31 March 2002, the basic command unit had 481 officers. That represents an increase of 61 in comparison with the number deployed on 1 July 2001 in the three divisions that now form the central BCU. The hon. Gentleman quoted figures that were possibly slightly more localised than those that I have just quoted. We can probably sort out the matter in correspondence afterwards—I do not have the figures that he quoted. My point, however, is that the number of officers available to serve his part of Hertfordshire has increased over that period.
  Mr. Clappison: I am listening carefully to the Minister's points. I will have to examine figures for the central division, but the figures that I gave were for Hertsmere and were supplied to me by the Hertfordshire constabulary. The Minister referred a moment ago to rising police numbers in Hertfordshire as a whole. The figures that I quoted in debate came from a written answer that he gave to me, which showed that police strength had fallen in Hertfordshire from 1,954 on 31 January 2001 to 1,825 in March 2002. I gave some further figures showing that there had been a slight increase since then but, even taking account of the increase to which I referred, the figure is still lower than it was two years ago.
  Mr. Denham: As the hon. Gentleman said—I do not want to mislead him on this matter—there has been an upturn in those numbers. I am happy to accept that because of the boundary changes, the secondment of officers, their return to the Metropolitan police and so on, the benefit of the overall increase in police numbers has come later in the day and is showing up much later in the figures than has been the case in other parts of the country, many of whose police forces can track increased numbers over a three-year period and have achieved record numbers within the past year or so.
  Mr. Clappison: I was very careful in my remarks to take account of the changes in secondment. My figures were on a like-for-like basis since the transfer took place. On that basis, there are fewer police officers in Hertfordshire today than there were two years ago.
  Mr. Denham: I do not think that we disagree about that. It is primarily the return of seconded police officers
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  to the Metropolitan police service that gives Hertfordshire a lower base from which to start. Any increase in numbers now builds on that.
  Mr. Heald: Of course, we receive regular updates from the chief constable and the chairman of the police authority. They say to us, "Yes, we've done much better on recruitment, but, sadly, it hasn't made any difference because we've lost so many officers on the retention side of the equation." That is the problem about which we are all very concerned.
  Mr. Denham: Indeed, that is the problem to which I now wish to turn. The debate has covered the difficulties in retaining officers which Hertfordshire undoubtedly faces. Recruitment has been quite impressive, particularly for a force of that size.
  The Met offers a higher salary. A few years ago, the situation was reversed. The Met was finding it extremely difficult to recruit and retain officers. It is important to sustain numbers in the capital, not least because one of the areas of growth in London is in the strength of the counter-terrorism service, which, as hon. Members know, the Met effectively provides to the country as a whole. The solution is not as simple as removing the differential; we have to tackle the problem from a number of different directions.
  As hon. Members have acknowledged, there is an additional allowance for officers in the forces immediately outside London who are not in receipt of the housing allowance. Hertfordshire gets the higher of those allowances, which is £2,000. In my area of Hampshire, the allowance is £1,000. We already have 1,112 places on the starter home initiative in the south-east. We are discussing a number of options with forces just outside London, including Hertfordshire. Peter Holland, the chairman of the police authority, who was mentioned earlier, and Paul Acres, the chief constable, have taken part in meetings with me about that issue.
  We are considering ways in which the Government can put their weight behind attempts to secure better transport deals, although we are advised by the forces that those need to be localised. We are looking to introduce special priority payments, which will be worth 1 per cent. of the pay bill this year, rising to 2 per cent, in a couple of years. Those will work with forces in two ways. First, they will make sure that there is no competitive bidding between London and the south-east forces, and secondly, they will try to achieve the maximum effect on retention. We are considering whether we can give greater assistance with housing, building on what we have done in the past. I hope that on at least one of those initiatives I will be able to make an announcement in the very near future that will be of benefit to forces in the south-east.
  We are considering also whether we can make recruitment from the south-east to other parts of the country less attractive. It would be wrong to think that all movement is from outer London forces into the Metropolitan police service area. There is clearly some movement from the south-east to other parts of the country.
