Commons Sitting of 10 February 2004

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

    Whisky Industry
    Mr. Brian H. Donohoe: What progress is being made on introducing strip stamps in the Scotch whisky industry. [152887]
    The Secretary of State for Scotland (Mr. Alistair Darling): I met representatives of the Scotch Whisky Association last week to discuss this issue, and general consultation with the spirits industry is, of course, continuing. My hon. Friend the Economic Secretary to the Treasury is due to meet the association on 23 February to discuss the issue further.
    Mr. Donohoe: I thank my right hon. Friend for that answer, and I am pleased that he is taking such a close interest in this important subject. The Scotch whisky industry has been looking for some time at alternatives to the stamp duty and strip stamps. If it comes up with a successful solution, will he make representations to the Chancellor, so that we can ditch that proposal once and for all and allow the Scotch whisky industry to get on with its main business, which is, of course, to sell whisky both here at home and abroad?
    Mr. Darling: My hon. Friend is right: the industry is of huge importance to Scotland—and, of course, to the whole of the United Kingdom. As my right hon. Friend the Chancellor made clear at the time of the pre-Budget report, his concern is about the growing amount of fraud. Customs and Excise and the Scotch Whisky Association put different monetary values on that fraud, but both agree that there is a problem, and it needs to be sorted out. The Chancellor has said that unless something else is done, he intends to go ahead with the strip stamps. However, he has made it clear that it is up to the industry to talk to Customs and Excise with a view to finding some other way to deal with what is undoubtedly a growing problem. I am sure that the whole House would agree that, faced with a growing amount of fraud, it is necessary to take action, but of course, that action must be consistent with ensuring that
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    we do everything we can to help the industry, which is why we have frozen whisky duty for the past six Budgets.
    Angus Robertson: Why should the Scotch whisky industry have to foot the bill to crack down on crooks? Surely Customs and Excise should be doing that more effectively. Why is a proposal being made for new systems, new overheads, new costs and new regulations, all to be borne by the Scotch whisky industry, when every bottle of whisky is already clearly marked with a lot number, which would help in the fight, which everyone supports, against fraud?
    Mr. Darling: Bottles may be marked, but there is still a problem with fraud, as representatives of the industry admitted when I met them last week. Whisky is going missing when it is shipped out of warehouses. We have made it clear—I have just done so again—that the industry and the Government need to talk together to consider alternatives. As for the hon. Gentleman's first point, it has always been the case in the Scotch whisky industry—and, indeed, in many other industries—that responsibility for security rests jointly with the industry and Customs and Excise. The Scotch whisky industry already has considerable security measures in force to ensure that whisky is kept safe and accounted for, and the vast bulk of it is—but there is a problem with fraud, and the industry and Customs and Excise need to work together to find out how we can sort it out.
    Mr. John McFall: The Economic Secretary will visit Scotland on 23 February at my invitation, in my capacity as the chairman of the all-party Scotch whisky group, and he will start at Allied Distillers in my constituency. I recognise that fraud is a problem, and I am trying to persuade the industry and the Government to take a consensual approach to achieve a satisfactory outcome, but will the Secretary of State ensure that he makes his colleagues aware that this is a £2 billion manufacturing industry, and any solution that is reached should not damage its competitiveness and productivity?
    Mr. Darling: My hon. Friend can rest assured that the Government, and the Chancellor in particular, are well aware of the importance of that industry. Indeed, it is not possible to live in Scotland without being aware of its importance. Of course my hon. Friend is right to suggest that it is in the interests of the industry as well as the general taxpayer—who, after all, will have to foot the loss unless something is done about it—that both the Government and the industry work together to ensure that the problem is dealt with. What is encouraging so far is that the industry is showing a willingness to talk to the Government and discuss with Customs and Excise measures that might help, but as my right hon. Friend the Chancellor has said, the Government cannot ignore a situation in which a very large amount of money is being lost in fraud, and we have to do everything we possibly can to stop that happening.
    Mr. Peter Duncan: The Secretary of State asks the industry to engage with Customs and Excise. Is he aware that one major distiller in Scotland has offered to audit-trail

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    random purchases from the high street to trace fraud? Why has it not received a single phone call from Customs and Excise about that? How can he condone such complacency, when one in 50 jobs in Scotland are at risk?
    Mr. Darling: When I met the industry and the people from the Scotch Whisky Association last week—the association represents the whole industry in Scotland—they said that they had been working on several measures, including audit measures, which they had been discussing with Customs and Excise. It is not true to say that Customs and Excise has not been engaging with the association—the association readily agrees that that is happening. If the hon. Gentleman thinks that something specific could be done that he would care to let me know about, I shall make sure that Customs and Excise sees it. However, it is important for all of us in the House to recognise that there is a significant revenue loss at the moment—the exact monetary value might be a matter of dispute—that is rising and needs to be dealt with. The question is: what is the best way of dealing with that revenue loss?

    Pension Credit
    John Barrett: How many pensioner households in Scotland are in receipt of pension credit. [152888]
    The Parliamentary Under-Secretary of State for Scotland (Mrs. Anne McGuire): As at 31 January, there were 229,000 pensioner households in Scotland, comprising approximately 271,000 individuals, receiving pension credit. The latest monthly pension credit progress report, including numbers of recipient households in each parliamentary constituency in Great Britain, was published yesterday.
    John Barrett: I thank the Under-Secretary for that answer. Does she agree, however, that the increase in the uptake of pension credit over the past month was only 1.4 per cent., and that at that rate of increase it would take another 30 years before everyone who was entitled to pension credit received it? What are the Government prepared to do to remedy that situation? Does she agree that the answer is to reduce the number of means-tested benefits and raise the basic state pension?
    Mrs. McGuire: The answer to all those questions is no. The actual fact about the current situation is that more than 4.1 million pensioner households have been written to about pension credit. I am sure that the hon. Gentleman welcomes the fact that, in his constituency, 2,065 households, comprising 2,424 individuals, now receive an additional £40.43 a week. I ask him to have a conversation with his colleagues the hon. Members for West Aberdeenshire and Kincardine (Sir Robert Smith) and for Gordon (Malcolm Bruce), because in the Mearns Leader, which I am sure is well read in Edinburgh, the hon. Member for Gordon said:
    "I am delighted to see Aberdeenshire pensioners gaining significantly by the introduction of the new Pension Credit."
    The hon. Member for Edinburgh, West (John Barrett) should have that conversation as soon as possible, before he makes any other misguided comments.
    Anne Picking: I am sure that my hon. Friend is aware that, although the good news story of pension credit is just that, another good news story is that only one third of pensioners in the UK actually pay tax. Is that equation reflected in Scotland?
    Mrs. McGuire: I think that I missed the last part of my hon. Friend's question, but I assume that she was talking about the numbers in Scotland. The number of pensioners in Scotland not paying tax will be pro rata to the number in the rest of the United Kingdom. What I do not want to lose sight of is the core of my hon. Friend's comments: we have reduced the tax burden on pensioners so that only about one third of pensioners in the United Kingdom now pay tax.
    Mr. Peter Duncan: Is the Under-Secretary aware that less than 0.25 per cent. of pension credit is currently paid into Post Office card accounts? Does she think that that is too much or not enough?
    Mrs. McGuire: I thought that the Conservative party had spent its whole history building on the idea that people ought to have choice. We cannot—I am sure that the hon. Gentleman is not suggesting this—force pensioners to collect their pensions in whatever way suits us. We have offered pensioners a plethora of initiatives, including support for the Post Office cards, to give them the choice of how they want to collect their pensions every week, and I would have thought that he would see fit to support that.
    Mr. Duncan: The Under-Secretary is right to say that I am very much in favour of choice, but it must be free and fair choice. I am sure that she is aware of constituents of hers who have tried to get their pension credit paid into a Post Office card account, and she will know how difficult that process is. According to the Government's own figures, 140,000 eligible pensioner households in Scotland will not claim the credit. Does she accept my view that they are likely to be the most disadvantaged and the most in need? Is she proud of that statistic?
    Mrs. McGuire: I suggest that the hon. Gentleman leave me to look after my constituents, rather than try to tell me what is best for them. We have widened the choice of ways in which pensions can be collected. One reason for moving from the approach of having books stamped weekly at the post office is that it was open to fraud and theft. Up to 100 pension books per week were stolen. The hon. Gentleman has no credibility on pension credit, because his party is against it.
    Mr. Michael Connarty: I applaud the Government's initiative on pension credit, from which 2,700 families in my constituency—more than 3,300 individuals—are gaining. However, I have found out over the past few weeks that some pensioners do not know that they can claim pension credit. They claim other benefits, and in the middle of it all, forget about claiming pension credit. Will my hon. Friend urge all pensioners and their families to telephone 0800 991234, to get immediate access to pension credit?
    Mrs. McGuire: I am sure that the Pension Service will be grateful to my hon. Friend for highlighting the helpline number. We must make sure that all pensioners have the information they require, and we applaud the Pension Service for making a commitment to contact every pensioner. Sometimes that work is not helped by the denigrating and negative comments that are made by Opposition Members for their own political motives, and certainly not to benefit pensioners.

    Transport Plan
    Gregory Barker: When he last discussed the 10-year transport plan with the First Minister. [152889]
    The Secretary of State for Scotland (Mr. Alistair Darling): I have regular meetings and discussions with the First Minister about a range of matters, including transport.
    Gregory Barker: We are almost one third of the way through the 10-year transport plan. Is it on track? Are trains now one third more reliable? Are road journeys one third better? Can we take any comfort that the plan is going where it should go?
    Mr. Darling: I will help the hon. Gentleman by giving examples that may assist him in relation to his own constituency—
    Hon. Members: This is about Scotland.
    Mr. Speaker: Order. Hon. Members should not tell the Secretary of State for Scotland how to answer a question. I think that he knows how to conduct himself. [Interruption.] Order. I will decide whether or not the right hon. Gentleman is out of order.
    Mr. Darling: Yes, the 10-year plan is on track. For example, we are spending more than £1 billion on upgrading the power supply to trains running south of the River Thames, and we have increased the amount of money going to local authorities. The hon. Gentleman's own local authority has seen a dramatic increase in money. As he is now interested in Scotland, which is a good thing, I can tell him that the Scottish Executive will be spending about £1 billion a year on transport—something they have never done before. The big difference between now and the past is that the Government are committed to sustained investment in the transport system. The problem has been that for decades, not enough money was put into transport. The hon. Gentleman may like to tell his constituents—and his party will no doubt tell this to people in Scotland— that Conservatives oppose every penny spent on transport. They have voted against such expenditure whenever they have had the opportunity.
    Mr. Frank Roy: My right hon. Friend will agree that shipping is vital to the transport sector in Scotland. Will he join me in congratulating the management and workers of the Wishaw firm that next week will charter a ship to transport 2,500 tonnes of steel that will be used in
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    building the grandstand for a racing track in Dubai? Will he do all that he can to encourage exports by companies such as Bone Steel?
    Mr. Darling: I agree with my hon. Friend that shipping is of great importance in exporting products such as the construction materials from Bone Steel that will be used in building the Formula 1 track in Dubai. I take this excellent opportunity to congratulate a Scottish firm on winning that contract and showing that Scottish engineering is respected throughout the world—and it is good, too, that our shipping is being used to transport it.
    John Thurso: Does the Secretary of State agree, particularly in respect of rail, that the 10-year plan has been superseded by his statement of 19 January, when he said that the Government would consider devolving more responsibility to the Scottish Executive? Does he agree that effective devolution of responsibility is possible only if the money to implement the decision is also devolved? Can he assure the House that responsibility will not be devolved without the required financial means being devolved too?
    Mr. Darling: The 10-year plan is an investment plan, and sets out sums of money, from both the public and the private sector, to be invested in the railways and other forms of transport, year by year in the whole of the United Kingdom. On 19 January, I said that we were looking at the organisation of the railways, and that one thing we wanted to consider was the devolution of decisions on rail spending. Obviously, we cannot have a railway if we do not spend the money, but at this stage I am not in a position to tell the House when our final decisions will be made. However, I fully understand the point that the hon. Gentleman is making.
    Mr. Malcolm Savidge: Has my right hon. Friend had discussions on the economic and environmental importance of fast long-distance trains, particularly on the Aberdeen-London route, for both freight and passenger transport? In the latter case, would he impress on the First Minister the fact that improving the track through Fife deserves higher priority?
    Mr. Darling: I agree that it is important that we have a fast and reliable train service from Aberdeen and Edinburgh down to London. I think that everyone in the House knows that the track through Fife has been a matter of concern ever since it was built. It is a difficult line, and it is something that the Scottish Executive and Network Rail, which owns the line, will want to consider. The priority for Virgin, GNER and ScotRail is to drive up reliability. If we get reliable train services, more people will use them.
    Mr. Alex Salmond: While the Secretary of State for Transport is seeking to devolve more responsibility to the Scottish Executive, is Network Rail not transferring control of route planning from Glasgow to Leeds? Is there not an inherent

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    contradiction between those two developments, and will the Secretary of State for Scotland use his good offices with the Secretary of State for Transport to resolve it?
    Mr. Darling: Only a nationalist could get steamed up about the fact that the four people involved in that planning are working out of a Leeds office instead of a Glasgow office. I know that the hon. Gentleman is a betting man, and I am willing to bet him that most people in Scotland did not know that four people in Glasgow were involved in route utilisation studies. For goodness' sake, the important thing is that we have a coherent network so that train services are reliable. That requires money and management, both of which the Government have continued to provide, instead of the petty squabbling that typifies much nationalist thinking.

    Crown Office
    Mr. Tam Dalyell: On how many issues he has consulted the Crown Office since 1 January. [152890]
    The Secretary of State for Scotland (Mr. Alistair Darling): I met the Lord Advocate just before Christmas and discussed a number of issues with him.
    Mr. Dalyell: Since the Crown Office is the lead Department on Lockerbie, would my right hon. Friend ask it what it is doing to follow up the $10 million paid on the 23 and 24 December 1988 to the Popular Front for the Liberation of Palestine general command?
    Mr. Darling: My hon. Friend has raised that matter on a number of occasions, both in questions and in an Adjournment debate. He raised it with the previous Government in 1995. As he knows, the prosecution and investigation of crimes in Scotland are entirely a matter for the Lord Advocate, but I undertake to pass his concerns on to the Lord Advocate, the Crown Office and the Foreign Office.

    Salmon Farming
    Mr. Alistair Carmichael: When he last met Scottish Executive Ministers to discuss the Scottish salmon farming industry. [152891]
    The Parliamentary Under-Secretary of State for Scotland (Mrs. Anne McGuire): My right hon. Friend and I regularly meet Scottish Executive ministers to discuss matters of common interest. He and I keep in close touch with developments affecting the Scottish salmon farming industry.
    Mr. Carmichael: May I remind the Minister that salmon farming was worth £110 million to the Shetland economy last year? It was estimated by the Shetland Salmon Farmers Association yesterday that, if the anticipated 50 per cent. drop takes place next year, some 410 jobs in Shetland will be under direct threat as a result. I remind the Minister that the Secretary of State for Scotland retains an executive power under the Crown Estate Act 1961 to direct the Crown Estate Commissioners. I urge her to consider exercising that power to allow a rent holiday for salmon farmers in
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    Shetland and other affected communities. The rents paid to the Crown Estate Commissioners are not crucial in themselves, but could help with cash-flow difficulties.
    Mrs. McGuire: I know that the hon. Gentleman has a great interest in developments because of his constituency interests—Shetland has the highest concentration of salmon farms anywhere in Scotland. Last year, the Crown Estate introduced a rate cut of some 10 per cent. for salmon farming. However, I will relay the hon. Gentleman's comments to the Crown Estate through my right hon. Friend the Secretary of State. I ask the hon. Gentleman to welcome the fact that the Government have submitted an application to the European Commission for temporary measures to safeguard the salmon farming industry against the importing of salmon from non-EU countries. I hope that that will prove to be one of the ways in which we can build up protection around a high-quality salmon farming industry.
    Mr. Calum MacDonald: Will my hon. Friend confirm that this is, I think, the first time the Government have ever asked for safeguard measures for any product or industry? Is that not a very positive sign of the importance that the Government attach to the salmon farming industry in Scotland?
    Mrs. McGuire: My hon. Friend clearly identifies the fact that this is an unusual measure for any Government to take. The Department of Trade and Industry, working closely with the Scottish Executive, was keen to take it, to ensure that we protect our salmon farming industry. I know that there is concern in my hon. Friend's constituency about dumping from non-EU countries undermining the quality of the product in Scotland.

  The Advocate-General was asked—
  ADVOCATE-GENERAL

    International Law
    Mr. Tam Dalyell: What issues of international law have been raised with her since 13 January. [152902]
    The Advocate-General for Scotland (Dr. Lynda Clark): No devolution issues of that nature have been raised. In relation to non-devolution issues, I am sure that my hon. Friend will be well aware of the long-standing convention in relation to Law Officers' advice that has been adhered to by successive Governments. I remind him that the purpose of that convention is to enable the Government to get the legal advice that they need to perform their functions without having to explain or to justify it, or to reveal that they may have concerns about a particular legal position.
    Mr. Dalyell: Will my hon. and learned Friend show her QC curiosity in relation to the inquiries that the Scottish Secretary is to make into the payment to the Popular Front for the Liberation of Palestine general command on 23 December 1988?
    The Advocate-General: I do not think that my hon. Friend fully understands my ministerial remit, but I shall certainly pass his comments on.

    Devolution
    Miss Anne McIntosh: What devolution issues she has considered since 13 January. [152903]
    Mr. Alistair Carmichael: What devolution issues have been raised with her since 13 January. [152904]
    Annabelle Ewing: What devolution issues have been raised with her since 13 January. [152905]
    Mr. Alan Reid: What devolution issues she has considered since 13 January. [152906]
    Ann McKechin: What devolution issues she has considered since 13 January. [152907]
    The Advocate-General: Since 13 January, 51 devolution issues have been intimated to me, all of which were in the criminal arena and concerned matters such as pre-trial delay, failure to communicate information required by sea fishing measures, and the use of sexual history evidence in trials. I am happy to elaborate on those matters if hon. Members wish.
    Miss McIntosh: I am most grateful to the hon. and learned Lady, particularly following our illuminating half-hour Adjournment debate last week, which was most positive. Will she comment on the situation that will arise after the enactment of the Traffic Management Bill, which will apply in England but not in Scotland? In particular, has she or her office given any thought to the difficulty of prosecuting for road traffic accidents in which cannabis use has been a causal factor
    The Advocate-General: Prosecutions and prosecution policy are entirely matters for the Lord Advocate. I am sure that he has considered that issue, and it is not for me to advise him.
    Mr. Carmichael: Today's report by the Constitutional Affairs Committee states at paragraph 39:
    "The jurisdiction of the Supreme Court over Scottish appeals and any changes will require legislation or a resolution of the Scottish Parliament."
    Does the Advocate-General agree with that assessment? Can she tell the House that she will ensure that it is implemented, and explain why that has not already been done?
    The Advocate-General: The short answer is that we do not have a Bill yet. My functions in relation to Scottish Parliament legislation do not kick in under section 33 of the Scotland Act 1998 Until Bills are available We are awaiting a United Kingdom Bill, and there is no Scottish Parliament legislation for me to examine.
    Annabelle Ewing: During last week's Adjournment debate, which some would describe as less than enlightening, and in which I was fortunate to
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    participate, I asked the Advocate-General a question to which I did not get an answer. I should therefore like to ask it again today. Is the hon. and learned Lady constitutionally required to put the interests of the United Kingdom Government before those of the Scottish Parliament?
    The Advocate-General: One of the reasons why I could not finish all the points that I wished to make in the interesting Adjournment debate that the hon. Member for Vale of York (Miss McIntosh) instigated was that I took too many interventions, including those from the hon. Member for Perth (Annabelle Ewing). I did reply to her question during the debate, but I do not think that she liked the answer. I must make it plain that I am a UK Law Officer and I obviously get instructions, which I consider, from UK Departments. However, my job is to give the best advice that I can about the law. It therefore does not matter whether I am advising the UK Government or anybody else: I always try to give the best advice I can.
    Mr. Reid: Customs and Excise is a UK department, whereas the Scottish courts are devolved. Customs and Excise claims that 200,000 bottles of spirits are sold illegally every day, yet in two years there were only five prosecutions for spirit duty fraud in the Scottish courts. As the Government's legal adviser in Scotland, can the Advocate-General shed any light on the reason why there are so few prosecutions when so much fraud is alleged?
    The Advocate-General: In the devolution settlement, all prosecutions—whether involving UK Departments or devolved matters—are devolved to the Lord Advocate. Prosecution policy is entirely a matter for him, and it is not for me to interfere with that.
    Ann McKechin: Does my hon. and learned Friend agree that, notwithstanding the concerns that the Select Committee on Constitutional Affairs raised today, the proposal for a supreme court is not a threat to the traditions and values of Scots law, and that it should be viewed as part of the process of evolution?
    The Advocate-General: My hon. Friend sums up the matter well. Scots law has survived for many centuries through developing. The institutions, too, develop, and the proposal is one example of that.

  CONSTITUTIONAL AFFAIRS
  The Parliamentary Under-Secretary was asked—
  CONSTITUTIONAL AFFAIRS

    Lord Chancellor
    Ann Winterton: If he will make a statement on the future role of the Lord Chancellor. [153651]
    The Parliamentary Under-Secretary of State for Constitutional Affairs (Mr. Christopher Leslie): To reform the justice system and enhance judicial independence. the Government have concluded that it is no longer tenable for a Cabinet Minister to head the

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    judiciary and chair the second Chamber. The Government will therefore introduce legislation to abolish the office of Lord Chancellor in this Session of Parliament.
    Ann Winterton: Why are the Government hellbent on meddling with our unwritten constitution and abolishing the office of Lord Chancellor, which has maintained judicial independence and in which our constituents have confidence? After all, if it ain't broke, don't fix it.
    Mr. Leslie: That is the right thing to do, and I shall explain why. It is right not only because we need more clarity and transparency than the current blurred arrangement between the different branches of our constitution provides, but, more importantly, because we need a more effective Parliament, judiciary and Executive to ensure that each branch can focus on its core functions. We now have a ridiculous position whereby the head of the judiciary is a politician who also chairs the second Chamber, and the Prime Minister chooses who should chair the House of Lords. The changes are overdue, and I am glad that we can make them.
    Keith Vaz: The Under-Secretary is aware that the Select Committee on Constitutional Affairs has today published our report on the reforms. Although there is support for modernisation of the judicial system, there is also concern that the pace is too fast and that mistakes will be made. Will he assure hon. Members that the post of Lord Chancellor will not be abolished until all the other elements of the modernisation process have been put in place and seen to work?
    Mr. Leslie: I welcome the report of the Select Committee, which looked in great detail at some of our proposals. The constitutional reform Bill will make it plain that all those different aspects are interrelated and that the reform programme has been well thought through. Of course I understand the need for widespread consultation, and the consultation documents were issued last July, so we have had a considerable period in which to consider them. However, I do not see any particular outstanding reason why we should have a further, prolonged period of debate before introducing the legislation so that the House can consider it line by line and in detail, in the proper scrutiny process that is needed.
    Mr. A. J. Beith: Bearing it in mind that the Lord Chancellor will have to remain in office until certain of these processes are complete, can the Minister give us an approximate date—or even a year—by which he expects the supreme court to be sitting in its own building and the judicial appointments commission to be appointing judges?
    Mr. Leslie: That is a simple question but, obviously, the answer depends not only on the date of Royal Assent for the legislation but on when we identify the future building for the supreme court. Both matters depend on various factors, some of which are commercial—in regard to whether we refurbish a building or build a new one—while others are connected to the passage of
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    legislation through Parliament. However, I anticipate that we should be able to make progress in the next couple of years and see such matters settled in good time.
    David Winnick: Is my hon. Friend aware that, far from criticising the plans that have been announced, we need to take further radical steps, here and in the other place? We must bring ourselves up to date. Parliament ensures the civil liberties of all our citizens, but that is no reason to worship what has occurred over centuries. Modernisation is essential.
    Mr. Leslie: My hon. Friend is right, and implicitly highlights the obvious conservatism of the Opposition, who have opposed themselves to any change, no matter how obvious and rudimentary it appears to the rest of the country. They think that Westminster is happy with the current arrangement, that the establishment is content with it, and therefore that no change is necessary. However, we believe that we must make sure that our constitution has clarity and transparency, so that it can be understood by the wider public. We must also ensure that we have a justice system that serves the public's needs.
    Mr. Nick Hawkins: Does the Minister recognise that the Government are indulging in dangerous constitutional tinkering, and that they have caused great anger through such proposals as the idea of calling the presiding officer of the other place the Lord Speaker? That move would be dangerous and confusing. Have not the Government in recent days accepted not one or two, but 12 Opposition amendments in another place to replace the title of Secretary of State for Constitutional Affairs with the original title of Lord Chancellor in the Domestic Violence, Crime and Victims Bill? The Government are really in a terrible mess. Would it not be better to keep the historical role of the Lord Chancellor, which works?
    Mr. Leslie: I take that as a commitment that the Conservatives will put it in their manifesto that they will repeal any changes and reinstitute the office of Lord Chancellor. Is that what the hon. Gentleman is saying? I can hear no response whatever from him—
    Mr. Speaker: Order. I say to the Minister that no response is necessary. The Minister is there to answer a question.
    Mr. Leslie: It is important that we do answer that question. There are several important issues involved, including whether the second Chamber chooses a different title for the person who presides over its business, but that is a matter for the second Chamber itself to debate. We will be careful to make opportunities to listen to what it says on that. The fact that there have been a number of amendments to a Bill in the other place is almost irrelevant, given that we will have the constitutional reform Bill, which will make all the necessary changes to previous legislation when it is passed. The principles are clear, which is what the hon. Gentleman refuses to address.
    David Taylor: I congratulate my hon. Friend on a rare ministerial victory over Jeremy Paxman last night on this issue. He performed superbly. Does my hon. Friend agree with the Lord Chief Justice that there could be a threat to judicial independence because future judges whose decisions offend Governments might be disciplined, moved to other work or denied promotion? Should there not be legislation to protect their independence?
    Mr. Leslie: Following extensive discussions with the Lord Chief Justice about the constitutional reform Bill, I am pleased to say that he has mentioned in a speech to the other place that he agrees with the process of changes now in train. For that reason, we shall put into the Bill provisions to ensure that the Secretary of State has a duty to uphold and maintain judicial independence, and that the Government as a whole have to respect that independence. Those are positive steps forward, and I know that my hon. Friend will welcome them.
    Mr. John Burnett: If the office of Lord Chancellor is abolished, does the Minister believe that there should be an objective voice in Cabinet at all times to safeguard the interests of justice? Does he also believe that that role should be undertaken by the Attorney-General, who would then have to attend not selected Cabinet meetings but all of them? Does the Minister then believe that the Attorney-General should be a voting or non-voting member of the Cabinet?
    Mr. Leslie: Thankfully, the composition of the Cabinet is a matter not for me but for the Prime Minister. The hon. Gentleman asks who should have the role of defending judicial independence. I believe that it should be the Secretary of State for Constitutional Affairs. That is our proposal, and we shall put it into the Bill. I hope that that will go some way towards satisfying the hon. Gentleman.

    Citizens Advice Bureaux
    Huw Irranca-Davies: What assessment he has made of the work of citizens advice bureaux in relation to legal advice provided to members of the public. [153652]
    The Parliamentary Under-Secretary of State for Constitutional Affairs (Mr. David Lammy): The citizens advice bureaux and other not-for-profit agencies have an important role to play in the community legal service and in increasing access to legal and advice services for people experiencing social welfare problems. During 2003–04, the Legal Services Commission contracted with 239 CABs. The contracts were valued at more than £25 million.
    Huw Irranca-Davies: The Minister will join me in applauding the work of the citizens advice bureaux throughout the UK, not least the offices in Maesteg and Bridgend, which reach out to all parts of Ogmore. However, may I draw his attention, with some concern, to a report published last week that suggested that parts of Wales were an advice desert, with people having to
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    travel up to 50 miles to reach advice from a lawyer? Does he agree that the long arm of the lawyers should stretch a little further?
    Mr. Lammy: I commend the work of the CABs in Bridgend. At this very moment, the LSC is involved in a contract bidding round with solicitors and CABs that want to provide legal aid services in Wales, and it believes that, as of April, some of the gaps that have been identified will be closed. I visited Wales a few months ago and looked at the telephone advice service that Shelter was providing on social welfare and housing issues. We have to look increasingly at other ways of providing advice, particularly in rural areas, and telephone advice will be one of those methods.
    Mrs. Jacqui Lait: Many CABs provide excellent services throughout the country, but is the hon. Gentleman aware that the inept local government settlement is making local authorities look closely at the donations that they make to charities, which will also affect the CABs? Is he concerned that some of those services might have to be withdrawn?
    Mr. Lammy: The citizens advice bureaux receive more than £116 million of public funding every year. That is more than they have ever received before, and on this side of the House, where we support the Attlee Government's establishment of legal aid, we shall of course continue to support citizens advice bureaux.

    Judicial Appointments Commission
    Vera Baird: What the system for monitoring and appraisal of judges will be after the introduction of the judicial appointments commission. [153653]
    The Parliamentary Under-Secretary of State for Constitutional Affairs (Mr. Christopher Leslie): The judiciary is responsible for its own system of monitoring and appraisal, in line with the principles of judicial independence. However, in cases in which conduct or discipline may be an issue because of incapacity or misbehaviour, the Secretary of State and the Lord Chief Justice will work together, supported by a complaints secretariat.
    Vera Baird: I thank my hon. Friend for that answer. He must be aware that there is no effective system for monitoring and appraisal of judges. For example, he may know of recent publicity about 25 or so criminal judges who are appealed four or five times as often as their colleagues and frequently criticised by the Court of Appeal, but nothing is done to improve their performance. Does he agree that it is essential to ensure that judges are not only independent, but competent and that a proper system must be introduced to guarantee that by, I suggest, the judicial appointments commission?
    Mr. Leslie: I do not think that the judicial appointments commission would be the right body to be involved in post-appointment issues related to complaints and discipline, as there could be a conflict of interest. It is important that the judiciary has a

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    monitoring and appraisal system, and my hon. and learned Friend raises a fair point. It would not be right for the political process to be involved in the day-to-day reporting of appeals and so forth because that would effectively represent a level of political interference. The judiciary and judges are, of course, not only accountable through the appeal process: they make their decisions in public, they give their reasons and their decisions can be open to appeal so that mistakes can be corrected. I know that the judges will listen to her point about the judiciary having a good monitoring and appraisal system.
    Mr. Alan Duncan: May I invite the Minister to study page 53 of this week's Gay Times? Perhaps he cannot normally reach the top shelf to see it. It says:
    "The second gay judge is appointed",
    and gives all the details. Under our existing system, that happened perfectly sensibly, it has been reported and that is fine. I consider it good news. Were the Government's proposals to be enacted, choosing such people would be seen as fulfilling the requirement that appointments must be, to quote from the Minister's consultation document, "reflective of society". If someone appointed under his proposed system were gay, female, disabled or black, the inevitable next step would be a public assessment of whether their judgments in court were consistently reflective of the appointment criteria. That is nothing to do with justice and would amount to the politicisation of judicial decisions. Does the Minister now understand that the requirement for any judicial appointment to be reflective of society will lead inevitably to demands for judgments also to be reflective? Will he now undertake to drop any such references from the forthcoming Bill?
    Mr. Leslie: It is a great pity that the hon. Gentleman seems to think that if we want merit as the sole criterion for appointment, it is somehow incompatible with achieving diversity. I see no incompatibility whatever in making sure that the judiciary is better reflective of our wider society and seeing that merit is the sole criterion. If he thinks that people who are not currently represented among the judiciary cannot be meritorious candidates, he needs to reconsider his perspective.

    Courts (East Anglia)
    Mr. Henry Bellingham: When he next expects to meet representatives of the local magistracy to discuss the modernisation of courts in East Anglia. [153654]
    The Parliamentary Under-Secretary of State for Constitutional Affairs (Mr. David Lammy): There are no plans to meet representatives of the local magistracy in East Anglia to discuss the modernisation of courts in East Anglia. That could be arranged, however, if it would prove useful.
    Mr. Bellingham: I am grateful to the Minister for that helpful reply, as it may well be useful. Does he agree that justice needs to be kept as local as possible to have maximum impact? Does he also agree that young offenders in East Anglia are much more likely to be deterred if they are tried in their local town by local
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    people? Will he therefore concentrate on modernising existing courts and not close any more magistrates courts anywhere in East Anglia?
    Mr. Lammy: The hon. Gentleman asked the very same question in September and on three occasions previously. On that occasion, I replied:
    "It is right and proper that magistrates live locally, but it is clear that we cannot have courts in every town." —[Official Report, 9 September 2003; Vol. 410, c. 163.]
    In the last two years of the previous Conservative Administration, 42 courts were closed. I am pleased that we closed only 11 last year.

    House of Lords
    Bob Spink: What estimate he has made of the level of support for a wholly elected House of Lords. [153655]
    The Parliamentary Under-Secretary of State for Constitutional Affairs (Mr. Christopher Leslie): When Parliament voted on the composition of the second Chamber last year, both Houses rejected the "wholly elected" option, in the Commons by 289 votes to 272 and in the Lords by 329 to 106. Because no consensus was reached, the Government are drawing up proposals enabling us to make progress where we can, including a proposal for the removal of the remaining hereditary peers.
    Bob Spink: Last week the Prime Minister wanted no democratically elected element at all. What is his view this week?
    Mr. Leslie: If the hon. Gentleman catches your eye, Mr. Speaker, he will be able to ask the Prime Minister at Question Time, but this is the Government's view: we want a further debate after consideration of the Bill, because we do not want the door to be closed to composition considerations. It is important for us to look to the future and at other options, such as indirect elections. The key issue is the need to reconcile Commons primacy with the need for more legitimacy in our second, revising Chamber. If we can achieve consensus on that, perhaps further reform will be possible.
    Andy Burnham: I do not know whether the Minister, like me, is a Billy Bragg fan, but is he among the growing number of people who feel that his secondary mandate proposal, whereby the House of Lords would be comprised proportionally and indirectly according to the share of the vote at general elections, is the answer to the question of Lords reform? Would not that system combine election and appointment with the advantages of both, reassert the primacy of this House and, crucially, give people more of an incentive to vote?
    Mr. Leslie: I know that my hon. Friend is a vocal advocate of the secondary mandate, which is indeed worthy of consideration. We need to ensure that this House is seen clearly as the democratic chamber—that it

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    is plain that we are accountable, and this is where the buck stops when it comes to decisions and responsibility in our constitution. But if we can find a way of improving the legitimacy of our revising chamber by other means, suggestions to that effect will merit further consideration.
    Mr. Andrew Mitchell: Does the Minister agree that we have far too many elected politicians in this country already? They are elected at European level, to this place, at regional level and at metropolitan. county, district and parish level. If he or any of his hon. Friends are really saying that we need more elected politicians—if that is the answer to the question—many of our constituents will want to have a very good look at what the question is.
    Mr. Leslie: That is a strange argument. Presumably in that case the hon. Gentleman would prefer hereditary peers to be retained in the revising chamber. But if he does not want that, he will obviously support our Bill when it is presented to Parliament.
    I believe that we have a duty to consider seriously what the composition of the second Chamber should be, but given that there was no consensus last February we must make progress where we can, and remove the hereditaries from the second Chamber.

  The Leader of the House was asked—
  LEADER OF THE HOUSE

    Parliamentary Business
    Mr. Michael Jack: What analysis of the way in which time is used in conducting House business is to be carried out by his office. [153632]
    The Leader of the House of Commons (Mr. Peter Hain): My office keeps a watching brief on the way in which the House conducts its business, and I am always open to suggestions from Members on how it could be better arranged.
    Mr. Jack: I note the work undertaken by the right hon. Gentleman to review our sitting hours. May I have a reassurance that, before reaching a firm and final conclusion, he will think carefully about how the House uses its time? On occasion, debates are kept going simply because a Division has been predetermined, although if discussions could have taken place earlier, better use could have been made of Parliament's precious debating time, and perhaps two items of business could have been dealt with rather than one. Will he consider that and the procedures of the House to ensure that we make the best possible use of our time and facilities in determining when the House sits?
    Mr. Hain: I understand the right hon. Gentleman's point, which he made with force. The difficulty lies in balancing Members' desire for predictable timing of
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    votes so that we can all arrange our work accordingly with avoiding the spinning out of debates which, as the right hon. Gentleman implied, sometimes occurs. I am certainly willing to consider all good suggestions from him or anyone else.
    Mr. Stephen McCabe: I am delighted to hear that my right hon. Friend is always open to suggestions. Is he aware of the growing body of opinion that the change in the Tuesday hours has not been wholly satisfactory? Were the recent arrangements to be modified, would he consider whether those for Tuesday could revert to something similar to the previous system, without in any way damaging the other modernisation initiatives?
    Mr. Hain: I am happy to assure my hon. Friend that I will look closely at that and other suggestions; indeed, I have my ear bent regularly about such matters. It is a listening ear—I know that the next question addresses the same issue—and I want to achieve a position whereby everyone is not dissatisfied with the outcome, even if everyone is not wholly satisfied.
    Mr. Oliver Heald: Does not the analysis that my right hon. Friend the Member for Fylde (Mr. Jack) mentioned show that the Leader of the House is simply not providing adequate time to debate the really important issues? I shall give three examples. When I asked the Leader of the House for extra time to debate the Higher Education Bill, he refused. As a result, many Members missed out, yet during the same week we had a debate on truancy that nobody attended.
    Mr. Kelvin Hopkins: I did.
    Mr. Heald: Well, seven Members attended, all of whom were photographed on the front page of The Times. I asked him for extra time to debate the Hutton report, but he refused. Only half the Members who wanted to speak got in that day, yet in the same week we finished early on Thursday and Monday. I asked for more time for the local authority finance debate, but he refused, and not a single Conservative Back Bencher had an opportunity to speak. Is it not time that he ensured that business management has priority over the news management in which the Government are engaging?
    Mr. Hain: As the hon. Gentleman knows. under the existing sitting hours we have in fact spent more time scrutinising Commons business than in the previous year. On the specific points that he raised, he pressed for two days' debate on the Hutton report, but when it was published and he and others realised what its contents were, at the previous day's business questions he did riot press the matter again, even though I reminded him about it. When he looks at what really happened, he will see that all these measures had plenty of time for scrutiny, as such measures have always had in the past, under Governments of all colours.
    Joan Ruddock: What plans he has to take private Members' Bills after 7 pm on Tuesdays. [153633]
    Mrs. Janet Dean: What plans he has to take private Members' Bills after 7 pm on Tuesdays. [153636]
    The Leader of the House of Commons (Mr. Peter Hain): I am aware that many Members favour this option, which the Modernisation Committee will consider as part of its review of sitting hours.
    Joan Ruddock: Does my right hon. Friend accept that even London Members such as me have to make constituency appointments for Fridays many months in advance to accommodate all the demands? The result is that Members, and indeed Ministers, often find a conflict between local loyalties and having to attend this House for a private Member's Bill. Does he agree that, if such Bills were taken on a Tuesday evening, more Members could participate in those vital debates, and constituents could be certain that their Member of Parliament was available on a Friday?
    Mr. Hain: My hon. Friend makes her case persuasively, and hers is one of the many arguments being put to me about how we could adjust the existing sitting hours that meet with widespread consent. Many Members, including her, have said to me that moving private Members' Bills to Tuesday evening would have the advantage of freeing up Fridays for constituency business, and would perhaps allow such Bills to be debated by more Members than are currently able to turn up on Fridays. There are counterbalancing arguments, and it is precisely this issue that I want to look at more closely.
    Mrs. Dean: Does my right hon. Friend also agree that, besides freeing up Fridays, moving private Members' Bills to Tuesday evenings would also allow more time for consideration on Tuesdays of Select Committee reports and other non-voting business?
    Mr. Hain: Again, that suggestion has been made to me in recent weeks, and I am looking at it very seriously. It struck me during my extensive consultations in recent weeks with Members of all political persuasions, and Ministers, that very few people are now arguing for going back to the old hours on Wednesdays. [Interruption.] Well, some may be, but there is not a large body of Members doing so. I am simply reporting to the House my findings in the light of such consultations. However, there is a focus on Tuesdays, and if we could reach agreement on how to handle Tuesdays, and if there were widespread consensus—I am not saying that we need unanimity—there would be
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    a case for having an early vote on the matter. However, if there is not a consensus, I do not want to rush into a vote, leaving behind a bitter division on the hours, so we need to continue our discussions. In doing so, we can take into account the views of my hon. Friends the Members for Burton (Mrs. Dean) and for Lewisham, Deptford (Joan Ruddock).
    Sir Nicholas Winterton: Does the Leader of the House accept that the findings of the questionnaire issued by the Procedure Committee, which I chair, will give good guidance to him and the House on future sitting hours? Does he agree that the Procedure Committee's report on "Procedures for Debates, private Members' Bills and the Powers of the Speaker" is an important report? Will he tell the House when hon. Members will have an opportunity to debate that report, which was published towards the end of last year, on the Floor of the House?
    Mr. Hain: I am always up for good guidance from the hon. Gentleman and I usually get it and am grateful for it. We are examining the Procedure Committee report and I want to reflect on it further. I also believe that the survey will be valuable in informing the investigations of the Modernisation Committee and, in the meantime, it will help inform me about how the feeling in the House is spread. I am already getting a pretty good idea from the regular verbal representations made to me, not to mention the discussions that I have in my office, including one that the hon. Gentleman attended, if I recall correctly.
    Mr. Paul Tyler: Reverting to Tuesday evenings, does the Leader of the House recognise that there is a demand from both sides of the House to ensure that we have enough time for proper scrutiny of private Members' Bills? If we allocate consideration of such Bills to Tuesdays, can he assure me that the aggregate total time available will not be a reduction on the current position? If anything, we need more time to be able to do the job properly, particularly given the raised expectations among the public about the importance of private Members' Bills, which are not being met by the current method of delivery.
    Mr. Hain: When the proposition was first put to me, the 13 Fridays allocated for private Members' Bills equated to 22 Tuesday evenings for an exactly similar time. Of course, there are about 36 Tuesdays in a calendar year, so there is an issue to be dealt with there. However, I do not disagree for one moment that private Members' Bills deserve a fair wind and proper scrutiny. It is one of the arguments being put to me, but, as I have already said, some counterbalancing arguments are also being put to me by business managers, Ministers and others who argue that the hon. Gentleman's preferred method is not a satisfactory way of proceeding. It is one of the issues that I shall have to bottom out.

