Commons Sitting of 26 February 2004

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

    Post Office Closures
    Simon Hughes: How many post offices in Greater London closed in each year from 1997 to 2003; and how many she expects to close in (a) 2004 and (b) each of the next two years. [156251]
    The Minister for Energy, E-Commerce and Postal Services(Mr. Stephen Timms): Data for Greater London are available from March 2000. Post Office Ltd. closed 10 branches in the year to March 2001, 16 to March 2002, 44 to March 2003 and 89 in the nine months to December 2003. The current programme will lead to a national network of urban post offices that can prosper, given today's requirements, with at least 95 per cent. of urban residents living within a mile of a post office and the majority within half a mile. There is no predetermined list or number of future closures.
    Simon Hughes: People will need to take time to digest the Minister's figures, but Postwatch suggests that about 160 of the current 214 that have been considered have already been closed or are ready to close. We are likely to have 14 out of 15 London post offices closed, at this rate. That is a slash and burn policy. What will the Minister do to change it and to listen to the hundreds of thousands of people who say that they value their local post office and want it to stay?
    Mr. Timms: The hon. Gentleman is quite wrong about the numbers and the nature of the exercise that is taking place. Just before the switch to direct payment started last year, 43 per cent. of benefit recipients were paid through their bank accounts rather than by giro, compared with just 26 per cent. in 1996. The needs of customers in London are changing—and changing quickly—and the post office must change as well.
    Our response was to invest half a billion pounds in technology so that a modern banking service could be provided at every post office branch in the country, and to support a programme to reduce the density of post offices in urban areas so that the size of the network
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    reflects the business available. Across London, and across the whole country, the outcome will be a post office network that serves benefit recipients and many new customers, too. As I said, 95 per cent. of people living in urban areas will still be living less than a mile from their nearest post office, and most of them less than half a mile.
    Huw Irranca-Davies rose—
    Mr. Speaker: Order. I would like to call the hon. Gentleman, but unless he represents Greater London I cannot do so.
    Mr. Mark Field: This is an important question, so in considering the urban reinvention programme will the Minister ensure that attention is given to the significant number of post office closures that have taken place in London during the past seven years? Does he agree that that context needs to be considered in relation to the closure programme over the next two or three years?
    Mr. Timms: That is absolutely right, which is why the process we have been going through since last September sets out for each area what the ultimate configuration of the post office network will be, and takes account of all the changes that have already taken place. In that way, everybody can see where this process is leading. Through the consultation, which is important in this exercise, we can make sure that we end up with a configuration that best meets the needs of all our communities in London, as elsewhere in this country.

    Nuclear Liabilities Authority
    Norman Baker: What progress is being made towards the establishment of the nuclear liabilities authority. [156252]
    The Secretary of State for Trade and Industry(Ms Patricia Hewitt): The Energy Bill, which will establish the nuclear decommissioning authority, is currently going through Grand Committee in another place, with Report scheduled for mid-March. The Bill will be introduced in this House as soon as the legislative timetable permits. We are hoping that the Bill will receive Royal Assent by July, and our goal remains to have an operational nuclear decommissioning authority by April next year.
    Norman Baker: Does the Secretary of State agree with Sir John Bourn, who said that British Energy's recent activities highlighted
    "the importance of monitoring and managing previously identified risks to ensure that the taxpayer is well protected"?
    Will she confirm that this authority will cost the taxpayer tens of billions of pounds to clear up the nuclear legacy? In particular, will she explain why we are being asked to pay £300 million to clear up a site in the United States at Springfield because of a flight of fancy of British Nuclear Fuels Ltd? When will we get a grip on the situation? How many schools and hospitals could that have bought?
    Ms Hewitt: Of course I agree with the comments of Sir John Bourn, and I note that the National Audit Office report on British Energy makes it absolutely clear that British Energy's collapse was not inevitable, that it contributed significantly to its own financial difficulties, and that the Government's actions in respect of the company were at all times appropriate and proportionate to the actual risk. As I have told the House on many occasions, we have the ultimate responsibility for ensuring nuclear safety and security of electricity supply, and that is why we have accepted, as any Government must, the responsibility for the clean-up costs for those historic nuclear liabilities. The company is in the process, I hope, of completing its restructuring plan, and we are awaiting completion of the state aids clearance on which we are working with the European Commission.
    Mr. Tom Watson: I thank my right hon. Friend for taking a courageous step forward in finally grasping the nettle in dealing with the UK's legacy of nuclear waste. Of course, the NDA is only one part of the equation. Will she take this opportunity to reiterate her commitment to making Nirex independent of the nuclear industry, so that we can say finally to the British people that we have a settlement, and that one institution is dealing with the long-term management of that waste?
    Ms Hewitt: My hon. Friend makes an extremely important point. I am discussing that issue with my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, and I hope that we can settle Nirex's long-term future very soon.
    Malcolm Bruce: Will the Secretary of State tell the House how much she thinks the nuclear liabilities contingency will be by 2010, and how much will have been drawn down? When does she expect a decision on British Energy from the European Commission, and why does she think that it is justified to put taxpayers' money at risk to bail out a company, its shareholders and directors because of that company's management incompetence, as confirmed by the National Audit Office? Should it not be allowed to go bust, just as any other business would in normal circumstances?
    Ms Hewitt: I have repeatedly made it clear that we stand ready to deal with the administration of that company if necessary. However, I have also made it clear that we believed that it was in the national interest to allow private sector restructuring to take place if that were possible. Either way, we would have had to take responsibility for those historic liabilities and, as I have said, we expect the average cost to the Government to be £150 million to £200 million a year for the next 10 years. Those costs will fall thereafter. We are working with the Commission on state aid clearance, and we hope that that process will be completed by about the middle of this year.
    David Taylor: The proposed nuclear decommissioning agency will be working with a new Government policy that envisages that the restoration of decommissioned sites
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    for unrestricted use will not always be the best practical environmental option. Given that, does the Secretary of State agree with the suggestion made in the Nuclear Engineering International magazine this month, which I know she will have read? It predicts that the remote sites, such as Sellafield and Dounreay, are highly unlikely to be fully restored, and are in fact being retained and kept waiting in the wings as locations for new nuclear power plants and future nuclear waste repositories. If that suggestion is accurate, is it not shocking?
    Ms Hewitt: I am very grateful to my hon. Friend for drawing my attention to that article, which, I have to confess, I have not read. With the nuclear decommissioning agency, we are ensuring that we will have a competitive market for the very important business of nuclear clean-up. On new nuclear power stations, the suggestion that he cites that article as making is simply wrong. We have clearly set out in the energy White Paper our position on new nuclear build. Our current position is that we have to put all the emphasis on greater energy efficiency and renewable energy to ensure that we meet not only our security of supply targets, but our environmental targets.

    Small Motor Repairs Businesses
    Mr. David Cameron: What steps her Department has taken to help small businesses in the motor repairs industry. [156254]
    The Parliamentary Under-Secretary of State for Trade and Industry(Nigel Griffiths): The House will be delighted to hear that since we extended the small firms loan guarantee scheme to include motor repairers 10 months ago, 69 loans have been guaranteed to the motor repair sector. Since the scheme was extended, applications have increased by 40 per cent. I know that the hon. Gentleman will want to join me in congratulating the sector on taking up that Government help.
    Mr. Cameron: Can the Minister explain why small garages are being sent such mixed messages about LPG —liquefied petroleum gas? On the one hand, the Department of Trade and Industry has launched "Boost LPG", a programme to encourage garages; on the other, the Department for Transport has stopped making Powershift grants to car owners to convert their cars. Is the Minister aware that if people ring Powershift they find that it has never heard of "Boost LPG", and that if they ring "Boost LPG" they find that it has never heard of Powershift? What would he say to garages, such as Ernigrip in Enstone in my constituency, that have spent thousands of pounds tooling up to convert cars to LPG, only to see what even the most kind-hearted Back Bencher would call a bit of a shambles from the Government?
    Nigel Griffiths: I notice that the hon. Gentleman calls for more Government money to go to people who want to convert. I wonder whether he has cleared that with the shadow Chancellor of the Exchequer, whether the shadow Chancellor has costed it and which further cuts he will propose to achieve that. However, I share the aim of many other hon. Members of ensuring that there is

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    diversity of supply. I recognise the role that LPG can play in providing clean fuel, and I would advise the hon. Gentleman to back what he rightly described as the DTI's position on the matter, which is very clear.
    Mr. Roy Beggs: The top priority concern of the 60,000 small businesses in Northern Ireland, including motor repair industries, is insurance. Already, average increases are about 62 per cent. Sole traders have seen premiums rise by more than 100 per cent., and 21 per cent face closure. Some 99.98 per cent. of small businesses believe that the Government have not yet done enough about that. What are the Government doing to address the problem of the huge rip-off of insurance for small businesses?
    Nigel Griffiths: We very much see insurance as a matter for the private sector companies that are providing it. We also wish to ensure that this is a regulated and fair market. Our concern is such that a working group—under the chairmanship of the Minister for Work, my hon. Friend the Member for Kilmarnock and Loudoun (Mr. Browne)—of which I was a member, has considered this matter. Premiums have risen for a number of reasons, a key reason being the market. Working with the insurance industry, we have come up with three areas concern and action. Those have been welcomed by the small business groups that have been involved in advising us. We must ensure that insurance is available to all ear owners and to the garages that carry out the repairs. I do not think that the problem is as acute as the hon. Gentleman suggests, but I am willing to consider any evidence that he cares to submit to me.
    Mr. Henry Bellingham: Is the Minister aware that, over the past seven years, more than 4,000 small garages have closed? Most cited the main reason as excessive regulation. For example, it is extremely costly and bureaucratic for a garage to open an MOT inspection centre. Furthermore, garage mechanics are now banned from wearing vinyl gloves in case they get eczema. More and more obstacles are being put in front of small independent businesses. The Minister said that he is the champion of small businesses, and he talks about the loan guarantee scheme, but what more can he do to stop the closure of these small businesses that are he lifeblood of rural economies.
    Nigel Griffiths: We have done a lot to help those businesses. I mentioned earlier that we have helped them by extending the small firms loan guarantee scheme. Under that scheme during the previous Conservative Administration, those rural motor businesses were not entitled to those guarantees. We have given them other help as well. They are among the up to 700,000 small and medium-sized enterprises that can benefit from the flat-rate VAT scheme. By raising the audit requirements, we no longer require 219,000 businesses to spend up to £275 million a year. Those are tangible benefits. There are lots more, and I think that we are shortly coming to a question that will allow me to elaborate on that.

    Renewable Energy Target
    Andrew Rosindell: If she will make a statement about the prospects for achieving the 2010 renewable energy target. [156255]
    The Minister for Energy, E-Commerce and Postal Services(Mr. Stephen Timms): The target that 10 per cent. of our electricity should come from renewable sources by 2010 is certainly achievable. That has been confirmed by my Department's renewables innovation review, which we shall publish on our website shortly. We have also put in place a framework of measures that we are confident will deliver that target.
    Mr. Rosindell: I take it from the Minister's reply that he expects the Government to achieve the target that they have set out, despite the fact that the current 3 per cent. target is not even being met, and that industry leaders believe that the 10 per cent. target for 2010 is unrealistic. Does the Minister now accept that the Government's preference for and reliance on expensive, unsightly and unreliable wind turbines will not achieve the 10 per cent. goal? Does he agree that, if we are to get anywhere near that target, the Government must diversify the types of renewable energy sources that they prefer and use?
    Mr. Timms: No, I do not agree. The target is certainly realistic, and we have made a lot of progress towards it. We certainly had a low starting point—the previous Conservative Government expressed little if any interest in renewable energy. We are now, however, making the progress that we need to make. The first big offshore wind farm—at North Hoyle, off the coast near Rhyl— started providing electricity to the grid last autumn. We made a big announcement about further offshore wind developments before Christmas, and I also announced in December an extension of the renewables obligation forward to 2015, to boost investor confidence. That, too, is helping. I welcome the projection announced this week by the British Wind Energy Association that 500 MW of wind capacity will be built this year, and 750 MW next year. We are making substantial progress and focusing very attentively on ensuring that we hit the target.
    Miss Anne Begg: Perhaps I can help the Minister in giving his answer to the hon. Member for Romford (Mr. Rosindell). Many exciting developments beyond wind power are being researched at Robert Gordon university in my constituency, involving obtaining energy from the marine environment, particularly tidal races. I know that the Minister is in Aberdeen quite often. The next time he is in the city, will he undertake to visit the university to look at those developments and to see how they can help to fulfil the renewables obligation?
    Mr. Timms: I know of the work to which my hon. Friend refers. A DTI-supported wave power device has been plugged in at the marine energy test centre in Orkney this week—a centre supported by the DTI, along with the Scottish Executive. As my hon. Friend says, there are some very attractive developments in wave and tide power, and also in other renewable energy

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    technologies. I expect them to make a substantial contribution to UK electricity generation, but probably in the period beyond 2010 rather than before it.
    Richard Ottaway: The Minister will be aware that Powergen is trying to build a wind farm on the breakwater at Portland Harbour, but is he also aware that the Royal Yachting Association has described the harbour as
    "one of the most important areas for recreational and competitive sailing in the UK"?
    Is he aware that it has now been established as a site for the Olympic games? Given all that, would it not be a good idea for him to have a word with the Department for Culture, Media and Sport and engage in some joined-up government? Will he confirm that this particular proposal will not have his support?
    Mr. Timms: I am aware of the project, and of the hon. Gentleman's interest in it. I have also seen the press coverage. As Powergen has made clear, the project is at a very early stage and a good deal of consultation will be required, as well as an impact assessment. All the factors that the hon. Gentleman has mentioned will be taken fully into account during that process.
    Mr. Bill O'Brien: I support the Government's programme for renewable energy and its extension beyond 2010. Would my hon. Friend consider clean coal technology as a source of renewable energy that would also renew jobs in mining, and could make a substantial contribution to energy production?
    Mr. Timms: I think that that could make an important contribution to a low-carbon economy in the future. That is why, for some time, we have supported research on the subject. I was in Washington last week, and as my hon. Friend knows the Americans are very interested in clean coal technology. We are working on some ideas with them.

    Call Centre Relocations
    Mr. Philip Hammond: What steps she is taking to reduce unintended incentives to financial services companies to relocate call centres outside the European Union. [156256]
    The Secretary of State for Trade and Industry(Ms Patricia Hewitt): Financial services companies take into account cost, quality, customer reaction and many other factors when making decisions about whether or not to off-shore their call centres. We will continue to ensure that the UK is an attractive place to do business, in this and other sectors.
    Mr. Hammond: The Secretary of State will be aware of the concern about the exodus of call centre jobs overseas. I know that she is looking carefully at ways of making the UK an attractive place for the call centre industry, but there is no point in her trying to support the sector if her colleagues in Government introduce further disincentives for centres to remain in the United Kingdom.
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    The Secretary of State will be aware that not only are labour costs lower outside the European Union, but financial services companies outsourcing their call centres outside the EU are not subject to a 17.5 per cent. VAT charge, which would not be recoverable. Is she also aware that Customs and Excise now proposes to tighten the grouping rules, so that for many financial services companies outsourced call centre work in the UK will be subject to an immediate additional 17.5 per cent. cost, leading inevitably to a further exodus abroad? Will she please undertake to talk to the Chancellor of the Exchequer and try to achieve some joined-up government?
    Ms Hewitt: The British Bankers Association has said that tax is not a major factor in decisions on outsourcing, and I am a little surprised to hear the hon. Gentleman criticise Customs and Excise for tightening arrangements to prevent tax avoidance.
    The current VAT rules—agreed by the Conservative party in 1992—do not create a level playing field, which is why my right hon. Friend the Paymaster General is currently negotiating to ensure that in future VAT on services will be charged wherever those services are consumed. That is than answer to the problem, which in any event is a very minor factor, if a factor at all, in decisions to off-shore.
    The important point is that when workers are displaced in Britain they should be able to look for support to a Government who are investing in innovation, business creation and skills. They would receive no such support from the Conservatives, whose shadow Chancellor has now committed himself and his party to cutting all public spending in those vital areas.
    Mr. Barry Sheerman: Does my right hon. Friend agree that although call centre work is not the most high tech and innovative, it provides a good, steady income for many of our constituents? Would she talk to her opposite number in the Department for Transport about the fact that the rail industry, which is heavily subsidised, is talking about taking its call centre for railway timetables abroad? It seems strange to subsidise a timetable service that is taken away to somewhere like India.
    Ms Hewitt: My hon. Friend makes an important point, but I should stress that we are seeing an increase of call centre employment in Britain. BT, which was criticised for investing in three call centres in India, has invested in 31 call centres here in Britain. Other companies have come back to Britain after having tried call centre operations in India. Each company should consider for itself what the balance of advantage is and how it can deliver the best quality services to its customers.
    None of us should make the mistake—I know that my hon. Friend is not doing so—of thinking that one more job in India is one fewer in Britain. It is not. As the call centre industry in India grows, so it will grow in this country, as we have larger markets for our exports and more effective partnerships between companies here and those abroad.
    Mr. Quentin Davies: Is not the Secretary of State extraordinarily complacent and misinformed about this issue? How can she argue that 17.5 per cent. is an insignificant cost handicap for a company that is contemplating an investment? She cannot have had any experience of investment appraisal if she says something like that. We all know that the Government are wasting a lot of money on a burgeoning bureaucracy, so are desperate to get money out of the public by any means, fair or foul. What they are doing is crazy. They will not make any more money. All that will happen will be that employment will be exported outside the European Union and these call centres will be established elsewhere, so the Government will not get the 17.5 per cent. anyway.
    Ms Hewitt: The hon. Gentleman is talking nonsense. I have already said that we are seeking to change the VAT rules to provide a level playing field for VAT, so that wherever services are delivered, they will be taxed on the same basis, whether they are provided by a UK-based company in-house, outsourced or offshored. The hon. Gentleman ignores the fact that, as the British Bankers Association has said, this is not a major factor in decisions. I refer him to the decisions of the Alliance and Leicester, the Royal Bank of Scotland and many other companies, which have said that they will stay in Britain so as to get the quality of customer service that they want. They are reinforced in their decision by knowing that, as every independent survey shows, the Government have created one of the best environments for business and investment in the developed world.
    David Cairns: I welcome my right hon. Friend's commitment to the UK call centre industry, especially in financial services, as the mortgage centre of the Royal Bank of Scotland is in my constituency. An issue that is worrying me is the level of basic skills training that people need in these jobs, which are not as basic as people think. The RBS has told me that when it advertises—it recently advertised in Greenock for 150 new jobs—some of the people who turned up did not have the basic skills that my right hon. Friend and I would take for granted, such as the ability to hold a telephone conversation for 20 minutes. When framing our training and skills programmes, will she ensure that she does not end too far up the chain, as basic skills are needed to keep these jobs in the United Kingdom?
    Ms Hewitt: My hon. Friend makes a very important point. I recently had the pleasure of visiting one of the RBS's call centre operations. It is essential that we get investment not only in basic skills, but in the higher level skills that will ensure that we remain competitive in call centre operations and in many other sectors. We are working with the Call Centre Association, employers and unions to achieve, that. That is why it is important that the Government go on investing in education, adult skills and lifelong learning. The Conservative party has already made it clear that it would cut that investment.

    Small Businesses (Regulation)
    Sir Nicholas Winterton: What steps she has taken to reduce levels of regulatory requirements on small business enterprises. [156257]
    The Parliamentary Under-Secretary of State for Trade and Industry(Nigel Griffiths): We have taken a number of measures to cut form filling and red tape. I mentioned just now the introduction of the flat-rate VAT scheme to cut paperwork and burdens for up to 700,000 small and medium-sized enterprises. We are raising the audit requirement to save 219,000 businesses up to £275 million a year. Let me now add another measure. We have abolished automatic fines for late payment of VAT. In the financial year 1996, the Government took £99 million from small businesses in such fines. I shall be happy to give the House more examples of then and now.
    Sir Nicholas Winterton: There are many small business enterprises in Macclesfield, generating many thousands of jobs. Despite what the Minister has just said, how does he respond to the fact that, according to the Library, there were 3,990 new regulations in 2003 alone, as HMSO confirms on its website? In the six full calendar years of the Minister's Government, new regulations total 23,322, 53 per cent. up on the number under the last Conservative Government. What will he do to reduce regulations in a meaningful way?
    Mr. Griffiths: The vast majority of those regulations do not affect the hon. Gentleman's constituents. About 40 per cent. of the regulations that I looked at regard road closures and the like, which are necessary. We must strip those out of the statistics that the hon. Gentleman gave and focus on regulations that do burden business. I have given some examples of regulations that we have tackled, but I am far from complacent on this matter.
    I would also refer to independent studies. The most recent from the World Bank, "Doing Business in 2004"—a survey of 130 countries—ranked Britain in the top 10 countries with the fewest regulations. The Organisation for Economic Co-operation and Development has found that Britain has almost the lowest administration costs of any EU country, as well as fewer regulations for entrepreneurs than any other EU country, and Government policies have contributed greatly to this.
    That is the message I would want the hon. Gentleman forcefully to give his constituents, including the manufacturers in his constituency. I share the hon. Gentleman's passion for manufacturing.
    Mr. Martin Salter: Does my hon. Friend accept that some reality must be injected into the argument that regulation on small business is necessarily bad? For example, there was the conduct of the gangmasters whose callous disregard for human life led to the death of the Chinese cocklers in Morecambe bay, something the hon. Member for Congleton (Ann Winterton) seemed to think was funny—
    Mr. Speaker: Order. The hon. Gentleman is out of order.
    Sir Robert Smith: The Government said in their White Paper that they felt that the new companies law would reduce the burden on small business by making it much clearer how company law operated by bringing it together in one Bill—a Bill that creates a minimum standard for small business. However, we have not yet seen that Bill; it has still not appeared. Can the Minister give small business some hope that the Government intend to produce it, and say when they will do so?
    Mr. Griffiths: If the hon. Gentleman looks at the latest surveys from the Forum of Private Business or the Federation of Small Businesses about the concerns of their members, he will see that that concern does not rank among them. Therefore, other matters are receiving priority. The measure to which the hon. Gentleman refers is important and will be brought forward at the appropriate time.
    Mr. Stephen O'Brien: The House will recall that the Chancellor said in his pre-Budget report last year that
    "in total the Government is announcing today 147 regulations for reform or removal".
    Rather than hearing the Minister smugly patting himself on the back, small businesses throughout the country are desperate to hear how many of those 147 regulations—the specific list of which was leaked by the Government only to the Financial Times, in order to secure a headline, and was not announced to the House—have today actually been reformed or removed.
    Nigel Griffiths: About 50 per cent. of the 147 regulations are directly focused on business and are being tackled. The regulatory reform action plan contains not 147 measures but more than 650, which contrasts with the problems that so many businesses faced a decade ago. One of the successes of the way in which we have tackled red tape and the burdens on business is the current record number of people working in Britain. That too contrasts with the burden of regulation and other factors that brought about not record numbers of jobs, but record bankruptcies in the 1980s and 1990s.
    Mr. O'Brien: It is no good relying on the figure of 650, because only 250 of those measures have been tackled to date, and few of those—about 25 per cent.—relate to tax or regulation. So the hon. Gentleman's answer will receive a massive raspberry from the UK's vital small businesses, not least because they are at the sharp end of this Government's relentless addiction to heaping on business regulatory burden upon regulatory burden at the rate of 15 regulations every working day, the cost of which hits small businesses disproportionately hard.
    Let us consider another regulatory threat to our small businesses. Will the Minister state here and now that preserving the UK's opt-out from the EU working time directive is a red line issue, not another white flag issue, for this Government? And will he tell us whether he will be disciplining all his Labour MEP colleagues who just two weeks ago voted to remove that very same opt-out?
    Nigel Griffiths: The measures that this Government have taken have achieved the successes in business that even the hon. Gentleman, I notice, does not rebut. But then, he cannot really do so, because the Leader of the Opposition said on 22 June:
    "It's true that we still have less red tape and lower taxes just than most of our competitors in Europe, in the European Union".
    We also know what Digby Jones of the CBI has said about regulation in Britain compared with Europe. We have reversed two decades of Britain's being over-bureaucratic compared with Europe, which is why so many businesses are growing. It is also why ours is the only one of the advanced countries in Europe and the G7 with an economy with consistent levels of growth, and consistent levels of business and wealth building, in the past seven years. On visiting any other European country that numbers among the advanced economies, one would see decline and the problem of mass unemployment. That is why we know that the actions that I outlined earlier are making an important difference, and nothing that the hon. Gentleman says will deflect us from our drive to ensure that the appropriate regulations are in place to protect people, while ensuring that we have record business growth.

    Sakhalin Oil and Gas Project
    Mr. Elfyn Llwyd: What the status is of the application for Export Credits Guarantee Department support from the Sakhalin II phase 2.oil and gas project. [156258]
    The Minister for Trade and Investment (Mr. Mike O'Brien): In October 2002, we received an application for cover for the Sakhalin II project. No decision on ECGD cover has yet been taken, pending a full assessment.
    Mr. Llwyd: I am grateful to the Minister for that response. Is he aware of the study by Richard A. Fineberg Research Associates on the seismic risk associated with the onshore portion of the phase 2.pipeline? That study found that the Sakhalin Energy Investment Company, led by the Royal Dutch/Shell Group, has underestimated the number of active fault lines that the buried pipeline will have to cross. Apparently, it has also underestimated the increased risk of the pipeline rupturing—a risk associated with its being buried, rather than elevated above the fault, as was the case with the trans-Alaska pipeline system. What account will the Minister take of the potential impact on the critically endangered western grey whale of constructing offshore production platforms?
    Mr. O'Brien: The issues that the hon. Gentleman raises are very serious and they will form part of the overall environmental assessment that has to be made. We will have to look not only at any seismic implications of the project, but at the impact on fisheries, the social impact, and the implications in terms of oil spills and human rights. Importantly, as he said, the western grey whale is a critically endangered species. It is believed that only 100 remain and I have personally written to the chief executive of the project expressing my concern. Before I approve any support for the project, however,

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    I will need to be confident that, among other things, the best scientific advice is available not only on the seismic and other environmental issues, but on the whales.
    Dr. Vincent Cable: When my former colleagues in the oil industry and others approach the Minister for help, why cannot they be told that it is possible to buy private political risk insurance and medium-term credit in the market? Why does the taxpayer have to underwrite it?
    Mr. O'Brien: If the hon. Gentleman talked to business interests in Britain, which I urge him to do—he clearly does not do so enough—he would find that they regard the support from the Export Credits Guarantee Department as absolutely vital to the future success of British industry, particularly our high-tech industry. The way in which the hon. Gentleman and his Liberal Democrat colleagues intend to destroy, as it appears, ECGD support for British industry is something that our industry must be deeply concerned about.
    Mr. James Arbuthnot: I am delighted to say that I entirely agree with what the Minister has just said. The Export Credits Guarantee Department used to be the best in the world, but does the Minister accept that Department's own judgment last year that it provides generally less cover than other export credit agencies and at generally greater cost than other such agencies in the world? Is that good for British business?
    Mr. O'Brien: The hon. Gentleman might like to consider the reason why ECGD is having more difficulties than some other export credit guarantee departments. Could it be attributable to the fact that, in 1993, the Conservative Government decided to privatise the most profitable area of ECGD, so the cross-subsidisation that takes place in other export credit agencies across the world cannot take place in the UK? That has damaged British industry in the long term, and we believe that we are now putting in place the best possible means of ensuring support for British industry. That is what we intend to do.

    Electricity Prices
    Julie Morgan: What investigation she has conducted into the differences in the price of electricity among the countries and regions of Great Britain. [156261]
    The Minister for Energy, E-Commerce and Postal Services(Mr. Stephen Timms): The most important reasons for variations in retail electricity prices are differences in local transmission and distribution charges and differing customer willingness to switch to competing suppliers.
    Julie Morgan: Will the Minister confirm that south Wales domestic electricity prices are the highest in Britain? Will he look further into the problem and try to do something about it?
    Mr. Timms: My hon. Friend is certainly right that the cost of electricity for domestic customers in Cardiff and
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    south Wales is relatively high by comparison with other areas. According to energywatch, however, a typical domestic customer in south Wales could cut the electricity bill by 10 per cent. by switching from the former local monopoly supplier. Fewer customers appear to have done that in south Wales than elsewhere. Energywatch does publish easy-to-use price comparisons and it might be helpful if my hon. Friend pointed out the benefits of shopping around, which can be significant.
    Bob Spink: So what are the Government doing to increase the transparency of the pricing of electricity, to encourage customers to make that move?
    Mr. Timms: That is an important area and, as I said, energywatch is doing valuable work in producing easy to-use and simple price comparisons so that people can easily make the requisite comparisons.
    Helen Jackson: Does my hon. Friend acknowledge that high electricity prices, together with steep rises in the price of scrap steel, are having a serious impact on the UK steel industry—which probably has the highest fixed energy costs of all industries, which it cannot reduce? What action will the Government take to control energy prices in that crucial industrial sector? If none is taken, the steel industry will seriously suffer.
    Mr. Timms: My hon. Friend makes an important point. We keep a close watch on energy prices because of their impact on UK competitiveness. Current changes in gas pricing, for example, will affect not only the UK but other countries throughout Europe. The competitive market for energy provides the best assurance of the lowest-possible prices but we shall continue carefully to examine the implications of energy costs for UK companies.
    Mr. Julian Brazier: In view of the blast against privatization, that we have just heard from Minister for Trade and Investment, will the energy Minister confirm that since privatisation, large British organisations have enjoyed the second-lowest electricity prices in the European Union and that all other organisations enjoy the lowest?
    Mr. Timms: There are significant benefits from the structure of the UK energy generating industry and the Government are firmly committed to ensuring that competitiveness is retained.
    Mr. Michael Clapham: My hon. Friend will agree that the cheapest electricity on the wires is from coal, which is much more flexible than other sources. The UK coal industry is facing a crisis, with Hatfield colliery facing immediate closure—and Hatfield leads into the country's largest coal reserves. Will my hon. Friend review the situation in respect of that colliery, so that coal reserves on the east coast are not lost?
    Mr. Timms: We have a substantial programme of coal investment, involving aid totalling £60 million—

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    including £15 million earmarked for Hatfield colliery. We all hope that a private sector financing package will present itself before the end of March, to take forward the development of the new seam at Hatfield and take advantage of the £15 million grant offer.

    Company Takeovers
    Tony Lloyd: What representations she has received on the laws governing company takeovers. [156262]
    The Minister for Industry and the Regions (Jacqui Smith): We have held widespread discussions and received representations—in particular, during negotiations on the takeovers directive. We will be consulting further on the detail of its implementation.
    Tony Lloyd: Professional football is enormously important in the life of the nation and to many of our fellow countrymen and women. Many football supporters are extremely agitated by the acquisition of Chelsea and there is constant speculation about a takeover of Manchester United, which is destabilising. The ordinary supporter would like it clearly recognised by the Government that the public interest should not be not confined to the interests of shareholders and that football fans ought to have their views considered and taken on board. Will my right hon. Friend make it clear that any proposed acquisition of a Premiership club or even of a smaller club in the Football League will be considered in terms of the public interest, and that the Government will take powers to ensure that the rights of football supporters are recognised?
    Jacqui Smith: Football clearly embraces and promotes great passion and emotion—though perhaps not quite as great as that shown by Manchester United's captain last night. Any business must pay attention to the needs of its customers, even when they are Manchester United fans. However, we must not lose site of the fact that football clubs are businesses. Manchester United, as a company, has chosen to raise money from investors by having its shares listed on the stock exchange.
    It would not be appropriate for me to comment on specific takeover speculation, but I assure my hon. Friend that robust safeguards are in place, under the City takeover code overseen by the takeover panel, to ensure that all shareholders— including those who support football clubs as fans—are properly protected. Concerns about competition are met by competition legislation, which safeguards against any company assuming a dominant position in a market.
    Mr. Nick Gibb: The Minister will know that the takeover of the one-stop shops by Tesco means that the one in Nyetimber in my constituency is to close its post office counter, even though the existence of that facility was used to justify the closure of the post office in Pagham. As a result, there is no now post office for the people of Pagham. Will the Minister or one of her colleagues meet a delegation from Pagham to discuss how we can restore postal services to the people there?
    Jacqui Smith: My hon. Friend the Minister for Energy, E-Commerce and Postal Services has already
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    spelled out the action that we are taking to ensure that we maintain the post office network necessary to serve people's needs. However, I am sure that the Post Office will look carefully at how it can maintain the service that the hon. Gentleman has referred to, for the good of his constituents.

