Commons Sitting of 8 January 2004

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

    Global Warming
    Mr. Graham Allen: What assessment she has made of the impact of global warming on the UK. [146366]
    The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): Scenarios of climate change published by my Department in 2002 suggest that average annual temperatures may increase by between 2° and 3.5° C by the end of the century. As a result, the United Kingdom is likely to experience warmer, wetter winters and hotter, drier summers. Such changes will have far-reaching effects on the UK, putting pressure on water resources and wildlife and increasing the risks of flooding and damage to health.
    Mr. Allen: Twenty years ago, a generation grew up in the shadow of the bomb and fear of nuclear explosions. Now colleagues in the House who go to local schools realise that schoolchildren fear environmental catastrophe in the shape of global warming. Will my right hon. Friend tell us what she is doing to tackle those concerns, so that young people in my constituency of Nottingham, North and elsewhere can be reassured that the Government are taking the problem seriously?
    Margaret Beckett: I understand the point that my hon. Friend makes. As he suggests, awareness of the impact of environmental change is growing. Broadly speaking, the Government are pursuing two courses of action. On the one hand, in the shorter term, there is a whole range of measures to encourage people to adapt to the potential impact of climate change. This is something that we are encouraging in the private sector and in Government Departments partly through the climate impact programme—which encourages organisations to make an assessment of the impact—and partly through measures to tackle it.
    Alongside that, and for the longer term, there is a programme of mitigation. My hon. Friend will be familiar with many of the proposals within that programme. They include the climate change levy, the
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    work of the Carbon Trust to promote low-carbon technologies, the promotion of energy efficiency and so on. We are trying a two-pronged approach to the problem by dealing with the actual impact and by trying to ensure that the impact does not become worse over the years.
    Norman Baker: The Secretary of State will have seen The Guardian and The Independent this morning and the numbing news that one in 10 species, including species found only in the UK, may be extinct by 2050. I am sure that she will agree that it is vital to take all possible action to avert that prospect so far as possible, but does she agree that, although her Department may be sound on the issue, that soundness is not mirrored by other Departments within government? In particular, will she recognise that the aviation White Paper projects a doubling of carbon dioxide emissions by 2030, so that they will become 25 per cent. of total UK emissions? Will she also confirm or deny that the Secretary of State for Trade and Industry—
    Mr. Deputy Speaker (Sir Alan Haselhurst): Order. May I suggest that we have a more compact question and not an extended statement?
    Norman Baker: Will the Secretary of State confirm or deny that the Trade Secretary wants to reduce the Government's target of 20 per cent. reductions in CO2 emissions to 15 per cent. by 2010?
    Margaret Beckett: The hon. Gentleman is entirely right in what he says about the reports in this morning's news media about the potential extinction of many species. The study that has been published today indicates that between 15 per cent. and 37 per cent. of land species in the area that was studied could face extinction by 2050. However, it is important for the House to understand that the impact of the highest predictions of global warming would have an even more disastrous effect. So it is not an exaggerated report that assumes catastrophe; it refers to the expected impact of climate change.
    The hon. Gentleman is wrong, however, in suggesting that the problem is not understood across the Government. He cited the aviation White Paper in particular, but the Government made it very clear in the White Paper that we would push for EU air services to be included in the forthcoming emissions trading scheme and that we would encourage all those involved with aviation to adopt working practices that minimise impacts. We are also talking to aerospace manufactures and others and encouraging voluntary action. We recognise the impact of aviation. and we also recognise that the problem has to be tackled at an international level. Through our involvement in the EU, we are striving to get that point recognised and dealt with across the world and not just in the EU.
    Andrew Bennett: Does my right hon. Friend realise that, given the amount of money that President Bush has raised from the gas guzzlers for his re-election, it will be extremely difficult to get international talks back on track to limit CO2

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    emissions? Is it not time that the British Government made as much effort on CO2 emissions as we are doing on terrorism?
    Margaret Beckett: Let me assure my hon. Friend that the British Government continually engage in dialogue with our counterparts in the United States about these issues, their importance and their likely impact on the world. It has long seemed to me that one of the influences on security is, indeed, environmental degradation and the impact that it has on poverty, the movement of peoples and so on. The issues are linked, but he may have overlooked the fact that the United States continues to be involved in the climate change convention and to agree with and promote the aims of that convention in reducing emissions.

    Recycling
    Mr. John Baron: What assessment she has made of whether the UK will meet its recycling targets by 2005. [146369]
    The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): National targets for England are to recycle and compost 17 per cent. of household waste in 2003–04 and 25 per cent. in 2005–06. Our current assessment of local authority performance is that we expect to meet the 2003–04 target and that, although challenging, the 2005–06 target is achievable.
    Mr. Baron: I thank the Secretary of State for that answer. Challenging is one way of putting it, but given that the Environmental Audit Committee has stated that the UK will not come even close to meeting any of its recycling targets because of a lack of funding, will she stop making false promises and start outlining to the House the concrete action that the Government will take to improve their poor record on recycling, given that failure could result in large EU fines, and incinerators being forced on local communities?
    Margaret Beckett: I understand and recognise the concern that we must do as much as we can to meet the targets, but it is not the case that the Government are not on track to meet the targets for this year. I note that the hon. Gentleman called for more funds, so I hope he is aware that the Government have already substantially increased the funds available for the disposal and recycling of waste, both through the general grant that goes to local authorities and specific grants that we have given to deal with waste. I note yet again that although Conservative Members continually complain that the Government spend too much, they call for us to spend more on specific issues.
    Mr. Peter Pike: Does my right hon. Friend recognise that we might achieve our recycling objectives better if the authorities responsible for the collection of waste were the same as those responsible for the disposal of that waste?
    Margaret Beckett: My hon. Friend makes a fair point. We are examining the way in which waste collection and waste disposal authorities work together. I hope that he knows that the Government recently put in place
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    measures that mean that such authorities will have to draw up joint management plans. We have done that precisely because we understand that there can otherwise be different interests and incentives for one authority to leave to another the burden of dealing with these issues.
    Miss Anne McIntosh: Will the right hon. Lady explain how she hopes to meet the 25 per cent. target given that local authorities have demonstrated only a 1 per cent. increase in recycling year on year under her Government? Will she also address the producer responsibility obligations regulations? Although the new scheme comes into effect on 31 January this year, the regulations have still not been published. How does she expect the companies that will comply with the proposed waste scheme to prepare for that when they do not know what they are being asked to do?
    Margaret Beckett: I do not recognise the figure that the hon. Lady cited—perhaps it is out of date or reflects a broad picture that is not relevant on the ground. She makes a point about the availability of regulations. I am mindful of the fact that the detail of regulations that are approved often does not become available until much later in the day and that that creates difficulties. That concerns the Department and we continually work to rectify the situation. However, the solution is not always in our hands. If we have to wait for legal texts, for example, it can be difficult to get regulations out as speedily as we should. However, we continue to work at that.

    Fishing Industry
    Mr. Austin Mitchell: What support she will provide to the east coast fishing industry following the recent catch and catching time restrictions imposed under the common fisheries policy. [146370]
    The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): The settlement we achieved at the December Council provides good support to the east coast industry through increases in quotas and the roll-over of the fishing days for cod vessels in the North sea.
    Mr. Mitchell: I am grateful for my hon. Friend's concern but I wonder whether he is being a little overoptimistic. The financial situation of the Grimsby fishing industry and the east coast fishing industry in general is desperate. We suffer from the same restrictions on catches and days at sea as the Scots—the restrictions were imposed because of the disastrous failure of the common fisheries policy—but although the Scottish industry got a £10 million lifeline last year and hopes to get a lifeline of the same scale this year, the east coast industry got nothing. Surely it is important to keep a viable English industry going on the east coast so that we can inherit the better times that should lie ahead. What is he doing about that?
    Mr. Bradshaw: I accept what my hon. Friend says about the hard times faced by the industry in Grimsby

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    in recent years, but I ask him to recognise the very real gains that we made at the December Council: a 55 per cent. increase in the haddock quota in the North sea and a 28 per cent. increase in the prawns quota. The chief executive of Grimsby fish market, Mr. Martin Boyers, said:
    "It is as good an outcome as you could possibly get",
    and Arnold Locker, who will be known to my hon. Friend, said that the outcome was
    "encouraging …it means that the East coast fleet will be economically viable."
    Mr. Alex Salmond: I do not know what world the Minister is living in. Does he not understand that the increase in the haddock quota has been totally wiped out by the ridiculous map that he and his officials accepted, which bears no relation whatever to the proposals of the Scottish Fishermen's Federation? Does he not understand that the major haddock fishing area has been put into a cod-restricted zone, which means that on one side of the line it will be impossible to fish the quota, and on the other the fishermen will be lucky if the catch lasts until June?
    We want to know who was responsible for this monumental disaster. Was it the Minister and his team; was it Ross Finnie and his team; was it the European Commission and its team; or did it take the combined efforts of all three?
    Mr. Bradshaw: The hon. Gentleman is talking absolute rubbish. We achieved at the December Council much of what he has been calling for over the last six months: a massive increase in the haddock quota for the areas that he is talking about and a huge increase in the prawns quota. I shall quote the industry spokespeople in Scotland, rather than the hon. Gentleman. The head of the Scottish Fishermen's Federation, Alec Smith, said:
    "The increase in haddock is good news",
    and John Patterson, from Peterhead fish market in the hon. Gentleman's constituency, said:
    "The deal overall must be welcomed."
    Yet there has been not a word of congratulation from the hon. Gentleman.
    Mr. Bob Blizzard: My hon. Friend will know that it is not all bad news on fish stocks: there is an abundance of herring off the east coast, which shows that fish stocks can recover if not too many are taken out. Will he set up a small study group to see how we can derive value from that herring? The inshore fishermen of Lowestoft could make a living from it if they could get a price, but at the moment they cannot. How about a marketing initiative for herring?
    Mr. Bradshaw: My hon. Friend makes an extremely constructive suggestion, which I shall consider carefully. He is absolutely right; one of the sad things about the current state of the industry is that some of the species that are most plentiful, such as herring, do not have an enormous domestic market, although there is a market in other parts of the world, not least in Europe. We therefore have a successful, thriving export industry of herring and herring products. I recommend bloaters to anyone who has not yet tried one, and I think that the
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    most delicious fisheries product is soft herring roe. I shall try to do everything that I can to encourage more people to eat herring and herring products.

    European Fisheries Council
    Sir Archy Kirkwood: If she will make a statement on the outcome of last month's EU Fisheries Council and its consequences for the North sea fleet. [146371]
    Mr. Alistair Carmichael: If she will make a statement on the recent European Fisheries Council. [146374]
    The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): As I have already said, the outcome was a good one for the UK. We agreed a long-term recovery plan for cod, the stock levels of which remain worryingly low, and we managed to maximise opportunities to catch those species that are plentiful, such as haddock and prawns.
    Sir Archy Kirkwood: I particularly welcome the increase in the nephrops quota; it has certainly thrown a lifeline to the local boats that fish for prawns in my constituency. However, if the Commission is now persuaded of the important concepts of decoupling and spatial management, surely it should also accept that micro-management from Brussels does not make sense in the long term and is counterproductive for effective fishery management. If, as is rumoured in the press, the Downing street strategy unit will, in the next few weeks, come up with a recommendation radically and dramatically to improve the regional management powers available to committees in this country, will DEFRA Ministers, and the hon. Gentleman in particular, support such a concept?
    Mr. Bradshaw: Yes, of course. I welcome the hon. Gentleman's constructive response to the outcome of the December Council, in stark contrast to that of the spokesman for the Scottish nationalists. It was a good deal and, as the hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood) said, we managed to persuade the Commission to accept the idea of spatial management—a concept that came from the Scottish industry. We also managed to persuade the Commission to accept the concept of decoupling. I hope that we can build on that, and I hope that when the strategy unit reports, we will be able to make faster progress towards regional management of our fishing industry.
    Mr. Carmichael: Does the Minister share the concern of fishermen in my constituency that an unintended consequence of the deal that was struck in Brussels is that they will be forced out of the haddock grounds where they have always caught the biggest, best and most mature haddock, as those grounds are now in the restricted zones, so they will be forced inshore, where younger, smaller fish are found? Does he agree that that is not in the interests of either fish conservationists or fishermen, and what can he do between now and the finalisation of the regulation to ensure that it does not happen?
    Mr. Bradshaw: I am happy to look at the technical matters raised by the hon. Gentleman. He may not be