BILL PRESENTED
  SLEEP APNOEA
  Alice Mahon, supported by Mr. Tam Dalyell, Mrs. Betty Williams, Mr. Michael Clapham and Mrs. Ann Cryer, presented a Bill to make provision about sleep apnoea and related medical conditions: And the same was read the First time; and ordered to be read a Second time on Tuesday 27 April, and to be printed. [Bill 50].

  Health and Safety at Work (Offences)
  12.32 pm
  Mr. Andrew Love: I beg to move,
  That leave be given to bring in a Bill to make provision about the prosecution and punishment of offences which are, or are treated as being, offences under the Health and Safety at Work etc. Act 1974 or the Employers' Liability (Compulsory Insurance) Act 1969.
  Thirty years ago, throughout 1973 and most of 1974, I worked as a labourer on the M1 extension in London, and my abiding memory of that time is of the very shoddy, to say the least, working practices on the site. That brought home to me personally the importance of health and safety at work, and the very strong reasons why the scandal of health and safety failures led directly to the Health and Safety at Work, etc. Act 1974. This year marks the 30th anniversary of the original Act—a piece of legislation that has served not only working people but the wider community with great success.
  Working as a labourer on a building site, or on the shop floor, can be hazardous, and the work environment has historically been plagued with injuries and work-related ill health. Although the 1974 legislation was a considerable achievement, we now need to re-engage on a number of important work issues to revitalise and renew the legislation, which has, perhaps not surprisingly, become out of date after 30 years.
  In the 21st century, most employees naturally expect working life to be, if not exactly comfortable, at least safe. Employees have a right to expect not to be maimed or laid off for life, and they are certainly entitled to expect that their place of work will not lead them to an early grave. A recent Health and Safety Executive national statistics study for 2002–03 revealed that the number of work-related fatalities fell to 226 in that year, from 251 in the previous year. The same study shows that, while the rate of work-related fatal injury is roughly what it was three years ago, it is around one third of the rate recorded in 1981. Most of that success can be put down to the impact of the 1974 Act, but those involved in health and safety recognise that the legislation must reflect the realities of today's workplace. That can be done by strengthening the penalties for those responsible for taking unnecessary risks with safety on sites and in workplaces across Britain.
  Occupational health and safety is an integral part of workplace well-being. We live in a world of greater uncertainty and risk than was the case in 1974. My Bill would meet public concern by amending the 1974 Act to increase the penalties for offences. It would do that in two ways. First, it would raise the maximum fine from the present level of £5,000, which is now out of date, to £20,000. Secondly, it would introduce the possibility of a custodial sentence for the most serious breaches of health and safety regulations.
  I believe that these measures, which were first identified in the Health and Safety Commission report entitled "Revitalising Health and Safety", launched by my right hon. Friend the Deputy Prime Minister in June 2000, will address health and safety concerns in workplaces across Britain. We all know of many good

  1271
  companies and safe workplaces that operate good health and safety policies. Sadly, we also know of bad companies, or at least have heard of poor companies with bad health and safety track records.
  In 2001, 295 workers lost their lives as a consequence of work-related activity. That is unacceptable, and the cost in human terms is immeasurable. In 2002, more than 1 million people were injured at work, while approximately 2 million suffered from ill health caused by work. That level of death and injury is caused because health and safety concerns are being ignored, and because the law is being broken in many cases.
  One example concerns a company and one of its directors, prosecuted following an HSE investigation into allegations that the company had not tested its crawler cranes, and that test certificates had been fabricated and offered to other companies' clients as proof that the tests had taken place. In his summing up, the judge in the case remarked:
  "Were prison an option that was open to me, today you would be going to prison, because there is no offence to my mind which is more grave than a managing director of a company of this kind signing"
  certificates
  "one after another, purporting to have examined a crane and not having done so…I sincerely hope that Parliament will look again at this legislation and amend it to allow the sentencing judge the option of a custodial sentence."
  We need to act to ensure that the hard-won improvements in health and safety continue to reduce the rates of work-related injury and death. We have been reminded, in the most tragic terms, of the need for an effective health and safety regime. At Morecambe bay last Thursday, 17 men and two women died at the hands of unscrupulous gangmasters operating outside the law.
  My Bill is simple and straightforward, as it follows basic common sense. It is supported by the TUC, many trade unions—including my own, the Transport and General Workers Union—and the CBI. Any employer in breach of the 1974 Act should pay a fine commensurate for that breach. We need to get tough on breaking safety laws, and the Bill's principal provisions
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  would raise the maximum level of fines for most health and safety offences. For the more serious offences, the Bill makes it possible, for the first time, to impose custodial sentences on the most recalcitrant employers.
  It is important to note, however, that the Bill would not change the requirements on business; companies complying with the law will not be affected by changes in the criminal penalties available to the courts. The Bill also recognises the need to improve the situation as regards employers' liability insurance, especially the implications of increases in that insurance if some firms thought they would be better off not taking out insurance at all. My Bill would ensure that good employers continue to be supported and helped, and that they are not undermined, but that bad employers face stiffer penalties. It recognises the need to reflect the realities of today's workplace; it will encourage good practices and punish bad ones.
  I cannot close my remarks without pointing out the contribution made by other Members to the health and safety at work agenda. My hon. Friends the Members for Scarborough and Whitby (Lawrie Quinn), for Barnsley, West and Penistone (Mr. Clapham), and for Aberdeen, North (Mr. Savidge) have worked assiduously in the all-party group on occupational safety and health to raise those issues in the House.
  I commend the Bill to the House. It will make a significant contribution to improving standards in the workplace and to getting rid of cowboy practices. It will create conditions for good health and safety and provide a modern legal framework to encourage best practice.
  Question put and agreed to.
  Bill ordered to be brought in by Mr. Andrew Love, Jon Cruddas, John Cryer, Lawrie Quinn, Mr. Colin Breed, Ian Stewart, Mr. Richard Allan, Mr. Malcolm Savidge, Mr. Michael Clapham and Tony Lloyd.

  Health and Safety at Work (Offences)
    HEALTH AND SAFETY AT WORK (OFFENCES)
    Mr. Andrew Love accordingly presented a Bill to make provision about the prosecution and punishment of offences which are, or are treated as being, offences under the Health and Safety at Work etc. Act 1974 or the Employers' Liability (Compulsory Insurance) Act 196: And the same was read the First time; and ordered to be read a Second time on Friday 12 March, and to be printed [Bill 51].
  Opposition Day
  [4TH ALLOTTED DAY]
  Opposition Day

    The Environment
    Mr. Speaker: I inform the House that I have selected the amendment in the name of the Prime Minister.
    12.43 pm
    Norman Baker: I beg to move,
    That this House believes there should be an annual debate in Parliament on the state of the environment; notes that sustainable development and the issue of climate change is fundamental to the long-term security and stability of the world; is very concerned that climate change could, according to leading international scientists, cause the extinction of one million species by 2050, could, according to the World Health Organisation, mean an additional 150,000 people dying each year, and is, according to Sir David King, the Government's Chief Scientific Adviser, "the most severe problem that we are facing today, more serious even than the threat of terrorism"; welcomes the Government's ratification of the Kyoto Protocol and their pledges to help meet its targets, particularly the Energy White Paper commitments to renewable energy and energy efficiency; notes however the worrying trends in key domestic environmental indicators with, since 1997, total municipal waste up by 17 per cent, road traffic up by 8 per cent, domestic energy consumption up nearly 7 per cent, high level radioactive waste up 6 per cent. and energy consumption from aviation up 21 per cent; acknowledges that investment in environmental protection and innovation benefits the whole economy and creates jobs, and calls on the Government to make better use of economic instruments to this end; and believes the Government needs genuinely to put the environment at the heart of government and to take a greater role in promoting sustainable development, and that this requires a clear lead from the Prime Minister.
    This year, there have been two startling stories which should cause us all to reflect. The first was a statement by Sir David King, the Government's chief scientific adviser. Writing in the journal Science, he said that climate change was
    "the most severe problem that we are facing today, more serious even than the threat of terrorism".
    It will not have escaped the House's attention that, while a great deal of our time is spent on terrorism, not very much of it is spent on climate change. The second was a report by a group of leading international scientists, warning that between 15 and 37 per cent. of all species could be extinct by 2050—a frightening statistic.

    I shall return to the substance of those matters shortly, but first may I express my regret that the House has not held a full debate on the environment for a long time? The last such debate was on 15 May 2002 and, as on this occasion, it was on a Liberal Democrat motion. The debate was held during the run-up to the world summit on sustainable development. Since then, there has been no debate on the environment in Government time. It is true that there was a debate on the report of the Environment, Food and Rural Affairs Committee on the work of the Department, but that debate was held in December 2002 and was mainly agriculture-focused.
    In Parliament, we need to give the environment the focus that it deserves, and the present ad hoc arrangements are not delivering that. That is why our motion suggests that the House should hold an annual
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    debate on the environment. If the Government do not give the lead and facilitate that, then Liberal Democrat Members will.
    Sir Sydney Chapman: I share many of the sentiments expressed in the hon. Gentleman's motion. The problem is that if we have an all-suited environment debate for one full day a year, it will cut out opportunities to debate important environmental issues that arise from time to time. For example, as chairman of the Council of Europe Sub-Committee on Sustainable Development, I am anxious to debate sustainable development, but if his proposal were adopted, such a discussion might have to form part of a wider environmental debate. Has he thought about that point?
    Norman Baker: I understand the point, which the hon. Gentleman is right to raise. We have an annual debate on defence, but it does not stop us debating defence throughout the rest of the year. I hope that an annual debate would raise understanding among Members and encourage further discussion of the environment throughout the year—the opposite effect to that which he fears.
    Mr. John Randall: The hon. Gentleman mentioned defence debates, of which there are normally three a year. Perhaps his motion is unambitious and there should be different debates on different aspects of the environment.
    Norman Baker: I would welcome three debates on different aspects of the environment, but I would settle for one if the Government were to concede the point. The Government have not called such a debate for a long time.
    I am disappointed that the Secretary of State for Environment, Food and Rural Affairs is not with us today. The sad fact is that she has not participated in any debate even partly related to the environment since 2002, and March 2002 was the last time that the Government volunteered even an oral statement on an environmental issue. I happen to think that the Secretary of State is sound on environmental issues, but I cannot say for certain and we must read the signals—it is like watching the Soviet Politburo. We do not know definitely, but in so far as we can tell she is sound. Why is she not in the House more regularly attending debates called in the Government's name to champion the cause of the environment? We would welcome that, but it does not happen. Perhaps the truth is that her views, which may be sound, are out of line with those of the Government in general, who rank the environment low down their list of priorities.
    Gregory Barker: The hon. Gentleman says that he has time for the Secretary of State, but can he think of a single area in which she has sounded her ambition to leave an imprint on the Government's environmental record by doing anything that is in any way out of kilter with what has happened before? Has she shown personal commitment to this important issue, as opposed to just being a safe pair of hands?
    Norman Baker: Tricky questions first. If we believe what we read in the press and consider the smoke

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    signals, the right hon. Lady was responsible for ensuring that the Government's Kyoto target was not downgraded by 15 per cent., which the Secretary of State for Trade and Industry apparently wanted. The Minister for the Environment is nodding, so that suggestion is correct.
    The Minister for the Environment (Mr. Elliot Morley)indicated dissent.
    Norman Baker: The Secretary of State for Environment, Food and Rural Affairs seems to be quite good at defending her budget, although I would not want to overplay that point. She is a friend of the environment—in so far as we have one in this Government—so let us not be too unpleasant about her because we need her on board to help us.
    I listened in vain to the Queen's Speech introducing this Session for a mention of the word, "environment", and it appeared once:
    "the new strategic environment in which the Armed Forces operate." —[Official Report, 26 November 2003: Vol. 415, c. 7.]
    It appeared, but not in the context that many of us would have wished.
    Mr. Colin Challen: The hon. Gentleman is making great play of the word "environment", as though someone who does not mention it cannot be doing the right thing by the environment. What about the Energy Bill, which is surely a major step forward? It proposes difficult targets on, for example, renewable energy sources.
    Norman Baker: The Energy Bill has a number of good elements—I was about to be nice about it—and I shall go on to discuss domestic policies. It is important to paint a fair picture so that one can criticise after having praised other matters.
    Mr. Michael Weir: Before the hon. Gentleman is too kind about the Energy Bill, does he share the views put forward by the Scottish renewable industry, which has expressed grave concern about the costs associated with tapping into the national grid? Many developments by the Scottish renewable industry are located in the far north of Scotland on the islands, and it will be expensive to connect them to the national grid, which has led the industry to raise concerns about the future of renewables.
    Norman Baker: The renewable target in the White Paper is welcome. Access to the grid is a serious issue. In many cases, power supplies are offshore, a long way from centres of population, and that is a matter that my hon. Friend the Member for Gordon (Malcolm Bruce) has raised on several occasions. The Government say that they will address it, and we will see in time whether they do so.
    When the Prime Minister was questioned last week by the Liaison Committee, he gave his usual impressive performance, except when he was asked about the environment. Then his eyes glazed over and we saw a
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    rather different Prime Minister. He was asked whether he agreed with the Government's chief scientist on climate change, and he replied:
    "Looking very long term, if I look at when my children are my age, yes, I think that is the key issue that faces us."
    He was not entirely convincing, and he even forgot the name of the Department represented by the Ministers here today. He gave the impression that the environment was a humdrum issue, as did Mrs. Thatcher before him.
    At least the Prime Minister said that he recognises climate change as an issue for 30 or 40 years' time, but he seems not to realise that it is with us now, and is accelerating. Species are already disappearing, the polar icecaps are melting and we are seeing wild swings in our weather patterns.
    Paddy Tipping: Does the hon. Gentleman accept that our Kyoto targets exceed those of any other country? Does he accept that the UK is the only European country to put forward an emissions trading scheme? Most particularly, does he agree that climate change will be long term? Even if we take steps now, it will be a long time before we change the pattern of the curve.
    Norman Baker: I certainly recognise the Government's commitment to Kyoto and I shall say so later. Climate change may be long term, but it requires action now, and that is what we are not seeing to a sufficient degree. The oil tanker will take a long time to turn round, and we need to start now. We cannot wait for the time when the Prime Minister's children are his age now to realise the catastrophe that awaits us. It is a difficult political issue for all of us. We have to convince the electorate and the wider world about an issue that is not immediately on our doorsteps but which requires immediate action. It will be too late in 30 or 40 years' time.
    The most recent models of climate change from the United Nations Environment Programme suggest that global temperature will rise between 1.4 and 5.8 per cent. by 2100. That is grotesquely in excess of anything that has happened in the past 10,000 years, and there is no guarantee that flora and fauna—let alone human beings—will be able to adapt to such change.
    Mr. Henry Bellingham: I share the hon. Gentleman's concern about flora and fauna. Does he agree with some scientific opinion that suggests that, if the polar icecaps continue to melt at a faster rate, the warm airs from the gulf stream will be greatly weakened and we will have a climate more similar to the deep continental one? In other words, winters in this country could become much colder.
    Norman Baker: That is indeed one scenario, and that is why we now try to talk of climate change, not global warming. What is clear is that we will see significant changes in our weather and climate, and we should not gamble with that—although it appears that we propose to do so.
    There are statistics that support both sides of the debate, but I was struck by the report that more than half of the world's wetlands have disappeared since

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    1900, and that figure will reach 85 per cent. in the next 30 to 40 years. That is an appalling figure. I say that not from soft sentimentality about wetlands, but because managing wetlands sustainably will aid significantly in meeting the targets set at the world summit on sustainable development to halve the number of people without adequate water and sanitation services by 2015. It is a people-centred statistic, as well as a nature-centred one.
    Sustainable use of the planet is inextricably linked to a stable and prosperous future. Many hon. Members will have seen the excellent WWF report "Living Planet Report 2002", which demonstrates all too graphically how we are using up the capital resources of the world faster than they can naturally be replenished. That will lead to an increase in poverty and human misery and, potentially at some time in the future, to resource wars over basic substances, including water. We must try to avoid that.
    It is worth remembering that the poorest countries are likely to be the most vulnerable and most affected by climate change. Some 60 per cent. of the additional 80 million people likely to be at risk from flooding are in southern Asia, and 20 per cent. in south-east Asia. Africa is expected to experience significant reductions in cereal yields, as are the middle east and India. An extra 290 million people could be exposed to malaria by the 2080s, with China and central Asia experiencing the biggest risk. Those are frightening projections. I hope that they are wrong, but if they are anywhere near right, we have a big problem on our hands.
    It is also predicted that 3 billion people, predominantly in Africa, will suffer through increased stress on water supplies. There is an old saying that forests precede man and deserts follow him, and that is becoming all too true. Deforestation is having a devastating impact on the global climate. That is true not only for Brazil and Indonesia, which are the focus of popular concern, but for countries that should know better, such as Australia and what is happening in Tasmania. It is also happening in Africa to a degree that people have not so far appreciated. A parliamentary answer I received from the Secretary of State for International Development suggested that 5.2 million hectares of forest disappeared from Africa each year. That is an area the size of France, and we cannot go on like that. Some 80 per cent. of ancient forests have been destroyed, degraded or fragmented by human activity, and that has a massive impact on biodiversity and threatens to destroy the livelihoods and way of life of millions of forest-dependent people. That is the bleak reality that we face.
    Much of the logging is illegal and many of the products are exported to the UK and other European markets. The Indonesian Government lose an estimated $6,700 a minute in revenue because of illegal logging, but Indonesian companies that rely on illegal logs to feed their sawmills still export plywood to the UK, where it is used once or twice and then thrown away. I welcome the fact that the Government support the European Parliament's resolution on forest law enforcement, governance and trade, which is a good first step. However, it will not stop the illegal timber trade with the European Union. As Greenpeace points out, the plan contains no commitment to legislate against the import of illegally logged timber, but relies instead on
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    voluntary partnership agreements, such as those already in place between the UK and Indonesia. That is clearly not enough.
    We need a sensible approach to public procurement. My hon. Friend the Member for Guildford (Sue Doughty) raised with the Prime Minister the issue of the timber being used for the new Home Office building. Unfortunately, the Prime Minister laughed at the matter, instead of treating it seriously. That is not good enough. I also gently suggest to the Minister that while Government statistics show that we import large quantities of timber from places such as Vatican City, there is some way to go in regulating the timber trade. Surely there are not that many old church pews in Vatican City.
    Climate change will affect us in the UK directly, as DEFRA's own website shows. The most recent climate change scenarios show an average annual temperature increase across the UK of between 2 and 3.5 per cent. by the 2080s, with all the possible consequences that we have heard about, including high summer temperatures and increasingly rare cold winters. However, the changes to the gulf stream may mean colder winters, giving us the temperatures found in Labrador. The US National Academy of Sciences has even described such changes as "likely". That may be the worst-case scenario, but even alternating between colder and warmer temperatures for several decades would play absolute havoc with agriculture and civilisation generally.
    Whatever the shape of the changes, it would be better not to take the gamble that we are taking. This is not an issue for the long term, as the Prime Minister said last week: it is an issue for now. However, I want to give credit where it is due, and the Government did sign up to Kyoto early and willingly. They have set ambitious targets and they are on course to meet the EU target, if not the 20 per cent. target. It is true that some of that resulted from the switch from coal to gas; nevertheless, our Government are on target, and we should be pleased that they have approached the matter responsibly.
    That attitude is in marked contrast to the attitude of our best friends, the United States, which has 7 per cent. of the world's population but accounts for 25 per cent. of all energy use and 36 per cent. of all greenhouse gas emissions each year: they are going up—and going up fast—in the United States.
    I feel sorry for the Prime Minister. He took a big political risk in supporting President Bush in his Iraqi strategy, and he is not being well repaid by the American President over Kyoto or indeed very much else. Either the Prime Minister has not pushed Kyoto very hard with the United States President, in which case he is failing in his duty to do so, or he is being completely ignored by the United States President—in which case, so much for the special relationship. I am not sure which explanation is right, but neither is very flattering to either man.
    The protocol could still become binding if Russia ratifies it. I hope and believe that the Government are doing all they can to persuade Russia to sign up. We have received assurances from Ministers to that effect, and we have no reason to doubt them. That is the right policy to pursue, and I welcome what the Government are doing in that regard. I very much hope that they will be successful.

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    I hope that the Government have also made plain their disagreement with the recent noises from Madrid suggesting that Spain may wish to reopen discussions over Kyoto in the European Union. That needs to he firmly squashed; we cannot afford to allow the EU to unravel over Kyoto.
    I referred earlier to the report by leading scientists suggesting that up to 37 per cent. of species could become extinct by 2050. I am told that that is about one every 45 minutes. I admit that I cannot prove it, but the prediction is probably more reliable than other recent 45-minute claims. Even if the figure were just 5 per cent., that could have a devastating impact on our world. Everything is connected to everything else, and the disruption of natural chains will have unpredictable and unwelcome consequences. Species will face disruption to habitat and may find it impossible to adjust. Even if they can adapt in climate terms, they may find that there is no food to rely on.
    The human race needs to wake up and address the issue. We cannot sit back while a third of all life forms, which have been here for millions of years, vanish in our lifetime, practically overnight in evolutionary terms. That means addressing quickly, not in the very long term, the root causes of this mass extinction, one of which is climate change, which I have mentioned. Another is the inequality in our world and the poverty that drives millions to destroy the land on which they depend as the only way of finding the next meal.
    Global problems require global solutions. They can be found; they can work. We have an example in the Montreal protocol, which has worked quite well in stopping the destruction of the ozone layer. That shows that the world can pull together when it needs to.
    We need Kyoto to work. It may not be perfect—the Americans say that it is not, and they are right to say that—but it is the only show in town and we need it to work. We also need to make international agreements such as the convention on biological diversity much more effective. That runs in parallel with the World Trade Organisation, but while the WTO has teeth the CBD merely has gums. That imbalance needs to be addressed. As the Minister's predecessor suggested, we also need a world environmental court to deal with these issues on a global basis, so that we have environmental and sustainability justice across the world.
    What we do in our own country is important too. In theory, it should be rather easier to achieve. The Government started well in 1997 by creating the right structure—a major Department, the Department of the Environment, Transport and the Regions, bringing together the environment and transport. Many of us in the environment field had argued for that for many years, particularly to try to stop the destructive transport policies that had been implemented until then. The Government also introduced a cross-cutting Environmental Audit Committee. That was absolutely the right policy; the Committee has done sterling work. In addition, the Government introduced a cross-cutting team of green Ministers. I am not sure how effective it has been, but the decision was right.
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    I recognise that the Government look for innovative ways to deal with issues across traditional departmental boundaries, as they should. I give them credit for doing it, even if the price is sometimes more control from No. 10.
    Mr. James Gray: The hon. Gentleman is right to praise the Government for their commitment, but does he not realise that green Ministers were established by my right hon. and learned Friend the Leader of the Opposition when he was Secretary of State for the Environment, in 1992? My right hon. and learned Friend also led this country to Rio de Janeiro for the world summit. Does not the hon. Gentleman also realise that the Transport Department and the Environment Department were intentionally co-located in Marsham Towers, and that there was a good deal of discussion between the two?
    Norman Baker: I did not realise that green Ministers were present in the Conservative Government, which may suggest that they were less effective than that Government might have wished them to be. It is true that there was Rio, and I pay tribute to the right hon. Member for Suffolk, Coastal (Mr. Gummer), who is not here today, who did some sterling work on the environment. However, I am sorry to say that, according to a number of indicators, the previous Conservative Government did not do very well. For example, they had the most appalling recycling record. They had a road-building programme that was the biggest since the Romans, and they had a joke figure for renewable energy. So I would not concentrate too much on the previous Conservative Government.
    I believe that it was a mistake to break up the DETR. I note that the "Greening Government" report stated:
    "Part of the Government's approach to this institutional difficulty"—
    the division between transport and the environment—
    "has been to eliminate one such divide with the creation of the Department of the Environment, Transport and the Regions (DETR). The Deputy Prime Minister described this as 'in itself…a very important step towards achieving the environmental objectives'."
    If it was a very important step towards achieving environmental objectives, why was it split up and abolished? That seems not to make much sense.
    With due respect to the Minister and his colleagues, for whom I have a great deal of time, as he knows, DEFRA is a bit of a throwaway Department. The Minister knows very well that key decisions affecting the environment are nearly always taken elsewhere—at the Department of Trade and Industry, whether on energy policy or trade matters, which are key to environment; the Department of Transport, with regard to aviation or road transport; the Office of the Deputy Prime Minister, for planning issues and key issues about the use of greenfield sites and so on; or No.10 or the Treasury, which is very happy to take decisions on behalf of any Department that it can muscle in on.
    Perhaps that helps to explain why, despite the commitment of DEFRA Ministers—I include the hon. Gentleman's immediate predecessor, of course—the Government's domestic record on the environment is a bit patchy. Many of us had high hopes with regard to

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    transport, for example. The Government came to power accepting at last that we could not build our way out of congestion. We had tried for 100 years and it had not worked. The Deputy Prime Minister even famously pledged himself to road traffic reduction targets and asked us to hold him to them. I happen to think that the Deputy Prime Minister understands transport, with his history in the National Union of Seamen, and that he was sincere when he made that pledge. But he could not have anticipated that he would have the rug pulled so swiftly from under him by No. 10, which is what happened.
    What do we have now? Last week I received a parliamentary answer from the Under-Secretary of State for Transport, the hon. Member for Plymouth, Devonport (Mr. Jamieson), who told me that road traffic—already up by nearly 8 per cent. since 1997, by the way—
    "is forecast to grow by between 20 per cent. and 25 per cent. in England between 2000 and 2010." —[Official Report, 3 February 2004; Vol. 417, c. 824W.]
    The news that road transport will go up by 20 per cent. to 25 per cent. in this decade comes from a Government who quite recently were committed to road traffic reduction. That is a failure of some magnitude, and it will not help the Government to meet their Kyoto targets. It is not a reduction, as the Deputy Prime Minister promised us. It is not even a reduction in the rate of growth, which is a formula the Conservatives used to use when trying to deal with the issue when they were in government. It is a massive growth and a catastrophic failure of transport and environment policy.
    While industry is busy cutting carbon emissions, emissions in the transport sector are going through the roof. It is not simply road transport, of course. There is also aviation, where I was told in answer to another parliamentary question that carbon emissions, which were 20,000 tonnes in 1990, would double to 40,000 tonnes by 2010.
    Mr. Bellingham: Does the hon. Gentleman agree that there is a dilemma here, because if traffic grinds to a halt there is obviously much more pollution? The Government have got another 1 million passengers on to the railways. Is he advocating the use of other modes of transport, such as aviation, which will create yet more pollution? It is obviously a very complex issue, and he should not try to simplify it in the way that he is.
    Norman Baker: I hope that I am not trying to simplify things. I recognise that this is a complex issue to which there are no overnight solutions, which is why the Government were right to produce a 10-year transport plan. That is the sort of period over which improvements can be delivered, but an election intervened and the Government did not see the policy through—they bottled out in an attempt to get through
    the 2001 election. Transport is now in free fall, or automatic pilot-whatever metaphor is used—and no one is pushing things forward. It seems that the Secretary of State for Transport dare not do anything that would upset anyone, so we have to make the best of things and, in the meantime, market forces take over. Market forces involve lots of people flying on cheap airlines, a massive increase in road transport and an
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    atomised, ineffective rail system. We have not moved on, which is a bitter disappointment for many of us who thought that the Government would do rather better on transport.
    Mr. Mark Francois: There is great concern in Essex about the environmental damage that could result from the proposed extension of Stansted airport. Does the hon. Gentleman agree that it is possible to achieve 40 million passenger movements a year using the existing runway at Stansted? Does he support the action being taken by Conservative-controlled Essex county council to consider submitting the proposal to judicial review in view of the fact that we believe that the Government are wrong and that the people of Essex are right?
    Norman Baker: The people of Essex must make up their own minds about how they wish to take that matter forward. Clearly, there is a strong body of opinion, to which the hon. Gentleman refers. The aviation White Paper relied far too much on predict and provide—a concept that I hoped we had got rid of in transport planning, but it seems not. The Prime Minister did not have very good answers when the Chairman of the Environmental Audit Committee, the hon. Member for East Surrey (Mr. Ainsworth), pressed him on the issue last week. The Government still have to bite the bullet. They cannot please everyone all the time: they must decide on a sustainable strategy and stick to it. They did the first bit; they did not do second bit.
    The recent energy White Paper genuinely embraces the concept of a big switch to renewables and the Government rightly view offshore wind as the first easily attainable tranche of that, but there is a mountain to climb: only 2.5 per cent. of our energy currently comes from renewable sources and most of that is hydroelectricity. That is pitifully lower than other developed countries. It is also important that the Government do all that they can to smooth the way for a transition to a renewable future. That involves sympathetic planning guidance and seeing off the nuclear industry's attempts to discredit wind power, in which it is busily engaged at the moment.
    I must confess that I find it breathtaking to hear those in the pro-nuclear lobby complain about the effect of wind generators on the countryside, when they are busy generating tons of highly radioactive material with a half-life measured in hundreds if not thousands of years. Having just managed to keep the door open to nuclear power in the energy review, the strategy is to try to demonstrate that renewables cannot deliver and to force Ministers back to "safe, reliable" nuclear power—those adjectives are in ironic quote marks.
    Mr. Francois: I thank the hon. Gentleman for his courtesy in giving way to me a second time. He mentions the Environmental Audit Committee, on which I have the honour to serve. The Committee considered this issue in great detail under the previous chairmanship of my hon. Friend the Member for Orpington (Mr. Horam), who is in his place this afternoon, and we found that one of the greatest impediments to renewable power was planning opposition to the development of wind farms in certain localities. Will the hon. Gentleman assist the House with the great dilemma that

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    we found: Liberal Democrat Members are always in favour of wind farms in general, but they always oppose them specifically whenever they are proposed in their own constituencies?
    Norman Baker: That is rather a red herring, an old chestnut and an incorrect challenge. Our policy is to recommend that wind power in general is a good concept. We ought to promote it—most Liberal Democrat councils are doing so—but no one in any party is suggesting that every application for a wind farm should be approved. That is the purpose of the planning process. There is a willingness and a desire to support that concept, which is manifest in Lib Dem councils throughout the country.
    Sue Doughty: The House will be interested to hear that the problem affects all parties. Indeed, a Conservative MSP has opposed wind farms at Huntly. The issue is specific not to parties, but to planning problems.
    Norman Baker: We must not demolish the planning system in considering these important matters.
    Mr. Weir: I thank the hon. Gentleman for giving way to me again. I agree with the hon. Member for Guildford (Sue Doughty). There are difficulties all over the country with specific wind farms, but does he agree that one thing that has not been properly explored so far is offshore wind farms, which would solve many of the problems about siting?
    Norman Baker: I agree, but, having looked at the guidance, I know that it is not that easy for an offshore wind farm proposal to be successful. The Government need to sort out that problem very quickly; otherwise those in the nuclear industry will respond by saying that renewables cannot deliver, and I want to avoid that.
    Let me make it clear that a sustainable future has no place for nuclear fission generation. No one who looks back at the past 50 years of nuclear power can do other than conclude that we would have been better off if we had never started down that road. The power that would be "too cheap to meter"—a phrase from the 1950s—has turned out to be fantastically expensive.
    Curiously enough, a Conservative privatisation proposal lifted the lid and showed just how uneconomic the industry was, but the DTI is now handing out multimillion pound lifelines to British Energy to stop it imploding financially—and still it continues. I was a little unfair to say that the Queen's Speech included no reference to the environment because it included the nuclear industry bail-out Bill, which is currently in the House of Lords and is designed to hand responsibility for gigantic amounts of nuclear waste firmly to the taxpayer in a desperate attempt to make the nuclear industry's books look better.
    Then there are the usual tricks, the latest of which is the racily entitled "Consultation paper on proposals for intermediate level radioactive waste substitution", which was quietly released on the Friday of Hutton week. If that was not an attempt to bury bad news, it was
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    clearly an attempt at least to store it above ground. The thrust of that supposedly independent paper is that we should not necessarily return to the countries whence it came all the waste generated from reprocessing. Why? Presumably it is because that suggestion would enable prices to be cut and business in that doubtful area to be propped up.
    The fact is that we have more than 75,000 cu m of intermediate-level waste lying around in this country, with no clear idea or strategy on how to deal with it. Nirex has no solution. Its last suggestion was pulled and it has not come back with another proposal since, but it now seems to want more of the stuff. The projections already suggest that we will have 107,000 cu m of intermediate-level waste by 2010, and 143,000 cu m by 2030. It seems that we want more waste from other countries to add to that stockpile. However, the author of that report—NAC International—makes some of its money by carrying out work for BNFL. A parliamentary answer that I received yesterday confirmed both that that financial arrangement exists and that the DTI was aware of it before it commissioned NAC to write the report. That is simply not acceptable. That paper is discredited and the DTI should now withdraw it.
    I am pleased that the Government are making progress with energy efficiency: given that domestic energy consumption is up 7 per cent. since 1997, they need to do so. One useful thing that they could do is to support the private Member's Bill introduced by my hon. Friend the Member for Hazel Grove (Mr. Stunell), who came top of the ballot, as the Minister will know.
    Gregory Barker: I wish to ask the hon. Gentleman a question before he leaves the section of his speech that deals with nuclear energy. I share much of his scepticism about the nuclear lobby and agree wholeheartedly that the way in which the Government bungled the latest massive handout to the nuclear industry is very regrettable. but does he want to slam the door on all types of possible research, particularly if in years ahead the prospect of cold fusion could unwrap the potential for new forms of energy, which may be produced without all the hazardous waste that typifies the nuclear industry today?
    Norman Baker: I am bound to say that a great deal of money has gone into nuclear fusion already without very much to show for it. If that money had gone into renewables, we might be rather better off than we are. I would not entirely slam the door on nuclear fusion, but I certainly wish to slam it on nuclear fission for the reasons that I have given.
    Waste concerns me greatly, and no one could think that the Government have performed very well on the matter. The waste hierarchy, which everyone supports, is applied upside down. There is a perverse incentive to landfill and, if not to landfill, to incinerate and only then to recycle—and reuse and waste minimisation get not even a look in.
    Mr. John Horam: Is it not evident that the danger now is that the Government's failure to produce a proper, coherent waste strategy is placing an

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    intolerable burden on local authorities, which simply have no guidance whatsoever to deal with the very difficult planning decisions that they often face?
    Norman Baker: The hon. Gentleman is right: local councils are being driven quickly by the Government to meet the targets required by the landfill directive, but they do not have the policy options or necessarily the resources to do other than probably opt for incineration. That is not the solution that they or the people in their areas want, but that is where we are going. We will end up with a chain of incinerators throughout the country if the Government do not do something quickly.
    We have had one disaster after another from the Government in the waste field. We had the famous fridge mountain about which my hon. Friend the Member for Gordon warned the Minister and his colleagues months before it appeared, although nothing was done. We now have a nationwide breaker's yard of abandoned cars throughout the country, with 238,000 dumped in England and Wales last year. That happened because the Government caved in to the motor lobby and instead of making the industry responsible for vehicles at the end of their lives, as happens in most of Europe, they put responsibility on to the last owners, who have vehicles at their lowest value. What a nonsensical policy that is. Apart from letting the motor industry off the hook, what kind of value does that give to the taxpayer? We paid £14 million last year to clear up abandoned vehicles because the Government took the wrong decision.
    Next, there will be lorries looking for an official site to dispose of hazardous waste. The Government admit that only 37 of the 218 present sites will be available for use for hazardous waste after a EU directive banning co-disposal takes effect in July. However, when my hon. Friend the Member for Guildford raised that matter, the Minister told her that her concerns were premature. There are fewer than six months until the directive kicks in, so I do not call that premature.
    Mr. Challen: That is all well and good, but the hon. Gentleman's speech has lasted three times as long as the Queen's Speech and we are yet to hear a single Lib Dem policy. Are there any?
    Norman Baker: There are buckets of Lib Dem policies, which I shall be happy to speak about for the rest of the afternoon if hon. Members wish to hear them. They are implicit in the comments that I have made. We propose a waste hierarchy that is actually based on the waste hierarchy and that gives incentives to waste minimisation—we desire a zero waste policy. We have a sound energy policy that has no place for nuclear power, is based on energy conservation and efficiency and would give a much better leg-up to renewables than any policy that we have seen from the Government. We have a transport policy based on an increase in cycling, walking and public transport, a reorganisation of the railways and a proper investment strategy to deliver what people want. I assure the hon. Gentleman that we have strategies coming out of our ears.
    Paddy Tipping: While we are pursuing solutions rather than problems, will the hon. Gentleman say a
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    little about the phrase "economic instruments" in the motion? Does he believe in the use of economic instruments, will he give us some examples of them, and does he believe in the principle that the polluter should pay through fiscal measures?
    Norman Baker: Yes, I do believe that and I shall come on to it shortly, although I should probably take no more interventions given the time. The polluter does not pay, as a matter of fact, because figures from the Environment Agency show that only 0.5 per cent. of landfill pollution incidents last year resulted in a fine, despite the fact that there were 285 major incidents. The 100 or 200 operators who did pay paid an average fine of only £6,000, which is a pittance to a landfill operator. The message from the Government is that the polluter does not pay, but gets away with it scot-free.
    Before I address the matter raised by the hon. Member for Sherwood (Paddy Tipping), let me say a few quick words about ghost ships. I would be grateful if the Minister would set out his position on the four ghost ships at Hartlepool. The ships are strange because they were apparently so decrepit that the US authorities demanded that they were dealt with right away. They then miraculously recovered to undertake a sea voyage across the Atlantic to this country, but they have now suddenly become decrepit again and unable to sail back—they are very curious ships. I understand that the official line was that the ships were due to return to the US when spring arrived and weather conditions permitted, yet a letter sent late last year by the Department for Environment, Food and Rural Affairs to British MEPs stated:
    "The UK is satisfied that the ships will be dismantled under environmentally sound conditions, in accordance with planning permission and the waste management licence for the site."
    Has DEFRA now decided that the ships will be dismantled in Hartlepool? How is it possible to pass judgment on the acceptability of the manner of disposal when there are outstanding issues regarding planning permission, the necessary licence and, indeed, the environmental impact? Are the Government pursuing a policy in private that is contrary to the one that they espouse in public?
    Will the Minister deal with the issue of genetic modification when he replies? He will have noticed that our colleagues in Wales and Scotland have taken a rather more robust line on GM matters than the Government here in Westminster. They do not wish to co-operate with GM maize Chardon LL, or T25, which is patented by Bayer. In the light of those decisions in Wales and Scotland, what is the Government's strategy to deal with that matter?
    I now turn to economic instruments, which the hon. Member for Sherwood rightly raised. If we are to have an environmental policy that is delivered effectively, we must have incentives and disincentives in place so that we generate the right behaviour patterns. I received a parliamentary answer showing that in this country, unfortunately, only 2.5 per cent. of taxes, as classified by the Treasury, are raised on environmental matters, which is lower than the percentage in most countries. We have some way to go. It strikes me as mad that if people build on greenfield sites they pay no value added tax, but if they renovate an inner-city building they pay 17.5 per cent.