  The Minister for Women and Equality was asked—
  MINISTER FOR WOMEN AND EQUALITY

    Gender and Poverty
    Tom Brake: What discussions she has had with the Chancellor of the Exchequer regarding gender and poverty in the United Kingdom. [156271]
    The Minister for Women and Equality (Ms Patricia Hewitt): I have had a number of recent discussions with my right hon. Friend the Chancellor of the Exchequer about issues that impact on gender and poverty, including child poverty and pensions.
    Tom Brake: I am grateful for that response. What progress has been made in the pilot project described in an article in the Financial Times on 27 November entitled "Brown to Focus Spending on Sex Appeal"? Will the project's findings be made public? Will any feedback from the pilot in respect of spending by gender be included in discussions of the comprehensive spending review?
    Ms Hewitt: I am delighted to say that my right hon. Friend the Chancellor for many years has undertaken gender analysis of, for example, the impact of Budget measures. I am not aware of the details of the pilot project to which the hon. Gentleman refers, but I shall write to him about it. However, I have no doubt that my right hon. Friend will make further provision in the forthcoming Budget to ensure that we reduce the poverty of women in our country, and to improve their well-being.
    Ms Julia Drown: One reason why women are poor is that they do the bulk of caring, for young people, the elderly and people with disabilities. I appreciate that the Government have acted to give carers better support, but when does my right hon. Friend expect that carers—and in the main they are women—will get all the support that they deserve? When will they know that they will get a decent income, in their working lives and when they retire?
    Ms Hewitt: My hon. Friend makes an extremely important point. My right hon. Friend the Secretary of State for Work and Pensions has taken steps already to improve the home responsibilities credit, for example, and to ensure that women in the lower-paid, part-time jobs which those with caring responsibilities often undertake can get access to the full coverage of the national insurance scheme. Those and similar measures are already making a real difference to carers. I agree with my hon. Friend that more needs to be done, although it is a question of priorities. However, she is

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    right: to ensure that women in that future do not suffer the poverty in retirement suffered by women today, we must continue to pay attention to the needs of younger women with caring responsibilities.
    Mrs. Caroline Spelman: I am glad that the Minister for Women has acknowledged that women in retirement suffer particularly from poverty. I am sure that she is aware of the research by Age Concern and the Fawcett Society, which shows that one in four single women pensioners live in poverty, that twice as many women as men rely on means-tested benefits in retirement, and that for every pound that a man receives from a pension, a women receives 32p. That is a shocking state of affairs. The same, research shows that up to 380,000 of the poorest women pensioners do not claim the pension credit to which the right hon. Lady referred. Three quarters of women near retirement age say that they are unhappy with the Government's handling of the pension situation. Does she accept that the Government are not doing enough to reach the poorest elderly women?
    Ms Hewitt: I have great respect for the hon. Lady, but I am astonished by her ability to ignore her party's polices and the impact that they would have on women pensioners in particular. We are, of course, aware of the greater poverty that women suffer in old age, and we are, of course, doing something about it. I know from my constituency that the pension credit has already made an enormous difference to women who, in the past, were sometimes left living on even less than the basic state pension. By guaranteeing an income of at least £102 a week for single pensioners, we have done a great deal already to support elderly women in retirement. The introduction of the state second pension and its extension to women who care for young children or disabled adults will make a great difference to the next generation of retired women, about whom I am also concerned.
    Angela Eagle: The Conservative party says that it will abolish the second state pension, which is one of the most progressive—
    Mr. Speaker: Order. The hon. Lady should try again. The Minister is not responsible for Opposition policy and cannot answer.
    Angela Eagle: I stand corrected—I thought that the point was relevant. Even as we speak, recipients of the second state pension are building up extra entitlements that will enable them to live properly in retirement. Just in case the second state pension is under threat, will my right hon. Friend undertake to campaign about the enormous benefits that it provides?
    Ms Hewitt: My hon. Friend is absolutely right—in all her comments. Perhaps not enough people know about the state second pension. It will benefit nearly 2.5 million careers who care for young children and older or disabled relatives. It will make an enormous difference to the problem of poverty in old age. I happily assure her that our Government at least will maintain the state second pension and will not abolish it.
    Sandra Gidley: Is the Minister aware that the UK has a comparatively high level of low-birth-
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    weight births? One quarter of such births are to mothers who are dependent on income support, which can be as little as £39.90 for 16 to 17-year-olds. It has been established that £39.90 is insufficient to provide a healthy diet and ensure the health of the next generation. Has the Minister made plans to improve the situation?
    Ms Hewitt: I have discussed that issue with my right hon. Friend the Minister for Children. Part of the problem is the issue of teenage girls on little or no income and from poor family backgrounds having children at very early ages. I am sure that the hon. Lady will welcome the increasing success of our programme to reduce teenage pregnancies. Where young mothers have babies, the programme to help them stay in education and improve their prospects and those of their children is also beginning to show good results.

    Commission for Equality and Human Rights
    Vera Baird: If she will make a statement on progress towards a commission for equality and human rights. [156272]
    The Deputy Minister for Women and Equality(Jacqui Smith): The Government are committed to the creation of a commission for equality and human rights to champion equality and human rights, to give better support and advice to individuals, businesses and communities and to crack down on discrimination. We have created an expert taskforce to provide advice on the role and priorities of the commission. Its discussions have already been productive and its advice will inform the forthcoming White Paper.
    Vera Baird: I am pleased by the progress that the taskforce is making. Will my right hon. Friend address concerns that gender may be sidelined by bringing it together with disability and race? The public sector has a duty to promote race equality and will soon have a duty to promote disability rights. Although a duty to promote gender equality was announced, the public sector is not currently subject to it. Will it be imposed and, if so, when?
    Jacqui Smith: As my hon. and learned Friend points out, we made a public commitment on that duty. The commission will contribute to all the strands that it will cover, not least of which is gender. One of our priorities in designing the new commission is to ensure that no one strand will trump another. In fact, a single champion for equality and diversity across all strands will be more powerful and influential, and better able to deliver results than each strand working separately.
    The other key issue is that women do not exist in isolation. It is sometimes the case that women who are disabled, who are older, who come from certain ethnic or religious backgrounds, or who are lesbians are likely to face additional discrimination. The commission will be uniquely placed to enable all parts of an individual's identity to be taken into account, benefiting women across the board.

Business of the House
12.30 pm
Mr. Oliver Heald: Will the Leader of the House please give us the business for next week?
(Mr. Peter Hain): The business for next week will be as follows:
MONDAY 1 MARCH—Remaining stages of the Asylum and Immigration (Treatment of Claimants, etc) Bill.
TUESDAY 2 MARCH—Second Reading of the Pensions Bill.
WEDNESDAY 3 MARCH—Opposition Day [6th Allotted Day]. There will be a debate on trade justice for the developing world followed by a debate entitled "Crisis in the Protection of Vulnerable Children". Both debates arise on an Opposition motion.
THURSDAY 4 MARCH—Motion to approve a money resolution on the Carers (Equal Opportunities) Bill followed by a debate on women, equality and human rights on a motion for the Adjournment of the House.
FRIDAY 5 MARCH—Private Members Bills.
The provisional business for the following week will include:
MONDAY 8 MARCH—Consideration of Lords Amendments to the European Parliamentary and Local Elections (Pilots) Bill.
TUESDAY 9 MARCH—Opposition Day [Unallotted Day]. There will he a debate on a motion in the name of the SNP/Plaid Cymru, subject to be announced.
WEDNESDAY 10 MARCH—Second Reading of the Justice (Northern Ireland) Bill [Lords].
THURSDAY 11 MARCH—Estimates [2nd Allotted Day]. Subject to be confirmed by the Liaison Committee.
FRIDAY 12 MARCH—Private Members' Bills.
I should also like to inform the House that the business in Westminster Hall for March will be:
THURSDAY 4 MARCH—Debate on the Report from the Transport Committee on ports.
THURSDAY 11 MARCH—Debate on the Report from the Culture, Media and Sport Committee on privacy and media intrusion.
THURSDAY 18 MARCH—Debate on the Report from the Science and Technology Committee on the scientific response to terrorism.
THURSDAY 25 MARCH—Debate on China.
Mr. Heald: I thank the Leader of the House for the business. Was he as flabbergasted as I was by the remarks this morning by the right hon. Member for Birmingham, Ladywood (Clare Short)? One understands the difficulties, but when will we hear a Government response on the issue?
The Prime Minister has just announced a new commission for Africa and a new emphasis on Africa. Is it not about time that we had a debate on Zimbabwe—we have not had one since 1997—now that the Government's quiet diplomacy has obviously failed? Is
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it not about time that the Government gave some clear guidance to the England and Wales Cricket Board about whether it should cancel its tour?
I have pressed tin Leader of the House on several occasions to tell us when the Penrose report is to be published. Hundreds of thousands of pension scheme members are worried about the loss of their life savings, and there is also concern on both sides of the House about the issue. Is it right that we are to have the statement next week? The rumour is that it will be on Tuesday. Is the Leader of the House able to give us clear information about that so that we do not have to wait for the Sunday newspapers, as we so often do these days?
The Leader of the House knows that we would like early debates on the airports and defence White Papers. Can he help us on those? When will the draft Mental Health Bill be produced for pre-legislative scrutiny? He will know that many Members on both sides of the House are concerned about that. Will we have to wait to hear about that in the Sunday papers, or will he tell us about it today?
Last week, the Government made announcements about the reform of the examination system, immigrants' benefits and substantial changes to the civil service and we had the inspired leak about genetically modified foods. To round off the week in recess, the Prime Minister gave an interview in the News of the World about proposing drug testing for school students. Does the Leader of the House agree that it is an important principle that announcements should be made in this place? When he said on the "Today" programme on Monday that there were too many announcements to inform Parliament about all of them, was he being serious and, if so, will he tell us what sort of announcement he will not be informing Parliament about? Will it be the tricky ones, or does he just want to leave something for the Sunday papers?
Mr. Hain: On the last point, if the hon. Gentleman looks at the "Weekly Information Bulletin"—as I am sure he has done—he will see that from 6 to 12 February there was a whole list of written ministerial statements—
Mr. Eric Forth: Written!
Mr. Hain: Indeed, written ministerial statements, because the time of the House could not be constantly filled up with statements. The Government are held accountable to the House through those statements—on top of which, the Government, whether the Prime Minister or other members of the Cabinet, have given regular statements, weekly statements, on all those key issues. May I suggest that that was a typically fatuous question from the shadow Leader of the House? On that point—[Interruption.]
Mr. Speaker: Order. Members should let the Leader of the House answer—that is how we handle things.
Mr. Hain: May I express surprise about the titles of the Opposition motions? I am grateful to the shadow Leader of the House for the advance notice, as it is in the interest of Members to know what next week's business

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will be, but I am very surprised that there is to be no Opposition debate on public spending levels, given the plans, as announced by the shadow Chancellor, to cut public spending in the first two years after the next general election by up to £18 billion. Surely, if the right hon. Gentleman is confident about that, there should be a debate in Opposition time on their spending plans.
The shadow Leader of the House said that he was flabbergasted by the statement made by the right hon. Member for Birmingham, Ladywood (Clare Short). May I simply repeat what the Prime Minister said? It was a deeply irresponsible statement, and that says it all.
The Prime Minister's announcement this morning of the commission for Africa was very important, because of the poverty that Africa has been trapped in for a very long time.
Mr. David Wilshire: Why was it not made here?
Mr. Hain: The Prime Minister has repeatedly made statements and answered questions on Africa over the past few years. He is a Prime Minister who has taken more interest in rescuing Africa from poverty than any of his predecessors. On Zimbabwe, the same is true. When I was a Foreign Office Minister, I remember regularly making statements to the House, answering debates in Westminster Hall and answering questions in robust terms. If behind the question put by the shadow Leader of the House is the view that Robert Mugabe's Zimbabwe is being dragged into a desperate state by that tyrant, I agree. We are working continuously with other African leaders to bring that situation to a conclusion, so that the people of Zimbabwe can be liberated from that tyranny. I notice, however, that there is never any suggestion from the Opposition for an alternative policy to deal with Zimbabwe.
On the planned, or proposed, English cricket tour, discussions have been going on, as the hon. Gentleman knows. Ultimately, the decision is for the English cricket authorities; they have sought and been given advice. Their adviser, Des Wilson, has drawn up a framework for taking a decision, and a decision will, ultimately, be taken.
The hon. Gentleman asked about the Penrose report. The Financial Secretary to the Treasury has said on several occasions, most recently only a couple of weeks ago on 12 February, that the Treasury plan to publish the report in full as soon as possible and that it will answer questions following publication. He asked when, and whether it would be next week. When is when we are ready to do so—[Interruption.] I understand the concern of Members and all our constituents about the matter, but the hon. Gentleman should appreciate that the Government will give a considered response when we are ready to do so, so that we can take the matter forward.
On the defence and airports White Papers, and all the others, I have already answered those questions, as the hon. Gentleman has put them to me before. On the draft Mental Health Bill, a great chunk of it has already been subject to consultation and pre-legislative scrutiny, as he knows. The question is when the remaining issues are to be considered, and we shall take that forward when we are able to do so.
Mr. Paul Tyler: I want to request an urgent statement for next week. The Prime
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Minister has been answering media questions this morning, but does the Leader of the House accept that he is principally accountable to the House? As there are extremely important topical issues—not least, of course, the collapse of the case against Katharine Gun and the disclosures of the former Secretary of State for International Development—for the remit of the Butler inquiry, will the Leader of the House ask the Prime Minister to come before the House on that specific issue, which only he can answer?
If it was so necessary to persuade members of the United Nations Security Council to support the second resolution, why did the Prime Minister later assure the House that that resolution was not necessary before he took the country to war? Will the Leader of the House ensure that the Prime Minister comes to answer that question and to explain precisely how the implications of those cases relate to the remit of the Butler inquiry? For example, the Attorney-General has already indicated in the other place that the Foreign Secretary must answer questions about GCHQ. He has already said that there are important issues that are the Prime Minister's responsibility, and the later statement from the Solicitor-General cannot possibly cover that. So when will we get that opportunity to question the Prime Minister?
Will the Leader of the House confirm whether the full advice and instructions given by the Foreign Office legal team to the Attorney-General before he produced his opinion on the legality of the Iraq invasion will be made available to the Butler inquiry and made public? As he knows, my right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell) has consistently asked for that to be made public. The leader of the Conservative party did not regard it as important that we saw the legal advice on the invasion of Iraq—he wanted to go to war anyway—but we have consistently asked for that, and we now believe that it is extremely important.
I have a constituency interest in GCHQ: the listening post is at Morwenstow in my constituency. I want to know whether my constituents are being put in an invidious position by what they are being asked to do. The Prime Minister set up the Butler inquiry. He, and only he, can answer to the House on its remit.
Mr. Hain: I do not know where the hon. Gentleman was yesterday, but the Prime Minister was here, answering questions put to him by hon. Members from across the House, and the hon. Gentleman could have put any question to him if he had been called. The Prime Minister is here every week. He appears before the Liaison Committee. He makes statements to the House. He is a Prime Minister who is more accountable to the House than any of his predecessors, and the hon. Gentleman ought surely to recognise that.
On the Gun case and the events that transpired yesterday, as the hon. Gentleman knows, the Solicitor-General is about to make a statement to the House, and the hon. Gentleman will be able to pursue any question that he wants then. The Attorney-General has already made a statement in the other place.
On Iraq, the issue has been debated up and down, inside out. No doubt the hon. Gentleman can continue to debate it if he wishes, but the position has always been

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clearly stated by Ministers—whether the Prime Minister, the Foreign Secretary or the Secretary of State for Defence. We worked night and day to try to get the second resolution. That was our preference. We wanted United Nations backing. That was not possible, and action was needed to follow to get rid of Saddam Hussein, which was accomplished.
On the Attorney-General's advice—again, as the Prime Minister has made it clear this morning, and he would have made it clear if he had been asked yesterday by the hon. Gentleman or any of his colleagues if they had taken the opportunity to do so—such advice is never published, and it never has been by previous Governments. That is the situation—frankly, it is irresponsible to suggest otherwise—but, as he also knows, a summary of the essential point that the Attorney-General was making appeared in an answer to a parliamentary question, as appropriately tabled. In fact, the House was informed of the gist of the advice, but it has not been the practice to publish the Attorney-General's advice because Law Officers' advice is not published. It is private advice to the Government.
Huw Irranca-Davies: Yesterday, Baroness Scotland visited my constituency to speak about antisocial behaviour, and two people were at the back of the hall: one was the new community beat officer and the other was the new community support officer in Pencoed. If the Opposition are not minded to do so, will my right hon. Friend arrange a debate on the £18 billion of cuts and on how many police and community support officers would go and how many police stations would close as a result in my constituency?
Mr. Hain: I am very tempted indeed to discuss with the Chancellor the opportunity to do that, because my hon. Friend is absolutely right to suggest that his constituents—indeed, the whole House—would wish at an appropriate time to discuss the consequences of the £18 billion-worth of cuts over two years, following the next general election. As he rightly suggests, that figure includes a cut in policing budgets of up to £1 billion. Those cuts would have a catastrophic effect on the recruitment of new police officers and the provision of extra resources to tackle crime that has been taking place under this Government. In contrast, under the previous Government, the number of police officers was reduced and crime went up—a dangerous situation for everyone concerned.
Mr. Roger Gale: Some time ago, I sent three letters to the Prime Minister asking him to correct the erroneous impression that the Wild Mammals (Hunting with Dogs) Bill introduced by the hon. Member for Hastings and Rye (Mr. Foster) was killed off by the Lords, when it never reached the upper House. I finally managed to wring an answer out of the Prime Minister on the Floor of the House, because the letters were not answered.
The Prime Minister seems to be having problems with his correspondence again. I recently wrote to him asking him to place in the Library a copy of the threatening letter that he sent the director-general of the BBC in 2003 and to list the threatening phone calls made by
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Mr. Alastair Campbell on his behalf to the BBC between March and April 2003. The Prime Minister seems to be unable to answer those questions, so can the House have a debate on the Floor of the House so that we can question the efficiency of the Downing street correspondence unit?
Mr. Hain: The hon. Gentleman can apply for any debate on any issue that he likes, including that one. However, may I just say that the Prime Minister does not send threatening letters to anybody?
Mr. Alan Meale: The Leader of the House may not be aware of the fact that decades ago MPs on both sides of the House representing the east midlands campaigned to establish an independent news and current affairs centre for the east midlands based in Nottingham. Like Members from the east midlands and me, he will be alarmed to learn that this morning ITV announced the proposed closure of that centre, which is to be moved to the west midlands, with the loss of 200 jobs. Will he do everything in his power to ensure that we have an urgent debate on the issue?
Mr. Hain: My hon. Friend will have the opportunity to put that to my right hon. Friend the Secretary of State for Culture, Media and Sport at Culture, Media and Sport questions on Monday 8 March. However, I well understand his anxiety about job losses and the concerns of people in the east midlands that there should be proper independent television coverage and programmes that reflect local and regional interests. I am sure that the television chiefs and the Secretary of State will want to bear in mind what he said.
Pete Wishart: Has the Leader of the House had an opportunity to look at early-day motion 657, which stands in my name and asks the Chancellor of the Exchequer to get his teeth into the sticky problem of discarded chewing gum?
[That this House despairs at the disgusting problem of discarded chewing gum 7 which blights the streets of every city and town the length and breadth of the country; notes the efforts of local authorities in trying to address this problem, but acknowledges that despite these efforts discarded chewing gum continues to present an intractable problem; calls on the Chancellor to introduce a chewing gum levy on the chewing gum manufacturers, so that for every packet of chewing gum bought a couple of pence is taken in the form of a levy to be then given to local authorities to address this problem; and calls on the chewing gum manufacturers to do more to make sure their product is fully bio-degradable and non-adhesive.]
I am sure that the House is aware of the appalling mess that blights every town and city the length and breadth of the country. Will the Leader of the House chew over my request for a debate, and consider my modest proposal for a 2p levy on chewing gum manufacturers so that that horrible mess can be addressed?
Mr. Hain: I will chew it over.
Mrs. Anne Campbell: May I bring to the attention of my right hon. Friend early-day motion 652 on private Members' Bills?

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[That this House believes that, under the present sitting hours, Private Members' bills should be taken on Tuesday evenings after 7:00pm, which would make all Fridays non-sitting days for honourable Members; further believes that this would allow honourable Members to be able to use Fridays for working in their constituencies, thereby enabling them to foster closer relationships with businesses, schools and organisations which function from Mondays to Fridays; and further relieves that it would enable more honourable Members to be present in the House and take part in the debates and votes on private Members' bills.]
The motion was tabled three days ago, and has already attracted 58 signatures. It proposes that private Members' Bills, instead of being heard on a Friday, should be debated on Tuesday evenings after 7 pm. What progress has my right hon. Friend made with the Modernisation Committee on the issue?
Mr. Hain: We have not had an opportunity to consider any detailed propositions such as the one suggested by my hon. Friend. I have noted the early-day motion, and am struck by the fact that it has cross-party support. It needs to be taken seriously, and I urge her and her colleagues, including Members who signed the early-day motion, to have discussions with other colleagues who have taken a different view of the original decision to change the hours to see whether a consensus can be built around the issue or a variation of it. If I can find an early consensus on the sitting hours of the House I am willing to table a motion, but I am not willing to table an early motion on a proper review in the absence of any such consensus.
Mr. Peter Atkinson: Will the Leader of the House allow us to have a debate on agriculture, as there are many issues that we need to discuss, not least the new subsidy arrangements announced by the Government two weeks ago and which, either by accident or design, will have a serious impact on the income of upland livestock farmers in England, including those in my constituency in Northumberland? Those farmers look after some of the most loved landscapes in England, including the Lake District, the Pennines, Dartmoor and Exmoor. We need a debate to find out how we can rescue them from impending financial disaster.
Mr. Hain: I recognise the hon. Gentleman's concerns. As he knows, the Secretary of State has made a statement on the likely outcome of European future financing and her plans in respect of England. However, when he talks about financial problems, he should recognise that his party now advocates a cut in agricultural and rural support programmes. The problems in his constituency will not be solved by Conservative party policy, and I suggest that he change his stance.
Mr. David Chaytor: My right hon. Friend will know that the decision to allocate secondary school places to children in London under the new unified pan-London admission system is imminent, and that that is a very important matter for thousands of parents and children in London and in other parts of the country where similar allocations are in the course of being made. In view
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of increasing parental pressure and competition for places in good schools and the increasing number of appeals against decisions by admission authorities, does my right hon. Friend accept that it is time to have a debate on the Floor of the House about the operation of school admissions, especially secondary school admissions, and specifically about the role of the schools adjudicator, two of whose decisions, in Wandsworth and Hertfordshire, were recently overturned by the courts? Will he find time for a debate on the whole issue of secondary school admissions in the near future?
Mr. Hain: I recognise my hon. Friend's continuing expertise on, interest in and advocacy of comprehensive schools through the campaign for comprehensive education, and I know of his concerns about such matters. My hon. Friend is of course free to apply for a debate, but I am sure that the Secretary of State for Education and Skills will want to pay close attention to his comments.
Mr. Adrian Flook: As we just heard, two weeks ago the Secretary of State for Environment, Food and Rural Affairs came to this House to make a statement about common agricultural policy reform. In that statement, she said that people on Exmoor will benefit from those reforms, but I am afraid that that is manifestly not the case. Will the right hon. Gentleman ask her to come to the House to correct those comments; and in his reply to me, will he refrain from giving us a party political tirade, because this is about European money, not domestic taxpayers' money?
Mr. Hain: I understand the hon. Gentleman's point about Exmoor. He is right to raise the matter, and the Secretary of State will certainly want to take account of his remarks if the impact is as he describes it. As my right hon. Friend said, the effects are balanced right across the country. Moreover, I am sure that the hon. Gentleman agrees that reform of the original subsidy system, which was provided by a bloated and inefficient common agricultural policy, was much needed. I am grateful to the hon. Gentleman for nodding. Although the general terms of the Secretary of State's announcement were welcomed, I understand that its application to his own area is an issue, and my right hon. Friend will want to take close account of his remarks.
Glenda Jackson: May we have an early debate in Government time on early-day motion 691, which stands in my name and in those of colleagues?
[That this House applauds the courage and patriotism of GCHQ translator Katharine Gun who made public information about a memo from the US Government National Security Agency requesting UK assistance with a covert surveillance campaign of the United Nations Security Council members such as Mexico and Chile prior to voting on a resolution which would have endorsed the proposed invasion of Iraq in March 2003; welcomes the decision to drop the charges against her for breaching the Official Secrets Act; considers that the actions of Ms Gun qualify her as a whistleblower—an employee who, on the basis of principle, exposes a malpractice or a miscarriage of justice that deserves public attention; calls on the Government to reform the Official Secrets Act so

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that whistleblowers are able to have a public interest defence so that if a jury can be persuaded that a breach of the Official Secrets Act is in the public interest this should be an absolute defence; and calls on the Government to make a statement on the information made public by Ms Gun.]
The motion, while praising the courage of whistleblower Katharine Gun and welcoming the decision, albeit somewhat late in the day, to drop all charges against her, calls on the Government to reform the Official Secrets Act to afford whistleblowers the defence of public interest, which, if a jury is so persuaded, will be deemed an absolute defence?
Mr. Hain: My hon. Friend will know that the Government introduced both legislation to protect whistleblowers and the Freedom of Information Act 2000, so our record in this respect is very good indeed. However, she is of course able to apply for a debate and to question the Solicitor-General when she appears in the House shortly.
Mr. Alistair Carmichael: I am aware that following this business we are to have a statement by the Solicitor-General. Having listened to the Attorney-General's statement in the other place this morning, I am sure that it is apparent to most observers that it raises more questions than it answers. Speaking as a one-time procurator fiscal depute, it is surely apparent that someone in Government has danced with tackety boots all over the notion of independent prosecutors bringing prosecutions in the public interest. It is inevitable that in the course of the next few days more information will come into the public domain about the case and the decision to drop proceedings. Will the Leader of the House give me an assurance that when it does, we will be allowed the opportunity to discuss it fully?
Mr. Hain: The hon. Gentleman is hunting for conspiracies that do not exist. The Solicitor-General's statement, like the Attorney-General's statement, will be crystal clear on the matter. The decision was taken by the Crown Prosecution Service on evidential grounds following consultation with independent prosecuting counsel and the Attorney-General. Such decisions are essentially for the independent prosecuting counsel. There is no point in the hon. Gentleman's shaking his head—that is the fact of the situation.
Jeremy Corbyn: Will the Leader of the House make time as early as possible next week for a full debate on all the security information that was sought before the conflict in Iraq, particularly the bugging operation that apparently went on at the United Nations? Does he not think that the British public and taxpayers who pay for all this have a right to know what went on, who made the decisions, and who authorised that bugging to go on, if it did? In the interests of transparency, an early debate would be very welcome.
Mr. Hain: As my hon. Friend knows, the Butler inquiry was set up specifically to look into the whole
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question of intelligence in relation to this issue. As regards the latest allegations, the Prime Minister made it absolutely clear this morning that Governments and Prime Ministers do not comment on security or intelligence matters. If we, or they, did, that would endanger the whole security of the country and the operations of the security services. Even if my hon. Friend is successful in getting a debate, he will not find it very profitable to have done so.
Mr. Andrew Rosindell: The Leader of House will have noted early-day motion 683 on the 300th anniversary of the British link with the territory of Gibraltar.
[That this House notes with great pleasure that this year sees the celebration of the 300th Anniversary of relations between Gibraltar and the United Kingdom; further notes during this long period of time the closeness of that relationship and the ongoing support of Gibraltar to the United Kingdom, especially during periods when the support of Gibraltar was of crucial importance; further notes, with pride, the deep commitment of Gibraltar as a member of the British Islands and Mediterranean Region of the Commonwealth Parliamentary Association to the principles of the Commonwealth in which it is a highly respected member; and believes there is a need for the fullest cooperation and understanding between the two countries in any decisions that may need to be taken that would in any way affect Gibraltar and this should only be done with the fullest involvement and co-operation of the elected representatives of Gibraltar and its people.]
The Leader of the House will be aware that next week a special service of thanksgiving will take place in London to celebrate that great anniversary. As he is renowned for his campaigning for democracy over many years, will he bring to this House at the earliest possible opportunity legislation to give the people of Gibraltar the same democratic right to vote to elect a Member of Parliament to this House that is enjoyed by everyone else in the United Kingdom?
Mr. Hain: The answer to that question is no.
Jon Trickett: Can the Leader of the House find the time to discuss the miners' compensation package? Such a debate would allow those of us who represent mining constituencies to congratulate the Government on recognising the suffering that miners underwent during their years of working underground. It would also allow me to raise the case of my constituent Mr. Harry Fletcher, who is 80 years old, worked underground all his life creating wealth for this country, and now suffers from the most severe vibration white finger imaginable. His records have been lost and there is no longer any living witness to the fact that he was employed underground, which has led to the denial of his application for compensation. Will the Leader of the House allow us to debate that matter on the Floor of the House or, if not, will he at least bring that case to the attention of his right hon. Friend the Secretary of State for Trade and Industry?
Mr. Hain: I will certainly do that. As a representative of a former coal mining community, in concert with my hon. Friend I know that these cases worry many of our constituents who are in an appalling state of health,

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whether caused by vibration white finger or lung disease. I am sure that everything that can be done to assist with his constituent's case will be done by the Minister for Energy or the Secretary of State. However, I remind him, and I am sure that he will want to agree, that there have been record payouts of hundreds of millions of pounds—indeed, getting on for £1.5 billion—across the country to rescue the sick miners concerned or their families from the appalling destitution into which they have fallen as a result of the ill health that they have suffered.
Mr. Eric Forth: Will the Leader of the House reconsider the sleight of hand that he practised in not giving a proper answer to my hon. Friend the shadow Leader of the House? When asked why we are not getting proper oral statements from Ministers in this House during which they can answer questions from Members, the Leader of the House resorted to some slick comment about written ministerial statements. Even he must understand that there is a difference between a written ministerial statement, which cannot be questioned by Members, and a proper oral statement when Ministers come to the Dispatch Box and are prepared to answer questions from Members of Parliament from both sides of the House. When will the Leader of the House stop taking refuge in this ridiculous written ministerial statement procedure and get his colleagues to come and answer properly at the Dispatch Box?
Mr. Hain: Does the right hon. Gentleman really think that it is better to have the procedure of planted questions—
Mr. Forth: No.
Mr. Hain: I presume, then, that he agrees that written ministerial statements are a good idea.
Mr. Forth: No.
Mr. Hain: He cannot have it both ways. He must surely agree that written ministerial statements are a preferable alternative to planted questions.
The right hon. Gentleman is practised at perpetuating the myth that there was sleight of hand. Cabinet Ministers have made masses of statements, and they make them every week. If he looks at the record of this Parliament, he will find that we are at least as accountable to the House as previous Governments. During the first six years and nine months of his premiership the Prime Minister spent 107 hours and 30 minutes in the Chamber, whereas John Major's equivalent period was 87 hours and 30 minutes—an extra 20 hours of accountability o the House by our Prime Minister. The Prime Minister has made 61 statements, compared with just 46 by John Major. That shows much greater accountability to the House by a Labour Prime Minister than by his Tory predecessor.
Mr. Stephen McCabe: Has my right hon. Friend had a chance to consider the demands of the Doctors for Reform group, which yesterday called for everyone in the country to be forced to purchase medical insurance, whether they can afford it or not? May we have an urgent debate on that
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important matter and on today's further revelations that, far from being an independent organisation, this group is a Tory front organisation dedicated to undermining and dismantling the NHS? When a group parades as independent, surely Members of the House have a right to know what its true political affiliations are, particularly when the issue is the sensitive one of health spending and the protection of the values of the NHS, and particularly when the group is clearly—
Mr. Speaker: Order. There are other Members' contributions to be considered.
Mr. Hain: I agree with every word of my hon. Friend's question. Indeed, I would be enthusiastic about the prospects for a debate on those lines, because a clear divide is opening up between this Government, who believe in publicly funded health services from which people can seek relief from pain or proper treatment free at the point of use, and an alternative point of view—advocated by the Conservatives, and probably also by this front organization—of moving towards increasing privatisation, robbing the national health service of up to £2 billion to walk down the road to private hospitals. That is the choice—a high-quality publicly funded national health service under Labour or privately funded health provision under the Conservatives.
In respect of one other matter, may I correct a mistake that I inadvertently made about business in Westminster Hall for Thursday 4 March? The debate will in fact be on the report from the Transport Committee on overcrowding on public transport, not, as I think I said, on ports.
Mr. Graham Brady: The Leader of the House has made great play of the amount of time that the Prime Minister spends in the House of Commons. Is it not important, however, that, when he is here, what he says is factually accurate? If it is not, he should come to the House to correct it as quickly as possible. During yesterday's Prime Minister's questions, he committed a clear error of fact when he said
"the right hon. and learned Gentleman is wrong; the guidance—"
he was referring to drug testing in schools—
"is to be issued next week."—[Official Report, 25 February 2004:Vol. 418, c. 279.]
That guidance was issued on 16 February, so the Prime Minister made a clear error of fact and should correct it. When will he come to the House to do that?
Mr. Hain: On the general matter of Prime Minister's questions—[Interruption.] I will answer the hon. Gentleman's point specifically. The Prime Minister has answered a massive range of questions, including one on Buddhism in relation to one hon. Member's constituency. I am advised that the drug guidance to head teachers and schools is being issued on 9 March, which accords absolutely with what the Prime Minister said yesterday, so the hon. Gentleman should withdraw his question.
Jim Sheridan: My right hon. Friend may be aware of early-day motion 665, which stands in my name, in relation to profits in the oil, gas and banking industries.

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[That this House recognises the excessive profits recently recorded in industries such as oil and gas and banking; and therefore calls on the Government to use its influence to ensure these profits are fairly distributed between shareholders, employees and consumers who have all contributed to these profits rather than the executives who award themselves large bonuses or other hidden benefits.]
Will my right hon. Friend use his tremendous influence within the Government to ensure that executives in those industries have a moral responsibility to ensure that these excessive and record profits are shared among shareholders, employees and especially consumers? Their contributions have led to the profits being gained, and they should not go into the coffers of chief executives.
Mr. Hain: I understand my hon. Friend's point. The staff concerned will want to be properly remunerated, and the senior managers concerned will want to be fairly remunerated, but not by being given exceptional rewards for mediocre performance. His question is important and he is free to apply for a debate to raise the issues involved.
Mrs. Patsy Calton: Will the Leader of the House give urgent consideration to holding a debate on the flawed processes surrounding consultation and decision making on the network reinvention programme for post offices? On 16 February I received a letter from Eddie Herbert, the north-west area head for post office reinvention, about Turves Road post office in my constituency, in which he stated that he was still having to take time to consider the consultation responses that he had received. I learned yesterday, however, that the meeting between the Post Office and Postwatch was held on 16 February—the same day that he wrote to me to say that he was taking more time to consider responses. May we please have a debate on the Floor of the House that will enable us to explore this and other flaws in the process?
Mr. Hain rose—
Mr. Speaker: Order. Before we go any further, I remind Members that they must be fair to other Members. Long questions mean only that other Members' questions will be cut out.
Mr. Hain: I understand the hon. Lady's concerns about consultative processes conducted by Post Office managers. I, and many other Members, have received many representations about flaws in that process. I am sure that the Post Office managers concerned, and the Secretary of State, will want to take careful note of what she says.
Mr. Andrew Miller: In the run-up to the publication of the defence White Paper, my newspapers regularly carried scare stories about the demise of the Cheshire Regiment. Will my right hon. Friend join me in praising the great work done by the regiment, and will he reconsider his answer to the shadow Leader of the House and grant an early
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debate on the defence White Paper so that we may praise the work of the county regiments and expose the proposed Tory cuts in defence?
Mr. Hain: I am inclined—[Interruption.] I see that Conservative Members are joining my hon. Friend in exposing the mistaken policies of their party. I join him in praising the brilliant standards, reputation and courageous work of the Cheshire Regiment over many generations. Its future, and that of other regiments, would be jeopardised by the cuts of £1.5 billion planned by the Conservative party in the first two years following a general election.
Mr. John Wilkinson: In reply to my hon. Friend the shadow Leader of the House, who complained about the plethora of Government news announcements made in the recess, the Leader of the House, sounding more like a partisan news manager than the custodian of our democratic principles, called in aid a long list of written ministerial statements. Does he not notice that three of the eight statements on today's Order Paper concern important issues relating to Northern Ireland business, which are the concern of this House and on which we need to question Her Majesty's Government, as the devolved institutions of the Province are in abeyance?
Mr. Hain: Notwithstanding the specific question that the hon. Gentleman asks, my point is that surely an above-board written ministerial statement on such questions is preferable to the practice adopted by Governments over the decades—and quite possibly the centuries—of planting questions so that they can answer them to make ministerial statements. That is common sense. In addition, as the hon. Gentleman will appreciate, many oral statements are made by Cabinet Ministers, virtually every week, and they are here to answer questions almost every day of the week as well.
Mr. Kelvin Hopkins: My right hon. Friend will be aware that many thousands of people in my constituency and elsewhere are in desperate need of rehousing, and that there are not enough houses for them. In recent discussions with private builders and construction trade unions, it has become obvious that builders are interested in the development of executive homes, on which they can make a big profit, not in the building of social housing on brownfield sites for local authorities or housing associations. Will my right hon. Friend make time for a debate in which we can look at the possibility of developing once again a substantial public sector house building industry, which could provide homes for people in my constituency and elsewhere?
Mr. Hain: The Government have initially been focusing on investment and improvement, rather than on new house building, which is a much-needed task, as I know my hon. Friend will agree. He nevertheless makes an important point on the need for more social housing. That is why the increasing investment going to local government—on a massive scale under this Government—and into housing provision is very important. That contrasts with the policies proposed by the Opposition, who would make cuts of £2.5 billion in local government spending in the first two years following a general election, if they were to come to office.