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    aware that the Commission's original map on spatial management around his constituency would have created severe difficulties, because it included inshore waters, meaning that the result would have been much worse. In return for the massive increase of 55 per cent. that we achieved in the haddock quota, we rightly took on board some of the industry's suggestions about spatial management, so that people will be able to catch that extra quota in geographical areas where there is not a lot of cod. The only way we could persuade the Commission to increase the haddock quota was to assure it that that would not mean catching a lot more cod.
    Mrs. Joan Humble: I welcome the visit that the Minister will shortly make to my constituency, and I congratulate him on the fact that the cuts in the plaice quota for the Irish sea are not as drastic as feared. However, when he visits my constituency to talk to Fleetwood fishermen, will he take on board their serious concerns about cuts in the quota for plaice, a stock that is within safe biological limits, and of which they want to catch more to remain viable?
    Mr. Bradshaw: I look forward very much indeed to visiting my hon. Friend's constituency on Monday. I welcome her remarks on the fact that we managed to avoid a much more substantial cut in the plaice quota. She may not understand the so-called Hague preference—I do not want to go into detail about it now, but I will discuss it with her and the industry on Monday during my visit. I should like to point out that there were massive increases in the Irish sea quota for haddock, which was trebled. I hope that that will help to mitigate the cuts in the plaice quota that my hon. Friend's local industry is worried about.
    Mr. John Wilkinson: When will Her Majesty's Government realise that the European Union's common fisheries policy has been an unmitigated disaster for the North sea fishing fleet and fishing communities throughout the United Kingdom? Instead of making these pathetic pilgrimages to Brussels to be told what to do by the European Fisheries Council, the Minister should visit Norway and Iceland, proud, independent maritime nations that manage their own fish stocks admirably.
    Mr. Bradshaw: I think it is fallacious to try to compare the United Kingdom fishery, a mixed fishery in close proximity to other EU nations, with Norway, Iceland or the Faroes, as many Opposition Members constantly do. We are, however, always keen to learn from the way in which other countries manage their fishing industries. Indeed, over the past 12 months, the Prime Minister's strategy unit has taken a close look at that, and has visited and spoken to those countries and their industries to see whether there are any lessons that we can learn.
    Shona McIsaac: There are serious concerns among people involved in the catching sector, as was articulated by my neighbour and hon. Friend the Member for Great Grimsby (Mr. Mitchell), and I accept that those fishermen feel that they need
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    extra financial assistance. However, what assessment has the Minister made of the industry's land-based operations in the processing and selling sectors following his discussions in Europe and his recent visit with me to the Grimsby fish auction?
    Mr. Bradshaw: My hon. Friend is right to point out that the UK fishing industry is more than just a catching industry. We have a highly successful fish processing industry, including operations in her constituency, which is going from strength to strength, creating wealth and providing employment. Many other sectors of the fishing industry are also forgotten, such as recreational angling, which, according to latest estimates, contributes about £3 million to the economy every year.
    Mr. John Whittingdale: The Minister attached great importance to fishermen's comments when he described the outcome of the council meeting. However, the chief executive of the National Federation of Fishermen's Organisations said that he was "bitterly disappointed" at that outcome. Alex Smith of the Scottish Fishermen's Federation, whom the Minister cited, said that his "worst fears" had been realised and declared:
    "We were sold down the river".
    The secretary of the Mallaig and North West Fishermen's Association said:
    "If Ben Bradshaw thinks this is a 'negotiating triumph' he must be plain barking mad".
    Is it not the case that the outcome will perpetuate a policy that has failed to conserve fish stocks, that encourages the dumping of dead fish back in the sea, and that is slowly but surely destroying the British fishing industry?
    Mr. Bradshaw: No. It is amazing that the spokesman for the official Opposition cannot recognise a good deal when it leaps up and bites him in the face. I am happy to carry on exchanging quotes from the industry, with whose members I had regular contacts all the way through the Council. They privately told me to my face that this was the best deal they had achieved for years, or ever under the Conservative Government. The president of the national federation, whom the hon. Gentleman mentioned earlier, Mr. Sam Lambourn, said it was "a positive result".
    Mr. Frank Doran: The Commission having accepted in principle the spatial management approach of the Scottish Fishermen's Federation, it is clear from the debates that took place in the Council that there will be additional enforcement measures. What progress has my hon. Friend made in that respect? Can he give us some details about how he intends to approach the matter?
    Mr. Bradshaw: We are taking extra enforcement measures all the time. My hon. Friend is right to point to the fact that if we are to continue to convince the Commission and other European Union countries that we can continue to catch at the present rate, given the science, the system must be properly enforced. As he may be aware, we are under threat of infraction proceedings from the European Commission because of

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    our enforcement. We are looking carefully at what more we can do. One measure is the introduction of satellite monitoring equipment, which will be tamper-proof, in all over-15m vessels. At the request of the industry, we have agreed to fund that fully, rather than expecting the industry to fund it.

    Rural Businesses (Payment)
    Mr. Henry Bellingham: When she next expects to meet representatives of rural businesses to discuss the prompt payment of bills. [146372]
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael)s: My colleagues and I frequently meet representatives of rural businesses and we discuss a range of issues. Any request to discuss the prompt payment of bills would be considered on its merits.
    Mr. Bellingham: Is the Minister aware that according to the Forum of Private Business, 350 contractors who helped solve the foot and mouth crisis are still owed over £100 million? That is a staggering figure, and includes firms such as R. W. Pugh of Montgomeryshire, which is owed £500,000, and Luke Furse Earthmoving Ltd. of Devon, which did a superb job and is owed £1.2 million. Luke Furse is a family owned business that has spent £100,000 on legal fees and is being driven to despair. When will the Minister play fair? When will he try and rebuild his credibility with the rural community? When will he follow his own rules and guidelines on the payment of bills?
    Alun Michael: That is a slightly hysterical way of asking the question. Opposition Members would be very critical of the Government were we to pay bills in relation to which there were serious questions. It is right for the Government to have all claims carefully examined. It is a big job, but according to the estimates that I have been given, the process has saved the public purse—it is not the Government's money; it is the public's money, at the end of the day—about £800 million. It is right that the figures should be scrutinised.
    Mr. David Drew: When my right hon. Friend meets rural businesses, will he take up with them the question of how banks impact on rural areas? We were pleased that banks were so positive in relation to farming businesses during the foot and mouth outbreak, but they do not seem to be quite as helpful in dealing with rural manufacturers.
    Alun Michael: Manufacturing in rural areas is extremely important. More people are employed, per head, in manufacturing in rural areas than in urban areas, so issues relating to the services that they receive are important. As my hon. Friend suggests, we found a ready response from the banks to the problems facing organisations outside the farming industry as well as inside it, as a result of the impact of foot and mouth disease. If my hon. Friend has specific issues in mind, I shall be glad to discuss them with him.
    Andrew George: The Under-Secretary of State for Trade and Industry, the hon. Member for
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    Edinburgh, South (Nigel Griffiths), confirmed to me on 6 November in the Chamber that over £50 million was being withheld in respect of claims for foot and mouth compensation pending a potential fraud investigation. Following the acquittal this week of Mr. Pedrick of Sheepwash in Devon in respect of a claim for £17,000, which I am told has cost the Department for Environment, Food and Rural Affairs a six-figure sum to pursue legally, can the Minister say how many more cases have yet to be resolved, whether the £20 million estimate for legal bills will be exceeded, and to what extent and when farmers with a legitimate claim will have those claims properly resolved?
    Alun Michael: Where we know that a claim is legitimate, it is paid. Legal and other costs incurred as a result of queries on claims have to be set against the large sums of money that I am talking about. As we are talking about possible savings of about £800 million, I am sure that the hon. Gentleman will agree that we are right to scrutinise claims carefully where they appear not to be substantiated, where they are not submitted in a timely manner or where there is a lack of invoices. It obviously would not be right for me to comment on an individual case such as that referred to, but ensuring that money is paid out in a timely way only where that is justified is surely the right approach.
    David Taylor: Pre-1997 life as a freelance accountant for small businesses in the rural east midlands now seems rather distant, but what would have been true then is true now—that cash is king for many small businesses and lack of cash flow can tip them over the edge. Will the Minister acknowledge that, despite the huge achievements—50 days down to 40 days in average payment time is great—there remain other things that our Government can do? Will he approach, with the Secretary of State for Trade and Industry, the chief executive of Companies House and get her to use existing Companies Act powers to require the publication of average invoice turnround times in annual reports? That would buttress Federation of Small Business league tables and help a great deal.
    Alun Michael: I am not sure about my hon. Friend's specific proposal, but I am happy to consider that. The Department's payment terms are the payment of valid invoices for goods, services and works within 30 days of receipt and agreement. In the last three years, which includes the year in which foot and mouth had an immense impact, we have met that requirement in respect of more than 90 per cent. of invoices. Anything that can be done to assist small businesses is important and we shall be happy to consider that.
    Mr. James Gray: The Minister says that in the last three years over 90 per cent. of payments have been made within 30 days. How then does he account for the letter, admittedly dated a year ago, from his noble Friend Lord Whitty, in which he says:
    "The Department's target is to pay contractors within 30 days of receipt of invoice."—

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    One might think that that is very fair, but he goes on:
    "Unfortunately, given the large number of suppliers of goods and services which the Department has contracted … this target has proved difficult to meet in the case of 9 out of … 12 invoices".
    DEFRA is not meeting its target on three quarters of those invoices. How does the Minister account for that? How does he account for the fact that the £55 million worth of debts that are owed by the Department to contractors as a result of the foot and mouth crisis are not the result of disputed claims? Those that are disputed form only a small fraction—12 cases, I think, out of 2,000 outstanding against DEFRA. Here is what The Western Morning News headline had to say about the case raised by the hon. Member for St. Ives (Andrew George) a moment ago:
    "DEFRA put me through hell".
    That is what happens to the farmers to whom the Government are trying to cover up their indebtedness.
    Alun Michael: The hon. Gentleman should distinguish between claims that are genuine, clear and not in dispute, for which I have given the figures for compliance with payment requirements, and those where there are questions. It is not surprising if companies that have put in a claim, and say that they have not been paid, do not refer to any disputes or disagreements with regard to the scrutiny that is necessary and that it is appropriate that we should undertake. As I have said, scrutiny of these claims has led to savings of the order of some £800 million. That is not a small sum.

    GM Crops
    Joan Ruddock: If she will make a statement on the withdrawal of six GM seed applications for UK national seed listing by Bayer CropScience. [146375]
    The Minister for the Environment (Mr. Elliot Morley): Bayer CropScience withdrew the UK national list applications for five oilseed rape varieties in November 2003. This was published in the Plant Varieties and Seeds Gazette in December 2003. In 2003, a total of 56 UK national list applications for oilseed rape varieties were withdrawn by the applicants. Withdrawal of national list applications is voluntary and entirely a matter for the applicants concerned.
    Joan Ruddock: May I suggest to my hon. Friend that the likely reason for the withdrawal is that the industry's claims for GM crops clearly cannot be sustained? Has he seen the latest American research, which has been publicised by the Soil Association and shows that, after initial reductions in the early years, there was a massive increase in the chemicals applied to the herbicide-resistant GM crops compared with the non-GM crops? In the case of maize, this amounted to a 29 per cent. increase. Maize is, of course, the only GM crop that achieved a slightly favourable result in the Government's farm-scale evaluations.
    Mr. Morley: I have seen reports on the research to which my hon. Friend is referring. It is important that we analyse those reports in some detail, and I am sure that they will be scrutinised by our expert scientific committees in relation to our current evaluations and discussions on GM applications in this country. It is certainly the case that in the field-scale evaluations, the detrimental impact was linked to the chemical application regimes, not with the genetic modifications themselves, although they are linked to the chemical regimes. That is an important consideration. The Advisory Committee on Releases to the Environment is currently making a detailed evaluation of the field-scale evaluations, and I am sure that it will take this research into account as well. We will receive its report in the near future.
    Mr. Robert Key: Does the Minister agree that we must keep an open mind on GM foods, that our policy must be based on sound science, and that we would be doing a disservice to consumers, farmers and the environment if we were to base public policy on dodgy extrapolations from one or two examples or from one or two dodgy looking research papers?
    Mr. Morley: The hon. Gentleman is absolutely right; we must base our decisions on sound science. Any research must be properly evaluated in detail, whether the conclusions are positive or negative, and we would expect to do that. No country has put in place such detailed examination and evaluation of GM as this country under this Government. That is entirely right and proper, because we must be guided by the facts and by sound scientific advice.

    Animal Welfare
    Mrs. Anne Campbell: When she expects to publish the draft Bill on animal welfare. [146376]
    The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): We hope to publish a draft animal welfare Bill in the first half of this year.
    Mrs. Campbell: I am pleased to hear that news, but may I tell my hon. Friend about an appalling story that appeared in my local paper just a few months ago? Two young children went into a pet shop and bought a hamster. They then tied the hamster to a firework and ignited the firework, killing the hamster. Does he not agree that it is now urgent that the age at which children can buy pets should be raised to 16, and will he consider including such a provision in the animal welfare Bill?
    Mr. Bradshaw: This is certainly one of the issues that will be included in the consideration of our animal welfare Bill. My hon. Friend might already know that this will be the first opportunity for 100 years to make major improvements to our animal welfare legislation. The distressing activity that she has described is covered by existing law, but I recognise that a number of areas need tightening up. I hope that she and other colleagues with an interest in these issues will help us to produce a good piece of legislation that will stand the test of time.

    Transport (Environmental Impacts)
    Sue Doughty: What recent discussions she has had with the Department for Transport with regard to the environmental impacts of transport. [146377]
    The Minister for the Environment (Mr. Elliot Morley): My right hon. Friend the Secretary of State and other DEFRA Ministers have regular discussions with the ministerial team in the Department for Transport on many matters, including the environmental impacts of transport.
    Sue Doughty: I thank the Minister for that answer. Is he aware of the deep concern resulting from DEFRA's failure to provide sufficient sites for hazardous waste when co-location ends in July this year? In a written answer to me on 6 January, there was no indication of any discussions being held with the Department for Transport about the environmental impact of lorries full of toxic waste having to travel many excess miles across the country. Will the Minister discuss this issue with his colleagues at the Department for Transport as a matter of urgency? Will he also apologise to the people who are going to have to put up with those lorries full of toxic waste going past their houses, and for DEFRA's failure in this respect?
    Mr. Morley: It is premature to talk about failure when the issue has not yet been put in place. The Government have set up the hazardous waste forum, where there is a dialogue between the Government and the industry on how those issues are being tackled and resolved. I will be meeting industry representatives in the very near future to talk face to face about the practical issues, which we recognise, and the hon. Lady should understand that the regulations that prevent co-disposal in existing sites do not prevent the construction of a separate cell, where hazardous waste can continue to be put on site, but apart from domestic waste. I am surprised that that issue has not emerged in the discussion that is taking place. That is not, in itself, a difficult technical solution, and some potential consequences of these changes have been grossly exaggerated.
    Mr. Michael Meacher: Is it not inconsistent for the Government to pursue demand management for road transport via motorway tolling and congestion charging only for the aviation White Paper to reject demand management in respect of air travel, where the climate change impacts are far greater? What is my hon. Friend doing to ensure that air transport is urgently brought within the Kyoto protocol, that emission caps are allocated to airlines so that they can be progressively reduced via emissions trading over time and that enforceable limits on noise and air pollution are placed on individual airports so that local residents do not bear all the environmental costs?
    Mr. Morley: On the latter point, I can assure my right hon. Friend that the White Paper addresses the issue of environmental impact on people who live adjacent to airports and, indeed, flight paths. I accept the main thrust of his argument in that the air transport industry
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    cannot continue to expect to be exempt from regulations and controls relating to carbon dioxide and its impact on the environment. We are having discussions with the EU about applying carbon trading to EU flights. He will he aware, of course, that this is a global industry; a global solution is required. We should not rule out any approach when considering the growth in air transport. That growth is a reality—we cannot ignore that either—but we must accept that the industry globally must come within controls that recognise its environmental impact and also the matter of reducing carbon dioxide emissions.
    Mrs. Caroline Spelman: The Minister says that he has regular discussions with the Department for Transport, but a clear gap in those discussions was identified by the Environmental Audit Committee, which criticised the Government for their failure to undertake a proper environmental impact assessment of their plans for airport expansion. That omission has been compounded by the White Paper, which has spread blight far wider than was necessary. The Department for Transport has said that airport operators will have to pay for the problem of generalised blight, but what assessment has his Department made of the impact on council tax payers where the airport is in local authority control?
    Mr. Morley: On the latter point, there are a number of airports under local authority control, many of which were pressing the Government for expansion along the lines set out in the White Paper. Of course there will be costs, which we would expect the airport authorities to deal with. They understand that very well in relation to their expansion plans.
    We recognise the potential for impact assessments and DEFRA has been sponsoring a study on the effects of aircraft noise on children in schools, for example, as part of our commitment to a proper evaluation of the potential impact of pollution at all levels, whether it is noise pollution, air pollution or any form of pollution from the airports. We take these things seriously; they are being addressed. Any airport that is subject to an expansion plan would be expected to do the environmental impact assessment.