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    We must create a structure that changes those perverse incentives without increasing the overall tax take—the policy is not about increasing taxes, but using different taxes. Energy saving equipment should incur lower VAT, and compensatory changes should be made elsewhere. We should especially consider how to deal with aviation, because as aviation fuel is not taxed there is a perverse incentive to take the plane, although the environmental solution would be to take the train— especially for internal journeys, and also for cross-channel journeys. On 17 April 2002, the Chancellor said:
    "There is also no necessary conflict between growing the economy and protecting the environment. There is a huge potential for British firms, small and large, to capture new world markets by investing in environmentally friendly technologies and creating new businesses and jobs as a result."—[Official Report, 17 April 2002; Vol. 383, c. 583.]
    That takes things on a stage, and it is important because we must demonstrate to businesses, which are sometimes sceptical about the environment, that investing in the environment can help them to cut their costs, improve their technologies and get them one step ahead of the opposition.
    David Taylor: I know that the hon. Gentleman takes a keen interest in the aviation industry. Will he comment on the fact that best estimates suggest that through not having to pay fuel tax and other taxes, the tax that the industry avoids paying aggregates to about £9 billion a year, which would pay for the whole of the United Kingdom's higher education budget? Is that not astonishing?
    Norman Baker: Yes, a gigantic amount of tax is not paid by the airline industry. Why should the rest of us be deprived of what we wish to do—on health, education or anything else—because that sector is excluded? That is entirely unfair and the Government must address it. I accept that the situation is difficult because of the international agreements and so on, but we must go further and faster than we have.
    People in this country want to help the environment—they have a hunger to do so in many ways. We know how people clamour for recycling facilities in their own patches. The most recent survey on public attitudes on the DEFRA website reveals that 91 per cent. of the population are either fairly or very concerned about environmental issues. Research by WWF says that 8 million people or more are likely to make decisions at the ballot box based on such issues, so they are politically, as well as morally, important, as I have tried to argue.
    I do not want to say that the Government have achieved nothing because they have several achievements. They ratified Kyoto, produced a reasonably good energy White Paper and made welcome structural changes. However, they have not gone far enough. Jonathan Porritt, the Prime Minister's adviser, said:
    "Anybody looking at it dispassionately is going to have a hard job proving that Labour has put the environment at the heart of Government, which is what they claimed they would do."
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    Friends of the Earth said:
    "Although the creation of DEFRA has brought environmental concerns to food and farming policy for perhaps the first time, it has also effectively sidelined the environment as a factor in many other crucial political areas, for example transport, trade, business and planning".
    The Environmental Audit Committee said that the Government are
    "making unsatisfactory progress on environment. The Government has made progress on only two of seven environmental indicators, with progress on the rest being unsatisfactory".
    We need to go further and faster. We have suggested an annual debate on the environment in Parliament to keep a focus on the topic. We welcome some of the Government's steps, but they need leadership from the top. We do not think that leadership is coming from the Prime Minister because he does not act as though he is interested in the topic at all. Perhaps that is why the best efforts of certain Ministers—the Minister for the Environment and his predecessor especially—do not always bear fruit as they should. The Government must ensure that the environment is at the heart of things, not out on a limb.
    1.29 pm
    The Minister for the Environment (Mr. Elliot Morley): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
    "applauds the leadership and commitment on the environment shown by the Government domestically and globally; welcomes the UK's climate change programme which has already put the UK on track to overshoot its Kyoto target of a 12.5 per cent. cut in 1990 levels of greenhouse gas emissions by 2012; commends the introduction in the UK of the world's first economy-wide emissions trading scheme; further welcomes the long-term improvement in air quality and steps to improve local environmental quality generally; notes that river and bathing water quality is the highest on record; congratulates the Government on achieving a household recycling rate of 15 per cent. in 2002–03 and being on track for 17 per cent. for 2003–04; further congratulates the Government for playing a key role in the Convention on International Trade in Endangered Species (CITES), increasing protection for a number of endangered flora and fauna; recognises that there is still much to do to promote sustainability at all levels; and calls upon the Government to continue to put environmental protection, locally, nationally and globally at the heart of its policies."
    That was an interesting run through a range of environmental issues and the hon. Member for Lewes (Norman Baker) took a fair approach, to the extent that he acknowledged that the Government have made a lot of progress with a range of environmental issues. We can be proud of measures that command widespread support. This is not a partisan issue because there is a great deal of commitment and interest from all parts of the House and all sections of public opinion. It is easy to be glib about some of the challenges, and I am the first to acknowledge that while the Government can point to real progress and achievements, there is much still to do.
    In principle, I am not against an annual debate on the environment. Why just one debate? The Government, DEFRA and I have all been strong on integrating environmental priorities right across Government strategies and policies. I would not want the environment to be the subject of an annual debate, then for it to be thought that we had "done" the

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    environment, and I am sure that that is not the hon. Gentleman's intention. Given the increased, scrutiny, Select Committees and improved facilities for Adjournment debates that the Government have put in place, there are many opportunities for the House to discuss, debate and scrutinise environmental issues—which also touch on the Treasury, trade and health, and the whole range of government functions.
    I must defend my right hon. Friend the Secretary of State because no one doubts her commitment to environmental issues or questions her international achievements in negotiations on the mid-term review of the common agricultural policy and with the Doha agreement, which for the first time put environmental and non-trade issues on the agenda. I do not pretend that that solved the problem because reaching agreement in a body such as the World Trade Organisation is difficult, but at least those issues are now on the agenda, when they were not in the past. There is not much evidence either of any attempt to get them on the agenda in the past. My right hon. Friend can take credit for that development.
    I do not doubt either the commitment to the environment of my right hon. Friend the Prime Minister, which he has demonstrated on many occasions. In his speech to the American Congress, he raised the issue of climate change right to the heart of American government. We have repeatedly said that, as America is the greatest contributor to greenhouse gases, it must take climate control seriously. Even though the Americans have not signed up to Kyoto, many American states, institutions and academics do take climate control seriously and have tried to address it unilaterally within the US system.
    The US Government are keen to take forward environmental technologies, which have a contribution to make. We do not believe that such technologies are the complete answer to climate change, but we are prepared to work with the Americans. We welcome the large sums of money that the US has committed to environmental technology research and to research and development generally. We have agreed to co-operate with the Americans in the G8 in taking forward environmental technology. The House should not be misled into thinking that there is no US engagement or involvement on climate change. However, we believe that the US ought to ratify Kyoto and ultimately should be part of a global agreement on controlling greenhouse gases.
    Sue Doughty: We welcome the fact that the Government are working with the US to secure improvements, but I still have great difficulty identifying the strategic leadership. This is not an anti-American debate. We accept that a lot of good work is being done in the US, but there is a huge gap. Something is needed to tip the Americans into ratifying Kyoto. The US must be made to understand the potential for jobs and other opportunities if it provides leadership.
    Mr. Morley: That is also an internal debate within the US. I heard a lecture by a prominent scientist who advises the Bush Administration in which he made it clear that there was no doubt about the impact of climate change and the need to address it. Many voices
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    have been raised in the debate in the US and I am sure that that will continue—as is the case with Russian ratification.
    Carbon trading and setting caps are not all negatives in respect of their impact on industry. They encourage energy efficiency, improve competitiveness and offer financial advantages—not least to Russia. We are trying to make the case to Russia that there are economic advantages to ratifying the Kyoto agreement.
    Mr. Weir: I was in Russia at the end of last year and one view expressed was that climate change might benefit that country as it might increase agricultural production. That opinion is prevalent in high Government circles in Russia, which is most worrying.
    Mr. Morley: That is worrying. I have heard the argument that where a country has a frozen hinterland, increased temperatures might be no bad thing. However, when road vehicles and pipelines start sinking into the melting tundra, climate change might not be thought such a good thing. There are also all the associated problems, not least the impact on biodiversity.
    The Hadley centre and the Tindale centre are both world-class institutions and the former has developed a regional model of its climate change programme, Précis. I had the opportunity to meet academics from various institutions in India who are applying the Précis model to the Indian subcontinent in a first-class project that is supported by my Department as part of its commitment to global sustainability and national sustainable development.
    Key to our approach is putting sustainable development at the heart of our policies, as we want them to impact positively beyond political time scales. Our key objectives include the sustainable use of natural resources and protecting the rural, urban, marine and global environments. To make changes sustainable, they must be set alongside economic opportunity and social well-being. One cannot separate the three strands.
    Structures are also involved. The hon. Member for Lewes referred to the change from the Department of the Environment, Transport and the Regions to DEFRA. I acknowledge the arguments for a DETR- type structure because keeping environment, transport and planning together offers certain advantages. But keeping together the environment, all land use policy, all water policy, biodiversity policy, global and national biodiversity, and sustainability in one Department also has advantages. What is key is ensuring that Departments engage with each other. Ministers from my Department have made joint appearances before Select Committees with Ministers from other Departments. The launch of the better building regulations task force involved Secretaries of State from the Office of the Deputy Prime Minister, the Department of Trade and Industry and DEFRA. We are developing joint strategies and there is a collective approach to decision making. All those initiatives are bringing together Government functions on sustainability.
    I accept the point that the hon. Member for Lewes made about the importance of transport, but our society is becoming more affluent and people have the freedom to buy cars if they so choose. That does not mean,

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    however, that we cannot address problems through, for example, the transport plan, which was widely welcomed. The hon. Member for North-West Norfolk (Mr. Bellingham) acknowledged that an additional 1 million people are using rail. We have applied fiscal measures to transport. For example, we have changed company car taxation, which is linked to car emissions rather than engines, as was the case in the past, and have made changes to road tax, which was also linked to engine size. We have introduced a range of measures to address the impact on society of transport, including air travel. We accept that more needs to be done, and that measures on air transport need to be introduced to tackle the issue of pollution and climate change. Air transport is by its very nature a global activity, so we need international agreements and approaches, but that does not mean that we cannot make progress on an EU level, and we are looking at that.
    Gregory Barker: When the Secretary of State for Transport appeared before the Environmental Audit Committee to discuss the Government's policy on air travel, we were extremely underwhelmed by the complete lack of a clear environmental policy on airport and airline expansion. Perhaps the Minister could enlighten us, and tell us what direct influence he has had on his colleague's transport policy and the future of the airline industry?
    Mr. Morley: We are, of course, consulted on issues such as the Government White Paper, strategy on air travel and related developments. It is easy to wrestle with such problems in opposition, but the hon. Gentleman should accept that more people want to travel by air. Plane use and passenger numbers are going up. We cannot ignore that. We must recognise trends in society such as the demand for travel, but we must try to tackle their environmental impact.
    Gregory Barker: I am extremely grateful to the Minister for being so generous in giving way. However, he cannot ignore the fact that the real cost of airline travel is falling dramatically. In recent years, the cash cost of air tickets has fallen dramatically, and is set to continue to fall in real terms. The Government, however, are quite unwilling to engage in the argument and simply talk about the generality of people wanting to travel.
    Mr. Morley: That argument is under way. However, if I interpret the hon. Gentleman's comments correctly, he seems to be arguing that air travel is getting cheaper, so it should be taxed to make it more expensive. That would not necessarily deal with the issue of emissions and pollution—it may simply mean that people pay more, so there will not be an effect on the environment. We must therefore think carefully about which measures we want to apply. For example, the application of carbon trading to air travel within the EU is being considered as part of the EU debate. The proposal has a great deal of merit and would have
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    genuine results. We need collective agreement on such issues, in this case in the EU, but in other cases on a global basis.
    Mrs. Patsy Calton: May I return to the Minister's comments about people being more affluent and using their cars more? The implication was that the Government simply recognise trends and follow them, rather than trying to set them. In a recent consultation about post office closures, my constituents said that they do not have more cars or more opportunities to use them. They want to be able to walk to the local post office. Government policy on post office closures does not help the environment or reduce the amount of car traffic. Where is the Government's leadership?
    Mr. Morley: With respect, post offices and small shops are closing because the hon. Lady's constituents are driving to out-of-town department stores. Of course, we must try to influence such trends and change them, but we must not make glib statements. Many shops close down because local people, who all want to keep them, do not use them themselves. Changes in patterns of behaviour and individual responsibility are not easy to bring about, and the Government cannot dictate exactly what people should do. The hon. Lady seems to think that Liberal Democrat policy is about whether people can or cannot buy a car, where they can take it and how they can use it. I did not know that there was a Stalinist element in Liberal Democrat policy on the environment. Sadly, however, life is a bit more complicated.
    We must introduce a range of measures to convince people to follow a course of action that is beneficial for their communities and society. That may, for example, involve restrictions on access to city centres, such as parking policies and parking charges. A range of measures can be applied, but a balance must be struck. It is not, however, always easy to do.
    Mrs. Calton: I thank the Minister for being generous with his time. However, he has changed the terms of the argument. No matter how much he wags his finger at me, in my constituency, which is considered affluent, there are people who do not have access to cars, buses or other forms of public transport. Forty per cent. of the people who replied to our consultation have mobility problems, and in some areas 20 per cent. have no car. What is the position of those excluded members of society who do not have the opportunities that the Minister is talking about?
    Mr. Morley: Of course there is a social exclusion problem, which the Government take seriously. Perhaps the hon. Lady would like to have a small wager with me as to whether or not car ownership in her constituency has gone up or down since 1997. I think I know exactly what the trend has been.
    Mr. Challen: I should like to return to aviation, as it is an important area. As the last international treaty governing aviation was signed in the 1940s, does my hon. Friend agree that the European Union offers us the best way of trying to make the environmental improvements in aviation that we need? That is one reason—Opposition Members obviously will not accept it—why we should remain fully engaged with the EU.

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    Does my hon. Friend agree that environmental measures should be built into new EU rules governing our relationship with other countries such as the United States? There is a moratorium on genetically modified food, and we could build in environmental considerations that would have a moratorium effect on air travel if we did not conclude a treaty in the near future.
    Mr. Morley: I certainly agree that there is a case for negotiation and discussion to reach an international agreement, both within the EU and globally. My hon. Friend is right—insufficient attention has been paid to the growth of air travel over the past few decades. Times have changed, and we need to address the problem.
    I do not think that there is any disagreement in the House about the need to tackle climate change. Our record is strong, given that we have exceeded our Kyoto targets and are pursuing an ambitious goal, as we are committed to reducing CO2 by 60 per cent. by 2050. I am not complacent, but nevertheless we are making progress and have considerable support for our approach. I hope that by leading by example—we are the first EU country to implement the EU carbon-trading scheme and set targets—we can encourage other countries to follow.
    Norman Baker: Before the Minister leaves the subject of aviation, what steps are the Government taking to try to ensure that aviation emissions are included in Kyoto targets, as currently they are absent? What will he the impact on aviation sector emissions following the Government's recent announcements on aviation? I think that there will he a big increase.
    Mr. Morley: There will be an increase in emissions, and the hon. Gentleman is free to look at our figures. As for Kyoto, ideally, aircraft emissions should have been included from the beginning, but we must be realistic and accept how far and how fast we can go. The hon. Gentleman and his colleagues are well aware of the problems with the Kyoto agreement, including the difficulty of getting Russia to ratify and the fact that the US has walked away. The inclusion of aircraft emissions would not have made that any easier. The best way to deal with the issue, as my hon. Friend the Member for Morley and Rothwell (Mr. Challen) suggested, is to approach it internationally rather than within the Kyoto process. Perhaps we will be able to do that post-Kyoto, but in the meantime, the main thing is to get Kyoto ratified and up and running.
    I strongly believe that environmental sustainability issues should be addressed locally, nationally and globally. The local aspect includes buying from individuals, which involves raising awareness by making these arguments. We recognise that we have a role to play as a Government, as do the local authorities and non-governmental organisations with which we cooperate closely in trying to get the message across. We also need to play our role globally, as we have done on climate change. We are fortunate in this country to have a first-class scientific base with a wide range of institutions and people. We have been active and successful in international bodies such as the convention on international trade in endangered species—CITES— and the convention on biological diversity, which I will
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    attend later this year, and where we will press for further changes, including the extension of protected areas to the marine environment. We have worked with our colleagues in the EU and internationally. We have increased the budget of the Darwin scheme—which was originally set up by the Conservative Government; I give credit where it is due, because it has been extremely successful—from £2 million to £7 million a year.
    We are making progress on forestry. I am proud of the fact that we were the first G8 Government to make a commitment to procuring timber on our Government estates from legal and sustainable sources. We have set up a point of expertise to advise people about that, and we are working with the forest law enforcement and governance process in Asia, Africa and the EU. We want to agree powers in the EU that will strengthen our power to seize illegal timber. We can, and do, seize timber that is in contravention of CITES regulations, but I want to be able to go further. That must be achieved on an EU-wide basis—we cannot do it unilaterally, because we could not stop timber coming from, say, Rotterdam into this country by rail or through the tunnel. We are actively encouraging that EU-wide approach.
    I turn to GM in Wales and Scotland. If the hon. Member for Lewes has a fault, it is that he tends to believe what he reads in the newspapers without any criticism or question. He should be wary about that, because in this case it was inaccurate. We are still discussing GM with the devolved Administrations, with whom we have a friendly and constructive relationship, and we will in due course announce our response to the recommendations of ACRE—the Advisory Committee on Releases to the Environment.
    Waste is one of the areas where we have lagged behind other countries, although we have a good record on climate, water quality, air quality, and involvement in sustainability and environmental issues. I am pleased, however, that we are making a great deal of progress on waste. We are hitting our targets on recycling, and many more doorstep collections are being introduced by local authorities. Our strategy—the waste implementation programme—is having a big effect. WRAP—the Waste and Resources Action Programme—has been successful in finding markets for recyclates. I am not complacent, because we need to do more, but I am encouraged by the fact that we have made very good progress, which seems to be accelerating.
    The hon. Member for Lewes asked about the ghost ships. The bottom line is that people should have the facts about that situation, and I hope that he will join me in condemning the extreme, alarmist and inaccurate descriptions of "toxic time bombs". The fact is that those ships are no better or worse than any other scrap ships of their age. They remain under an injunction and are stored safely in Hartlepool in the facility run by Able UK. In terms of their future, if there are proper green recycling facilities in this country that are legal and have all the required permits, the best option would be to do the job in this country, not tow them all the way back across the Atlantic. That is self-evident, and most green groups regard it as the best option environmentally.
    The situation gives rise to wider issues such as our strategy for ship recycling. As many ships, particularly single-hull tankers, will come on to the market in the

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    next few years, we need good facilities in this country to avoid exporting our problems to other countries. We are in the process of developing those facilities.
    Mrs. Caroline Spelman: The Secretary of State for Environment, Food and Rural Affairs is on record as saying that the ships will be sent back. Is the best environmental solution therefore effectively a U-turn?
    Mr. Morley: No. The hon. Lady did not listen to what my right hon. Friend said. She made it clear, in the same words as I have used, that we are seeking the best environmental option. If the option of proper green recycling facilities is not available in this country, the US recognises that the ships will have to be returned. There is no change in the present situation. The hon. Lady joined the bandwagon on these ships, but it ran into a ditch when the green groups recognised that the incident had been exaggerated disgracefully. Is she saying that she does not want Able to be developed as a world-class recycling facility?
    Mrs. Spelman: Of course I would love to see a world-class facility at Able, but the dry dock has not yet been built and the ships are moored up next to Seal sands in Hartlepool. While I entirely share the Minister's desire for the best environmental solution, we both need to be clear about exactly what was said.
    Mr. Morley: Indeed. That is why I have made it clear to interested parties that there are no shortcuts in this process and that there will be no compromise on the environmental assessments that will have to be made in relation to the adjacent special protection area. We do not know whether the dry dock facilities can be put in place, the payments approved and planning permission granted; those are issues to be resolved by the company and the appropriate authorities. At the moment, it is a hypothetical situation, and we shall have to see how it develops.
    Norman Baker: The Minister seems to be keeping his options open as regards the best environmental option—as indeed he must, given that there is no planning permission, no dry dock and no licence. How does he square that pragmatic position with the extract that I quoted from the letter that his officials sent to MEPs late last year, which suggests that the decision has already been taken to dispose of the ships in
    Hartlepool—in other words, that it is a fait accompli?
    Mr. Morley: I saw that letter, and I do not give it that interpretation. It is entirely consistent with the position that I spelled out to the House, which is the position at the present time.
    Paddy Tipping: Surely it is wrong to focus on these alleged ghost ships, because the bigger issue is that increasing numbers of ships will require decommissioning. Instead of arguing about the specifics, should we not leave that to the courts and work on developing a strategy, in the UK, Europe and internationally, to tackle the problem?
    Mr. Morley: My hon. Friend is right. That work is in progress. A review of UK facilities and an assessment of
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    future demand are under way. For example, we calculate that approximately 2,000 single-hull tankers are EU-flagged and they will need to be tackled in proper facilities. Apart from not wishing ships to be exported to countries that do not have proper facilities, health and safety measures or hazardous waste handling equipment, we are considering an environmental business. I see nothing wrong with developing environmental businesses in this country, provided that they fulfil the proper standards. There is a considerable opportunity for businesses in this country in a range of environmental business, not only ship recycling.
    I welcome the debate. It is useful to tackle important and serious issues. The whole Government take environmental matters seriously. We try to lead by example in procurement and energy policies. For example, we have exceeded the targets that we set for the share of power from renewables and combined heat and power in Government estates and for the standards that we apply. We have reduced water use and increased recycling, but we want to do a great deal more. We want sustainability to be at the heart of every Government policy, whether on transport, housing or development. We hope that new developments such as Thames gateway, which will be Europe's biggest brownfield development, will set the pace for reducing energy and water use and building in sustainable transport.
    I saw an interesting development by BedZed for sustainable zero emission housing that had workshop units underneath homes so that people could work where they live. Such developments are not appropriate in all parts of the country, but they have a role to play. I am pleased by the proposal for up to 2,000 of those units in the Thames gateway. I therefore believe that Thames gateway gives us a chance to demonstrate some cutting-edge technology in sustainable design and planning.
    Mr. Francois: I thank the Minister for his courtesy in allowing me to intervene before he concludes. He mentions Thames gateway, where he well knows that there are issues about building on a flood plain. He also knows from discussions that he and I have held about the concerns in Essex about the reorganisation of flood defence committees. In a non-partisan manner, I remind him of that and stress to him that it is important to the people of Essex to be allowed to retain a flood defence committee, not least to provide reassurance about the sort of things that he has just mentioned.
    Mr. Morley: I congratulate the hon. Gentleman on getting Essex flood defence committees into a debate on the environment and Thames gateway. He knows that I acknowledge the case for local involvement. We have not taken the final decision about the structure of the new single-tier flood defence committees, but he knows that I am sympathetic to the case that Essex has made and that I invited that committee to present some proposals. I shall consider them in due course.
    Flood plain development is important and we have changed the planning policy guidance to reflect that. Indeed, we are reviewing PPG10 on development, energy and a range of sustainable issues. Thames gateway is currently defended to the level of one in 1,000, which is very high. We have long had big urban

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    centres, such as Hull, on flood plains. They can be defended; of course, that entails a cost. That brings me back to where I started: climatic change.
    When we present arguments to convince people, we admit that there are costs, through caps, to industry in carbon trading. We understand that that has an impact, but if we do not tackle global warming, there will be huge costs to society. I pay tribute to Professor King, the Government chief scientist, and Professor Dalton, DEFRA chief scientist, who have been active and outspoken. We cannot ignore the matter. If we do not tackle climate change internationally, the results for our country and the world will be catastrophic.
    2.4 pm
    Mrs. Caroline Spelman: I tend to agree that an annual debate on the state of the environment is the very least that the Government should provide. I pressed for at least an annual debate on trade justice when I was working on international development.
    There are few tests more exacting than the legacy that we leave future generations and the quality of life that we bequeath our children. When I was a child, the major threat to world security was the prospect of a third world war—a nuclear one at that. Today's children grow up facing not only the threat of international terrorism but the genuine prospect of environmental catastrophe. Although international terrorism is unpredictable, we can predict what will happen if we continue to ignore environmental problems. Furthermore, as part of a league of rich nations, if we have the will, we have the power to do something about it.
    The Minister referred to the importance of the Doha round and getting the environment on to the agenda. However, an agenda is useless unless there is a meeting at which to discuss it. As we all know, the round collapsed fatally at the talks in Cancun and it has been difficult to get any agenda back on the table. There is therefore no room for complacency among nations that are as well developed as ours.
    We need to be clear about what we mean by the environment. The term literally covers a multitude of sins. The fact that the debate is on the state of the environment underlines the breadth of the subject. For some, "environment" evokes concerns about global warming, ozone depletion or renewable energy. For others, it suggests anxieties about the amount of litter locally, river pollution or fly-tipping. It is important to appreciate the divergence in people's understanding of the environment and to make strenuous efforts to tackle each concern. Whether people's environmental concerns are focused locally or globally, there is general recognition that our lifestyle has an effect on the quality of our environment.
    There is a vast difference between the outward concerns that people may express publicly and the action—or lack of it—that they take personally. My children are a case in point. They are always quick to point out to me when in the supermarket that we should not buy aerosol cans, but they are the worst offenders for leaving the lights on once we get home. However, the fact that more and more people want to be seen to be
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    green is encouraging. Environmental concerns often resemble those about car safety in the way in which they have infiltrated the public consciousness.
    Fifteen years ago, accident safety was not such a high priority for car buyers, as shown by the fact that so few car manufacturers focused on safety as a means of marketing. However, today, vehicle safety is a strong influence on consumer choice. The same pattern is emerging with the environment. The material satisfaction that many have experienced since the 1980s has brought in its wake a new set of anxieties and priorities. Parents who are in the fortunate position of being able to provide fully for their children's immediate needs start to consider the longer-term needs of their children's children. The environment is at the heart of that.
    The cultural change is not uniform. We need to recognise and tackle the fact that environmental concerns do not figure especially highly in the priorities of people who live in deprived areas. My constituency has four of the most deprived wards in England and Wales, where daily worries about housing, drug abuse and crime render issues such as landfill and climate change almost irrelevant. I say that because it is important that we recognise that although cultural change may be in train throughout what is crudely termed middle England, there remains a vast tract of society for whom the environment is an expensive luxury.
    Improving local environments through reduced litter, fly-tipping and graffiti is a vital component in fostering a sense of pride and responsibility in areas where people live. If we do not tackle the quality of life in deprived urban environments, I fear that we shall miss art opportunity to help facilitate the sort of social improvements that we all want. The Conservative party has a proud history on the environment. I should like to correct the false impression that Lady Thatcher somehow thought of the environment as a humdrum issue. As a scientist, she was one of the first party leaders to bring the environment on to the mainstream political agenda, when she said:
    "We do not have a freehold on the earth, only a full repairing lease."
    Mr. Martyn Jones: Does the hon. Lady not remember that Margaret Thatcher stopped the very important Salter's duck renewable energy project? That project is now nowhere to be seen, but at the time it was at a production level of 10 per cent., and cheaper than nuclear energy. That was one reason why she closed it.
    Mrs. Spelman: Perhaps the hon. Gentleman will just wait a little to hear me talk about renewable energy. Technologies have moved on a great deal, even since I wrote my PhD on the subject 20 years ago. Improvements in technology have improved the economic viability of so many renewable technologies, but that was perhaps not the case at the time when Lady Thatcher was leading my party.
    Many would seek to demonise centre-right politics, capitalism and business as the arch-enemies of environmental welfare. That simplistic analysis is as flawed as the assertion that because the Conservative

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    party is pro-business, it cannot be pro-environment. However, centre-right politics yielded the end of the cold war and with it, the beginning of the end of some of the world's most environmentally destructive industrial practices. The word conservatism is a derivation of the verb to conserve, meaning to protect or preserve. Conservatism is all about taking responsibility for one's actions, being prudent, safeguarding the future and nurturing a framework of codes and practices that permit the maximum possible freedoms for everyone.
    Those four tenets go to the very heart of the protection of our environment, reflected at every level at which my party operates. At global level, as my hon. Friend the Member for North Wiltshire (Mr. Gray) has said, it was the present leader of my party, my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), who led the negotiations for Britain at the 1992 Rio Earth summit, which gave rise to the Kyoto protocol, of which we remain fully supportive. At European level, the Conservative group negotiated to chair the environment committee in preference to other committees, because we recognised the importance of working with our neighbours to combat environmental threats. At national level, hon. Members on both sides will recognise the role played by my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), who continues to be dedicated to environmental matters and who led for the Conservatives in the debate on climate change in Westminster Hall two weeks ago.
    Hon. Members will observe that, to show our ongoing commitment to the environment and our understanding that it involves cross-cutting concerns, we have again combined transport and the environment in one portfolio, which we are certainly finding beneficial for policy development. At local level, according to the National Audit Office, Conservative councils consistently perform better on environmental issues than their Labour and Liberal Democrat counterparts.
    There is broad consensus among all parties on the need to protect the environment. However, although we can agree on that aim, there are bound to be differences in the way in which we would go about attaining it. It is important, especially in a debate such as this, to give credit where it is due, and many of the Government's intentions on the environment are very good. That is why my party can make common cause with the Government on so many environmental objectives, but where we differ is on how those objectives can best be realised. Too often, the underlying problem has been misdiagnosed, and consequently the wrong priorities are chosen in the attempt to devise an effective solution. There has therefore been a system failure in implementation, creating a whole generation of new problems as a consequence.
    It is not difficult to understand how that has occurred. The Department for Environment, Food and Rural Affairs has evolved comparatively recently, and it has become rather centralised and bureaucratic, having difficulties with its lines of responsibility. I do not make that diagnosis of the problem; it was made by the person whom the Government appointed to undertake an
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    analysis of DEFRA's structural problems: Lord Haskins. He described the Department as
    "a dog's dinner of the highest order".
    Nowhere are the Department's failings clearer than in the context of the environment, and the rural environment in particular. Although we would think that the environment would come first in the list of departmental responsibilities because it is first in the Department's title, all too often—partly through events, including the demands of the crisis in agriculture—it has come last in the Government's departmental priorities. We have only recently discovered, now that the figures have come to light, that it took £500,000 of taxpayers' money to rebrand DEFRA when it was established in 2001, absorbing the Ministry of Agriculture, Fisheries and Food. Such is the confusion in DEFRA that when I recently asked a written question, the Minister who replied was unable to supply even the most rudimentary information on staffing levels in the Department. Only during oral questions in the Chamber last week did I finally obtain that information, which should have been readily available.
    The practical effect of the organisational problems in DEFRA is manifest to those who have to use its service and those of us who observe it in action. I shall quote Lord Haskins again. He said:
    "Too many organisations are involved in rural delivery, resulting in confusion—the delivery of sustainable land management, for example. is handled by at least six national agencies working with multiple regional and local organisations."
    The problems are not only of an organisational nature, but concern broader questions of competency. According to DEFRA's municipal waste management survey, England recycles or composts just 13.5 per cent. of its municipal waste. That is one of the lowest rates in Europe and compares with a recycling rate for municipal solid waste of 48 per cent. in Germany and roughly the same rate in Austria. I am yet to understand why DEFRA cannot do more to include home composting in the compilation of its figures. I strongly suspect that a failure to include in the figures the extent to which we, as a nation, compost at home has led to an underestimation of the extent to which we compost in general. If the reduction in the number of black sacks that my family puts out is any indication of the role and value of home composting, there are great savings to be made in that area.
    I have been made aware today, by industry sources, of the industry's estimate of the ground that needs to be made up. In its view, we are so massively off target over meeting the requirements of the landfill directive that unless there is a fourfold increase in the amount of composting that we undertake as a nation, we will fall way short of the directive targets by 2010. In response, the Government have set a target for the recycling rate for household waste to rise to 25 per cent. by 2005, to 30 per cent. by 2010 and to 33 per cent. by 2015. However, the Environmental Audit Committee believes that the UK will
    "not come close to meeting any of the national targets set for recycling",
    and that the 2010 and 2015 targets will be missed by "a wide margin".
    Paddy Tipping: I agree entirely with the hon. Lady's points on home composting and the need to compost.

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    However, will she cast her mind back a few months to the passage of the Waste and Emissions Trading Bill? Her Front-Bench colleague in the other place tabled amendments that would, if accepted, have led to the demise of composting.
    Mrs. Spelman: It would take an awful lot, in such a nation of gardeners, to lead to the real demise of composting. Fundamentally, we are a nation not, perhaps, of shopkeepers but very definitely of gardeners, and I think that we all understand the value of composting. If our spokesman in another place is unaware of its benefits, perhaps it is for lack of a garden—who knows? I shall speak to him on the subject.
    Mr. Morley: On the figures for recycling and composting, the hon. Lady will be aware that I have said that we have a lot to do in that area. I am not complacent about that. The Environmental Audit Committee report said that the Government would not meet any of their targets, but that is just not true. We are meeting our targets, and the rate is accelerating. Will the hon. Lady also, in a spirit of fairness, acknowledge that in relation to recycling and composting, we are starting from the very low base that we inherited in 1997?
    Mrs. Spelman: I do not deny that, as a nation, we have a lot of catching up to do, as anyone who is aware of the cultural and lifestyle differences among certain comparable developed economies, particularly on the continent of Europe, in relation to recycling and segregating household waste before it is passed to the municipal authorities will know. However, I am concerned that we sometimes sign up to directives without having put in place the necessary facilities to implement them, so that even if we want, with the best will in the world, to embrace the changes involved, we are unable to do so. A good illustration of that is the batteries directive, which we have signed up to despite there being no facilities in this country for recycling batteries. In comparable developed economies, it is regarded as a heinous crime to put batteries in the waste paper bin. However, that directive remains the only solution to that problem in this country, and I look forward to the necessary facilities being put in place so that when a safe and environmentally suitable solution exists, we really can take advantage of it.
    Recycling rates and landfill rates are two sides of the same coin. It is no surprise, given the slow progress being made on increasing recycling, that aspirations towards the reduction of the amount of biodegradable municipal waste going to landfill are also faltering. The hon. Member for Lewes (Norman Baker) made a fair point when he said that the hierarchy of dealing with waste seemed to have been turned on its head. Much more effort needs to be put into this area, because the more that can be segregated and recycled at household level, the less will be the temptation to justify the easy solution of burying it all in the ground, which we want to move away from.
    The amount of landfill increased to 22.3 million tonnes in the last year for which there are figures. That is not only an indictment of this country's inability to get on top of waste disposal as an issue—it also means that Britain is perilously close to missing the requirements of
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    the European landfill directive, which would result in a fine of up to £180 million a year. Perhaps the Government will tell us whether they intend to pass that fine on to local authorities and, ultimately, to council tax payers, should we be faced with such a bill.
    Another target that is looking increasingly fallible is that of attaining 10 per cent. of electricity production derived from renewable energy sources. The reality is that the 3 per cent. target for 2002 was missed by a considerable margin. That makes the likelihood of fulfilling the 10 per cent. target in a mere six years look more and more like a costly pipedream. I am of course aware of the recent announcements regarding wind farm investments, which the Government have been keen to cite as examples of progress in meeting those targets. However, there are many concerns about wind farms—particularly onshore wind farms—with regard to their reliability, their efficiency and, ironically, their environmental impact. Wind farms can at best be only part of any sensible programme for generating electricity from renewable energy sources. The Government must certainly look to offshore wind farms and wave farms as ways of harnessing renewable forms of energy in a more environmentally acceptable way.
    Among the most interesting and logical sources of renewable energy are biofuels. As the author of a book entitled "Non-Food Uses of Agricultural Raw Materials", perhaps I ought to state a private interest in this particular issue. Biofuels, like wind power, are not in themselves the holy grail of environmentally friendly energy production, but they could well offer part of the solution and they certainly warrant further research.
    Sadly, biofuels are another area in which the Government's thinking has appeared muddled and little or no effective progress has been made. In October last year, the Environment, Food and Rural Affairs Committee published a report which confirmed that. It stated:
    "We deplore the fact that the Government has not nominated any one Department to lead on biofuels and consider that this is the prime reason for the slow progress that has been made in this area."
    The report concluded:
    "The Government's biofuels policy still appears to be muddled and unfocussed: it has expressed support for biofuels but the mechanisms used to promote their use have had little effect so far".
    It is bad enough that the Government are found wanting when it comes to taking effective action for our medium-term renewable energy commitments, but there are also a number of very worrying failures with regard to their present day implementation of EU environmental measures. Every so often, a snapshot image of the kind used in newspapers and on television screens becomes imprinted on the public consciousness, and I would argue that one such image is that of mountains of decaying fridges piled up throughout the country with no adequate means of disposal for them.
    Mr. Challen: The hon. Lady has not really talked about nuclear energy. What are her party's policies on that issue? Its history, when in government, was to support nuclear energy with what I call a nuclear tax of 10 per cent.—otherwise known as the non-fossil fuel levy. That gave our competitors in Germany and Denmark a great opportunity to advance on us in terms of the engineering and technology required to develop wind power, for example. Would the Conservatives go

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    back to such an approach, which would set back our renewable energy prospects? Do they have a policy on nuclear power yet?
    Mrs. Spelman: The hon. Gentleman would expect the environmental spokesman for the Conservative party to state the blindingly obvious on this issue, which is that until an adequate environmental solution is found to the problems of waste from nuclear energy, nuclear power is not an option that can enthusiastically be embraced. So far, such a solution has not been found. I think that that answers the hon. Gentleman's question.
    To return to the mountains of fridges, the arguments over whose fault that was—the Government's, for failing to read and understand the implications of the ozone-depleting substances directive, or the European Commission's for not making the implications explicit—have been rehearsed many times. In June 2002, the Commons Environment Sub-Committee concluded that DEFRA and not the European Commission was primarily to blame for the situation. The Committee, of whom eight members out of 10 are Labour MPs, said that clearing up the problem would cost taxpayers £40 million. In particular, the report said:
    "While the European Commission must accept some blame for lack of clarity, the overwhelming responsibility for mishandling the implementation lies with the Government."
    The report concluded:
    "We find it deeply disturbing that the Government signed up to the regulation whilst still suffering 'knowledge gaps' about its full impact."
    What this episode serves to highlight is a routine deficiency in the implementation of European environmental legislation, and the spectre of the fridge mountain fiasco looms large as we begin implementing the hazardous waste directive and the waste electrical and electronic equipment directive. I very much fear that, as a country, we are inadequately prepared to deal with the de-manufacturing and recycling of our waste electrical goods, particularly as we feel the effects of the ominous trend towards built-in obsolescence in manufactured goods.
    One consequence of this lack of preparation is the increased problem of fly-tipping, which blights urban and rural areas throughout the country. That problem is likely to be exacerbated with the closure of 290 of the 300 landfill sites that currently take hazardous waste, just months before the hazardous waste directive takes effect. Perhaps the Minister will clarify the position on that.
    Mr. Morley: Yes, I will. The sites will not be closing. The directive ends co-disposal, but they will continue as landfill sites. Some of them, if they so choose, will be able to continue by installing a separate cell for hazardous waste on the site; indeed, a number have already put in a planning application to do so. The vast majority of the sites do not take hazardous waste anyway, so the hon. Lady's figures are really quite misleading.
    Mrs. Spelman: I tabled a written question on this subject. It is of the utmost importance to know the
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    pattern of sites to which hazardous waste will be able to be sent. Given the combination of the increase in landfill use and the costs involved, if there are to be restrictions on the type of material that can go to such sites, those who try to avoid those costs will be tempted to deposit certain materials in the countryside.
    Fly-tipping presents similar problems to those of litter, graffiti and, to some extent, urban water course pollution, which are also symptoms of ineffective law enforcement. Litter costs local authorities in the region of £342 million each year. I am not convinced that measures contained in the Anti-social Behaviour Act 2003 will reverse the fall in the number of prosecutions and convictions for depositing litter and the fall in the number of fixed penalties issued to offenders. More policing will be a far greater agent for change than more legislation.
    Another grave concern among Conservative Members is the inconsistency within the Department. Last Friday, I went to Stansted to meet campaigners opposed to the construction of a new runway. They, like me, are bewildered at the lack of an environmental impact assessment before the Government announced their plans about where to expand. This view is shared by the Environmental Audit Committee, which stated:
    "The opaqueness of the appraisal process means that it is not possible to evaluate … the cumulative impacts at both regional and national levels, and the relative balance of economic, social and environmental benefits and disbenefits."
    The Committee added:
    "We regard the absence of concise, transparent and strategic integrated appraisals as a major weakness in the consultation documents. The Department's failure in this respect conflicts with its own guidance."
    The aviation White Paper also brought to light another inconsistency in the Government's approach, to which other Members have alluded in interventions. The ambitious carbon reduction targets that the Government have set will be impossible to meet given the growth in aviation facilitated by the Government's airport expansion plans. Those failings clearly suggest that the environmental implications of airport expansion were of little or less concern when the Government reached their decision.
    At each level of environmental awareness that I identified at the outset—global, European, national and local—there are clear failings by DEFRA. It would be disingenuous of me to suggest that Britain was alone in being without a joined-up approach to dealing with the environment. I am sure that we can all name one country whose failure to ratify Kyoto should be a cause of grave concern to us all, which the Prime Minister would do well to use his much-vaunted transatlantic influence to remedy.
    The point. however, is that there is no good reason why we should not be one of the pioneers of environmental policy and good practice. It is an uncomfortable reality that without many of the EU-originated regulations, Britain would not even now be adopting environmental good practice in many crucial respects. Britain is a bold, entrepreneurial, creative country with a natural instinct for conservation and protection, and it is the Government's duty to harness that instinct. Britain could and should become a beacon of environmental progress among industrialised

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    nations. If we fail in this, we will certainly be in no position to try to influence the environmental practices of the developing countries that otherwise will surely follow in our footsteps.
    2.33 pm
    Mr. Colin Challen: I very much welcome this debate. Given the importance that the Liberal Democrats attach to it in their motion, I am surprised that it is only a half-day debate. It seems that the ice caps could melt before we move off the subject of a local income tax, but that is their order of priorities.
    The motion calls for an annual debate on this subject, and we should give it a regular slot. Perhaps it could be tied to regular debates on reports from the Environmental Audit Committee, on which I sit. The EAC, as Members on both sides of the House will know, has produced some highly critical reports, to which reference has often been made this afternoon. Its reports deserve a wider audience. The Committee was one of the key creations on the parliamentary environmental scene that arose from the Labour party's 1997 manifesto, and it has firmly established itself as an authoritative voice on the environment and sustainable development.
    My main concern with the nature of the political debate on the environment and sustainable development is that it does not engage the public as widely as it should. We know that politicians of all persuasions are reluctant to go too far down the road of radical change because a swift and debilitating electoral consequence would follow. Sustainable development, if we take it seriously, implies that those living in the most developed countries will have to make some sacrifices. Our pattern of consumption is clearly unsustainable, but it is our solemn duty as politicians—in all parties, I hasten to add—to tell voters at election time that we will make their quality of life better, which is always understood to mean their material quality of life. Our whole economic model is based on the presumption that we must pursue economic growth, and that we must emulate countries such as the United States, which has experienced the longest sustained growth rates in the western world. The fact that the US does that by consuming more resources per capita, at a rate that simply could not be replicated around the globe, is the kind of argument that is compartmentalised in discrete packets of worthy thinking labelled "the environment", "climate change" or whatever, which are not allowed as yet to challenge the assumptions of economic growth.
    How do we square the circle? It will be very difficult. The first party that dares seriously to challenge those assumptions will be laughed out of court. Unless a major disaster forces our hand, we will inevitably have to take an incremental approach, which runs the risk of not doing enough fast enough to make much difference. I applaud this Government's early and urgent efforts to get the world to agree on the Kyoto protocol, but it is still not yet in force, and, even when it does come into force, it is such a modest measure that some doubt that it will have the desired impact.
    Nations will therefore have to take more unilateral action to get things done, but even that will cause howls of protest from those such as the CBI, which would prefer simply that the climate change levy would go
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    away, because it says that it damages our competitiveness. That is the same argument used by George Bush, who wants a purely voluntary approach to climate change, which I am not sure he really believes exists anyway. He wants to prevent the American economy from suffering. He has already caused enough unemployment; he does not want any more.
    Such short-term attitudes will ultimately be self-defeating, as the costs of climate change mount. Those costs will hit us with higher insurance premiums, more flooding in some areas, more drought in others, food and water shortages and high levels of human migration causing civil strife. The Government have made some very useful steps in the right direction: the climate change levy, the renewables obligation, and the Energy Bill, which clearly has set some stiff targets in sourcing energy from renewable sources—10 per cent. in only six years' time and 15 per cent. by 2015. Some people say that we do not have the engineering capacity to meet those targets. I hope that we address that criticism by putting more resources into our energy strategy from Government funds, and that we seriously increase our research and development resource in other areas, apart from wind, which is now a fully fledged technology. How is it that we spend less on R and D in wave and tidal energy or other renewables than we use to prop up British Energy and its outdated nuclear technology?