Katharine Gun
1.12 pm
The Solicitor-General (Ms Harriet Harman): This morning, my right hon. and learned Friend the Attorney-General made a statement in another place about the prosecution of Katharine Gun. I apologise to the shadow Attorney-General and to the hon. Member for Torridge and West Devon (Mr. Burnett), who speaks for the Liberal Democrats on these issues, for the lateness in getting the Attorney-General's statement to them. His statement is as follows.
Yesterday, at the central criminal court, the Crown offered no evidence in the case of Katharine Gun. Ms Gun had been charged under section 1 of the Official Secrets Act 1989. The effect of offering no evidence was that the case against Ms Gun was discontinued. Before I answer the questions that hon. Members will put to me today, I hope that it will help the House if I explain the process in respect of prosecutions under the Official Secrets Act.
Prosecutions under the Official Secrets Act are governed by the normal rules applied by the Crown Prosecution Service when considering any prosecution: the code for Crown prosecutors. There is an additional requirement for the Attorney-General's consent before a prosecution can go ahead under the Official Secrets Act. May I say at the outset that when making decisions under the code for Crown prosecutors, the CPS acts in the public interest? It takes independently the decisions for which it is responsible. I also remind the House that when making decisions on whether to consent to a prosecution, the Attorney-General makes his decisions in the public interest, not in the interest of the Government.
When the CPS is considering a prosecution under the Official Secrets Act, the normal code rules require that it first consider the sufficiency of the evidence—evidence to make out the case and evidence to rebut any defence that might be available and that might be raised. It will not take further action if it thinks that there is insufficient evidence. If its view is that there is a realistic prospect of conviction—that is, the evidence is sufficient to make it more likely than net that a jury would convict—it then considers the public interest test. In the Gun case, the evidential test was met in the view of counsel instructed by the CPS, and in the view of the Director of Public Prosecutions. The evidential test having been met, the CPS next moved on to the public interest test. That test is, quite simply, to ask whether the prosecution would be in the public interest. As this prosecution was taking place under the Official Secrets Act, it also required the consent of the Attorney-General.
When considering whether to consent to a prosecution under the Official Secrets Act, the Attorney-General carries out a Shawcross exercise, whereby he seeks the views of a
ny ministerial colleagues who may have an interest in the case. That is so that he can be informed of their views on the public interest considerations of the case within their ministerial or departmental responsibilities. When those ministerial views are expressed, the Attorney-General takes them into consideration when deciding whether to give his consent.
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In the Gun case, the view of the independent prosecutor, senior Treasury counsel Mark Ellison and his junior Ed Brown, on the review of the evidence available at that time was that the evidence afforded a realistic prospect of conviction. The Crown Prosecution Service applied for the Attorney-General's consent, and he undertook a Shawcross exercise by way of a Shawcross letter to the Secretary of State for Foreign and Commonwealth Affairs, in view of his departmental interest. That letter was copied to other interested ministerial colleagues. Views were expressed that, as always with the Shawcross exercise, the decision was the Attorney-General's. He gave his consent to the prosecution on 13 November 2003.
Under the code, it is the obligation of the prosecutor, as a case progresses, to keep under review the prospects of a conviction resulting. If, on that review, the prosecutor forms the view that the evidence is such that there is no longer a realistic prospect of conviction, it is his or her duty to withdraw the prosecution. Counsel reviewed this case. The decision not to proceed with the prosecution was made by the CPS, after consultation with the Attorney-General. It was based on the advice of senior Treasury counsel in the case. The evidential deficiency related to the prosecution's inability within the current statutory framework to disprove the defence raised on the particular facts of the case. The view of senior Treasury counsel and the DPP was that there was no longer a realistic prospect of conviction.
The prosecution consulted the Attorney-General before offering no evidence in this case. However, the decision not to pursue the case was that of the Crown Prosecution Service, as it was based on the view that there was no longer a realistic prospect of conviction. The Attorney-General made it clear, however, that he agreed with it. At the central criminal court on 25 February 2004, senior Treasury counsel informed the court that the prosecution was offering no evidence, as there was no longer sufficient evidence for a realistic prospect of conviction. Perhaps at this point I may tell the House of a statement made this morning by the Director of Public Prosecutions, Ken Macdonald. He said:
"Senior Treasury Counsel prosecuting this case gave advice, with which the Director of Public Prosecutions fully concurred, that there was no longer a realistic prospect of convicting Katharine Gun.
As has been commented upon there was, in this case, a clear prima facie breach of section 1 of the Official Secrets Act 1989.
The evidential deficiency related to the prosecution's inability, within the current statutory framework, to disprove the defence of necessity to be raised on the particular facts of this case.
This determination by the prosecution had nothing to do with any advice given by the Attorney General to Government in connection with the legality of the Iraq war. It was also a determination made by the prosecution in advance of the defence request for disclosure which came on 24 February 2004.
The Attorney General was consulted and concurred.
But the decision to offer no further evidence was one made by the Crown Prosecution Service as an independent prosecuting authority. It was a decision taken solely on legal grounds and in accordance with the Code for Crown Prosecutors, free from any political interference."
That was the DPP's statement.
I recognise that many in the House will want to know more about the detailed basis on which counsel concluded that there was no longer a realistic prospect

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of conviction. However, as the matter concerns issues of intelligence, it is not appropriate for me to go into that, even to this House.
As for the impact of the decision on the conduct of future prosecutions, the substantive law is always kept under review, and the effect of particular prosecutions on the substantive law considered.
Mr. Dominic Grieve: May I first thank the Solicitor-General for giving me an advance copy of the statement? I make no criticism of the slight lateness of its arrival, and I accept her apology for that. I should also like to say at the outset that I see no reason to express any criticism whatever of the conduct of the Attorney-General, on the facts as they are available at present, or indeed of the Solicitor-General. Nevertheless, this case raises some very important and worrying features.
It is an unusual feature of the case, as the Solicitor-General will confirm, that the facts of Ms Gun's actions were not in dispute. The defence that had been raised was one of necessity. When was that defence first expressed? Was it, as has been suggested and as I believe to be the case, in the numerous interviews that took place between Ms Gun and her interviewers, under caution, in the spring and summer of last year, leading to her being charged with this offence in November?
Was it the case that, prior to charge, the Director of Public Prosecutions and the Attorney-General were consulted, so that the Shawcross exercise of which the Solicitor-General spoke was carried out? If so, why did the evaluation of the chances of conviction change so dramatically between the date of charge in November and the events yesterday? When did it become clear that the case would not succeed? When was it decided by the Attorney-General that it should not go ahead? I have heard what the Solicitor-General said about that decision being made prior to a request for further material from the prosecution on 24 February, but will she be more specific about that? I understand that the Attorney-General had discussions with the Foreign Secretary on 14 and 24 February. Will she amplify from that when the decision was taken?
Why was the view changed? There is no suggestion in this case that a defence statement had yet been served, because none was required prior to the plea and directions hearing. It was suggested by the Attorney-General in his statement in the House of Lords that new material had come to light. I appreciate that the Solicitor-General will not be able to comment on specific material, but will she tell the House why that material was not available earlier? Was the material produced for the prosecution by those supplying it with information within the intelligence services, or was it served by the defence?
I understand that the Attorney-General properly consulted Cabinet colleagues, as he is entitled to do under the Shawcross rules. As I said earlier, I believe that he consulted the Foreign Secretary on at least two occasions. Will the Solicitor-General tell us whether, in addition to that, the Prime Minister was consulted about this case at any time between its first investigation and its discontinuance?
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It has been widely suggested and publicised that the discontinuance followed a request by the defence for a copy of the Attorney-General's advice on the Iraq war. I cannot see a reason why the Solicitor-General cannot indicate whether such a request was made prior to discontinuance yesterday, and I would be grateful if she would tell the Roust whether that was indeed the case. I would obviously agree with her if she were to confirm that that document would be covered by privilege and therefore be unobtainable, unless of course the Government chose to waive the privilege upon it.
The Attorney-General made an important point in his statement, which was repeated by the Solicitor-General:
"The evidential deficiency related to the prosecution's inability within the current statutory framework to disprove the defence raised on the particular facts of the case."
That is a very serious statement, and if that is so, is the Solicitor-General saying that, under the Official Secrets Act, no defence of necessity can be rebutted, so that in future no such prosecution can ever succeed, allowing anyone who chooses to leak official documents—potentially causing great damage to our freedom—to escape conviction? Or is she saying that, as Official Secrets Act prosecutions usually require the withholding of certain material from a jury under public interest immunity, resulting in the acceptance by the jury of the good faith underlying the prosecution process brought by the state, that the current state of public distrust of the Government over their actions in Iraq has rendered the process of justice impossible in this instance? Whichever is the case, this is a disastrous state of affairs for the due process of justice in this country.
In the House of Lords, the Attorney-General suggested that a review of the Official Secrets Act was to be conducted. Will the Solicitor-General tell the House when that might happen and when a statement might be made to the House if the implications of this case? There have been previous requests by many people to see a copy of the Attorney-General's advice. There are perfectly good legal reasons for not making it available, but does the Solicitor-General agree that it is open to the Government, if they so choose, to waive their privilege and to allow the advice to be made available to the public? Will she consult her Cabinet colleagues about whether that might help to restore faith in the administration of justice in this country? There are very serious matters that go way beyond the issues surrounding the case in the Solicitor-General's and Attorney-General's statements. I very much hope that the Solicitor-General can clear up some of these matters.
The Solicitor-General: The hon. Gentleman asked whether the defence of necessity was disclosed at an early stage and therefore considered by those who had conduct of the prosecution. It is clear that it became evident at an early stage, if not from the outset, that it was a realistic prospect that Ms Gun might raise the defence of necessity. That was known and considered before the charge. Prior to the charge, the Shawcross exercise was undertaken. The Attorney-General has to consent to a prosecution going forward.
The hon. Gentleman asked why the evaluation had changed. That is a difficult question for me to answer as fully as I would like to. He will know from his experience

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at the Bar that evidence comes and goes, and that a case has to be kept under constant review. If at any point counsel with the conduct of the case decides, on the balance of all the admissible evidence that might go to the proving of the charge or the rebutting of the defence, that there is no longer a realistic prospect of conviction, it is counsel's duty to make his view known that that is the case.
The hon. Gentleman asked when the Attorney-General decided not to go ahead with the case, but I can tell the House that it was not decided by the Attorney-General. He was told of the view Treasury counsel, with which the Director of Public Prosecutions concurred, relating to the lack a sufficiency of the evidence. The Attorney-General was told about, and agreed with, the view of Treasury counsel, but it was actually the decision of the prosecuting authorities, not the Attorney-General.

I ask the House to understand the separate nature of the Attorney-General's discussions with the Foreign Secretary. The Shawcross exercise means that the Attorney-General will consult his ministerial colleagues in deciding, as part of his consideration, whether a prosecution is in the public interest. He will do that because the prosecution might affect the Departments for which they are responsible.
That is quite separate from the issue of evidential sufficiency. As the Attorney-General explained in the other place this morning, the discussions that he had on 14 and 24 February were about the evidential questions. As a matter of courtesy, he was reporting to the Foreign Secretary on the evidential issues that had arisen, and discussing them with him. He was not asking for the Foreign Secretary's views on whether the prosecution was still in the public interest, nor was he giving the decision on the sufficiency of evidence to the Foreign Secretary. He was not consulting the Foreign Secretary; he was simply explaining to him, and discussing with him, the evidential position. No defence statement had been served—this brings us back to the issue of the defence of necessity—but obviously counsel for the prosecution, and the prosecution as a whole, are under a duty to anticipate what any defences might be.
The hon. Gentleman asked whether any request by the defence for the Attorney-General's legal advice to the Prime Minister on the legal basis for the use of force in Iraq would have been covered by privilege. That question did not arise, and therefore the question of whether the Attorney-General had to decide whether he would claim legal privilege did not arise either, because the request for disclosure had not been made.
The hon. Gentleman asked about the future of section 1 of the Official Secrets Act. He asked whether it was now the case that no defence of necessity could ever be rebutted. All I can say is that before we rush to any conclusions about where this case leaves the state of the law, careful consideration must be given—and no doubt will be given—by the Home Secretary. It will be for him to come to the House if he has any views that he wishes to convey to it about the state of the Act. As for whether the prospect of a conviction receded because of the anticipation of public distrust of the Government—I think that that is what the Hon. Gentleman was alleging—that was not an issue in relation to the discontinuance of the case.
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The hon. Gentleman asked when the Official Secrets Act would be reviewed. I think that that is a matter for the Home Secretary. As I have said, in all cases in which there has been a significant event in the course of a prosecution, the implications for the substantive law that might arise from that prosecution are always considered. I said no more than that.
The hon. Gentleman asked whether the Government should waive confidentiality—whether either the Prime Minister or the Attorney-General should waive the normal rule, which is that legal advice to Government is confidential. He suggested that it should be waived. I remind him that because of exceptional public interest in the question of the legal basis for the use of force in Iraq, the Attorney-General did, on 17 March, set out the basis on which he believed in the lawfulness of the use of force in Iraq; and he was able to reaffirm this morning, in another place, that his opinion of whether his view of the law was right had not changed.
No doubt many people will have examined the law on the use of force, and, as we know from lectures and newspapers, many of them do not agree with the Attorney-General. I should point out that when the Prime Minister appoints the Attorney-General, he cannot shop around for legal advice. If the Attorney-General tells him that he cannot do something, he cannot do it. He is obliged to take the Attorney-General's advice: that is the basis and the nature of the appointment. Similarly, if the Attorney-General tells the Prime Minister that he is entitled to do something, the Prime Minister is entitled to rely on that, irrespective of whether many other people take a different view.
I realise that I have left many questions unanswered, but I can at least explain to the House what the Attorney-General's responsibilities are under this procedure, and make it clear that he fulfilled them with integrity.
Mr. John Burnett: I thank the Solicitor-General for giving me notice of her statement.
When deciding whether to proceed with a prosecution, the Attorney-General must be convinced first that there is a realistic chance of success and secondly that it is in the public interest to proceed. He believed that both conditions were met in this case. My understanding is that the evidential test was passed on the basis of Ms Gun's first interview. Despite what the Solicitor-General has just said, I am still not sure what has changed since that first interview, and what assessment was made subsequently to change the decision to prosecute.
The Solicitor-General has said that it was clear at an early stage that Ms Gun would raise the defence of necessity. I concede—and it is entirely proper—that we must safeguard our intelligence. The defence made a submission two days ago seeking disclosure of the Government's legal advice on the legality of the Iraq war, because it believed that unless the Government could prove they were acting legally, Katharine Gun had the defence of acting in the public interest. Yesterday, Treasury counsel informed the court that the prosecution was to be abandoned. The Solicitor-General will be aware that there has been considerable speculation that it was abandoned because the

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Government feared that at the trial evidence would be adduced of the grave misgivings of many officials in a number of Departments of State about the legality of the war with Iraq. I respect both the Attorney-General and the Solicitor-General, but unless they put in the public domain, or submit to Lord Butler's inquiry, the compelling legal reasons for the withdrawal from the prosecution, we can only assume that the law officers have capitulated to the Executive, and have failed in their duty to the House and the country.
The Solicitor-General: I take exception to the suggestion that the Law Officers have done that, and that the Attorney-General failed to carry out his duties as he was required to in this matter. Let me say most emphatically that he did not. If the hon. Gentleman accepts what I said in my statement, he will agree that that is not what has happened.
The hon. Gentleman said that many officials had misgivings. That might well have been the case, but the question of whether the Prime Minister had a lawful basis for the use of force is one on which he takes the advice of the Attorney-General. It is not for him then to second-guess that by taking the view of many officials who have misgivings. The system has to run like that. I assure the House that the enabling that is conferred on the Prime Minister by the Attorney-General's saying that he can do something is matched by the Attorney-General's ability to tell the Prime Minister or his ministerial colleagues that they cannot do something. It works both ways.
The hon. Gentleman asked me whether there was a connection between the discontinuance of the case and the request for disclosure. I can reaffirm that the discontinuance was not connected to a request for disclosure of the Attorney-General's full legal advice or the anticipation of such a request being made. I hope that the hon. Gentleman will accept that. I may not have been able to answer many other questions that he would like to put, but I hope that he accepts that there is no connection between the anticipation of a request or the submission of a request for disclosure of the Attorney-General's advice on the legality of the war in Iraq and the discontinuance of this case.
The hon. Gentleman mentioned that the Attorney-General must consider two things when giving his consent to a prosecution under the Official Secrets Act: the evidential test of whether there is a realistic prospect of a conviction and the public interest test. I remind him of something that I know he knows, which is that the evidential test does not become a matter for the Attorney-General's consent. The evidential test remains the custody of the prosecution. Consent is a wider and different issue about the public interest. The evidence was regarded as sufficient and the Attorney-General was asked whether the case was in the public interest. What changed was that, as the case progressed, Treasury counsel took the view that there was no longer a sufficiency of evidence, and he brought that to the Attorney-General's attention. At that point, the Attorney-General was not considering whether the case was in the public interest, but whether there was sufficiency of evidence.
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Hon. Members will know that there must be evidence not just that supports the charge, but to rebut the defence. The evidence that is available changes over time in every case. Much has bee n said about this being a sudden decision. The House would rightly criticise the authorities—[Interruption.] Sorry, am I taking too long?
Hon. Members: —Yes.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I do not think that it was anything I said, but I was intending to say that the exchanges between Front-Bench Members have now taken half an hour. I appeal to hon. Members. There is time-limited and important business still to come, and notwithstanding the legal complexities of this subject, I would appreciate brief questions and equally brief answers.
Glenda Jackson: Are the views expressed under the Shawcross exercise furnished to the defence, and did they contribute in any way to the decision that was taken yesterday?
The Solicitor-General: As I understand it, the Shawcross letters are not furnished to the defence. They go to the Attorney-General's decision whether the prosecution is in the public interest, and are not a matter of evidence.
I apologise to the House for taking so long to answer questions put by Front-Bench Members, but these are complicated and nuanced issues of some constitutional depth. I would rather choose my words carefully and get it right than mislead the House. However, I realise that other hon. Members have tabled urgent questions and they want to be able to ask them.
Mr. Nigel Jones: GCHQ is in my constituency, and Katharine Gun is one of my constituents. I have supported her through the recent difficult months, during which she has felt vulnerable, and I felt the relief that she experienced yesterday. Have the Government given any thought to compensation for legal costs and any other compensation that it may be appropriate to give Ms Gun to help her to rebuild her life?
The Solicitor-General: Obviously, it will be for the defence to apply for legal costs if it is so minded, and the processes will be applied in the usual way.
Mr. Harry Barnes: On the public interest test, is my right hon. and learned Friend aware that, through the Enterprise Act 2002, the Department of Trade and Industry has virtually scrapped public interest concerns in its area of responsibility? How safe is the public interest in the Government's hands?
In her statement, my right hon. and learned Friend referred to ministerial colleagues who may have an interest in the cases, because of public interest considerations. Is not there a distinction between ministerial interests and the public interest?
The Solicitor-General: Ministerial interest is not a question of curiosity, but whether Departments are affected by the scope of the issues in any particular

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prosecution. My hon. Friend asked whether the Department of Trade and Industry takes the public interest sufficiently into account. I was not aware that DTI prosecutors no longer operate the evidential and public interest tests. If that is so, I will correct the position, but that is not the situation as I understand it.
Mr. Douglas Hogg: Is not it plain that Katharine Gun was going to allege that what she did was necessary and justified? Is not it astonishing that the Government did not feel able to rebut that contention? Does not the right hon. and learned Lady understand that many of us who opposed the war strongly suspect that in the Government's possession are documents that they would have been obliged to produce that would haw shown that the war was unlawful and unnecessary? It was because of their reluctance to put such documents before the court that they felt unable to rebut the defence.
The Solicitor-General: No, that was not the case. It is not a question of a judgment having been made that if we went ahead it would have involved us putting forward these documents, so we decided to pull the plug. That was not the case. All I can refer to in relation to the evidential obstacles is what I said in my opening statement, and that is the position
John McDonnell: The trial of Katharine Gun would inevitably have had to address the question whether Mr. Frank Koza, senior official of the United States National Security Agency, had requested the Government's help on an eavesdropping "surge" on delegates from six non-permanent members of the United Nations Security Council. This is a matter of the gravest public interest, which has been heightened today by my right hon. Friend the Member for Birmingham, Ladywood (Clare Short), who was asked whether British spies were
"instructed to carry out operations within the UN on people like Kofi Annan"
and she replied, "Yes, absolutely."
What route is available to us now to seek the truth before the House?
The Solicitor-General: I can at least reassure my hon. Friend that, in all respects, the Government act within international and domestic law in their dealings at home and abroad.
Mr. William Cash: I hope that the Solicitor-General will understand when I say that I found much of what she said pretty unconvincing. Surely it is in the public interest to prosecute such a blatant breach of the Official Secrets Act. The Shawcross exercise seems to have played an enormous part in the decision-making process. It certainly leaves me unconvinced by the explanation that we have just been given.
With respect to the right hon. and learned Lady's assertion that the Prime Minister is obliged to take his law from the Attorney-General, I refer her to a letter I received from the previous Clerk of the House, Sir William McKay. He quotes Balfour in 1901, and says:
'The Law Officers have no control over the legal action of the government. A minister is not obliged to take his law from the Attorney General'. Accountability thus rests with the (ministerial) decision-taker."
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Therefore, it is open to the Prime Minister and the Foreign Secretary to release the opinion of the Attorney-General, and should do so.
The Solicitor-General: I remind the hon. Gentleman that the decision on any action by a Department of State or the Prime Minister is for the Minister concerned or the Prime Minister. The legality of the action is a question for the Attorney-General. That is quite straightforward. It is not open for a Minister to obtain the Attorney-General's legal advice, for the Attorney-General to say "That is not within domestic or international law" and for the Minister then to go ahead and do it. That is not what happens. If it did, it would be unacceptable. I emphasise that that is not what happened. There is not a take it or leave it attitude about the legality of Government actions. There is not a shopping around for whose advice to take. The Government have made it clear that they will not act in breach of international or domestic law, and they have only one authoritative source of legal advice, aside from the courts, and that is the Attorney-General.
Mr. Cash: And Balfour?
The Solicitor-General: I am sorry. I cannot comment on Balfour. That would take too long.
I am disappointed that the hon. Gentleman found what I said unconvincing because I have tried to be as clear as possible. He says that it seems that the Shawcross exercise played a large part in the discontinuance of the case. I do not know how many times I have to repeat it, but neither the Shawcross exercise nor any considerations arising from it played any part in the discontinuance. The Attorney-General spoke to the Foreign Secretary on both 14 and 24 February; it was not a secondary Shawcross exercise along the lines of "Shall we drop this case? What do you think?" It was simply a matter of reporting to him about evidential developments that had been identified by Treasury counsel in the process of the case and that materially affected the case to the extent that, as we now know, the prosecution decided to discontinue it.
Denzil Davies: Given the reasonable assumption that the defence of necessity must have been based upon a belief by the defence that the war was illegal, and since my right hon. and learned Friend has said that the Government would not be able to rebut that defence, does it not follow that the Government are not able to disprove the assertion that the war was illegal?
The Solicitor-General: No. The defence of necessity can be based on many issues.
Sir Patrick Cormack: As one who deeply deplores the actions of Katharine Gun, and is somewhat bemused and disappointed by the Attorney-General's decision, I should like to ask the Solicitor-General what steps can be taken to preserve the trust and confidence that are and must be at the heart

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of any civilised Government in a democratic society. In that context, how soon can we have a review of the Official Secrets Act?
The Solicitor-General: I cannot add to what I have already said, except that the question of the implications for the Act will have to be considered by my right hon. Friend the Home Secretary.
Donald Anderson: Many of us must surely still be puzzled as to what was new; what of fundamental importance happened between the initial decision of the Attorney-General and the decision to discontinue. We know that the defence of necessity was anticipated. We know that any public anxiety about the legal basis of the war was a constant. We know that the defence had not yet made any request for particulars. What is the lacuna in the law that has been revealed? Will it be stopped? Is there not otherwise a great danger that other people in a position similar to that of Ms Gun will feel that they can disobey their obligations under the Official Secrets Act and talk to newspapers?
The Solicitor-General: It was an issue of evidence in this case, not of a lacuna in the law. I agree with my right hon. Friend; he is right to say that it was not a question of any late identification of the likelihood of the defence of necessity being raised. That had been anticipated from the outset. I repeat also that he is right that it was not a question of whether the disclosure of the Attorney-General's legal advice would be requested. That was not an issue.
I apologise to the House, as I appreciate that without being able to go through all the intelligence that comprised all the evidence forming not just the basis of the charge, but the basis on which the defence would be rebutted, hon. Members will not feel fully in the picture. But one of the characteristics of the security services is that people are supposed not to be put fully in the picture.
Mr. David Trimble: The Solicitor-General has necessarily left some questions unanswered. None the less, she has been able to answer certain questions, and the House will have noticed the emphasis with which she has answered particular questions. Does she agree that it is a very good thing that she, and the Attorney-General in another place, are in a position to come to Parliament so promptly to deal with these matters and to be able, as she and other hon. Members have, to steer their way round those areas that have to be kept to, as it were, the discretion of the prosecuting authorities? Would it not do enormous damage to the House and its standing in the country if, as a result of some jejune notions about the separation of powers, these issues could not be ventilated here?
The Solicitor-General: I thank the right hon. Gentleman for his comments. I should like time to reflect on whether it was a thoroughly good thing for me to come to the House today to make this statement. Certainly, the Attorney-General takes very seriously his accountability to Parliament, through another place, and I take very seriously my responsibility to be
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accountable to this House. For the most part—nearly wholly, but not exclusively so—we exercise our responsibilities in the public interest, not in a party political way and not in the Government's interest. To the extent that we can, we are open with Opposition Back-Benchers and Front-Benchers, as we are with our ministerial colleagues and Back-Benchers. Law Officers are in a special position. That is why I emphasise that there are procedures, that they are robust and that they have been followed.
Mr. Jon Owen Jones: You will be pleased to hear, Mr. Deputy Speaker, that I cannot speak lawyerly language, and do not wish to do so. Is not this case a very simple one, in that the Government decided that they could not convince a British jury that they had gone to war legally?
The Solicitor-General: That is not the case. My hon. Friend is entitled to assert it, but I ask hon. Members at some point to believe what I have said, which is that it was not an issue about the Attorney-General's advice on the legality of war or about second-guessing the extent to which the jury trusted the Government. I ask my hon. Friend to believe that that is the situation. He might well be mystified as to what happened, but that certainly is the situation.
Richard Ottaway: The Solicitor-General ha said many times what the reasons were not for there being no realistic prospect of conviction. She said that she could not give a detailed basis for that, because it concerned intelligence issues. Is it fair from that to reach the conclusion that it was for matters of intelligence that she reached that conclusion?
The Solicitor-General: As I have said, it was a question of what evidence was available within the normal limitations, including statutory limitations, not a question of what evidence was comfortable, both to prove the charge and to rebut the defence. It was not the case that the Government looked at the evidence and decided that they did not want it in court and therefore pulled the plug. Were it the case, the Director of Public Prosecution's statement would not be true.
Mr. Hogg: That is exactly what happened.
The Solicitor-General: I say this to the right hon. and learned Gentleman, who is intervening from a sedentary position: the Director of Public Prosecutions has made a statement, which I have read to the House. I ask the right hon. and learned Gentleman to accept that he has made that statement and that it is the truth.
Jeremy Corbyn: The Solicitor-General said that many questions remain unanswered and that further questions perhaps need to be asked. May I ask her one more? Given that the case against Katharine Gun was dropped and no evidence was put forward, can we all assume that the Solicitor-General and the Government accept Katharine Gun's defence of public interest overriding her loyalty—or not—to her employer, and that she will now be reinstated in the service?
The Solicitor-General: That is a very good question and I am actually going to answer it. The Government

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do not accept the public interest defence, of necessity. As my hon. Friend will know, in the Shayler case a decision was taken in the Court of Appeal that did not then go to the House of Lords, in which the Government made their position clear on that issue.
On whether this was an eleventh-hour, last-minute discontinuance, perhaps I should remind the House that this case had not been set down for trial and no trial date had been set. This was not an eleventh-hour decision; in legal terms, it was taken quite early in the morning.
Mr. Michael Weir: The case against Katharine Gun arose initially because of allegations that GCHQ was involved in spying on members of the UN Security Council, as has been amplified this morning by the former Secretary of State for International Development. Does the Solicitor-General accept that any such action is a clear violation not only of the Vienna convention on diplomatic relations, but —perhaps more importantly—of the 1946 general convention on the privileges and immunities of the United Nations? Article 2(3) of the convention states:
"The premises of the United Nations shall be inviolable. The property and assets of the United Nations, wherever located and by whomsoever held, shall be immune from search, requisition, confiscation, expropriation and any other form of interference, whether by executive, administrative judicial or legislative action."
If such operations did take place, those who authorised them and carried them out were themselves in breach of the law. Will there be an investigation, and will action be taken against those who authorised and carried out these surveillance operations?
The Solicitor-General: I am afraid that all that I can say in response to the hon. Gentleman is that the Government comply at all times with their international treaty obligations, as well as with domestic and international law. That is not just a throwaway line—it is a very serious process.
Mr. Colin Challen: While we are left in this mystified state, it is fair for Members to speculate about the reasons why this prosecution was withdrawn. I wonder whether, a la Clive Ponting, there was a fear that no jury in the land would actually find this woman guilty. Echoing the points made earlier, I wonder whether the substantive issue is being buried under the various legalities. The substantive issue is whether or not we acted at the behest of the American Government, and perhaps it should be referred, at the very least, to the Intelligence and Security Committee, so that these questions can be investigated in the usual way and we can have a report on that substantive issue.
The Solicitor-General: Obviously, the question of what the Intelligence and Security Committee decides to look at is a matter for that Committee, which regularly hears from the Attorney-General in person.
My hon. Friend wonders whether no jury would ever have found this young woman guilty. The nature or characteristics of this particular defendant did not contribute to this decision, so I can reassure him that his speculation on that point is wrong
Mr. Quentin Davies: Has the right hon. and learned Lady any notion at all—she certainly has not expressed it this afternoon—of the enormous damage that this shambolic incident has done to the credibility of the Official Secrets Act and therefore to the credibility of our ability to keep our secrets, and to the confidence that our allies and partners have in that ability; and to our national security and safety in an age of international terrorism? Does she agree that this morning, even greater damage was done to those essential elements, and will she tell the House now whether the right hon. Member for Birmingham, Ladywood (Clare Short) has herself signed the Official Secrets Act?
The Solicitor-General: I think that Ministers are covered by the Official Secrets Act whether or not they sign it. The hon. Gentleman will know that the substantive law is a matter for this House, and that the operation of the law is a matter for the independent police activities and prosecution service. If there is to be a discussion of the substantive law, so be it, but so far as the independence of the police investigation, the Crown Prosecution Service and the Director of Public Prosecutions is concerned, that must remain.
Mr. Alistair Carmichael: If the view was reached that there was no longer sufficient evidence for a realistic prospect of conviction, and if the defence of necessity was known to the Crown at the outset, does that mean that the Crown decided that it could no longer rely on evidence on which it was initially going to rely, for reasons of admissibility, credibility or reliability? How on earth does the defence of necessity have any bearing on the decision to discontinue proceedings?
The Solicitor-General: The defence of necessity has to be looked at in respect of the evidence in any particular case. I am afraid that I cannot add to what I have repeatedly said: when counsel reviewed the case—that happens on an ongoing basis—his view was that there was no longer sufficient evidence.
Hugh Robertson: Does the Solicitor-General accept that the Government's inability to prosecute a civil servant who leaked state secrets to the press—particularly given that she worked at GCHQ—will send a shiver down the spine of every man and woman who works for our intelligence services? What steps are the Government going to take to ensure that, in their review of the Official Secrets Act, the security of those people is paramount?
The Solicitor-General: The issues that the hon. Gentleman raises are ones for reflection on the part of the Home Secretary and the Foreign Secretary. He speaks of the Government's inability to prosecute, and without labouring the point I should perhaps remind him that it is not the Government who prosecute under the Official Secrets Act; it is the prosecution service, and that is indeed what happened in this case. The Official Secrets Act has a long history, which I shall not go into.

Points of Order
2.7 pm
Dr. Julian Lewis: On a point of order, Mr. Deputy Speaker. In view of the reply that the Solicitor-General gave to my hon. Friend the Member for Grantham and Stamford (Mr. Davies) about the right hon. Member for Birmingham, Ladywood (Clare Short) being subject to the Official Secrets Act, have you received any indication that a Minister will make a statement to this House about whether an offence was committed through a former Cabinet Minister's making remarks such as those that the right hon. Lady made on the "Today" programme this morning?
Mr. Deputy Speaker (Sir Alan Haselhurst): No such communication has been received, but I should tell the hon. Gentleman and the House that it is not the custom to make allegations about the conduct of other Members of this House in a point of order. Indeed, any such remarks are extraneous to the strict scope of today's statement.
Mr. William Cash: On a point of order, Mr. Deputy Speaker. Given what the Solicitor-General said about the need for the Foreign Secretary to come to the House, would it be in order to suggest that we have clarification that he will in fact do so?
Mr. Deputy Speaker: The hon. Gentleman will know that there are other ways of pursuing that matter. It is not something on which the Chair can rule.