    Horse Passports
    Mr. David Cameron: What estimate she has made of the cost of enforcing new legislation on horse passports; and if she will make a statement. [146378]
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): The horse passports regulations will be enforced in two ways. Local authority trading standards officers will be responsible for enforcing the requirement to have a passport. The Meat Hygiene Service will be responsible for enforcing the legislation at the slaughterhouse. Enforcement will be subsumed in existing responsibilities and resources.
    Mr. Cameron: What will the Department tell people when they see an army of snoopers paid for with council tax to inspect their stables; when they see a law that has

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    been condemned as defective by a Committee of the House; and when they see a measure that excludes most wild ponies, which do occasionally—and regrettably—end up in the food chain, while including donkeys and other ponies, virtually none of which do? Why have the Government wasted so much time in introducing such a ridiculous piece of bureaucracy just so that the French can go on eating horsemeat?
    Alun Michael: The hon. Gentleman obviously knows very little about the legislation and the reasons for it. It will clearly surprise him to learn that it has strong support in the horse industry.
    The advantage of the horse passport system, apart from the identification of horses and the meeting of our obligations under the legislation, is that the industry will be able to go on using the methods that it currently uses, which are extremely valid and would not be used unless the regulations were in place.
    Mr. Owen Paterson: That was an amazing reply. The National Audit Office has confirmed that the British Cattle Movement Service has lost more than 100,000 cattle, at a cost to the British taxpayer of £15 million a year. Can the Minister name three clear lessons from that fiasco to prove to the House that this latest bureaucratic nightmare will not lose a similar number of horses?
    Alun Michael: It was an amazing reply because it was made in response to an amazing question from an Opposition Back Bencher, but the Front Benchers are even better: they do not seem to understand the difference between horses and cattle.
    We have introduced a statutory instrument that responds to our discussions with the industry about the most efficient and co-operative way of implementing legislation. It is a good example of the Government working with the horse industry and recognising the contribution that it makes to this country and the economy of rural areas. I must say to the hon. Gentleman that that was never done by his party when it was in government.

    Coastal Erosion
    Norman Lamb: If she will make a statement on the impact of dredging on the rate of coastal erosion. [146379]
    The Minister for the Environment (Mr. Elliot Morley): There is no evidence that licensed gravel extraction off the coast is having an effect on coastal erosion, but as a precaution each application must include a coastal impact assessment, which is carefully scrutinised.
    Norman Lamb: Given that many experts—including the head of the erosion project—believe that dredging can have a significant effect on the rate of coastal erosion, given that the revenue from dredging off the Norfolk coast amounts to some 40 per cent. of national revenue from dredging in any one year, and given the extent of erosion off the Norfolk coast, is it not time for an urgent inquiry into the impact of dredging on the rate of coastal erosion?
    Mr. Morley: Research has been and is being done on both the impact of dredging and the movement of
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    sediments in the southern North sea. In the 1990s Southampton university conducted studies on the impact of offshore dredging and concluded that it had no real impact on sea bed patterns or erosion. More recently, in 2002, a study was undertaken of the movements of sea bed sediments in the southern North sea. Although it did not specifically examine the dredging itself, it too concluded that dredging was having no direct impact on coastal erosion.As far as I am aware, there is only one example of a proven impact on coastal erosion, and that dredging was immediately inshore.
    We take these matters seriously; we do not dismiss them. We take them into account in our overall evaluation of licence applications. At present, however, there is no evidence that dredging is having an effect on coastal erosion.

    Milk Prices
    Sir Nicholas Winterton: If she will take steps to increase the farm-gate price of milk for UK dairy farmers. [146380]
    The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): The reasons for low farm-gate prices over the past few years are complex, and cannot be reduced to a single factor. Many of them are for the industry to address. However, the Government can and have taken action in line with their strategy for sustainable farming and food to facilitate such developments.
    Sir Nicholas Winterton: The Secretary of State will know of my long interest in the UK dairy industry. Does she admit that it is extremely important to many parts of the countryside throughout the UK? While there has indeed been a strengthening of support prices in recent times, for obvious reasons, the price increase is not percolating down to farm-gate prices. What meaningful action are the Government taking to ensure that the dairy industry supply chain operates correctly, thereby addressing the frustration of dairy farmers—not least in my constituency, where the industry is very important? They are justifiably concerned about farm-gate prices, and feel that producers should receive a bigger and fairer return for what they produce.
    Margaret Beckett: I do recognise both the hon. Gentleman's long-term interest in this issue and the importance of the industry to the country as a whole. I am grateful to him for recognising that there has been a recent strengthening in the price, and I understand his concern as to whether that is reflected at the farm gate. However, there have been recent signs that cheese prices have improved, which may lead to a further increase in prices, at least in the short term.
    The important point that the hon. Gentleman highlights concerns the action that should and can be taken to improve the supply chain. My noble Friend Lord Whitty has chaired meetings of the Dairy Supply Chain Forum, which has looked at improving efficiency, collaborative solutions and other issues. The Milk Development Council has initiated an innovation workshop to look at the barriers in the sector, and we have given a grant to the Food Chain Centre so that it

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    can look at precisely these issues. We have also established the English Food and Farming Partnerships in order to encourage collaboration. I fully recognise that great concern still exists in the dairy sector and that we would all like to see a lot more improvement, but I hope that the hon. Gentleman will accept that, just as he has sought, the Government are taking steps to work on the supply chain.
    Mr. Ian Davidson: How many of the dairy farmers for whom more money is being sought were among those farmers and rural businesses who made false and exaggerated claims to the Government for compensation and repayment after the recent foot and mouth outbreak? Can my right hon. Friend tell us what steps she is taking to reduce the welfare dependency that is prevalent among so many of our farmers?
    Margaret Beckett: Although we of course deplore, as the whole House doubtless deplores, any steps that were taken to make false claims on taxpayers' resources during the foot and mouth outbreak, I do not believe that there is any indication that a particular sector is more responsible than another. However, my hon. Friend is right in that there is a widespread wish, including within farming itself, for a change in the way that we support British agriculture, making it more related to the actions of the market. Indeed, that process underpins the common agricultural policy reforms that we negotiated recently, and we are in continuing discussion about how we implement those reforms in the near future.

    Fruit Farmers (Kent)
    Hugh Robertson: If she will make a statement on Government assistance to fruit farmers in Kent. [146381]
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): Fruit farmers in Kent, like fruit farmers in the rest of the country, receive benefits from the Department for Environment, Food and Rural Affairs' substantial research and development programme, of which about £2.5 million is being spent in this financial year on relevant research at East Mailing, and on the national fruit collection at Brogdale. Producer organisations in the fruit sector receive about £3.5 million a year in assistance from the EU. In addition, growers are eligible for assistance under the England rural development programme and other Government schemes.
    Hugh Robertson: Bearing that reply in mind, can the Minister therefore explain to the House why the national orchard—the country's supply of fruit trees—has declined by a staggering 25 per cent. since this Government came to power?
    Alun Michael: The timing, I suggest to the hon. Gentleman, may not be related to electoral decisions in the way that some matters are. It is the industry's role to produce and to market goods at a quality and price that are attractive to consumers. It operates in a very competitive market, and certain products are more
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    difficult to produce in this country than in others: those factors have certainly had an impact. Because of our climate, the yield of some varieties is not as great as it can be elsewhere. It is worth pointing out that horticulture has never received the price support that has caused such economic distortion in other areas of agriculture.

    Foot and Mouth Disease
    Michael Fabricant: What steps she is taking to prevent a further outbreak of foot and mouth disease. [146382]
    The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): The many steps that have been taken to prevent foot and mouth disease, including improving the detection of illegal imports of meat, banning swill feeding, subjecting animal movements to licensing and a standstill period, are all detailed in the Government's response to the foot and mouth inquiries. Contingency plans have also been strengthened to deal with the disease, should an outbreak occur.
    Michael Fabricant: I am grateful to the Minister for mentioning the illegal importation of meat, because he knows that the British Veterinary Association has identified that as one of the main causes of foot and mouth disease. If he visits the US, Australia, New Zealand—or indeed most other countries—he will find sniffer dogs waiting for him whose job is to detect the illegal importation of meat. The last time that I raised this matter with the Minister, he accidentally told me that the UK had more than two sniffer dogs available. I am grateful for the letter of apology that he sent to me, but will he say how many sniffer dogs we now have for the detection of the illegal importation of meat, and how many airline terminals and seaports have to be covered?
    Mr. Bradshaw: That was a very long question and I shall try to answer as much of it as I can, if Opposition Members stay quiet for a moment. I have travelled to New Zealand, where I was snapped by a sniffer dog for carrying a piece of fruit. The hon. Gentleman is therefore not correct when he says that America, Australia and New Zealand have sniffer dogs only for meat. Those countries have them for the detection of other food products as well, but they have a very different tradition from us. The hon. Gentleman knows that New Zealand is especially concerned about its particular biodiversity.
    In the UK, we have two sniffer dogs that are specifically allocated to the detection of illegal food imports into this country. We will soon have six such dogs, and in the next financial year we will double the amount of money made available to Customs and Excise for that purpose. I expect that the number of sniffer dogs will increase further. However, Opposition Members must realise that, in the current security climate, there has been a bit of a run on sniffer dogs and on their handlers. Their main priority has been to detect explosives, and I hope that Opposition Members will agree that that is absolutely right.

    Sites of Special Scientific Interest
    Colin Burgon: What assessment she has made of the effectiveness of English Nature in protecting sites of special scientific interest. [146383]
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): The Countryside and Rights of Way Act 2000 gave English Nature new powers to protect SSSIs from harm, and to concentrate funding on improving their condition through positive management. The Department is working with English Nature and others to increase the percentage of SSSI land in favourable condition. The first complete condition assessment of the 4,112 sites in England was published in full last month. I should add that 1 have seen the work of English Nature on my recent visits to national parks, and it is very impressive.
    Colin Burgon: I thank my right hon. Friend for that reply, but cannot agree with this classification of the work of English Nature. If I had to give it a mark for its 'work in my constituency, I would give it nul points. It gives us very little help in protecting SSSIs. We recently fought an opencast sand and gravel application between Methley and Allerton Bywater. If I were to write to the Minister, would he give me a considered reply that would help to illustrate the weakness of the approach adopted by English Nature?
    Alun Michael: I should be happy to look at any specific issues that my hon. Friend wishes to raise. The Government's 95 per cent. target is a tough and challenging one, spread across a very large number of sites. However, I should be happy to look at specific examples, if my hon. Friend would like to write to me.

    Common Agricultural Policy
    Paddy Tipping: When she will make an announcement on the method of making agricultural support payments to farmers in 2005 following the mid-term review of the common agricultural policy. [146384]
    The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): We hope to make an announcement on the model for allocating entitlements under the new single payment scheme in a matter of weeks.
    Paddy Tipping: The outcome of the mid-term review was a radical and progressive step. Will my right hon. Friend go further down that path and introduce
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    proposals that do not rely only on historical claims, but which pay close attention to those voices that advocate a hybrid solution?
    Margaret Beckett: I am grateful to my hon. Friend for those observations. We have received some 800 responses to the consultation that we carried out following the reformed negotiations, and their variety was most interesting. Some responses supported historic allocation, while others supported area-based schemes and still others supported hybrid solutions. We are considering all those proposals with great care, and are paying particular and detailed attention to their impact on farm incomes and on the future and sustainability of UK farming.

    Bovine Tuberculosis
    Ann Winterton: What recent assessment her Department has made of the spread of bovine TB. [146386]
    The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): Our latest assessment shows that bovine TB restrictions affected approximately 5 per cent. of cattle herds in Great Britain between January and November 2003, compared with nearly 4 per cent. for the same period in 2002. There were 2,869 new TB incidents in the first 11 months of 2003—a slight reduction on 2002. The long-term trend is still upward, although this has been distorted by changes to the TB testing programme in the aftermath of the 2001 foot and mouth disease outbreak.
    Ann Winterton: May I tell the Minister that this is a very serious subject for the cattle industry in the United Kingdom, that bovine TB is almost endemic and that it is creeping into different areas of the country? We have had trials and reviews, but what action will the Government take?
    Mr. Bradshaw: I recognise the seriousness of the matter, not just for the cattle industry, but for the taxpayer. TB in cattle is costing the general public more than £70 million a year—not just in compensation paid to owners whose cattle are slaughtered, but on research programmes, which are an important part of the action. The hon. Lady will be aware of the randomised badger culling trials that are being undertaken to try to ascertain the true role played by badgers and whether badger culling operations should be a possible policy option in the future. We are also reviewing our whole TB strategy. If the hon. Lady would like to feed her views and comments into that review, I am sure that they would be extremely welcome.