    Most of what the Government have done so far has addressed major players in the environmental field. They have addressed corporations' use of energy, for example, and they have introduced market mechanisms, which take a while to filter through, such as the renewables obligation. What we lack is a way of engaging the public in this debate, such as mechanisms that encourage individuals to make pro-environment choices in their lives. That is the real test, because, unlike businesses, individuals have votes, and if, for example, we told individuals that they could not drive their cars our popularity would evaporate faster than a cloud of carbon dioxide. Nor, as we have seen, can we easily introduce more taxes, since the fuel protests put paid to that. No doubt it is the memory of those events that makes the Government reluctant to tax aviation fuel. What, I wonder, is the Liberal Democrat policy on that? I do not think we have had an answer to that important question.
    Norman Baker: I am sure the hon. Gentleman will be given a very full answer by our shadow Chancellor when he winds up. but in the meantime let me repeat what I said to the hon. Member for Sherwood (Paddy Tipping): aviation is currently untaxed, and we need to find ways of dealing with that. The Government have imposed airport passenger duty, which is very low and not terribly focused. There is talk of the Chancellor's doubling it, but I am not sure whether that is the right idea. We would like aviation fuel to be taxed, but we realise that that must happen, if not internationally, at least on a Europe-wide basis, which is not immediately achievable.
    The Government's aviation paper mentioned a number of economic instruments, some of which should be investigated carefully. There may, for instance, be a case for taxing aeroplanes—on the assumption that they

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    are full—because that would give airlines an incentive to fill seats rather than running half-empty flights. There are a number of possibilities—
    Mr. Deputy Speaker (Sir Michael Lord): Order. I think the hon. Gentleman has said enough for the time being.
    Mr. Challen: I was still waiting for the answer, actually. I was not sure where it was in all that. Perhaps we shall hear it at the end of the debate.
    I am happy to say, as I said to the Secretary of State for Transport in the Environmental Audit Committee, that I favour a tax on aviation fuel. The £8 billion or £9 billion that is spent on subsidising the airline industry could be better spent on other things.
    I have been talking about the individual. I suppose the individual elector might want to punish me for talking so explicitly about what has been described in a local paper as the right to cheap holidays, but I think there are ways in which we can help that individual elector to contribute to a reduction in environmental damage. In that context, I shall now shamelessly promote a meeting that I am hosting in Room 21 at 6 pm, entitled "The carbon consumer". Positive ideas will be presented, some of which originate from the Tyndall Centre, which has already been mentioned. It is a well-respected organisation that has been considering ways of cutting our carbon emissions.
    One suggestion is the introduction of domestic tradeable quotas. I have a lot to learn about the subject, but I understand that they would operate rather as international emissions trading schemes do, while in this case applying domestically to individuals. That idea builds on something mentioned yesterday by the Bishop of Leicester in his maiden speech. He referred to contraction and convergence, first proposed by Aubrey Meyer of the Global Commons Institute. The idea of contraction is to reduce the amount of carbon emissions overall, while convergence is seen as a way of distributing responsibility for the reduction. Those are exciting ideas, and I hope that the Minister will meet me soon to discuss them, as they seem to me to constitute one of the few ways in which individual citizens can become involved in reducing emissions.
    At tonight's meeting, I will also promote a scheme called "save as you travel". If it were adopted, people would be given reward cards—a concept that is familiar to the British consumer. They would be rewarded for using public transport more, by means of points, air miles or financial remuneration. The Treasury could support the scheme quite generously if it chose, by taxing aviation fuel.
    I want to mention a third proposal that deals with the environment more generally. It is not an original idea, but one that I picked up during a visit to Ontario. There, an environmental bill of rights enables individuals to launch cases or complaints against any Government, corporation or other body, which can then be investigated and pursued vigorously with a remedy possible at the end.
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    Those are three policies that I think could deal with the problems of which we have heard today. I hope that the Minister will respond positively and seek more information about them, and that we can meet to discuss them.
    2.44 pm
    Mr. Andrew Stunell: Many Departments have a role to play in the delivery of sustainable development when it comes to energy policy and environmental policy generally. I agree with my hon. Friend the Member for Lewes (Norman Baker). We have a Department for Environment, Food and Rural Affairs, and I know that the Minister wants to give a good account of what it and the Government have done, but I am constantly perplexed at the way in which the Government's responsibilities for delivering sustainability and environmental policy are split between so many different Departments. The Department of Trade and Industry, for instance, is responsible for supervising policy on electricity generation and the generation industry as a whole, while the Minister's Department is responsible for conservation and efficient energy use. The Treasury deals with fiscal regulation and such matters as the climate change levy, and our built environment is regulated largely by legislation from the Office of the Deputy Prime Minister. As the hon. Member for Morley and Rothwell (Mr. Challen) pointed out, a significant proportion of our energy consumption takes place in the transport sector, and is dealt with by the Department for Transport.
    As one who does his best to make connections between the various parts of Government policy and to evaluate them—as well as the views of many outside organisations that seek to engage with the whole Kyoto policy process—I feel that that diversity of responsibility, which is a polite way of putting it, often prevents the Government from delivering as effectively as the Minister would no doubt wish. If we are to have a sustainable environment in the future—plenty has been said about the need for that, and what should be done to achieve it—conserving resources and using them efficiently will be just as important as anything we do to generate energy. Conservation and efficiency constitute a more cost-effective way of improving our environment than any substitution of technologies for the generation and use of energy.
    I was a member of a deputation attending an environmental conference in Berlin last week to discuss sustainability and the development of policy in both Germany and the United Kingdom. The conference was addressed by Lord Whitty, a member of the Minister's departmental team who, obviously, spoke on behalf of the Government. As ever, he made a well-rounded speech, featuring plenty of explanation of what the Government had done and intended to do. As I listened, I felt rather like repeating a line from a John Cleese sketch—the one in which he goes into the kitchen and says "I think I got away with it that time." The words were fine and the message was good, but the audience was not in a position to apply its critical faculties in order to find out what was actually going on.

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    A German participant in the conference said later "The difference between your Minister and mine"—the German Energy Minister had also made a speech—"is the difference between a 1 MW and a 12 MW man." Of course, that underlined the fact that our performance falls well short of the words that we use. I hope that the Minister, in responding to the debate, can give some reassurance that the Government are not only talking a good talk but are prepared to walk a good walk.
    I cannot sit down without saying something about the small contribution that I am making through my private Member's Bill, the Sustainable and Secure Buildings Bill. I am happy to report that it has support from both sides of the House—from Government Front Benchers, from Conservative Members and from my own party. It tries to focus the attention of the building industry in particular on the fact that how we save energy is as important and cost-effective as how we generate it. Notwithstanding the rows that we have in this House about the applicability of renewable technologies windmills or waves, for example—compared with nuclear energy, we need to remember that for every £100 that we can invest, we will take a bigger step towards sustainability by investing it in conservation and efficiency than by investing in any of the available generating technologies. My Bill tries to pick up on that point, and to make sure that in future our building stock is more sustainable and efficient.
    The hon. Member for Morley and Rothwell said that we cannot make progress without everybody having to pay some of the price. However, if we improve the efficiency of our building stock, we will improve our comfort levels, reduce the number of people who die in the winter because their homes are too cold, reduce the bills that people have to pay and reduce the carbon dioxide emissions that contribute to climate change. I want us to spend more time focusing our political energy on those factors that can produce a win in every dimension: a financial win for the consumer, a health win for our country, and an environmental win in terms of a reduction in greenhouse gases. I thoroughly agreed with 99 per cent. of what the hon. Gentleman said, but his point about progress constituted 0.5 per cent. of what I did not agree with.
    The other 0.5 per cent. of what I did not agree with was the hon. Gentleman's proposal—assuming that I understood it properly—that we award public transport points, so that people receive a reward for travelling by bus. That is fine, but giving a reward of air miles would somewhat undermine his initial point.
    Mr. Challen: The point is that, as has been argued, putting a tax on aviation fuel would tax working-class and poorer people out of air travel. They are the people who use public transport, so if they were rewarded in the way that I am suggesting, we could balance the risk that such people would be taxed out of the air.
    Mr. Stunell: I thank the hon. Gentleman for that explanation, which puts the idea into a somewhat different context. Perhaps we could debate on a separate occasion how we might run such a card; however, we are some way from that at the moment. I certainly agree that we need to do all that we can to make people aware of the benefits to them of a healthy public transport
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    system that they actually use. Practically everybody says that they are in favour of a better public transport system—on the basis that others will use it, so that they themselves can drive their cars more rapidly. Some significant work needs to be done to change that situation, and if the hon. Gentleman's proposed card will achieve something, I am certainly prepared to consider it.
    We need a broad consensus in this House on what needs to be done in terms of the environment and sustainability. The proposal of my hon. Friend the Member for Lewes that there be an annual report, and all that is implied in bringing to the House the key strands of Government policy, are very important. We need a broad consensus because we have to keep going with this project, and not just for one or two Parliaments. For the next eight, nine or 10 Parliaments, and certainly for the next 50 years, this issue will be of fundamental importance. We need that consensus so that we can move matters forward, so that those outside this place can believe with some confidence that they are backing the horse that will come first in the race, and in particular so that we can achieve real results.
    If we decide to go for a long-term strategy—the Government have indeed set targets for where they want to be in 2050—the important thing is to ensure that the steps taken between now and 2050 are each of a size that enables them to be taken at the time, but which continue progressively year after year, so that we can reach our goal. For example, we need only a 1 per cent. increase in our renewable generating capacity each year to achieve 50 per cent. by 2050. Admittedly, it will take us another 40-odd years to get there, but that is the time scale and progress that we need to think about.
    With that in mind, I want to give credit to the Government for the recent extension of the renewables obligation, beyond 10 per cent. for 2010, to 15 per cent. for 2015. I thoroughly approve of that decision, but I do hope that they will quickly recognise that further progressive increases are needed, because that is the way to lay the foundations of certainty for investment.
    Norman Baker: Is my hon. Friend aware that in the 1980s the then Department of Energy predicted that it would be possible to obtain 40 per cent. of our energy from renewable sources by 2020? Back then, development of renewables was very limited, and such matters were the responsibility of the Atomic Energy Authority, which was not necessarily very keen on developing renewables.
    Mr. Stunell: I certainly agree with my hon. Friend's underlying point, which is that we have missed several boats over the years. However, we are where we are. We are standing on the quayside, and another boat is available. When we get on it, we must make it go as fast as we can, but the main thing is to ensure that we are on it. It is important to set course in the right direction, and to proceed with all due speed.
    I hope that, in responding to the debate, the Minister will pick up on the urgent need to ensure that all Government Departments are focused on this problem and are working together. I hope, too, that he will focus

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    on the need to achieve a broad consensus throughout the House on the need for the environment and sustainability to be at the heart of policy making. I hope that there can be broad, non-partisan, all-party encouragement to the Minister—and to subsequent Ministers—to make progress in future.
    2.58 pm
    Paddy TippingI am very pleased to follow the hon. Member for Hazel Grove (Mr. Stunell), particularly given that I am a sponsor of his private Member's Bill. It must make sense to have buildings that are more sustainable and efficient, and which will last us in the long term. I want to reinforce his argument—the hon. Member for Lewes (Norman Baker) made the same point in opening the debate—that the more we can do to achieve a shared long-term strategy, the better it will be for us all.
    I am pleased to be involved in what has been a balanced debate, although it has perhaps been out of synchronisation in certain ways. The discussion has concentrated on problems. It is easy to recognise problems, but it is sometimes hard to develop solutions. The reality is that the more we concentrate on solutions instead of problems, the better off we will be in the long term.
    The tenor of the debate has been such that we have tended not to recognise the Government's achievements, but to look instead at some of the failures. It is always easy to look at failures, but there have been achievements. The temptation with achievements is simply to pocket them and move on.
    Let me remind the House of one or two of the Government's achievements. We are committed to building 60 per cent. of all new housing on brownfield rather than greenfield sites—something for which we all campaigned. When the Government came into office, they stopped the privatisation and progressive sell-off of woodland across the country. We have taken steps to create two new national parks—the South Downs and the New Forest national parks. Significantly, after years of decline, the number of wild birds is at last beginning to increase again. It is important to me that, after 100 years of campaigning by MPs across the country, we will have legislation in force later this year enshrining the right to roam on wild, open spaces. I believe that those are all significant gains, which should not be denied.
    I want to deal with one or two problems and try to move us towards partial solutions. The hon. Member for Meriden (Mrs. Spelman) and the hon. Members for Lewes and for Hazel Grove all touched on energy policy. Let us recognise that it is almost the anniversary of the White Paper. I support its aspirations and believe that it is right to move towards a lower carbon economy, but I have anxieties about whether the targets correctly set out in the White Paper will be met. It has already been mentioned that, at the current 3 per cent. figure, we have a long way to go before reaching the 10 per cent. target by 2010, particularly when we have acknowledged that most of the 3 per cent. is traditional hydro energy and that the current rate of acceleration towards renewables is pretty slow.
    We should also recognise, as stated in the White Paper, that wind power is the best method of getting us from 3 per cent. to 10 per cent. and then up to 20 per
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    cent. The language of the White Paper is interesting: it is an aspiration that some people might say is impossible to achieve, but we should strive towards that wind power goal.
    I believe that there are some problems with on-land wind power. The Minister will remind me that two-thirds of planning applications for new wind farms are either withdrawn or rejected. The great hope—my hon. Friend the Minister for Energy, E-Commerce and Postal Services has campaigned hard for it—is to secure offshore fields. Some important points need to be made about that. Wind power will, by definition, be peripheral and there is a sense in which we need to rewire Britain. We are moving from an energy policy that was dependent on coal and steel to one in which power generation will be more embedded. In those circumstances, that rewiring of Britain will have costs, as will the renewables obligation.
    I am anxious about the lack of recognition in the White Paper that energy will cost us more in the future than at present. For the past decade, we have seen low energy prices in relative terms. The White Paper speculates that those prices will, over the next few years, rise by 5 to 15 per cent. I think that it will rise even more and I am very concerned that the social, political and economic consequences have not yet been properly thought through. If energy prices are going to rise more dramatically than predicted in the White Paper, we must reflect carefully on the consequences, particularly for the more disadvantaged members of the community.
    I accept the point of the hon. Member for Hazel Grove that we should pursue energy conservation more vigorously. I must confess that, although I am interested in energy policy, I do not understand the whole range of energy conservation measures that are available. I believe that the time has come for us to examine them and review them radically. We need to increase funding, but it is important that we measure outputs and deliver resources to new energy efficiency and conservation programmes according to the amount of carbon that could be saved.
    We have acknowledged in the debate that, although carbon emissions are falling, it has been mainly on the back of the coal industry. I believe that the Government are relatively weak on having a coherent policy towards the transport sector. There are few remedies around to tackle the problem. We have an example of congestion charging in London, but it could be the case that, in the short term, the only show in town is to move towards biofuels, by which I mean biodiesel and bioethanol. I am concerned that, although the present duty rates set by the Treasury have been reduced by 20p, that will not be sufficient to encourage the UK biofuel industry.
    I believe that biofuels can help us to deliver two policy objectives: to reduce the amount of emissions; and to provide a real lever to help British farmers to bring new investment, and new and different ways of working, into the British rural economy. I am truly concerned about the current Treasury approach of generally accepting in the pre-Budget report that biofuels have a place in our energy policy, because there is a danger of sucking in biofuels from abroad, particularly from Brazil, and failing to encourage our own biofuel industry. I hope that the Minister will pass on my pre-Budget representations to his colleagues in the Treasury. It is

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    important for the Department for Environment, Food and Rural Affairs to talk across Government. My main pre-Budget representation is the need for us to be adventurous and imaginative about how we approach biofuels policy.
    I am not convinced that a further cut in duty rates is necessarily the right way forward. British Sugar, for example, wants to use its factories to create bioethanol. One means of help could be through capital allowances. Another way of helping the whole industry would be to consider having a biofuels escalator. That would allow us to build on the EU biofuel regulations—stipulating 2 per cent. by 2005, though I worry whether we can achieve that—and set ourselves a longer-term goal. By regulation we could encourage an increasing biofuels mix—starting at 1 per cent. and perhaps increasing to 10 per cent. over a 10-year period. That would provide British producers and British farmers with the opportunity to put down roots and develop their business rather than sucking in from abroad. As I said, that is a real danger because biofuels are taking off not only in Europe, but across the world. We need the opportunity to develop our own industry.
    Norman Baker: I agree with the hon. Gentleman that the Treasury could provide some long-term stability so that people had some knowledge of how matters would stand in five or 10 years' time. One current problem is the uncertainty about whether the Treasury is going to chop and change its view on what is desirable.
    Paddy Tipping: That is exactly the point. We need to set long-term goals with appropriate fiscal mechanisms so that producers can operate in a market that they understand.
    The energy White Paper will have consequences for carbon emissions, as will biofuels. I accept that global warming is taking place, although one can argue about its scale. I want DEFRA to work across Government, and internationally, to compile a report on the consequences of global warming for people in the UK. It is clear that summers here will be drier and winters wetter, and that there will be real consequences for sewers. Storm sewers will overflow as a result of flash floods, and real damage will be caused.
    This debate is about the state of the environment. This morning, I was talking to the Minister about private sewers. Most hon. Members will be aware of that issue as a result of their constituency work. We are making important progress, but we must keep one foot on the pedal. I look forward to the Government announcing the future direction of policy in the spring. We should look at how private sewers could be adopted, and at how to fund the work that needs to be done on them.
    We also need to look at water. It is a scarce resource, and global warming will cause problems with its provision. I hope that the Government will consider that problem, and devote to it part of a larger report on the consequences of global warming. Flooding is a big issue, and we need to have a discussion about managed coastal retreat.
    Important though these issues are, they must not be taken in isolation. If we can deal with issues of the countryside and landscape in a more careful and thoughtful way, we may be able to find some solutions.
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    The Government have achieved an enormous success with the mid-term review of the common agricultural policy. Only 12 months ago, people said in this Chamber that it would never happen, but the biggest change ever in the CAP has been secured. We should not throw that achievement away lightly.
    Shortly, the Government will announce how subsidy support to farmers will be paid in 2005. I hope that we will break with the past on that, in the same way that we have changed the CAP. I know that the Minister and his colleagues will listen to claims for historical payments, but I hope that they will recognise that a hybrid approach based on area payments will have better consequences for the environment. There may be difficulties in terms of management, but I advise my hon. Friend the Minister, firmly, that we should not throw away the gains that CAP reform offers.
    The reform of the CAP would allow us, in the longer term, to pay landowners to let their land be flooded Lots of other possibilities would open up as well, especially when it comes to protecting the environment. Diffuse pollution is a real problem. Farmers will not want me to me say so, but the farming communities are the biggest polluters at present. We must link CAP reform—which deals with how farmers are paid—with how we inspect and regulate the farm sector. It might be possible to adopt a single, whole-farm approach, and in that way bring about changes in behaviour.
    In my speech, I have considered various problems and suggested partial solutions. As other hon. Members have noted, to achieve big gains in the environment we must work from the local level to the national level, and from there to the international level. We must recognise that the changes will not happen overnight: these are long-term issues, requiring policies that are sustainable in their own right. As far as possible, policies need the all-party support that will mean that they can be delivered, not in one Parliament but over several decades. As many speakers noted, it will become increasingly vital to take seriously environmental concerns—such as enhancing the environment and improving the landscape—and make them the cornerstone of Government policy in the future.
    3.16 pm
    Mr. John Randall: In my capacity as an Opposition Whip, I confess that I was slightly disappointed with the Liberal Democrat motion for this debate, as I could find nothing in it to disagree with.
    The hon. Member for Lewes (Norman Baker) made a thoughtful introduction. Not long ago, the Minister was present for a very interesting debate in Westminster Hall on climate change. I shall not recycle the speech that I made then, even though the same people tend to take part in these discussions and there is a great temptation to use renewable sources of information.
    There is a danger that some hon. Members will be seen to be banging on about this subject continuously, but it is so important that there is sometimes no other way to deal with it. My own interest is biodiversity. Many people wonder whether that is really so important, given all the other things that are going on, but I advise them to think of the miner's canary: if animal species are—almost literally—dropping off their perches, should we not worry about what might happen to us?

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    There has been an interesting discussion about forests this afternoon. I spent most of my life before I entered the House selling furniture, so I am acutely aware of timber, and of the great joy that wood products give many people. However, I also know how difficult it is for our manufacturers to find timber that comes from sustainable sources. Nearly all British manufacturers want that, but my experience was that they did not always get it, despite the assurances that they were given. The suspicion was that some of the money put aside for replanting in fact ended up in a Swiss bank account.
    As many hon. Members know, I have a special interest in the marine environment. I urge the Government again to see what can be done about implementing legislation that will give the marine environment real protection. I have gone through the agonies and ecstasies that a private Member's Bill involves. In my case, the ecstasy came first: the agony followed when my Bill foundered on the rocks of the House of Lords. I am aware of how complicated marine environment legislation is. The marine environment is not like the land and the legal competences seem extremely complex; we do not have the same protection for something that is just as valuable as the terrestrial environment. I hope that the Government, my party and the Liberal Democrats will work together to try to implement such protection—I know that the Minister takes a keen interest in the matter. It is not always easy to raise a priority with a Government who have many other priorities in mind—although I may not agree with many of their priorities and certainly not with the way they carry them out—but environmental matters are important.
    I have a particular interest in genetically modified crops. During my first year as a Member, the hon. Members for Lewes and for Nottingham, South (Alan Simpson) and I took the Government to court over genetically modified seeds. I was a bit concerned that I might have to foot the bill. The action was about the process and the Government acknowledged that they might have cut a corner, so things were put right.
    The results of the Government's farm-scale evaluations of three genetically modified, herbicide-tolerant crops—spring oilseed rape, beet and maize—were published in January. Each crop had been genetically modified to allow it to withstand a particular broad-spectrum herbicide. The trials examined the effect of growing GM varieties of those crops on the abundance and diversity of wildlife, and compared those effects with what happened in conventionally grown fields of the same crop types. The results for the beet and spring oilseed rape showed significant environmental harm and I believe, with many others, that the Government should thus rule out growing them commercially.
    The maize results were better for many types of wildlife than those for conventional maize; there were more weeds and weed seeds in and around the crops and more insects at certain times of the year. However, those results cannot be attributed directly to the way in which the maize was genetically modified; rather, they were a consequence of crop management, as the broad-
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    spectrum herbicide applied to the GM maize was less effective in reducing weeds than the herbicide regime used on conventional maize.
    In many of the conventional trials, the herbicide used was atrazine—a chemical that has recently been banned in the European Union, owing to its damaging environmental profile. Given those uncertainties, I hope that the Minister will agree that it would be premature to approve commercial growing of GM maize before the Government have tested the crop's performance by comparison with conventional maize that has not been treated with atrazine. The need for caution is paramount, because the public have not yet been persuaded. If GM technology is to be used, it is vital that the public are behind it, and we are a long way from that.
    We have already heard about aviation, and tomorrow there will be a debate in Westminster Hall on the aviation White Paper during which I hope to catch the eye of the Chair, but I want to touch briefly on the subject. Those of us who live near Heathrow already know about air pollution and the effects of aviation on our environment. There is a dichotomy, however, because aviation is part of our local economy. Many Members have alluded to similar problems. We can all talk about what we want to happen, but we do not want it to impinge on our own lives.
    The hon. Member for Morley and Rothwell (Mr. Challen) said that he might get into trouble for talking about the possibility of charging higher air fares. My constituency may be a bit more marginal than his, but as I have already said in this place, we have to accept that cheap air travel is not a human right. We might want it, but not at the cost of our environment. I was interested to hear his idea for a travel card; I appreciate the point that he was making.
    There are ongoing problems at Heathrow and we need to discuss them. Most of our discussions have been with the Department for Transport, but DEFRA has an important role, too, as it will—I hope—monitor the results of air pollution around Heathrow. If the levels cannot be reduced, the third runway will not go ahead. I am not sure what existing data we can use for comparison to determine whether pollution is going down, nor am I sure how independent the results will be.
    I regret to tell the House that as I get older not only do I get grumpier, but also more cynical; I may be unwise to go down this path, but sometimes I think that results are determined by the requirements of certain Departments rather than by the facts—one can get what one wants if one asks the right questions.
    I have every sympathy for DEFRA and for some of its excellent personnel because they face problems of interdepartmental conflict. During the course of my private Member's Bill, soundings were taken by various Departments—for example, the Department of Trade and Industry and the Treasury, which of course always rears its head. I understand that, but we must take serious note of the fact that the environment is not a luxury; we must take it very seriously.
    My hon. Friend the Member for Meriden (Mrs. Spelman) wisely pointed out the danger that care and concern for the environment can be seen as "middle England"—although perhaps that reflects her constituency, as it is in the middle of England. Many people think that they have greater concerns in their

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    everyday life than worrying about which products to use and whether they are environmentally friendly and so forth. If that is true in this country, we can understand why certain other countries, with incredible problems, feel that environmental concerns are not for them. However, we cannot take such things lightly.
    Mr. Peter Ainsworth: My hon. Friend always speaks well on these subjects. Does he agree that part of the problem that has dogged environmental policy for generations is that the Treasury seems to think that the environment is part of the economy, whereas of course the reverse is true?
    Mr. Randall: My hon. Friend puts the point admirably, as befits his position as Chairman of the Select Committee on Environmental Audit. I congratulate him and the other members of the Committee on doing such an excellent job.
    I have lived in Uxbridge all my life—I still regard it as Middlesex. I can still walk out of my house and go bird-watching, but I have noticed, despite the comments of the hon. Member for Sherwood (Paddy Tipping), that the number of species is declining. It may be part of the grumpy old man syndrome, but the environment around me is changing, and not for the better. My constituents, my family and I feel the effects of environmental pollution on our health every day. We should not take that lightly.
    We all experience contradictions in our lives. Before I became a Member of this place and could speak on these matters, I used to walk to work, but now I travel to work by public transport and, yes, I drive here on many occasions because the public transport system is so bad. However, I shall try to make an effort, because of what I want for my children.
    The environment is a wide subject—it can cover everything from litter to climate change, as has been pointed out. We must take it seriously and I hope that the debate has awakened some people's thoughts on the subject.
    3.30 pm
    Dr. Vincent Cable: It is clear from the contributions that have been made that this subject does not arouse enormous ideological division and passion, and there has been an extraordinary degree of consensus. My hon. Friend the Member for Lewes (Norman Baker) was generous in his introduction and acknowledged the many things that the Government are doing with which we agree. The hon. Member for Meriden (Mrs. Spelman), the Conservative spokesman, used language such as "common cause" and "credit where it is due", and any doubts that she might have had that she was speaking off message were assuaged by the contribution from the Conservative Whips Office. The Minister reciprocated by acknowledging Government failings in areas such as waste management in an open-minded spirit. In a particularly thoughtful contribution, the hon. Member for Sherwood (Paddy Tipping) discussed the need for a balanced approach.
    People on the free market, libertarian right would regard the debate as wet and woolly, and people at the deep green end of the argument would regard all of us as hopeless consumerists, but none the less there is a fair
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    degree of agreement on the way we should head. However, this is not an Adjournment debate; it is an Opposition day debate, and perhaps I can focus on some of the areas of criticism.
    My criticisms are not of strategy, objectives or philosophy; they are criticisms of effectiveness. I shall quote the previous Minister for the Environment, the right hon. Member for Oldham, West and Royton (Mr. Meacher), who spoke openly about his position not with the freedom of the Back Benches, but shortly before he resigned from the Government. He said that he felt like a lone voice in the wilderness and that the Government had failed to grasp the magnitude of the environmental challenge. His point was that there was a lack of leadership on environmental issues. When we discuss that lack of leadership, we are talking about the top of the Government.
    A few weeks ago, there was a revealing exchange in the Liaison Committee where the Prime Minister was being particularly articulate and effective. However, his exchange with the hon. Member for East Surrey (Mr. Ainsworth) contained a weak passage about what is being done at No. 10 Downing street about environmental strategy. He was asked, "Are you taking an active role?" He replied, "Yes, in two ways. First of all in the discussions that we have had about so-called liveability at local level, and then most particularly in relation to issues to do with sustainable development at an international level like Kyoto." On the first part of the reply, perhaps I am not fully in the loop on environmental jargon these days. Can the Minister explain what the Prime Minister means when he discusses his role in relation to "liveability at a local level"? What does that mean and what is No. 10 Downing street doing?
    The other issue is more substantial. Labour Members were correct to say that the Government have adopted ambitious targets in relation to Kyoto. We have accepted a commitment to a big reduction, and although it is not quite as big as that accepted by countries such as Germany, we have accepted it and a positive lead is being taken.
    I confess to not having been a great fan of many things that Baroness Thatcher did, but in the late 1980s I worked on one of the first big intergovernmental reports on climate change, which was submitted to the Commonwealth Prime Ministers in 1989 when concern first surfaced about sea level rises. The report was pitched at Mrs. Thatcher—as she then was—in particular. Although she may have had a blind spot over many other issues such as renewable energy and recycling, she was at least aware of the importance of global environmental problems. She took a leadership role on issues such as the Montreal protocol and even persuaded Ronald Reagan, whose environmentalism was best captured in his campaigning slogan about trees being the world's biggest source of pollution, to sign up to it.
    That is in marked contrast to the current Prime Minister, who has staked much of his reputation on his close relationship with the President of the United States. Despite the advocacy and speeches in Congress, however, he has been totally unable to make any serious inroads into US policy on Kyoto.
    Mr. Peter Ainsworth: I am flattered that the hon. Gentleman should refer to my brief exchange with the

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    Prime Minister. When I asked that question, it occurred to me that it was the only moment in the lengthy exchange between the Prime Minister and the Liaison Committee where his eyes went blank and his body language went pear-shaped. The hon. Gentleman is on to the right issue.
    Dr. Cable: That is first-hand evidence to support my suggestion.

    One very important Department, the Treasury, provides leadership and interest in environmental policy, and I am speaking in this debate because I shadow the Treasury. A lot of thought is going on, and the pre-Budget report contains 20 densely argued pages on the matter, and last year there were 100 pages. Many relevant tax instruments and economic instruments are going through the system such as the climate change levy, taxation on landfill and aggregates and the measures on biofuels, which we have discussed today. Innovation is taking place in those areas and, as a broad development in principle, I favour the introduction of economic instruments into environmental policies, which is positive from many different points of view. The introduction of economic instruments sends clear market signals to producers and consumers, it reconciles the environment and the market economy and it encourages the quantification of the economic costs of environmental damage.

    My hon. Friend the Member for Lewes has recently tabled a series of parliamentary questions to which he has received helpful answers from Ministers. The answers suggest that in major areas such as road congestion and nuclear liabilities the aggregate economic cost of current policy is some £65 billion a year, and that is a superficial measure. My hon. Friend's questions help us in another way because they quantify the costs of regulation, which is desirable in itself. The regulation of the environment is, as with other matters, not desirable in itself, and there are often considerable costs associated with it.
    David Taylor: Is the hon. Gentleman aware that under the removal of hazardous substances regulations, lead must be removed by July 2006, but there has been relatively little negotiation and discussion with the electronics industry, which is a major lead user in, for example, solder? Although the Government have a good environmental track record, they should take on board at a much earlier stage the concerns that industries put to them—the aggregate industry and the restriction of hazardous substances directive are two examples of that.
    Dr. Cable: That is absolutely true. One of the advantages of economic instruments is that they enforce discipline in thinking about the problems and costs of regulation. Before I entered this House, I worked in the energy industry and saw at first hand the billions of pounds that often had to be spent across Europe in order to comply with requirements that had minimal environmental benefit. One of the advantages of using economic instruments is that they address that problem.
    Having said flattering things about the Treasury and its approach, there is the major criticism about the basic lack of coherence at the heart of its actions. I make that
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    point as the Opposition spokesman, but the all-party Environmental Audit Committee—I think that this occurred before the hon. Member for East Surrey became its Chairman—produced a critique of the Treasury paper "Tax and the environment: using economic instruments", which is worth quoting. It said:
    "This document, for all its elegance as an economic and policy development treatise, certainly does not amount to an environmental tax and fiscal strategy. It is unclear to us in what way either the review or this document will help the Treasury develop its approach and implement its strategic objective of shifting the burden of tax from goods to bads."
    There are some specific areas in which that lack of coherence is all too apparent. I shall give several examples that came up in the debate.
    The first example is climate change. It has been pointed out already that this country will pioneer a traded permits system, which is positive and I welcome it. However, it will be difficult, because there is no liquid market in permits at present. It will also be difficult to trade across national frontiers, and the scheme will not cover most small and medium-sized businesses. The major instrument at present is taxation, and the Government had the option of introducing a sensible, across-the-board system of carbon taxation that would tax carbon according to its role as a natural raw material. The carbon tax system could have been applied upstream on primary fuels, with minimal administrative costs, and would have spread throughout the economy. The Government did not take that route because they wanted to exempt households and the transport sector. As a consequence, the climate change levy fell almost exclusively on manufacturing industry, at a time when it was already suffering from all the problems of an over-valued exchange rate. The Government then exempted much of the most energy-intensive manufacturing and replaced taxation with voluntary negotiated agreements. That produced a system that is horrendously complicated. Even the most committed environmentalists in the green movement now want that system to be phased out and replaced by a proper system of carbon taxation. That is a good example of adopting the right principle—using a market instrument—but introducing a tax system that was over-complicated, discriminatory and ineffective.
    A second example was mentioned by several hon. Members, including the hon. Member for North-West Leicestershire (David Taylor), and that is the imbalance between the taxation of motorists and of aviation. At the moment, motorists face extremely high rates of taxation—in theory for good environmental reasons, but in practice driven largely by revenue considerations. The Government manage demand for road use through queueing and congestion. That is in marked contrast to their approach to aviation, which is lightly taxed and enjoys a permissive approach to airport expansion, as the hon. Member for Uxbridge (Mr. Randall)—a fellow Heathrow neighbour—reminded us.
    That problem can be dealt with in several ways. The hon. Member for Morley and Rothwell (Mr. Challen) advocated the introduction of aviation fuel taxation, and I support that in principle, although it would be difficult in practice because of treaty obligations. There are other ways to deal with the problem at national level. We have a system of regulation of airports—the so-

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    called single till system—which means that we have ludicrously low landing charges. We have a system of allocating permits for landing, in which they are handed out free of charge on what is called the grandfathering principle. There is no reflection of the scarcity or congestion involved. Both of those systems could be reformed at a national level if we were more aware of the environmental costs.
    The Chancellor has introduced some aircraft taxation—the passenger fuel duty—but it is only obliquely related to environmental costs, because it relates to the number of passengers, not the number of flights. Again, the broad principle of using economic instruments is understood and accepted by the Government, but it is applied incoherently.
    The third example is in energy policy. Other hon. Members mentioned broad agreement with many aspects of the Government's energy policy. When I was my party's spokesman on the Department of Trade and Industry, I spoke on several occasions about the energy White Paper and I broadly agree with the Government's approach. Many of us would sign up to the renewable energy obligation and the commitment to carbon reduction, but the incoherence arises—as my hon. Friend the Member for Hazel Grove (Mr. Stunell) specifically highlighted—between the role of the DTI in energy production and the role of DEFRA in energy conservation. One of the issues that the Minister must explain is why his Department has been so weak in its dealings with the rest of Government on the key issue of the Warm Front programme. That is a small area of Government expenditure, but it is important, because it is one of the ways in which the Government can influence energy conservation and simultaneously address issues of fuel poverty—at relatively low cost. The cut of a third in the Warm Front programme sent a powerful signal that the Government were either uninterested in energy conservation or that DEFRA did not have the clout to deliver it.
    The last example that I want to give is another issue that I dealt with extensively as the shadow DTI spokesman: the Government's approach to car recycling, where we have a European obligation. Again, the broad policy is right and I do not think that any of us have any problems with that. However, it seems that the Government were effectively nobbled by the motor car industry.
    The Government were told that they could not introduce, as they should have done, a sensible environmental tax on the sale of the first car, but that the levy to pay for recycling had to be borne by the last owner. As we know, the last owner is generally at the bottom end of the income scale. Estimates of the recycling cost vary from £40 to £100, so there is a strong incentive for people simply to dump their vehicles, and the evidence that that is happening is already emerging. The total number of abandoned cars was, I think, 295,000 in 2001–02. It rose by 27 per cent. last year. The figure is growing rapidly.
    My hon. Friend the Member for Lewes was unduly flattering when he said that the disposal cost was £40 million; it is probably 10 times that magnitude, for the simple reason that many vehicles are torched and then the fire brigade and the police have to be involved, at a cost of several thousand pounds per vehicle. There are enormous associated costs, and the problem has been
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    aggravated by had policy produced by tension between different Government Departments and the wrong side winning the argument.
    There is a lack of coherence. Where we ultimately come together—and the intervention about the relationship between the environment and the economy was helpful—is in accepting that there is a very sensible principle underlying policy: the whole idea of sustainable development. I worked with Mrs. Brundtland when the original report on sustainable development went to the United Nations Secretary-General and so brought the idea into common use. There was then—and I think it has been accepted since—a powerful insight that, contrary to what many environmentalists had been claiming, there is no fundamental conflict between economic progress and the environment. Indeed, economic progress is vital to remove poverty, which in itself is the major source of environmental pollution. I think that we can all sign up to that.

    For that concept to become really embedded in government, it must be taken seriously and given priority. Our main criticism of the Government is that although the words are right, the actions are often ineffective.
    3.47 pm
    Mr. Morley: With the leave of the House, I should like to respond to the debate.
    Some very interesting contributions have been made—by the hon. Members for Lewes (Norman Baker), for Meriden (Mrs. Spelman), for Hazel Grove (Mr. Stunell), for Uxbridge (Mr. Randall) and for Twickenham (Dr. Cable), and by my hon. Friends the Members for Morley and Rothwell (Mr. Challen) and for Sherwood (Paddy Tipping).
    I can agree with much that was said, but some of the comments, especially those of the hon. Member for Meriden, were a little ungenerous about the role that DEFRA has established and is establishing, bearing in mind the fact that it was formed in 2001 and has come a long way since. The progress that we have made must be recognised.
    In 1997, the waste recycling rate was 7 per cent. We are confident that we shall hit our target of 17 per cent. in 2003–04, and we are on target for 25 per cent. in 2005–06. It is a very challenging target, but we are moving forward. In 1997, the percentage of energy from renewables was 0.7 per cent. We are aiming for 10 per cent. and are extending the target to 15 per cent. This is considerable progress.
    The hon. Member for Lewes quoted Jonathan Porritt. Jonathan Porritt's role in government is to be outspoken; he is there to push us on, and he is very good at it. However, he said of the 2002 Budget that it brought about a series of positive sustainability measures. They include such matters as excluding combined heat and power from the climate change levy, and abolishing stamp duty on the most deprived neighbourhoods. We are dealing with an issue of environmental quality of life. That is what my right hon. Friend the Prime Minister was talking about when he mentioned liveability. It is a very important issue, and I shall return to it. There was also a commitment to look at other matters, such as road wear charges based on distances covered by lorries.

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    A number of hon. Members mentioned airport expansion and other aspects of aviation. The hon. Member for Meriden said that she had had a meeting at Stansted. On that basis, I take it that she does not support the proposal for another runway at Stansted.
    Mrs. Spelman: I should make it perfectly clear that, as an environment spokesman, I was not performing the role of transport spokesman; I was specifically talking about the lack of an environmental impact assessment at any airport in the context of the very prescriptive proposals in the White Paper.
    Mr. Morley: That is very helpful—we understand that the Conservatives are in favour of a second runway at Stansted—but what the hon. Lady says about environmental assessment is not correct. Let us be absolutely clear that detailed environmental assessments must be conducted as part of the evaluation of extra runways. The third runway at Heathrow cannot go ahead until the airport reduces NOx levels, which will, of course, take a great deal of time and investment.
    David Taylor: Does the Minister agree that environmental impact assessments must consider not just extra or longer runways, but significant expansion in use, such as that at East Midlands airport, where stringent noise controls are what the Secretary of State for Transport referred to and what are desperately needed?
    Mr. Morley: That is absolutely right. My hon. Friend makes the point very well that all those issues will be examined, and I fully agree that they need to be examined.
    The hon. Member for Meriden mentioned pioneering good environmental practice. I believe that the Government have pioneered good environmental practice, especially in carbon trading—the UK is the only country in Europe to introduce its own scheme—and in the other work that we have done. I gently remind her that we inherited a number of directives that had never been fully implemented—for example, the bathing water directive, the nitrates directive and the freshwater fish directive. Indeed, some parts of the waste directive were overdue. Those issues have had to be addressed, and we are applying the various environmental directives properly and effectively, as they should be.
    My hon. Friend the Member for Morley and Rothwell rightly referred to consumption and production. Again, the Government have produced a strategy on consumption and production—another pioneering approach that is important for sustainability. He talked about the need to change attitudes towards the approach to sustainability at every level. He is right about that. He also talked about carbon management and renewable energy sources. I am aware of his interest in those issues, and he has some very interesting ideas. I assure him that his views are always welcome, and my door is open to him if he wants to come and talk about them.
    The hon. Member for Hazel Grove talked about structures. Indeed, there is always an argument about the structures of government, but I served in the
    1324
    Ministry of Agriculture Fisheries and Food before it became DEFRA and I have seen the structures change for the better. People in government can always argue about where Departments should go, but the problem is that every issue cannot be dealt with in one Department. Of course people can say that it is good to put planning with the environment or to put transport with the environment—that is all very true—but a balance must be struck about what is effective and what works.
    I believe that the DEFRA structure is very effective. I remind the hon. Member for Meriden that DEFRA brought in Lord Haskins to look at how our agencies work. He concluded not that DEFRA was in any way ineffective but that there should be a clearer split between policy and delivery, as well as more devolution to the regions in relation to delivery, and we do not disagree. Indeed, we will respond to his recommendations in due course.
    Mr. Stunell: I appreciate the line of argument that the Minister is developing, but will he say something about improving co-operation between Departments so that they deliver a coherent objective in the way that he describes?
    Mr. Morley: Absolutely. I mentioned in my opening remarks the joint approach taken by Departments and co-operation across Government structures, such as the green Ministers structure—the ENV committee—but the fact is that there is common working in areas of common interest. That has been established; it is being developed, and it is becoming more effective all the time. DEFRA is establishing itself as an effective Department, both nationally and internationally. There is a lot of interest in DEFRA internationally. A lot of people come to see its structures and how it works. There is a lot of experience in DEFRA—able civil servants, able officials and excellent scientists. People have been attracted to work for DEFRA and have joined in recent years because of the new structures, and we should be proud of the expertise in the Department.
    My hon. Friend the Member for Sherwood was right to talk about the need to address the whole issue of renewables—not only wind, but other important renewables. He mentioned biofuels, in which I know he has an interest. Biofuel production in this country has had an enormous boost under the policies that have been put in place. The last figures that I saw showed that some 2 million litres of biodiesel are produced a week, which is not only due to the 20p reduction in duty, but because it can be grown on set-aside land, which attracts specific subsidies. There is a whole package of measures to encourage the production of biofuels. He was also right to say that there is potential for a range of non-food industrial crops in addition to biofuels. The Government are providing a great deal of support for the research and development of crops such as hemp for clothing and vehicle parts, and bio-oils. There is a great deal of potential for non-food crops, so we are giving that the attention that it deserves.
    My hon. Friend the Member for Sherwood mentioned water. I know that he has a particular interest in sewers, which we talked about during our useful meeting earlier today. There is no doubt that water will be a major political issue not only in this country, but internationally. Although our country has always been

    1325
    considered to be not exactly short of water, water resource management will become more pressing and something that we cannot take for granted. We must recognise that the changes in our weather patterns, with milder and wetter winters and hotter and drier summers, will have a range of implications. Water resource management at every level—drinking water management, and flood and coastal management—will be important.
    Norman Baker: Is the Minister worried that the Deputy Prime Minister is concentrating housing development in the south-east, which is where water resources are under the most stress?
    Mr. Morley: That gives us an example of the integration about which hon. Members talk. Water management and supply is one of the strategies for housing development in the south-east. I assure the hon. Gentleman that there will be no development unless the water supply is secure because that must feature in planning from its initial stages. We are actually going further than that. I mentioned new developments in which one has the opportunity to build in sustainability at the beginning. We are setting a target for new houses in the Thames gateway to reduce water use by 30 per cent., which can be achieved through modest investment in water-saving devices. In fact, we can go further with technology depending on what people are prepared to pay.
    The hon. Member for Uxbridge, who has a long-standing interest in the environment and biodiversity, especially, made several important and sensible points. I agree that sometimes, especially on the international stage, people talk about the environment and biodiversity as two separate issues. That is a mistake, because biodiversity is certainly an environmental indicator. Where there is strong and healthy biodiversity, there is a strong and healthy environment—the two go hand in glove. He will be aware that the Government use several important biodiversity indicators as part of our strategy to measure sustainability and quality of life.
    The hon. Member for Twickenham mentioned leadership. We have put in place a range of measures on liveability. We are addressing fly-tipping, urban life and the quality of life. Our tough targets on climate change are important and require political leadership from the very top. Otherwise, we would not be able to set targets. That emphasises the Prime Minister's commitment to measures such as the landfill escalator, climate change levy and aggregate levy. The hon. Gentleman rightly mentioned the financial instruments from the Treasury, which come from the top in terms of the lead given by the Prime Minister, Chancellor of the Exchequer and Cabinet in the priority given to the World Trade Organisation, reform of the CAP and the emphasis on private and commercial sustainable production and consumption.
    The hon. Gentleman was wrong in respect of end-of-life vehicles. We have reached agreement that they will be the responsibility of the makers of the marques. That scheme will be put in place, along with other directives demonstrating the Government's commitments to sustainability—many of which are admired internationally, most of which are effective and others of
    1326
    which have still to be developed. But no one should doubt the commitment at every level of the Government, right to the top.
    Question put, That the original words stand part of the Question:—
    The House divided: Ayes 183, Noes 306.