Employment Relations Bill [Money]
Queen's recommendation having been signified—
2.8 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): I beg to move,
That, for the purposes of any Act resulting from the Employment Relations Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in sums payable out of money provided by Parliament under any other enactment.
The Employment Relations Bill deals mainly with the regulation of trade unions and with employment relations more generally. Its provisions make various minor changes to the existing regulatory regime to improve its operation. Many of its provisions flow from the review of the Employment Relations Act 1999, which we launched in July 2002. The review concluded that the 1999 Act was working very well, but that some relatively minor adjustments were required. None of the Bill's existing provisions requires additional public expenditure, so we did not table a money resolution when the Bill was introduced and had its Second Reading. It is now being considered in Standing Committee. On 10 February, I tabled an amendment to the Bill that gave a power to the Secretary of State to spend money on the modernisation of trade unions.
Mr. Andrew Mitchell: Will the Under-Secretary give way?
Mr. Sutcliffe: I will not give way.
If the amendment were incorporated into the Bill following its consideration by the Standing Committee, it plainly would have implications for public expenditure.
Mr. Mitchell: Will the Under-Secretary give way?
Mr. Sutcliffe: I will not give way. There is a maximum of 45 minutes for this debate and the hon. Gentleman will have an opportunity to contribute.
The amendment plainly would have implications for public expenditure. Its tabling therefore necessitates that a money resolution be attached to the Bill. The wording of the money resolution—
Mr. Mitchell: For the third time, will the Under-Secretary give way?
Mr. Sutcliffe: I have indicated to the hon. Gentleman that I am not going to give way.
The wording of the money resolution takes the standard form authorising this type of expenditure. My amendment involves the insertion of a new section into the Trade Union and Labour Relations (Consolidation) Act 1992. The legal basis for the expenditure will be located in the 1992 Act. The reference to "any other enactment" in the money resolution reflects the way in which the power is drafted and the position of the legal basis for the expenditure.

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On the day the amendment was tabled, I made a written parliamentary statement to explain the relevant background—
Mr. Mitchell: On a point of order Mr. Deputy Speaker. What the Minister is describing is a simple, classic bung. Should not he come clean to the House and admit to that?
Mr. Deputy Speaker (Sir Alan Haselhurst): That is not a point of order.
Mr. Sutcliffe: Thank you, Mr. Deputy Speaker. I hope that the hon. Gentleman will contribute to the debate in due course.
On the day the amendment was tabled, I made a written parliamentary statement to explain the relevant background. I indicated that we would use the power to establish a union modernisation fund, the total size of which would be between £5 million and £10 million, with the expenditure spread over several years. We do not envisage the fund opening until the 2005–06 financial year because further work needs to be undertaken that will involve—I stress—full public consultation in the autumn on the details and design of the fund.
I commend the motion to the House.
2.12 pm
Mr. Henry Bellingham: I am sorry that the Under-Secretary did not give way because, as he said himself, we are meant to be debating the issue and my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) wanted to contribute.
As the Under-Secretary said, that Bill was the result of substantial public consultation. The explanatory notes show that we had the DTI discussion paper, "High Performance Workplaces: The role of employee involvement in a modern economy" in July 2002. Last year, we had "High Performance Workplaces: Informing and consulting employees" to seek the views of a wider audience on the proposed scheme. The Under-Secretary knows that there was a great deal of discussion between the trade unions and the employer organisations, particularly the CBI. Those organisations basically agreed on the measures included in the Bill.
There was consensus, although the unions would have liked to go a bit further and the CBI and other organisations felt that parts of the Bill had gone a little too far. In the spirit of what was agreed, we have supported quite a lot of the Bill. However, the original Bill did not require a money resolution. The understanding of all the employer organisations was that there would not be any major demand on the public finances.
On Second Reading, my hon. Friend the Member for Eddisbury (Mr. O'Brien) said that he was concerned that the Bill would be a Christmas tree upon which other measures and demands by the trade unions or other parties would be hung. The Under-Secretary said that that was not the case and that no other concessions would be made to the trade unions, employers or anyone else. The Bill would remain exactly as it stood.
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Out of the blue, we had the new clause, which requires the money resolution that we are debating. The new clause makes it clear that the Secretary of State may provide money to a trade union to enable or assist it to carry out various measures. We on this side support much of the work of the trade unions. I am meeting the TUC, with which my hon. Friend the Member for Sutton Coldfield has had a number of meetings. We have also met individual trade unions. We support the idea of trade unions providing a good service to their members and we support the idea of trade union modernisation. We feel that there is a great deal that they can and must do to help their members.
The Under-Secretary said that he envisaged the size of the fund being between £5 million and £10 million. However, nothing in the Bill states what the ceiling will be; the amount could be much, much more. There is plenty of money washing around in the DTI, such as the post office renewal fund, the Business Link budget and other budgets. It would be easy for the Secretary of State to take some money from one of those budgets and put it into the modernisation fund. Indeed, the amount could go well beyond £10 million.
Furthermore, the measure is open-ended. The new clause states:
"money may be provided in such a way as the Secretary of State thinks fit (whether as grants or otherwise) and on such terms as he thinks fit (whether as to repayment or otherwise.)"
That is extremely open-ended.
There are a lot of purposes for which the money may be spent. The note accompanying the new clause suggests that the money may be used for training union representatives in, for example, business and people management. It may be spent on helping to promote the development of high performance workplaces, on reviewing internal union structures and organisations, on enabling unions to broaden their dialogue with members by greater use of the internet or on making union systems more accessible.
Those are all noble measures, but surely any organisation doing its job properly in the modern world—with the internet and IT—is doing that sort of thing already. The unions are doing that already. My hon. Friends and I in the Opposition business team have great respect for the trade unions, which we think are well-run organisations.
Mrs. Angela Browning: Surely this sets a precedent for any national member-based organisation to be able to obtain Government or taxpayer's money. For example, I was just thinking how much the women's institutes would welcome such a pot of gold.
Mr. Bellingham: My hon. Friend is right. The Bill is not even-handed. Plenty of employer organisations that were very much part of the consultation process—such as the CBI, the Institute of Directors, the Engineering Employers Federation and the Federation of Small Businesses, as well as the organisation mentioned by my hon. Friend —would love to have public funding to modernise. Many of them would love to do more research but most, unlike the trade unions, are leanly staffed. I was talking to a trade association yesterday— the Garage Equipment Association—which has

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precisely one full-time member of staff and a secretary. Such organisations would love to have Government money to modernise. That is why the money resolution is not even-handed it gives money only to the trade unions and not to other organisations.
Mr. Colin Challen: How many of those organisations have asked the Government for money?
Mr. Bellingham: The CBI and the IOD have in the past told the Government that they would like to be able to access public funds if they were available. However, they live in the real world and know that public finances are extremely tight. They know that they do not have a cat in hell's chance of getting public money to modernise. That is why the new clause is completely one-sided.
Furthermore, the new clause is open to abuse. The Under-Secretary's written statement says that the Government will publish for full consultation the draft rules and procedures of the fund after Royal Assent. We are making this money available; surely we should know now the draft rules and procedures. We are being invited to vote for an open-ended amount of money with no rules or procedures whatever in place.
Mr. Andrew Robathan: I am listening to my hon. Friend with great interest. Is the £6 million to be given each year or is it just one lump payment? If it were each year, would that mean a transfer from taxpayers to the trade union movement or would it be a £6 million transfer from the trade union movement to the Labour party?
Mr. Bellingham: My hon. Friend has a suspicious mind, which brings me on to another significant concern. As he rightly points out, the arrangement is wholly open-ended and there is no ceiling, so when he talks about £6 million a year, it could really be £10 million or £15 million a year. The key point is that the money could easily be abused. No rules or procedures have been laid down, so the money could be used for blatantly political purposes—there is no question about that.
My hon. Friend believes that the raison d'être of the new fund is to help the Labour party. It may be no coincidence that, in the last financial year, the Labour party received almost exactly £6 million from the trade unions. When the Minister was asked how much would be in the fund, he said that it would be between £5 million and £10 million in total, spread over several years, but we have had no more detail.
We know that the Labour party's finances are under pressure. The National Union of Rail, Maritime and Transport Workers said that it was going to withdraw its funding of the Labour party, and Amicus is now in the hands of a pretty left-wing general secretary. Let us envisage the situation. Amicus might tell the Labour party that it is not going to pay any more funds to Labour from next year. The Secretary of State rings up
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Derek Simpson, and says with a nod and a wink that there is money in the modernisation fund, but Amicus is going to cancel payment—
Mr. Deputy Speaker: Order. I must tell the hon. Gentleman that he is straying rather wide of the terms of the resolution before the House.
Mr. Bellingham: We are talking about money and if Derek Simpson had such a conversation, the Secretary of State could say that money from the fund of exactly the same amount could be passed to the trade union.
This country's public finances are under substantial pressure. We heard only yesterday in Prime Minister's questions about a children's fund that supports many good causes such as dyslexic and dysphasic children, vulnerable young offenders and so forth, but that fund is being cut. Soldiers and marines are short of Arctic warfare equipment and 30 of them have frostbite because of the lack of Government money, yet the Electoral Commission has a budget of more than £25 million, the new supreme court will cost roughly £50 million and we now have a new fund up of to £10 million and possibly more.
There is no question that this amounts to nothing more and nothing less than what my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) said—a bung to the trade unions. It is dressed up—
Mr. Deputy Speaker: Order. I have to tell the hon. Gentleman that, what ever the merits of his points, they are more suited to subsequent debates in Committee and on Report. They are not suited to today's debate on the money resolution.
Mr. Bellingham: I have a speech prepared for Committee and I will indeed—on your advice, Mr. Deputy Speaker—resrve some of my best phrases for that debate. However, it is clear that the Minister's statement was dressed up in modern business school management consultancy jargon, and nothing can disguise the fact that this is a rotten use of public money. That is why we will vote against the resolution this afternoon.
2.24 pm
Malcolm Bruce: I might not have chosen the same language as the hon. Member for North-West Norfolk (Mr. Bellingham), but on the substantive issue we are in agreement with the Conservative Opposition. We support the principles of the Bill and we voted in favour on Second Reading, and I am sure that the Minister will testify that we have engaged constructively in Committee.
I respect the Minister and his personal good faith, but if he is saying that £5 million to £10 million will be devoted to certain purposes, why does not the money resolution say that, rather than giving an open-ended commitment? Money resolutions usually have a figure attached. I appreciate that they do not have to have one, but it is reasonable for he House to be concerned about being asked to vote for a money resolution that literally has no price tag attached but only the Minister's

447
indication in his speech. As a matter of principle, I believe that the House should expect the courtesy of a figure.
Mr. David Wilshire: It occurs to me that the position might be even worse than the hon. Gentleman fears. He suggests that we have been given an indication that the amount might be £5 million to £10 million, but we have not been told whether it is a one-off payment or one that will be made every year, every other year, every month or whatever. It is a seriously open-ended commitment that amounts to a blank cheque to the trade unions.
Malcolm Bruce: The wording on the Order Paper shows that it clearly is. I am prepared to accept the Minister's good faith, and I assume—perhaps he will make it clear—that he is talking about a total figure. The hon. Member for Spelthorne (Mr. Wilshire) is right that it could be anything, and the new clause that amounts to the requirement for the resolution is even more open-ended.
The connection, it seems to me, should be a matter of awkward embarrassment to the Government. It rather has the shape of a reverse takeover. The Labour party was originally the creature of the trade union movement and it is essentially a wholly owned subsidiary of the trade union movement. That is why it is called the Labour party. We now have a position in which the trade unions may become a wholly owned subsidiary of the Labour party through the courtesy of the taxpayer.
It is a matter of clear concern and Ministers know perfectly well that the public will draw conclusions from it. Personally, I believe that it is unwise for the Government to take this course. There has been, in several ways, a respectable distancing of the relationship between the Labour Government and the trade union movement, but the money resolution blows away what I had thought was a real division. It now looks more like a facade.
The timing is also uncomfortable. Many of us expect that we are likely to be at the hustings within 12 to 14 months, and money will change hands between the trade union movement and the Labour party. [Interruption.] The smiles on the faces of Opposition Members tell me that they know perfectly well what this is all about and that they are very comfortable with it.
Mr. Andrew Mitchell: A bung.
Malcolm Bruce: The hon. Gentleman uses his phrase again, but I have tried to express it more specifically and elegantly in my terms; I accept that both versions relate to the same basic issue.

On union modernisation, which I agree with, the hon. Member for Tiverton and Honiton (Mrs. Browning) made a point in her intervention that was not facetious. The reality is that the unions should modernise: unions are modernising and most of us I have paid considerable tribute to the change in the character of the trade union movement over the last 20 or 30 years.
When I was a member of the Trade and Industry Committee I had experience of taking evidence from trade unions. I recall some extremely constructive engagements in which the trade unions made positive
448
contributions to business interests, relations with management, market developments and all sorts of issues that were extremely beneficial to the good working of the economy. It seems strange that taxpayers' money is now required to achieve that.
To conclude, the Minister might have acquired my party's acquiescence—I doubt whether he would have secured that of the Conservatives under any circumstances—if the wording of the motion had been more specific about the money requirement. However, I still have a concern in principle about whether the Government should be doing this. My warning to the Minister, his Cabinet colleagues and perhaps even the Prime Minister is that I believe that the Government will come to regret their decision because the political damage will far outweigh the financial gain.
2.29 pm
Mr. Andrew Robathan: We have just heard a courteous and elegant speech.
Mr. Andrew Mitchell: Two speeches.
Mr. Robathan: Of course; both of which attacked the measure before the House. I have always had a high regard for the Minister, whom I know well and like, even though he is not listening. We have taken part in a tug of war together and on some obscure occasion we went running together, so I make no personal attack on him. It is a matter of principle. Government Members are smiling, as though this were not a matter of principle. Some of them are members of trade unions, which is absolutely fine. As far as I am concerned, free association and trade unions are important. However, I wonder whether Labour Members would like to explain to the national media and their local press how they can support an open-ended commitment of taxpayers' money to trade unions that give the Labour party large amounts of money and will receive large amounts of money back from the taxpayer. How can Labour Members sit there smiling and rubbing their hands together?
It is a great matter of principle as to whether we, as guardians of the public purse, are to give trade unions money. I would like the Minister to defend the motion on that basis alone.
2.30 pm
Mr. David Wilshire: The resolution refers to
"any increase attributable to the Act"
and it is clear that the measure is necessary for the purposes of a clause that the Government want to introduce into the Employment Relations Bill. I fully accept that it would be wholly inappropriate to get into a discussion about what the Government may want to do in Standing Committee. However, the House is being asked to sign a blank cheque.
I had a good working relationship with the Minister in a different capacity, when he was part of the usual channels, and have the highest regard for him. Like my hon. Friend the Member for Blaby (Mr. Robathan), I mean him no discourtesy and none of my observations is meant personally, but a matter of principle is at stake.

449
The Minister will understand that when principles are discussed, the person concerned is sometimes dragged in. I apologise in advance if he feels that is happening in this instance.
The Government could guarantee that the arrangement that the Minister described cannot be departed from.
Mrs. Browning: Does my hon. Friend share my concern that no cost analysis has been presented? Normally that information would be presented in Committee. I hope the Minister will confirm that will be done. Specific costings should be available to the Committee.
Mr. Wilshire: I have a shrewd idea that if I were to discuss whether the figure should be £5 million or £10 million, I would be straying into the business of the Committee. The Committee can resolve whether or not it is appropriate for funds to be used for trade unions. I would love to discuss whether the figure of £5 million or £10 million is right. I would love to discuss whether or not the measure has been properly costed, how the figures have been arrived at and whether or not it is appropriate to make payments to trade unions. However, Mr. Deputy Speaker, you have said that one should not touch on those matters, so I will leave them alone.
Mr. Deputy Speaker: Order. If this helps the hon. Gentleman, it would be perfectly in order to talk about the amount of money that could be made available. Only moving beyond that subject would be likely to lead the hon. Gentleman into difficulties.
Mr. Wilshire: I am most grateful. I was trying to get there without being told that I could not.
Missing from the motion is any indication of how much money is involved. We have the Minister's word, but given the way that politics work, he might not be the Minister tomorrow.
Hon. Members: Oh.
Mr. Wilshire: I am suggesting that he might be promoted rather than sacked. He is such a good Minister that he might be doing something else. While I respect his explanation to the House, I cannot say that I have the same confidence in all his colleagues. It may be that tomorrow, the day after or next week the figure of £5 million to £10 million that the Minister suggested will become something entirely different. Who knows how much pressure may be exerted?
Mr. Challen: Will the hon. Gentleman remind the House of the cap placed by Margaret Thatcher on the cost to the taxpayer of trade union political fund ballots when she introduced them? In the main, trade unions chose not to use that taxpayers' money. I remind the hon. Gentleman that more than 7 million trade unionists are themselves taxpayers.
Mr. Wilshire: I would like to discuss Margaret Thatcher and her sensible policies but I suspect that that
450
would be well beyond allowable debate. If the hon. Gentleman wants to discuss that issue, let us meet in the Strangers Bar and see how we get on. We would not be constrained by the terms of the motion.
It is important that there should be some justification for the appropriateness of the figure of £5 million to £10 million. The Minister's estimate is pretty sloppy guesswork. The Government should have known that devising a resolution to give money to their trade union masters would be controversial and be seen as a party political move. The least they could have done was explain how they calculated the figure.
Malcolm Bruce: Is there not a remarkable coincidence as regards the sums quoted by the Minister and the amounts voted by trade unions to the Labour party? Would it not be sensible for trade unions to use the political money to fund their modernisation?
Mr. Wilshire: The hon. Gentleman is being very kind, for a Liberal Democrat. Perhaps he is being kind to the Government. That would make some sense. I take a more cynical view. I do not believe that it is a coincidence that the two sums of money are much the same. That is exactly what the resolution is all about. A figure has been announced by the Government's trade union masters, and the Government feel obliged to pay up. Since the trade union masters have not said precisely how much the Government must pay, there is a 100 per cent. variation in the figure that should be in the resolution, but is not The Liberal Democrat view that there is a coincidence is too generous by half given how the Government work and the way in which they are controlled by the trace unions.
If the Minister wants to continue to be held in high regard, all he need do, since the money resolution is unamendable, is to confirm that he will arrange for a new motion to be brought before the House that imposes a limit. Whether the figure is £5 million or £10 million, there must b some justification for it. Surely somebody in the Minister's Department or the Treasury is capable of doing some sums, rather than saying simply that there may be a 100 per cent. variation in the figure first suggested. It should not be difficult for the Government to present definite figures to the House and say, "If we need more we guarantee that we will return to the House for further discussion."
Although we are told that the purpose of the measure is to enable a particular clause to be added to the Employment Relations Bill so that a bung can be given to the trade unions, the motion does not say that but refers to
"any increase attributable to the Act"
I accept the Minister's assurance, but if that is the resolution's purpose, why does it not say so? If the motion stated that a maximum amount of money should be made available for a specific purpose, we would know exactly where we stood.
The Minister may be promoted shortly and his successor may say, "I have thought of another reason. The motion refers to 'any increase', and I do not need to come back to the House to justify a payment."
Mr. Deputy Speaker: Order. The hon. Gentleman is straying into territory that must be explored by the

451
Standing Committee in connection with the relevant substantive clause. It is not appropriate for the money resolution debate.
Mr. Wilshire: I understand, Mr. Deputy Speaker. I would not dream of quarrelling with you, but I am bothered by the motion's wording. The Standing Committee will debate the use of the money when it considers the relevant clause, but the House should not write blank cheques to whichever organisations the Committee inserts into the Bill. It is a question not only of the amount of money involved but the purposes to which it is put. I do not like the fact that the motion uses the phrase "any increase attributable". I should prefer it to be specific.
I hope that the Minister will live up to his justified reputation, and that he will prove it to anyone who has doubts about his ability, integrity or sincerity by saying that he understands the error of his ways and will use his influence to put the matter right. He should guarantee a maximum amount, and limit the purposes to which the money is put.
2.41 pm
Mr. Bill Tynan: I declare an interest as a member of a trade union. I congratulate my hon. Friend the Minister on the motion before us. It is a money resolution, and I am sure that it will be subjected to some debate in Standing Committee, but I am surprised at the anger that it has generated among Opposition Members, which means that my hon. Friend must be getting something right.
I expected that the process of modernization—of trade unions or business—would be supported by the House as essential in a modern society. The Government have given considerable amounts of money towards the modernisation of business, with the support of hon. Members of all parties, including those who belong to trade unions. Sums have been mentioned of between £5 million and £10 million. For obvious reasons, I should like the amount to be much higher. The modernisation of trade unions is essential.
In the dark days of the distant past, trade unions often used to act in ways that could not be called honourable. The trend is different today. Trade unions have earned the right to support for modernisation that is vital in today's world.
Mr. Robathan: The hon. Gentleman has declared his interest. Will he put out a press release to defend the measure? If so, will he point out that the trade union movement gives the Labour party £6 million a year?
Mr. Tynan: Any press release that I put out expressing my support for the money resolution would be supported by my constituents. I am sure that the hon. Gentleman will put out a press release that says something entirely different, but that is his business.
The money being set aside in the motion is important. I do not want to stray out of order, but my hon. Friend the Minister made it clear that the £5 million to £10 million will be used for trade union modernisation. It is not a bung, as has been claimed. To my surprise, the Liberal Democrat spokesman, the hon. Member for Gordon (Malcolm Bruce), supported the use of that
452
word, although in a different context. If the money is used for training union representatives, I hope that Opposition Members will be in favour of those representatives getting the best training possible. In that way, they will understand the problems facing unions trying to support the businesses that are essential to the country's future.
I hope that we can debate the money resolution again, although I know that the Minister may not agree.
Mr. Bellingham: There is no need for the Government to come back to the House to increase the figure, as it is unlimited and has no ceiling. The Government could pay £15 million, £20 million, £30 million, £40 million, £50 million or £60 million a year, if they wanted to.
Mr. Tynan: I am delighted by that interpretation. I hope that the Minister agrees with it, but suspect that he does not.
I remind the House that the Government have given 83,000 loans to small businesses, worth £3 billion. There is also a bad-debt provision worth £116 million over the next 10 years. We should compare that with the £5 million to £10 million that is being proposed today.
Mr. Deputy Speaker: Order. I think that the hon. Gentleman knew that he was trespassing outside the confines of the debate. I have allowed a wide scope for the debate on the money resolution, and I have given the hon. Gentleman fair opportunity to rebut points made by Opposition Members. I hope that he will confine his final remarks to the money resolution itself.
Mr. Tynan: I accept your wise counsel, Mr. Deputy Speaker. I shall engage in further debate on this matter in Standing Committee.
Mr. Paul Tyler: On a point of order, Mr. Deputy Speaker. The House will vote on this motion in a few minutes, and I seek guidance from you. It is clear that hon. Members who are sponsored by trade unions could benefit directly if the funds to be voted on this afternoon prevent the need for an increase in trade unions' political or other funds. Would it be proper for those sponsored hon. Members to vote in the forthcoming Division?
Mr. Deputy Speaker: All hon. Members who have declared any personal pecuniary interest in a matter before the House are entitled to vote.
2.48 pm
Mr. Sutcliffe: This has been an interesting debate. I am sorry to say, however, that it has not been a surprise. Parliamentary procedure requires a money resolution if public expenditure is attached to a Bill. It is not unusual for a Bill such as the Employment Relations Bill to change as it proceeds through Standing Committee. It is therefore proper to have a debate on the money resolution, and the details can be reviewed in Standing Committee, on Report and at Third Reading.
I am surprised at the response from Liberal Democrat Members, as the key elements in the Bill are information and consultation. It aims to change the culture of industrial and employment relations in the UK. I

453
expected some Labour Members to ask why we are calling it a modernisation fund, given that the unions are doing a good job already. However, there has been a complete change since 1997 in the way that unions and employers work with each other. The information and consultation directive—the framework agreement arrived at by the TUC and the Confederation of British Industry—is a perfect example of how we want things to continue in the future. I utterly refute the attack that the fund has anything to do with the funding of the Labour party.
It is interesting that Conservative Members have forgotten the time when the Conservative Government gave £24 million to trade unions for political fund ballots and £28 million to trade unions for education. Conservative Members have lost the foresight that their predecessors had to make sure that trade unions are involved in education. We know that they are not interested in good industrial relations: at the Tory party conference, the director general of the CBI said that the Conservative party could no longer be guaranteed the support of business because it looks backward rather than forward.
People will bid into the fund, and it is difficult to state the exact details until the bids are forthcoming. It may be that match funding will be required in the bidding process, which would mean that unions would have to put in some money as well. The scheme is similar to the partnership fund on which trade unions and employers have come together successfully.
Let me turn to the £5 million to £10 million figure. Unions spend about £800 million each year. Assuming that 5 per cent. of that figure—about £40 million equates to investments by unions in their futures, the fund could support a 10 per cent. increase in such union expenditure over a two to three-year period, which is how we reached the £5 million to £10 million figure.
I thank Conservative Members for protecting my integrity, although I am sure that Labour Members will call into question my relationship with them. The fund is genuinely about good employment relations and good industrial relations. We understand that the Opposition parties would like to have a kick about with the money resolution. However, the Committee will discuss the matter, there will be another debate on Report, and hon. Members will have an opportunity to examine the details over the summer. [Interruption.] Quieten down. After hon. Members have examined the details, they will support the modernisation fund if they truly want good industrial relations and good employment relations in the UK in the coming years.
Question put:—
The House divided: Ayes 261, Noes 123

Division No. 60]

[2:52 pm

AYES

Abbott, Ms Diane

Atkins, Charlotte

Adams, Irene (Paisley N)

Austin John

Ainger, Nick

Ainsworth, Bob (Cov'try NE)

Bailey, Adrian

Alexander, Douglas

Baird, Vera

Allen, Graham

Banks, Tony

Anderson, rh Donald (Swansea E)

Barnes, Harry

Anderson, Janet (Rossendale & Darwen)

Barron, rh Kevin

Bayley, Hugh

454

Beard, Nigel

Griffiths, Nigel (Edinburgh S)

Begg, Miss Anne

Griffiths, Win (Bridgend)

Beggs, Roy (E Antrim)

Grogan, John

Benton, Joe (Bootle)

Hain, rh Peter

Berry, Roger

Hall, Mike (Weaver Vale)

Best, Harold

Hall, Patrick (Bedford)

Betts, Clive

Hamilton, David (Midlothian)

Blackman, Liz

Hanson, David

Boateng, rh Paul

Harman, rh Ms Harriet

Bradley, Peter (The Wrekin)

Harris, Tom (Glasgow Cathcart)

Brennan, Kevin

Healey, John

Brown, rh Nicholas (Newcastle E Wallsend)

Henderson, Doug (Newcastle N)

Hendrick, Mark

Buck, Ms Karen

Hepburn, Stephen

Burden, Richard

Heppell, John

Burnham, Andy

Hermon, Lady

Byers, rh Stephen

Hesford, Stephen

Cairns, David

Heyes, David

Campbell, Alan (Tynemouth)

Hodge, Margaret

Campbell, Mrs Anne (C'bridge)

Hoey, Kate (Vauxhall)

Caplin, Ivor

Hood, Jimmy (Clydesdale)

Casale, Roger

Hoon, rh Geoffrey

Caton, Martin

Hope, Phil (Corby)

Cawsey, Ian (Brigg)

Hopkins, Kelvin

Challen, Colin

Howarth, rh Alan (Newport E)

Chaytor, David

Howarth, George (Knowsley N & Sefton E)

Clapham, Michael

Clark, Mrs Helen (Peterborough)

Hoyle, Lindsay

Clarke, Tony (Northampton S)

Hughes, Beverley (Stretford &Urmston)

Coaker, Vernon

Coffey, Ms Ann

Hughes, Kevin (Doncaster N)

Coleman, lain

Humble, Mrs Joan

Colman, Tony

Hurst, Alan (Braintree)

Connarty, Michael

Iddon, Dr. Brian

Cook, Frank (Stockton N)

Ingram, rh Adam

Cook, rh Robin (Livingston)

Irranca-Davies, Huw

Cooper, Yvette

Jackson, Glenda (Hampstead &Highgate)

Cousins, Jim

Cruddas, Jon

Jackson, Helen (Hillsborough)

Cryer, Ann (Keighley)

Johnson, Alan (Hull W)

Cryer, John (Hornchurch)

Jones, Jon Owen (Cardiff C)

Cunningham, Jim (Coventry S)

Jones, Kevan (N Durham)

Curtis-Thomas, Mrs Claire

Jones, Martyn (Clwyd S)

Davey, Valerie (Bristol W)

Joyce, Eric (Falkirk W)

David, Wayne

Keeble, Ms Sally

Davies, Geraint (Croydon C)

Keen, Alan (Feltham)

Dawson, Hilton

Kelly, Ruth (Bolton W)

Dean, Mrs Janet

Kennedy, Jane (Wavertree)

Dhanda, Parmjit

Khabra, Piara S.

Dismore, Andrew

Kidney, David

Dobbin, Jim (Heywood)

Kilfoyle, Peter

Dobson, rh Frank

King, Andy (Rugby)

Dowd, Jim (Lewisham W)

King, Ms Oona (Bethnal Green & Bow)

Drown, Ms Julia

Dunwoody, Mrs Gwyneth

Knight, Jim (S Dorset)

Eagle, Angela (Wallasey)

Kumar, Dr. Ashok

Edwards, Huw

Lawrence, Mrs Jackie

Efford, Clive

Laxton, Bob (Derby N)

Ellman, Mrs Louise

Leslie, Christopher

Etherington, Bill

Levitt, Tom (High Peak)

Farrelly, Paul

Lewis, Ivan (Bury S)

Fisher, Mark

Linton, Martin

Fitzpatrick, Jim

Lloyd, Tony (Manchester C)

Flynn, Paul (Newport W)

Love, Andrew

Follett, Barbara

Lucas, Ian (Wrexham)

Foster, Michael (Worcester)

Luke, Iain (Dundee E)

Francis, Dr. Hywel

McAvoy, Thomas

Gapes, Mike (llford S)

McCabe, Stephen

Gardiner, Barry

McCafferty, Chris

George, rh Bruce (Walsall S)

McDonagh, Siobhain

Gerrard, Neil

MacDonald, Calum

Gibson, Dr. Ian

McDonnell, John

Gilroy, Linda

MacDougall, John

Godsiff, Roger

McIsaac, Shona

Goggins, Paul

McNamara, Kevin

Griffiths, Jane (Reading E)

MacShane, Denis

455

McWalter, Tony

Sarwar, Mohammad

Mahmood, Khalid

Savidge Malcolm

Mallaber, Judy

Sawford, Phil

Marsden, Gordon (Blackpool S)

Sedgemore, Brian

Meale, Alan (Mansfield)

Shaw, Jonathan

Merron, Gillian

Sheerman, Barry

Michael, rh Alun

Sheridan, Jim

Miller, Andrew

Simon, Siôn (B'ham Erdington)

Moffatt, Laura

Skinner Dennis

Mole, Chris

Smith, rh Andrew (Oxford E)

Moran, Margaret

Smith, John (Glamorgan)

Morgan, Julie

Smyth, Rev. Martin (Belfast S)

Morley, Elliot

Soley, Clive

Mountford, Kali

Spellar, rh John

Mudie, George

Stewart Ian (Eccles)

Munn, Ms Meg

Stinchcombe, Paul

Murphy, Denis (Wansbeck)

Stoate, Dr. Howard

Murphy, Jim (Eastwood)

Stringer. Graham

Murphy, rh Paul (Torfaen)

Sutcliffe, Gerry

Naysmith, Dr. Doug

Tami, Mark (Alyn)

Norris, Dan (Wansdyke)

Taylor, David (NW Leics)

O'Brien, Bill (Normanton)

Thomas, Gareth (Clwyd W)

O'Brien, Mike (N Warks)

Thomas, Gareth (Harrow W)

O'Hara, Edward

Timms, Stephen

Osborne, Sandra (Ayr)

Touhig Don (Islwyn)

Owen, Albert

Trickett, Jon

Pearson, Ian

Trimble. rh David

Perham, Linda

Turner, Dennis (Wolverh'ton SE)

Picking, Anne

Turner, Dr. Desmond (Brighton Kemptown)

Pickthall, Colin

Pike, Peter (Burnley)

Turner, Neil (Wigan)

Plaskitt, James

Twigg, Derek (Halton)

Pollard, Kerry

Tynan, Bill (Hamilton S)

Pond, Chris (Gravesham)

Vaz, Keith (Leicester E)

Pope, Greg (Hyndburn)

Vis, Dr Rudi

Pound, Stephen

Walley Ms Joan

Prentice. Ms Bridget (Lewisham E)

Ward, Claire

Wareing, Robert N.

Prentice, Gordon (Pendle)

Watson, Tom (W Bromwich E)

Prosser, Gwyn

Watts, David

Purnell, James

White, Brian

Quin, rh Joyce

Whitehead, Dr. Alan

Quinn, Lawrie

Williams, Betty (Conwy)

Rapson, Syd (Portsmouth N)

Wills, Michael

Raynsford, rh Nick

Winnick, David

Robertson, John (Glasgow

Woolas, Phil

Anniesland)

Worthington, Tony

Roche, Mrs Barbara

Wright, Tony (Cannock)

Ruane, Chris

Wyatt, Derek

Russell, Ms Christine (City of Chester)

Teller for the Ayes:

Ryan, Joan (Enfield N)

Mr. Fraser Kemp and

Salter, Martin

Pail Clark

NOES

Ainsworth, Peter (E Surrey)

Bercow, John

Amess, David

Blunt, Crispin

Arbuthnot rh James

Boswell, Tim

Atkinson, Peter (Hexham)

Bottomley, Peter (Worthing W)

Bacon, Richard

Brady Graham

Baker, Norman

Brake Tom (Carshalton)

Baldry, Tony

Browning, Mrs Angela

Barker, Gregory

Bruce Malcolm

Beith, rh A. J.