Business of the House
12.31 pm
Mr. Oliver Heald: Will the Leader of the House please give us the business for next week?
The Leader of the House of Commons (Mr. Peter Hain):The business for next week will be as follows:
MONDAY 12 JANUARY—Second Reading of the Housing Bill.
TUESDAY 13 JANUARY—Opposition Day [2nd Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.
WEDNESDAY 14 JANUARY—Second Reading of the Employment Relations Bill.
THURSDAY 15 JANUARY—Second Reading of the Human Tissue Bill.
The provisional business for the following week will be:
MONDAY 19 JANUARY—Second Reading of the Civil Contingencies Bill.
TUESDAY 20 JANUARY—Second Reading of the Armed Forces (Pensions and Compensation) Bill.
WEDNESDAY 21 JANUARY—Opposition Day [3rd
Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.
THURSDAY 22 JANUARY—Debate on "Attendance and Behaviour in Schools" on a motion for the Adjournment of the House.
I have today written to all Members explaining how I intend to review the sitting times of the Chamber before the next election. Members will recall that the decision of the House in October 2002 was to change the hours until the end of this Parliament. The Modernisation Committee will need to review the current arrangements before then, and the House will need to decide whether to maintain or change them.
In the meantime, I will consult on a series of commonsense alterations that can be made—without waiting for the Modernisation Committee's review—to make the current arrangements work better, for example, through changing Committee sitting times and the times when the Chamber is available for visits. Members have expressed their concerns to me about the clash of Committee sittings with other duties, the 8.55am start times, the compression of the week, making better use of early evenings and access for constituents.
On the main question of the sitting hours themselves, there were and still are strong views. Since becoming Leader of the House in June last year, I have been made only too aware of the deep division of opinion between Members in all parties. We are keen to ensure that we find a way forward that, as far as possible, reflects a new and durable consensus, so I wish to explore a balanced set of changes. Colleagues will receive from the Procedure Committee a questionnaire about hours and the Modernisation Committee will consider its findings as part of its formal review of hours, which will include a more comprehensive survey. I can assure the House that all Members will have an opportunity to express their views.
Mr. Heald: I thank the Leader of the House for his announcement about sitting hours, but he knows that
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the House is looking for prompt action from him. Will he tell us more about the timetable of his review and that of the Modernisation Committee—either today or, if not, next week?
The programme motion on the Traffic Management Bill, which was dealt with on Monday, provided for a Committee end-date of 12 February. However, hon. Members assumed that the Bill would start its Committee stage next week, in accordance with normal procedure. Is he aware that we have now been told that the Committee will not start until 3 February and that there is widespread concern about that? Will he pledge that future programme motions will make it clear if there is to be a late start date in Committee, and what does he intend to do about that programme motion in particular?
On the Hutton report, can the Leader of the House confirm that the Prime Minister will not only make the statement to the House that we have been told about, but will lead for the Government in the debate? Does the Leader of the House agree that it is important that civil servants are treated fairly? He will have seen the draft Bill proposed by the Public Administration Committee this week on the civil service. Are we to have a statement on that? On the same subject, does he expect the Prime Minister to make it clear next week in the House whether he agrees with Sir Kevin Tebbit's evidence that it was the Prime Minister who authorised the release of Dr. David Kelly's name? If the Prime Minister agrees with that evidence, he should say so, rather than leaving Sir Kevin—a senior civil servant—dangling in the wind.
Will the Leader of the House tell us whether the constitutional Bills, such as that on the reform of the House of Lords, will be dealt with on the Floor of the House, as is the convention? It is important that we receive such an assurance, especially on House of Lords reform.
Mr. Hain: I thank the hon. Gentleman for his welcome for my statement on the sitting hours. He requests prompt action, and I am concerned about the aggravation caused by early sitting times and other issues—including the fact that hon. Members have not been able to bring constituents into the Chamber after the House has risen in the sometimes relatively early evening, and the fact that Members with constituencies well outside London, such as myself, have not been able to bring constituents to the House for line of route tours in the same numbers as before because they cannot get here early enough. I am in discussion with the House authorities to see what progress we can make promptly.
On the question of the Modernisation Committee's timing, the hon. Gentleman will know—as a member of the Committee—that we are engaged in an important exercise to discover how Westminster can be better connected to the average citizen, so that they can feel that the House of Commons reflects their views.
Mr. Eric Forth: What does that mean?
Mr. Hain: The right hon. Gentleman sneers at that, but I see it as my responsibility as Leader of the House to ensure that the Commons is better connected to the democratic wishes of voters. That exercise will go on for

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some months and thereafter the Committee will formally start the review of the sitting hours. I welcome contributions from the Conservatives, and from Front Benchers and Back Benchers on both sides of the House, so that we can reach a new and durable consensus. It is possible to make changes that will mean that instead of bitterly divided views on the sitting hours, we have a consensus on how to move forward. However, as I said in my letter, I do not see a majority for returning to the old sitting hours when we used to sit well into the night and sometimes into the early morning. Members of the public did not believe that their elected representatives could sensibly make laws at such times. We must consider a series of changes and I want to listen to everyone before proceeding.
The hon. Gentleman asked about the Traffic Management Bill. I am curious about his question on that point, because the start date and the number of sittings were agreed through the usual channels and I understand that no further representations have been made by the Conservatives or anyone else through the usual channels. It is, therefore, a source of concern to me that the hon. Gentleman has raised the matter, and I am sure that the Whips will want to consider any points that are made in the normal way, through the usual channels.
The hon. Gentleman asked about the Hutton report, and I have made the situation perfectly clear. I agree that civil servants must be treated fairly—I am in absolute agreement with the hon. Gentleman on that point. But let us take one step at a time. As I made clear well before Christmas, the Prime Minister will come to the House on the day that the report is published; he will answer questions and, as he said yesterday, he will be willing to be cross-examined on all the issues, including those raised by the hon. Gentleman. That is the proper way to proceed. Subject to the decisions made by Mr. Speaker on how long the Prime Minister's statement will run, there will be an opportunity for as many Members as possible to put their point of view and to hold the Prime Minister to account following the publication of the Hutton report.
My job is to ensure that the House can discuss accountability and all the issues involved in a proper way. When the report is published, I shall keep the House informed about exactly when the subsequent debate will take place and how it will be structured.
On the question of the constitutional Bills, of course the Bill on reform of the House of Lords will be heard on the Floor. That is the proper way to discuss that matter and I shall be happy to receive representations about the detail of it from the shadow Leader of the House.
Mr. Paul Tyler: May I assure the Leader of the House that we at least think that the central role of the House of Commons and Parliament generally in debating the affairs of the nation is critical, and that the re-engaging the electors in that process is extremely important? In that context, can he give us some reassurance?
As Leader of the House he is, we would hope, the primary champion for the rights of the House. Can he give us an absolute undertaking that when the Hutton
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report is published it will be made available to Members of the House at precisely the same time as it is made available to the media? Would it not be outrageous if the report of that inquiry, which has become something of an inquest into Government spin and Government spin doctors, was handed out to the media—or spun to the media—in advance of its presentation to the House? I appreciate that the details are not in the right hon. Gentleman's hands, but will he undertake to make representations to Lord Hutton to ensure that the report will be released simultaneously to Members of the House and to the media? That is extremely important and I hope that right hon. Gentleman can give us that assurance today or, if not, that he will do so as soon as he has been able to discuss the matter with Lord Hutton.
On the sitting hours, I agree with the Leader of the House that it is extremely important that those who send us here should have an input in the process.
Mr. Forth: What?
Mr. Tyler: The right hon. Gentleman does not seem to think that it matters whether the electors know what is happening in the House. Well, I do and I believe that it is extremely important that, for example, broadcasters have at their disposal, in the evening, the main decisions of the House. At present, the Government have a large majority, but important debates and Divisions could be taking place—perhaps in the near future—that should be communicated to those who send us here. Is it not important that those who send us here know what is happening in the House of Commons and can see it at a reasonable hour? Will the Leader of the House give us an undertaking that the Modernisation Committee will take evidence from those whom we represent, as well as from Members and those who communicate with us?
Mr. Hain: I welcome the hon. Gentleman's definition of my role as the primary champion of the rights of the House. That is the way that I see my role and that is how I try to carry it out.
The hon. Gentleman made important points about the Hutton report. As he implied, those matters are for Lord Hutton. Neither my right hon. Friend the Prime Minister nor I, in my role as Leader of the House, have been informed when the Hutton report will be published. We do not yet know that. I shall draw to Lord Hutton's attention the points that the hon. Gentleman made. The decision on who receives what first, in respect of the media and the House, is not in the hands of the Government, but I am sure that Lord Hutton will want to take careful note of the points that he made. I am equally sure that the hon. Gentleman is not accusing Lord Hutton of spin; the matter is not for the Government, but for Lord Hutton and his secretariat.
I very much agree with the hon. Gentleman's last point: electors matter. They send us here and hold us accountable at general elections. It is imperative that we address how electors feel about what we do in the House, the way that we do it and the access that we give them, including better online access. We should not simply be preoccupied with contemplating our own navels and our own internal procedures. We should also

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think about how we have a better direct link to the views of the people in the ways that we conduct business and reflect their views in our proceedings
Several hon. Members rose—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. May I just tell the House that we have a very congested agenda before us today? There is an important statement to come, and there is a great deal of interest among hon. Members in the Bill that will follow. I am not sure whether I will be able to call every hon. Member who is trying to catch my eye during business questions, but I appeal for brevity, and I will do my best in those circumstances.
Mr. George Howarth: May I congratulate my right hon. Friend the Leader of the House both on the decision he has reached and on the open-minded way in which he has approached this subject? May I assure him that, contrary to some press reports, those of us who have been campaigning for a review have been doing so not with a wish to turn back the clock—that can never happen—but to arrive at a sensible way in which the business of the House can be conducted? Indeed, does he agree that that is precisely what our constituents would expect? Finally, may I suggest that, if he continues to proceed in the manner that he has described, we can reach a consensus, which, even if it does not please everyone, will content most hon. Members about how we conduct our business?
Mr. Hain: I very much welcome and agree with what my hon. Friend says. I interpreted the motion as a call for a review, not for a reversal, and between the position that he enunciates and those who, like me, voted for the arrangements governing the existing hours, it is possible to find a new consensus that meets all people's concerns.
Sir Patrick Cormack: Does the Leader of the House accept that the best way to test the will of the House is to have a vote? Will he bear it in mind that Tuesday sittings were changed by a majority of seven? Why cannot we have a vote now on that and keep the other arrangements as an experiment?
Mr. Hain: Because it is not clear what the vote would be on. The hon. Gentleman and many other hon. Members will know that I have spoken to scores of Members in all parties on this matter. There are very divided opinions. We ought to have a proper review and proper consideration, and then decide how we can move forward on an agreed basis.
Mr. Clive Betts: Will the Leader of the House arrange for a debate on the Government's policy with regard to child day centres, linking early-years education with care provision beyond normal school hours, and, in particular, on how that links to existing provision in local authorities? In my constituency, in the Mosborough area, a pioneering project does precisely what the Government intend to do nationally. Unfortunately, the local authority is proposing major changes, which greatly concern my
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constituents, and I would very much welcome the opportunity to discuss that issue on the Floor of the House.
Mr. Hain: I am sure that the opportunity to discuss that issue on the Floor of the House could arise in various different ways, but I agree that it is very important and I am pleased that my hon. Friend has raised it.
Mr. Forth: The Leader of the House will recall that, yesterday, the Prime Minister said:
"we are about to have a report published"—
the Prime Minister obviously knows something that the Leader of the House does not, so perhaps he will have a chat with him about that—
"and rather than the right hon. and learned Gentleman",
the Leader of the Opposition,
"cross-examining me now, he can do that on the day the report is published".—[Official Report, 7 January 2004; Vol. 416, c. 250.]
Can the Leader of the House therefore confirm exactly what he envisages the arrangements will be? First, when the Hutton report is published, will hon. Members have a reasonable amount of time to consider it before it comes to the House? Secondly, will we have a proper opportunity and length of statement to question the Prime Minister immediately? As important, will we then have a full-day debate, opened by the Prime Minister, who should stay throughout the debate so that he can be held properly to account and answer the questions that arise from the Hutton report? Can we please have all that now on the record from the Leader of the House?
Mr. Hain: I assure the right hon. Gentleman that we will not follow the precedent set by the Conservative Government on the Scott report when the Opposition spokesman was led into a darkened room and had only a brief time to consider the situation. It is a matter for Lord Hutton to decide precisely the terms in which the report is released, and I am sure that he will listen to the points made by the right hon. Gentleman. However, the Prime Minister has made it crystal clear, as he did yesterday and as I did before Christmas, that he will come to the House on the day that the report is published and immediately make a statement and be subject to cross-examination and questioning by all the Members of the House who wish to take part in that. I have already answered the point about the arrangements for the debate to follow.
Dr. Brian Iddon: On Tuesday in the other place, there was a debate on the use of the Pugin Room and demands were made for it to be returned to the exclusive use of peers or, as a compromise, for it to be turned over to joint use. Will my right hon. Friend bear in mind the fact that we represent constituencies and are regularly lobbied? We need space to meet our constituents and those who otherwise lobby us.
Mr. Hain: I understand that this is a matter for the Accommodation and Works Committee, but I unite with my hon. Friend and, I guess, Members on both