    Division No. 50]

    [4:00 pm

    AYES

    Ainsworth, Peter (E Surrey)

    Fox, Dr. Liam

    Allan, Richard

    Francois, Mark

    Ancram, rh Michael

    Gale, Roger (N Thanet)

    Arbuthnot, rh James

    Garnier, Edward

    Atkinson, Peter (Hexham)

    George, Andrew (St. Ives)

    Bacon, Richard

    Gibb, Nick (Bognor Regis)

    Baker, Norman

    Gidley, Sandra

    Baldry, Tony

    Goodman, Paul

    Barker, Gregory

    Gray, James (N Wilts)

    Baron, John (Billericay)

    Grayling, Chris

    Barrett, John

    Green, Damian (Ashford)

    Beith, rh A. J.

    Green, Matthew (Ludlow)

    Bellingham, Henry

    Grieve, Dominic

    Bercow, John

    Gummer, rh John

    Beresford, Sir Paul

    Hague, rh William

    Boswell, Tim

    Hammond, Philip

    Bottomley, Peter (Worthing W)

    Hancock, Mike

    Brake, Tom (Carshalton)

    Harris, Dr. Evan (Oxford W & Abingdon)

    Brazier, Julian

    Brooke, Mrs Annette L.

    Hawkins, Nick

    Browning, Mrs Angela

    Hayes, John (S Holland)

    Bruce, Malcolm

    Heald, Oliver

    Burnett, John

    Heathcoat-Amory, rh David

    Burnside, David

    Hendry, Charles

    Burt, Alistair

    Hogg, rh Douglas

    Butterfill, Sir John

    Horam, John (Orpington)

    Cable, Dr. Vincent

    Howarth, Gerald (Aldershot)

    Calton, Mrs Patsy

    Hughes, Simon (Southwark N)

    Campbell, Gregory (E Lond'y)

    Jack, rh Michael

    Campbell, rh Sir Menzies (NE Fife)

    Jackson, Robert (Wantage)

    Jenkin, Bernard

    Carmichael, Alistair

    Keetch, Paul

    Cash, William

    Kennedy, rh Charles (Ross Skye & Inverness)

    Chapman, Sir Sydney (Chipping Barnet)

    Key, Robert (Salisbury)

    Chope, Christopher

    Kirkbride, Miss Julie

    Clappison, James

    Kirkwood, Sir Archy

    Clarke, rh Kenneth (Rushcliffe)

    Knight, rh Greg (E Yorkshire)

    Clifton-Brown, Geoffrey

    Laing, Mrs Eleanor

    Collins, Tim

    Lait, Mrs Jacqui

    Conway, Derek

    Lamb, Norman

    Cormack, Sir Patrick

    Laws, David (Yeovil)

    Davey, Edward (Kingston)

    Leigh, Edward

    Davies, Quentin (Grantham & Stamford)

    Lewis, Dr. Julian (New Forest E)

    Liddell-Grainger, Ian

    Davis, rh David (Haltemprice & Howden)

    Lilley, rh Peter

    Llwyd, Elfyn

    Djanogly, Jonathan

    Loughton, Tim

    Donaldson, Jeffrey M.

    Luff, Peter (M-Worcs)

    Dorrell, rh Stephen

    McIntosh, Miss Anne

    Doughty, Sue

    Mackay, rh Andrew

    Duncan, Alan (Rutland)

    Maclean, rh David

    Duncan, Peter (Galloway)

    McLoughlin, Patrick

    Duncan Smith, rh lain

    Marsden, Paul (Shrewsbury & Atcham)

    Evans, Nigel

    Ewing, Annabelle

    Maude, rh Francis

    Fabricant, Michael

    Mawhinney, rh Sir Brian

    Field, Mark (Cities of London & Westminster)

    May, Mrs Theresa

    Mercer, Patrick

    Flight, Howard

    Mitchell, Andrew (Sutton Coldfield)

    Flook, Adrian

    Forth, rh Eric

    Moss, Malcolm

    Foster, Don (Bath)

    Murrison, Dr. Andrew

    1327

    Oaten, Mark (Winchester)

    Swire, Hugo (E Devon)

    O'Brien, Stephen (Eddisbury)

    Syms, Robert

    Öpik. Lembit

    Tapsell, Sir Peter

    Osborne, George (Tatton)

    Taylor, Ian (Esher)

    Page, Richard

    Taylor, John (Solihull)

    Paice, James

    Taylor, Matthew (Truro)

    Pickles, Eric

    Taylor, Sir Teddy

    Portillo, rh Michael

    Teather, Sarah

    Price, Adam (E Carmarthen & Dinefwr)

    Thomas, Simon (Ceredigion)

    Thurso, John

    Prisk, Mark (Hertford)

    Tredinnick, David

    Randall, John

    Trend, Michael

    Redwood, rh John

    Turner, Andrew (Isle of Wight)

    Rendel, David

    Tyler, Paul (N Cornwall)

    Robathan, Andrew

    Tyrie, Andrew

    Robertson, Angus (Moray)

    Viggers, Peter

    Robertson, Hugh (Faversham & M-Kent)

    Waterson, Nigel

    Watkinson. Angela

    Robertson, Laurence (Tewk'b'ry)

    Webb, Steve (Northavon)

    Robinson, Mrs Iris (Strangford)

    Weir, Michael

    Rosindell, Andrew

    Whittingdale, John

    Russell, Bob (Colchester)

    Wiggin, Bill

    Salmond, Alex

    Williams, Hywel (Caernarfon)

    Sanders Adrian

    Williams, Roger (Brecon)

    Selous, Andrew

    Willis, Phil

    Shepherd, Richard

    Wilshire, David

    Simmonds, Mark

    Winterton, Ann (Congleton)

    Simpson, Keith (M-Norfolk)

    Winterton, Sir Nicholas (Macclesfield)

    Soames, Nicholas

    Spelman, Mrs Caroline

    Wishart, Pete

    Spicer, Sir Michael

    Yeo, Tim (S Suffolk)

    Spink, Bob (Castle Point)

    Young, rh Sir George

    Spring, Richard

    Younger-Ross, Richard

    Streeter, Gary

    Tellers for the Ayes:Sir Robert Smith and Mr. Alan Reid

    Stunell, Andrew

    Swayne, Desmond

    NOES

    Abbott, Ms Diane

    Burnham, Andy

    Adams, Irene (Paisley N)

    Byers, rh Stephen

    Ainger, Nick

    Caborn, rh Richard

    Ainsworth, Bob (Cov'try NE)

    Cairns, David

    Alexander, Douglas

    Campbell, Alan (Tynemouth)

    Allen, Graham

    Campbell, Mrs Anne (C'bridge)

    Anderson, Janet (Rossendale & Darwen)

    Campbell, Ronnie (Blyth V)

    Caplin, Ivor

    Atherton, Ms Candy

    Casale, Roger

    Atkins, Charlotte

    Caton, Martin

    Baird, Vera

    Cawsey, Ian (Brigg)

    Banks, Tony

    Challen, Colin

    Barron, rh Kevin

    Chapman, Ben (Wirral S)

    Battle, John

    Chaytor, David

    Bayley, Hugh

    Clapham, Michael

    Beard, Nigel

    Clark, Mrs Helen (Peterborough)

    Beckett, rh Margaret

    Clark, Dr. Lynda (Edinburgh Pentlands)

    Begg, Miss Anne

    Bennett, Andrew

    Clark, Paul (Gillingham)

    Benton, Joe (Bootle)

    Clarke, rh Tom (Coatbridge & Chryston)

    Berry, Roger

    Best, Harold

    Clelland, David

    Betts, Clive

    Clwyd, Ann (Cynon V)

    Blears, Ms Hazel

    Coaker, Vernon

    Blizzard, Bob

    Coffey, Ms Ann

    Borrow, David

    Cohen, Harry

    Bradley, Peter (The Wrekin)

    Coleman, Iain

    Bradshaw, Ben

    Connarty, Michael

    Brennan, Kevin

    Cook, rh Robin (Livingston)

    Brown, rh Nicholas (Newcastle E Wallsend)

    Cooper, Yvette

    Corbyn, Jeremy

    Brown, Russell (Dumfries)

    Corston, Jean

    Browne, Desmond

    Cousins, Jim

    Bryant, Chris

    Cranston, Ross

    Buck, Ms Karen

    Cruddas, Jon

    Burden, Richard

    Cryer, Ann (Keighley)

    Burgon, Colin

    Cryer, John (Hornchurch)

    1328

    Cummings, John

    Irranca-Davies, Huw

    Cunningham, rh Dr. Jack (Copeland)

    Jackson, Glenda (Hampstead & Highgate)

    Cunningham, Jim (Coventry S)

    Jackson, Helen (Hillsborough)

    Cunningham, Tony (Workington)

    Jamieson, David

    Curtis-Thomas, Mrs Claire

    Jenkins, Brian

    Dalyell, Tam

    Johnson, Alan (Hull W)

    Darling, rh Alistair

    Jones, Helen (Warrington N)

    Davey, Valerie (Bristol W)

    Jones, Lynne (Selly Oak)

    David, Wayne

    Jones, Martyn (Clwyd S)

    Davies, rh Denzil (Llanelli)

    Joyce, Eric (Falkirk W)

    Davies, Geraint (Croydon C)

    Kaufman, rh Gerald

    Dean, Mrs Janet

    Keeble, Ms Sally

    Denham, rh John

    Keen. Alan (Feltham)

    Dhanda, Parmjit

    Keen, Ann (Brentford)

    Dismore, Andrew

    Kelly, Ruth (Bolton W)

    Dobbin, Jim (Heywood)

    Kemp, Fraser

    Dobson, rh Frank

    Kennedy, Jane (Wavertree)

    Donohoe, Brian H.

    Kidney, David

    Doran, Frank

    Kilfoyle, Peter

    Dowd, Jim (Lewisham W)

    King, Andy (Rugby)

    Drew, David (Stroud)

    Knight Jim (S Dorset)

    Dunwoody, Mrs Gwyneth

    Kumar, Dr. Ashok

    Eagle, Maria (L'pool Garston)

    Ladyman, Dr. Stephen

    Edwards, Huw

    Lammy, David

    Efford, Clive

    Laxton, Bob (Derby N)

    Ellman, Mrs Louise

    Lazarowicz, Mark

    Ennis, Jeff (Barnsley E)

    Lepper, David

    Farrelly, Paul

    Leslie, Christopher

    Field, rh Frank (Birkenhead)

    Lewis, Ivan (Bury S)

    Fitzpatrick, Jim

    Liddell, rh Mrs Helen

    Fitzsimons, Mrs Lorna

    Linton, Martin

    Flint, Caroline

    Lloyd, Tony (Manchester C)

    Flynn, Paul (Newport W)

    Love, Andrew

    Follett, Barbara

    Lucas, Ian (Wrexham)

    Foster, rh Derek

    Luke, Iain (Dundee E)

    Foster, Michael (Worcester)

    McAvoy, Thomas

    Foster, Michael Jabez (Hastings & Rye)

    McCabe, Stephen

    McCafferty, Chris

    Francis, Dr. Hywel

    McCartney, rh Ian

    Gardiner, Barry

    MacDonald, Calum

    Gerrard, Neil

    McDonnell, John

    Gibson, Dr. Ian

    MacDougall, John

    Gilroy, Linda

    McFall, John

    Godsiff, Roger

    McGuire, Mrs Anne

    Griffiths, Jane (Reading E)

    McIsaac, Shona

    Griffiths, Win (Bridgend)

    McKechin, Ann

    Grogan, John

    McKenna, Rosemary

    Hain, rh Peter

    McNamara, Kevin

    Hall, Mike (Weaver Vale)

    McNulty, Tony

    Hall, Patrick (Bedford)

    Mactaggart, Fiona

    Hamilton. David (Midlothian)

    McWalter, Tony

    Hanson, David

    Mahmood, Khalid

    Harman, rh Ms Harriet

    Mahon, Mrs Alice

    Harris, Tom (Glasgow Cathcart)

    Mandelson, rh Peter

    Healey, John

    Mann, John (Bassetlaw)

    Henderson, Doug (Newcastle N)

    Marris, Rob (Wolverh'ton SW)

    Henderson, Ivan (Harwich)

    Marsden, Gordon (Blackpool S)

    Hendrick, Mark

    Marshall, Jim (Leicester S)

    Hepburn, Stephen

    Martlew, Eric

    Hermon, Lady

    Merron, Gillian

    Hesford, Stephen

    Michael, rh Alun

    Hewitt, rh Ms Patricia

    Miliband, David

    Heyes, David

    Miller, Andrew

    Hill, Keith (Streatham)

    Mitchell, Austin (Gt Grimsby)

    Hood, Jimmy (Clydesdale)

    Mole, Chris

    Hope, Phil (Corby)

    Moonie, Dr. Lewis

    Hopkins, Kelvin

    Morley, Elliot

    Howarth, rh Alan (Newport E)

    Morris, rh Estelle

    Howarth, George (Knowsley N & Sefton E)

    Mountford, Kali

    Mudie, George

    Hoyle, Lindsay

    Mullin, Chris

    Hughes, Kevin (Doncaster N)

    Munn, Ms Meg

    Hurst, Alan (Braintree)

    Murphy, Denis (Wansbeck)

    Iddon, Dr. Brian

    Murphy, Jim (Eastwood)

    Ingram, rh Adam

    Norris, Dan (Wansdyke)

    1329

    O'Brien, Bill (Normanton)

    Smith, Llew (Blaenau Gwent)

    O'Neill, Martin

    Soley, Clive

    Owen, Albert

    Steinberg, Gerry

    Palmer, Dr. Nick

    Stevenson, George

    Pearson, Ian

    Stewart, David (Inverness E & Lochaber)

    Perham, Linda

    Picking, Anne

    Stewart, Ian (Eccles)

    Pickthall, Colin

    Stinchcombe, Paul

    Pike, Peter (Burnley)

    Stoate, Dr. Howard

    Plaskitt, James

    Stringer, Graham

    Pollard, Kerry

    Stuart, Ms Gisela

    Pond, Chris (Gravesham)

    Sutcliffe, Gerry

    Prentice, Ms Bridget (Lewisham E)

    Taylor, David (NW Leics)

    Thomas, Gareth (Clwyd W)

    Primarolo, rh Dawn

    Thomas, Gareth (Harrow W)

    Prosser, Gwyn

    Timms, Stephen

    Purchase, Ken

    Tipping, Paddy

    Purnell, James

    Todd, Mark (S Derbyshire)

    Quinn, Lawrie

    Touhig, Don (Islwyn)

    Rapson, Syd (Portsmouth N)

    Trickett, Jon

    Raynsford rh, Nick

    Turner, Dr. Desmond (Brighton Kemptown)

    Reed Andy (Loughborough)

    Reid, rh Dr. John (Hamilton N & Bellshill)

    Turner, Neil (Wigan)

    Twigg Derek (Halton)

    Robertson, John (Glasgow Anniesland)

    Twigg, Stephen (Enfield)

    Tynan, Bill (Hamilton S)

    Robinson, Geoffrey (Coventry NW)

    Vaz, Keith (Leicester E)

    Walley, Ms Joan

    Roche, Mrs Barbara

    Ward, Claire

    Rooney, Terry

    Wareing, Robert N.

    Roy, Frank (Motherwell)

    Watson, Tom (W Bromwich E)

    Ruane, Chris

    Watts, David

    Ruddock, Joan

    White, Brian

    Ryan, Joan (Enfield N)

    Whitehead, Dr. Alan

    Salter, Martin

    Wicks, Malcolm

    Sarwar, Mohammad

    Williams, rh Alan (Swansea W)

    Savidge, Malcolm

    Wills, Michael

    Sawford, Phil

    Wilson, Brian

    Sedgemore, Brian

    Winnick, David

    Shaw, Jonathan

    Winterton, Ms Rosie (Doncaster C)

    Sheerman, Barry

    Sheridan, Jim

    Worthington, Tony

    Shipley, Ms Debra

    Wright, Anthony D. (Gt Yarmouth)

    Short, rh Clare

    Simpson, Alan (Nottingham S)

    Wright, Tony (Cannock)

    Skinner, Dennis

    Wyatt, Derek

    Smith, Angela (Basildon)

    Smith, Geraldine (Morecambe & Lunesdale)

    Tellers for the Noes: Margaret Moran and Mr. John Heppell

    Smith, Jacqui (Redditch)

    Question accordingly negatived.
    Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.
    MADAM DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
    Resolved,
    That this House applauds the leadership and commitment on the environment shown by the Government domestically and globally; welcomes the UK's climate change programme which has already put the UK on track to overshoot its Kyoto target of a 12.5 per cent. cut in 1990 levels of greenhouse gas emissions by 2012; commends the introduction in the UK of the world's first economy-wide emissions trading scheme; further welcomes the long-term improvement in air quality and steps to improve local environmental quality generally; notes that river and bathing water quality is the highest on record; congratulates the Government on achieving a household recycling rate of 15 per cent. in 2002–03 and being on track for 17 per cent. for 2003–04; further congratulates the Government for playing a key role in the Convention on International Trade in Endangered Species (CITES), increasing protection for a number of endangered flora and fauna; recognises that there is still much to do to promote sustainability at all levels; and calls upon the Government to continue to put environmental protection, locally, nationally and globally at the heart of its policies.
    Mr. Tim Yeo: On a point of order, Madam Deputy Speaker. Are you aware that an hon. Member said today that he had been gagged by Government Whips, who removed him from the Standing Committee that is considering the Higher Education Bill? As the defender of Back-Bench rights, do you share my view that it is scandalous that because the hon. Member for Wirral, West (Stephen Hesford) refused to give an undertaking about the way in which he would vote in Committee, he has been denied the chance to explain why he broke his election promises through voting for Second Reading?
    Madam Deputy Speaker (Sylvia Heal): I remind hon. Members that last week Mr. Deputy Speaker said that "Erskine May" makes it clear that the Speaker cannot interfere in the work of the Committee of Selection, which is responsible for nominations to the Standing Committee. I can add nothing further to that ruling.
    Mr. Andrew Mitchell: Further to that point of order, Madam Deputy Speaker.
    Madam Deputy Speaker: Is it on the same point.
    Mr. Mitchell: It is on a related point.
    Madam Deputy Speaker: I have already ruled on that and there is nothing further that the occupant of the Chair can add.

  Local Taxation
  4.17 pm
  Mr. Edward Davey: I beg to move,
  That this House believes council tax is unfair, should not have been introduced and should be replaced by a system that reflects people's ability to pay.
  Today's debate on the council tax is about fairness in local taxation. Most people agree that fairness may be in the eye of the beholder when the judgment is about the object of one's affections. However, when the object is taxation policy, surely the judgment is less subjective.
  The usual meaning of fairness in the context of taxation is progessivity. Simply put, that means that it is fair that a person's tax bill should increase at least in proportion with their income. It means people paying according to their means; taxpayers paying what they can afford, and tax related to ability to pay. That is not a difficult concept and I hope that it is not controversial. Yet when we apply the fairness test to council tax, what do we find? The poorest pay the most in proportion to their incomes. Whether they are pensioners, low-paid public sector staff or low-paid private sector employees, those on modest incomes pay more in council tax. It is the reverse of fairness and progressivity.
  We are not considering a little unfairness, with the poorest paying a smidgen more, but gross, grotesque unfairness—unfairness not seen since the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) extolled the virtues of the council tax in the House.
  Mr. David Borrow: The hon. Gentleman said in his introduction that fairness must be perceived in terms of income. Does he accept that fairness in terms of ability to pay is not only a matter of income but of wealth and that both must be taken into account when judging whether a tax or a basket of taxes is fair?
  Mr. Davey: The hon. Gentleman is right that we should consider all aspects of a person's wealth when considering overall tax policy, but I wonder whether he wants to force people out of their homes by taxing them through council tax. I would rather ensure that that part of property wealth is taxed through inheritance tax when people die, or through stamp duty when they move. That is the fair way of taxing property. It is much fairer for local taxation to be based on ability to pay—on income.
  Dr. Julian Lewis: There is a certain déjîvu to this debate—I am thinking back to the community charge, which was introduced before the hon. Gentleman and I were in this House. If we had a local income tax, what would happen where a household had three or four wage earners who all paid that tax, whereas previously just one householder had paid the council tax? How would the hon. Gentleman avoid the same sort of demonstrations and upsets that attended the community charge? Is not this the Liberals' version of the poll tax?
  Mr. Davey: I am grateful to have a Conservative intervention so early because I will be asking every
  1332
  Conservative MP who intervenes on me today two questions. First, do they think that the council tax is fair; and secondly, what is their policy on council tax? This House needs to know the Tory party policy.
  Mr. Patrick McLoughlin: On a point of order, Madam Deputy Speaker. The hon. Gentleman has just said that he will ask every Conservative Member who intervenes two questions. Will it be in order for us to get up and answer those questions? If we are asked questions, it is only fair that we have the chance to answer them.
  Madam Deputy Speaker (Sylvia Heal): The occupant of the Chair always tries to be fair to all hon. Members, so I think that we will wait and see as the debate progresses.
  Mr. Davey: Madam Deputy Speaker, I can assure hon. Members that if some of them want to answer those questions, I shall allow them to intervene.
  I can tell the hon. Member for New Forest, East (Dr. Lewis) that the difference between our proposal for a local income tax and the community charge is that one is related to ability to pay and the other is not. Under one scheme, millionaires paid the same as dustbin men; under the other, they would not. That is the difference, and that is why this party stands for fairness and his does not.
  Mr. Lindsay Hoyle: I understand the point that the hon. Gentleman is trying to make, but I wonder whether he shares my worry that the wealthiest in this country usually have the best accountants, who ensure that they pay only a very limited amount of income tax. How would those wealthy people contribute to the hon. Gentleman's local scheme?
  Mr. Davey: I am interested to hear Labour Members defend the very richest in the land. The hon. Gentleman should speak to his right hon. Friend the Chancellor, because if he is failing to administer the tax system properly, this House ought to know about it.
  Mr. Mark Field rose—
  Mr. Davey: I know that Conservative Members are desperate to answer my questions, and I promise that I will give them the chance to do so, but I want to make some progress.
  I shall give the House some measure of the unfairness of council tax. Let us start with households. The richest households pay just 2 per cent. of their income in council tax, but the poorest pay 7 per cent., which is more than three times as much. That figure alone should worry the House, but I am afraid that there are worse examples. Let us look at pensioners. According to the Office for National Statistics, the poorest 20 per cent. of pensioners pay on average 7.1 per cent. of their income in council tax, taking into account council tax benefit and single person's discount. Hon. Members may have examples of pensioners who are paying far more—perhaps 20 or even 30 per cent. of their incomes. I have some such examples in my constituency, but on average,

  1333
  the poorest 20 per cent. of pensioners pay 7.1 per cent. of their income in council tax, which is nearly six times more than the richest 20 per cent. of non-pensioners. They pay just 1.2 per cent. of their income in council tax.
  That is unfairness on an extraordinary scale, and it goes a long way towards explaining why there has been a revolt against council tax in this country.
  Sir George Young: Returning to the question that the hon. Gentleman did not answer, is it not the case that the millionaire to whom the hon. Member for Chorley (Mr. Hoyle) referred will pay nothing at all under the hon. Gentleman's proposals and that, by definition, the less well off will have to make good the difference?
  Mr. Davey: The right hon. Gentleman ought to know better, as I believe he served in the Treasury in years gone by. Under this Government, and under the previous Conservative Government, the Inland Revenue has cracked down on people who evade tax. He ought to be ashamed, because he is saying that this House cannot implement the tax legislation that it passes. That is a very bad precedent to set, and Government figures in fact show that people on higher incomes pay more in income tax, but less in council tax.
  Mr. Andrew Turner: Does the hon. Gentleman accept that he appears to be confusing those who are rich, which is a measure of capital, with those who have a high income? Somebody can be rich and still have nil income, and therefore pay nothing through a local income tax?
  Mr. Davey: If the hon. Gentleman had been listening closely, he would know that I was not doing that. I said that those people with assets and property could be taxed through inheritance tax and stamp duty, and that that was the fair way to do it. I therefore answered that question.
  Mr. Eric Pickles: Will the hon. Gentleman explain what is the Liberal Democrat position with regard to those people who receive remuneration through shares? How will he tackle that with a local income tax? How will he square it with increased share ownership, which is one of the Liberals' aims?
  Mr. Davey: I do not know whether the hon. Gentleman fills in a tax return at the end of the year. These people will, however, and they will therefore pay local income tax on it, as is the case in many other countries.
  Mr. Pickles: My question is simple, and an answer to it will help the House enormously. Will people pay local income tax on what was referred to as unearned income—yes or no?
  Mr. Davey: I am afraid that if the Inland Revenue, under current rules, classes that as income, local income tax will apply to it. If national income tax applies to income, local income tax will apply to income. That is the simple policy that we propose.
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  It is interesting how concerned Conservative and Labour Members are. They are rattled, we know that they are rattled, and that is why "Focus" editors up and down the country are putting out leaflets on the subject.
  Mr. Hoyle: Will the hon. Gentleman give way?
  Mr. Davey: I will do so in a second. I want to make a little progress.
  There is a revolt against local council tax across the country. What is interesting, however, is that the complaints are not just against one council, and they are not just against councils controlled by the Labour party, the Lib Dems, or the Conservatives. There have been complaints against council tax across the country. The anger is nationwide, and it is against the council tax system.
  That is probably why opinion polls on council tax have shifted so sharply in recent times. Only a year ago, 57 per cent. of the public blamed local councils for the council tax rises, while a mere 29 per cent. blamed the Government. Now the position is reversed: 39 per cent. blame the Government, while only 24 per cent. blame councils. People have sussed it out. The national Government are responsible for the council tax system—councils do not choose the local tax system that they use or the local government finance system. That is the job of Ministers, and this lot have opted for the Tory council tax, which is why people are so worried about it.
  What is bizarre about the Government's choice is that it is despite the recommendations and advice of the independent Audit Commission, which echoes the views of the public. It said last December that the council tax system is fundamentally flawed. That is why the House must debate the motion, put matters right and get rid of the council tax.
  Huw Irranca-Davies: Does the hon. Gentleman recognise that one of the greatest and most antagonistic issues with the current council tax is the failure to re-band for too many years? Will he therefore applaud the Labour-led Welsh Assembly Government for introducing a change by spring 2005, which will mean that greater variety exists, instead of lumping everybody together in bands that are 13 years out of date?
  Mr. Davey: If the hon. Gentleman thinks that re-banding is going to solve the problem, I am afraid that he does not understand the post-war history of local government finance. I recommend to him a text that I read in Greece during the recess, when I was boning up on local income tax, which shows that in every decade since the second world war, a local taxpayers' revolt has taken place, whether on rates, poll tax or, now, council tax. The truth is that successive Governments since the second world war have asked local taxation, whether it is on property, individuals or per capita, to do far too much. That is a problem that we must solve, whether through the balance of funding review or our approach.
  Huw Irranca-Davies: If there is a history of revolts year after year—I will read the pamphlet to which the hon. Gentleman referred—what increased burden on

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  the taxpayer does he anticipate, if any, under the Liberal Democrat proposals? Back in September, we were talking about possible increases of 3 per cent., 4 per cent and so on. Will it be a zero point gain, or will people who pay the local income tax have an increase within the first couple of years?
  Mr. Davey: No, they will not. The policy is designed to be revenue-neutral overall. It is not a tax-raising but a tax-neutral policy. The aim is to shift tax-raising power from central Government to local government, which is done in many other countries.
  Mr. Hoyle rose—
  Andrew Bennett rose—
  Mr. Davey: I am going to make some progress, but I promise to give way in due course.
  Our motion is pretty clear. The first part says, very simply, that
  "this House believes council tax is unfair".
  I look forward to hearing from many Members, particularly Conservative and Labour Members, whether they disagree with that part of the motion. If they are going to stand up and put on record that they think the council tax is fair, I am sure that their electors will want to know that.
  Mr. Hoyle rose—
  Mr. Davey: I will give way, because I am worried about the hon. Gentleman's health.
  Mr. Hoyle: While the hon. Gentleman worries about my health, I will ask him a question that will give him something else to think about. Does he know how many airline pilots and people who work abroad have their salaries paid into overseas accounts? The one thing that the previous Government established was that people move but properties do not. That is why they had to return to the old system. How would the Liberal Democrats begin to collect tax from those who are paid abroad in offshore accounts—and there are a lot of them—and how would they assess what those people should pay? Or—this is the key question—would they put the burden back on to the people who are employed in the United Kingdom?
  Mr. Davey: I will not be worrying about the hon. Gentleman's health again.
  What we are arguing is that the national income tax base should remain, and that local income tax should go on to it. If there is a problem with people not paying income tax now, it should be sorted out by the Chancellor of the Exchequer. He should make sure that they pay their dues.
  As I learnt during my sojourn in Greece, many other countries operate a local income tax. It is a tried and tested policy. It works in very left-wing countries like the United States of America and Switzerland; it works in
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  very right-wing countries like Sweden, Denmark, Finland and Norway. The hon. Gentleman may suggest that there are difficulties, but I am afraid that he is wrong.
  Andrew Bennett rose—
  Mr. Davey: I give way to the Chairman of the Select Committee.
  Andrew Bennett: The hon. Gentleman says that his proposal is revenue-neutral. All the upsets over the council tax and the poll tax have related to the problem of those taxes going up. Will the hon. Gentleman now admit that a local income tax will have to keep going up if councils are to provide extra services?
  Mr. Davey: It is revenue-neutral compared with what otherwise obtains. [Laughter.] I am surprised that Members laugh. Obviously if more is to be spent, tax revenue will go up. That is what has happened under the poll tax and the council tax. Members may wish to deny the facts, but I am afraid that they will have to face them.
  One of the real benefits of a local income tax for local government is its buoyancy. Unlike council tax, which must rise every year just to keep pace with inflation, local income tax rates could stay the same because more money would come in as employment and earnings increased. [Interruption.] Of course, the rates could go down if locally elected councillors and local communities wished. That is what has happened in other countries.
  Mr. Graham Stringer: Will the lion. Gentleman give way?
  Mr. Davey: No, I will not.
  When I made my point about the council tax being unfair, I expected Conservative Members to leap to their feet. I am sure that they will in a second. I expected them to do so because their Front-Bench spokesman, the right hon. and learned Member for Devizes (Mr. Ancram), has said that the council tax is
  "as fair a tax as you will find".
  A tax that makes the poorest pay more is a fair tax, according to the Tory Front Bench.
  Mr. George Osborne: rose—
  Mr. Davey: Does the hon. Gentleman want to intervene now?
  Mr. Osborne: I am grateful to the hon. Gentleman for giving way, but I suggest that he answer my questions, rather than trying to turn the tables. Students are currently exempt from council tax. Can he confirm that under the Liberal Democrat proposal, any holiday earnings that they accrue would be taxed?
  Mr. Davey: That depends on whether they earn more than the personal allowance. For the current financial year, 2003–04, there is a tax-free sum of £4,615. If they earned less than that, they certainly would not pay.

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  This is an interesting point that I am sure will be made again during this debate. Conservatives will be desperate to point out the losers under this policy, but they will not point out the gainers. They will not point out that 70 per cent. of people will either gain or be largely unaffected. They will not point out that pensioners and those on low or modest incomes will gain massively. They will not point out that our policy is a major tax cut for some of the poorest in our society.
  We have heard today from the right hon. and learned Member for Folkestone and Hythe the "moral case" for low taxation. The problem is that his party is the party of unfair tax, not low tax. That is its history and heritage, and that is what it keeps supporting.
  Mr. Mark Field: I am an obliging sort of chap, so I shall partly answer the hon. Gentleman's question. I believe that the council tax is a fairer tax than inheritance tax. In terms of elderly pensioners, his party is playing to the gallery by proposing a local income tax. I would like to know by how much Liberal Democrats envisage increasing the inheritance tax take, which would of course affect the estates of many elderly folk, who may not be around for much longer, and who want to pass on their assets to the next generation. They need to be told about that, in advance of the so-called advantages that a local income tax will offer them.
  Mr. Davey: We have no plans to increase inheritance tax, but it is interesting to note the hon. Gentleman's point, which is that inheritance tax is somehow unfair. In some cases, we are talking about people who have literally millions, yet he seems to suggest that on their death, such money should be in no way taxable. That would clearly be wrong.
  Mr. Andrew Turner: Will the hon. Gentleman give way?
  Mr. Davey: No, I have given way to the hon. Gentleman before. The problem for the Conservatives is that in terms of local taxation, they have "form" as long as your arm. That is mainly because they have not got a clue about fairness. I refer them to a debate on the poll tax that took place on 18 April 1988. The then Conservative Minister said—[Interruption.] I shall come a little further up to date with the same person in a moment, if Conservative Members will be patient. In 1988, the then Conservative Minister said:
  "The proposal that we seek to put in place of that discredited system"—
  he was referring to the rates—
  Mrs. Angela Browning: On a point of order. Madam Deputy Speaker. No one on the Conservative Benches can answer for what happened in 1988, apart from my right hon. Friend the Member for North-West Hampshire (Sir George Young), who voted against the proposal in question.
  Madam Deputy Speaker: That is a point for debate and not a point of order for the Chair.
  Mr. Davey: As I was saying, the then Conservative Minister said:
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  "The proposals that we seek to put in place of that discredited system are much better related to ability to pay." —[Official Report, 18 April 1988; Vol. 131, c. 639.]
  The Minister in question was the right hon. and learned Member for Folkestone and Hythe, the current leader of the Conservative party. He was telling the nation that the poll tax was fair, but wait—fairness is apparently a concept that can change. On 11 November 1992, a certain Conservative Minister—there are no prizes for guessing his constituency—said:
  "I am confident that the council tax will be seen to be a fair replacement for the community charge".—[Official Report, 11 November 1992; Vol. 213, c. 873.]
  The council tax is fair, according to the Conservatives. I can assure them that if they fail to change their mind in that regard—if they fail to vote with us tonight—they will be seen by the public not just as the inventors of the council tax, but as the arch-defenders of this discredited system.
  The Tories have a bit of a problem at the moment—the problem of being a true party of opposition. They have no policy on tuition fees, they backed the Government on Iraq, and the Prime Minister hoodwinked them on weapons of mass destruction. On council tax, they are incapable of telling us about their alternative—or at least, their leader is.
  Mr. Andrew Turner: Could the hon. Gentleman help those of us who do not have to travel abroad to get our summer sunshine—we who live on the Isle of Wight—by explaining why he said to a Labour Member that we were asking the tax system to do too much, but then said later that he expected the local taxation system to be given more responsibility, and to take a greater role in the funding of local services?
  Mr. Davey: I will come on to that in a few moments, but the hon. Gentleman knows that I have discussed that matter with him. When a local income tax is in place, it is possible to slash national income tax and reduce some of the subsidies going to local government, allowing local income tax to take the strain. The hon. Gentleman knows that, because I have spoken to him privately about it.
  Mrs. Browning rose—
  Mr. Davey: I will not give way, as I want to make some progress.
  Only 10 months ago, when the current leader of the Conservative party was the shadow Chancellor, he was jumping on the council tax bandwagon. He told The Daily Telegraph that he would
  "change the system of council tax when we come back to office."
  Spotting a scoop, the journalist pressed on and asked the then Tory shadow Chancellor how he would change the system. His reply was short: "I don't know". So we have "I don't know" from a man who has spent years studying local government finance as a Minister. The right hon. and learned Member for Folkestone and Hythe has more ministerial knowledge on that subject than any other Member of the House and has the distinction of having introduced two new local taxes—the poll tax and the council tax—but now the Tory leader does not know.
  Mrs. Browning: Will the hon. Gentleman give way?
  Mr. Davey: No.