Burnett, John

Bellingham, Henry

Burnside, David

456

Butterfill, Sir John

McLoughlin, Patrick

Cable, Dr. Vincent

Maples, John

Calton, Mrs Patsy

Mawhinney, rh Sir Brian

Cameron, David

May, Mrs Theresa

Campbell, Gregory (E Lond'y)

Mercer, Patrick

Carmichael, Alistair

Mitchell, Andrew (Sutton Coldfield)

Cash, William

Chapman, Sir Sydney (Chipping Barnet)

Moss, Malcolm

Opik, Lembit

Chidgey, David

Osborne, George (Tatton)

Chope, Christopher

Ottaway, Richard

Clappison, James

Paisley, Rev. Ian

Clarke, rh Kenneth (Rushcliffe)

Pickles, Eric

Clifton-Brown, Geoffrey

Portillo, rh Michael

Collins, Tim

Price, Adam (E Carmarthen & Dinefwr)

Cotter, Brian

Cran, James (Beverley)

Prisk, Mark (Hertford)

Curry, rh David

Redwood, rh John

Davis, rh David (Haltemprice &Howden)

Rendel, David

Robathan, Andrew

Doughty, Sue

Robertson, Hugh (Faversham & M-Kent)

Duncan, Alan (Rutland)

Duncan Smith, rh lain

Roe, Mrs Marion

Evans, Nigel

Rosindell, Andrew

Flight, Howard

Ruffley, David

Francois, Mark

Russell, Bob (Colchester)

Gale, Roger (N Thanet)

Selous, Andrew

George, Andrew (St. Ives)

Smith, Sir Robert (W Ab'd'ns & Kincardine)

Gibb, Nick (Bognor Regis)

Spicer, Sir Michael

Goodman, Paul

Spink, Bob(castle point)

Grayling, Chris

Spring Richard

Green, Damian (Ashford)

Stanley, rh Sir John

Green, Matthew (Ludlow)

Stunell, Andrew

Gummer, rh John

Swayne, Desmond

Hammond, Philip

Syms, Robert

Harris, Dr. Evan (Oxford W & Abingdon)

Taylor, Ian (Esher)

Taylor, Sir Teddy

Hayes, John (S Holland)

Thomas, Simon (Ceredigion)

Heald, Oliver

Tyler, Paul (N Cornwall)

Heath, David

Tyrie, Andrew

Heathcoat-Amory, rh David

Walter, Robert

Hoban, Mark (Fareham)

Waterson, Nigel

Hogg, rh Douglas

Watkinson, Angela

Holmes, Paul

Whittingdale, John

Hunter, Andrew

Wiggin, Bill

Keetch, Paul

Wilkinson, John

Kirkbride, Miss Julie

Willetts, David

Laing, Mrs Eleanor

Williams, Hywel (Caernarfon)

Lait, Mrs Jacqui

Williams, Roger (Brecon)

Lamb, Norman

Winterton, Ann (Congleton)

Lansley, Andrew

Winterton, Sir Nicholas

Lewis, Dr. Julian (New Forest E)

(Macclesfield)

Liddell-Grainger, Ian

Younger-Ross, Richard

Lidington, David

Llwyd, Elfyn

Tellers for the Noes:

Luff, Peter (M-Worcs)

Mr. David Wilshire and

Mclntosh, Miss Anne

Mr. Hugo Swire

Question accordingly agreed to.
Resolved,
That, for the purposes of any Act resulting from the Employment Relations Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in sums payable out of money provided by Parliament under any other enactment

Welsh Affairs
[Relevant documents: The fourth Report from the welsh Affairs Committee, Session 2002–03, "The Primary Legislative Process as it affects Wales", HC79 and the Government Response thereto, The Second Report from the Welsh Affairs Committee, Session 2003–04, "The Work of the Committee in 2003", HC178, and Minutes of Evidence [The Wales Office Departmental Report 2003],, HC883, Session 2002–03.]
Motion made, and Question proposed, That this House do now adjourn. — [Mr. Ainger.]
3.6 pm
The Secretary of State for Wales (Mr. Peter Hain): It gives me great pleasure to introduce this debate in front of your good self, Madam Deputy Speaker, one of our proudest women representing Wales in Parliament—
Chris Ruane: From north Wales!
Mr. Hain: My Parliamentary Private Secretary reminds the House that you are from north Wales, Madam Deputy Speaker.
I start today by paying tribute to two great servants of the Welsh people here at Westminster whom we have lost during the past year. Lord Williams of Mostyn was a good friend, a highly valued Cabinet colleague and a man of both the sharpest intellect and the wisest wit. He put his great talents to use in the service of Wales and both the Government and the people of Wales miss him greatly. Lord Islwyn was a great fighter for his constituents, who took part in this Welsh day debate on many occasions. He was very proud when Newport was awarded city status by Her Majesty the Queen in 2002.
I also wish to pay tribute to John Charles, an international football legend and one of the greatest Welsh sportsmen of all time, who well merited his nickname of the gentle giant. He had a distinguished international and league career, was a most versatile player and was one of the first British players to make his mark in the Italian league. My sincere condolences go to his family and friends on the loss of a true Welsh gentleman on and off the field.
I also wish to pay tribute to all those Welsh men and women of our armed forces serving in Iraq, and in other conflict zones around the world and, in particular, I offer sympathies to the families of those who died in the service of their country, including those from my home village of Resolven. Last week I had the pleasure of visiting Maindy barracks in Cardiff to meet Brigade Commander lain Cholerton, and be briefed on the excellent work of the Royal Regiment of Wales. I am sure that every Member of the House would wish to join me in recording our thanks for the dangerous and demanding tasks that they carry out on our behalf.
During this past year as Secretary of State I have taken forward my pledge to work with the Assembly to build and promote a world-class Wales, with a highly skilled, high quality economy and top class public services—a Wales determined never to be second best—and we have a good story to tell. In the past, when the world did badly, Wales did much worse. Today, in a period of global economic uncertainty, Wales has done
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much better: we have more jobs, greater growth, low interest rates, higher public investment and sustained stability. We have the lowest public debt almost anywhere in the world; the lowest interest rates since 1955; the lowest inflation since the 1960s; and the lowest unemployment for 25 years. Of all the major economies, the British economy has been the fastest growing, despite the worst global slowdown for nearly 30 years.
Mr. Elfyn Llwyd: The Secretary of State notes the increasing economic success of Wales, as he sees it. In the light of that fact, will he accept the view of the National Assembly that we should have a public holiday on 1 March, St. David's day? The right hon. Gentleman would be in a strong position to suggest that to the Cabinet and I know that it would have cross-party support and the approval of the National Assembly. Will he consider the point further?
Mr. Hain: I shall consider the idea further and keep it under review. If a serious, argued case were to be presented to us, based on full consultation with the business community, taking into account the economic impact on the Welsh economy vis-á-vis the English economy, we should give it even more careful consideration than we were able to do last year or the year before.
The employment rate in Wales is up by 0.7 percentage points since December 2002. Wales has also seen a fall in the rate of economic inactivity—hidden unemployment—which is down by 0.3 percentage points since December 2002. Wales has 28,000 more people in work than this time last year, 4,000 fewer people inactive in the economy and for the nine months to December 2003 business activity accelerated at its fastest rate. Average earnings were up 3.9 per cent. in 2002–03, so employment and earnings are rising together, which show: that we are on the right path to close the prosperity gap.
I remind hon. Members of the words of the then Secretary of State for Wales, the right hon. Member for Richmond, Yorks (Mr Hague), who warned in this very debate seven years age:
"There is no question but that Labour's policies would reduce employment, and they would certainly reduce employment opportunities for the future in Wales."—[Official Report, 27 February 1997; Vol. 291, c. 458.]
Chris Ruane: Eat your words.
Mr. Hain: I agree. No doubt, we shall hear similar dire predictions from the Opposition today, and I have no doubt that they will prove to be just as inaccurate and fatuous.
That economic success is the result not of good fortune or chance circumstances, but of a strong partnership between the Government in Westminster and the Assembly Government in Wales. It represents a complete break with the boom-and-bust, stop-go economic policy of the previous Government and a rejection of the isolationist, mist, confrontational approach of the nationalists. Both have failed Wales in the past and both would fail Wales in the future.
Lembit Öpik: Does the Secretary of State agree that there are employment

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black spots in Wales? Job cuts in localities can create local recessions, so does he agree that the Assembly and Parliament must ensure that we do not neglect communities that depend on one large employer? As he knows, that is exactly the problem in my mid-Wales constituency.
Mr. Hain: I am aware of the problem in the hon. Gentleman's constituency, especially as we sought to rescue the factory concerned. We must constantly try to provide alternative employment patterns and opportunities.
What is the practical effect of our hard-won economic stability? It has meant that thousands of Welsh men and women who were without work in 1997, and thousands who would have had no hope of work under a continuation of the economic policies of the previous Government, now have jobs. Claimant-count unemployment in Wales has fallen by 45 per cent. over the past seven years. Welsh gross domestic product per head increased by 15.6 per cent. between 1997 and 2001. Wales is closing the gap with the UK on economic activity, and we are on the right path to close the prosperity gap with other parts of the country, with the third fastest rise in earnings in Britain in 2002–03. It means, too, that more than 50,000 unemployed people in Wales have found employment through the new deal—a programme that the shadow Chancellor has described as "an expensive failure", and which his party is pledged to abolish.
I challenge the right hon. Gentleman and his Front-Bench colleagues, including the hon. Member for Leominster (Mr. Wiggin), to visit, as I did before Christmas, the Disability Action Crust in Llandarcy, in the constituency of my hon. Friend the Member for Aberavon (Dr. Francis), to see the work it is doing through the new deal programme to equip people with sight difficulties for the world of employment, and then to tell me whether he still thinks that the new deal is an expensive failure.
Thanks to a member of the Liberal Democrat staff in the Assembly, we now know, from their draft manifesto, that the Liberal Democrats intend to scrap the new deal. Although it is not yet St. David's day, the Liberal Democrats already have a leak, but perhaps next time they might consider circulating their draft manifesto to all Labour Members of Parliament and not just to Labour Assembly Members. It is an insult to the House that Labour Members of Parliament were not included in the circulation list.
It is important that we focus on the proposals in that document and their implications for Wales. The Liberals describe the new deal as a
"waste of time for unemployed people who only need superficial help".
It also says that the Liberal Democrats would get rid of the child trust fund, which the Government are introducing to ensure that, in future, all children have a financial asset at the start of their adult life—[Interruption.] This is an equality issue, yet on the basis of that document the Liberal Democrats will be going
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into the next election proposing to rob Welsh babies of up to £500 each—the 30,000 Welsh babies born every year who would attract that money.
Mark Tami: Does my right hon. Friend agree that the manifesto shows, once and for all, that the Liberals are just the Tories in disguise?
Mr. Hain: My hon. Friend puts the point eloquently; he is right.
It is instructive that the Liberal Democrats choose to oppose two of the most radical and transforming measures that the Labour Government have introduced: the new deal and the child trust fund. Another radical measure, the national minimum wage, is benefiting tens of thousands of people in Wales. Let us not forget that the Leader of the Opposition opposed its introduction because he claimed it would cost 1 million jobs. In fact, since it was introduced, more than 1.5 million additional jobs have been created across Britain.
Mr. Roger Williams: Does the Secretary of State agree that the best investment that can be made for young children is at the start of their lives? Holding on to £250 until they are 18 is a wasted opportunity; the real benefit would be felt when the children are very young.
Mr. Hain: I do not know what the definition of the start of one's life is if it is not to be a baby. That is when we are providing for children to receive up to £500, and that will help many thousands of Welsh babies born into low-income families. Over the years, that figure can be added to through public funds and contributions from relatives, to provide a protected asset when the young people reach adulthood. It will enable Welsh babies born into deprived backgrounds, like many of those in the hon. Gentleman's constituency and mine—especially in the south of my constituency—to have a decent start in life, which they do not have at present. In other words, it is an equality measure that the Liberal Democrats want to chop.
Average mortgage rates are less than half their level between 1979 and 1997, meaning that home owners in Wales are spending much, much less of their budget on housing costs. An objective 1 programme has already created 22,000 gross new direct and indirect jobs and safeguarded 30,000 more, yet it seems that hardly a week goes by without the Opposition parties putting out a press release attempting to belittle or discredit that programme. They hate it when Labour policies are successful. They love running Wales down, instead of honestly acknowledging that Wales is on the up. I say to them: look at the evidence in your own constituencies—
Mr. Nigel Evans rose—
Mr. Hain: And to the hon. Gentleman, who does not have a Welsh constituency, I give way.
Mr. Evans: But unlike the Secretary of State for Wales, at least I was born in Wales.

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The Secretary of State says that we hate it when the Government are successful, but I hate it when they are not successful. Will he spend some time talking about the council tax rises under the Labour Government over the past seven years?
Mr. Hain: I remember when the local government boundaries were redrawn by the right hon. Member for Wokingham (Mr. Redwood), who preceded the right hon. Member for Richmond, Yorks as Secretary of State for Wales. Council tax increases in my Neath constituency started to take off under the Conservatives, owing to a dreadful, miserable local government settlement, from which we have been trying to recover. We are putting record investment into local government, compared with the cuts, which the hon. Gentleman supports, that the Conservatives introduced in Wales and elsewhere.
Mr. Evans: Is that it?
Mr. Hain: We seek to reduce council tax increases. In Wales, the increases are among the lowest for years, because of the investment that we are making.
Albert Owen: Does my right hon. Friend agree that the new spending assessments of the National Assembly Government, which the Conservatives opposed, help deprived areas such as mine by as much as £7 million a year? Plaid Cymru and Tory Assembly Members refused to support those new arrangements to help deprived communities.
Mr. Hain: That is another example of a shameful attitude of the Liberal Democrats and, especially, the Conservatives in the Assembly. Look at the projects that would not have come into existence and the jobs that would not have been created if it were not for a Government who were prepared to negotiate at the heart of Europe to secure objective I status, together with an Assembly Government who were able to draw together partnerships across the public and private sectors to implement the programme.
The truth is that the nationalists cannot stand to see an example of partnership working between different tiers of government in Europe, at Westminster and in Wales. They know that the success of objective I would mark the failure of their outdated ideology. An independent Wales cut off from the rest of Britain and isolated from the rest of Europe—that is their objective 1.
The Welsh economy still faces many challenges, but we are better placed than for many years to overcome them. Unemployment is still too high. Levels of entrepreneurship are still too low. Our work force must become more highly skilled. We need more research and development activity and stronger links between our higher education institutions and Welsh business.
Mrs. Jackie Lawrence: On the need to upgrade skills, does my right hon. Friend
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agree that both Opposition parties' plans to eradicate the new deal would compound skill shortages and do nothing to help to "upskill" our population in Wales?
Mr. Hain: My hon. Friend is only too right, because in her constituency, in mine and in those of all Welsh Members, including the Opposition, the cutting of the new deal would deprive thousands of people—disabled people, lone parents and long-term unemployed and young people—of the opportunities to work. However, in every area, the Government and the Assembly in Cardiff are working together to address the big challenges that we face.
Adam Price: The Secretary of State mentions the comparatively low level of R and D activity in Wales. Could not the UK Government perform a function in that respect? We have only one Government-funded research centre in Wales, compared with 20 in Scotland. Surely Wales is not getting its fair share of Government-funded research at the moment?
Mr. Hain: One of the things that we are considering in the Lyons review is the relocation of public sector jobs to Wales, and I am sure that the hon. Gentleman will want to identify such opportunities. I assure him that we will certainly consider most carefully any research and development opportunities that arise.
Those who are still isolated from the labour market have been targeted for personal assistance and advice through the employment action zones and the new incapacity benefit pilot scheme that covers the Bridgend and Rhondda Cynon Taff areas.
From April to November 2003, the Assembly and the Welsh Development Agency assisted more than 3,300 business starts through the entrepreneurship action plan, and Finance Wales has secured more than £7 million in first phase funding to support start-ups and early stage investment in small and medium-sized enterprises.
The Government have introduced a new range of R and D tax credits, anti prestigious R and D facilities, such as those of General Dynamics, are choosing to locate in Wales. I foresee opportunities for Wales in renewable energy products, and I have welcomed Sharp's recent decision to invest in the production of photovoltaic cells for solar energy at its production site in Wrexham. I pay tribute to my hon. Friend the Member for Wrexham (Ian Lucas) for helping to secure that investment. That is in addition to existing exciting projects, such as those based on the Baglan energy park.
Over the coming 15 years up to 5 million jobs could be outsourced from European Union countries and the United States combined to countries that are only now industrialising and see king to catch us up. That is a considerable challenge for us, and it is essential that we accept that our education and training system is central to our ability to respond, as a nation, to such economic challenges in the coming decade and a half. Investment in science and skills is the key to meet the challenge of outsourcing and to ensure that we have a high-quality economy, with high employment and the high skills to underpin it. For that, we need an enabling Government in Westminster and Cardiff, not a minimalist Government who seek to draw back and to cut and chop, as the official Opposition would do.

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The Government made clear from the start the priority that we attach to the role of education in our society. As parents and teachers will testify, the investment that we have made and the reforms that we have pioneered are bearing fruit. Utilising that extra investment, and following its own distinctive agenda, the Welsh Assembly Government are developing a world-class education system in Wales, which provides quality learning and ensures that all children have the means to realise their full potential.
Infant classes are at historically low levels. Teacher numbers have increased year on year, with nearly 960 more teachers in maintained schools than there were four years ago. Of those pupils in their final year of compulsory education, 51 cent. achieved five or more GCSE grades at A to C, or vocational equivalent, last year—5 per cent. higher than in 1998. Schools across Wales are piloting the exciting new Welsh baccalaureate qualification.
We have recast and modernised the structure of post-16 education in Wales. The Assembly has introduced learning grants to provide guaranteed additional financial support for students in further and higher education, and we are devolving to the Assembly the right to take vital decisions about the student support system for further and higher education students domiciled in Wales, as well as the tuition fee regime.
I am delighted that higher education institutions in Wales are outperforming the UK average in attracting a wider social mix of students and working with groups and communities that are under-represented in higher education, but the Assembly Education Minister, Jane Davidson, shares this Government's desire to ensure far greater access for the children of low-income families than has been the case in the past. I am afraid those children can expect no comfort from the Opposition.
The hon. Member for Leominster (Mr. Wiggin) has made it clear that the Conservative proposals for higher education funding are based on reducing the number of university places, so thousands of Welsh youngsters would be denied the chance to go to university. On average, about 500 youngsters in each of our 40 Welsh constituencies would be blocked by the Tory proposals from going on to higher education: Tories blocking new talent, Tories blocking new opportunities—the same old Tories doing Wales down again.
Mr. Evans: Will the right hon. Gentleman give way?
Mr. Hain: I want to make progress because many other hon. Members wish to speak.
In health, a sustained period of investment has led to real improvements in treatment. In 2004–05, the Assembly Government have been able to allocate almost 95 per cent. more to the health budget than was spent when we inherited it from the Conservatives in 1997. As a result of that increased investment, there are now nearly 19 per cent. more NHS staff in Wales, including 30 per cent. more whole-time-equivalent hospital consultants and nearly 16 per cent. more qualified nurses. Nearly 200,000 more patients were seen in 2001–02 than in 1996–97.
There have also been significant decreases in the number of people having to wait long periods for targeted procedures—cardiac, orthopaedic and cataract
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surgery—as was demonstrated by the latest figures released yesterday. However, all that hard-won progress in rebuilding public services in Wales is now threatened by the shadow Chancellor's announcement that he intends to slash an estimated £1 billion from public spending in Wales, leaving a black hole in our finances that would inevitably lead to service cuts and tens of thousands of job losses throughout Wales—a £27 million cut per Welsh constituency from the Conservatives.
I challenge the hon. Member for Leominster to tell us today—I hope that he will do so from the Dispatch Box shortly—whether he was consulted on that £1 billion cut in spending for Wales. Exactly where should the axe fall?
Mr. Bill Wiggin: The Secretary of State misrepresents what the shadow Chancellor said. As this is an intervention, I will explain very briefly that if the Government continue to spend at greater rate than the economy grows, they will have no choice but to increase tax. We believe that that is the wrong thing to do. We will not increase tax. That is why he is misrepresenting our policy.
Mr. Hain: The shadow Chancellor is not even proposing any difference in taxes until 2011. Meanwhile, in the first two years of a Conservative Government, if they were to be elected at the next election, there would be a two-year cash freeze. I quote the shadow Chancellor:
"For all other spending than health and education… which is a 5 per cent. real terms cut in the first two years… with further real-terms cuts in each area until 2011…a £1.5 billion cut in defence."
That would have affect lots of jobs in Wales and many of my hon. Friends' constituencies.
Mr. John Smith: I fear that my right hon. Friend is too generous to the Opposition, because defence cuts will almost certainly have a disproportionately adverse effect in Wales. The proposal for a freeze is a disaster and will do enormous damage to defence now, not in the future. It will be factored into decision making, and is reckless and outrageous.
Mr. Hain: Indeed, there will be a £1.5 billion cut in defence, a £900 million cut in Home Office and criminal justice spending, a £600 million cut in transport—what will happen to our railways and buses?—a £400 million cut in housing, a £2.4 billion cut in local government, which will affect council tax, and a £250 million cut in international development. That is just for starters, and we will not get anything in return, such as tax cuts that would at least offset the cuts that the official Opposition would make. Which schools will be closed in Wales, and how many teachers will be sacked? Which hospitals will be shut and how many nurses will be sacked—[Interruption.] Ah, they say that they would maintain health and education spending, but they would rob the health budget across Britain by £2 billion to fund their patient passport scheme and a similar school passport scheme. That would allow rich patients to take money out of the national health service and go down the road

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to a private hospital. The NHS will be robbed of much-needed funds so that those people can top up their ability to pay.
How many nurses will be sacked? How many bus and rail services will be chopped? How many thousands of Welsh defence-related jobs will go, and how many Welsh companies will close? In general, we know the answers to those questions because we have been here before in the miserable decades under the Conservatives in the 1980s and 1990s. By contrast, our Labour Government have built a strong economy and are investing in our children's future. However, we must protect our communities. Strong communities have been a feature of our way of life in Wales, whether in the urban centres of the south and north-east or the rural villages of the north and west.
The Leader of the Opposition recently told us that Welsh communities "revived very considerably" under Margaret Thatcher. What planet is he living on? Welsh communities were decimated by Thatcherism, and life and hope was drained from them by 18 years of economic mismanagement, neglect and misery. Our Labour Government have revitalised them with new jobs, new public investment, objective 1, the Communities First programme, and by reviving the public transport network. That is why we have increased the numbers of police officers in Wales by more than 760, and introduced more than 110 community support officers. Progress has been encouraging—crime in England and Wales has gone down by 25 per cent. since we came to power and the chances of becoming a victim of crime are the lowest for 20 years. Too many people's lives, however, are still plagued by antisocial behaviour. Vandalism, graffiti, dumped rubbish, fly-tipping, abandoned cars, relentless noise and nuisance have a long-lasting and corrosive effect on the quality of people's lives.
Many people, especially those living on their own, feel that there is little that they can do to tackle those problems, but the truth is that the community, working together, can take a stand against antisocial behaviour and deliver change. The Government have made provision for antisocial behaviour orders, which prohibit specific antisocial actions, and acceptable behaviour contracts. The Anti-Social Behaviour Act 2003 includes measures to give local authorities permission to apply for antisocial behaviour orders, disperse groups causing harassment or intimidation, widen the use of fixed-penalty notices and place restrictions on the ownership and possession of airguns. The Government cannot, however, do everything on their own. We have given powers to local authorities and the police, and now people must work together both to reassert our traditional community values of respect for one another, and to ensure that we do not allow a minority to spread fear and distress in their area.
This is a time of great opportunity for Wales —opportunities for work, opportunities for business, opportunities to learn. Employment has risen to record levels, and new markets in eastern Europe and across the world are opening to Welsh businesses. Higher education is becoming available to people from low-income families who never had the chance to study before. We also have an opportunity to renew the
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community values for which Wales is renowned. We aim to ensure a diverse, vibrant society in which, through tolerance and respect for one another, people are able to shape their own lives and fulfil their individual potential. The evidence of the past 12 months is clear—we are moving forward, and Wales is changing for the better. By working together, our Labour Governments in Westminster and Cardiff are making the difference.
Madam Deputy Speaker(Sylvia Heal): Mr. Speaker has imposed a 10-minute limit on Back-Bench speeches.
3.35 pm
Mr. Bill Wiggin: Before the Secretary of State got into his usual stuff, he made some important comments, particularly about Welsh men and women who had passed away. We, too, would like to pass on our condolences to the friends and family of John Charles, Members of the other place and other Welsh people who served our country so well.
I do not want to talk Wales down—the Secretary of State usually accuses me of doing so—but I shall examine exactly what is going on in Wales. We heard from the Secretary of State exactly how much has been put in, but we must look at what is coming out. It used to be thought that the NHS was the envy of the world, and all that it needed was a touch more cash. That myth has been well and truly scotched. The Welsh Assembly Government have increased the Welsh health budget by 40 per cent., to £4.55 billion, which is £822 per capita, compared with £740 in England. That is the largest health budget in the UK, and has not altered the status of the Welsh health service as the worst in western Europe. The truth, proven by the Labour Government's huge increases in tax and spending, is that it still fails to fulfil patients' wishes. That is not the fault of the doctors, nurses or even the administrators, and it is not that they do not try to do their best. The mountain of rules and regulations has become a barrier instead of a method of improvement.
Lembit Öpik: Is it not the case that we have difficulties in the Welsh health service because when the Labour party took office they insisted on carrying out the Conservatives' bankrupt health policies for three years?
Mr. Wiggin: I think that we all agree that that is nonsense.
It is finally clear that more regulations from Whitehall or Cardiff will not reduce the length of time that people must wait for treatment. Since the Assembly took over responsibility for health in Wales in 1999, waiting lists have escalated rapidly. Overall, 307,608 people are on a waiting list for treatment, 40,000of whom have waited over 12 months, and 14,815 people in Wales have been waiting over 18 months. The divide with services across the border—Welsh people are disadvantaged simply because they live in wales—is unacceptable. How can the Labour Government in Wales have got it so wrong? How can this be allowed to happen and continue?
Only by trusting the people, both patients and professionals, can we reverse that trend. At the moment, the state runs health care in Britain, but we want that control to pass to patients. Even under this Government, there an proposals that will deliver real

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improvements to health in Wales. However, what is needed, and what the Conservatives will undertake, is the removal of the mass of regulations so that patients are allowed to make the choices that will determine where and when they go to hospital. We will give patients a passport to health that will provide that freedom of choice and control, as well as allowing the medical profession more flexibility and freedom in handling the individual requirements of a modern population.
Albert Owen: On health passports, can the hon. Gentleman explain to people in my constituency who are on fixed incomes how far they would have to travel and how much of their own money they would have to put towards those passports?
Mr. Wiggin: One of the dangers of this is that people misunderstand the fact that having extra freedom does not mean that they have to use it. People would not lose anything. If they decided that they did not want to change—[Interruption.] I am trying to respond to the hon. Member for Ynys Môn (Albert Owen). If they wanted to travel further, they would be free to do so—they cannot at the moment—but if they chose not to take advantage of that, they would not have to. This is about giving extra freedoms, not taking things away. I think that the hon. Gentleman s constituents would agree that he should support that.
Ian Lucas: Is that the same as the freedom for everyone to send their child to Eton?
Mr. Wiggin: I do not believe that it has ever been illegal to send one's child to Eton. The hon. Gentlemen's intervention is extraordinary—clearly, he did not go there.
Welsh Conservatives recently announced their five-point plan to rescue the Welsh NHS from its relentless decline. They will channel money directly to NHS trusts, with a fundamental review of NHS structures; reduce bureaucracy in the Health Minister's Department; encourage and reward NHS trusts that meet targets and tackle financial deficits; use spare capacity at NHS and private hospitals in England and hospitals abroad to reduce waiting lists; and make bitter use of the private finance initiative for a programme of hospital building.
People want to become doctors and nurses because they believe in caring for others. We have first-class professionals who want to respond to the needs of the patient but are unable to do so because they are operating within a second-class system as Ministers' targets, bureaucracy and directives unnecessarily take away their freedom to deliver quality care. That must change. Something must be done quickly for the health service to deliver quality medical care for the people of Wales. At the current rate, the total number of people on waiting lists in Wales will hit 0.5 million in six years and 1 million by 2024.
Waiting lists are not the only measure of Labour's health care failure in Wales. For example, 4,802 patients were left for more than 12 hours in accident and emergency between October 2002 and September 2003, compared with 1,517 the year before. Of the 10 UK health authorities with the worst health care records, six
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are in Wales. That means that the proportion of people in Wales who are too ill to work is 23.37 per cent.; in England, it is 17.93 per cent.
The repair bill for NHS buildings in Wales stands at more than £465 million—a figure that has risen by £147 million since 1999. The Labour Assembly Government's pledge to spend £550 million on modernising GP surgeries and hospitals will not even cover that growing backlog of repair costs. Jane Hutt may want to tackle waiting lists more than anybody else, but it is not her good intentions that count. Her good intentions to tackle certain diseases, increase bureaucracy and set up 96 administrative groups are making the lives of many people in Wales worse because they have no control over health treatment.
Mrs. Betty Williams: Assuming that the hon. Gentleman's facts and figures are entirely accurate, does he recognise that the Assembly has a good record in terms of its orthopaedic initiative? When that started in 2001, more than 2,000 people waited for more than 18 months—now, only 15 do so.
Mr. Wiggin: I am delighted to hear that a waiting list has fallen, but the sad thing is that they are not all falling. When we consider what is best for the people of Wales, as we should in the debate in honour of St. David's day, we should look at all the waiting lists—cherry-picking one good statistic is not the right way to sell the benefits of Jane Hutt. I am citing the statistics for the whole of Wales. I am grateful to the hon. Lady for drawing attention to that, because I should point out that they are all taken from parliamentary answers to the Wales Office or the Department of Health.
It is the consequences of Labour politicians' actions, not their intentions, that matter. It is important that control should be passed to patients, giving them the opportunity to choose where and when they are treated.
There has been a huge escalation in crime in Wales. However, because of the changes in crime recording practices, it is difficult, but not impossible, to assess Labour's record on crime since 1997 without the police whining, as did the north Wales chief constable, that it is unfair. Those changes were down to further Whitehall interference. However, because three out of four of the Welsh police forces introduced the national crime recording standard prior to its official introduction on 1 April 2002, we have one year where we can compare crime statistics without causing confusion or being accused of being misleading or unfair. According to the Home Office, during the past year, overall crime in Wales has risen by 21 per cent., with a 20 per cent. rise in north Wales and a 22 per cent. increase in south Wales. Over the past year, throughout Wales there was a 44 per cent. increase in violent crime; in north Wales, the increase was 52 per cent. Violent crime has risen almost twice as fast in Wales as in Greater Manchester or London.
In addition to those increases in crime, Cardiff prison is recorded as overcrowded and exceeding its maximum capacity, and 1,580 Welsh prisoners are in English prisons because there is not enough prison capacity in Wales. Despite that, the Home Office wrote to me in answer to a parliamentary question saying that there are no plans to build any more prisons in Wales, but that

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accommodation requirements will be kept under review. Clearly, accommodation requirements for Welsh prisoners are far exceeding capacity. Bearing in mind the importance of families in preventing reoffending, there should be plans to build more prisons in Wales so that families do not have so far to travel.
Mr. Hain: On the hon. Gentleman's points about crime, he will know that the chief constable of North Wales police wrote to him challenging in the strongest terms the statement that he made at Welsh questions last month. The chief constable wrote:
"The way in which you have done this is not merely misleading and unfair but also wrong. The true facts tell a very different story."
He went on:
"I expect politicians to help manage down the fear of crime in our communities, not to stoke it up with grossly erroneous and highly misleading selective use of statistics."
Will he apologise to the chief constable of North Wales police?
Mr. Wiggin: Is the Secretary of State seriously suggesting that if crime statistics are going up we should tell lies about it? I will not do that. Is he also suggesting that the chief constable of North Wales police was happily reading Hansard, or can he confirm whether he encouraged him to see the statistics to which I referred? [HON. MEMBERS: "Withdraw."] I cannot withdraw, because I have not had a reply from the Secretary of Sate. Can he also say whether we should ignore facts that are produced by the Home Office?
Mr. Hain: The hon. Gentleman should withdraw that statement, because the letter from the chief constable of North Wales police arrived unsolicited to him, and was copied to me and no doubt to others who are interested. I put it to him directly: will he apologise to the chief constable of North Wales police? What is his reply in relation to providing a misleading impression through erroneous statistics, as the chief constable said? In fact, there has been progress on all recorded crime for north Wales—it is 4.4 per cent. down. Recorded burglary of dwellings is 15.9 per cent. down, recorded violent crime is 4.5 per cent. down, and recorded vehicle crime is 5 per cent. down. Those are the figures that are provided, and he ought to apologise to the chief constable and the people of north Wales.
Mr. Wiggin: This is very interesting. Let me quote what the Secretary of State said about the chief constable of North Wales police. On the BBC's "Question Time", he rejected Brunstrom's view on the sale of heroin. He said:
"It is appalling that a high ranking police officer or anybody can suggest that hard drugs including heroin can be dished out like confetti and made available to children and adults. Drugs can turn a once healthy individual into a miserable dependant… I am appalled at the suggestion heroin, which is capable of causing such human misery, should be legalised and sold on street corners".
I do not believe that the Secretary of State has had a conversation with the Home Secretary about the concerns of the chief constable of North Wales police that were given as an example. I do not believe that the
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Secretary of State was wrong when he was critical of the chief constable. If I am in a position to quote Home Office statistics, however, and if those statistics are given to me in written answer to parliamentary questions, he should talk to his colleagues in the Home Office, not criticise me for quoting what I am given by his Government.
Mr. Hain: The hon Gentleman has had a letter from the chief constable of North Wales police about an allegation that he originally made across the Dispatch Box on the Floor of the House. The chief constable has asked him to withdraw his allegations, and the misleading impression and erroneous picture that he presented. The chief constable deserves a reply, as does the House, because the hon. Gentleman made those allegations at the Dispatch Box. I remind him that the subject was not heroin, but crime statistics.
Mr. Wiggin: I have written back to the chief constable, but I do not see how any Member of the House should be denied from quoting the written answer that he gets in reply to a question to the Home Office. How can a Member of the House be expected to withdraw statistics given to him by the Government? It is therefore impossible for me to withdraw, and I do not recall that the chief constable of North Wales police asked me to do so. He made those comments that the Secretary of State quoted, but I do not believe that it is possible to withdraw Home Office statistics. However much the Secretary of state would like it to be otherwise, the fact remains that overall crime in Wales has risen by 21 per cent., with a 20 per cent. rise in north Wales. That is what the Home Office is telling everybody, and that is what I am telling the Secretary of State. It is no good his asking me to withdraw that, because I cannot undo the crime. If I could, I would. I cannot deny that crime has gone up.
Mr. Hain: I thank the hon. Gentleman for giving way again, and I shall not detain him any more after this, but I want to quote from Richard Brunstrom's letter to him. It said:
"I expect politicians to help manage down the fear of crime in our communities, not to stoke it up… You have been unfair to North Wales Police specifically. The growth in our crime figures is due entirely to better recording practices"—
[Interruption.] He continues:
"we have been externally audited by the Audit Commission and found to have the best recording system in England and Wales".
Either the hon. Gentleman is jeering at the chief constable of North Wales police, or he is responding to the charges that the chief constable made about his comments, which he should withdraw.
Mr. Wiggin: It is absolutely ridiculous to try to spin the chief constable's letter in that way. If crime is going up, I will not try to mislead people in Wales. The Secretary of State should not even suggest that the chief constable is right on that. Of course we should not be putting fear into people's minds, but neither should we be denying it when things are going wrong. The Secretary of State is very much out of order in suggesting that anyone should deny the facts, given that in a parliamentary answer—
Lembit Öpik: Just for the record, is the hon. Gentleman telling the House that not one single per