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sides of the House. I have regularly taken constituents to the Pugin Room. It is an important facility for Members of the Commons even though it has a red carpet.
Sir George Young: On another parochial issue, the Leader of the House will have noticed that the unsightly and noisy demonstration in Parliament square has not reappeared in the new year. Can we have an early debate on the report of the Procedure Committee and a vote so that the House has the necessary powers to prevent any recurrence of that demonstration?
Mr. Hain: I agree with the right hon. Gentleman. The matter needs to be addressed and we are considering it. We will seek to address it as soon as possible in the way that he describes.
Ms Meg Munn: I welcome the announcement by the Leader of the House that he will move immediately to look to make changes to improve the operation of the new hours. Does he agree, however, that it would be premature to consider how the new hours are operating before the problems that Members have raised continually over the past year have been resolved?
Mr. Hain: As I said earlier, I agree that some aggravating issues can be addressed quite quickly. We then need to take not too long but enough time to make sure that we reach a consensus. As my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth) suggested, I believe that it is possible to reach a consensus on modern hours that do not involve some of the anomalies that we face at present. That is the issue that I wish to consult upon, and we can move forward and find an agreed way to do that.
Mr. Andrew Mackay: Does the Leader of the House appreciate that his response to my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) indicated to the House that the Prime Minister was not going to lead in the debate on the Hutton report? Again and again, the Leader of the House and the Prime Minister merely say that the Prime Minister will make a statement. Can we have a categorical assurance that there will be a reasonable amount of time between the statement and the debate and that, as has to happen, the Prime Minister opens the debate from the Government Dispatch Box and remains in his place throughout the debate so that he takes account of what the House thinks of the report? As the Prime Minister has made it clear that Hutton will report shortly, it is essential that the Leader of the House now tells us that what I have asked for will happen. If he does not do so, we will assume that the Prime Minister is on the run.
Mr. Hain: That is an outrageous suggestion, and the right hon. Gentleman knows it. The Prime Minister set up the Hutton inquiry and the Prime Minister has already made it clear that he will come here on the day that the report is published to answer questions from the
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right hon. Gentleman and anybody else. I do not think that the Prime Minister could be more accountable or open than that.
As for the debate, I have already made it clear that it will happen a week after publication of the report, so there will be enough time for the right hon. Gentleman and other hon. Members to consider it. The question as to the handling of the debate needs to be decided in the light of what the Hutton report says. [Interruption.] Indeed, the Conservatives have made up their minds about what the Hutton report says in advance. That is a prejudiced position; we are adopting a fair and open-minded position and the House's interests will be protected to ensure that the handling of the debate and who opens and who closes it is appropriate in the light of the report that appears from Lord Hutton.
Mr. Peter Pike: Although I still support the changes made to the hours, may I urge my right hon. Friend to consider one change that would be welcomed by many people who do not live in London or the south-east? That would involve making all Fridays constituency days in which we could accept constituency engagements and moving debates on private Member's Bills to Tuesday evenings. When the Modernisation Committee considers the proposals, will he also confirm that the Conservatives' proposal was for the House to sit from 9 to 5?
Mr. Hain: It was indeed, but I will not pour oil on troubled waters. [HON. MEMBERS: "Go on."] I am being incited to do that, but I am seeking to be a cross-party Leader of the House rather than a single party one.
My hon. Friend makes a very interesting suggestion, and I have received strong representations to that effect. It may well be one of the ways in which we can achieve a new consensus. I point out, however, that I read in The Guardian the other day that, under the new sitting hours, the average length of a sitting day has increased from 7 hours 40 minutes in 2002 to 7 hours 57 minutes. It is not the case that the new sitting hours have led to less scrutiny. On the contrary, they have actually led to more time in the House.
Rev. Martin Smyth: The Leader of the House will be aware that the Northern Ireland Assembly has been in suspended animation since October 2002, and it does not look like it will get off the ground very speedily. Will he therefore consider how urgent legislation required in Northern Ireland is dealt with in the House? For example, the draft Disability Discrimination Bill refers to every other part of the United Kingdom, but does not refer to Northern Ireland except to exclude it from its provisions. Surely all citizens with disabilities or other problems should be looked after by the House in the interim.
Mr. Hain: I agree that citizens suffering from discrimination, including on the ground of disability, must be protected by the House. The hon. Gentleman will know that Northern Ireland questions will take place on Wednesday next week, so he will have an opportunity to raise these matters then. I know that the Secretary of State for Northern Ireland will certainly want to take account of his views.
Mr. Alan Williams: In the negotiations that the Leader of the House has about the

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hours, will he place priority on opening up the hours from 9 o'clock to 12 o'clock on Wednesday morning, which, as he understands, are not at present regarded as available for Select Committees? If he could release those hours, that would make a major difference to the problems that currently confront Select Committees.
Mr. Hain: I am very sympathetic to my right hon. Friend's point. We could make better use of Wednesday mornings for Select Committees, in particular. That is precisely one of the common sense and balanced set of changes that I am seeking to explore over the coming weeks.
Mr. Patrick McLoughlin: Bearing in mind that two Cabinet Ministers gave evidence to the Hutton inquiry—the Prime Minister and the Secretary of State for Defence—is it not only right that those should be the two people who deal with the debate?
Mr. Hain: That may well be the case.
Mr. Forth: Ah.
Mr. Hain: We continually get a ray of darkness from the right hon. Gentleman. This is about handling the matter in a way that is satisfactory to both sides of the House in the light of what Lord Hutton's report says. We do not know where its focus will be and where its spotlight will fall in any conclusions. There is a range of institutions from the BBC to the Ministry of Defence and to the others involved for which there is ministerial accountability, so it is sensible to consider the report and then decide. I will report to the House immediately it is possible to agree a way forward. I will obviously hold business questions on the Thursday of the week in question—whenever that is.
By the way, it is not the case that I have said something different from the Prime Minister about the publication of the report. He is not aware of the publication day any more than I am.
Mr. Michael Connarty: I welcome the statement by the Leader of the House on the revised hours. I know that he is trying to be balanced, but I urge him to amend them only marginally. We now have a more intense, productive and focused week when we are here, and that should not be damaged.
To turn to other Government business, the House received—I think quite warmly—a ten-minute Bill from me in July that talked about amending the National Minimum Wage Act 1998 to take out the anomaly by which people's tips paid through the payroll are counted towards the minimum wage. Are the Government making any progress in introducing such a provision as an amendment to part of their business?
Mr. Hain: I will certainly make inquiries about my hon. Friend's latter point and let him know what the situation is. I, with him, voted for the changes to the sitting hours. I did not think that it was sensible for the House to sit at 11.30 pm, 12.30 am or 3 am and make legislation. However, the existing hours and
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arrangements have thrown up a series of issues, some of which I have described, that we need to address. Unless we address them, we will not get a new consensus and there will be continued division—sometimes bitter division. It is my job to try to assemble a new consensus and I hope that I will have the co-operation of every hon. Member in doing that.
Sir Nicholas Winterton: As Chairman of the Procedure Committee, I thank the Leader of the House for his announcement about the sitting hours. He might not be aware that the Committee is issuing a questionnaire this very day to all Members of the House. Will he join me in urging all hon. Members to respond to the questionnaire, which, although short, is comprehensive? When he sees the replies that are received, he will see that it deals with every option that the House could consider.
On the day on which the statement on the Hutton report is made, will he, as the Leader of the House representing the best interests of the House, ensure that the business on that day is light—there will be notice of when the statement is likely to take place—so that Mr. Speaker can allow maximum time for questioning?
Mr. Hain: I will bear in mind the important point that the hon. Gentleman makes. I have a copy of his excellent survey in front of me, which will be dispatched to hon. Members today. I am glad that he is conducting the survey because it will provide an important background to the Modernisation Committee's review. I have identified at least four options in the letter that I have dispatched today to all hon. Members: first, that we should revert to the old hours; secondly, that the new hours should stand; thirdly, that adjustments should be made to improve the new hours, including Committee sitting times; and fourthly, that the House should sit until 10 pm, as previously, on Tuesdays, but that we should keep the early hours on Wednesdays and Thursdays. Those are not the only options but they show the complexity of the issue. We need to take a bit of time to consider it, and his survey will help us to achieve that.
Mr. Harry Barnes: Has my right hon. Friend read early-day motion 357, which is about an unjustified United States raid on the offices of the Iraqi Federation of Workers Trade Unions in Baghdad on 6 December?
[That this House notes that no explanation, apology or compensation has so far been proffered by the US military authorities in Iraq for the unjustified raid on 6th December 2003 on the temporary headquarters in Baghdad of the Iraqi Federation of Workers' Trade Unions (IFTU) which led to the arrest of eight IFTU leaders who were later released; congratulates a wide range of organisations around the world such as the International Confederation of Free Trade Unions, the International Labour Organization, the Scottish TUC, the RMT union, the Labour Start web site, the Italian CGIL, the International Metalworkers' Federation and the Congress of South African Trade Unions for showing solidarity with the fledgling independent Iraqi trade union movement; regrets that the Iraqi Governing Council and Iraqi political parties failed to act to defend such an important part of the new civil society in Iraq; agrees with

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the IFTU on the need for an apology from the local US military commander who led the attack, for commitments that such an act should never happen again, and for compensation for damages inflicted on the IFTU personnel and possessions; and endorses its appeal for the American authorities not to be further misled by remnants of Saddam Hussein's regime about the new trade union movement.]
I appreciate that it has been difficult to get information out of the Americans about what occurred, but will efforts to find out be redoubled so that we may have a statement to tell us what actually happened from their point of view? I am aware that the Foreign Office and the TUC are taking a progressive line to encourage the development of free trade unions in Iraq, but efforts need to be made so that the Americans respond in a similar way to this country. There was an answer on 27 November—
Mr. Deputy Speaker: Order. The hon. Gentleman has made his point.
Mr. Hain: I am concerned that we get to the truth of what really happened on the occasion that my hon. Friend mentions, which he also raised before Christmas. I assure him that in a democratic Iraq there must be democratically constituted trade unions. They should have the right to organise and their headquarters should have the right to be free from any intimidation or harassment. We should bear that principle in mind when trying to get to the bottom of the matter.
Mr. Michael Weir: Is the Leader of the House aware of the proposal made yesterday by the hon. Member for Falkirk, West (Mr. Joyce) that Scotland adopt variable top-up fees if they proceed in England to prevent Scottish universities from being at a financial disadvantage? Surely we need a debate on the emptiness of the Government's devolution policy if Scotland is simply expected to follow policy decided here. Should the Scottish Parliament not have full financial independence so that it can adopt Scottish solutions rather than being forced to follow this place?
Mr. Hain: We know where the hon. Gentleman stands. He wants an independent Scotland—he nods—despite the fact that the people of Scotland have overwhelmingly rejected that. They prefer devolution with the strong Scottish Parliament that they have with responsibility for matters including education.
Mr. Martin Salter: We are all aware of the pressure that the Leader of the House is under on the revision of the hours, but has he had an opportunity to cross-reference the Conservative Members who signed early-day motion 262 with their entries in the Register of Members' Interests on outside business concerns that might be influenced by the new regime?
[That this House notes that the revised sitting hours and related arrangements have now been in place for 12 months; believes that there is now sufficient experience of the new arrangements to enable the House to judge what
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adjustments would be appropriate to enable the business of the House to be conducted more effectively; and calls for an urgent review of the reforms.]
Mr. Hain: I have not had the opportunity to do that. I am sure that any decision taken by the House will not be informed by what individual hon. Members might do outside the House in the mornings.
Mr. Greg Knight: Is the Leader of the House aware that this week 500 employees at the Sara Lee factory in Bridlington in my constituency lost their jobs? Does he appreciate that the scale of that loss is likely to have an effect on the town of Bridlington similar to that which the collapse of the entire UK car industry would have on the city of Birmingham? Will he therefore pass on my deep concerns to the Secretary of State for Trade and Industry with a plea for more to be done to encourage inward investment in English seaside towns, and may we have a debate on that?
Mr. Hain: The right hon. Gentleman is free to apply for a debate. I am concerned to hear the news from his constituency, but it is against the background of a continued rise in jobs and employment and cuts to unemployment—including in his constituency. Despite the sometimes terrible impact of company and factory closures, most, if not all, people find alternative jobs. We must ensure that we defend existing jobs wherever we can, including in his constituency, but if closures take place, we have active employment programmes to ensure that new job opportunities arise. That has been the case consistently throughout the country since we took power in 1997.
Mr. Kelvin Hopkins: My right hon. Friend will no doubt have seen reports this week about my right hon. Friend the Secretary of State for Transport's frustration at the failure of the Strategic Rail Authority and his apparent decision to take back powers from the authority to Ministers. That is clearly another stage toward direct public ownership and control of the railway industry, which I welcome. Will the Leader of the House arrange a full debate on the Floor of the House on the ongoing crisis in the railway industry, especially so that we may consider the prospect of bringing the whole industry back into public ownership and making it accountable to this Parliament?
Mr. Hain: I am sure that the Secretary of State will want to take account of my hon. Friend's views. I am also sure that my hon. Friend will want to celebrate the fact that more than 1,500 new trains have come into service since we came to power. Passenger numbers have been rising and record investment is going into the railways. There is a long way to go, given the mess that we inherited in 1997, but I am sure that he would want to applaud those trends.
Mr. Nigel Evans: The Leader of the House says that he wishes to reconnect Parliament with the people, which I support. In that spirit, is he aware that the Radio 4 "Today" programme held a poll of its listeners over Christmas to find out the sort of Bill