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  As I said, the Tory leader was shadow Chancellor a few months ago, presumably in charge of the Conservative tax policy, yet he did not know. Perhaps he has run out of ideas. Well, I have some good news for him. His successor as shadow Chancellor, the right hon. Member for West Dorset (Mr. Letwin) has been thinking. He sketched out the latest Tory thinking in a little noticed interview for The Independent on 10 December last year. According to that newspaper, he said that, in "the short term", the Conservatives
  "would come up with some answers to the problems caused by soaring council tax bills."
  In the short term—yet we are still waiting for their answers. The newspaper report continued:
  "The Tories may propose that the share of council budgets raised locally is increased from 25 per cent. to more than 50 per cent. and the council tax is likely to remain under their plans."
  I am grateful to the right hon. Member for West Dorset for those fascinating words, not least because they amount to the only official Front-Bencher policy that the Tories appear to have on council tax.
  Dr. Julian Lewis: On a point of order, Madam Deputy Speaker. I appreciate that we are having what is called an Opposition day debate, but does that mean that the Liberal Democrats should spend the entire debate talking about the Conservative Opposition? Is it conceivable that they should talk about the policies of the Government?
  Madam Deputy Speaker: Order. I have no doubt that the spokesman for the Liberal Democrats will, when he continues his speech, include some comments about the Government.
  Mr. Davey: You are absolutely right, Madam Deputy Speaker, and you rightly anticipate my remarks, but I have not yet finished with the Conservatives.
  What might the words of the right hon. Member for West Dorset mean? To double the amount of money that councils raise locally, they will presumably have to be given some new tax, or council tax will have to go up. I am a fair and generous person, and given that the Conservatives have not mentioned any new tax and have said that they will keep council tax, I have drawn the obvious conclusion. Council tax will double under the Conservatives. All households will, if they re-elect the Conservatives, see council tax bills of more than £2,000.
  Let us consider what that would mean for average band D council tax for different regions. Under the Tories, people in the east of England would have to pay double the council tax—£2,230. In the east midlands, it would be £2,250 and in London, it would be £2,160—and I could go on. It is a brave policy and "Focus" editors will be interested in explaining it. However, we will refuse to help the Conservatives sell that policy nationwide if they can tell us that they have a different policy.
  Mr. Pickles: The hon. Gentleman is being courteous to the House, but can he reconcile what he has just said with the answers that he gave to the distinguished
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  Chairman of the Select Committee, when he said that incomes and expenditure of councils would rise? I would be grateful if he would tell the House how much the doubling of local income tax would cost.
  Mr. Davey: To most taxpayers, nothing, because national income tax would be cut to offset it. It is, as we have said, a neutral tax policy. I was rather disappointed by what the hon. Member for Brentwood and Ongar (Mr. Pickles) had to say, and wonder whether the Tories have a different plan. If they want to tell us their plans for council tax, we should be very interested to hear them. Until then, we will continue to tell the public that the shadow Chancellor has said that the Tories want to double council tax.
  There is some fresh thinking going on in the Conservative party. Last week, I stumbled across a paper written in 2002 by a certain Mark Nicholson, deputy chairman of the Ealing Southall Conservative association. It was entitled "No Representation without Taxation—"
  Mrs. Browning: On a point of order, Madam Deputy Speaker. The Minister is a generous and understanding man. Would it not be appropriate for him to change places with my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles), so that my hon. Friend can answer the debate when the time comes? Clearly, Labour Members are not involved in the debate, and they could all have a cup of tea.
  Madam Deputy Speaker: I shall leave hon. Members to make their own decisions about staying in the Chamber.
  Mr. Davey: The paper in question was published by the Bow group. Its executive summary states that local government should raise a far higher proportion of its costs through local taxation. We agree. It goes on to say that a local income tax should supplement council tax to allow councils to become self-financing, and that the national rate of income tax should be reduced to compensate for the introduction of the local income tax, leaving the overall tax burden unaltered by the reforms. It is an interesting document, although not exactly Liberal Democrat policy, as it proposes an extra tax and would retain council tax. "Focus" editors would probably call it the "Tory two-tax solution", but it is at least coherent, and spelled out in detail over 46 pages.
  I am grateful to that leading Conservative thinker for his explanation of how a local income tax would work and benefit people. This Conservative member of the Bow group says that a local income tax would improve accountability, protect less affluent areas, improve transparency and not require "any great additional administration". I have decided to send a copy of the pamphlet as a gift to the right hon. and learned Member for Folkestone and Hythe, so that he can get a few ideas. After all, he was chairman of the Bow group in days gone by.
  Mr. Stringer: Will the hon. Gentleman give way?
  Tim Loughton: Will the hon. Gentleman give way?
  Mr. Davey: No. I hope that the Conservatives will come to their senses on this matter, and join our

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  campaign for fairer local taxation, even if that means that Opposition Front-Bench Members have to apologise for getting local taxation so badly wrong twice in one political generation.
  Tim Loughton: Will the hon. Gentleman give way?
  Mr. Davey: I will, as I am about to turn to the Government lot.
  Tim Loughton: I am greatly relieved about that. Before the hon. Gentleman tells us what the mutual aid officer of the Little Piddling in the Marsh Conservative branch had to say on this subject some years ago, will he return to what he said about proposals for increasing the share of taxation that comes from local tax? Does he not realise that that has been happening in practice already? In West Sussex, the share of local spending met by national Government grant five years ago was about 75 per cent.—the average for shire counties—and is now 56 per cent. That has happened not because we have raised council tax by enormous amounts, but because the grants to counties such as West Sussex have been slashed and the money has gone elsewhere. That is another example of the equalisation of the rates that the hon. Gentleman is talking about. Will he also explain—
  Madam Deputy Speaker: Order. That is a rather lengthy intervention.
  Mr. Davey: I am grateful to the hon. Gentleman, as his was one of the first interventions this afternoon with which I could feel any agreement. There is no doubt that the Government have manipulated the grant system, and that their operation of local government finances has not been fair. It must be said that the Government learned most of their lessons from the previous, Conservative Government, but he is right to point out that there have been many examples of unfairness.
  The Government should be most ashamed of their record on council tax. Before 1997, most people thought that a Labour Government would be committed to fairness, especially in taxation. However, the fact that the unfair council tax has survived for nearly seven years under Labour is hard evidence to the contrary. The problem for the Government is that retaining council tax undoes all their attempts to do good works elsewhere. Those attempts include winter fuel payments, free television licences for people over 75, tax credits—the Chancellor of the Exchequer can reel them off. They may all have been designed to help pensioners and the less well-off, but are the recipients truly grateful when their extra cash has to be set against the highly visible and rocketing council tax?
  Last year, the basic pension went up by 2.6 per cent., but the average council tax rose by 12.9 per cent. Council tax takes a record share of the basic pension; on average, it is more than 20 per cent. That unfairness is felt by many erstwhile Labour voters.
  Although the Government are like the Tories, in that they do not have an answer to council tax unfairness, they have at least set up the balance of funding review and the process has, so far, been relatively transparent. The only problem is that Ministers are busy ruling out
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  options before the review has even concluded. I very much regret that, as the review could turn out to be a real shambles.
  Andrew Bennett: The hon. Gentleman is doing the House a disservice; he is spending his time making knock-about points, but there are serious issues in the balance of funding review. If he has confidence in a local income tax system, should he not spend most of his speech trying to explain it to the House so that we can see whether it has any validity and can make a contribution to the review?
  Mr. Davey: The hon. Gentleman anticipates me—I was coming to the balance of funding review. As he knows, we have published full details of our policy; it is on a website and easily accessible, and we are receiving many favourable comments. He should have already seen it.
  The Government's review is supposed to be looking into 12 new revenue sources—at the last count. On the ODPM website, we are told that the review is considering a reformed council tax, a localised non-domestic rate, a local income tax, a localised vehicle excise duty, a localised stamp duty on property transfers, a local sales tax, a local land tax, tourist taxes, new council charges, street works charges, local congestion charging and new, unspecified, environmental taxes.
  Some of us felt that 12 new taxes were a bit over the top, but we were reassured by the Government's comments to The Guardian in October, after those proposals appeared on the website. Ministers were said to be looking at
  "a local income tax as an alternative to council tax and a means of allowing local councils to raise more of their own funds".
  Indeed, the Minister for Local Government, Regional Governance and Fire was reported as saying that replacing council tax with a local income tax was one of the three frontrunners in the review.
  That was music to our ears, but unfortunately, that commitment lasted only 24 hours. That was how long it was before No. 10 Downing street barged in to close down the options and the Prime Minister made it clear that he opposed local income tax. He was at it again when he appeared before the Liaison Committee last week. He repeated his opposition to local income tax and went on, in words that were almost identical to those used by the leader of the Conservative party, to say that the trouble was that he himself did not know what the answer was. So the leader of the Conservative party does not know and the Prime Minister does riot know. That is extremely worrying. The House should be very, very worried. The Prime Minister knows about weapons of mass destruction but he does not know how to reform council tax.
  Mr. Stringer: I have been listening carefully as the hon. Gentleman has developed his arguments on funding for local services and I understood him to say that he wanted less dependence on and interference from the centre. In that case, how can he support a local income tax that would require more intervention and more redistribution from the centre than any tax that has been considered since the 1981 Green Paper?
  Mr. Davey: If the hon. Gentleman were right, he would be right to criticise me, but unfortunately he is

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  completely wrong. The whole point of a local income tax is that it would build a local tax base into the grant formula, so distribution would be automatic—there would not be more intervention.
  The Government must look at the problem more closely. The Audit Commission, in its report on council tax rises last year, stated:
  "The review that the Local Government Minister is chairing on the future funding of local government needs to address the fundamental flaws in the local tax system".
  Those flaws have led to massive council tax rises and if they are not addressed, no amount of threats and capping will save the Government from blame. After all, if, having set up the review, Ministers decide to do nothing, they will deserve to get the blame. They must realise that tinkering with council tax reform will not solve the balance of funding problem. It might make a dreadfully unfair tax slightly less unfair, but it will not stop the gearing effect that is producing above-inflation council tax rises.
  Last Thursday, we held a ridiculously short debate on the local government grant settlement, which touched on some of those problems.
  Sarah Teather: On the grant settlement, does my hon. Friend agree that it is hypocritical to discuss capping council tax or complain about rises in council tax when the Government grant settlement forces a particular council tax outcome? The Government provide a grant based on the difference between what they think local government should spend and the assumed national council tax level. In the case of Brent, council tax must therefore rise by 8.7 per cent. to reach the assumed national council tax level. Brent effectively has two options: it can either set an inflation-busting council tax or it can cut central services that the Government think that it should provide.
  Mr. Davey: My hon. Friend has explained in detail how the council tax system is failing. The Audit Commission says that there are perverse effects where central Government try to insert their tentacles into all aspects of local authority budgets, preventing local authorities from making sensible decisions and pushing them into silly ones. That is why the Government's capping solution is simply not the answer.
  Mr. Parmjit Dhanda: The other side of the coin in respect of the argument made by the hon. Member for Brent, East (Sarah Teather) involves authorities such as Liberal Democrat Cheltenham, which is close to my constituency. Last year's settlement, which included capital, was about 12.5 per cent.; the hon. Gentleman discusses the gearing effect, but Liberal Democrat local authorities such as Cheltenham multiply it by putting council tax up by 13.9 per cent.
  Mr. Davey: The hon. Gentleman fails to mention the rules, restrictions, ring-fencing and passporting that force councils to take decisions, many of which they do not want to take. That is the problem.
  Mr. Adrian Sanders: When the Government claim a 5.9 per cent. increase in their
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  contribution to local government expenditure, it applies only to 75 per cent. of that expenditure and is therefore worth less than that percentage rise. Furthermore, when a local authority sets its budget, it must deal with a public sector inflation rate of around 7 per cent.
  Mr. Davey: My hon. Friend is right, and the situation is worse than he suggests because the 5.9 per cent. increase does not apply to national non-domestic rates. The flawed system needs reform.
  Mr. Borrow: Will the hon. Gentleman give way?
  Mr. Davey: No, I will not give way again because I want to make progress.
  The system is flawed and a problem for the Government is coming down the track. In 2007, several million properties will change council tax band. Some people will enjoy a windfall tax cut; others will see their council tax bills suddenly jump as their houses are re-banded upwards by one or even two bands. It is difficult to know the balance both between losers and gainers and between regions, but initial analysis by the New Policy Institute on the Office of the Deputy Prime Minister website gives us some hints. For example, in London most homes now in band C will go up at least one band and face a tax hike of 15 per cent. on top of annual council tax rises. Those households will, in the main, be on low or modest incomes and contain pensioners and public sector workers—band C homes in London are not mansions.
  A no-reform option from the balance of funding review will sentence such families to a massive hike in a grossly unfair tax, with nothing to show for it just after the next election, which may be the point that Ministers are grappling with. Maybe they think it convenient that the revaluation will occur after the next election. However, I warn the Minister that if the Government cannot promise reform before or at the next election, I hope that they will have the honesty to mention that prospective tax rise in their manifesto, because if they do not do so I promise him that others will. The balance of funding review is a huge opportunity for local government and local taxpayers if Ministers have the courage to take it.
  Ministers know where this party stands on the balance of funding because we have made submissions and published our detailed proposals. Indeed, we have set up a website containing those plans and even answered the questions from the Minister for Local Government, Regional Governance and Fire on our policy. We urge Ministers to consider our policy seriously, and we are prepared to get round the table and discuss it with them. I hope that Ministers in the ODPM can persuade the Prime Minister to get round the table.
  Mrs. Lorna Fitzsimons: It is not good enough for the hon. Gentleman to say that the details are on a website. This is a debate that his party asked for on the Floor of the House. I should like to know which of my constituents will have to pay more tax, when the hon. Gentleman says that other people will have to pay less. Who?
  Mr. Davey: It is very rich for Labour Members and Conservative Members to complain that our party is not

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  publishing its detailed policy. We have published it. It has been widely reported. We are very happy to put it to the balance of funding review. The vast majority of the hon. Lady's constituents would pay less tax under local income tax.
  I want the hon. Lady and her hon. Friends on the Front Bench to persuade the Prime Minister of the virtues of local income tax, and I suggest a strategy: tell him that they have a local income tax in the United States. That might just tip the balance. Tell the Prime Minister that they do not have it in France. but they have it in countries as diverse and wealthy as Japan, Switzerland and Sweden.
  A local income tax is a policy whose time has come. I commend the motion to the House.
  5 pm
  The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Phil Hope): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
  "welcomes the current work of the Balance of Funding review of how local government in England is funded; notes that the review is receiving evidence on a number of possible reform options suggested in public consultation; awaits with interest the report of the review in summer 2004; and urges local authorities to set budgets for 2004–05 which deliver value for local taxpayers."
  It is always good to debate the important and complex subject of local government finance. It is a chance to have a good Liberal Democrat baiting session, which I think Conservative Members have enjoyed.
  Unlike the Liberal Democrats, the Government take this issue very seriously. It is currently the subject of our balance of funding review. I listened with great interest to the speech of the hon. Member for Kingston and Surbiton (Mr. Davey) and his attacks on the Conservative party. It was most interesting to hear all of that, but we are here to debate the serious issues facing the country today.
  I have one preliminary point. The hon. Gentleman might have chosen a better day for today's debate, since the Minister for Local Government, Regional Governance and Fire and I are both involved today in the Committee on the Fire and Rescue Services Bill. My right hon. Friend sends his apologies for being unable to be here for the start of the debate, as he is still in Committee. Dedicated and talented though he is, he cannot be in two places at the same time.
  It may be helpful if I start by briefly setting out some background. First, I refer hon. Members to the recent generous grant settlement for local authorities in England. This is the essential context of the issues facing the local government finance system and the reality of what is happening now.
  Last Thursday, my right hon. Friend put before the House proposals confirming that the total of formula grant would be £46.1 billion in 2004–05, an increase of 5.5 per cent. compared with 2003–04. On top of that, specific grants take the overall increase to no less than 7.3 per cent.
  Of course, it is not a one-off increase. It is part of a programme of sustained growth in investment in the vital public services delivered by local government.
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  Overall Government funding to local authorities is up by 30 per cent. in real terms over the past seven years. That is in stark contrast to the previous four years, when year-on-year cuts were the norm—a 7 per cent. real-terms cut over that period.
  Conservative Members may wish to forget their responsibility for the realities of life in that era, when real-terms cuts were the order of the day. However, those involved in local government, including some of my hon. Friends and me, do not have such short memories. They know the change that has occurred. They know that in 2004–05, for the second year running, all local authorities receive a real-terms increase in formula grant on a like-for-like basis.
  As the hon. Member for Kingston and Surbiton said only last week,
  "it is a generous settlement…the settlement is far more generous than anything ever proposed by the Conservatives." —[Official Report, 5 February 2004; Vol.417, c.990.]
  I am grateful for that recognition.
  I am pleased to say that in recent grant settlement we have removed ring-fencing from some £750 million of specific grants, and thus reduced the ring-fenced grant from over 13.3 per cent. to about 11 per cent. of the total grant. That is part of our commitment to reverse the trend on the ring-fencing of grants to local authorities.
  Mr. Pickles: Will the hon. Gentleman concede that ring-fencing is still slightly over three times the level that the Government inherited in 1997?
  Phil Hope: The hon. Gentleman makes a fair point, but the direction of travel is now definitely right, with less ring-fencing and therefore more freedoms and flexibilities to local authorities.
  I come to council tax rises.
  Mr. McLoughlin: I should like to take the Minister back to what he said a few moments ago. He was talking about the amount of money by which the Government have increased the grant to local authorities. Given that what he says is true—and I do not argue with his figures—why have our constituents seen such a large rise in council tax over the past few years, when in the years when he says there was a reduction in council grant there was actually a smaller increase in council tax levels?
  Phil Hope: I was coming to precisely that point. Given the generous grant settlement for next year and the scope for efficiency improvements, our view is that local authorities can and should deliver council tax increases in low single figures in 2004–05, so we are now looking at proposed council tax rises very closely. We are pleased that initial indications suggest that many authorities have listened and are planning increases in low single figures. For example, Southampton is talking about a council tax increase of 2.9 per cent.; Birmingham, 1.5 per cent.; Dudley, 1.5 per cent.; Derbyshire, 2.9 per cent.; and Suffolk, 3.9 per cent.
  Mr. Ivan Henderson: Is my hon. Friend aware of the situation with my local council, Tendring district council, which is run by the Conservatives? In May last year, the Conservatives on the council said:

  1347
  "Your Conservative district councillors have implemented the lowest Council Tax increase in Essex and one of the lowest in the UK".
  The increase was 2.5 per cent. because the Government were so generous in giving them a good increase previously. Less than six months later, they were advocating an increase of 30 to 45 per cent. Is not the serious concern regarding such councils either that they are playing games for elections or that they are bad financial managers? They need to be looked at seriously.
  Phil Hope: My hon. Friend makes an excellent point. Despite significant extra investment, some local authorities—he has just quoted his own. Tendring— have not listened, and they have indicated that they will impose large council tax increases. I shall give some examples of authorities proposing very high rises. Torbay is proposing a 17.5 per cent. increase; Leicester, 14 per cent.—a subject of debate in the House last week—Milton Keynes, 11.1 per cent.; Dover, 17.1 per cent.; Warwick, 24 per cent.; Waverley, 14 per cent.; Rother, about which we had a debate in the House last night, 13 per cent.; Medway, 15 per cent.; and Brighton and Hove, 13 per cent. Those are simply unacceptably high council tax increases.
  My right hon. Friend the Minister for Local Government, Regional Governance and Fire has now written to no fewer than 65 local authorities about which we have seen reports of council tax increases that are not in low single figures, and he is planning to call in some authorities. It appears inevitable that the Government will have to use their capping powers this year.
  Mr. Pickles: Will the hon. Gentleman confirm whether the letter has now gone to the Mayor of London?
  Phil Hope: I cannot confirm at the moment whether the letter has gone to the Mayor of London. There is a complicated debate between the Greater London authority and the Mayor, but he will receive a letter if he is considering such an increase. Indeed, no sooner have I answered the question than I am holding in my hand the letter that has gone to the Mayor of London.
  The hon. Member for Kingston and Surbiton prayed in aid the Audit Commission to explain the increases. saying that they were all the Government's fault. Let me remind him that the chairman of the Audit Commission said, in commenting on the settlement, that there are a number of factors behind the rises this year and that trying to find a single point of blame is not only counter-productive, but simply not borne out by the evidence. It is interesting that, although we are still gathering information about council tax increases, our initial reports show that the average increase in Labour councils is about 5 per cent., but Conservative councils are coming in at about 7 to 8 per cent.—and, yes, hon. Members will be glad to hear that Liberal Democrat councils are coming in at about 8 to 9 per cent. Perhaps
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  one reason why we are hearing about alternatives to the council tax is that Liberal Democrat councils cannot budget awfully well.
  Mr. Edward Davey: Will the Minister confirm that Liberal Democrat councils had the lowest rises last year?
  Phil Hope: I am discussing the council tax for next year, and Liberal Democrat councils are coming in with much higher figures than the others, although the Tories are not far behind.
  I come now to the balance of funding review, which is the essence of today's debate.
  Mr. Pickles: I am grateful to the hon. Gentleman for giving lots of information. Will he tell us which political party has the lowest council tax, band for band? Would that be the Conservatives?
  Phil Hope: Unfortunately for the hon. Gentleman, the average band D council tax in Conservative councils is now higher or equal to that in Labour councils, so the previous position, which I think he was trying to put, no longer applies.
  Sir Paul Beresford: Will the Minister give way?
  Phil Hope: I want to move on to the balance of funding review, if I may.
  The review's steering group has met several times over the past few months. It discussed the principles of a successful local government finance system, held a public consultation and commissioned independent research, all of which is publicly available. It is now discussing possible reform options. I shall take a moment to emphasise one of its research findings. Many members of the public are not clear where accountability for local government services lies or where the money comes from. However, what matters to them is not where local authorities get their money, but that services are efficiently delivered. According to the review's research, there seems to be no sign of a direct link between balance of funding and local election turnout. That was a surprise to many of us.
  What are the options for reform of balance of funding? The hon. Member for Kingston and Surbiton talked about 12 options, but the review is examining four. Given today's debate, hon. Members will be interested to learn that one of them is indeed local income tax. The others are a reform of council tax, the relocalisation of business rates, and a mixed option of smaller taxes or charges. I should emphasise that the fact that the review is hearing evidence on different options is not an indication that the Government accept that the balance of funding must be changed, nor that they favour any of the reform options. One difficulty with an open debate is that it can be open to abuse. If all information is published on websites so that people can engage in the debate openly, the inevitable party politicking starts and positions are misrepresented. The hon. Member for Kingston and Surbiton did that, and I shall come back to it later.
  The hon. Gentleman asked whether we had ruled anything out, but one option that we are not considering is a return to the Tories' failed community charge, or the

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  poll tax as it was popularly—or, perhaps, unpopularly—known. Many hon. Members will remember that one of the consequences of that rushed reform was that value added tax increased to 17.5 per cent. to raise an additional £140 per community charge payer in central Government support. That is one reason why a considered approach to these matters is essential, rather than a knee-jerk response based on slogans such as "Axe the Tax" or "Scrap the Cap". There is nothing like a good Liberal slogan—frankly, they are nothing like good Liberal slogans.
  Mr. Edward Davey rose—
  Phil Hope: I shall give way to the hon. Gentleman, who will no doubt give me another slogan.
  Mr. Davey: Will the Minister confirm that, although he has ruled out the community charge, he has not ruled out the local income tax?
  Phil Hope: I am looking forward to reaching the part of my speech about the local income tax, but first I want to talk about something that the hon. Gentleman skipped over during his speech: reform of council tax. Many responses to the review consultation said that there were serious problems with council tax, including the questions of fairness with which he opened the debate, but most suggested that it could be reformed rather than abolished. The tax was widely accepted until recently. It has advantages—for example, it is relatively easy to understand and collect. Indeed in 2002–03, local authorities in England collected more than 96 per cent. of the council tax due within the financial year.
  Mr. Borrow: Does my hon. Friend agree that any Government should be reluctant to give up a property tax in favour of increasing an existing tax, as the Liberal Democrats propose? If the Government were to do that, the likelihood is that a future Chancellor would resurrect a property tax because it makes sense to have a good basket of taxes, of which a property tax should be part.
  Phil Hope: My hon. Friend is a renowned expert in the field and I am grateful for his excellent point.
  What kind of reforms to the council tax might we be talking about? Such changes include the revaluation of domestic properties, to which we are already committed and which is currently planned for 2007. That will ensure that a council tax bill is based on the up-to-date value of a house rather than its value in 1991. I make the especially important point that the revaluation is not designed to raise more tax overall. Our 2001 local government White Paper made clear that its overall impact would be neutral. The hon. Member for Kingston and Surbiton misses the point. At the same time as revaluation, we will consider the case for changing the existing bands. Quoting revaluation without taking into account band changing, as he did in respect of London properties, is disingenuous
  The point came through strongly from the consultation that council tax should reflect more closely people's ability to pay and mirror with more accuracy
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  variations in property values. Ways of doing that mentioned during the review include introducing new bands or a regional banding system. I make it clear that we are not committed to any particular changes. Before changing the banding system. we would need carefully to examine the impact on groups such as pensioners on low or fixed incomes living in high value properties. It simply will not do for Liberal Democrats to scaremonger by quoting selectively from documents from the balance of funding review or for them to avoid key questions from hon. Members in all parts of the House about their proposal to increase stamp duty and inheritance tax.
  Another key issue identified by the reviewers is resolving problems relating to council tax benefit—an inbuilt way of achieving more progressivity in local taxation, which the Liberal Democrats say they want. Council tax benefit helps people on low incomes, including many pensioners, with their payments. The problem is that many people are not aware of their right to that money—1.4 million are eligible but not claiming. Some who are aware are put off by the perceived stigma of claiming a benefit and are reluctant to claim other than the state pension. It is for local and central Government together to do all they can to ensure higher take-up. We are already abolishing the restriction that limits the maximum council tax benefit for property in bands F, G and H from 1 April. We are also considering whether other improvements can be made to the system.
  Mrs. Annette L. Brooke: Is not the Minister making the argument for local income tax? The poverty trap that he described, with people either not claiming council tax benefit or just missing out, is where the tax really hits people.
  Phil Hope: I am intrigued by the hon. Lady's intervention because the motion does not mention local income tax but states that
  "council tax is unfair, should not have been introduced and should be replaced by a system that reflects people's ability to pay."
  The motion does not say that council tax should be replaced by local income tax—although that was mentioned by the hon. Member for Kingston and Surbiton. I have demonstrated how we can reform council tax by re-banding and benefit changes that will better relate to people's ability to pay. I am surprised that the hon. Lady cannot support those reforms, given that their outcome matches the Liberal Democrat motion.
  Replacing council tax completely with local income tax is the solution favoured by the hon. Member for Kingston and Surbiton and his colleagues. The balance of funding consultation showed support in some quarters for replacing or supplementing council tax with local income tax—or at least considering the case for doing so. The Prime Minister has made it clear that the Government do not favour replacing council tax with local income tax, but we are certainly prepared to listen to reasoned arguments. Local income tax is one of four issues on which we are asking expert organizations—in this case, the Chartered Institute of Public Finance and Accountancy—to provide further evidence on the pros and cons. It will give a presentation at the next meeting of the balance of funding review steering group in

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  March, which will be attended by Liberal Democrat and Conservative members of the Local Government Association.
  Liberal Democrats have focused on the importance of relating local government tax sources to the ability to pay—by which standard, as was indicated by the hon. Member for Mid-Dorset and North Poole (Mrs. Brooke), they argue for the superiority of local income tax. Council tax can be made more progressive for the lowest income tax group by increasing the take-up of council tax benefit. I hope that all right hon. and hon. Members will help to resolve that issue by fully supporting our campaign.
  The argument is made that local income tax works so well and is so popular in other countries that it should be introduced in Britain. International experience does not justify that rosy picture. It certainly does not justify abolishing our domestic property tax and relying entirely on local income tax. Last week, the hon. Member for Kingston and Surbiton said that he would be happy to take my right hon. Friend the Minister for Local Government, Regional Governance and Fire to countries with a local income tax system. I advise them to wrap up warm, because the only country in Europe to rely on a local income tax is Sweden. Other EU countries rely partly on a property tax, as my hon. Friend the Member for South Ribble (Mr. Borrow) said. Spain and Italy are increasingly reliant on such a tax. Only five countries in Europe have a local income tax, and in four of them—Belgium, Denmark, Finland and Italy—it is one of several forms of taxation. All that information is available on the website of the Office of the Deputy Prime Minister.
  As various countries have been bandied about, hon. Members should be aware that comparisons between UK local government finance systems and those of other developed countries do not compare like with like. Different countries have different political and legal systems, their terminology and data are often incompatible with ours, and state finance systems do not stand still. I fear that the proposals for a local income tax advocated by the hon. Member for Kingston and Surbiton would result in disruptive and complicated changes to the tax system. First, they would do little to improve the flexibility available to local authorities. The Liberal Democrats would increase the proportion of local funding from central Government by using £1.7 billion of their proposed higher rate tax increase to increase grant and keep local income tax bills down to 4p in the pound.
  Mr. Edward Davey: It is 3.75p.
  Phil Hope: I would not like to get the figure wrong, but I can readily envisage it creeping up to 4p under the Liberal Democrats. They will use £1.7 billion to keep the local income tax bill down. Authorities in poor and deprived areas will collect less income tax than the richest areas, so the hon. Gentleman's proposals would mean that poorer authorities would become more heavily dependent on grant. There would be less flexibility and a worse gearing effect for those authorities than at present.
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  Secondly, there would be substantial costs, which are not mentioned in the Liberal Democrats' proposals. They would combine their local income tax with an increase in the level of personal allowance to £5,000, but that would cost an extra £2.4 billion—
  Mr. Davey rose—
  Phil Hope: I have tried to do the maths, and shall see if I have got it right before giving way to the hon. Gentleman.
  The Liberal Democrats will raise £4.7 billion from their tax increases for the higher paid. They will spend £1.7 billion on local income tax, and £2.4 billion on raising the threshold for income tax. They will then use an additional £2 billion to abolish university tuition fees—that emerged in a press release issued by the leader of the Liberal Democrats before Christmas—and £1 billion to pay for care of the elderly. That adds up to £6.7 billion, all of which will be paid from an increase in taxation of £4.7 billion. The Liberal Democrats are therefore £2 billion short.
  However, it does not end there. My right hon. Friend the Prime Minister has drawn attention to other spending pledges by the leader of the Liberal Democrats. There are 70 such pledges on top of that £6.7 billion, including free eye and dental checks, a new community safety force and cutting primary class sizes. We would all like to have those wonderful things, but how will the Liberal Democrats pay for them, given that they are at least £2 billion short?
  Mr. Davey: I want to put the hon. Gentleman out of his misery. We have made our spending package clear in letters to the Prime Minister, and the fact that he does not appear to take our word for it is a disgrace. If the hon. Gentleman reads the document in which those figures appear, he will see that it is clear that the £5,000 allowance would be introduced when our proposals are implemented. If implemented in 2003–04, we would stick with the current allowance of £4,615. It is a disgrace that the Government and Ministers are not prepared to accept what we have said in a published document.
  Phil Hope: The hon. Gentleman has just demonstrated why the Liberal Democrat figures cannot be trusted—they simply do not add up.
  Finally, the Liberal Democrats' proposals on local income tax have weaknesses that they have not considered. They have two ideas for collecting the tax—one is to collect it during the year through tax codes, the other is to collect it at a standard rate across the country, then settle up with individual taxpayers to reach what they should have paid at the end of the year by using the year-end adjustment process. The Liberal Democrats do not appear to have taken into account in their costings the additional costs for employers arising from the first proposal. Employers would have to deal with local income tax rates for every local authority in which their employees lived, and would have to account separately for the different amounts of local income tax subtracted from their employees' wages. The Liberal Democrats simply have not considered that in their costings for local income tax.
  Matthew Green: Clearly, the Minister has not been involved in administering PAYE in a small

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  business. It is already the case that virtually any employee will have a different PAYE code from another because of the many different circumstances that can apply.
  Phil Hope: I do not think that my PAYE form has a location code on it. Under the Liberal Democrat proposals, I would have a variety of location codes depending on where I lived, where I worked and where I paid my income tax.
  Andrew Bennett: Does the Minister accept that one of the problems is that many people pay council tax on more than one property? Would not considerable difficulties arise in trying to apportion their income tax commitments between two different properties?
  Phil Hope: I have no idea of the answer to that, but it is not my problem. It seems that the Liberal Democrats would offer choice to everybody, leading to goodness knows what chaos.
  Mr. Davey: It is interesting that the Minister does not know the answers to these questions, because they are in the document from which he quoted and the letter that I wrote to the Minister for Local Government, Regional Governance and Fire. Either he is not communicating with the Office of the Deputy Prime Minister or he cannot read.
  Phil Hope: The correspondence between my right hon. Friend and the hon. Gentleman makes for entertaining reading, because it is full of questions but offers precious little in the way of answers from the Liberal Democrats.
  The second option would be an odd compromise that would satisfy no one—a local income tax under which most of the time the bill that one paid had nothing to do with the rate set by one's local authority. How would such a system promote local accountability and flexibility, and how would it aid the taxpayer in understanding how much money their council was asking from them or spending on services? In addition, given that the mechanics of the tax system mean that underpayments or overpayments would not be fully settled for months or years, it would be doubly complex and unpredictable for individual taxpayers, local authorities and the Inland Revenue. When it comes to a local income tax, a slogan sounds good, but the reality is unacceptable.
  The third issue that was highlighted by the balance of funding review consultation was the relocalisation of non-domestic or business rates. For the past 10 years, although local authorities have collected business rates they have not set the level of rates or kept the proceeds. Now, central Government set a national business rate and redistribute the money to areas on a per capita basis. Relocalisation—a return to the pre-1990 system—is not something that the Government have favoured in the past, but there is strong demand for it from many in local government. Most consultation responses from councils argued that relocalisation would resolve the balance of funding problem and encourage better partnerships with local businesses. However, many in the business community would be strongly opposed to any change to the level playing field for business. The balance of funding review is continuing to address that problem.
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  The fourth and final option that is being considered in the public consultation is the mixed option of smaller taxes or charges, which is sometimes called the basket option—I think that the chairman of the Local Government Association calls it the cornucopia option. The LGA is among those who are keen to explore this option, which covers a wide range of possibilities that build on the freedoms already given in the Local Government Act 2003, including localised vehicle excise duty, localised stamp duty on property transfers, land value taxes, hotel bed taxes and more charges for the use of local services. I have not got time to go into more detail, but I stress yet again that because the Government are listening to evidence from interested parties who favour those options does not necessarily mean that they are the Government's favoured options. If Members want openness and transparency in debating these issues, it is important that they do not pretend, as did the hon. Member for Kingston and Surbiton, that there are 12 new taxes. That is an unacceptable way to conduct the debate.
  I welcome the debate, which has given a good airing to some important issues. People will have more to say, and we look forward to hearing it. Those of us who are directly involved—myright hon. Friend the Minister for Local Government, Regional Governance and Fire is here—will take careful note of all the points that have been raised. It is clear to us that many people have serious concerns about many aspects of the local government finance system, especially gearing and the impact of council tax rises on taxpayers with fixed incomes. It is also clear, however, that there are no easy fixes or quick wins. This Government will not return to the dark days of the Tory poll tax, nor will we be conned by Liberal Democrat proposals for an uncosted and unworkable local income tax—instead, we will analyse the options carefully. In the meantime, local government and the people it serves can be satisfied that the Government are committed to providing and supporting local services.
  5.29 pm
  Mr. Eric Pickles: It is a pleasure to see the Minister for Local Government, Regional Governance and Fire in his place. My right hon. Friend the Member for Skipton and Ripon (Mr. Curry) would have liked to participate in the debate, but he is awaiting news of the birth of his first grandchild. We look forward to the time when he can come to the Dispatch Box and say, "We are a grandparent."
  The debate has been interesting so far. Interventions from my hon. Friends and Labour Members did an effective job of destroying the Liberal Democrats' local income tax plan. I am therefore left with the slightly humbler task of bayoneting the wounded.
  At times, I felt sorry for the hon. Member for Kingston and Surbiton (Mr. Davey). For him, the past few months must have been a living hell. He has been saddled with the most unworkable and impractical of all Liberal Democrat policies; no extended sojourn on the Greek islands could possibly have made up for that dreadful task. The policy was devised when the Liberal party was a single entity and its activists were bearded, sandal-clad men of a certain age and earnest young women sporting tank tops. It belongs with such other Liberal Democrat policies as giving the vote to

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  prisoners, legalising cannabis while simultaneously banning smoking in public and outlawing goldfish from funfairs. It is the hon. Gentleman's misfortune to have to try to make the misdirected policy credible. I tell him, with oodles of affection, that he sadly failed to do that today.
  The hon. Gentleman's response to the Minister's 10 questions dated 14 October was a master class in why one should always ignore letters from political opponents. In the autumn, Liberal Democrat headquarters supplied a draft motion on local income tax to their groups on local councils. Among my many duties, I monitored those debates. I apologise to the Whip because I am sure that I shall get into terrible trouble with my party hierarchy, but I have a confidential report on the debates from central office. In a spirit of openness and glasnost, I am prepared to risk discipline by reading out its main conclusions.
  One must understand how one should read a central office report, and I admit that the first two points are predictable. [Interruption.] There may be some pleasant surprises for the hon. Member for Kingston and Surbiton in the report. The first point states:
  "Conservative councillors…were well prepared for when the debate occurred in council",
  which is nice; it is good to know that. The second point emphasises:
  "Conservative councillors are united against the motion put forward by the Lib Dems."
  The third point is a little worrying for the hon. Gentleman. It states:
  "Where it has been debated Lib Dems are often ill prepared and ill informed of the particulars of the motion. In several cases the motion was not unanimously supported by all Lib Dem members."
  Oh dear! I cannot imagine that. There is some comfort for Labour Members because the document states:
  "Labour groups are generally voting against the Motion en bloc."
  I have a list of those who did not, which is available for a reasonable fee afterwards. The fifth point stresses:
  "Media attention around the motion has been poor."
  Oh no!
  Let us take some random examples, which I have highlighted for the convenience of reading them out. On Bournemouth, the document states that
  "two Liberals abstained. (on an amendment to their own motion—one of them is the husband of the Lib Dem MP."
  I have no idea who that is. In Devon,
  "the Lib Dem opposition"
  said that
  "the main anomaly with the local income tax policy was that young couples with a big mortgage, children and heavy outgoings would be 'very hard hit' by the local income tax policy."
  That does not seem terribly on-message. Let us move to Harrogate, about which the document states:
  "The proposer and the seconder were extremely cagey on the LIT proposal and seemed reluctant to even say that they supported it instead of saying that the motion was one of principle rather than specifics."
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  We can sympathise with them.
  In Norfolk, I read that Liberal Democrats tried to disguise the tax
  "as the sort of locally raised tax that everyone could support and the proposer made great play of the fact that she had never mentioned local income tax."
  I have just two more examples, and it is hard to say which is my favourite. This one was my favourite until I got to the last example. It is from Poole, and says:
  "Lib Dems said…that the regional income tax was no longer a policy and made mutterings and shouted about savings being made"
  from local income tax. I think that that is pretty good, but this last one is the best. It is from Somerset, and says:
  "Their cause was not helped by David Laws MP for Yeovil's website which showed under 20 per cent. supporting their idea of local income tax!"
  We look forward to what the various "Focus" teams say. We even heard a report of a Liberal Democrat leaving the Chamber rather than debating the issue. I thought that that was cowardice until I heard the hon. Member for Kingston and Surbiton speak today; now it seems like wise tactics.
  Mrs. Brooke: I am sure that as I was inadvertently referred to I can make a brief response. It is true that at a Poole council meeting my husband abstained on a Conservative amendment. However, my point in intervening is to ask the hon. Gentleman to tell us whether the Conservatives proposed alternative policies in all the council meetings to which he has referred, or whether all those councils were simply satisfied with the council tax.
  Mr. Pickles: Indeed, I will come to that point. I am sure that the hon. Lady's apology to her party will be noted and that it will not at all affect her chances of success.
  When the Minister was kind enough to take an intervention from me, he suggested that band D levels were equal between Conservative and Labour councils. However, according to the latest figures, which are for last year, the Conservative level was £1,030, the Labour level £1,111 and the Liberal Democrat level £1,129. Given that councils have not determined their figures for this year, what the Minister said to the House on that was clearly inaccurate. Would he like the opportunity to withdraw his earlier comments?
  Phil Hope indicated dissent.
  Mr. Pickles: I am sorry about that, because the facts speak for themselves.
  I shall refer in a few moments to the point that the hon. Member for Mid-Dorset and North Poole (Mrs. Brooke) made, but first I have some comments on local income tax. Much has been made of the effect that the tax would have on different categories of person. Council tax is based on two adults sharing a house, with a discount for single occupiers, reflecting a crude recognition of the use of local services. Many families with two people working would be worse off under the Liberals' proposals, and families on average earnings would be particularly badly hit. It is important for the House to remember that in most households with two

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  people working, they are doing so from necessity to make ends meet. As the Sunday Express has pointed out with some force, there would be a tax blow under a local income tax, with bills rising by 60 per cent.
  Let us aid consideration of the matter by using the figures that the hon. Member for Kingston and Surbiton supplied. Let us assume a local income tax rate of 3.75 per cent., and take a couple on average male and female earnings paying an average council tax bill under this year's tax system. Whether they live in England, Scotland or Wales, local income tax would be more expensive for them than the present system. In England—
  Matthew Green rose—
  Mr. Pickles: I shall just give the hon. Gentleman the figures; then he can dispute them. In England, the couple would pay an extra £547 a year, in Scotland an extra £510 a year and in Wales an extra £471 a year. Were there a third or fourth person earning in the household, there would be a heavy extra burden. A son or daughter still at home with their parents and just starting out at work would find the tax very heavy.
  Matthew Green: It would be helpful if the hon. Gentleman confirmed that the median household income in the UK is £21,700, and not the £48,000 that the Conservative briefings quoted in the Sunday Express suggested is the average household income. I would love to know where all those people earning that amount are.
  Mr. Pickles: I am sorry that the hon. Gentleman disputes our figures, because they stand the test of scrutiny. We are talking about average male earnings— I do not think anyone would dispute that that figure is £525 a week—and average female earnings, which are £396 a week. Those are the facts—[Interruption.] The hon. Gentleman should face reality. People on average earnings will lose out under his proposals, and the Liberal Democrats' blindness to that fact is leaving them looking utterly foolish.
  David Taylor: I am reluctant to rise to the defence of the Liberals, but will not the hon. Gentleman accept that there can be an enormous difference between median income and mean income because of the distorting effect of the many huge household incomes at the upper end of the spectrum? It is therefore fair of the hon. Member for Ludlow (Matthew Green) to quote the figure of £21,700.
  Mr. Pickles: I am not disputing what the hon. Gentleman says about the difference between median and mean incomes. I choose my figures carefully—[Laughter.] They are based on income, because we are debating a local income tax. It is right to take into account the level of people's incomes in such a debate. The hon. Member for North-West Leicestershire (David Taylor) should remember that the proposal is for 3.7 per cent. on top of existing base rates, and is based on incomes between £5,000 and £100,000.
  Students, student nurses, apprentices and young trainees are exempt from council tax under the Local Government Act 1992. The Local Government Act 2003 goes further in removing their joint and several
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  liability if they live in a house with non-students. Yet under the Liberal Democrats' plan, students who work hard will pay local income tax. I am indebted to their document "Labour's unfair council tax: the facts"; I think that we are right to rely on the facts. The document contains a question and answer section that includes the question:
  "Will students have to pay?"
  The answer is:
  "Only if they are already paying income tax, e.g. earnings during holidays and so on."
  It is no use trooping through the Lobby to oppose the Government on variable fees while at the same time proposing a measure that will increase student indebtedness.
  Most students do not pay income tax, but it is worth noting the research carried out by NatWest bank, which shows that 53 per cent. of students have a part-time job during term time and 20 per cent. of all students earn more than £100 a week. Many students work full-time during their vacations to top up those earnings. Most student nurses now earn enough to have to pay income tax. In addition, it is estimated that 75 per cent. of them now have to do part-time work to supplement their income while studying, and would therefore have to pay extra in the form of local income tax.
  While pensioners are protesting, and some are even going on strike, it takes the genius of the Liberal Democrats to find a system that would make a significant proportion of them pay more, especially those who have worked hard and saved for security in their retirement. The poorest pensioners receive council tax benefit and do not pay council tax. One fifth of pensioners in Britain are in receipt of that benefit. Seventy-one per cent. of all pensioners receive income from their own investments. That income would be taxed under the Liberal Democrats' proposals. With a local income tax of 3.75 per cent., the average pensioner couple in the top quintile of pensioners would be an extra £563 a year worse off. That is on top of the Liberal Democrats' 50 per cent. income tax band, their regional income tax band, their regional national insurance contribution, their business land tax, their toll tax and their parking tax. It begs the question: is there anything that the Liberal Democrats do not want to tax. The hon. Member for Ludlow (Matthew Green) was unhappy with the Sunday Express, so let us consider the opinion of the Daily Mail, a very fair paper. It commented in January:
  "The Liberal Democrats put forward their own plans for local income tax which would hit the middle classes hardest".
  To be fair, that is a clear and stated aim of their policy. As their leader said on BBC Radio 4's "Today" programme:
  "Middle classes £ should pay more for a better society".
  One aspect of Liberal Democrat policy that I particularly look forward to exploring on the doorstep in my constituency is the commitment to keep resource equalisation through a grant. The level of local tax will therefore still be at the whim of central Government, and the rate of local income tax charged in some localities will be higher. That point was made tellingly by the hon. Member for Manchester, Blackley (Mr. Stringer) in an intervention. It is helpful that the Liberal Democrats have provided confirmation:

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  "It may be that areas which currently have very high council taxes will have a slightly higher local income tax".
  Again, that comes from the Liberal Democrats' document, "Labour's unfair council tax: the facts", so it must be a fact.
  We also have the advantage of the interesting letter from the Minister for Local Government, Regional Governance and Fire. He asks the hon. Member for Kingston and Surbiton a reasonable question:
  "How would the redistribution of funds between areas operate?"
  And he makes the reasonable point that
  "London and the South East currently generate 33 per cent. of total Council Tax revenue but 45 per cent. of total income tax revenue in England".
  The hon. Gentleman made the mistake of replying to that. He says in his letter, at point 7:
  "Inter-regional redistribution would of course be necessary £The exact figures would depend on the final grant system adopted, which would of course be one tailored to a LIT system".
  I can imagine myself on the doorstep. After the usual pleasantries, my script would be, "I'm really sorry that Brentwood's local income tax is going up. But your local Liberal Democrats think that the money would be better spent on services in Bradford." The good folks of the Ongar road will be queuing up with their piggy banks saying, "Please take away our money and give it to Bradford. We've seen the pictures from up there. We know the kind of suffering you had in your early life. Give them the money." I do not think it will be like that.
  Matthew Green: Can the hon. Gentleman name a local tax system that does not have a formula that redistributes money through some sort of grant settlement of some degree? For instance, the standard spending assessment was the formula introduced by the Conservatives to go with council tax, and the Government have now introduced the formula spending share.
  Mr. Pickles: Of course I cannot do that. That is the point. The redistribution system for local income tax would make it worse. Everything must have a redistribution process, but this would not make that redistribution process fairer; it would make it unworkable.
  Mr. Edward Davey: Justify it.
  Mr. Pickles: I will happily justify it with the point that the Minister for Local Government, Regional Governance and Fire made in his letter. It is as plain as a pikestaff, and it is a telling point. I will read it to the hon. Gentleman again. I am sorry if I am embarrassing him by reading out his marvellous work:
  "London and the South East currently generate 33 per cent. of total Council Tax revenue but 45 per cent. of total income tax revenue in England".
  If the hon. Gentleman has not grasped that, it probably explains why the Liberal Democrats tabled the motion.
  Mr. Davey: Will the hon. Gentleman give way?
  Mr. Pickles: Oh dear; all right.
  Mr. Davey: What the hon. Gentleman has not grasped is how the grant system would have to work. If
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  at present the council tax base of any local authority is in the formula, obviously it could not be retained for a local income tax. It would be bizarre in the extreme to include a council tax base in the formula when a local income tax was operating. There would be significant changes in the grant formula, which would override everything that the hon. Gentleman has said.
  Mr. Pickles: With respect, I do not think that it is I who has not grasped the point. It is the hon. Gentleman who needs to grasp this if he wants to hold on to his southern seat: his proposal will more than extend the redistribution from the south of England to the north. In fact, I think I might go on the doorsteps of Kingston and Surbiton to ensure that the hon. Gentleman makes that point.
  Let us set aside for a moment the inconsistencies of local income tax. Let us set aside the extra cost, and set aside the unworkability. The problem with local income tax is that it misses the point. The problem is not so much the form of the tax as the fact that it has risen by 70 per cent. since 1997. We need to examine why that is before we can consider ditching such an easy tax to collect.
  The council tax has become the Government's favourite stealth tax. The Government have enjoyed the headlines about increased public spending without having to fund it directly. Instead, they have indirectly forced councils to fund national Government diktats through the council tax, and through the distorted mirror of its multiplier.
  In opposition, the present Prime Minister promised that he had no plans to increase taxation. Of course we now realise that we should not have taken those words in terms of their ordinary meaning. What we should have done is view the pledge in its totality, to use a fashionable phrase. What the Prime Minister could not get through the front door of income tax he has chosen to introduce through the back door of council tax.
  The Government's abuse of council tax is the clearest indication that it is impossible to increase public expenditure without increasing taxation. The fact that the public now blame the Government for these rises is the clearest possible indication that old Abe Lincoln was right: you cannot fool all the people all the time. Ring-fencing, specific grants and the introduction of passporting have pushed many services directly on to the backs of council tax payers.
  There are six councils in the country that are in a "100 per cent. passporting" position, which means that there is nothing extra for hard-pressed services such as care for the elderly and vulnerable children, or even for day-to-day services such as refuse collection, planning enforcement and environmental controls. Those councils are Richmond upon Thames, East Sussex, Windsor and Maidenhead, Southend-on-Sea, West Sussex and Bromley. All are Conservative controlled except Windsor and Maidenhead, which is controlled by the Liberal Democrats.
  In other councils. passporting covers more than 90 per cent. of grant increases. The Minister for Local Government, Regional Governance and Fire said on Thursday:

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  "Those are real-terms increases that are well above the rate of inflation, and we expect local authorities to work within the finance available to them, and to look for economies in order to deliver value for money and quality services to their residents."—[Official Report, 10 February 2004; Vol. 417, c. 967.]
  That is meaningless when the Government have unbalanced authorities' budgets.
  The Minister for Local Government, Regional Governance and Fire (Mr. Nick Raynsford): Will the hon. Gentleman give way?
  Mr. Pickles: It is a real pleasure to give way to the Minister, fresh from his Committee.
  Mr. Raynsford: When the hon. Gentleman's party was in power, local authorities received grant increases below the rate of inflation but were given a similar exhortation to deliver better services and keep council tax down. If he regards our settlement—a 5.5 per cent. increase in formula grant and a 7.3 per cent. increase in total grant—as inadequate, will he tell us how much more his party would put into local government expenditure to achieve his objectives?
  Mr. Pickles: The Minister knows the answer to that. It is not just a question of money; it is a question of the burdens. It is a question of unbalancing—
  Mr. Davey: The burdens?
  Mr. Pickles: I shall deal with the burdens in a moment. In fact, the list is the one that the hon. Gentleman read out. I know that he feels a little bruised because his figures did not add up.
  The Minister must consider the fact that the council tax has gone up by 70 per cent. since his Government took office, yet nothing like those figures occurred when the Conservatives were in office. He says that he is giving more money to local authorities, but he is increasing the burdens on them, and increasing expenditure by making them do likewise without matching their funds. So from national insurance contributions to the pension tax, the Government have given with one hand and taken away with the other. They have imposed on local councils a purpose and a burden that councils were not intended to carry.
  Let us consider the comprehensive performance assessment and best value. The local government information unit estimates that the annual cost of external inspections of local government is £600 million, and that the indirect cost of inspections, compliance, council staff time and so on is an additional £400 million. For most local authorities, the number of premises to be licensed will increase between five and 10 times, and there will be no additional funding for start-up costs. I raised this issue with the Minister, who offered the pious hope that eventually we will be able to work out a system of charges that will provide recompense. But start-up charges are immediate. Councils have an immediate cash crisis, and these factors will immediately add to that crisis.
  Local authorities had to comply with the Freedom of Information Act 2000 by July 2002, with full openness coming into effect by 2005. [Interruption.] My hon. Friend the Member for Cotswold (Mr. Clifton-Brown)
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  says from a sedentary position that the Minister admitted the other day that there was a problem with licensing, and that is my recollection, too. We should also consider the Homelessness Act 2002, EU environmental directives, the Care Standards Act 2000, the Travel Concessions (Eligibility) Act 2002, e-government targets, the cost of asylum seeker dispersal and care, and emergency and civil contingency planning following 11 September. Moreover, the Criminal Records Bureau increased fees for standard and enhanced disclosures by 142 per cent. in July 2003, at an estimated additional cost to councils of £15 million a year. Bed-blocking fines are costing an estimated £10,000 to £15,000 a week, and there is also the school budget pressures caused by passporting.
  The recent ICM opinion poll that the hon. Member for Kingston and Surbiton quoted was compiled by the Conservative group on the Local Government Association. It is not the first time that the Liberal Democrats have quoted Conservatives in aid of their argument, and this time we are happy to lend them our support. That poll shows that 39 per cent. of the public put the blame on the Government. That is a 10 per cent. increase on last year, and a complete reversal of fortune for all the Minister's efforts. Nobody is buying his argument.
  The independent Audit Commission makes it clear who is to blame. Its report, entitled "Council Tax Increases 2003–04: Why Were They So High?", which was published in December last year, shows that the burdens imposed by central Government have increased local authorities' costs. Page 9 states:
  "National cost pressures taken together account for about £2.3 billion of the total increase in councils' spending of £4.3 billion. In other words slightly more than half the total increase is due to national pay and price inflation, increased national insurance and general population growth".
  It also states:
  "The causes of increased spending by councils included …national policy priorities, such as the requirement to increase funding for schools by the amount determined by government or to meet national waste recycling targets".
  It also refers to the changes in allocation of funding that have hit many councils. It mentions the redistribution from London and the south to the midlands and the north—
  Mr. Raynsford rose—
  Mr. Pickles: Does the Minister want me to give way because he thinks that I am quoting from the wrong passage?
  Mr. Raynsford: If the hon. Gentleman's thesis is right, why does the chairman of the Audit Commission, James Strachan, clearly state that there were
  "a number of factors behind the rises and trying to find a single point of blame is not only counter-productive but also simply not borne out by the evidence."?
  Mr. Pickles: I think that the Audit Commission is ticking off the right hon. Gentleman for all his wild assertions about political control. I am quoting from the Audit Commission's written report, not a press release, and the report dismisses the Government's claim that last year's high rises were due to councils not being up for re-election. It states:

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  "We could find no evidence of a statistically significant relationship between either budget or council tax increases and the length of time until the next council election".
  The right hon. Gentleman's argument therefore collapses. The report also noted that the political control of councils made no difference to the rises and saw the size of the grant as the central factor. That is what it says in the main text of the report, and no one's press release can undermine what the report states.
  In conclusion, council tax has become unpopular because of the abuse of the system and because no one now trusts the fairness of the grant system. The council tax is also unpopular because under Labour it has shot up by 70 per cent. As The Independent put it:
  "The council tax may be unpopular, but the alternatives are worse."
  The message is clear: to restore confidence we must reintroduce fairness into the system, redress the balance of funding and start trusting local government.
  Several hon. Members rose—
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Front Benchers' speeches have taken up 104 minutes of the 163 available. In order to allow all the Back Benchers who wish to contribute to the debate to do so, I suggest a self-imposed time limit of about 10 minutes.
  6.1 pm
  Huw Irranca-Davies: May I explain first why a Member of Parliament from Wales such as myself should venture into the debate when the Chamber today is peopled largely—with the notable exception of the hon. Member for Brecon and Radnorshire (Mr. Williams)—with English Members? It is because, as with so many other policies, the repercussions of today's debate, coupled with an Assembly review running alongside the current balance of funding review, will have major repercussions across the border. There are voices of discontent out there—whether it be in Cardiff, Canterbury, Oldham or Ogmore—and people are greatly disconcerted over recent rises in council tax levels. No one in the Chamber should ignore that.
  Sir Robert Smith: I reinforce that point by saying that the same concern extends north of the border to Scotland. If we are to have a major reform in respect of local income tax, it would be more easily done if introduced across the United Kingdom.
  Huw Irranca-Davies: My only proviso would be that, as a great supporter of devolution, I welcome the differential. Sometimes it can be a little annoying, but I welcome the freedom to implement policies differently. As the hon. Gentleman knows, the Treasury has given a massive tranche of funding to Ministers in the National Assembly for Wales to pass on to local authorities.
  The Government have commissioned an ongoing review of council tax to explore future options and, as I mentioned. the Welsh Assembly Government have also considered the matter and are paying close attention to what we are saying in the House today.
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  I commend the Liberal Democrats on their choice of debate today, because council tax has had a massive impact on my constituents. Like many others, my constituency has seen large increases in recent years and many people agree that the position either is, or is rapidly becoming, untenable. Politically, as I have no need to remind my hon. Friends, including those on the Front Bench, our constituents look to us to bring forward carefully crafted proposals, so I ask my Front-Bench colleagues not to rush the proposals, no matter how much the Opposition or the media want us to introduce a hasty policy, which might help Conservative Members to snap up a few political crumbs. Our electors will not thank us for introducing badly thought-out measures.
  All too often the headlines in the right-wing press have singled out one or other Government policy and screamed, "This is Labour's poll tax". In my two years in the House, I must have heard that on at least a dozen occasions already. However, when we talk about the council tax, we are haunted by a spectre of the past —the real, Conservative poll tax. Before us waits the spectre of a possible future—the local income tax. If it is the only source for local government financing, it could well become the next poll tax, as I shall explain. I must say to my right hon. Friend the Minister that, if we fail to reform and renew the existing council tax adequately, we could find that our present policy could mutate before our very eyes into another poll tax.
  I commend the Liberal Democrats on their ability to climb aboard a political bandwagon. It is world class. They have spotted something that is currently unpopular, and come up with an eye-catching, if flawed, idea. They have proceeded to flog that poor horse until it has keeled over.
  I do not blame them. That is the nature of politics in opposition. Labour Members remember our 18 years in opposition, and Liberal Democrat Members have had to live with 100 years in the wilderness.
  Mr. Edward Davey: I have here a piece of paper containing quotations from the general election manifestos produced by Liberal Democrats and our predecessor parties since 1983. Each manifesto contained a proposal for local income tax. That is some bandwagon.
  Huw Irranca-Davies: Despite my warm words, I cannot commend the Liberal Democrats on their blinkered focus on a local income tax. Their proposals resemble a promise to fix up an old house, using a sledgehammer only and ignoring the other tools in the box. There is more danger that a sledgehammer will bring the house down than accomplish any good or complicated repairs. The Liberal Democrats, with their blind allegiance to a single option, could truly be called the house wreckers of local government.
  Mr. Roger Williams: Will not any reform of the council tax merely alleviate the symptoms, and not cure the complaint? The complaint is the unfairness that lies at the heart of the council tax.
  Huw Irranca-Davies: I agree with the hon. Gentleman about unfairness, but I hope that the present exhaustive

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  and thorough review of the balance of funding will produce an analysis based on evidence. Using that analysis, we can make decisions. That is the way to go about things; we should not leap ahead and adopt a policy just because it looks politically attractive. The Liberal Democrat proposal on local income tax can be rendered in two or three words in a little manifesto statement, but I would need to have the evidence before making a decision to move in that direction.
  Matthew Green: If the review is so thorough, why has the Prime Minister ruled out one option before it has even begun—and before the Chartered Institute of Public Finance and Accountancy has given the evidence that it was asked to give? The Prime Minister has ruled out one option, with no regard for the information that is available.
  Huw Irranca-Davies: The hon. Gentleman must be as confused as I am on this matter. I have read statements in the media that flatly contradict his version of events. Some newspapers, and especially the right-wing press, assert that nothing is being ruled out of consideration. It has also been stated—wrongly, but the same point has been raised in this debate—that the Government will bring in a dozen different new taxes. My right hon. Friend the Minister has made it clear that nothing is being ruled out of the review, but that people should not assume that Government policy will use only one of the tools available in the toolbox.
  I want to go back into the mists of time, to February 2003. The Liberal Democrats' alternative Budget promised all voters that the adoption of a local income tax would result in a cut of £100 in council tax bills. That claim was repeated in the party's local election manifesto, entitled "Power to the People"—with its echoes of the Tooting popular front—and in the by-election at Brent, East. It is pretty clear then, that between February and September last year, the Liberal Democrats were offering a very catchy promise of "£100 in your pocket".
  However, a curious trick had taken place by December. That catchy promise of £100 back with every Liberal Democrat vote had shrunk. The right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy) suggested in The Guardian of 8 December that the amount would be £70. From September to December, the amount fell by £30, yet only two days later his colleague, the hon. Member for Truro and St. Austell (Matthew Taylor), was insisting that it was still £100. However, for the moment, let us stay with the leader of the Lib Dems and the tenner a month shrinkage. If the amount saved continues to decrease by £10 a month, it will be down to no saving at all by the time the balance of funding review reports in the summer. The public will be no worse off, but they will certainly be no better off either.
  One question jumped out at me when I considered the pay-as-you-earn option for local income tax: how do the Liberal Democrats plan to plug the funding gap they will cause by missing out the 500,000 people who do not have a salary but receive dividends? Some of the wealthiest people in the country would be missed out. Has there been a calculation of that lost tax take? How much extra will have to come from those who pay
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  through a PAYE system? If the Liberal Democrats cannot tell us today, will they tell us in the press releases after the debate?
  I refer briefly to an article provided by the Library—I commend the excellent work of the Library staff. It was published in The Observer on 1 February 2004. Part of the headline was "Another Fine Mess" and it was subtitled:
  "If you hate dealing with one tax return a year, consider coping with two."
  Mention was made earlier of the American example. In the article, Brendan Donnelly, a director of the Federal Trust stated that local taxation
  "is infinitely more complicated than people think …There would be so many winners and losers among the public, and many would be distributed in a highly unpredictable way."
  Apart from the over-simplistic platitude that the poor will be better off and the rich will not be, we have failed to get an answer about exactly who the winners and losers will be. If the system will be unpredictable, have the Liberal Democrat policy wonks already come up with an analysis of where the knife will fall? Who will it affect across the UK and, to be parochial, who will it affect in Ogmore? I am still not clear about that and I do not think that Liberal Democrat Members are clear about it either.
  We must actively consider change, but we must not leap prematurely into wholesale changes that could worsen the situation. Despite a real-terms increase of 30 per cent. to local government in England since 1997, and a commensurate transfer of funds to the Welsh Assembly Government, many local authorities have had massive increases in local taxation.
  David Taylor: My hon. Friend is forensically dissecting what remains of the Liberal income tax policy, but does he recognise that the unease to which he referred about council tax rates in Wales, which also exists north of the border, is significantly cushioned by the generosity of the Barnett formula? The formula certainly needs review in parallel with the balance of funding review undertaken by the Chartered Institute of Public Finance and Accountancy. I declare an interest as a member of CIPFA.
  Huw Irranea-Davies: That point alone could fill an entire debate. The complexities of the Barnett formula, especially when we consider proposals for regional assemblies, may not have the beneficial effects in Wales that some Members on the Opposition Benches and some people in the nationalist community claim. We need to treat the matter with great caution.
  The Government were right to set up the balance of funding review in April 2003. My understanding is that no options have been ruled out, but that, at present, nothing has been ruled into Government policy. That is the right way to play it. Based on the evidence, local income tax certainly has a role to play in the debate and it may even have a partial role in the eventual solution, but to pretend that it is the magic bullet fools no one except some headline writers who believe that there can be simple solutions. It is rather like believing in the tooth fairy; it is reassuring, but at some point we need to put away such things.

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  We should let the review get on with its work, and look at some of the proposals, including aspects of local income tax, that are worth considering. I commend the review group for its work—the quality of the research, the extensive consultation that is being carried out and the willingness to explore all options. That is quite contrary to what has been put to us by some Opposition Members today.
  I want to put to the Minister some of the feelings of my local authority—Bridgend county borough council. It dislikes the over-zealous use of ring-fencing, although that is primarily conducted by the Welsh Assembly Government, and it would also welcome the flexibility of a return to non-domestic rates in one form or another—I throw that in for the Minister's consideration. It does not have an appetite for pure local taxation as the prime way forward because it recognises that central Government funding has advantages, not least of which is the equalisation function. For all the criticism of central Government funding, it is the mechanism by which we can ensure that deprived areas and rural areas are adequately rewarded.
  Whatever happens in the review, its very existence is an explicit recognition of the unsatisfactory current situation and, most notably, the seemingly unmanageable regressive element of the council tax system. The criteria are correct, so any alternative system should balance stability for local authorities; predictability of income; sufficiency of resources looking more than one year ahead; allowing local authorities to respond to local circumstances; and variety of income. Relying on one source of income is the way to disaster. I would not rule out elements of the Liberal Democrat policy, but a wholesale transfer to it would be dangerous.
  On the necessity of equalisation, I do not envy those wise people who are trying to juggle the often conflicting criteria, but I applaud their efforts and watch their progress with interest. Earlier, I referred to a well-argued article by Neasa MacEarlean in The Guardian, and its closing statement is apt. It states:
  "If we get a sophisticated debate going in the run-up to the next election, we could end up with a more sensitive tax system that will serve us for decades to come".
  The corollary is that, if this debate is unsophisticated and dabbles in simplicity for the sake of spinnable, winnable headlines, we risk ending up with another poll tax, albeit a local poll tax.
  Whatever the outcome of the review, I urge the Minister to adopt certain principles. We must examine an appropriate measure to devolve powers and funding, but the process must not be wholesale. We need a mix of funding rather than an over-reliance on a single source, equalisation within central funding and minimum standards that guarantee that wayward councils will not revert to slashing services as a response to tighter times. Whatever the solution, it is patently not local taxation. The wise solution is more complex and we must be honest with the electorate and not paint them a mirage of a promised land of low, lovable, local income tax.
  6.18 pm
  Sir Paul Beresford: When I considered this debate, I realised that we would probably have some knowledgeable contributions, particularly on national issues, so I decided to examine the matter from a local perspective.
  My local council is, unsurprisingly, called Mole Valley district council. As with many local councils, particularly in the south-east, it has had considerable difficultly with the size of the council tax, not the method. It was hurt in this round: after the adjustment in the formula, which predominantly went back to the Department for Work and Pensions, the transferred grant was sent through and it received an increase of £14,000, which is about 0.4 per cent. A little bit of Government panic money came down to it—another £25,000—giving it the grand total of a 1.2 per cent. increase.
  Mole Valley council felt fairly sore. Fortunately, although it is under no overall control, the Conservatives and the independents used this year to look for efficiency savings and resisted yet another year of Liberal calls for vast increases in expenditure—many hon. Members will have noted that the Liberals are quick to dispense other people's money. In this case, the Conservatives and independents made some savings and managed to keep the proposed increase down to 5 per cent. The Mole Valley Liberals called every saving a cut and suggested an 18 per cent. rise in council tax. Going by the reaction at the council meeting when the final decision was made, the Liberals complained that the 5 per cent. increase was too much while also complaining about the cuts.
  As many hon. Members have recognised, the council tax has, in the main, worked quite well. I agree with the Government that many authorities have the opportunity to make enormous savings, but many just do not try. For example, why is it that Hammersmith and Fulham's bin collection costs twice as much per head of population as its Conservative neighbour's? That is a little gem of a question that I am sure the Minister of State will think about and have a reply of some sort to when he winds up the debate.
  The Government's contribution to high bills must be acknowledged. It includes the changes in local council procedure and structure, the effective removal of market testing, the huge volume of targets, the number of reviews and reports required by central Government, and the direct controls on the size and direction of spending-just some examples, in addition to those already mentioned. Last year the Minister introduced his new grant system. It was not fair, but as the Minister said to the Office of the Deputy Prime Minister: Housing, Planning and Local Government Committee, it had to involve an element of rough justice. It was certainly rough, but it was a bit short on justice. Many of the needs indices were subjective—as the Minister put it,
  "We had to make choices."
  The Government did make choices, and many were politically motivated. The Committee warned the Government, but the Minister ploughed on. The money moved from the south-east and London to the urban north. The Government denied that that was the effect of their changes, but the Audit Commission—much quoted today—said that it was. Many local authorities.

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  especially in the south, lost huge sums year on year. For example, Surrey lost about £39 million. Around the country, but especially in the south-east, council taxes rose, often by large amounts.
  The Liberal Democrats' proposal is the local tax—their long-term bandwagon. As ever, they claim that it would be fair. They always claim that until one lifts the glossy lid and finds a bin full of expensive problems for local authorities. That is not even to mention the prospect of having local finance directors and councillors examining one's tax declaration. The Liberal Democrat estimate of 3 per cent. is considered by experts to be incorrect: the true figure is probably nearer 6 or 7 per cent.
  The local income tax—like the poll tax, but even more so—would mean technical and administrative problems, and costs would be horrendous. Local authorities would have to locate every taxpayer for collection and keep track of those who moved in each financial year. That would apply even if the tax were collected centrally and dispensed locally. I understand that the Inland Revenue does not have the home addresses of most PAYE taxpayers and only a nominal address for some others. When the Revenue has an address, it is often a taxpayer's home, but it may not be. It may well not be the only home, let alone the main home.
  Mr. Edward Davey: Will the hon. Gentleman give way?
  Sir Paul Beresford: I shall not give way. I am very aware that the opening speeches were especially long, and that my right hon. Friend the Member for North-West Hampshire (Sir George Young) is in his place and desperate to make his speech.
  No consideration has been given to the situation in which, for business or other reasons, earners have two or more residences. If the tax were set at 5 per cent., would an individual with two properties pay 10 per cent. or would the 5 per cent. be split between councils? If so, how would it be split? One wonders. If the tax were collected centrally, the money dispensed by Government would have to be on a per head basis, in which case rural areas would be hard hit, or on a formula basis, which is the source of the present complaints. Any central collection and distribution would effectively remove any real local government autonomy.
  As has been mentioned, because the tax year correction is retrospective, adjustments, either up or down, would cause a large measure of uncertainty. That would mean that local council taxes would have to supplement balances, and reserves would have to be increased considerably. The readjustment would be complicated by each local council having to seek out individuals retrospectively, further adding to administration costs.
  I would be one of the first to recognise some of the problems with the poll tax. I set a zero poll tax twice, and one of the biggest single savings was of the annual £2 million cost of collection. Similar costs, at today's prices, would apply to the Liberal Democrat local tax.
  The Liberal Democrats make great play of local decisions, but only when it suits them. If local councils set their own local tax, the problem of accommodation
  1370
  addresses would arise. It would be interesting to see how many people would appear to move from Lambeth, or Hammersmith and Fulham, to Wandsworth, at least for tax purposes. The local tax idea is fraught with problems and has huge prospects for unfair results. It should not be taken seriously.
  6.24 pm
  Mr. David Borrow: In view of the time, I shall be brief. I should like to make a few general comments on issues around taxation and then specifically on the review of local funding.
  In 1975, I started my career as a local taxation professional, and I declare an interest as a member of the Institute of Revenues, Rating and Valuation.
  In 1976, the Layfield report came out, following the 1973 rating valuation. It raised issues similar to those that we are discussing. The report included all the sorts of issues that are currently being considered; it raised all the problems with local income tax—the nature of raising the money and all the other technical difficulties [Interruption.] If the Liberal Democrats will listen a little longer, I shall deal with certain issues and they may learn a little.
  There is no truly fair tax. All a Government can do is try to put together a basket of taxes on different things in the right combination, in the hope that they can tax enough different things to achieve a fair basket. That means taxing property, wealth, income and expenditure. Those are the main sources of taxation on individuals. The way in which that combination is put together is crucial to whether the tax system is fair.
  Income tax on its own is not fair, because it ignores wealth. It ignores the fact that, if there is only a tax on income, a working couple with kids, paying off a mortgage and struggling with all the expenses of starting out in life, may have a higher income and so pay more income tax, but not be as comfortably off as a wealthy retired couple with a low income, but £200,000 in the bank and their mortgage paid off. We must recognise that fairness in taxation means looking at it as a whole.
  A property tax is essential in any basket of taxes. Because of its very nature—the fact that property does not move—such a tax is easy to collect. Not only in this country, but in many others across the world, it is seen as ideally suited for a local government tax, rather than a national Government tax. That is one reason why, whatever comes out of the review, a local property tax needs to be part of the system that we end up with. Whether it is the only local tax is a different matter, but it needs to be a part.
  The existing council tax is unfair, because the bandings are not sufficient. There should be more bands at the top and the bottom. That can be dealt with when the revaluation takes place. We also need to ensure a proper balance between the different bands. At present, those in a low band pay more than they should, and those in a high band pay less than they should, taking the value of the property alone. There is quite a lot of scope to improve the existing system.
  If we look at local government funding as a whole, we see that the reason for the current problem with council tax increases is the gearing system, which means that 75 to 80 per cent. of local government income is dependent

  1371
  on the decisions of central Government. Of that chunk, about a quarter to a third is geared to the nationalised business rate, which is linked to inflation, and the remainder comes as Government grant. So the only bit that councils have any control over is the 20 to 25 per cent. That percentage is higher than it was 10 years ago, but it is a small percentage linked to the council tax. Replacing the council tax with a local income tax would not change that problem, because councils could still control only a small proportion of council income.
  We need to increase local government's tax base. We need to look again at the localisation of the business rate and restore that to local authorities. One of the matters that Layfield looked at in 1976 was whether it was possible to introduce other forms of local tax in addition to the property tax.
  Local income tax may be a possibility, but my view is that it would be complicated and difficult to introduce because of the existing structure of local government, with small shire districts of about 100,000 people such as those that I represent and the two-tier system. Local income tax is possible with a regional system or with much larger local authorities, as in the United States, where local income tax seems to work better.
  I was reminded of my hon. Friend the Minister's constituency—Corby—when comments were made about the buoyancy of local income tax. Local income tax is all right when the economy is booming, living standards are increasing and income tax yield is going up every year. However, 10 or 15 years ago, when the steel industry collapsed in Corby and the town struggled for a number of years, those who were running the local authority had to try to deliver all the services although its tax base—the workers—was wiped out at a stroke. To an extent, that happened in my own authority, when Leyland Trucks got into difficulty in the early 1990s. If local income tax is the only tax that local authorities control, they are vulnerable to the ups and downs not just of the national economy but of the local economy. The smaller the local authority, the more vulnerable it is to those changes.
  The Liberals need to think again about their policy. I can understand why it is viewed as sexy and the sort of thing that goes into "Focus" across the country, but people move away from it when they consider it. If the Liberals seriously felt that they had a chance of winning the next election, that commitment would disappear from their policy by the time the manifesto was written.
  6.31 pm
  Sir George Young: It is pleasure to follow my hon. Friend the Member for Mole Valley (Sir Paul Beresford) and the hon. Member for South Ribble (Mr. Borrow), who have spoken with authority and brevity, and I will certainly seek to match them on brevity.
  The Liberal Democrats, who have made this proposal, need to stand back and look at the overall structure of taxation. There are taxes on income, on expenditure and on capital or assets. They propose to abolish a tax on capital or assets—council tax is almost exclusively a tax on home ownership—and to replace it with a tax on income. They assert that that will be fairer, but I remain to be convinced.
  1372
  A number of residential properties in my constituency are owned by companies or trusts and a substantial amount of council tax is levied on them at the moment. That could be lost, to be made good by a rise in income tax on the average punter. Other substantial properties are owned not by companies, but by individuals who are not domiciled in this country and may legitimately pay no tax in the UK. Their contribution would also be lost. Finally, some properties are owned by wealthy individuals who are domiciled in this country but have so arranged their affairs to make ingenious use of tax allowances that they pay little or no income tax. They live off their capital, and I am sure that they will be interested in the Liberal Democrat proposal to reduce their tax burden at the expense of those who are less well off.
  I have looked at the website, and the Liberal Democrats make it clear that they want to abolish the council tax and replace it by Inland Revenue and pay-as-you-earn measures. That would not capture a range of people, and that lost income would have to be made good. So some arguments of principle need to be addressed before reducing taxes on capital and replacing them with taxes on income, and there are some important practical and distributional consequences, as well as possibly an impact on incentives. If 3p in the pound were added to the basic rate of income tax, it would help to make this country less competitive internationally and add to the incentive to take tax avoidance measures. I do not put too much emphasis on this, but related to that is the view of some economists that house prices will rise if a tax on houses is abolished. The Government have tried to damp down buoyancy in house prices by using stamp duty. It follows that, if the tax on houses is reduced, prices may go up, with consequences for marginal first-time buyers.
  I have considered the impact of the proposals on my constituency. At the moment, the average council tax bill in Test Valley is £1,042 a year. To raise the same amount of money would require a local income tax of 4.3 per cent., yet a household with one person on average male earnings and another on average female earnings would end up paying a yearly local income tax bill of £1,670; so having got rid of the council tax, that couple would pay £628 a year more. I know that the Liberal Democrats keep saying, "We expect 70 per cent. of households to be better off", but I remember my Government saying that about the poll tax. The reality is that it is not households who vote, but voters. I do not believe that 70 per cent. of my constituents would be better off.
  I shall touch on one or two specific issues in the time available. Let me start with what I call visibility. How visible would the new tax be? At the moment, I receive a bill in April from Test Valley borough council setting out how much I must pay. I have a standing order for 10 months, which I see on my statement, so I know exactly how much money has gone where. That keeps me focused on the cost of local government and allows me to compare my band with those in other local authorities. Under one of the Liberal Democrat proposals, there would simply be less visibility. A flat sum would be deducted from my pay each month, along with my national income tax, national insurance, contributions to the Members' fund, give-as-you-earn, and all the rest. The tax would be less visible, which

  1373
  would reduce the accountability of local government and the transparency of its costs. It would get lost in my transactions with central Government, instead of being a stand-alone transaction with local government. There would be a complicated settling-up process at the end of the year, although which tax year's return would be used as the basis for the settling up is not quite clear.
  There is a further point that has not been mentioned in the debate. How would my town hall know what the tax base would be when setting the rate at the beginning of the year? At the moment, it knows with some certainty how much in the pound a certain amount of council tax will raise—it has a fixed, immovable tax base. Under the Liberal Democrat proposal, it would not know how much it would raise from a specific rate of tax. I suspect that councils would aim high so that they would have a margin.
  What percentage of the tax would be collected? Some 96 per cent. of council tax is collected at present. Do the Liberal Democrats really think that local authorities would get the same return from central Government?
  Mr. Edward Davey: Will the right hon. Gentleman give way?
  Sir George Young: I shall, but the time will come out of the hon. Gentleman's colleague's winding-up speech.
  Mr. Davey: As in other countries, the Inland Revenue would tell local authorities their income tax bases at the beginning of the year and guarantee that from the Exchequer.
  Sir George Young: But how would the Inland Revenue know whether I would stay in that area for the whole year? How would it know what my income would be? The Inland Revenue might have an idea about how much I will earn in the current year, but I have to tell the hon. Gentleman that it is quite often wrong. Under his proposal, the tax would not have the same fixed base on which it could be levied as the council tax. I listened attentively to his opening speech, but he did not begin to address that point. Under the system, there would be questions of where I lived and whether I would have to pay twice. At the moment, the Inland Revenue is relatively relaxed about the address from which I send off my tax return, as long as it gets one. Under the new system, it would be vital that the address was right.
  The hon. Gentleman said that an advantage of his proposal was that it would provide a buoyant source of revenue. I am not sure that I want local government to have a buoyant source of revenue. [HON. MEMBERS: "Ah!"] No, I want authorities to have a threshold through which they must go each year before they put up the council tax. I want them to justify their increases year in, year out. The hon. Gentleman wants local government to have a buoyant source of tax revenue so that it does not have to answer the difficult questions that are asked at the moment. I consider what the Liberal Democrats see as an advantage to be a disadvantage.
  The real problem at the moment is that too much weight is put on the council tax. It was invented some 14 years ago when the average amount paid was around £500. It could bear that amount of traffic without too
  1374
  much damage to its structure—it is like a bridge with a weight restriction. However, many of my constituents are now paying four-figure, not three-figure, amounts.
  The hon. Member for Kingston and Surbiton (Mr. Davey) asked at the start of his speech what could be done. I would keep the council tax and complement it with another tax, perhaps a variable vehicle excise duty, for the sake of argument. That would be a much better response to the challenges facing local government than those that he proposed. The debate has shown that the House does not want to axe the tax; it wants to axe the Liberal Democrats.
  6.39 pm
  Matthew Green: This debate has shown that if the arguments used by Conservative and Government Members are the best that they can throw at us, we are on fairly firm ground. As to the comments by the Under-Secretary about the date of this debate, that was not in the gift of Liberal Democrats. I am sorry that the Minister for Local Government, Regional Governance and Fire could not be present for the start of the debate because he was in Committee. Originally, our Opposition day was Wednesday, but, quite rightly, it was moved because of the Hutton report. The Minister can make cheap jibes, but this debate was originally intended for the day on which the Hutton report was published.
  The hon. Member for Brentwood and Ongar (Mr. Pickles) and others used as a theme how much a working couple would pay under our proposals and those of the Conservatives. Two weeks ago, one of my excellent local newspapers, the Ludlow Journal, published an article about a young couple named Charlotte and Scott Downes from Burford. Charlotte is 24 and Scott is 30. They both work and have a four-year-old daughter. They went to the press from choice—that was not down to me. The paper reported:
  "Mrs. Downes said she and her husband were a couple who worked to pay their own way and didn't expect others to do it for them. 'We support ourselves but I can work only 20 hours a week and get £4.50 an hour. Scott works full time and gets just £5 an hour'."
  Such wage levels are common in my constituency. Charlotte Downes went on to say:
  "We have to pay around £3,500 a year in rent and we have to clothe and feed themselves. We don't get 10 and 20 per cent. increases in what we earn but that is the sort of increases we have been getting in Council Tax over recent years. We are already paying over £1,200 a year in Council Tax"—
  presumably under band D—
  "and now it's set to go up yet again."
  As well as asking their permission to quote them, I did some calculations. On the basis of those figures, that couple's joint income is just over £16,000 a year, which is quite common in my constituency and puts them above council tax benefit levels. Currently, they pay £1,200—a hell of a chunk out of £16,000, on top of the other taxes that couple have to pay and their cost of living.
  If we scrapped council tax and implemented our proposed local income tax bands with a national average of 3.75 per cent., that couple's local income tax bill as a household would be £260. They would be £900 a year better off than under the current proposals that are being defended. According to the information

  1375
  revealed by the right hon. Member for West Dorset (Mr. Letwin), under the Conservatives, the Downeses would pay £2,400 council tax. On the assumption that that was done by cutting national income tax—I will not claim that the Tories would increase the burden of taxation nationally—by 3.75 per cent across the bands, that would save the Downeses £260. Overall, they would be £900 a year worse off under the Conservative proposals–unless the Tories have another policy that they have not yet revealed. We would love to know.
  At the other end of the scale, the local Member of Parliament—myself—earns £55,000 a year.
  Mr. Hoyle: No, £56,000.
  Matthew Green: I will work on £55,000 as a round figure.
  My current council tax for my band E property is £1,400 a year. Under my party's proposals, I would pay local income tax on just over £50,000 of my income, taking the personal allowance into account, but council tax would be scrapped. My local income tax bill would be £1,900 but I would save £1,400 in council tax, so I would pay £500 more. I think that I should. Under the Conservative plans outlined by the right hon. Member for West Dorset, I would pay council tax of £2,800 but save £1,900 on my income tax bill, so I would be £500 better off under the Tories' current plans. I say that I should pay more and that the young working couple from Burford should pay less. Conservative proposals would reverse that. The Government may be trying to come up with new proposals, but they are going nowhere fast.
  In the short time available, I shall tackle a few points that were made in our debate. The Minister cited some countries that used local income tax. He needs to go back to his officials because he did not mention Switzerland or Norway, both of which use local income tax, as do many other countries. He should ask his officials to take another look at countries that use such a system—Switzerland certainly does so. The hon. Member for Ogmore (Huw Irranca-Davies) made some well-argued points. He clearly favours a hybrid system, but the danger of that is that the cost of collection is likely to be greater. Council tax raises £19 billion a year, 4 per cent. of which—about £670 million—is the cost of collecting and administering benefits. If we added another tax system on top, it would be hard to escape the conclusion that administration costs would be higher. One or two other Labour Members found a hybrid system attractive, but they must consider how those administration costs would be met. More would be spent on bureaucracy, so the return would be smaller.
  The hon. Member for Mole Valley (Sir Paul Beresford) said that local income tax would not be levied at 3.75 per cent. of earnings, but at 6 to 7 per cent. The figure of 3.75 per cent. is based on the local income tax rate for earnings between £5,000—the personal allowance—and £100,000, where we would set a cap. The figure of 3.75 per cent. is not just based on the standard rate. If the tax were based on that rate, 6 or 7 per cent would be a possible figure. However, because the tax is levied across the board, the figure is 3.75 per cent. We must therefore be careful to specify what portion of income the tax is based on.
  1376
  The hon. Member for South Ribble (Mr. Borrow) mentioned the Layfield commission, and we got excited because we thought that he was going to tell us what its conclusion was. However, he swallowed his words and could not bring himself to say what it was. The Layfield commission pointed out that local income tax is not perfect—every tax has pros and cons—but it recommended it after assessing a range of local taxes. The hon. Gentleman could not bring himself to say that the Layfield commission recommended local income tax. He talked about buoyancy, and gave Corby as an example of a local community where our proposals would have a disastrous impact. At the moment, people without income receive council tax benefit and extra money from the Government kicks in. However, revenues can be affected if something happens that has a major impact on an area. I hope that that does not happen to communities, but if it does the authorities step in. I think that something similar would happen if a local tax system were introduced.
  The right hon. Member for North-West Hampshire (Sir George Young) asked what we would do with a property owned by a business rather than an individual. That is a fair point—we would tax the owners as businesses, which would either pay uniform business rate or our replacement for UBR, details of which I shall not go into.
  Sir George Young: How does the hon. Gentleman know which properties are involved?
  Matthew Green: We would know at which property someone was registered for income tax purposes—[Interruption.] I am being reminded that capital gains tax exemption is another way of finding out.
  Our debate has shown that the Tories are in denial. Council tax is an unfair tax—we cannot escape that conclusion. Labour Members have admitted that council tax is inherently unfair. The Conservatives introduced one unfair tax—the poll tax—only to replace it with an equally unfair tax. It is time for the unfair council tax to be scrapped and replaced with a tax that is based on ability to pay and is fair to the people who are paying it.
  6.49 pm
  The Minister for Local Government, Regional Governance and Fire (Mr. Nick Raynsford): I apologise for having been unable to attend the start of this important debate. As my hon. Friend the Under-Secretary explained, it has been difficult for us to cover this debate as well as the Committee on the Fire and Rescue Services Bill. However, I listened to all the points that hon. Members have made since my arrival. I shall respond to those, but I must first repeat some of the points made by my hon. Friend the Under-Secretary, because they are crucial, and the message seems not to be getting through in some quarters.
  This Government have given continuing year-on-year increases in grant to local government, now totalling £46.1 billion—30 per cent. more in real terms than the figure that we inherited in 1997. This year, we increased formula grant by 5.5 per cent. and total grant by 7.3 per cent—that includes specific and special grants. That represents a sustained growth of investment in our

  1377
  public services, in stark contrast to the 7 per cent. real-terms cuts that applied between 1993 and 1997. I must also emphasise that those increases in grant have benefited all authorities, irrespective of political control—contrary to the impression that the right hon. Member for Skipton and Ripon (Mr. Curry) tried to convey last week, when, presumably prompted by Conservative central office, he uncharacteristically lapsed into the use of wholly spurious and bogus statistics. Conservative-controlled councils received on average slightly larger grant increases this year than Labour authorities—6.2 per cent. as against 5.9 per cent.—[Interruption.] My hon. Friends may not be happy about that, but it is important to put the record straight. Yet despite that, Conservative councils are threatening large council tax increases that will punish their unfortunate council tax payers. If the example of Conservative-controlled councils is bad enough, wait until we get to those that are under the control or influence of the Liberal Democrats, who seem to think that the sky is the limit for council tax rises.
  There is absolutely no justification for unreasonably large council tax increases, given the generous Government grant increases that all authorities received this year. We have not only increased grant, but extended freedoms for local authorities, reversing the trend on ring-fencing—a point raised by my hon. Friend the Member for Ogmore (Huw Irranca-Davies). In the recent grant settlement, we unfenced £750 million-worth of grant—hardly a centralist measure—and the Local Government Act 2003, to which he also referred, contained several important freedoms for authorities, especially the new borrowing system and the rights to trade, to charge and to vary discounts.
  Mr. Pickles: Will the Minister give way?
  Mr. Raynsford: Very briefly, but the hon. Gentleman will know that my time is limited.
  Mr. Pickles: The hon. Member for Ogmore (Huw Irranca-Davies) was kind enough to acknowledge that the level of ring-fencing is now roughly three times the rate that the Government inherited. Will the Minister confirm that?
  Mr. Raynsford: I will confirm that the trend in ring-fencing is going down—it has gone down to 11 per cent. from 13 per cent. last year, and we are on target to reduce it, as we pledged, to below 10 per cent. next year.
  Given the good grant increases and the additional freedoms, there is no excuse for unreasonable council tax increases. That is why we have made it clear that if necessary we will use our capping powers. The public are unhappy about the unreasonably large council tax increases of recent years, and we share their concern. We will not stand aside or duck the issue when councils levy, year on year, continued unsustainable increases in council tax. Given the generous grant settlement for 2004–05 and the scope for efficiency improvements, our view is that local authorities can and should deliver council tax increases in low single figures.
  1378
  I have already written to 65 authorities to express concern at reported increases in excess of 5 per cent., and I am pleased to say that many have written back to me to make clear their intention to restrict increases to low single figures. Some indicated that the press reports about larger increases were incorrect; others have clearly acted to bring down their originally higher estimates. That is very welcome. Some, however, have not, and I therefore plan to call in some authorities that did not provide satisfactory replies. We would much prefer not to use our capping powers, but it appears inevitable that we will have to do so this year.
  Let me consider the points that were made in the debate. The hon. Member for Brentwood and Ongar (Mr. Pickles) gave us an amusing tour of Liberal Democrat operations, but he was painfully silent about the Conservative alternative. That is a comment on the party of the poll tax. Perhaps on this occasion he is showing some discretion.
  My hon. Friend the Member for Ogmore highlighted the complexity of local government finance and issued a warning about the unpredictable consequences of major changes such as the Liberal Democrats' local income tax. I entirely agree with him.
  The hon. Member for Mole Valley (Sir Paul Beresford) claimed that the new grant system redistributes grant from the south to the north. I have some figures for him and I hope that he will listen because allegations of skewed allocation of grant are unfounded. The figures are averages for whole regions, not selective figures for individual councils, and they show the change in grant in 2004—05, compared with 2003—04. In the south-west, the average increase is 5.5 per cent.; in the south-east it is 5.6 per cent., and in London it is 5.4 per cent. That compares with a national average of 5.5 per cent.
  Let us consider the increases in the three northern regions. In Yorkshire and the Humber it is 5.0 per cent.; in the north-east it is 4.8 per cent., and in the north-west it is 5.2 per cent. [Interruption.] I understand that some of my hon. Friends from northern regions are not happy with that, but I hope that the figures make it clear that there is no question of a shift in grant from the south to the north, as our political opponents allege.
  My hon. Friend the Member for South Ribble (Mr. Borrow), who is an expert on the matter, highlighted the complexity of local taxation and the unfairness of simply taxing income. He emphasised that fairness requires a balance between different tax sources, including a property tax.
  The right hon. Member for North-West Hampshire (Sir George Young) made a telling point about the impact of tax changes. He highlighted the Liberal Democrats' claim that 70 per cent. would be better off under local income tax and reminded hon. Members that the Conservative Government in which he served had promised the same of the poll tax. Not surprisingly, we all laughed.
  The hon. Member for Ludlow (Matthew Green), who replied for the Liberal Democrats, alleged that the Government were going nowhere fast. He is wrong on both counts. We are not going fast because rushing into change is a recipe for disaster. indeed, it led to the poll tax. The Liberal Democrats are in danger of rushing into change. We are going somewhere and considering the

  1379
  issues carefully. We do not adopt the Liberal Democrats' approach. The only adage that I shall cite, with all modesty, is "Fools rush in". We do not intend to do that.
  The focus of the debate has been the Liberal Democrats' proposal for a local income tax. They propose nothing less than the wholesale abolition of a property tax and its replacement with a local income tax, which local councils set at whatever level they believe that they need. As the Liberal Democrats put it, "Axe the tax" and "Scrap the cap". However, two slogans do not add up to a working local government finance system. If we did as the Liberal Democrats suggested, it would make us one of only a tiny number of countries in the world that have no property tax at all.
  Local income tax would be a major departure and we need to examine its practicalities and implications carefully. The balance of funding review will do just that in early March when the Chartered Institute of Public Finance and Accountancy gives a presentation on the issue. However, the Liberal Democrats have been much more cavalier in their approach, brushing aside any voices that urge caution in their rush to produce a new slogan.
  As anyone who has studied the complex subject of local government finance will testify, there are no quick and easy fixes. Those who pretend that there are simple and painless solutions—"Axe the tax"—are no more than peddlers of fantasies, snake oil salesmen who claim to offer a cheap and cheerful remedy.
  We have given councils sustained, above-inflation increases in grant and more freedom from ring-fencing. We expect councils to budget prudently for low council tax increases. The public deserve nothing less. If they do not do so, we will have no option but to cap those councils that have imposed unreasonable council tax increases on their tax payers. In the longer term, we need to create a workable, widely accepted system. We are doing that by working through the balance of—
  Mr. Andrew Stunell rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 53. Noes 435.