  Mr. Prisk: May I impress upon the Minister the fact that many officers tell me that what concerns them is

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  cash in hand? The remaining £4,000 gap between the Metropolitan force and the Hertfordshire force is of concern, and many officers in my constituency find that they are policing Metropolitan officers who live in the area when Hertfordshire officers cannot afford to do so. Police officers are looking for cash, and another £2,000 may close the gap without causing the problems in the Metropolitan force to which the Minister refers.
  Mr. Denham: I always listen with interest to Conservative Members. I recall that when the Conservatives were in power, police numbers were falling and there were huge problems in the Met because most of the current allowances and the transport assistance did not exist, and nor did the current regional allowances. I should be interested to know whether the Conservatives are saying that they would simply pay extra allowances.
  Even if money and total resources were not an issue, simply closing the differential, with the possible effect of moving the cliff edge further from London or creating a crisis in the Metropolitan police service, is not the best way to address the issue. However, one obviously understands why officers say what they do. We are tackling a range of pay, housing and other issues with the south-east forces to see how we can maximise the impact on retention, and I believe that we can make worthwhile moves this year.
  I am grateful for the comments made by the hon. Members for South-West Hertfordshire (Mr. Page) and for North-East Hertfordshire (Mr. Heald) about national specials weekend. I wrote to all right hon. and hon. Members about that, and I know that the hon. Gentleman took part in promoting that weekend, as did my hon. Friend the Member for Watford (Claire Ward). I took part in a promotion for the specials in Hampshire. We can do much over the next couple of years to promote the special constabulary as a key component of the policing service and a complement to full-time professional police officers. Numbers have suffered in the past two or three years, ironically partly because of the rapid expansion of police service recruitment. A significant number of specials who joined as a precursor to taking up a full-time career in the police service have moved across. We need to rebuild those numbers.
  On Hertfordshire's funding, I mentioned the headline level of police funding, which will increase by 6.2 per cent. going into the next financial year. The police grant is somewhat below that figure and Hertfordshire's share of the increase is 3 per cent., which is below the average of 4.3 per cent. We operate a funding formula that was developed under the last Government and from which we phased out the establishment figure. It is based largely on policing activity. In our review of funding formula, we did not introduce the option of a
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  deprivation component, as Hertfordshire police authority urged us not to do. We have ensured that forces like Hertfordshire are protected by having a floor on the level of increase received by any particular authority. Importantly, the money received through the police grant is only part of the resources available to the police authority. In Hertfordshire's case, the police authority will receive up to £3.14 million next year from the crime fighting fund, which is over and above the 3 per cent. increase. That money goes directly on the costs of recruiting, paying and retaining police officers and translates into a direct level of service to the people of Hertfordshire.
  The police authority will also receive £290,000 to help it move ahead with the implementation of the Airwave radio communication system. That is a significant investment in more modern and effective communications technology. Hertfordshire will receive just over £500,000 from the basic command unit fund, which will strengthen the ability of BCU commanders to work with local authorities on the implementation of crime reduction strategies. The force will also receive £1.74 million in capital funding. Those sums do not include additional funding for the DNA programme, the money made available for special priority payments or any money that Hertfordshire might get this coming year from the premises improvement fund, from which it received £1 million last year. It is important to stress that the grant to Hertfordshire is not just the money covered by the 3 per cent. increase in funding.
  Mr. Prisk: Those sums are obviously welcome, but council tax payers know that they have to pay 21 per cent, more to get the same service. Does the Minister understand their frustration?
  Mr. Denham: It is the hon. Gentleman's judgment that the service will remain unchanged. I hope that police numbers will increase and there may well be investment in other aspects of the service. It is ultimately the decision of the police authority what precept they wish to levy after consulting local people. The reality is that the increases received by the police service over the past three years compare well with levels historically. That is why the police service as a whole has a record number of officers and why the number continues to improve.
  I have put the debate in the context of overall crime figures, which have decreased in the past few years. None of us is complacent, however, especially about particular crimes. Hertfordshire police force has a good performance record compared with similar forces, but there are issues about its history, the transfer of officers back to the Met and retention. We have acknowledged those and are working with the force in the hope that we can assist it to deal with those in the coming year.
  Question put and agreed to.
  Adjourned accordingly at sixteen minutes to Nine o'clock.