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that they would like to come before Parliament? They decided that there should be a Bill on law and order so that people could protect their homes properly. Will he arrange an urgent debate on that so that we can discuss something that worries many people?
Mr. Hain: I agree that the issue worries many people. I thought that the "Today" programme's poll was a worthwhile exercise. It is open to any Member of the House, including those high up on the private Member's ballot—
Michael Fabricant: Where is the hon. Member for Ealing, North (Mr. Pound)?
Mr. Hain: My hon. Friend the Member for Ealing, North (Mr. Pound) was not high up on the ballot. It is open to any hon. Member to take forward the "Today" programme listeners' verdict, and I hope that hon. Members will consider doing so.
Ms Oona King: May I urge the Leader of the House to support the suggestion to bring in private Members' Bills on a Tuesday evening because it is important that we use that space more? I resist being held hostage here by the lovely gentlemen opposite—they are all gentlemen—and urge my right hon. Friend to ensure that we maintain the current sitting hours.
Mr. Hain: My hon. Friend and others have put to me the interesting suggestion that we could liberate all Fridays and consider private Member's Bills on Tuesday evenings. Arithmetically speaking, we would require 22 Tuesday evenings to have time equivalent to that on the Fridays on which we sit. The suggestion will no doubt be considered during the Modernisation Committee's review.
Bob Russell: The House will agree that the health and well-being of our children is of the utmost importance. With that in mind, will the Leader of the House, with the Secretary of State for Education and Skills, find time to debate here the incredible, callous decision of Conservative-controlled Essex county council to abolish the school meals service in Essex?
Mr. Hain: I find it astonishing that the Conservative council has taken that decision, and I agree with the hon. Gentleman that the welfare of youngsters ought to be at the top of our agenda.
Mr. George Foulkes: Returning to the topic raised by the hon. Member for North Cornwall (Mr. Tyler), engaging the public with our work here, does not the Leader of the House think it entirely unsatisfactory that he cannot announce the topics for Opposition day debates when he makes his statement? The public do not know what is coming up in those debates, and neither do the MPs and Ministers who have to prepare for them. Should he not make it a requirement that, when he makes his statement, the topics of Opposition day debates have to be announced, or are the Opposition in total disarray?
Mr. Hain: Fortunately, I am not responsible for the Opposition, but I think that my right hon. Friend makes
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an interesting suggestion. In the last few minutes, I have had requests about all sorts of details for the coming weeks shouted at me or made in more sedate terms. It would be interesting to know the subject of Opposition day debates in advance so that Members could prepare and their constituents make representations. I shall energetically pursue the suggestion.
Mr. David Ruffley: The Leader of the House may be aware that the Penrose report delivered to the Treasury on 23 December has now been copied to the Financial Services Authority. That is not part of the normal Maxwellisation process, and it is a decision that the Equitable Life members action group has rightly described as highly questionable. In light of that and the appalling year-long delay in publishing Penrose, may I ask the Leader of the House to prevail on the Financial Secretary to the Treasury to come here next week and make an urgent statement about what exactly is going on in the Penrose inquiry?
Mr. Hain: I am sure that the Financial Secretary will have carefully noted the hon. Gentleman's points. Those with Equitable Life pensions have suffered grievously, and their interests ought to be seriously considered.
Mr. Mark Lazarowicz: I am grateful to my hon. Friend the Member for Burnley (Mr. Pike) for pointing out earlier that the Conservatives' proposal for our hours was for a 9 to 5 day. Will the Leader of the House bear it in mind that the 11.30 am start was itself a compromise between those who wanted a late start and finish and those who wanted an earlier start to the day? Will he assure the House that if he moves towards a compromise, it will not only be a question of having later hours; we should also have the option of an earlier start on all days of the week?
Mr. Hain: That is exactly why the issue is so complex. My hon. Friend has made a perfectly fair case. I do not know whether Conservative Front Benchers will resurrect their proposition—the right hon. Member for Bromley and Chislehurst (Mr. Forth) is nodding vigorously—or whether they will get unanimity on that point. Opinion on the Conservative Benches is just as divided as it is in other parties. We should approach the issue on a non-party basis in the interests of the House.
Mr. Christopher Chope: May I assure the Leader of the House that he was absolutely wrong in what he said about the Traffic Management Bill? No start date for the Standing Committee sittings has been agreed, and nor has the number of sittings. Surely, in any event, those are matters for the Programming Sub-Committee, and that cannot meet until the Selection Committee has appointed the Standing Committee. Will he assure the House that the Standing Committee on the Traffic Management Bill will be appointed this coming week so that the Programming Sub-Committee can decide how many times the Committee should sit and when it should start?
Mr. Hain: I made it clear earlier that the usual channels—the Government Whips—invited further

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representations. That invitation still stands, and if the hon. Gentleman or anyone else wants to make representations, they will be listened to.
Huw Irranca-Davies: My right hon. Friend will, I am sure, have noted several excellent ideas for modifying the existing hours. He, like me, is of a generation who remembers the joy of getting a Meccano set at Christmas, and we know that just because one cannot get all the right pieces in place the first time, that does not mean that one chucks it in the bin.
Mr. Hain: That is a verdict with which I completely agree.
Mr. Tim Boswell: In the interests of justice, will the Leader of the House consider having a word with his Foreign Office colleagues about the situation of my constituent, Ian Nisbet, who, with two other British nationals, has been imprisoned in Cairo since April 2002? His legal process has been constantly frustrated by adjournments, the last one of which took place on Christmas day and is likely to lead to a further 15-week delay. Does the right hon. Gentleman consider that entirely inappropriate in a legal process? If we do not get some action from the Egyptian authorities, it may be necessary for me and other concerned Members to hold another debate in the House on the matter.
Mr. Hain: I appreciate the hon. Gentleman's point, and I know that the Foreign Secretary will want to address the matter as soon as he can. Indeed, he is actively considering the hon. Gentleman's requests and representations at the moment.
Several hon. Members rose—
Mr. Deputy Speaker: Order. We must now move on.

Higher Education (Student Support)
1.15 pm
The Secretary of State for Education and Skills (Mr. Charles Clarke): Today, the Government will introduce a Bill to reform higher education. Before we do so, I wish to make a statement about the related matter of student support.
Change in higher education is necessary because, first, the barriers to access to university need to be lowered. The measures that I am announcing today mean that disadvantaged students will get financial support to study what they want, where they want. Secondly, universities need more investment. Vice-chancellors will say that these proposals will generate hundreds of millions of pounds of new money for them to spend on improving the quality of teaching and to compete with the best universities in the world. Thirdly, we need to move towards treating students as financially independent from the age of 18.
I believe that there is a broad consensus about the fact that universities need more resources and that it is reasonable for students to make some contribution, after they have graduated, to those resources. Where there has not been consensus is about the fairest way to raise this new funding, so that access from the poorest communities is promoted and not undermined. The Government have listened carefully to the concerns that have been raised and we have discussed this matter widely. Those concerns very much inform the proposals that I make today.
Our original proposals were set out in the White Paper that I presented to the House on 22 January last year. Those are that we will remove up-front fees for full-time undergraduates, so that higher education is free at the point of entry. We will provide loans with a zero real rate of interest, paid back through the tax system at a rate dependent on earnings, beginning at a threshold of £15,000 a year rather than the current £10,000. We will introduce the new higher education grant from September this year.
We will also establish the new office for fair access, to ensure that universities support students from the poorest backgrounds. The focus of OFFA's work will be those universities with the poorest track record in widening participation. No university will be able to put up its fee without OFFA's agreement. OFFA will concern itself not with admissions but with applications. In addition, universities will be able to set fees ranging from £0 to £3,000. We will maintain the £3,000 cap in real terms through the next Parliament.
Those were the commitments in the White Paper. Today, I add the following commitments to meet the concerns expressed by some colleagues. First, I accept that some colleagues have genuine concerns about the impact of variable fees on our university system. The Government will therefore establish an independent review, working with OFFA, to report to this House, based on the first three years of the fees' operation.
Moreover, our legislation will require that any proposal to raise the fee cap above £3,000 in real terms is subject to affirmative resolution. There will be an opportunity for a debate on the Floor of both Houses so that every Member of Parliament can vote on such a

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proposal, dependent on discussions through the usual channels. However, I have to make it clear that we do not agree that a substantially higher fixed fee would be the way to raise additional resources. It would be deeply damaging. We would be denying universities the freedom to incentivise industrial, vocational, scientific, technical, engineering and sandwich courses, or foundation degrees, which are vital for the economic future of this country.
Secondly, I want to emphasise the Government's strong commitment to promoting access to higher education for part-time and mature students. From September 2004, we will provide improved fee support and a grant for part-time students. I welcome the changes recently announced by the Higher Education Funding Council for England to support part-time and foundation degree courses. My right hon. Friend the Minister for Lifelong Learning, Further and Higher Education and the funding council will consult on ways in which the funding system might further support the development of part-time study in higher education.
Thirdly, for full-time undergraduates entering higher education from 2006, we will write off any student loan repayment that is still outstanding after 25 years. On average, we expect graduates to repay their loans in 13 years, but those who have taken on family responsibilities or are on low incomes may need more time. That gives rise to genuine concerns and fears, and I think that a 25-year limit is fair. Fourthly, from September 2006, maintenance loans will be raised to the median level of students' basic living costs, as reported by the student income and expenditure survey. That increase will be modest for most students, but it will be significant for those studying away from home in London. The principle of the decision will ensure that students have enough money to meet their basic living costs while studying.
I emphasise that the student loan is free of real interest. Repayments will be based on money earned, not money owed. It is much better for students to be able to borrow on those terms than at commercial rates. Over time, although it cannot be afforded at this stage, the Government's aspiration is to move to a position where the maintenance loan is no longer means-tested and is available in full to all full-time undergraduates, so students will be treated as financially independent from the age of 18. My fifth and final intention is to ensure that every student from a poor economic background has enough resources to meet even the highest course fee without incurring additional debt. The £3,000 package is achieved by maintaining fee remission at about £1,200; raising the new higher education grant from the £1,000 that I originally proposed to £1,500 a year for new students from 2006; and, through OFFA, requiring universities to offer bursaries to students from the poorest backgrounds, so that the full fee cost of the course will be covered. For example, there will be a minimum bursary of £300 for a course whose fee is £3,000.
The effect of our commitments is that no student from a poor background will be worse off as a result of our proposals, whichever university they attend and whatever fee is charged for the course. Moreover, those commitments will align the level of the higher education grant with that of the education maintenance allowance for 16 to 18-year-olds, which has been very successful.
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About 30 per cent. of students will receive a full grant and a further 10 per cent. a partial grant. A major advantage of this approach is that modern universities with strong records in recruiting students from poorer backgrounds will be able to use at least 90 per cent. of any increased income from fees to improve course quality, rather than about 70 per cent. of such income, as implied in some earlier discussions. Those universities have made, and are making, a first-class contribution to this country's higher education and economy, and I want to encourage, not discourage, that commitment.
On the bursaries, I have invited Universities UK to work with universities and ourselves to develop model bursary schemes to provide a clear offer to students. In addition, I accept in principle the argument of some of my hon. Friends, who have made it very coherently, that there is a strong case for combining the higher education grant and fee remission to give students greater choice up front about the way in which they use the financial support that they receive from the Government. Again, that would be a further move towards financial independence at 18. However, that approach raises policy, financial and practical issues, which we are examining in detail. If they can be resolved, we will adopt that approach.
From the outset, I have emphasised that our changes, which mainly come into effect from 2006, will not affect adversely the level of public funding for teaching and research. My proposals will improve access to university by abolishing up-front fees and re-establishing student grants. They will provide universities with resources that they urgently and desperately need. They will raise the threshold at which repayment begins from £10,000 to £15,000 and, moreover, they move us towards the day when students become financially independent at 18. The abolition of up-front fees, the higher education grants and bursaries, the raising of the interest-free loan, the higher repayment threshold, and the 25-year write-off of debt mean that students will have the money that they need while they learn, and can afford to contribute when they earn. Universities will get the sustainable funding stream that they need to deliver world-class higher education. I can tell the House that this is a coherent package to be taken as a whole or not at all. If it is not supported by the House, none of those benefits will arise. It is not a pick and mix menu. I commend the proposals to the House.
Mr. Tim Yeo: I am grateful to the Secretary of State for providing me with a timely copy of his statement.
The policy that the Secretary of State has announced today is a clear breach of a specific pledge given by every Labour Member of Parliament to voters at the last general election. I remind hon. Members that the Labour manifesto in 2001 said:
"We will not introduce 'top-up' fees and we have legislated to prevent them."
That promise was made without any qualification whatever. Even hon. Members who read the totality of the Labour manifesto would not have found any hint that that promise applied only to one Parliament.
In the face of principled opposition to the Bill from Members on both sides of the House, including a significant number of Government Back Benchers who

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are less willing than the Prime Minister and the Secretary of State cynically to break their promise to voters, the Secretary of State has now produced a policy that achieves an amazing triple whammy. It is bad for students, it is bad for universities and it is bad for taxpayers. It is bad for students because, in future, the vast majority will pay far more for their education, thus making university education dependent on ability to pay, not ability to learn. It is bad for universities because, for the first time ever, their freedom to decide whom they admit to study will be taken away. There is no certainty that all the money paid by students in top-up fees will become extra income for the universities, which may well remember that when the Government introduced new student fees in 1998, much of the money was later clawed back by the Treasury. It is bad for taxpayers because, for every extra pound that the universities receive, the taxpayer will have to contribute at least £1.25. Even a Government as wasteful of taxpayers' money as the present one may think that that is not good value.
The first question—[HON. MEMBERS: "Hurrah!"]
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sorry to interrupt the hon. Gentleman. The House should listen to the Opposition spokesman in exactly the same—[Interruption.] Order. If the hon. Member for Huddersfield (Mr. Sheerman) wants to teach me to do my job he must find another occasion. The fact of the matter is that the House should listen with moderation and calm. This is a difficult issue and has attracted a great deal of attention. The Secretary of State was listened to respectfully, and so should the Opposition spokesman.
Mr. Yeo: Will the Secretary of State guarantee that Exchequer funding per student will grow in real terms after the introduction of top-up fees? Has the Chancellor of the Exchequer, notable today by his absence from the Front Bench, guaranteed the Secretary of State that that is indeed the case and that there will be no repeat of the previous clawback?
Secondly, if the Secretary of State does not intend to increase the maximum top-up fee that universities can charge, why is that not included in the Bill—adjusted, perhaps, for inflation? As the whole policy is based on breaking one election promise, any assurance the Secretary of State offers on this matter is of little value, especially as his statement today already confirms the very mechanism by which he plans to increase the maximum cap in future.
Thirdly, will the Secretary of State confirm, therefore, that top-up fees capped at £3,000 a year are too low to contribute to the costs of increasing student numbers to the arbitrary 50 per cent. target set by the Prime Minister, and that top-up fees would need to rise to £8,000 or £10,000 a year to make any meaningful contribution to the costs of meeting that target?
Fourthly, what is the cost of the extra concessions the Secretary of State announced today? In particular, what will be the cost of writing off any student loan not repaid within 25 years? Will the right hon. Gentleman confirm that the cost of the concessions that he announced today
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and of any further concessions that he may decide to make during the passage of the Bill raise the cost to taxpayers without benefiting universities? In practice, it would be cheaper for taxpayers if the Secretary of State simply wrote out a cheque to the universities, instead of setting up the cumbersome bureaucracy contained in the Bill, but that of course would not allow him to establish the new access regulator, and thus to be able to control who will enjoy the benefits of university education.
Fifthly, the Secretary of State has said that some universities may retain 90 per cent. of the income received in fees. Will he confirm that that means that other universities will retain less than 90 per cent.? How much less? Seventy per cent.? Fifty per cent.? Will he confirm that the system that he is setting up involves a cross-subsidy between one university and another? Is this the stick that the new access regulator will use to beat universities that refuse to co-operate with the Government's social engineering experiment?
Sixthly, we know that some hon. Members are worried about variable fees and the fact that they create two tiers of universities—those that charge the top fee and those that do not. Is the Secretary of State happy that his policy creates two tiers of students—those willing to incur debts of £30,000 and those who are not? Does he recall saying in the House on 3 December that universities that charge a zero fee for certain courses would encourage people to study those subjects? The right hon. Gentleman thereby, perhaps unwittingly, confirmed that top-up fees would deter some students from taking up the university places for which they are qualified.
The Conservative party will fight this damaging policy every inch of the way. We will oppose the Bill when the Secretary of State finally summons up the courage to bring it before the House for a vote on Second Reading. We believe the Bill breaches the principles that universities should have independence not just academically, but over admissions policy, and that access to university should not be based on ability to pay.
A year after first announcing the policy, the Government have been forced into a series of changes which have made an already flawed policy much, much worse. The Government are destroying the independence of universities, burdening future students with huge debts, and wasting more taxpayers' money. That is wrong in principle, it will be damaging in practice and it must be defeated.
Mr. Clarke: Let me deal with the points that the hon. Gentleman raises. The manifesto was for a Parliament. It is for a Parliament. That is what will be carried through. On the so-called triple whammy, it was almost a triple whammy in the foot, if I may say so, covering up a serious absence of policy on the part of the Opposition.
The hon. Gentleman claimed that our policy was bad for students. It is not. It is good for students. Getting rid of up-front fees will benefit students. Providing proper financial support for students when they are at university is good for students. Expanding places at universities, which the hon. Gentleman wants to close, will be good for students, particularly for those from working-class backgrounds who traditionally have not gone to university.