  Division No. 51]

  [6:59 pm

  AYES

  Allan, Richard

  Davey, Edward (Kingston)

  Baker, Norman

  Doughty, Sue

  Barrett, John

  Ewing, Annabelle

  Beith, rh A. J.

  Foster, Don (Bath)

  Brake, Tom (Carshalton)

  George, Andrew (St. Ives)

  Breed, Colin

  Gidley, Sandra

  Brooke, Mrs Annette L.

  Green, Matthew (Ludlow)

  Bruce, Malcolm

  Hancock, Mike

  Burnett, John

  Hermon, Lady

  Cable, Dr. Vincent

  Holmes, Paul

  Calton, Mrs Patsy

  Hughes, Simon (Southwark N)

  Campbell, rh Sir Menzies (NE Fife)

  Keetch, Paul

  Kennedy, rh Charles (Ross Skye & Inverness)

  Carmichael, Alistair

  Cotter, Brian

  Kirkwood, Sir Archy

  1380

  Lamb, Norman

  Stunell, Andrew

  Laws, David (Yeovil)

  Taylor, Matthew (Truro)

  Llwyd, Elfyn

  Teather, Sarah

  Marsden, Paul (Shrewsbury & Atcham)

  Thomas, Simon (Ceredigion)

  Thurso, John

  Oaten, Mark (Winchester)

  Tyler, Paul (N Cornwall)

  Öpik, Lembit

  Weir, Michael

  Price Adam (E Carmarthen & Dinefwr)

  Williams, Hywel (Caernarfon)

  Williams, Roger (Brecon)

  Pugh, Dr. John

  Willis, Phil

  Rendel, David

  Wishart, Pete

  Robertson, Angus (Moray)

  Younger-Ross, Richard

  Russell, Bob (Colchester)

  Tellers for the Ayes:

  Salmond, Alex

  Mr. Alan Reid and

  Sanders, Adrian

  Sir Robert Smith

  NOES

  Abbott, Ms Diane

  Caborn, rh Richard

  Adams, Irene (Paisley N)

  Cairns, David

  Ainger, Nick

  Campbell, Alan (Tynemouth)

  Ainsworth, Bob (Cov'try NE)

  Campbell, Mrs Anne (C'bridge)

  Ainsworth, Peter (E Surrey)

  Campbell, Gregory (E Lond'y)

  Alexander, Douglas

  Campbell, Ronnie (Blyth V)

  Allen, Graham

  Caplin, Ivor

  Ancram, rh Michael

  Casale, Roger

  Anderson, Janet (Rossendale & Darwen)

  Cash, William

  Caton, Martin

  Arbuthnot, rh James

  Cawsey, Ian (Brigg)

  Armstrong, rh Ms Hilary

  Challen, Colin

  Atherton, Ms Candy

  Chapman, Ben (Wirral S)

  Atkins, Charlotte

  Chapman, Sir Sydney (Chipping Barnet)

  Atkinson, David (Bour'mth E)

  Atkinson, Peter (Hexham)

  Chaytor, David

  Bacon, Richard

  Chope, Christopher

  Baird, Vera

  Clapham, Michael

  Baldry, Tony

  Clappison, James

  Banks, Tony

  Clark, Mrs Helen (Peterborough)

  Barker, Gregory

  Clark, Dr. Lynda (Edinburgh Pentlands)

  Barnes, Harry

  Baron, John (Billericay)

  Clark, Paul (Gillingham)

  Barron, rh Kevin

  Clarke, rh Charles (Norwich S)

  Battle, John

  Clarke, rh Kenneth (Rushcliffe)

  Bayley, Hugh

  Clarke, rh Tom (Coatbridge & Chryston)

  Beard, Nigel

  Begg, Miss Anne

  Clelland, David

  Bellingham, Henry

  Clifton-Brown, Geoffrey

  Bennett, Andrew

  Clwyd, Ann (Cynon V)

  Bercow, John

  Coaker, Vernon

  Beresford, Sir Paul

  Coffey, Ms Ann

  Berry, Roger

  Cohen, Harry

  Best, Harold

  Colman, Tony

  Betts, Clive

  Connarty, Michael

  Blears, Ms Hazel

  Conway, Derek

  Blizzard, Bob

  Cook, rh Robin (Livingston)

  Blunkett, rh David

  Cooper, Yvette

  Boateng, rh Paul

  Corbyn, Jeremy

  Borrow, David

  Corston, Jean

  Boswell, Tim

  Cousins, Jim

  Bradley, Peter (The Wrekin)

  Cranston, Ross

  Bradshaw, Ben

  Cruddas, Jon

  Brady, Graham

  Cryer, Ann (Keighley)

  Brazier, Julian

  Cryer, John (Hornchurch)

  Brennan, Kevin

  Cummings, John

  Brown, Russell (Dumfries)

  Cunningham, rh Dr. Jack (Copeland)

  Browne, Desmond

  Browning, Mrs Angela

  Cunningham, Jim (Coventry S)

  Bryant, Chris

  Cunningham, Tony (Workington)

  Buck, Ms Karen

  Curtis-Thomas, Mrs Claire

  Burden, Richard

  Dalyell, Tam

  Burgon, Colin

  Darling, rh Alistair

  Burnham, Andy

  Davey, Valerie (Bristol W)

  Burnside, David

  David, Wayne

  Burt, Alistair

  Davies, rh Denzil (Llanelli)

  Butterfill, Sir John

  Davies, Geraint (Croydon C)

  Byers, rh Stephen

  1381

  Davies, Quentin (Grantham & Stamford)

  Heathcoat-Amory, rh David

  Henderson, Doug (Newcastle N)

  Davis, rh David (Haltemprice & Howden)

  Henderson, Ivan (Harwich)

  Hendrick, Mark

  Dawson, Hilton

  Hendry, Charles

  Dean, Mrs Janet

  Hepburn, Stephen

  Denham, rh John

  Heppell, John

  Dhanda, Parmjit

  Hesford, Stephen

  Dismore, Andrew

  Heyes, David

  Djanogly, Jonathan

  Hill, Keith (Streatham)

  Dobbin, Jim (Heywood)

  Hoey, Kate (Vauxhall)

  Dobson, rh Frank

  Hood, Jimmy (Clydesdale)

  Donaldson, Jeffrey M.

  Hoon, rh Geoffrey

  Donohoe, Brian H.

  Hope, Phil (Corby)

  Doran, Frank

  Hopkins, Kelvin

  Dorrell, rh Stephen

  Horam, John (Orpington)

  Dowd, Jim (Lewisham W)

  Howard, rh Michael

  Drew, David (Stroud)

  Howarth, rh Alan (Newport E)

  Duncan, Alan (Rutland)

  Howarth, George (Knowsley N & Sefton E)

  Duncan, Peter (Galloway)

  Duncan Smith, rh lain

  Hoyle, Lindsay

  Dunwoody, Mrs Gwyneth

  Hughes, Beverley (Stretford & Urmston)

  Eagle, Maria (L'pool Garston)

  Edwards, Huw

  Hughes, Kevin (Doncaster N)

  Efford, Clive

  Humble, Mrs Joan

  Ellman, Mrs Louise

  Hunter, Andrew

  Ennis, Jeff (Barnsley E)

  Hurst, Alan (Braintree)

  Evans, Nigel

  Iddon, Dr. Brian

  Farrelly, Paul

  Ingram, rh Adam

  Field, rh Frank (Birkenhead)

  Irranca-Davies, Huw

  Field, Mark (Cities of London & Westminster)

  Jack, rh Michael

  Jackson, Helen (Hillsborough)

  Fitzpatrick, Jim

  Jackson, Robert (Wantage)

  Fitzsimons, Mrs Lorna

  Jamieson, David

  Flight, Howard

  Jenkin, Bernard

  Flint, Caroline

  Jenkins, Brian

  Flook, Adrian

  Johnson, Alan (Hull W)

  Follett, Barbara

  Jones, Helen (Warrington N)

  Forth, rh Eric

  Jones, Lynne (Selly Oak)

  Foster, Michael (Worcester)

  Jones, Martyn (Clwyd S)

  Foster, Michael Jabez (Hastings & Rye)

  Joyce, Eric (Falkirk W)

  Kaufman, rh Gerald

  Foulkes, rh George

  Keen, Alan (Feltham)

  Francis, Dr. Hywel

  Keen, Ann (Brentford)

  Francois, Mark

  Kennedy, Jane (Wavertree)

  Gale, Roger (N Thanet)

  Key, Robert (Salisbury)

  Gardiner, Barry

  Kidney, David

  Garnier, Edward

  Kilfoyle, Peter

  Gerrard, Neil

  King, Andy (Rugby)

  Gibb, Nick (Bognor Regis)

  Kirkbride, Miss Julie

  Gibson, Dr. Ian

  Knight, rh Greg (E Yorkshire)

  Gillan, Mrs Cheryl

  Knight, Jim (S Dorset)

  Gilroy, Linda

  Kumar, Dr. Ashok

  Godsiff, Roger

  Ladyman, Dr. Stephen

  Goggins, Paul

  Laing, Mrs Eleanor

  Goodman, Paul

  Lait, Mrs Jacqui

  Gray, James (N Wilts)

  Laxton, Bob (Derby N)

  Grayling, Chris

  Lazarowicz, Mark

  Green, Damian (Ashford)

  Lepper, David

  Griffiths, Jane (Reading E)

  Leslie, Christopher

  Griffiths, Nigel (Edinburgh S)

  Letwin, rh Oliver

  Griffiths, Win (Bridgend)

  Levitt, Tom (High Peak)

  Grogan, John

  Lewis, Ivan (Bury S)

  Gummer, rh John

  Lewis, Dr. Julian (New Forest E)

  Hague, rh William

  Liddell, rh Mrs Helen

  Hall, Mike (Weaver Vale)

  Liddell-Grainger, Ian

  Hall, Patrick (Bedford)

  Lidington, David

  Hamilton, David (Midlothian)

  Lilley, rh Peter

  Hammond, Philip

  Linton, Martin

  Hanson, David

  Lloyd, Tony (Manchester C)

  Harman, rh Ms Harriet

  Loughton, Tim

  Harris, Tom (Glasgow Cathcart)

  Love, Andrew

  Hawkins, Nick

  Lucas, Ian (Wrexham)

  Hayes, John (S Holland)

  Luff, Peter (M-Worcs)

  Heald, Oliver

  Luke, lain (Dundee E)

  Healey, John

  Lyons, John (Strathke/vin)

  1382

  McAvoy, Thomas

  Raynsford, rh Nick

  McCabe, Stephen

  Redwood, rh John

  McCafferty, Chris

  Reed, Andy (Loughborough)

  MacDonald, Calum

  Reid, rh Dr. John (Hamilton N & Bellshill)

  McDonnell, John

  MacDougall, John

  Robathan, Andrew

  McFall, John

  Robertson, John (Glasgow Anniesland)

  McGuire, Mrs Anne

  McIntosh, Miss Anne

  Robertson, Laurence (Tewk'b'ry)

  McIsaac, Shona

  Robinson, Geoffrey (Coventry NW)

  Mackay, rh Andrew

  McKechin, Ann

  Robinson, Mrs Iris (Strangford)

  McKenna, Rosemary

  Roche, Mrs Barbara

  Mackinlay, Andrew

  Rooney, Terry

  Maclean, rh David

  Rosindell, Andrew

  McLoughlin, Patrick

  Roy, Frank (Motherwell)

  McNamara, Kevin

  Ruane, Chris

  McNulty, Tony

  Ruddock, Joan

  Mactaggart, Fiona

  Salter, Martin

  McWalter, Tony

  Sarwar, Mohammad

  Mahmood, Khalid

  Savidge, Malcolm

  Mahon, Mrs Alice

  Sawford, Phil

  Mandelson, rh Peter

  Sedgemore, Brian

  Mann, John (Bassetlaw)

  Selous, Andrew

  Maples, John

  Shaw, Jonathan

  Marris, Rob (Wolverh'ton SW)

  Sheerman, Barry

  Marsden, Gordon (Blackpool S)

  Shepherd, Richard

  Marshall, Jim (Leicester S)

  Short, rh Clare

  Martlew, Eric

  Simmonds, Mark

  Mawhinney, rh Sir Brian

  Simpson, Alan (Nottingham S)

  May Mrs Theresa

  Skinner, Dennis

  Merron, Gillian

  Smith rh Andrew (Oxford E)

  Michael, rh Alun

  Smith, Angela (Basildon)

  Miliband, David

  Smith, rh Chris (Islington S & Finsbury)

  Miller, Andrew

  Smith, Geraldine (Morecambe & Lunesdale)

  Mitchell, Andrew (Sutton coldfield)

  Smith, Jacqui (Redditch)

  Mitchell, Austin (Gt Grimsby)

  Smith, John (Glamorgan)

  Mole, Chris

  Smith, John (Glamorgan)

  Moonie, Dr. Lewis

  Smith, Llew (Blaenau Gwent)

  Moran, Margaret

  Spelman, Mrs Caroline

  Moss, Malcolm

  Spicer, Sir Michael

  Mountford, Kali

  Spink, Bob (Castle Point)

  Munn, Ms Meg

  Spring, Richard

  Murphy, Denis (Wansbeck)

  Steen, Anthony

  Murphy, Jim (Eastwood)

  Steinberg, Gerry

  Murrison, Dr. Andrew

  Stevenson, George

  Norman, Archie

  Stewart, David (Inverness E & Lochaber)

  Norris, Dan (Wansdyke)

  O'Brien, Bill (Normanton)

  Stewart, Ian (Eccles)

  O'Brien, Stephen (Eddisbury)

  Stinchcombe, Paul

  O'Neill, Martin

  Straw, rh Jack

  Osborne, George (Tatton)

  Streeter, Gary

  Owen, Albert

  Stringer, Graham

  Page, Richard

  Stuart, Ms Gisela

  Paice, James

  Sutcliffe, Gerry

  Palmer, Dr. Nick

  Swayne, Desmond

  Pearson, Ian

  Swire, Hugo (E Devon)

  Perham, Linda

  Syms, Robert

  Picking, Anne

  Tapsell, Sir Peter

  Pickles, Eric

  Taylor, David (NW Leics)

  Pickthall, Colin

  Taylor, Ian (Esher)

  Pike, Peter (Burnley)

  Taylor, John (Solihull)

  Plaskitt, James

  Taylor, Sir Teddy

  Pollard, Kerry

  Thomas, Gareth (Clwyd W)

  Pond, Chris (Gravesham)

  Thomas, Gareth (Harrow W)

  Prentice, Ms Bridget (Lewisham E)

  Timms, Stephen

  Prentice, Gordon (Pendle)

  Tipping, Paddy

  Prescott, rh John

  Todd, Mark (S Derbyshire)

  Prisk, Mark (Hertford)

  Touhig, Don (Islwyn)

  Prosser, Gwyn

  Tredinnick, David

  Purchase, Ken

  Trend, Michael

  Purnell, James

  Trickett, Jon

  Quinn, Lawrie

  Turner, Andrew (Isle of Wight)

  Rapson, Syd (Portsmouth N)

  Turner, Dennis (Wolverh'ton SE)

  1383

  Turner, Dr. Desmond (Brighton Kemptown)

  Williams, rh Alan (Swansea W)

  Williams, Betty (Conwy)

  Turner, Neil (Wigan)

  Wills, Michael

  Twigg, Derek (Halton)

  Wilshire, David

  Twigg, Stephen (Enfield)

  Winterton, Ann (Congleton)

  Tynan, Bill (Hamilton S)

  Winterton, Sir Nicholas (Macclesfield)

  Tyrie, Andrew

  Vaz, Keith (Leicester E)

  Winterton, Ms Rosie (Doncaster C)

  Viggers, Peter

  Walley, Ms Joan

  Woodward, Shaun

  Ward, Claire

  Woolas, Phil

  Wareing, Robert N.

  Worthington, Tony

  Waterson, Nigel

  Wright, Anthony D. (Gt Yarmouth)

  Watkinson, Angela

  Watson, Tom (W Bromwich E)

  Wright, Tony (Cannock)

  Watts, David

  Wyatt, Derek

  White, Brian

  Yeo, Tim (S Suffolk)

  Whitehead, Dr. Alan

  Young, rh Sir George

  Whittingdale, John

  Wicks, Malcolm

  Tellers for the Noes: Mr. Fraser Kemp and Joan Ryan

  Widdecombe, rh Miss Ann

  Wiggin, Bill

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31(Questions on amendments), and agreed to.
  MR DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House welcomes the current work of the Balance of Funding review of how local government in England is funded; notes that the review is receiving evidence on a number of possible reform options suggested in public consultation; awaits with interest the report of the review in summer 2004; and urges local authorities to set budgets for 2004–05 which deliver value for local taxpayers.
  Mr. Patrick McLoughlin: On a point of order, Mr. Deputy Speaker. Can you confirm that, if there were a Division, it would be deferred?
  Mr. Deputy Speaker (Sir Michael Lord): There are no deferred Divisions at the moment.

  PETITION

    Respiratory Disease and Ambulatory Oxygen
    7.17 pm
    Hugh Bayley: I rise to speak on behalf of those of my constituents who suffer from respiratory diseases that require them to breathe oxygen artificially. They are greatly concerned that, although oxygen for use at home is provided by the national health service, portable or ambulatory oxygen is not, and can only be provided privately.
    Those constituents have asked me to present a petition, which is signed by Mr. Tony Wilson, of Clifton, York, and by hundreds of other constituents. It reads as follows:
    To the House of Commons
    The Petition of members and supporters of Breathe Easy York declares that all people in Britain living with respiratory disease should get a comprehensive lung health service from the national health service.
    The Petitioners therefore request that the House of Commons press for the NHS to provide ambulatory oxygen and pulmonary rehabilitation services for those who need them.
    And your Petitioners remain, etc.
    To lie upon the Table.

    Nuisance Neighbours
    Motion made, and Question proposed, That this House do now adjourn.—[Margaret Moran.]
    7.19 pm
    Vera Baird: It is a rare surgery in Redcar that does not bring to me people who are full of anxiety about nuisance neighbours. Last weekend, into the Saturday calm of Redcar library came a couple with a horror story about their community. About a year ago, my constituents' car was taken from outside their flat; they got a replacement and parked it in the only place they could—outside their flat. Two days later, the windows had been smashed with a brick.
    Around that time, a couple of the flats on the estate started to be occupied by a pair or a group of 17 and 18-year-old lads, who seemed to congregate around them much larger groups of similar lads. A couple of them got into the habit of riding motorbikes—rather noisy and dilapidated ones—at night without lights and at speed, in and out of the alleys between the blocks of flats.
    One day, the couple came home to find furniture from an unoccupied flat all over the green between the buildings. Since the new year, the female has clearly seen a knife in the hands of a young man in a gang, who were being followed around by a group of six or seven-year-old children. The next week, there was no knife, but there was an air rifle in similar hands and the female told me that if she looked at those people on the street, they poured abuse on her. She said that they all felt under threat and that she went home with her eyes cast down. One day in January a couple of them chewed a cake half up, spat it into their hands and threw the lumps at a middle-aged woman's windows, and when she came out to protest what must have sounded like an army of feet ran across the roof of the block of flats, pulling up the aerials like weeds as they went.
    The police come. There are no complaints. The police talk to the lads and disperse them. "Yes, of course, officer, we will go", say the lads. The police go, the lads come back and the same happens again. No one in the community wants to be a witness for a prosecution, an antisocial behaviour order or an eviction. Not even the people who came to see me wanted that. They wanted to know how to move, but it is not easy to move.
    Later that week, a 20-year-old with a baby girl who was housed on an estate at the other end of the constituency called me because she wanted to move. Next door to her lives a family that is noisy, rowdy and drinks a lot, often slamming doors late at night so that neither the woman nor the baby can sleep. She is worried about her baby's welfare. Across the road lives another family whose comings and goings, with streams of visitors at all times of the day and night, heavily suggest drug dealing. She is very scared.
    The police came, as they should, about the noise. When she told them about the drugs, they asked her whether she was prepared to be a witness. Of course she was not prepared to be a witness: she is 20 and lives on her own. She has to be there when the police are not: she cannot be a witness.
    Those are random examples of hundreds and I guess that every MP could list similar cases. Apart from the misery, fear and stress that people trapped in those
    1386
    situations experience, it seems to me that both the police and the people are trapped in a nuisance neighbours conundrum: the police cannot take action without witnesses and the people are too afraid to be witnesses.
    There are some methods in force. Cleveland police have an acceptable behaviour contract campaign, which they now use for adults as well as children. They talk to people, keeping it as anonymous as possible. They take graded steps; they send graded letters, and it is pretty successful. There is a group of local authority wardens, and people can be seen talking to them, because they could be talking about grass cutting or a hole in the ground. Information can be given to the police on a reasonably anonymous basis.
    I cannot praise the Government highly enough for their recent focus on antisocial behaviour. The Antisocial Behaviour Act 2003 allows the police to disperse gangs and provides for more parenting orders; and the Housing Bill will at last require landlords to co-operate in attempts to control antisocial tenants. There have also been witness protection measures since the Youth Justice and Criminal Evidence Act 1999 allowed people to give evidence from behind a screen without having their names revealed. I have even seen a piece of equipment designed to distort people's voices.
    It is not easy, however, to have much faith in witness protection measures when the culprit lives only two doors away. The culprits will see someone going to court, check the time someone leaves home and recognise that the "plain clothes" police car outside is indeed a police car. They will recognise an incident when it is related in court, thereby recognising the person giving evidence. Someone might have a police alarm on the house, but how could the police get there in time when the neighbours live just up the street? I do not believe that the police could, in all conscience, guarantee to protect people who live so hugger-mugger with their tormentors.
    Some of the methods work, and more ASBOs are being secured, but the conundrum continues to prevail. Policing methods must be upgraded to the levels of those used historically against serious crime. The police must take the primary responsibility for gathering evidence. They must launch antisocial behaviour surveillance operations, with cameras hidden in cars, empty houses and on the roofs of public buildings. They must be able to call on professional witnesses, such as other police officers, wardens, and community support officers. They must be able to move into empty houses, or wait outside in a series of different vehicles. In that way, they can make tape recordings and observations and notes of events, and recognise the people involved. In the end, officers can testify about what they have seen done and who they have seen doing it.
    That sounds melodramatic, like cops and robbers. I am sure that the Government will think that it sounds very expensive for a response to what is antisocial behaviour and not armed robbery. However, it has become clear that antisocial neighbours can force ordinary families into real misery. The methods that I have outlined, and their costs, are justified.
    I am aware that there are some green shoots by way of developments in this matter. A series of ASBOs was obtained in Leeds on the strength of professional evidence, and I know that Sunderland council, some 40

    1387
    miles north of Redcar, is a trailblazer for the "Together" antisocial behaviour campaign. It has been tasked with looking at ways to collect evidence.
    I am also aware that ASBOs are issued under civil proceedings. Hearsay is acceptable, so it is possible for one officer to collect 10 accounts and deliver them to the court. Also, the Criminal Justice Act 2003 allows hearsay to be admitted in criminal proceedings. As long ago as 1988, a power was given to admit statements rather than oral evidence from people who were being kept away from court by fear. However, those tools are not being used. In addition to them, we need the other tools that I have described. We cannot leave people to act against antisocial behaviour on their own.
    The methods that I have outlined may allow us to win some more prosecutions and ASBOs. More culprits will be evicted, and there will be great relief as people start again to want to live where they live, but what happens to the culprits then? They have to have somewhere to live. If they have children, they will need to be rehoused, often in an area of low housing demand that may not be far away from where they used to live. In such areas, there will be plenty of voids, and plenty of other people who, for similar reasons, will have been moved in from elsewhere. The neighbourhood will be in decline already.
    It is well known that decent people can get trapped in such areas. For instance, owner-occupiers are unable to sell their properties because no one wants to buy them; even if they did sell them, they would not get enough money to buy another house. Other people to be affected would be the tenants of registered social landlords with no points to move or exchange. All that puts a new meaning on the much-used phrase, "Hello, I'm your new neighbour." Even in my surgery in Redcar—a very small microcosm of the area—we have dealt with a family that caused trouble at location A. It was moved away from there, to the relief of neighbours, and is now causing trouble again at location B.
    It was not all that long ago—in 1996, in fact—that Dundee council realised that it was moving nuisance families and antisocial behaviour around the city at the same time. It set up the Dundee families project, with the aim of changing the behaviour of problem families so that they could live unobjectionably in mainstream housing.
    An assessment by Glasgow university in 2001 said that the project was "a rare example" of an "intensive intervention" targeted at the sort of behaviour that I have described. Such projects remain rare even today, and that is the problem. The charity NCH joined the Dundee council project, because it understood how necessary it was. It knew that the children of problem families were likely to be the biggest casualties of eviction and of its aftermath—bed-and-breakfast accommodation, going into care, poor school attendance and the break-up of families.
    The Dundee project had worked with 83 families by 2001, when the Glasgow university study stated that most of them had made real progress. Their decline had been stopped.
    It is not my main point. but I want to tell the House that the project also saved money. The cost of even intensive rehabilitation is less than the cost of repeated
    1388
    evictions and of taking children into care. In addition, it obviously makes a strong contribution to maintaining the stability of the community. The point is that behaviour can be changed.
    The Dundee project works in three ways. For the worst people, there are three flats in a block where there is 24-hour supervision and intervention; the average stay is nine months. Flats dispersed through town but owned by the project offer support at the next stage down, when people have moved on. An outreach arm tries to make early interventions before either of those two courses is required.
    Behaviour is addressed by intensive work on a family group basis, with anger management, parenting and budgeting skills, alcohol and drug counselling or whatever is needed. The project is a success, although probably not with everybody; but for many families who realise that they are in the last chance saloon, it has been a success. Indeed, the project is so successful that it has been shortlisted for a national housing award. It must be good because it won a local government award for innovation in Scotland, presented by the Labour party.
    Although such schemes are rare, there are similar projects in Manchester and Rochdale—the latter in partnership with Shelter. In its first year, the Rochdale scheme reported a high number of mental health issues among problem families and that, where children were part of the problem, 35 of the 50 heads of families were single mothers. Provisionally, Rochdale, like Dundee, reports that incidents of ASB among many of those households have been reduced or have stopped.
    There is a scheme in Bolton, and Dundee has received inquiries from as far away as Devon and Middlesbrough—the next town to Redcar, where I started and where I briefly return, to finish my speech. Redcar is a little place, on the edge of the Teesside conurbation, and there are many extended families. That aggravates both elements of antisocial behaviour to which I have referred. It is doubly hard for a witness to have confidence when not only do they live in the same street as their adversary, but they know that his relations know where their relations live. Furthermore, moving problem families around a small place brings them more quickly back to where they started.
    On behalf of the Redcar people who come to me so frequently with those problems, I ask the Government to consider the two policy developments that I have proposed. First, they need to understand more fully the burden of being an intimidated victim, and ease it by putting the primary responsibility for collecting and presenting evidence on to the public authorities. Secondly, there should be more local intervention schemes to change the behaviour of nuisance families, so that they are not evicted from next door to brother on one day only to move next door to sister on the next.
    7.32 pm
    The Minister for Crime Reduction, Policing and Community Safety (Ms Hazel Blears): I genuinely thank my hon. and learned Friend the Member for Redcar (Vera Baird) for securing the debate. Although attendance is sparse, the topic is probably the top issue in the surgeries and postbags of most Members and

    1389
    councillors throughout the country. When I visit local communities, antisocial behaviour and quality of life issues are at the heart of people's concerns.
    Dealing with antisocial behaviour is hugely important. In our recent assessment, under the British crime survey, one in three people nationally—a huge number—said that antisocial behaviour affected their quality of life. It is wholly unacceptable that people have to tolerate the kind of behaviour that my hon. and learned Friend has detailed. Disgusting and despicable acts are committed against very vulnerable people, some of whom have to live with such behaviour day in, day out, week in, week out. That incessant pressure on people's lives really has to be experienced to be understood.
    The problems that many communities face cannot be tackled in isolation; they cannot simply be dealt with either by the police or the local authority and certainly not by communities on their own. It is vital that all the agencies work together—the police, local authority workers, neighbourhood wardens and social workers. Our schools are a vital element in tackling antisocial behaviour. Other officers, such as environmental health officers, are much undervalued in terms of the powers and analysis that they can bring to bear on some of the problems, especially in relation to housing.
    I have heard of some devastating experiences over the past few weeks and months as I have visited areas to talk to local people. Recently, I visited the Little London area of Leeds where 66 antisocial behaviour orders were obtained by the local authority at the end of the summer in a period of only a few weeks. In that community, all control had been lost. Children as young as nine or 10 were running amok; many of them were acting as runners for drug dealers and the whole community was at a complete loss about what to do.
    The fact that the authorities have now obtained the antisocial behaviour orders—35 of them are full orders and 30 are, at present, interim orders—has sent out a huge message to that local community. People have told me that for the first time in years they have been able to use the local play area and their children have been able to play out in peace and quiet. They have not been able to do something as simple as that, which most of us would take for granted, because of the behaviour of the minority who have made their lives an absolute misery.
    Yesterday, I was in Nottingham, visiting a local community in the Stonebridge and St. Ann's area of the city. It suffers the problems of antisocial behaviour, vandalism and young people gathering in intimidating groups, much of it fuelled by drug addiction. The authorities in the area are beginning to get a grip on the antisocial behaviour, but they have some way to go before local communities will feel fully safe and protected.
    For those reasons, my right hon. Friends the Prime Minister and the Home Secretary and I launched the antisocial behaviour action plan and campaign in November last year. We have backed the plan with £75 million of new money, to be distributed across the country with funding for every area. There will be an antisocial behaviour co-ordinator for every crime and disorder reduction partnership. Crucially, help and support will be provided for front-line practitioners.
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    My hon. and learned Friend is right: although the powers are on the statute book, tackling antisocial behaviour is a fairly new discipline and people have yet to come to terms with which powers they can use, how they can use the courts and how they can drive forward action at a local level. That is why we have set up the "Together" academy, which brings together a range of practitioners from the police, local government and the court system, and provides free training, delivered by expert practitioners who have already pushed forward the boundaries in the use of such powers. They have come across the problems before and solved them for themselves, and they are ready to share their expertise and good practice with others. The academy has now organised an event for every region of the country and, in the next six to eight weeks, it will train 3,000 people. There will be an academy event in my hon. and learned Friend's region and I urge her to get local people to take advantage of that training, so that they can be skilled up to use the new powers that the Government have put on the statute book.
    Along with the "Together" academy will go the "Together" action line. Again, that is a practical way to try to help local communities. The action line will be staffed by expert practitioners, who will be at the end of a telephone line so that people can get in touch with them and say, "I've got a problem. I do not know how to get the evidence to obtain an order. The witnesses feel intimidated—what should I do to help them?" The expert practitioners stand ready to help at every opportunity. The action line, the website and the academy are practical ways to help people deal with these issues.
    My hon. and learned Friend is right to say that antisocial behaviour spans a range of issues, including graffiti and fly-tipping, but the impact of nuisance neighbours can be enormous. We have examples from across the country of ordinary people's lives being ripped apart by the intimidation, harassment and criminal damage carried out by a small minority of families, who make life a misery for the majority. Such behaviour, as evidenced by my hon. and learned Friend, cannot go unchecked. It needs to be challenged and put under pressure, to the point where people want to change their behaviour. If they do want to change, we will be there to support them in doing so.
    My hon. and learned Friend makes the important point that obtaining orders and moving the problem around does not resolve the underlying issues for some nuisance neighbours. It is key to our strategy to develop ways in which we can prevent the antisocial behaviour in the first place, rather than transferring it when we disperse those subject to an order.
    We have set up 10 trailblazers across the country to deal with a range of antisocial behaviour, including nuisance families, but we have also set up a nuisance neighbour expert panel, which brings together people from social services, education, the police and various other agencies, to look at the hard cases with multiple problems. Those could include substance misuse, mental health problems and children with problems. The panel analyses the cases and determines exactly what support needs to be provided, alongside enforcement, to change the situation around. The first meeting of the nuisance neighbour expert panel was

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    extremely interesting and if my hon. and learned Friend's local practitioners wish to key in to that panel, we would be delighted to provide that support.
    My hon. and learned Friend cited some examples of good practice—the shelter inclusion project and the Dundee families project—where support is offered in various parts of the country to families who have been threatened with repossession, threatened with eviction, or against whom there are ASBOs. The projects are long term. The Dundee project has a residential element, with support offered 24 hours a day. Clearly, that is very intensive help for the families concerned. The projects are being evaluated, and so far the news is very encouraging, in that behaviour can be turned around.
    It is vital that we have twin tracks to our strategy: support for those who are prepared to take it, but also very tough and swift enforcement, because the majority of people in this country have to know that we are on their side in dealing with the kind of horrific behaviour that my hon. and learned Friend has identified.
    My hon. and learned Friend also raised the very important issue of witness intimidation, one of the most difficult and intractable matters with which we have to deal. As she rightly says, very often the victims of nuisance neighbours and antisocial behaviour will live in the same street, in the same community, and will have to face those who are perpetrating this behaviour day after day.
    We are doing a great deal of work around witness support. It is vital that we support people, not just from when the matters get to court, but from when they first occur, and that we take them right through the process, supporting them at every point. My hon. and learned Friend is right that the ASBOs are civil orders, and therefore we can use hearsay evidence and professional witnesses. In many cases, police forces have been prepared to do surveillance and to put in different kinds of evidence. Where authorities have got used to using the powers, they have also adopted new ways of gathering evidence. We can share that best practice, concerning ways in which evidence can be gathered, through the academy.
    At the end of the day the very best evidence is from the victims—those who have witnessed the behaviour themselves. Therefore, a key part of our strategy is to try to encourage them to come forward and to support them at every step. One of the key things that we have done is to launch "Taking a Stand" awards. Here in Parliament just a couple of months ago, we had people from all around the country who had been nominated by their local communities for their courage in taking a stand against antisocial behaviour. They were prepared to stand up and give evidence, with support. The message that that has sent to the rest of their communities is that if one stands up and is prepared to give evidence and get the ASBO, one really can transform the community in which one lives.
    The overall winners of the awards were some extremely brave women from Failsworth who had suffered antisocial behaviour for three years. They had petrol poured through their letterboxes. Their children were bullied and harassed on the way to school. Their lives were an absolute misery. They finally decided that
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    enough was enough. They came together, co-operated with the police, and obtained ASBOs. Now their community is a much better place to live in. They have recently obtained an empty house on their estate and turned it into a community drop-in centre. They have done something extremely positive with the anger, distress and hurt that they were feeling, and have been able to make a tremendous contribution to the local community.
    It can be done. I do not underestimate the difficulties that people experience in tackling antisocial behaviour, but there are examples now, beacons up and down the country, of people having been able to make a difference by standing up in this way.
    I commend to my hon. and learned Friend the "Together" campaign pack, produced to go with the academy and the action line. It contains details of all the powers available, when they come in and how they can be used. There is also a guide to running a local "Together" campaign. Perhaps we could have "Together Redcar", which would be a very good way of bringing people together.
    There is thought of running local "Taking a Stand" awards. Again, my hon. and learned Friend might like to think about organising, perhaps with her local authority, nominations of local people who have made this kind of contribution, giving them a small reward for a community project and publicising the fact that people can come forward and make a difference in their communities.
    My hon. and learned Friend has mentioned using housing powers, as well as the powers under the Antisocial Behaviour Act 2003, and I also remind her that a series of powers is being introduced in respect of housing. Demoted tenancies will be introduced from June this year. Where nuisance and antisocial behaviour occurs, demotion will remove the tenant's right to buy and security of tenure for a year, so it is a powerful weapon.
    The Housing Bill, currently before Parliament, includes the prospect of introducing selective licensing and interim management orders for houses in the private sector. A big problem has been to try to ensure that unscrupulous private landlords do not simply let their properties to people without any vetting or supervision, allowing them to indulge in antisocial behaviour without any remedy. The prospect of being able to license private sector landlords will come as an enormous relief to those in many areas of the country that have been blighted by irresponsible private landlords. Of course, many good landlords are part of voluntary accreditation and licensing schemes and manage their properties properly, but far too often irresponsible landlords allow their tenants to make other people's lives an absolutely misery.
    We will also introduce new powers in relation to noise nuisance, which, I understand, is a particular problem in my hon. and learned Friend's constituency. From 31 March, all local authorities will have the power to investigate complaints of excessive noise at night, to give warning notices in respect of that noise and, where it remains excessive after the issue of the notice, either prosecute or issue a fixed-penalty notice for £100, which is far more likely and should bring some people up pretty sharp, making them realise what their

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    irresponsible behaviour is doing to their neighbours. Noise pollution and noise nuisance are some of the most difficult things to deal with, and they cause people a huge amount of anguish in their own homes. So we now have a range of powers—from housing and managing noise to dealing with ASBOs—that are beginning to come on stream.
    I also want to highlight to my hon. and learned Friend the fact that we will also introduce powers to deal with the some of the underlying causes of antisocial behaviour. That is as important as enforcement. We will introduce individual support orders to juveniles with ASBOs. When an ASBO is made on a young person, an individual support order will be directed to the causes of the antisocial behaviour, such as substance misuse, mental health problems and anger management, so that we can try to change that person's behaviour for the future. The real success—the real prize—for us is to try to ensure that we prevent the antisocial behaviour from getting any worse and causing more concern in the community.
    Antisocial behaviour powers have been on the statute book for some years now, and we have recently tried to streamline them, to make them easier for people to use and to give them the tools to make a difference. I am delighted that there are now more than 1,600 ASBOs throughout the country. There are many more
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    acceptable behaviour contracts, and they are now being used with adults, as well as juveniles. There are nearly 4,000 parenting orders. Again, they are a key part of our strategy to try to involve the whole family in dealing with such issues. There are about 18,000 drug treatment and testing orders. Many of these problems are driven by drug abuse and addiction.
    On enforcement, we now have record numbers of police officers and community support officers, who are out there in communities, giving people some visible reassurance. For far too long, people have been crying out for that reassurance. My hon. and learned Friend will know that record numbers of police officers and community support officers are helping the community in her constituency.
    I am delighted that my hon. and learned Friend has raised this extremely important issue. I hope that she is reassured that the Government have an intense focus on the issue and that we are absolutely determined to tackle antisocial behaviour wherever it may be and to support the decent majority against the actions of the loutish minority who have made some people's lives far too difficult for far too long.
    Question put and agreed to.
    Adjourned accordingly at eleven minutes to Eight o'clock.