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cent. of the increase in recorded crime results from the recording method? Is he saying that it is all a genuine increase in actual crime?
Mr. Wiggin: That is important, because there is now a difference in the way in which crime statistics are recorded, which the Government have implemented. That is why I chose carefully the crime statistics from 2001–02 to 2002–03.
Chris Ruane: That is cherry-picking.
Mr. Wiggin: It is not, because those are the statistics drawn up after the change that the Government made to the way in which they are recorded. If the chief constable of North Wales police does not like the way in which the facts are put out, he should complain to the Government who changed that, not complain about people reading them out, as I did. He should complain not about the facts, but about the Government who make the rules change.
I should like to go on about the way in which the chief constable of North Wales police has behaved. That letter was unworthy of him. He should spend more time pursuing criminals rather than pursuing politicians.
Chris Ruane: He is.
Mr. Wiggin: No matter how much Labour Members might like to portray me as a criminal, at this stage I am not—[Interruption.] Well, I shall not be visiting north Wales and breaking the speed limit, that is for sure.
On education in Wales, testing for schoolchildren in English and maths at key stage I was abolished in 2002. Recently, the Welsh Assembly review group on the national curriculum recommended that key stages 2 and 3 be phased out, leaving only one formal set of tests for children before their GCSEs. We believe that the tests should be retained. Testing at 11 and 14 is important, provided that the tests are conducted properly, because they highlight schools that are not meeting required standards. It is not a case of naming and shaming schools, but if a school is failing, its pupils will fail. That must be put right. If there is only one set of formal examinations before the age of 16, there are not enough chances to put that right.
Education funding in Wales is in crisis. There was shock and anger in mid-Wales at the beginning of this year when it was announced that there would be a 2 per cent. cut in the education budget—which amounts to £1 million—to make savings across the board. However, there will still be a 9.5 per cent. increase in the Powys council tax.
Instead of dealing with failure to meet targets at key stages 3 and 4, the Labour Members of the Welsh Assembly have been busying themselves with free school breakfasts. Dr. Chris Howard of the teaching union NAHT Cymru has aptly labelled the Assembly Government's scheme a "dog's dinner". Teachers are dedicated and committed, but cannot perform to the best of their ability because of a system that hinders, rather than helps, them. Parents should be able to decide which school would provide their child with the best education. Every parent has the right to expect that their child will fulfil their potential, but for that, we need an
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education system that caters for the talents of each child. That is why the Conservatives in power would provide a better schools passport to give parents a wider choice.
The Secretary of State talked about employment. Wales is the least profitable region in the United Kingdom, and a recent CBI statement declared:
"Welsh business is the least optimistic in the United Kingdom with firms blaming the Government for failing to support them properly".
We need to get rid of the targets, initiatives and strategies, and give people freedom to use their own talent and enterprise. Endless targets result in wasted effort and increased costs, which have an impact on real life for millions of people. Wales is full of talented people who deserve to make the best of their lives, but they cannot do so at present because of the constraints and barriers imposed on them by the state. Wales is also full of missed opportunities.
The Secretary of State persistently emphasises the higher employment figures. In the past year there has been a welcome increase of 61,000 in the number of jobs, which has taken the Welsh employment rate to 72.1 percent. Such increases, however, must always be weighed against the fact that the employment rate still lags behind the UK average of 74.5 per cent. It is also important to remember that 45 per cent. of jobs created since 1997 are in the public sector, funded by the taxpayer, although the public sector accounts for only 22.2 per cent. of employment. That is unsustainable unless the Government revise their strategy on the private sector. Increasing the number of taxpayer-funded jobs cannot help to sustain a more competitive economy.
It has been estimated that 10,000 call centre jobs will be lost in Wales. Currently 24,000 such jobs contribute £400 million to the Welsh economy. The expected loss will have a substantial impact not only on the lives of the 10,000 made redundant—let us not forget them—but on an important sector of the Welsh economy. While I differ from the Secretary of State's view that the Welsh economy will benefit from the loss of 10,000 jobs, I hope that he will stick to his later, contradictory, statement that he would fight for every call centre job in Wales.
Mr. John Smith: How would the hon. Gentleman stop the outsourcing of call centre jobs in Wales? What policy would he introduce?
Mr. Wiggin: The most important cut to be made is in red tape. We need to get rid of the extra burden that makes call centre jobs more competitive abroad. Many companies still find it convenient to have call centres in the UK. We should be thinking about how they manage to do that, rather than writing off jobs. We must not forget how important call centre jobs are to Wales.
The situation is no better for the manufacturing sector. Manufacturing output in Wales is down by 4.2 per cent., and the number of manufacturing jobs fell by 3,000 between September 2002 and September 2003. Since 1997, 30,000 manufacturing jobs have been lost. The manufacturing sector now accounts for just 17 per cent. of gross domestic product, compared with 21 per cent. in 1997.
Mark Tami: I am glad that the hon. Gentleman is not talking Wales down. If he were, God knows what we

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would be hearing. Will he now look at the positive side of manufacturing in the country? The employment by Airbus at Broughton of 6,000 people doing highly skilled jobs will make the factory the largest manufacturing plant not just in Britain, but in western Europe. Is that not a great achievement for Wales? Will the hon. Gentleman stop knocking Wales, and start talking about the positive developments there?
Mr. Wiggin: I am glad that I gave way to the hon. Gentleman. Yes, let us be pleased about everything that is going well in Wales; let us just be sad that there are not more positive things we could say. It is important to talk up the good stuff, and I am grateful to the hon. Gentleman for that reason, if for no other.
The trouble is that the overall picture is not as rosy as the one presented by the hon. Gentleman, and someone is responsible for that. Indeed, a group of people are responsible. I refer to the Welsh Assembly Government, and to our Secretary of State here. They are in a position to do even more, but they are not doing it, so I shall continue to stress what a shame it is that there are not more great examples like that given by the hon. Gentleman.
The number of Assembly civil servants has increased by 65 per cent. since 1999, to 3,861. The number of officials employed by the Welsh Assembly Government has risen by 37 per cent. since 1999, and costs have increased by 50 per cent. to more than £90 million. It recently emerged that £10.1 million had been spent since 1999 on civil servants' travel expenses and "subsistence allowances". The picture of the employment sector in Wales is not a rosy one. It is vital that the Government do not neglect the private sector any longer.
In 1999, west Wales and the south-west valleys qualified for objective I status because their gross domestic product per head was 74 per cent. of the European Union average. Their status has since significantly declined to just 68.6 per cent. of the EU average. West Wales fares worse than the former East German cities of Dresden and Leipzig, which have a GDP per head index of 69 per cent. and 72 per cent. respectively. That is an appalling record, and the objective 1 project cannot boast the successes that it should be able to boast.
In 2001, the Assembly set targets to regenerate the Welsh economy over the next 10 years. They set the target of taking the Welsh GDP of 80 per cent. to 90 per cent. by 2010. The latest figures show that it is now 78.7 per cent., so it has gone backwards. They now claim that 90 per cent. was not a target, but an aspiration.
Objective 1 is in a cash crisis. Applications total £100 million, and there is believed to be a shortfall of £20 million in the pathway to prosperity funding pot. The Economic Secretary recently announced that he would have to dip into other departmental budgets, and it was also confirmed recently by the Department of Trade and Industry that the Labour-controlled Welsh Assembly spent less on European projects in the first three years of the programme than the Conservatives did when they were in government.
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Hope was offered to Wales last week, when it was announced that the poorest parts will qualify for six more years of European funding when objective 1 ends in December 2006. Obviously, the fact that they still qualify for aid shows the Government's failure to capitalise on the existing objective 1 programme. I hope that plans are already being put in place to ensure that the extra £931 million is not wasted for the second time.
Mr. Wayne David: Does the hon. Gentleman remember that it was the Conservative Government who opposed objective 1 status for Wales? Does he also realise that, because moneys are being spent so well in Wales, the European Commission has given the Welsh Assembly an extra £57 million?
Mr. Wiggin: The last time I gave way to the hon. Gentleman on objective 1, he tried to catch me out. The truth is that, if it had not been for the Conservative Government's changes to the structure in Wales, it would not have qualified for objective 1 funding, so that is enough nonsense form him. I had hoped that he would use his intervention to confirm whether such plans have been put in place, but of course he could not.
The people in such deprived areas of Wales deserve better. They deserve to receive the financial regeneration that is rightly mine—I am sorry, that is rightly theirs, not mine. The situation on taxation brings no more good news for the people of Wales. Since 1999, the average band D council tax in Wales has risen from £602 to £837. People in Neath Port Talbot—the Secretary of State's constituency—pay the highest council tax in the land.
Mr. Roger Williams: Does the Conservative party support the abolition of the council tax and the introduction of a local income tax?
Mr. Wiggin: What a shame the hon. Gentleman does not talk about paying less tax, but just about a different way of collecting it. If only he could get it into his head that it is not the council tax that people object to: it is the size of it that they resent. If the Liberal Democrats recognised that, they might make some progress, but I sincerely doubt that.
Mr. Jon Owen Jones: Perhaps the hon. Gentleman should have asked the hon. Member for Brecon and Radnorshire (Mr. Williams) whether, with four properties, he would benefit from a non-property-based council tax.
Mr. Wiggin: I am grateful for the hon. Gentleman's intervention. The hon. Member for Brecon and Radnorshire, who represents the Liberal Democrats, has turned a pale shade of pink in embarrassment, and rightly so.
Dr. Julian Lewis: While we are on the subject of Liberal Democrat policy on council tax, does my hon. Friend think that the Liberal Democrats are in danger of going back to a situation that it is not helpful to be in, as the Conservatives learned to their cost? If we had a local income tax, everyone in a household I with a taxable income would be

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liable. Would not that lead to certain difficulties that a previous Conservative Administration experienced to their cost?
Mr. Wiggin: I am grateful to my hon. Friend for that intervention. I do not want to rake over too many of the coals on the poll tax. The great thing is to learn from one's mistakes, and the Liberal Democrats have learned nothing from ours.
The threat of local income tax is extremely dangerous, because the Liberal Democrats have failed to understand that people who do not have their income paid in the United Kingdom are still liable to pay council tax, but would fall out of the brackets to collect local income tax. They have also ignored the huge bureaucracy necessary to collect local income tax. Those are two reasons why local income tax will remain a Liberal Democrat fantasy, as it should.
The 40 per cent. increase in council tax since 1997 has made people feel low and constrained, whereas low taxes give people the opportunity to make their own decisions. It appears that Wales is not fulfilling its potential. That is because of the number of constraints imposed and the lack of energy from the Labour Government in both Wales and Westminster. Sixty stealth taxes, countless regulations and ridiculous amounts of red tape are all tying up Wales and leaving it to struggle against Government interference.
The people of Wales need to break free, to be given the opportunities to follow their own path and to be rewarded for their hard work.
4.5 pm
Mr. Martyn Jones: I am delighted to contribute briefly to our customary debate to mark our national day—and incidentally also my birthday. [HON. MEMBERS: "How old?"]
Mr. John Smith: Thirty-nine.
Mr. Jones: I thank my hon. Friend for that.
Principally, I should like to bring the House up to speed on what the Select Committee has been up to over the past 12 months. Since the last St. David's day debate, we have published two major reports, on our inquiries into the primary legislative process as it affects Wales and the empowerment of children and young people in Wales.
I shall first address our inquiry into the primary legislative process. In undertaking the inquiry, the Select Committee did not seek to comment on the devolution settlement for Wales. Rather, we decided to consider the effectiveness and efficiency of the current process of passing legislation for Wales in this House.
First, our report made a number of recommendations to the Government to improve the consistency of approach to conferring powers on the Assembly and to improve access to information on Bills affecting Wales. I am pleased to report that the Government broadly welcomed those recommendations.
Secondly, the Committee made recommendations that addressed the current limitations on joint working between the House and the National Assembly for Wales. In particular, we recommended that the
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procedures of the House should be amended to allow for more joint working between the Welsh Affairs Committee and the committees of the National Assembly on issues of mutual interest. The report also called for an annual joint meeting between the National Assembly for Wales and the Welsh Grand Committee.
My Committee also called for a mechanism for Assembly Members to be able to register formally their views on legislation passing through Parliament that directly affects the Welsh Assembly's remit. After our last meeting with the National Assembly's Panel of Chairs, the Presiding Officer of the Assembly and I sent a joint letter to the Procedure Committee, reinforcing the support of both the Welsh Affairs Committee and the Panel of Chairs for formal joint working, which the Procedure Committee is now considering. The Committee also gave evidence to that effect to the Richard Commission, which I understand is to report in the near future. The Committee looks forward to hearing Lord Richard's views on the issue.
Finally, on a personal note linked to this inquiry, I reiterate a previous request that Members of the National Assembly be given reciprocal passes for admission to the House of Commons, a courtesy currently extended to Members of our House when visiting the National Assembly in Cardiff bay.
The other major inquiry undertaken by the Welsh Affairs Committee related to the empowerment of children and young people in Wales. It focused on political participation; citizenship and active communities; diversity; youth justice; the United Nations convention on the rights of the child; and the relationship between the National Assembly for Wales and Westminster on policy development. In total, we held eight oral evidence sessions and took evidence in Wales on three occasions during the course of the inquiry.
Throughout the inquiry, the Committee held informal meetings with young people from across Wales, and it took formal evidence from young people on two occasions—from sixth-formers at Pantycelyn school and from the Welsh Youth Assembly, otherwise known as Funky Dragon. Young people also attended evidence sessions alongside adult witnesses as representatives of organisations directly involved with children and young people.
Incidentally, right hon. and hon. Members will be pleased to know that when we took evidence from representatives of Funky Dragon in this House they made parliamentary history, as it was the first time a witness had given evidence in the Welsh language to a Select Committee in the House itself.
In summary, one of the report's major conclusions was that the current limits of the remit of the Children's Commissioner for Wales do not best serve the interests of Welsh children and young people. The Committee therefore recommended that the commissioner's powers be extended to cover all non-devolved matters, and a suitable vehicle for that change could be the Bill to establish a children's commissioner for England.
The Welsh Affairs Committee is engaged in a wide-ranging inquiry into manufacturing and trade in Wales. It has taken evidence on three occasions and has a full programme of evidence sessions to complete in the next few months.
Albert Owen: On empowerment, another of the Committee's important conclusions was that 16-year-olds should be given the vote. Does my hon. Friend think that an important issue, and will he encourage the Department for Constitutional Affairs to take it on board during its inquiry?
Mr. Jones: Absolutely, and I am grateful to my hon. Friend for raising that issue. That was one of our report's main conclusions, and although we heard evidence from both sides of the argument—including from young people who thought that the voting age should not be lowered—on balance, we recommended that the voting age be lowered to 16. I apologise for omitting that point, but it is difficult to include everything in my speech.
Julie Morgan: Does my hon. Friend agree that one reason why we were convinced that the voting age should he lowered to 16 was that the young people who put the case for lowering it tended to be those who had experienced some form of struggle in their lives, and who had taken part in different campaigning groups to improve the condition of their environment, or of a particular group of people? It was their enthusiasm and the way in which they expressed their views that strongly influenced us.
Mr. Jones: My hon. Friend is indeed right, and one reason why I was convinced by that argument is that, generally speaking, young people aged 16 are still in education, so their involvement and interest in the voting process can be maintained by having mock elections in schools, whereas a couple of years after leaving school they might well lose that interest. I hope that that change will serve to increase participation, which is the purpose of our report, as she will remember.
On the manufacturing and trade inquiry, last October the Committee paid a successful visit to Los Angeles, Atlanta and New York, where we met many prominent US companies that are significant investors in Wales. It was useful to learn exactly why foreign investors are prepared to come to Wales. Once published, the report will be a useful tool in ascertaining what attracts inward investment to Wales, and what must be done to secure jobs and continuing prosperity for the Welsh people.
On wider issues relating to the role of the Welsh Affairs Committee, we were particularly interested to note the Liaison Committee's recommendation that Select Committees should play a much more prominent role in pre-legislative scrutiny in this House. That is a task that the Welsh Affairs Committee takes seriously. It scrutinised the draft National Health Service (Wales) Bill in 2002, and the draft Public Audit (Wales) Bill in 2003. The draft legislation set out the Government's proposal to create a more unified public accountability framework for Wales. Our report was published last July, in time for the debate on the draft Bill in the Welsh Grand Committee, and the Government's response to it welcomed a number of our recommendations.
Six of our 34 formal meetings were held in Wales, and we also held many informal meetings with individuals and organisations in Wales. During the past year, we met nearly 300 representatives from throughout Wales—from Llandudno, Bangor, Rhyl, Llandovery, Ammanford, Llanelli, Swansea, Cardiff and Newport.
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The Welsh Affairs Committee plays an important role in developing relations with the National Assembly for Wales, and it consults, the Assembly wherever possible. During 2003, the Committee took evidence from the Assembly Ministers for Finance, for Local Government and Public Services, and for Health and Social Services. In addition to those formal meetings, the Committee held informal meetings, with National Assembly committees and Ministers during our inquiries into railways in Wales, manufacturing and trade in Wales, and—more recently—Customs and Excise in Wales. The Committee also meets the National Assembly's Panel of Chairs twice a year to develop closer working relations and links. I am delighted to report that progress is being made in a range of areas.
I turn to an issue that is going to dominate Welsh politics during the next few months: the publication of Lord Richard's report on devolution in Wales. I wish to make it clear that, on this issue, I speak in a purely personal capacity and not as chairman of the Welsh Affairs Committee.
None of what I have to say should be seen as a criticism of the Assembly; quite the contrary. It is, in my experience, a fair and accurate description of the sentiments of the people of my constituency and northeast Wales about further devolution that they need to be convinced of the very real benefits that devolution is bringing. I made this point to the Richard commission when members of the Select Committee gave evidence, and added that the onus remained with those who advocated major changes to the devolution settlement to demonstrate that the current arrangements were not working for the Welsh people.
Hywel Williams: The hon. Gentleman's earlier remark—that his constituents were not satisfied with the way in which the National Assembly is working—is surely evidence that it is not working very well. Would he expect a three-legged racehorse to win the Derby? Clearly it would need four legs to win the race The National Assembly needs greater powers to succeed and to convince his constituents.
Mr. Jones: I could not hear half of what the hon. Gentleman said. Would he like to intervene again?
Hywel Williams: The hon. Gentleman's point—that there was dissatisfaction in his constituency with the way in which the Assembly works—could be evidence that the Assembly needs more powers, rather than, as it is sometimes termed, "time to bed in" or whatever.
Mr. Jones: That is a position that one could take but, frankly, that was not the point I made. The Assembly is doing a lot of good, but my constituents do not know about it. That could be the fault of the Assembly, which may not be selling itself to my constituents, but it is a great danger, as I shall go on to explain.
The Welsh Affairs Committee has already recommended areas where there should be further devolution to make the Assembly work better. However, I do not think that any major change would receive widespread support. The current arrangements are working and developing in imaginative and novel

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ways, but if the Richard commission advocates major change, the arguments should be tested in a referendum of the Welsh people, particularly if those changes involve primary legislative or tax-raising powers. Any demands that the commission makes would not only be overwhelmingly defeated in a referendum, but sadly could put back further devolution for Wales for a generation or more. That would be a tragedy for Wales and would have serious implications for the development of the government of Wales in the future.
In recent weeks, some have attempted to draw a comparison between the likely outcome for the future governance of Wales and the situation that existed in Northern Ireland following the Good Friday agreement. This comparison is not correct, either in substance or from an historical perspective. Wales and Northern Ireland are completely different entities in terms of governance, both in the past and now. The Good Friday agreement, which, we must not forget, was an international peace accord, was the basis for ending conflict in Northern Ireland. The referendum that ensued was on an all-Ireland basis, north and south.
Without wishing to give the House a history lesson, from the foundation of the Northern Ireland state in 1921 until 1972, Northern Ireland had its own Parliament at Stormont, with its own Prime Minister and Cabinet. Due to the worsening security situation that existed in the early 1970s, our then Prime Minister, Edward Heath, imposed direct rule from London. Even though direct rule was opposed, Government Departments dealing with the judiciary, health, policing, the prison service, education and other matters remained in place but under the aegis of successive Secretaries of State. That is not the case in Wales. There is no comparison to be made, and I urge right hon. and hon. Members not to make such a mistake.
Finally, all of us must not forget that there are people in Wales who are anti-devolution and who, if a referendum were held, would demand an additional question to be put on the referendum paper: whether the Assembly should be scrapped. I do not want that under any circumstances and I do not believe that any hon. Member in this House would want that.
4.18 pm
Lembit Öpik: May I first associate myself with the comments made about John Charles, who made a great contribution and was a credit to Welsh football, which is experiencing something of a renaissance?
Secondly, I apologise for the condition of my daffodil. I was impressed by the adhesive qualities of the Secretary of State's daffodil but I cannot wear mine due to what might be called a wardrobe malfunction. I shall donate it to charity after the debate.
Thirdly, I wish to point out the relative dedication of the political parties to Wales. Obviously, zero per cent. of the MPs here are Welsh MPs from the Conservative party, which has no Welsh MPs—
Mr. Evans: I am Welsh.
Lembit Öpik: That is despite the protestations of the sorely missed hon. Gentleman. As I look across to the Government side, I see that only about a third of
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Labour Members with Welsh constituencies are in their places. By comparison, 50 per cent. of Plaid Cymru Members are present, but, in stark contrast, 100 per cent. of Liberal Democrat Members with Welsh constituencies have turned up today. I may once have said, "Never mind the quantity, feel the quality", but today the Welsh Liberal Democrats have quantity and quality.
Hywel Williams: I should like to tell the House that my hon. Friend the Member for Ceredigion (Mr. Thomas) is in Committee and my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd) informed the House that he had to travel back to his constituency because of the weather conditions. Thus, in terms of the number of Plaid Cymru Members available, we have 100 per cent. attendance.
Lembit Öpik: The implication, as I reflect on our relative destinations, is that Plaid Cymru Members suffer worse weather conditions than the rest of us. I wish them all speed to get home. For the record—I know that irony does not translate well in Hansard—I stress that I meant those comments jocularly. [Interruption.] I also feel that I am particularly well qualified to discuss the weather in Wales, but we shall move on.
The Welsh Assembly enjoyed a brief halcyon era of successful Government under the Liberal Democrat-led coalition. Sadly, it has fallen into darker times as the six Lib Dem Assembly Members look on sadly at the missed opportunities as the Assembly struggles on under a Labour-led Administration. I shall first discuss devolution, then assess Labour's performance against some of its pledges, followed by a brief assessment of the other parties, and I shall conclude with the Liberal Democrat response to the issues facing Wales.
First, on devolution, Labour Members seem to have drawn daggers over it. Rhodri Morgan, the First Minister, told the Assembly on 3 February 2004 that
"it would be better if we had primary legislative powers and it would give us more capability to do good work for the people of Wales."
However, the Secretary of State for Wales wrote:
"The Government believes that the current settlement does provide an adequate framework for integrated and consistent policy-making in Wales."
He then told the commission:
"I personally am very open minded about the case for change."
That is just about consistent, but what that means logically is that he may be persuadable, but the Government are not.
Meanwhile, Carwyn Jones, the hard-working Assembly Member for Bridgend, told The Western Mail in reference to other devolved institutions in the UK that
"it makes no sense at all for the Welsh body to be the only one without primary law-making powers. If the Isle of Man can make its own laws, why should the Welsh Assembly not be able to?"

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Yet the hon. Member for Bridgend (Mr. Griffiths) told the Richard commission that
"it could be argued that the Assembly has not exploited in full its secondary legislative powers"
and added:
"it is too early to make a judgement about moving towards primary law making powers."
The position is even worse, because the right hon. Member for Swansea, West (Mr. Williams) said:
"There should be no power of Primary Legislation for the Assembly."
Then hon. Members from north Wales got together en bloc and said:
"We believe the present arrangements are working satisfactorily and there is no pressing need to make major changes".
Unlike the Secretary of State for Wales, other Government operatives are more forthright in their opposition to devolution. The hon. Member for Clwyd, West (Gareth Thomas)—tipped as a potential future leader of the Labour party, as are all hon. Members, potentially—said:
"I do not think there is a case for, certainly at the moment, conferring primary legislative powers upon the Assembly".
If there is any doubt about where the Government stand, one need look only at the comments of the hon. Member for Delyn (Mr. Hanson), who is already a parliamentary aide to the Prime Minister, so I suspect that he discusses these matters fairly regularly with him. He added his voice to the opposition to further devolution in supporting the secret document, which was leaked to the Prime Minister. It states:
"We wish to make it clear that we regard the present constitutional arrangements as a settlement specifically endorsed by the people of Wales in a referendum."
The tone of that leaked letter to the Prime Minister is quite clear. Nineteen Back Benchers wrote to the Secretary of State for Wales to tell him that the Assembly should not be able to make its own laws unless Welsh electors gave their agreement.
Meanwhile, local Labour party branches are also at odds. The Bargoed and Gilfach ward of the Labour party in Caerphilly constituency wrote to the commission, saying:
"The branch therefore feels that there is no case at present for expansion of powers."
Yet Mumbles Labour party wrote:
"The branch were on the whole disappointed at the powers that the Assembly was established with, and wanted it to have more."
The Llandaff branch of the Labour party in the constituency of the hon. Member for Cardiff, West (Kevin Brennan) flatly disagreed, saying:
"These policies need to be further developed and fully implemented."
The whole situation is summed up by Cam branch of the Labour party in the constituency of the Under-Secretary of State for Wales, which added grimly that
"no additional powers should be given to the Assembly without the full agreement of the National Labour Party, the Government and the people under a referendum."
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The picture does not look rosy and convincing for the party of government to support the kind of powers that Liberal Democrats always felt the Assembly should have been given at the time of its establishment. The Labour party ought to have a big conversation with itself about devolution, to provide clarity so that those who are pro-devolution, such as Welsh Liberal Democrats, can seek positive partnerships rather than wait for a moribund Labour party to decide whether it has the courage to continue with devolution.
Mr. Wayne David: Would it not be simpler for the hon. Gentleman to say that the Labour party is having an honest debate?
Lembit Öpik: It is fantastic to see an honest debate in the Labour party on this issue. It is not for me to cast aspersions on the honesty or integrity of any hon. or right. hon. Member. Many of us feel that the Scottish Parliament was given the sort of powers that the Welsh Assembly should have been given from the start. The Assembly's ability to make a positive impact on Wales and the voters of Wales is restricted by its limited powers. I ask the Minister to give an assurance that the open and honest conversation that is being conducted in the Labour party is concluded soon enough to enable us to move forward constructively once the Richard commission reports.
Mr. Wiggin: Would it not be sensible to wait for the commission's report before having that debate?
Lembit Öpik: The Richard commission should form the foundation of the report but many of the comments that I quoted were responses to a request from the commission for feedback. It is right to have an open debate, but my concern is that if Labour does not decide more positively to support devolution, the Assembly will suffer.
In its 2003 Assembly manifesto, Labour said that it would abolish all prescription charges.
Ian Lucas: By 2007
Lembit Öpik: I do not want to misrepresent the party: Labour said that that was not a first-year pledge but would be phased in. Labour is a late convert to free prescriptions, welcome though the conversion is, because that was originally a Welsh Liberal Democrat policy. We insisted that the partnership agreement included pledges to freeze prescription charges and make them free for under-25s—policies that were successfully delivered.
Until a few weeks ago, Labour resisted attempts by a Welsh Liberal Democrat Assembly member, Kirsty Williams, to remove prescription charges for people with long-term chronic illnesses. Labour's policy is to reduce charges by a proportion each year. People in need of help and with chronic illnesses such as arthritis may have to wait a few years alongside individuals who are not in such great need, but it is a start and I am pleased that Labour's conversion is leading to action.
Mr. Roger Williams: Does my hon. Friend agree that Labour in the Welsh Assembly, particularly Jane Hutt,

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seem unable to respond to the recommendations in the Wanless report, which would give impetus to improving the Welsh health service?
Lembit Öpik: Indeed, and there have been other frustrating instances of communication difficulties between Jane Hutt and Ministers in Westminster. It is a shame that her office did not treat that important report appropriately. Incidentally, I was once waiting for a reply from Jane Hutt after a big story appeared in the press. My office got a call the day after, and we were told that we would receive the letter that I was waiting for immediately. The letter was sent—but to Kirsty Williams, and not to me. Most people can tell us apart, I think.
Mr. Williams: My hon. Friend is not pregnant.
Lembit Öpik: For one thing, I am not pregnant, as my hon. Friend says.
The police have told me and my hon. Friend that they are worried about the fact that mach of the increase in their funding has been absorbed by the additional mandatory responsibilities that have been given to them. For example, the Dyfed-Powys force suffered a real-terms cut in the money available to fight crime.
In Montgomeryshire and in Brecon and Radnorshire, we are blessed with a fairly low crime rate. However, I hope that the Minister will accept that, with the best will in the world, the police may not he able to achieve the targets set for them because of cuts in the disposable part of their income that they would use for delivering those improvements. I look forward to hearing the Minister's perspective on that when he responds to the debate.
Labour also said that free bus travel for the over-60s and disabled people would be extended, and that a scheme would be developed for half-price bus travel for 16 to 18-year-olds. However, what was claimed to be an extension of free bus travel turn; out to be merely a continuation of another policy initiated by the Liberal Democrat-Labour partnership It is hardly groundbreaking not to scrap a scheme.
Liberal Democrats would go further in giving 16year-olds power, and I shall respond briefly to what was said a few moments ago. Our policy is that 16-year-olds should be given the vote. There is no justification for patronising them by pretending that they lack the responsibility and judgment to vote. At that age, they can pay tax, get married and raise children, but they cannot vote. That is preposterous. We would change that as soon as we came to power
Labour said that they would rule top-up fees out for Welsh universities. In fact, they have done so only for the duration of this Assembly. That is only one year longer than the time within which the fees can theoretically be introduced across the rest of the UK, so it is not much of a promise. The Labour promise is really rather empty, but the Liberal Democrat policy is clear: we do not support the introduction of top-up fees across Britain, and we absolutely refuse to support them for Wales. The Secretary of State criticised the Conservatives for their policy of restricting access to higher education, yet there is no question but that, for many people, enormous debts are a significant disincentive to entering university.
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If I have reservations about the Conservative party's policies, I have no doubt that the Labour party is guilty of introducing a tax on learning. It means that people are considerably better off on the dole than they would be if they chose to better themselves at university. I lament what is a great betrayal and a broken promise. It makes it difficult for politicians of all parties to win the trust of the public, who feel deeply betrayed by the scrapping of a manifesto promise.
On health, there has been significant investment in hospitals and in GP surgeries, but the hon. Member for Leominster (Mr. Wiggin) was right to say that the health service in Wales faces huge problems. It is not clear whether there has been some double counting in respect of the money already invested. Although we are told that £560 million has been devoted to improving school buildings and that £550 million has gone on modernising GP surgeries and hospitals, it is not clear that that money has not been spent already. I hope that the Minister will reassure the House that when the Government talk about the school buildings investment, they are not including the £300 million over three years that has already been committed for that purpose. It is not clear that the money is all new, nor where it will come from in the budget for Wales.
I turn now to the other parties' plans for Wales, beginning with the Conservatives. It is possible that they will make cuts worth £ 1 billion, but the shadow Chancellor, the right hon. Member for West Dorset (Mr. Letwin), has said that he wants to protect spending on health, education and pensions. With respect, I cannot see how his figures add up. Will the hon. Member for Leominster confirm what the proposals will mean for Wales? Would the Conservatives abolish the Assembly? The Conservative leader, speaking in the debate on the Bill that became the Referendums (Scotland and Wales) Act 1997, likened the Welsh Assembly to a meeting of church wardens.
Mr. Wiggin: Will the hon. Gentleman give way?
Lembit Öpik: In the anticipation that the hon. Gentleman knows what I am going to say, I give way to him.
Mr. Wiggin: I find it extraordinary that the Liberal Democrat spokesman should even begin to suggest that we would abolish the Assembly—no one in my party has said that. On anything to do with devolution, we are waiting for Lord Richard to report, and the hon. Gentleman should do the same.
Mr. Roger Williams rose—
Lembit Öpik: I give way to my hon. Friend.
Mr. Williams: Would my hon. Friend like to remind the hon. Member for Leominster (Mr. Wiggin) that the Conservative Assembly Member for the Monmouth constituency has done more than think about the issue—he has spoken about it as well.
Lembit Öpik: I thank my hon. Friend for his insightful contribution. I shall quote the leader of the Conservative party, who said:

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"Unlike the Scottish Parliament, the Welsh Assembly will not have tax-raising powers. It will not have the power to legislate on local government, on health, on education, on housing or on transport. If the Scottish Parliament is like an English parish council, how would the Prime Minister describe the Welsh Assembly? Would he describe it as a meeting of church wardens? … What will be the position of the Scottish and Welsh Secretaries of State? How will they occupy themselves in the Cabinet? Will they make the tea or do some photocopying, or will they just sit sniggering together like middle-aged versions of Beavis and Butthead?"—[Official Report, 21 May 1997; Vol. 294, c. 732.]
Not an enthusiastic endorsement of devolution, is it?
Chris Ruane: Which one is which?
Lembit Öpik: One question is who would be Beavis and who would be Butthead; the other is whether the hon. Member for Leominster backs his leader's view of the Welsh Assembly.
Mr. Wiggin: It is extraordinary that in such a serious debate the hon. Gentleman is quoting bizarre examples and calling hon. Members names, when we should be discussing achievements in Wales. It is nonsense to use quotes from the past.
Lembit Öpik: I agree with the hon. Gentleman if he is saying that his leader's comments about the Welsh Assembly are ridiculous and inappropriate. I hope that he will bring the matter up in a private meeting with his leader because that approach is the wrong way to deal with the Welsh Assembly.
The hon. Gentleman condemns the Labour party and the Assembly for their failure on health policy—I have issues with it too—but it is worth remembering that the Conservatives presided over a record cut in hospital beds in Wales, which is one reason why we have today's problems.
Plaid Cymru pretended for a long time that it was not in favour of independence. In fairness, it has come clean and said what we believed it to think—it is in favour of independence. I am not opposed to independence in principle. [HON. MEMBERS: "Oh!"] How can I be? I am an Estonian nationalist who supported the independence of Estonia from the former Soviet Union. I am not against independence in principle; I am against it in practice.
In my judgment, independence is a bad policy for Wales. There is a tendency to demean Plaid Cymru simply because of its position on separatism. Given that it is no longer being contradictory or hypocritical about its commitment to independence, I respect its candour. Those in Wales who seriously think that independence is the most important thing for Wales should, of course, support Plaid Cymru. Independence would be economically bad for Wales and would provide insufficient cultural or identity benefits. We can have a rational debate on that.
I am not trying to score a point; I am just trying to set up a level playing field. Now Plaid Cymru has described what their single key issue is, we can have a sensible, rational debate and the public can judge whether they support separatism.
Adam Price: I am grateful for the hon. Gentleman's candour. He thinks that independence would be
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economically bad for Wales, but does he recognise that the Union has been economically disastrous for Wales? What is his proposed alternative?
Lembit Öpik: Wales currently benefits from the Union and there is a net flow of income to it. If it were independent, it would not only lose direct support from the Westminster Government but suffer damage to various trading links because it would have a different currency from the rest of the UK. I have to assume that Plaid Cymru would either join the euro or create some other currency, perhaps with the hon. Gentleman's face on it. If the currency in Wales was different from that of the rest of the UK, there would be practical problems. I do not want to discuss; that at present, but we could hold a sensible debate on the matter, which would inform the public and enable them to make a decision. I hope that we can at least give Plaid Cymru credit for being honest about what it stands for.
The Liberal Democrat approach to Welsh issues was summed up well by my colleague Mike German, an Assembly Member and the Deputy First Minister when we led the coalition. He said:
"I'd like to look forward to 2004 with optimism. I'd like to see Wales, powered up and flying down the main line. I'd like the First Minister to offer a vision for Wales. to say what powers he wants for the Assembly, to have a clearly thought-out action plan for the health service and to be clear about how to get the best deal for Wales to create jobs in the poorest areas. For the sake of those on low and fixed incomes, I d like the UK Government to be bold, scrap the unfair council tax and replace it with a local income tax, clearly based on people's ability to pay. And I'd like the First Minister of Wales to lead that charge on behalf of the people of Wales."
In broad terms, that sums up the Liberal Democrats' vision.
Adam Price: We have all read the manifesto.
Lembit Öpik: Indeed. We were so excited by our manifesto that we could not help sharing it. We also hope that the 30 Labour Assembly Members who received the manifesto will be so impressed that they will defect to the Liberal Democrats and cause a change in the Administration, thereby ending the scourge of tuition fees in Wales.
Many issues relating to Wales have already been mentioned and we do not need to go into policy discussions. High on the list of those issues is dental treatment. Mrs. Wendy Gill recently moved to Newtown with her family and she cannot get dental treatment. She has always taken care of her teeth hut, as she rightly points out, it costs more in the long run to allow people's health to decline. I am sure all Members share that concern.
We must also be concerned that, last year, 600 people queued to take up places in a new national health service dental practice in Carmarthen. When another new dental practice opened up in the county, its location was kept secret for fear of similar scenes. This is 21st-century Wales, not the 1950s Soviet Union. People in Wales and throughout the UK deserve better than that.
General practitioner vacancies are at an all-time high; 190 posts are vacant at present—almost 10 per cent. Given the prospect of tuition fees and ever increasing

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debt, there is a diminishing likelihood that that figure will improve. The biggest problem is waiting times and we are all familiar with concerns about them.
I want to highlight a specific problem in the border area that I have previously raised with Ministers. Constituents feel—indeed, they can see—that there is different treatment in Wales and England. I have already informed the Secretary of State that I am awaiting the breakdown of the figures to support the claim made by the Royal Shrewsbury hospital that it is not appropriate for it to provide various treatments for people from mid-Wales. In effect, the hospital says that Powys local health board owes it money. Unfortunately, the hospital is taking a long time to provide those figures and I am concerned that the reason it is dragging its feet may have to do with the veracity of its claim. I hope that I receive the figures and that we can all recognise the need to address those differentials. We cannot pretend that we shall win people's confidence when there are such obvious differences in treatment.
We can all list individuals who are waiting for health treatment. A Mr. Vaughan became so frustrated that he went private so that he could have the hernia operation for which he had been waiting. That is paying twice for health care—once through tax and once through private fees. We must deal with that.
Many people in rural areas continue to feel marginalised. If my hon. Friend the Member for Brecon and Radnorshire (Mr. Williams) catches your eye, Madam Deputy Speaker, he will speak about farming. However, despite post office closures, the concerns of elderly people that they will lose their pension books and the threats to rural schools, there is some good news. I am encouraged by the Government's help to BT to implement broadband. We have benefited from that in Montgomeryshire. That is a good example of getting people to work from home.
Another problem—a negative—is that digital television is the only way that some people can receive public service broadcasting, but it seems that the Solus card, which is designed to give people public service broadcasting through the digital network, is not currently available. I raised that issue in Welsh questions yesterday, and the Secretary of State was positive and affirmed his commitment, but I hope that I can work with Ministers to get a result.
On another matter that affects all hon. Members, I wish to refer to my concern for a chap called Des James, whose daughter tragically died—I think at the age of 18—when she was serving at the Deepcut Army barracks. I will not go into detail because the issue is slightly at variance with what we are discussing today. I simply want to say that the many parents in Wales whose children have gone into the Army have a right to know that the Army's duty of care is being appropriately administered. I hope that we will soon see a report from the Surrey police about the circumstances surrounding Cheryl James's death. Inasmuch as that affects Welsh families of people in the Army, I hope that we can have a dialogue with Ministers.
I like working with colleagues from other parties, but it is the duty of the Liberal Democrats, as the effective Opposition in Wales, to point out where Labour could do better. I regard politics as a competition, not a war,
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but I believe that the public are best served when we accept feedback in the spirit in which it is offered. The Welsh Liberal Democrats offer an approach to achieve that aim. If our approach—a less confrontational style of politics, with a positive commitment to partnership—is welcomed by the public of Wales, that is exactly what they will get by voting Liberal Democrat.
4.46 pm
Mr. Win Griffiths: On the day when we look at the affairs of Wales, it is already apparent that, to a certain extent, we are at one step removed. I shall start with our function as the body that passes the Welsh block to the Assembly, using the Barnett formula. Although no hon. Member has mentioned that yet, it is relevant to many comments made about the health service in Wales because the Barnett formula depends on passing the relevant money from the health service budget in England to the health service budget in Wales. We all know that the health of the population in Wales is far worse, and therefore in need of far greater investment, than the health service in England. In fact, Labour and Tory Administrations in the past have provided more money from the Welsh block to the Welsh health service than happens, pro rata, for health spending in England. That is a difficult starting point when we consider the health service.
The health service in Wales faces a long-term problem—it goes across the lifetimes of many Governments—but one thing that we can say is that no other Government in Wales, for Wales, have invested so much in the health service. While the Assembly has been in existence, health spending has increased by 50 per cent. in cash terms—I guess that that must be worth more than 30 per cent. in real terms—and the number of dental, medical, nursing, midwifery and health visitor staff has increased by just under 2,000 full-time equivalents. Under the Labour Administration, the number has increased by more than 2,200; under the Tories, although dental and medical staff increased by nearly 700 after 1990, the number of nurses, midwives and health visitors decreased by more than 1,500—a loss that we could not really stand if we were to deliver a better health service in Wales. At the moment, 65 per cent. more doctors and 35 per cent more nurses are in training than were when Labour came to power in 1997.
Unfortunately, the record for beds is not good. Under the Tories, from 1990, more than 4,000 beds were lost, at a rate of more than 700 a year. Under Labour, that rate has been significantly slowed—about 1,000 beds have been lost, at just over 200 a year—and I am pleased to say that we have increased the number of acute medical beds by nearly 200. The plan is to carry on increasing them.
Mr. Wiggin: I am pleased to hear someone defending the health service in Wales, but can the hon. Gentleman tell the House why one in 10 people in Wales is on a waiting list if things are going so well?
Mr. Griffiths: I shall come to that later.
Bed occupancy is a significant measure of the effectiveness of the health service in Wales. Under the Tories, it averaged 77 per cent. in the 1990s, but under Labour, it has averaged 80 per cent., and in some of the

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better trusts it is above 85 per cent., although I would argue that that puts a strain on the delivery of an effective and high-quality service. There have been great improvements in out-patient attendance in Wales. Under the Conservatives, it increased in the 1990s by about 8 per cent. a year, and under Labour it has increased by slightly more. On average, 13,000 more patients are seen every year than was the case in the Tory years. However, that has not had a significant impact on waiting lists, which have undoubtedly grown.
There are a multitude of reasons for that increase. A major factor is that accident and emergency attendance in Wales has increased much faster than in England—the rate is 19 per cent. faster in Wales. I have seen a couple of different figures for emergency admissions. One increase is 33 per cent. higher than the figure in England, and the other is 40 per cent. higher. However, the increase is high, and it has had a big impact on elective lists. Elective list activity has gone down in the past few years, although out-patient attendance has increased significantly.
We have seen what Wanless said about the health service in Wales, and there was particular praise for the development of public health and primary health care policies. However, there was also significant criticism of the health service in Wales, such as insufficient acute beds-that is being worked on—wasted resources, which is a serious issue, duplication, misuse of skilled personnel, and the provision of inappropriate and inefficient services. The Assembly is committed to respond to those issues, but there is a big question mark about whether we are moving quickly enough in using the extra resources to tackle the problems.
Wanless made some telling comparisons with the north-east of England, whose industrial past, population and current make-up are similar to those of Wales. The report pointed out that Wales spent 5 per cent. per head more than the north-east. It said that we had 8 per cent. more nurses, midwives and health visitors, and 17 per cent. more beds per head of population. The average stay in hospital was 15 per cent. longer, 9 per cent. more per head was spent on prescribing, and 12 per cent. more items were prescribed per head.
We can obviously learn lessons from the north-east, and we need to do so. This is only a guess, but the 5 per cent. difference in spending per head must be worth about £100 million. Just over three years ago, I spent a little time studying the way in which costs were worked out in the health service. I found that, for 1996–97, if all trusts in Wales using the 100 most frequent treatments hit the Welsh average, there would be a saving of £30 million. If they hit the average of the best three trusts, there would be a saving of £100 million. That could have a significant impact on what is happening in Wales.
Some staff in hospitals that are not providing effective and efficient services should move to new-buy hospitals. In south Wales, and to some extent in north Wales, hospitals are sufficiently close for that to be done. We need to concentrate our activities on those hospitals that provide the best and most efficient services. That requires hard decisions. I was disappointed when the Assembly, instead of making it official policy to make those changes, said only that they might be made,
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because they are necessary if the health service in Wales is to be more effective. When I look back on the 15 months or so for which I was a Minister in the Welsh Office, with responsibility for health among other things, I sometimes wish with the benefit of hindsight that I had done this or that differently. Now, we have to grasp the nettle.
Some excellent developments are taking place in Wales, but there are still significant areas in which the Assembly will have to take action if we are to ensure that the significant additional resources put into the health service in Wales an; used effectively to improve the health and speed up the treatment of those on waiting lists
4.56 pm
Hywel Williams: The provision of affordable and good-quality housing is clearly one of the major problems facing Wales, especially in rural areas such as my own. The competition for houses almost guarantees that local buyers will be priced out of the market. For example, last summer Gwynedd county council surveyed house prices in the Llyn peninsula and found that the salary multiples allowed by building societies meant that no one on an average wage could afford a single house. In other words, many residents were shut out of the housing market.
A quarter of holiday homes in Wales are to be found in Gwynedd, a largo proportion of which are in my constituency. In some communities, such as Abersoch, around 65 per cent. of houses are second homes. Prices have risen steeply in those areas in the past year or so, no doubt catching up with prices in England. But the rate of house price inflation in some parts of Wales, including my constituency, has been as high as 30 per cent.—for example, in Pwllheli. my home town. Needless to say, the growth in wages has not kept up with that huge growth in house prices. That makes it increasingly difficult for local people, particularly first-time buyers, to access the housing market. Although house price inflation is apparently slowing in parts of England, no such trend is discernible in rural Wales—or, for that matter, in Cardiff and other urban areas. Doubtless the price disparity between England and Wales will cause that to continue for some time, and house price inflation in Wales will continue at a high rate. That is very significant, as I will explain later.
The National Assembly Government recognise the existence of the problem. According to an answer given by the Secretary of State to the hon. Member for Clwyd, West (Gareth Thomas), the Assembly is spending
"£56.4m in Social Housing Grant to assist the provision of affordable housing."—[Official Report, 17 September 2003; Vol. 410, c. 735W.]
So the Assembly is clearly doing something, but is it enough?
Significantly, the Assembly's Environment, Planning and Countryside Committee undertook an investigation into the matter, and it produced a report in February, entitled, "Planning Aspects Associated with the Provision of Affordable Housing and Sustainable Communities in the Countryside". The Committee points to the rapid and huge increase in house prices, particularly in coastal areas, in areas of great natural beauty, and in rural northern and western communities.

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It states that that has effectively locked local people out of the housing market. It makes recommendations regarding greater flexibility for planning authorities to respond, and it recommends that options already open to planners should be clarified so that local authorities know where they stand. In areas where there is acute pressure on the housing market, it also calls for new policies on new build that favour local people where need is robustly proved, which, I contend, applies to a large part of my constituency and many others.
So far, so good, and I hope that those changes, however marginal, will be useful in future, if adopted. Will they have a fundamental effect, however, on affordable housing provision in Wales? I fear that they will not, because of the Chancellor's proposals on tax relief for self-invested personal pensions and self-administered personal pensions in relation to investment in second and further homes. I fear that much of the good work that the Assembly might do, and the good that further changes might effect in rural Wales, will be undone as a result of those forthcoming Budget proposals.
Before I turn to that part of my speech, may I draw the House's attention to the nature of housing stock in Wales? It remains in a poor state, with a huge potential repair bill. Much of our housing; is pre-1919—much more than in England. I have looked for recent figures, but they are difficult to access. In 1996, at any rate, 35 per cent. of housing stock in Wales was pre-1919, compared with 25 per cent. in England. There is certainly a need for new build in Wales, but repair and renovation are more important, especially in constituencies such as mine, where, on the whole, we have enough houses already—in fact, we have a surplus of them, many in the holiday home market.
If new build is needed in Wales, and renovation needed even more, it is significant that new build is nil rated for VAT whereas repairs attract the full rate. If we are looking for a VAT regime that fitted the circumstances in Wales, it should be the other way round—repairs could, at least, be rated lower, if not nil rated. Under the current VAT regime on repair of houses, Wales loses out. I will not ask the Secretary of State or the Minister to take the matter up with the Treasury, however. I have already made inquiries, and the prospects of a beneficial change in the VAT regime for Wales on repair of houses are also probably rated at nil. When someone in my constituency fixes the roof, puts in a toilet or fixes the damp, they pay 17.5 per cent. more than someone who builds a new house. We do not need that many new houses; we are losing out.
The Government's proposals for the Budget on SIPPs and SAPPs were published in December, and consultation goes on until 5 March. I believe that those proposals will have an extremely negative effect on the housing market in Wales. What are they? The Chancellor intends to extend the ability of pension schemes to invest in residential property. That may sound innocuous, but it means that investment in residential property will attract tax relief at up to 40 per cent. In simple terms, if someone with that sort of personally administered scheme invests £100,000 in a second, third or fourth home in A ales or anywhere else, that £100,000 will attract 40 per cent. relief. On my simple arithmetic, someone would therefore get a £100,000 house for £60,000, which seems a very good
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bargain. Furthermore, it is intended that when the value of that house is realised, it will be free of capital gains tax. That is quite a bargain for people investing for the first time in SIPPs and SAPPs—tax relief on the purchase, and the sale is free of capital gains tax. With huge house price inflation in Wales—30 per cent. in one year £100,000 would be converted into £130,000 in one year.
In addition, in some wards, such as Abersoch in my constituency, purchases of houses up to £150,000 are free of land stamp duty tax. That is a huge bargain. Second, third, fourth or fifth homes are free of tax at every point, whereas the help available to first-time buyers is virtually nil. That is entirely wrong.
Have the Government any idea of the effect on the housing market in Wales? When I asked the Secretary of State whether any assessment had been made of the effects on the second home market, he answered that none had. When I asked the Treasury what effect there would be on the market in general, it answered that the market would rule. Will wealthy pensioners from England invest in Wales? At a return of 30 per cent. a year in house price inflation, with 40 per cent. off the purchase price and with no capital gains tax to pay, any sensible investor will invest in Wales rather than in England, where the return is 8 per cent. on current house price inflation.
The Treasury has apparently told the press in Wales that very few people will apply for those advantages. I think that that will not be the case. and that the proposals need to be resisted. It would be good for Members on both sides of the House, considering the effect on first-time buyers, if we all resisted those proposals before 5 March. I appeal to hon. Members to do so.
5.6 pm
Mr. Huw Edwards: It is a pleasure to follow the hon. Member for Caernarfon (Hywel Williams), who speaks with authority on housing in Wales, having been a lecturer in social work and a special adviser to the Select Committee on Welsh Affairs.
I have a comment on the point made by my hon. Friend the Member for Clwyd, South (Mr. Jones), the Chairman of the Select Committee, on the Committee's support for the principle of reducing the voting age to 16—a point also made by the hon. Member for. Montgomeryshire (Lembit Öpik). I certainly agree with that aspect of his speech, but one aspect of Liberal Democrat policy that I cannot support now, although I probably have supported it in the past, concerns aspects of electoral reform. I was one of those who believed that the Welsh Assembly should have an element of fair representation, and I supported the election of additional members. I even supported one of my colleagues, my hon. Friend the Member for Cardiff, West (Kevin Brennan), in his paper on the current system, but a few years later I feel profoundly disappointed with the way in which the additional Member system is working in Wales.
In my constituency, I try to tell people that they have five Assembly Members, not just one, and that every square inch of Wales is represented by one twelfth of the Assembly. That is an enormously important resource

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that could be used for effective representation, but I fear that the Members elected on the additional Member system are not the resource to work on the strategic issues and debates that affect south-east Wales—for example, whether we should have an international airport—and the area's serious problems.
I commend my right hon. Friend the Secretary of State, who was good enough to come to my constituency last week.
Mr. Wiggin: He lives there.
Mr. Edwards: My right hon. Friend the Member for Neath (Mr. Hain), as the hon. Gentleman acknowledges, came to my constituency for a couple of big conversation events. He also visited a local factory in my constituency that specialises in recycling, and which is now under threat because of the Government's possible failure to implement the waste electrical and electronic equipment directive, which would allow printer cartridges to continue to be recycled.
I want to draw all hon. Members' attention to that matter, because I am sure that most Members and their constituents wish to recycle their printer cartridges. However, because certain companies, such as Hewlett Packard, insert chips that make it either uneconomical or impossible to recycle the cartridges, there is a danger that we will create a printer cartridge mountain, because they will have to go for landfill if they cannot be recycled or remanufactured. The insertion of those devices is anti-competitive and against the interests of the environment, and I urge the Government to look at that issue, which has cross-party support. I am grateful that my right hon. Friend the Secretary of State considered that when he visited my constituency last week.
In recent months, I have been particularly involved in the debates on higher education. I was not able to speak on Second Reading of the Higher Education Bill, but I felt strongly about the issues involved, having worked in higher education in my professional life. I would be the first to admit that I was very much opposed to many of the Government's proposals before we secured a number of improvements. I never liked the idea of variable fees, or the idea that students aged 17 would face a menu of prices for different courses. The universities now say that, in practice, there will be very little variability, and that most courses will be pitched at around £3,000. I certainly support some of the measures that the Government have introduced and the modifications that they have made. These include the increase in the grant to £1,500, as currently exists in Wales. the transfer of fee remission to the grant, and the abolition of up-front fees in favour of a contribution after graduation.
My proposal would be to try to get away from the notion of variable fees and to introduce a standard contribution on graduation. It would be known as the standard contribution because it would be fairly standardised and it would be only a contribution to the costs of higher education, to be paid on graduation. I accept that some universities do not want all their courses to be pitched at the £3,000 level—which is what I would call the standard contribution—and that they
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should be allowed to discount it. In those circumstances, I accept that there should be a discounted standard contribution, or even that it should be waived. That would remove the entire menu of prices from courses. I would ask the Government to consider that proposal, which was also proposed by Sir David Watson, the director of my former university, the university of Brighton.

Last week, I attended a local livestock market in my constituency. It was very encouraging to see the greater optimism in the farming community. Three years ago, we were in the depths of the foot and mouth outbreak, and some sectors of the farming community have certainly improved since that time, including the lamb and beef sectors. The dairy sector, however, remains very bad. Farmers whom I met last week complained that they barely make any money on the sale of raw milk. This problem results from the great power of the supermarkets and the relative weakness of the individual producer.
When the Welsh Affairs Committee considered the livestock industry a few years ago, it recommended a code of conduct between retailers such as the major supermarkets and the small producers. I wish that that code of conduct was much tighter, and that our farmers could get a better especially in the dairy sector, so that they could improve their position in the market. Many are involved in co-operatives, but not all. The power of the co-operatives could be increased if the code of practice were stronger. It was, however, most encouraging to see the greater optimism in the industry.
In my constituency there is a proposal to close the livestock market in Abergavenny, and it has now been decided that the site will be redeveloped. There is concern about establishing a new market, and I have given a commitment to the farming community throughout the time since I was re-elected in 1997 that I would campaign for a new livestock market. I sincerely hope that the right decisions will be made about this, and that it will be located in a place that will serve the farming community of Monmouthshire and other areas of Wales as well as the border areas of England. It is essential that a richly traditional farming community such as Monmouthshire should have the infrastructure of a modern livestock market; it would be a great boost to the industry.
I am grateful to have had the opportunity to contribute to this debate; I know that many other hon. Members would now like to speak.
5.14 pm
Mr. Roger Williams: It is a great pleasure to follow the hon. Member for Monmouth (Mr. Edwards), with his understanding of rural and farming issues; he represents a constituency that is contiguous to my own.
I would like to say a few words about agriculture and the situation in rural areas. However, I hope that the House will bear with me if I first mention a particularly important constituency issue, which I would like to bring to the attention of the Minister and which I have already let him know I shall speak about. Hon. Members will be aware of the outbreak of potato ring rot at Middlewood farm, which belongs to Mr. John Morgan, in my constituency. Here I must declare an

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interest: I have taken advice from the Commissioner for Parliamentary Standards, and entered in the Register of Members' Interests the fact that I own land at Tredomen Court, along with my wife. From time to time Mr. John Morgan rents some of it to grow potatoes.
I thank the hon. Member for Cardiff, Central (Mr. Jones), who demonstrated his intricate knowledge of my interests as they appear in the register, and of the practical support that I give to the provision of affordable housing in rural areas.
The potato industry is particularly important to Great Britain. In most years farm-gate sales reach about £600 million, and a large amount is added to that by the proceeds of wholesale, packaging and retail. The processing industry is huge: the production of processed mash, frozen chips, and crisps and other savoury snacks take the farm-gate figure to nearly 10 times as much.
Britain has an excellent record on plant health owing to the combined efforts of growers, inspectors at ports, and Government officials. Three years ago the Government proposed to end tests on potatoes imported for seed production; the National Farmers Union objected, and the tests were reinstated. Seed imported for growing on for ware—for human consumption—is subject to limited random testing, but every consignment imported for seed production is tested for brown rot, although only one in three of those is tested for ring rot. The test for ring rot involves examining 200 tubers from each consignment, which consists of between 10 and 20 tonnes. There is an 80 per cent. chance of ring rot's being identified in a consignment that has 1 per cent. infection. Fewer than 0.5 per cent. of the tubers that John Morgan imported from Holland were infected, and under the present testing regime there was only a 67 per cent. chance of identifying infection. Given that ring rot can reduce potato yields by more than 50 per cent., it is questionable whether the present system of testing is robust enough to protect the British potato industry.
Every single piece of evidence has shown that John Morgan has a very good record on biosecurity. He has full and accurate records of purchases, harvesting, testing and sales. All potatoes that have left his farm for seed have been traced and accounted for. Mr. Morgan imported seed from Holland, whit h is a leading country in breeding new varieties of potato to meet modern market demands. The Provento variety, along with seven other new varieties, was grown at the request of a major customer. All varieties are kept separately. It is clear that the success in containing the disease to one farm is due entirely to John Morgan.
The Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Exeter (Mr. Bradshaw)—who is responsible for plant health—issued a press release welcoming the containment of the outbreak and paying tribute to the co-operation with the industry. It also speaks of
"the substantial Government resources committed to the containment exercise".
What it says is true, but only to the extent that large-scale testing by the Plant Health and Seed Inspectorate was able to show that there had been no spread of the disease, and that was because Mr. Morgan's records had enabled all potato movements to be tracked. The containment was due entirely to his efforts.
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The net result is that Mr. Morgan has £450,000 worth of seed potatoes on his farm, which have been grown to the highest standards of biosecurity, and that—through no fault of his own, but owing to his meticulous approach to plant health—have been rendered worthless because the Government have insisted on either their destruction or their limited use for human consumption. As the potatoes were grown specifically for seed, they are the wrong size for human consumption, or for processing. They are therefore practically worthless.
Ring rot is a notifiable disease, which the Government have rightly identified as being potentially devastating to the British potato industry. Nevertheless, it is iniquitous that property that has been obtained legally should be confiscated by the Government, or restricted by the Government to a less valuable use, with no compensation being provided. It seems wrong to me that an individual who has been an example to the agriculture industry on biosecurity should have to bear the burden for the whole nation. Hon. Members should be in no doubt that this is a personal tragedy for this family, especially for the son, who has become the driving force of the business and wants to take it on.
The potato business is notoriously volatile. Last year many growers made large losses. This year prices have been higher, because of drought on the continent and currency fluctuations, and some profits were to be made. The Minister has signalled that a lessons-learned inquiry will be instigated. I am sure that one of its conclusions will be to commend John Morgan for his high standards of husbandry. I hope that it will also find that individuals whose actions have limited and mitigated the effect of disease outbreaks should not have to bear the financial burden of their actions.
I do not want to pre-empt any recommendation of the inquiry that is being undertaken, which may recommend Government compensation or the establishment of an industry scheme to safeguard these people, but the Government have increased the cost to my constituent by requiring him to dispose of these potatoes at great cost and rigorously to clean his premises and machinery.
As the Minister has said, this is a one-off incident and there is only one loser. This is a UK issue with a Welsh focus, and I ask the Secretary of State to facilitate a meeting between John Morgan and either the Secretary of State for Environment, Food and Rural Affairs or the Under-Secretary of State for Environment, Food and Rural Affairs and Carwyn Jones, the Minister for Environment, Planning and Countryside in the Welsh Assembly to review Mr. Morgan's personal position, as any recommendation of the inquiry will not be retrospective.
At the moment,Mr. Morgan has incurred not only the expense of growing last year's crop and the possibility of the expense of disposing of that crop, but he is unlikely to be able to engage in potato growing of any sort this season. He is a substantial employer of local labour and local agricultural contractors, so his absence will have a big effect on the local economy. No one is looking to make money out of this situation. Contrary to Mr. Stephen Hunter's comments at the Select Committee on Environment, Food and Rural

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Affairs when this subject was being considered, no one in their right mind would claim to have a case of a notifiable disease or deliberately infect their produce to claim compensation. All I am asking on behalf of my constituent is that he is able to speak directly to the politicians who will make the decisions that will have a dramatic effect on his business and personal life. He is currently engaged in a legal dispute with the suppliers of the infected potatoes, but that may not be resolved for two years. In the meantime, his business is in jeopardy. I ask the Minister to help me to arrange that meeting.
5.22 pm
Mr. Martin Caton: Like the hon. Member for Brecon and Radnorshire (Mr. Williams), I shall concentrate on a constituency issue. Coincidentally, it focuses on a failure to test a food product.
Two years ago in our Welsh day debate in the House, I focused my remarks on the problems created in the Burry inlet cockle fishery by the apparent presence of diarrhetic shellfish poisoning. Things have moved on since then, and the Food Standards Agency, which is responsible for the regular testing of shellfish in our waters, has come under scrutiny and, to say the least, has been found wanting—most recently by the House of Commons Environment, Food and Rural Affairs Committee. I congratulate that Committee, and the Sub-Committee that considered this issue, on the valuable work that it undertook and the quality of its succinct report.
It is impossible to raise issues of the British cockle industry without thinking about the terrible tragedy in Morecambe bay on 4 February, when 20 cockle pickers were killed. We are all still shocked by those deaths, and I am sure that we all feel for those poor people and their families. At least that is how I assumed we all felt until I listened to the "Today" programme this morning.
We have open shellfisheries like Morecambe around the Welsh coast, and pickers can come from anywhere and gather cockles. However, the Burry inlet is not one of them. It is a regulated fishery, administered by the South Wales Sea Fisheries Committee, where only a limited number of licensed gatherers can collect cockles and the amount each of them can take is controlled, as is the size of the cockles taken. That cockle fishery has always been an example of good, environmentally sustainable practice, with the cockles being gathered using hand rakes and very hard work. While other shellfisheries throughout the UK and Europe have turned to the use of heavy equipment from boats or large tractor rakes, pickers in the Burry inlet have stuck with traditional methods. That means that it is the only cockle fishery in the UK that remains open for 12 months of the year—at least, it did before the summer of 2001.
The Burry inlet until then was not only environmentally, but economically sustainable, providing a decent livelihood for more than 40 families in north Gower and leading to the establishment of a sizeable co-operative cockle and laver bread factory, as well as other family processing units in the Penclawdd and Crofty area. In addition, of course, there are cockle
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gatherers and processing facilities based on the other side of the estuary. On average, some 3,500 tonnes of cockles have been taken from the estuary each year.
In early July 200 a regular test recorded a positive result for something called diarrhetic shellfish poisoning, a condition whose name speaks for itself. That was on the north side of the estuary. It was followed the next day by a similar result for the south side.
For the next 14 months the entire fishery remained closed, barring a few weeks when there were some negative results and the gatherers were allowed back. During that period the cockle gatherers were, of course, in a desperate situation, and they were asking some serious questions.
The first question was: "Why does the whole fishery have to close when there is a negative result in just one part of the estuary? Why can't the inlet be zoned as some other shellfisheries are?" The Food Standards Agency eventually, after more than a year, gave way on that matter. Zoning was allowed, and gathering started again, because usually one zone or other got a negative result.
The second question the gatherers asked was: "If these cockles are poisonous when they are taken for testing, how come no one has ever got ill?" It must be remembered that after the cockles are taken for testing, provided the previous test was negative, it takes several days for the results to come back. If the tests are positive, a closure order is imposed. That means that for some days supposedly contaminated cockles are put on the market, but there hive been no reports of illness in customers buying them. Even more significant for the gatherers was the experience of their own families, who continued to eat considerable quantities of cockles that were said to be poisonous without any evidence of illness ensuing.
The gatherers also pointed out that the incidents of so-called diarrhetic shellfish poisoning were not occurring in circumstances that were usual for the problem—extended periods of sunshine and an accompanying increase in algal bloom. Eventually the Food Standards Agency acknowledged that it was not a normal DSP outbreak so it changed the classification to "atypical".
The industry started asking questions about the testing regime that produced the results and two factors started alarm bells ringing. First, the positive atypical diarrhetic shellfish poisoning results started coming in immediately after responsibility for algal testing and monitoring for England and Wales transferred from the Marine Laboratory, Aberdeen, to the Centre for Environment, Fisheries and Aquaculture Science in Weymouth. Secondly, the positive results started coming in for shellfisheries around the English and Welsh coast, from us in the west round to the Thames fishery in the east all at the same time as the transfer. Yet at the same time, Scottish cockles, which were still being tested in Aberdeen, were consistently getting negative results in their DSP test, and cockles collected by the Dutch gatherers off the Netherlands coast, just 60 miles away from the Thames fishery, were still all clear and indeed were being imported into this country.
While many shellfisheries were affected, none was as badly hit as the Burry inlet, which even after it was zoned had each of its three zones closed for many weeks

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at a time, inevitably affecting the number of cockles gathered and the quality of the cockle beds, which need regular picking to be maintained.
If we look at what the testing, under the EC shellfish hygiene directive, actually involved before and during the period in question, what we find is illuminating. The test method used was and is the mouse bioassay, whereby shellfish extract is injected into mice. As I have said, after the work for England and Wales was transferred to Weymouth the explosion in positive results occurred. However, something was different from the usual DSP: the mice were dying much quicker and positive results were sustained over a much longer period than normal.
The transfer to Weymouth meant that in the UK three different laboratories were now carrying out tests: Aberdeen for Scotland; Weymouth for England and Wales; and the Department of Agriculture and Rural Development in Northern Ireland. it eventually became clear that different testing techniques in conducting the mouse bioassay were being used at each of those laboratories. That followed an audit by Professor Hugh Makin, who also showed some poor scientific practice and a lack of quality assurance. Most amazingly, there were even different approaches to determining whether a particular test result was negative or positive.
Dr. Godfrey Howard, who had been responsible for shellfish hygiene testing for England and Wales when it was conducted in Aberdeen, gave significant evidence to the Select Committee on Environment, Food and Rural Affairs, reporting that his laboratory had come across the atypical test response on occasions since before 1995. It believed it to be the result of solvent carry-over in the test procedure, which was termed as "false positives" in Aberdeen. Since November last year, a common method has been established in the three laboratories. Coincidentally—or perhaps not—since that time no positive atypical DSP results have been reported.
I should like to conclude by drawing the House's attention to a couple of quotes from the Select Committee report, to which I have already referred. I recommend that my hon. Friend the Minister read them over the weekend. The report states:
"The FSA was slow to recognise that the atypical results merited further investigation, slow to take account of the industry's suggested explanations and was slow to investigate the possibility that the methodology could be at fault. The flaws highlighted in the methods applied by the laboratories, even if they do not explain the atypical results, suggest that the FSA should, at the very least, have paid closer attention to quality control in its investigations. These delays have means that this crisis has been unduly prolonged."
I particularly welcome the following recommendation:
"The Government should consider what avenues are available to it to compensate shellfish harvesters and processors for their loss of earnings during prolonged closures."
It is clear that this Government agency has badly let down cockle gatherers throughout England and Wales. These recommendations set out the way forward for rebuilding this small but important industry. We need to implement them with urgency and commitment for the whole shellfish industry, but no one needs that to happen more than the cockle pickers of the Burry estuary.
5.31 pm
Mr. Nigel Evans: I have agreed to speak for only five minutes to allow somebody else to get in, but your disappointment will hopefully be relieved, Mr. Deputy Speaker, by the fact that it will all be quality stuff. [Interruption.] Yes, I shall depart from my normal level of speaking. I want to talk about only two things: the Richard commission and the North Wales police chief.
I do not know why the Richard commission was set up in the first place. As we know, the Welsh Assembly was created by only a narrow majority on a lacklustre turnout, so spending £1 million on such a review is money wasted. The Assembly has to do a lot more to gain the confidence of the Welsh people. It did not get off to a very good start; indeed, every time I open the newspapers to read about the Assembly there are only bad news stories, many of which are self-inflicted. There was its incompetent running of the national health service—the out-patient waiting list has risen dramatically—but there were also some petty things. It had huge debates on foreign affairs, over which it has no domain, and on where Members should sit in the Assembly. And of course, there was the fiasco of the Welsh Assembly building. The hole in the ground cost £8 million, and its only defence was, "At least we're better than the Scottish Parliament, which cost £400 million."
All the political parties have been debating what we should do about the Welsh Assembly and whether it should be given extra powers. The question of whether it should be scrapped was raised, and the hon. Member for Montgomeryshire (Lembit Öpik) said that there are some within my own party who are very "devosceptic". He was referring to David Davies, the Assembly Member for Monmouth, who is indeed a devosceptic. Only two people are more devosceptic than him—his parents Peter and Kath. They are the only parents I know who tried to campaign their son out of a job, and they did so with vigour and heart-felt clamour. However, David Davies secured a huge majority at the last Assembly election, which was a first-past-the-post election, so he speaks on behalf of the vast majority of his constituents, at least.
We know that some people have strong feelings about the Assembly one way or the other, but it could do better. If the Richard commission suggests that it should have extra powers—goodness forbid that it recommends taxation-varying powers—there will have to be another referendum. If there is another referendum, there will be a clamour for including on the ballot paper the question of whether the Welsh Assembly should exist at all. So people should be put on warning that if we have another referendum, it will be about not just extra powers, but the whole gamut of the Assembly.
Secondly, I want to talk about the North Wales police chief. He is a colourful character who regularly dominates the pages of the Daily Mail. When he is not reading that, he is doubtless writing to the Secretary of State for Wales and to my hon. Friend the Member for Leominster (Mr. Wiggin). He is obsessed with two things:the legalisation of heroin and, so far as I can make out, all sorts of drugs; and the speed cameras of he which seems to be in charge. He seems to be in favour of.