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The policy is good for universities, as the universities will tell the hon. Gentleman in his interesting cabals with them, because the universities will get the resource they need to provide the quality of teaching to raise standards in this country. It is good for the taxpayer, because in our basic position the taxpayer will be able to benefit from an active economic sector with the universities which generates the current economic strength of the country.
On the hon. Gentleman's specific points, I can give him the pledge he seeks that the Exchequer funding per student will grow, as it has done since we were elected in 1997, and in sharp contrast with the record of the Government whom he supported. We have decided not to write the top-up fee into the Bill, as he suggests, but to allow every hon. Member to vote on any increase in that fee, as I suggested, because of the existing concerns. It would be inflexible to do otherwise.
On the hon. Gentleman's third point, he said that the £3,000 capped fee is too low. That is extraordinary from a party that says that it will introduce a zero fee for everybody and criticises us for introducing a £3,000 cap, which it says is too low. That is an arrow at the inconsistency and dishonesty at the core of the Conservative party's policies.
On the hon. Gentleman's fourth point, the cost of extra concessions, the one that he specifically asked about was the 25-year debt repayment guarantee. The cost of that, we estimate, is about £25 million all together. We think it is reasonable because there are groups of people—I think particularly of those who are parenting, who may go through university and decide to raise families and not go into the workplace, or people who go for vocational work, for example in the Church or voluntary organisations, without significant income—who should be freed from the worry that they have a debt hanging over them for the rest of their life. I believe that policy is right.
It is not the case that there will be cross-subsidy between one university and another. Overall, the fees that are generated will be used by the universities to improve the quality of what goes on at those universities. That is the right way to proceed. On the hon. Gentleman's final point about the zero fee, as I have said many times to him across the House and to his predecessors, money is a factor in any decision that anybody takes. My point is that money is a factor, not the factor. If we are trying to encourage, as we are, foundation degrees, science study, engineering study and sandwich courses, it would be extremely shortsighted to take the view that we should forbid a university trying to encourage people on to those course to use the power to vary fees.
Mr. Phil Willis: I thank the Secretary of State for an advance copy of his statement.
Despite the orchestrated support for the Secretary of State, Labour Members should be ashamed of themselves and of the statement. If they vote for the policy, they will be breaking a solemn manifesto promise. To say that it was for one Parliament will not wash with the electorate, who were told categorically that they would not have to pay top-up fees. Labour Members will vote for the policy knowing that they are pulling up the ladder of opportunity for thousands of poorer students in generations to come.
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If Labour Members vote for the policy, that will fly in the face of everything the Labour party has stood for since its inception. This is a policy born out of Thatcherism. It has been adopted by a party that has lost its way—a party that has sold its principles to a Prime Minister who has led it elsewhere. Perhaps Labour Members think it is okay to say one thing to the electorate and something else when they are in government. [Interruption.]
Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman. The House should give a hearing to the Liberal Democrat Front-Bench spokesman, in the same way as the other two spokesmen have been heard.
Mr. Willis: Thank you, Mr. Deputy Speaker. Hon. Members do not like the truth. The electorate will not be allowed to forget. We will not allow them to forget.
I have told the Secretary of State on many occasions that as a party we share the objectives that the Government are trying to achieve, particularly to encourage more students who are currently excluded from university to go there, and to provide greater resources to our universities. We are the only party that is offering a viable, sensible and costed alternative to the Secretary of State's policies.
It is no good members of the Tory party crying crocodile tears. This morning on the "Today" programme, when asked what the alternative was, the hon. Member for South Suffolk (Mr. Yeo) said that the Tories did not have one; they are simply against what the Government say. That is not a sensible debate. The Secretary of State may not appreciate our policy to fund higher education with a 50p tax rate, but it is a viable alternative to the Government's policy.
We will examine the Bill carefully. We support many of the proposals that the Secretary of State has put forward today. We support the up-front tuition fees; the increase in the repayment threshold; the raising of the threshold for maintenance loans and the 25-year limit on payments. We particularly welcome the increase in support for part-time and mature students. But for the Secretary of State to say that the Government will increase grants to £1,500 for our poorer students and then tell them to keep that in the bank for three years so that they can use it to pay off their tuition fees, is really hypocrisy of the greatest sort. That is exactly what has been said today.
The Secretary of State said that the £300 bursaries would be the minimum. What will happen in universities such as South Bank? How will our poorest universities get the funds together to support increased top-up fees? Perhaps the Secretary of State will enlighten us on how they will be supported.
The statement is a dog's breakfast. It is over two years since the Prime Minister launched a review of student funding. Two years ago he said that one of his objectives was
"tackling the problems of debt and the perception of debt".
How on earth can one treble students' debt and achieve that objective?
The Secretary of State and the Prime Minister may believe, from their privileged backgrounds, that debt should be seen as an investment, but in reality, many of

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the kids on the estates of Moss Side, St. Paul's in Bristol or Seacroft in Leeds would laugh in the face of anyone who made that comment. It is a middle-class comment perpetrated on working-class kids.
What in these proposals will support students with disabilities? Where is the support for students on four-year courses and sandwich courses? Will they all have to pay top-up fees? Where will our universities get the resources? Too little, too late, was the response from the chairman of the Russell group this morning. It expected, like most hon. Members, that £3,000 would be only for starters for the universities; it would not be where they finish. The regulator is simply a sop to Labour Back Benchers and is a bureaucratic nonsense for our universities.
What is the funding gap that these proposals are trying to bridge? The Secretary of State must have an estimate, because on page 6 of the DFES paper "Student loans and the question of debt" the average student debt in 2006 was estimated to be £15,000. What are we trying to do? Does he agree with the Institute for Fiscal Studies that the money coming in from his proposals will be only £500 million?
The Secretary of State has been uncharacteristically disingenuous. He has tried to move the debate between fixed fees and variable fees. The real question is whether we have fees at all. The Conservative party has sold its principles long ago. The Labour party is about to do the same. The Liberal Democrats will oppose this measure on principle, not simply as opportunists.
Mr. Clarke: First, I thank the hon. Gentleman for his Christmas card this year. It contained as much information about Lib Dem policy as what we have just heard.
The Government's position is not to pull up the ladder of opportunity, to use the hon. Gentleman's metaphor, but to build a staircase whereby people from the poorest communities in Britain can have a chance. It is a staircase that involves better school education, better college education, better skills education and better university education, and that is something that we, and I believe the hon. Gentleman, are broadly concerned to do.
I am grateful that the hon. Gentleman said that he would examine the Bill carefully, but the point that I make in all candour to him and his colleagues is that when they consider whether to support the Bill on Second Reading, they must decide whether they want to carry through his mis-statement, when he said that he supported up-front fees. [Interruption.] It was a mis-statement; I acknowledge that his policy is the opposite. But the effect of voting against the Bill on Second Reading will be to ensure that up-front fees stay; to ensure that grants do not happen; and to ensure that the threshold is not increased. So the choice that he and his colleagues have to make is whether to vote for the Bill on Second Reading and then consider the various improvements that they would like to see made during the Bill's passage, or whether to try to vote the Bill down on Second Reading.
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The £1,500 grant to which I referred today is on top of the student loan, not in place of it in any respect whatever, and it can be used immediately, if so chosen, to pay off any fee that arises; it is not saved for three years and then used.
The new universities are very positive about the proposals, for the important reason that they are precisely the universities that have been most effective, most entrepreneurial, at developing courses that deal with the economic problems of our country, building relations with our different institutions—the sandwich courses and the four-year courses, the foundation degrees—and they want the flexibility to decide how best to do that, which is one reason why variability is important.
We have taken measures to assist students with disabilities. The disability student allowance is a good case in point. We do encourage the sandwich courses through our sector skills approach, and we will continue to do so.
All kinds of assertions have been made on the funding gap, but I shall rest on what Lord Dearing said in the report in 1996. He estimated a funding gap of the order of £8 billion. In order to deal with that, he proposed that we should ask graduates to contribute: a policy that the hon. Gentleman opposes. Lord Dearing proposes today, in an article in The Guardian that the hon. Gentleman may or may not have seen, that the variable fee approach is a way to attack that funding gap. He acknowledges, as he should, that from the Exchequer, from taxpayers' money, we have already put £3 billion in towards that £8 billion funding gap, and, as I said to the hon. Gentleman, we will continue to invest from the Exchequer, from taxpayers' money, in universities. So, yes, the hon. Gentleman is right that there is a funding gap; the question for serious politicians and serious political parties is how we close it. Our proposals are about doing just that.
Several hon. Members rose—
Mr. Deputy Speaker: Order. The House will be aware that there is some interest in this matter, but I must protect later business, so once again I ask for the co-operation of right hon. and hon. Members in not making statements but putting precise questions to the Secretary of State. That would be most helpful to everyone concerned.
Mr. Barry Sheerman: My right hon. Friend will know that I appreciate and support much of the Bill because, as he said, it moves back to the principles of the Dearing report. Does my right hon. Friend believe that there can be some refinements in Committee and on Report, because there is still room for change and improvement? Has he an open mind on change during the Bill's passage through the House?
Mr. Clarke: First, may I appreciate not just my hon. Friend's but his Committee's contribution to the public debate on this question during the past year? The short answer to his question is that of course refinements—his word—will always be looked at; that is the right thing to do. But if the question is whether we would be prepared

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to contemplate a fundamental change in the Bill's approach, for example on variability or whatever, the answer is no. It is, as I said, a package, but a package where refinements can be considered.
Mr. Julian Brazier: Will the Secretary of State confirm that the amount of money that the package in its totality will raise is less than the cost of the latest round of expansion in the universities, so the funding gap can only widen? Secondly, will he confirm that there are now 10 universities with a dropout rate of around 25 per cent. or higher, and does he think that that drop-out rate will go up or down after these proposals?
Mr. Clarke: I cannot confirm the hon. Gentleman's first figure because it is wrong. The extra money coming through will be of benefit to the universities. On his second point, Britain has the lowest drop-out rate of all the OECD countries. The drop-out rate is high in 10 universities; there are other universities from the same group—the ex-polytechnics and so on—which have outstandingly good records on drop-out rates. We all work to improve them and the hon. Gentleman is right to raise the matter, but he should not demean what is happening. Our universities have an outstanding record on this compared with those in any OECD country.
Mr. Nicholas Brown: Why are the Government philosophically attracted to a market-based solution to the funding problems of higher education? Once the cap is lifted, as it inevitably will be, how will youngsters from homes of ordinary means, or even just above ordinary means, ever be able to afford to take the most prestigious courses at the most prestigious universities, for which the fees will of course rapidly be raised, as the vice-chancellors have, in fairness, said is their intention?
Mr. Clarke: My appeal to my right hon. Friend and others is to look at the reality of the current university system. Fifty per cent. of students in our universities—part-time students. postgraduates and others—are paying variable fees right now, in the system that is moving forward. That is the reality. The second reality that it is important to recognise—I believe, after speaking to the universities, that this is the case—is that every university will have at least one course whose fee is £3,000, and that no university will have only £3,000 courses. There will be massive variety through the system, and that is as it should be.
The reason for variability is not some ideological market-based obsession of the kind that some people are concerned that we are about. This is about trying to ensure that universities, in seeking to increase access and to provide courses that are relevant to the economic future of the country, are able to make rational choices about adopting the right fee structure to address those issues while bringing more money into the system. The assurance that I will happily give to my right hon. Friend is that there is no market dogma driving this approach. I know that some people believe that there is, but there is not.
The second assertion made by my right hon. Friend related to ambitions for raising fees in the future. I know that he is concerned about that because we have
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discussed it directly. As I have announced today, we have in place a rigorous process—involving every Member of the House in a vote, if the situation were to arise—relating to allowing the cap to increase. That is a positive approach that will deal with the issue properly.
Mr. Peter Luff: How can the Secretary of State justify imposing on a newly married, recently qualified teacher couple a combined household debt of £50,000 to £60,000 or more?
Mr. Clarke: That will not happen. The hon. Gentleman gave the example of teachers, but he may not be aware that my Department has a whole programme for encouraging people into teaching which involves paying up front in a way that deals with many of these questions. Other colleagues in both the private and public sectors have similar policies. The key question for the married couple to which the hon. Gentleman refers is: are they able to earn at a level that enables them to make a reasonable contribution? If so, they will make that contribution; if not, they will not have to pay it. If, for example, the wife decided to stay at home and look after the children, the effect of the 25-year cap that I have announced today would mean that that debt would not hang over her after that point.
Dr. Alan Whitehead: I welcome my right hon. Friend's commitment to move money into the pockets of poorer students who would otherwise not have access to higher education. May I urge him, however, to examine urgently and early the case for fee remission to grants up front, so that the £1,300 that could be created by that process could go into the pockets of those poorer students in 2006, when the scheme starts?
Mr. Clarke: I appreciate the effort that my hon. Friend and his colleague, my hon. Friend the Member for The Wrekin (Peter Bradley), have put into the consistent, serious, intelligent and applied work that they have done to promote the course of action that he suggests. My right hon. Friend the Minister for Lifelong Learning, Further and Higher Education has discussed with him in detail the direction that we should take. We do not agree on all the points, as my hon. Friend knows, but we appreciate the spirit and style of the serious discussion on the policy.
The answer to my hon. Friend's question is yes, we will examine the question in the way that he suggests. As I said in my statement, there is a strong case for bringing fee remission and the grant together, which we support in principle. There are some serious issues involved, and it would be foolhardy of me to say, "Okay, we can brush those aside", which is why we must look at the matter carefully. If we can sort those problems out, however, we will do what he and his colleague have suggested.
Mr. George Osborne: Do a majority of Labour Back Benchers support this policy?
Mr. Clarke: I am tempted to ask the hon. Gentleman whether a majority of Conservative Back Benchers support their Front Bench's policies—[Horn. MEMBERS: "Yes!"]—then I will say the same the other way round.