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speed on the one hand, and against speed on the other. He should make up his mind. The policy on speed cameras is completely insane; he is obsessed with them.
I have asked for an independent audit of the cameras to ensure that they are put in blackspot areas, as the last thing we want is for those speed cameras in effective areas to lose public support. I have received letters from people who have been booked for doing 33 mph in a 30 mph zone, and from people who feel that they are always looking at the speedometer instead of the road and are afraid that they will have an accident.
In Lancashire, the number of fatalities went up last year when the number of speed cameras increased by 100. We need balance to ensure that we retain public support, which the police need to help them solve other crimes. Also, as much vigour needs to be shown in terms of cameras that protect against car crime as in dealing with speeding. We know that speed kills and that in the wrong weather conditions a 40 mph zone is probably too high. Drivers also need to show some discipline.
There are a number of other matters on which the House knows I would have spoken had we more time, but I decided to concentrate on two; the need to be careful with regard to the Richard commission and the need for some sanity in the question of speed cameras in Wales.
5.36 pm
Mrs. Betty Williams: I have decided to focus my remarks on crime. There are two major reasons for that. First, my postbag shows that it is a great concern to some constituents. Secondly, the Government have instituted programmes to tackle crime and I believe that success is evident.
My contact with the criminal justice system begun at an early stage of my working life; I had better explain that, lest I create the wrong impression. Leaving school at 16, I went on to the secretarial staff of the late Emyr Thomas, solicitor, who was clerk to the justices in Caernarfon. Several years later, I became chair of the Mon-Gwynedd victim support scheme. Victims have first-hand, and often highly distressing, experience of crime and we rightly recognise their needs.
The perception of crime for those without first-hand experience is frequently exaggerated by poor data and misleading reporting. We have a part to play in that, and it can be for good or ill. Concerning data, I believe that the British crime survey is acknowledged as authoritative and a world leader in tracking crime trends. On the other hand, until recently the police had recording methods that under-reported crime. The police schemes and the British crime survey were not comparable and I know that the chief constable of North Wales, Richard Brunstrom, recognised that.
In short, the police under-reported crime, which is why our chief constable was an early enthusiast for the new police scheme, the national crime recording standard. He ensured that North Wales was an early participant in the new scheme. Now North Wales police have a more reliable system of reporting crime. When externally audited by the Audit Commission, North Wales police were found to have the best recording system in England and Wales.
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What is the result of the data? Contrary to the perception in some quarters, crime is falling. Alongside that, however, it is notable that, in north Wales, detection rates are increasing. For example, detection rose from 28.8 to 31.5 per cent. for the period April to January between 2002–03 and 2003–04. I frequently meet officers in North Wales police and I have no doubt as to their commitment to protecting our citizens. They deserve our support; not only through legislation to assist them, but in correct reporting. Parliament has reformed the criminal justice system and the Government will continue to bring forward measures to further reform the system.
On 18 February, Llandudno in my constituency hosted the first North Wales criminal justice board conference. In his address to the conference, John Grant Jones OBE—the chair of the board—pointed out that crime has fallen for seven years. Persistent offending had also fallen and the number of offenders brought to justice was increasing. He added, however, that nearly 73 per cent. of the public believe that crime is increasing. He clearly saw that misperception as a challenge, and I am sure that the board, the agencies, the police and we in Westminster should also rise to that challenge.
To show what is happening in my constituency, I mention a meeting that I had with the central divisional commander at Llandudno two weeks ago. The introduction of a divisional burglary action scheme has already had a positive effect. In three of the four months since its inception, the number of burglaries reported decreased by more than the targets and the number of burglaries detected also surpassed those targets. The trends are good, and I know that the officers will do their utmost to ensure that those positive trends continue.
I have already mentioned my involvement with victim support, and I welcome the publication last December of the Domestic Violence, Crime and Victims Bill. During my time with Mon-Gwynedd victim support, I was very conscious of what victims and volunteers told me. They believed that the perpetrators were receiving better treatment than the victims. Victims and their families were not given enough information at the right time; and they did not receive adequate support as they faced the daunting task of appearing as witnesses in court. That is changing. The Bill is central in putting victims first. It will ensure that they receive the help, support and protection that they need. The Bill will build on the Government's ongoing reform of the criminal justice system. A key part is to allow victims to take their case to the Parliamentary ombudsman if they feel that the code has not been followed by the criminal justice agencies.
I would be grateful if the Under-Secretary could explain whether the proposals in the Bill will help a young lady who was assaulted in an unprovoked attack while on holiday in north Wales recently by a young male and a young woman whom she had never met. The incident was captured on CCTV and an off-duty police officer witnessed it. The victim's injuries necessitated medical treatment and she may suffer long-term effects after her ordeal. The offender escaped a custodial sentence: he managed to get off lightly, while the distressing experience will remain with the victim for the

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rest of her life. She feels aggrieved at out the magistrates' decision and feels strongly that her case shows that the victim is secondary to the offender.
My postbag tells me that my constituents also feel badly let down by magistrates. They tell me that the police investigate complaints thoroughly but that the perpetrators, as in the case I have mentioned, are often dealt with far too leniently at the magistrates court. Antisocial behaviour can no longer be tolerated. The Anti-social Behaviour Act 2003 was born out of individuals, communities and agencies sharing their experiences.
Reflecting successful outcomes in my constituency, it has been said for some time that crime reduction partnerships need strengthening and, indeed, more financial resources, but money is not everything. To those areas in Wales that have not moved forward speedily enough in pursing applications for antisocial behaviour orders, I say that they should get their act together, and think of their communities and individuals who are suffering. That is why they are involved in crime reduction partnerships.
I welcome the opportunity to talk about the record of the police and crime detection in north Wales, and I look forward to hearing the Under-Secretary's response.
5.43 pm
Mr. John Hayes: This has been an interesting debate, in which many contributions have been made—[Interruption.] I am told that I have not been in attendance, but hon. Members will have noted that I have been in my place for considerably longer than the Secretary of State for Wales. Having said that, he has two jobs and must he torn by being able to devote only part of his time to the concerns and interests of the people of Wales.
The Government's lamentable failures are not simply exemplified in, or typified by, Wales. Wales fails more than the rest of the United Kingdom as a result of the Government's policies. It would be wrong of me to claim the expertise in Welsh matters of right hon. or hon. Members who have sat for Welsh constituencies for many years but I believe in the Union, so I care about and believe in Wales. As a Member of this Parliament, I have responsibility for the people of Wales, in the same way that I have responsibility for people in other parts of the kingdom. I make no apologies for making a few humble remarks about Wales and the Government's failure to deliver for the people of Wales.
Fifteen small schools have closed in Wales since May 1999 and the Minister will know the impact on small communities. As a Member of Parliament representing a rural constituency, I know that schools are at the heart of villages. When a small school fails, the community suffers. There has been a 2 per cent. cut in the education budget for mid-Wales this year. Labour has failed to meet the targets for key stages 3 and 4. For the Secretary of State to defend in the House today Government policy on tuition fees was flagrant, appalling and an abuse.
I was the first of my family to attend university, helped by a grant. If the Government have their way and introduce punitive fees and tap-up fees, tens of
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thousands of children from working-class homes will not go to university as I was able to do. The Government, understandably, are sensitive about their tuition fees policy. A considerable number of Labour Members do not support it. The Secretary of State offered statistics about education in Wales but they were all measurements of input, not output.
I acknowledge that the Government are spending 40 per cent. more on health than in 1999 but waiting lists have doubled since devolution and currently total 307,608—well over 10 per cent. of the population. Almost 40,000 people in Wales wait more than 12 months for treatment, compared with 188 people across the border.
The Secretary of State chose his words carefully in talking about Government successes in targeted areas singled out for special treatment. Those statistics are no comfort to the sick and needy people waiting for operations that fall outside those criteria and their families. The Secretary of State must answer to them and to their representatives from Welsh constituencies who sit in this Chamber.
The hon. Member for Conwy (Mrs. Williams) said that the chief constable of North Wales was enthusiastic about the method for reporting crime but simultaneously lauded the British crime survey and commented on misconceptions about crime levels. That survey is based on perceptions and understandings. One cannot claim that there is a definitive guide to crime, then observe that there are misconceptions about the facts. I was amazed that she contradicted herself in consecutive sentences.
Mrs. Betty Williams: Will the hon. Gentleman give way?
Mr. Hayes: Because I have been so harsh on the hon. Lady and she is so charming, I happily give way.
Mrs. Williams: I said that there were some misperceptions among the public about crime detection in north Wales.
Mr. Hayes: I understood the hon. Lady but the British crime survey is a reflection of perceptions about crime.
The Library informs me that in 1998–99 to 2001–02, before the method of reporting was changed, violence against the person in Wales rose 13.7 per cent, and that, in those same years, robbery rose 20.8 per cent.
The truth is that the picture is, of course, mixed. However, before the method of reporting crime changed, there were significant rises in crime in critical areas. They damaged people's lives, and it is no wonder that people are fearful about crime. In Wales, the number of special constables has fallen, just as it has fallen in the rest of the kingdom under this Government.
On farming, I was pleased to hear what the hon. Member for Brecon and Radnorshire (Mr. Williams) had to say. He is always a doughty defender of farmers' interests, and he spoke with great authority on a subject to which other hon. Members contributed.
Farmers have suffered a dreadful plight since this Government came to power in 1997. Last year, 700 jobs in Welsh farming were lost. The National Farmers

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Union has said that the average income on Welsh farms in January 2003 amounted to little over £9,000. The situation was much worse for the many farmers who fall below that average. Other problems include bovine tuberculosis and the plight of the dairy industry. The Government pretend that they will deal with those matters through reforms to the common agricultural policy, but that cannot be done.
In summary, I say that although the Government are spending in Wales, they are also spinning, squandering and failing there. As Aneurin Bevan said, we do not need to look at the crystal ball when we have the record book. The Government's record book is a sad one—sad for the people of Wales, for the Welsh Members, who, I acknowledge, represent their constituents honestly, and for the kingdom. On this St. David's day debate, I hope that all hon. Members will stand up for the people of Wales and, to a man and woman, condemn the Government and this part-time Secretary of State.
5.51 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): Once again we have had an excellent and wide-ranging debate. Geraldus Cambrensis—Gerald of Wales—wrote of the Welsh in 1183 that
"in set speeches they are so subtle and ingenious that they produce… ornaments of wonderful and exquisite invention both in words and sentences."
Clearly, there are some ornaments among the Opposition Members who have taken part in today's debate, which reminded me of those words.
The greatest Welshman in history was, of course, Aneurin Bevan. He spoke in the very first Welsh day debate here in 1944, and talked of the great problems facing Wales at that time. He said:
"I spent most of my adult life in the shadow of unemployment because the basic industries happened to be situated largely in south Wales. Our problem was to try to get enough political leverage to secure attention to our difficulties." — [Official Report, 17 October 1944; Vol. 403, c. 2313.]
What he said was right then, and would have been right during those 18 dark years of Tory rule. But Nye Bevan would see a different Wales today. The story that emerges from the speeches made by Labour colleagues in this debate shows that, under a Labour Government, Wales is changing for the better.
Unemployment used to be the blight on our communities, and it was once described by the Tories as price worth paying. While this Government have been in office, it has fallen to 41,000, from 168,000 under the Conservatives. We are tackling the problem of unemployment in Wales. That does not mean that jobs have not been lost. Of course that has happened, but we are also working together to ensure that we bring new, quality jobs to the people of Wales.
It is not just in our economy that is doing well. There is a greater confidence in Wales, and the BBC presenter John Humphreys said recently:
"There is a vibrancy and confidence about Wales that I can never remember."
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That confidence in the people of Wales stands in stark contrast to the whingeing, carping tale of doom and gloom being spun by Opposition parties.
We have heard today of the work of the Welsh Affairs Committee, and I my tribute to my hon. Friend the Member for Clwyd. South (Mr. Jones) and the work of the Committee in the past year.
The Queen's Speech this year was good for Wales. Not only did it contain the Public Audit (Wales) Bill, there was also the Fire and Rescue Services Bill and the Higher Education Bill, both of which will have important Welsh clauses. Other Bills with important implications for Wales include the Children's Bill, the Civil Contingencies Bill, the Housing Bill, the Planning and Compulsory Purchase Bill and the Traffic Management Bill. Two draft Bills, the Charities Bill and the Transport Bill, are also important for Wales.
All of those measures bear testimony to this Government's commitment to devolution and to giving the Assembly in Cardiff the opportunity to produce policies best tailored to Wales. I do not doubt they will be vigorously debated by hon. Members in this House.
The hon. Member for Leominster (Mr. Wiggin) spoke at length, and he was entertaining. I commend his website to my hon. Friends, which shows him posing with Labour Ministers—he also finds room for pictures of his hairdresser and of the owner of his local Indian restaurant. However, his website does not include any pictures of members of the shadow Cabinet—he has impeccable taste and has gone up in my estimation as a result. A speech by the hon. Member for Woodspring (Dr. Fox), the Conservative party chairman, calling for a return to the values of Thatcherism was on his website until recently. In Wales, we know about the values of Thatcherism: the Conservatives closed 70 hospitals and 271 pits, decimated communities and put thousands of Welsh people on the dole.
The hon. Gentlemen discussed the NHS and said that he wants greater power for patients. He wants patients to have the power to start paying for the NHS, which would happen if the Tories were to return to power. The patients' passport would mean that patients would pay £1,900 for a cataract removal, £4,600 for a hip replacement, £5,700 for a knee replacement and £8,500 for a heart bypass. He discussed waiting times but ignored yesterday's figures, which show an across-the-board improvement c n waiting times.
The hon. Gentleman in discussed crime, but after the letter from the chief constable of North Wales, no one can take him seriously. His suggestion that my right hon. Friend the Secretary of State for Wales prompted the chief constable to write that letter is a slur, a disgrace, and unworthy of a Front-Bench spokesman. It should be withdrawn.
The hon. Member for Ribble Valley (Mr. Evans) made an excellent contribution. Whether or not we agree with him, he was forthright about the Richard commission and the chief constable of North Wales. We enjoy his contributions, and he is missed from the position that he used to occupy on the Conservative Front Bench.

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I shall move from the diffident Tories to our own daffodil Tories. Robert Kennedy said:
"One-fifth of the people are against everything all the time."
Time after time, the Welsh nationalists prove that he was right. The hon. Member for Caernarfon (Hywel Williams) made an important point—he asked questions about it a while ago—-about affordable housing in his constituency. There are around 15,500 second homes in Wales, which comprises less than 1.5 per cent. of the housing stock, and the figure is declining overall. He discussed how the Chancellor's Budget proposals will affect pensions and holiday homes. The important point is that if a member of a small, self-directed pension scheme were to use its funds to buy a holiday home for their own use or for the use of their families, they would be subject to a tax charge and would not benefit.
The Liberal Democrats managed to dredge up a few points that they have not already e-mailed to the Labour party. Once again, they proved that it is not only their asteroid policy that is focused on otter space. They have given us promise after promise after promise, which proves that their commitment to the environment is consistent—the extra money that they have pledged has been recycled time after time.
The hon. Member for Montgomeryshire (Lembit Öpik) is a constitutional anorak, spending 10 minutes of his time discussing the Labour party's excellent debate on the Richard commission. I advise him to wait until the Richard commission reports.
The hon. Member for Brecon and Radnorshire (Mr. Williams) raised an important matter. I regret that I have not received the note that he planned to send to me; as soon as I receive it, I shall get it touch with him.
A number of my hon. Friends made important comments, and I am sorry that I cannot address all of them in my response.
We have come a long way since the first Welsh day debate in 1944. The story of Wale; in that 60 years is a tale of ups and downs—ups under Labour and downs under the Conservatives. Today, I see a confident partnership in Wales between Labour working in Government in Westminster and Labour working in partnership in the Assembly. Time and again, the people of Wales have been presented what a choice between Labour representatives, Tories, the nationalists, who would isolate us, or Liberal Democrats, and the important point is that they choose Labour. The story of Wales as a nation of success, prosperity, and social justice is a Labour story delivered by Labour Governments and supported by Labour Assembly Members and Labour Members of Parliament. We have a good record, and when we go before the people of Wales in a couple of months' time in the European and local council elections, they will give Labour a resounding vote of confidence once again.
It being Six o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Main Post Office (Berwick-upon-Tweed)
Motion made, and Question proposed, That this House do now adjourn—[Mr. Ainger]
6 pm
Mr. A. J. Beith: The Minister answers many debates on post office closures, but this one is different. Many are about rural or suburban sub-post offices, closed either because of the reduction in business resulting from pressure to get benefits paid into bank accounts, or because of the Post Office's network reinvention programme—a title that does not impress some of my colleagues because of the closures involved.
So far, most village post office closures in my constituency have been because no one could be found to take on the business. In fact, I have found the Post Office to be generally helpful and flexible in seeking to identify new sub-postmasters, and it has taken up my suggestions of experienced staff who could take on village post offices temporarily. I have had a useful and fruitful relationship with Post Office management locally on many village sub-post office closure issues, and it has tried hard to maintain the service wherever possible.
The case that I wish to raise tonight is different, because it concerns a main town centre post office, which used to be a Crown office but which was franchised out some years ago. Its closure, since August 2003, is not the result of policy decisions or viability problems, but of the failure of the Post Office to set up alternative facilities following a landlord-tenant dispute. It is very important to the people of Berwick, and it raises issues about the network of town centre post offices, the former Crown offices, which provide the widest range of Government-related facilities, including the issuing of motor vehicle licenses and provision of passport application assistance. I shall return to the wider issues after I have given the Minister something of the story of Berwick post office's closure.
I regard it as a disgrace that Berwick should have been without a main post office for seven months, with still no sign of it reopening. For many years—as long as anyone can remember—Berwick's town centre post office was a Crown office, occupying, in recent times, modern Post Office-owned premises combined with the Royal Mail sorting office. In the early 1990s, it was franchised out, and when we expressed widely held concerns about that, the Post Office insisted that the new arrangements would ensure the continuance of a conveniently sited central post office.
That facility was in fact provided in the Co-oppremises for six or seven years, but when it gave up the contract three years ago, a new contractor and premises had to be found. Central premises were found, and the post office reopened. In February last year, the postmaster gave up the contract and a new postmaster was appointed, using the same rented premises.
At the end of August last year, the post office suddenly closed, for what was described as "operational reasons". Pensioners were advised to collect their pensions from sub-post offices, and motor vehicle licences could be obtained only by travelling to Scotland—to Duns or Eyemouth—or to Wooler, which.

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is 16 miles away. On 11 September, it was revealed that the post office might not reopen for two months, and staff received their P45s. That was a grim day for them. A Post Office spokesman said:
"Due to circumstances beyond our control, it is now highly unlikely that the branch in Berwick will reopen in its current location. We are now working with a number of organisations to try and find an alternative solution but this could take up to two months to finalise.
We would like to apologise to our customers in Berwick for the inconvenience this is causing them but we want to reassure them that we are doing all we can to reopen a branch in the town as soon as possible."
Then, on 25 September, the post office reopened, with a picture in the local paper. Within days—on 1 October—it had closed again, and it became known that there was a dispute between the tenant and the landlord. That resulted in the Post Office being unable to gain access to the premises. One consequence was that people who had bought motor vehicle licences began to receive letters from the Driver and Vehicle Licensing Agency warning them that they had committed an offence because they had not licensed their vehicles. The records were locked in the safe of the former post office.
Meanwhile, sub-post offices in the area were working hard to fill the gap. One is in Castlegate, quite close to the town centre, and I pay tribute to the sub-postmaster, Mr. Alistair Fairbairn, for the hard work he has put in. There has been great pressure on his sub-post office, sometimes with queues down the street of people collecting pensions and benefits. The Spittal post office took on motor licences, a valuable service that meant people could avoid the long journeys I mentioned earlier. The Tweedmouth and East Ord post offices carried extra responsibilities. There is no feeling among the sub-postmasters that they welcome the absence of the main post office, even though they might gain some business in the longer term if people choose not to go back to it.
On 30 October, the Post Office said that
"regrettably, it will be a minimum of 6 weeks before any solution can be put in place"
We had already been warned that it would take two months, yet on 30 October we heard that it would be another six weeks. On 4 December, a company interested in taking over the post office complained that it could not obtain basic information to enable it to decide whether to make a bid, especially financial information relating to the number of staff it would need.
On 18 December, just before Christmas—the busiest time for a post office in terms of mail delivery and counter business—the Post Office announced that three sites were under consideration. On 12 February 2004, the Post Office confirmed that there was no further progress to report, although there had been plenty of local rumours that various premises were being considered. That was only a few weeks ago, but no further progress had been made by the Post Office. We are entering the seventh month since the closure of the town centre post office with no announcement that it will reopen.
I have repeatedly raised the matter with the Post Office and with Postwatch. Earlier this week, I presented a petition from readers of the Berwick Advertiser to the
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chief executive of the Post Office. Now, it is the Minister's turn. He should be involved, because a principle of public policy is at stake. Surely, we must retain a network of town centre post offices, like that previously provided by Crown offices. Like Departments and public offices, such post offices must remain open, rather than closing for six months or a year at a time; or are the former Crown offices simply regarded as being like other sub-post offices—possible victims of the network renewal programme? Are they to be put in the balance? Will some of them have to go, or do they have a special place—as I believe—because they. are the main town centre facility and usually provide services that smaller sub-post offices cannot offer? When the franchise offices were created, every assurance was given that the tradition of the town centre Crown office would be maintained. Those offices provide vital public services and their retention should be a primary obligation for the Post Office. Franchising is supposed to provide those services, but the Post Office will have to deal much better with the loss of postmasters and premises to maintain service.
It is inevitable that franchise arrangements will break down occasionally, but the Post Office should have adequate emergency arrangements when that happens. A team of post office staff should have been brought in, using temporary premises or a mobile office, such as those used by banks, to maintain the service until a new contractor could be found, approved and, if necessary, trained—a process that is likely to take weeks or. possibly months.
The Strategic Rail Authority does not allow the suspension of rail services for six months while it finds a new train operator—.at least not so far; perhaps we shall. reach that state eventually. The county council does not close schools for six months while it finds a new school transport contractor; it has to make emergency arrangements rapidly when things go wrong. Surely, the Post Office should have such mechanisms, including standby facilities to deal with emergency interruptions to service at main post offices, especially if that would lead to loss of service for long periods.
People in Berwick are very angry about the situation, which reflects badly on Post Office management. A similar situation could arise in other towns where the Crown office has been franchised out. Next time the Post Office proposes to replace a Crown office with a franchised office, the example of Berwick will be thrown back at it. The Post Office will no longer be able to give assurances with any credibility; they will no longer be believed, because people will refer to what has happened in Berwick.
The answer is twofold: the Post Office should get on with the job of setting up a replacement post office, and it should have an emergency facility that can be moved in whenever and wherever such a crisis occurs. The Minister should recognise that a matter of public policy is involved, put pressure on the Post Office to restore the service that Berwick ought to have and ensure that the Post Office considers how it can provide arrangements whenever this sort of thing happens in any part of the country.
6.10 pm
The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen timms): I congratulate the right hon. Member for Berwick-upon-Tweed (Mr. Beith) on.

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securing this debate, and I thank him for what he said about the work of the Post Office's rural transfer advisers. I agree that they have been very effective in ensuring, wherever possible, that an alternative branch in a nearby location can replace rural Post Office branches that are threatened with closure.
The right hon. Gentleman spelt out very clearly and fully the problems that the main Post Office branch in Berwick-upon-Tweed has faced, and he gave a detailed account of events since last September, when the problems first arose. Let me emphasise that Post Office Ltd. considers the current closure to be temporary, and I entirely sympathise with the frustration that he has expressed on behalf of his constituents about the fact that it has lasted so long. The Post Office and I very much wish that it will be able to provide a service again to his constituents as quickly as possible.
As the right hon. Gentleman said, the office closed following a dispute with the sub-postmaster, and the Post Office is continuing to try to re-establish the service. As he also said, despite the Post Office's efforts in the early weeks, it is unlikely that it can resume a service in the previous location at Marygate. He has rightly paid tribute to the sub-postmaster at the Castlegate branch, which has been struggling to cope with the increased traffic. Since the closure in October 2003, Post Office Ltd. has been working with the local borough council and others to try to find a solution lo reopen a branch in the town.
I can confirm that the Post Office is committed to finding a long-term solution for the town on the north side of the river. There is certainly no intention at all to leave things as they are. The Post Office is talking to possible new sub-postmasters and is still looking for new premises, which should be close to the town centre. As the right hon. Gentleman said, nothing has yet been confirmed, although I understand that detailed discussions have taken place with prospective candidates for the position of sub-postmaster.
In defence of the Post Office, I would make the point that, clearly, if finding appropriate premises is a real difficulty, that may well constrain—I imagine that it has done so—the speed with which the replacement service can be provided. However, I entirely accept that the current position is unacceptable and the fact that it has last so long is deeply regrettable. I am sure that the Post Office would wish to express its apologies to all the right hon. Gentleman's constituents, who have been so severely inconvenienced over the past seven months.
The right hon. Gentleman raised some ideas about what might be done in the future. A lot of post offices have been converted from Crown offices to privately run offices. That happened at Berwick, where the Co-op initially operated the office. About 570 post offices are still run by Post Office employees—the directly managed or Crown offices. The process of conversion started in the 1980s as a means to strengthen the economic viability of the Post Office network.
Concerns arose as a result of some of the earlier conversions, so in May 1997, the then newly elected Government imposed a moratorium on further conversions pending a review. That moratorium was
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lifted in December 1998, following agreement on proposals submitted by the Post Office to the trade unions on a future strategy for the Crown office network. Those arrangements were included in the White Paper on the Post Office published in July 1999, and they require Post Office Ltd. to ensure that a significant proportion of its total business transactions are carried out at Crown offices. Currently, that figure is at least 15 per cent.
The performance and innovation unit report on the future of the network in 2000 concluded that as a matter of priority the Post Office should pursue work to maximise the commercial potential of the network, the efficiency of its operations and the quality of individual post offices. In particular, the report concluded that more Crown offices should be converted to privately run operations as a means of addressing the poor profitability of the Crown office part of the network. The network of directly operated offices, which, as I said, numbers only about 570, loses about £80 million a year. In the last financial year, Post Office Ltd. as a whole lost £194 million before exceptional items. We therefore need to be cautious before suggesting that we could move to an arrangement with substantial new subsidies for offices that were previously Crown offices and have since been franchised. I understand, however, the point that the right hon. Gentleman made about the inconvenience suffered by his constituents. I will convey the frustration and anger that he conveyed on their behalf to the management of Post Office Ltd., and encourage them to find a solution to the problem as quickly as possible.
Mr. Beith: The Minister has just made a helpful point, because he has demonstrated that many post office staff are still working in Crown offices. There is therefore a pool of staff, so it is surely possible to draw a few people from here and there to staff a temporary facility where such a change has taken place. That would help the people of the area, and if such action is not undertaken it will become increasingly difficult to franchise any more Crown offices, as people will think that the continuity of service may be lost.
Mr. Timms: I can reassure the right hon. Gentleman that the situation that he described is extremely unusual. As he said, I frequently respond to Adjournment debates and receive letters form hon. Members about post office matters, but this is the first instance of such a situation that I can recall. I do not think that we are seeing the beginning of a general pattern, and I certainly do not think that there are grounds for concern about other conversions of Crown offices, as happens from time to time, to franchised status. If it became a frequent occurrence in any way the right hon. Gentleman's argument would be a strong one.
The Post Office does not have numbers of people around the country who can be moved in, as the right hon. Gentleman suggested, although I agree that that ought to be considered if the problem lasts much longer. However, there would still be a problem with providing premises. He proposed a mobile arrangement, but we would have to address logistical issues. However, I shall certainly convey to the management of Post Office Ltd.,

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the problems that he has described fully this evening, and encourage them to do everything possible to sort them out.
The post office network faces an enormous challenge, and I have already talked about the losses that Post Office Ltd. suffered last year. Ninety-seven per cent. of the nation's post offices are run by sub-postmasters, private business people who have invested not only their own money in their businesses but a great amount of care and effort to help the post office network achieve its highly regarded status. That is true of a large number of sub-postmasters, including the gentleman in the Castlegate branch to whom the right hon. Gentleman referred. However, declining profitability in the network as a whole has given a severe knock to the ability of sub-postmasters to sell on their businesses, which is how they have moved on in the past. Decisive action has been required to ensure that we maintain a sustainable and countrywide network for the future, and that is the action that the Government are taking. As the right hon. Gentleman said at the beginning of his speech, we must not allow gaps of the kind that have temporarily opened up in his constituency to become a more widespread phenomenon.
That is the reason for the process of urban reinvention—I understand the misgivings of the right hon. Gentleman and some of his hon. Friends about that name—that we have been going through. It is also the reason that we have invested £0.5 billion in technology to ensure that banking services can be provided at every single post office branch in the country. According to the latest figures, about 1 million banking transactions a week take place in post office branches around the country. I believe that there is a very attractive future for the post office network and hope that that will address some of the problems that have arisen in Berwick as a result of the difficulties that people who run sub-post offices have faced over the past couple of years. I hope that a much better prospect for those individuals will emerge in future.
I was pleased to see evidence that the number of sales of post office branches increased in the last financial quarter to the end of December, with 231 successful transfers of urban post offices compared with 148 in the corresponding period of the previous year. That significant increase in successful urban transfers suggests that there is a strengthening market and greater confidence in the future viability of many urban post offices as the implications and effects of the programme work through. That has always been its aim.
Mr. Beith: Is the Minister aware of anxieties about the Post Office card account in relation to the attitude of some Departments towards encouraging, or not encouraging, people to take it up? Although several people are registered, a relatively small number have
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communicated the details to the Department concerned, and there is anxiety that the system is not developing as originally envisaged.
Mr. Timms: I can certainly reassure the right hon. Gentleman on his first point. Those concerns have been raised with me on numerous occasions. The figures on the choices that people are making for receiving their benefits show that so far more than 60 per cent. of pensioners have indicated that they want a Post Office card account. That means that they have been able successfully to navigate the system by going through the call centre and have got to the stage of expressing a preference for a card account. There are not difficulties on the scale that had been feared.
What is interesting about that data is that if one considers recipients of other benefits, such as the jobseeker's allowance, child benefit and so on—benefits received by people of working age—one realises that the number of those who have chosen Post Office card accounts is much lower. That underlines the importance of the investment that we have made in new technology and other changes such as the work to open up a new range of products and make financial and other services available in post offices, because it is clear that younger customers in particular have different aspirations in relation to the post office from those who receive the state pension.
On the right hon. Gentleman's second point about the number of people who have opened and are using a Post Office card account, I share some of his concerns. We are therefore working with Post Office Ltd. and talking to the Department for Work and Pensions and the National Federation of Sub-Postmasters. All of us agree that we need to make sure that people are able to use those accounts, which they have clearly expressed an intention to use, as quickly as possible. That is in everybody's interest.
With the change that we have been making, we can see a way out of the heart of the problems that the Post Office has been facing—being locked into a shrinking base of customers. Its task in Berwick and across the country is to continue to serve its traditional customers with excellence, which certainly has not been happening over the past seven months, and to attract new customers and give the network access to expanding banking markets, not just dwindling markets as in the past. That is the key to future success, and the groundwork that we have been laying provides a good prospect of that being achieved. I entirely share the concern that the right hon. Gentleman has rightly expressed on behalf of his constituents about the serious disruption in the service provided by the Post Office in his constituency, and I will do everything that I can to encourage Post Office Ltd. to bring those problems to a conclusion as swiftly as possible.
Question put and agreed to.
Adjourned accordingly at twenty-six minutes past Six o'clock.