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I will answer that question after the Second Reading of the Bill, when we are able to count up the numbers in detail.
Mr. Huw Edwards: What reassurance can my right hon. Friend give to those modern universities that already take a high proportion of access students? They have expressed concern that the extra fees that they might receive would be redirected to the students and not directed into teaching and other resources that they need.
Mr. Clarke: The reassurance that I can offer to those universities is that, instead of having to find about —800 per student in the form of higher fees—as outlined under our previous proposals—they will have to find about £300 per student, as a result of our decision to increase the student grant. As I said in my statement, that means that in all cases, the universities will be able to spend more than 90 per cent. of any income that they generate by increasing fees—it is a matter for them to decide whether they want to do that—directly on teaching quality, salaries, investments and so on, rather than reprocessing it into student bursaries. We have analysed this question in relation to those new universities. The figure that we were talking about before was of the order of 70 per cent., and it was that figure that gave rise to some of the concerns reflected in my hon. Friend's question. What I have announced today addresses that point.
Mr. David Bendel: Given that the universities that charge top-up fees are now going to be expected to pay something back to the students in the form of bursaries, will the Secretary of State tell us what proportion of the gap in funding—whose existence he has acknowledged—will be covered by the increase in fee income that the universities can expect to receive?
Mr. Clarke: The estimate depends entirely on the level of fees that the universities charge, and we do not know that yet. If we were to assume that 75 per cent. of courses were set at the full £3,000 level and the remaining quarter at the current level, for example, the extra income that that would generate would be of the order of £1 billion to £1.2 billion. On an annual basis, it helps to supplement the £3 billion that we have already put in to attack the historic underfunding deficit that we inherited from the Conservatives.
Peter Bradley: I am rendered practically, but not quite, speechless. It has to be acknowledged that this is a radically different Bill from the one that I believe Ministers originally envisaged, and much of it is welcome. I welcome the commitment to a maintenance grant, to equity for the modern universities, and to parliamentary control over the future of variable fees. The Bill leaves one important question unanswered, however. If we have disarmed the adverse consequences of variable fees, what are they for? If the three-year review is unable to find an answer to that question, will my right hon. Friend be prepared to abandon them altogether?
Mr. Clarke: The reason we have variable fees—I know that my hon. Friend understands that we already
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have them for part-time students, postgraduate students and so on—is to reflect the reality of university courses as they are. As I said to my right hon. Friend the Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown), this policy comes not from some ideological dogma but from a recognition of the reality of promoting the kind of courses that we want. I recognise, however—and it is an important recognition, if I may say so—that my hon. Friend and his colleagues reflect accurately a widespread concern, certainly on the Labour Benches and possibly on the Opposition Benches, that the impact of variable fees could be different from the one that I have just described. It would be foolish not to acknowledge that such concern exists.
My answer has two parts: first, that we have a review of the kind that my hon. Friend and his colleague, my hon. Friend the Member for Southampton, Test (Dr. Whitehead), have promoted, to analyse the effect of the variable fees after three years, so as to determine whether my hon. Friends' fears have been realised, involving an independent report making recommendations directly to the House so that it can make its judgment on those questions and every hon. Member can make their call—that is a principled way of going about this in a proper way. Secondly, we put in the safeguards that I announced earlier relating to the ability of every Member of the House to vote on any increase in fees.
Mr. Desmond Swayne: On precisely that point, will the right hon. Gentleman remind us of whether such motions would be amendable and tell us how much time would be available for their debate?
Mr. Clarke: As I said in my statement, the precise process is for the usual channels to discuss, but the submission that we are making quite explicitly is that this particular issue should be dealt with not on the Committee Corridor in the normal 90-minute exchange, but on the Floor of the House so that every hon. Member can make a decision on it.
Mr. Dennis Skinner: Is the Secretary of State aware that way back in 2001 I was elected to represent the parliamentary Labour party on the committee that endorsed the manifesto? There were a lot of things in it, but I felt pretty certain that we would not introduce top-up fees. It is clear that variable fees is just another way of describing top-up fees. I suggest to my right hon. Friend and colleagues that if there is not some way found to eliminate the variability of those fees, it is conceivable that the Government have bitten off more than they can chew.
Mr. Clarke: I am genuinely grateful for that contribution—[Laughter.] I mean that seriously. I answered the manifesto point a moment ago. I want to put in the mind of colleagues and my hon. Friend this fact: universities close courses; it happens quite frequently. They close courses because they cannot find students to go on to them. The main funding for those courses—say a physics course—comes through the HEFCE. If the universities say, "We want to run that course with the money from the HEFCE", they may

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decide that the best way to achieve that is to charge a low fee. If they want to establish a foundation degree in some area that we are talking about, which is a key aspect of our proposals, they may decide that it is not intelligent to charge a fee of £2,500 from the outset for such a degree. The question for us is, in those circumstances do we effectively forbid universities from deciding to lower a fee to attract students? My answer is no.
Mr. Eric Forth: How can the Secretary of State have the gall to talk about academic freedom when the Government control fees and funding, and a bureaucracy is to be set up to control admission?
Mr. Clarke: The OFFA process is about applications, not admissions, as I indicated earlier, and the right hon. Gentleman and Conservative Front Benchers are fundamentally wrong in respect of a charge made earlier by the hon. Member for South Suffolk (Mr. Yeo) and now by the right hon. Gentleman. It is wrong to say—it will not happen—that OFFA, which we are to establish, will control university admissions. Universities will control university admissions, and that is as it should be. Power would truly be taken away from the universities by following the policy of the hon. Member for South Suffolk, in saying that the money would come only from the state and not through fees. The inconsistency in his position—which many Conservative Members understand, but he does not—is the risk of universities being entirely dependent on the state.
Mrs. Lorna Fitzsimons: I represent Rochdale, where a majority of my constituents still do not go on to higher education, partly because we have not been lucky enough to have one of the education maintenance allowance pilots, although we are going to have them rolled out. Will my right hon. Friend accept it from me, as the representative of such a constituency, that the debate about choice and variability is erroneous? The biggest choice for my students—for those who are going to choose—is whether to go into higher education in the first place; the choice is not between institutions. The biggest determinant in that choice is aspiration at the ages of six and 11. As the Bill progresses, will he also ensure that we do everything we can for those aged six and 11? Although I give a huge welcome to the maintenance increase, which is long overdue, the thresholds represented by the ages of six and 11 will make the distinction for constituents such as mine.
Mr. Clarke: I agree with my hon. Friend completely. One of our hon. Friends told me this week that 9.1 per cent. of the students in his constituency went to university—that is a disgraceful figure. As I said to the hon. Member for Harrogate and Knaresborough (Mr. Willis), our task must be to build a staircase of opportunity and, as my hon. Friend says, it starts at the very bottom. In fact, I would say that it starts not even at six and 11, but at pre-five through the Sure Start initiatives, which have been so important. The only way that we will crack this appalling waste of talent and the
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disincentive to ambition and aspiration is by investing in the education system from birth and right through. That is why we must decide how and where we are going to do that. I believe that our policies will positively assist that to happen.
Mr. Tim Boswell: I was a higher education Minister when student numbers were expanding but no tuition fees were charged. Does the Secretary of State recognise the fact that from time to time I have had the chance to consider non-starter policies, which evolve by concession into non-earner policies without stopping being non-starters?
In the light of that analysis, I understand that the cost of the concessions that the Secretary of State has announced today exceed £1 billion a year. Can he confirm to the House—an answer he did not give earlier—that the Chancellor has guaranteed those commitments to concessions as new money for the higher education budget, or is there a danger that it will simply be knocked off that budget and lost to the university sector?
Mr. Clarke: If I had been a higher education Minister under the previous Government, I think that I would draw a veil over my record on university funding. The answer to the hon. Gentleman's question is that the policy is completely agreed with the Chancellor and with the Treasury. It will be carried through with the guarantee that I gave earlier—it is fundable and it will be funded.
Mrs. Anne Campbell: I welcome the concessions that my right hon. Friend has made, but, for those of us who are still extremely concerned about the principle of variability, how can he reconcile his statement that this is a coherent package with some incentive for us to vote for the Bill on Second Reading?
Mr. Clarke: I think that this is a coherent package. I also think two other things. The first relates to variability for fees for students from the poorest third of families. The proposals that I have made today effectively take away that variability, because they mean that any student from one of those poorest families will get their fees effectively covered by the combination involved in the £3,000 package. So, there is no variability from that point of view.
More than that, as my hon. Friend knows better than anyone else in the House, the decision of the university of Cambridge to respond to this approach by saying that it will go for bursaries—on top of the grant of £1,500 and on top of the fee remission of £1,200—of £4,000 for students from those families, which makes a total package of about £6,500, is a dramatic illustration of the fact that it will be genuinely possible for students from the poorest backgrounds to go to the most prestigious universities in this country. I can say to her that other elite universities, although I am not at liberty to reveal which, are prepared to do similar things. That is a direct consequence of the policies that we have carried through.
Sir Patrick Cormack: As the Secretary of State has been kind enough to share

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some of his aspirations with the House and to acknowledge concerns, he must have thought about what he will do if things do not work out as he hopes. What answer will he give to the vice-chancellors, and what will he do if they say to him, "This policy is not working. We are still underfunded."?
Mr. Clarke: On the funding aspects, we will continue to put funding in, as we do through the comprehensive spending review and by the process that we have had. As I said to my hon. Friend the Member for The Wrekin (Peter Bradley), we will review the operation of the process from that point of view as from every other. That is the right thing to do. I will tell the hon. Gentleman what I say to the vice-chancellors, and I say it quite directly: this is a major opportunity to transform the resources, funding and standing of universities in this country and to enable them to make the contribution that we all want them to make to research, teaching and local economic development. The Bill will be the means of achieving that. I urge all vice-chancellors to seek support for it for precisely those reasons.
Mr. Kevin Barron: My right hon. Friend knows that the take-up of higher education in my constituency and many others in South Yorkshire is well below the national average. I would like to know what estimate he has made of the difference that the new grant package, in particular the removal of up-front fees, will make to take-up. I recognise that low-income families are not the only issue, but my constituency has a high proportion of them, which must impact on the aspirations of my constituents. Will more of our young adults than at present go into higher education?
Mr. Clarke: The answer is yes, unequivocally. I say, by the way, that that is in direct contrast to the policy of the Conservative party, which wants to reduce the number of students. We are removing two key barriers. Key barrier No. 1 is that we are removing the up-front fee, which has to be paid if someone wants to get even a foot into the campus. The second barrier that we are removing is the fact that the maintenance loan is not enough for many students to fund their living costs while they are at university. I am putting that right through the announcement that I have made today, so our measures will specifically assist people in my right hon. Friend's constituency, and I am glad to say that.
Mr. Patrick McLoughlin: I quote:
"We will not introduce 'top-up' fees and have legislated to prevent them".
In the totality, what does that mean?
Mr. Clarke: I have already dealt with that on a number of occasions and I have nothing to add.
Dr. Brian Iddon: I find the concept of variability impossible to accept. I am worried about, for instance, the impact of the policy on the newer universities, which are already struggling financially to the extent that they are chopping the most
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expensive courses in science and engineering. In order to compete in the market economy that we are about to introduce, they will have to charge extremely low fees in comparison with better-off universities. That will make their financial position much worse. Are those universities expected to survive, or does my right hon. Friend expect them to amalgamate with nearby universities that are better off?
Mr. Clarke: I certainly do not expect amalgamation. As my hon. Friend knows, a specific proposal in the White Paper has allowed a higher education college in his constituency to become a university, which was not permitted by the previous arrangements. That is not a policy for merger; it is a policy for strong universities with community roots—and the Bolton institute certainly has those.
We need to invest in the science and engineering-based courses mentioned by my hon. Friend. The fundamental remunerative resource for those courses does not come from fees; it comes from the HEFCE, as a result of decisions made by my right hon. Friend the Chancellor in conjunction with it about the types of course that we want to encourage and support. That can happen only if those courses attract students, however, and that is what we must bring about. We must not erect barriers that prevent universities, such as the one in my hon. Friend's constituency, from doing what they need to do to recruit students.
Mr. Elfyn Llwyd: Yesterday, the hon. Member for Falkirk, West (Mr. Joyce) said that if the Bill became law Scotland would inevitably have to follow because it would not be able to compete. The Leader of the House has said the same to Welsh Labour Back Benchers. Does that not undermine the whole concept of devolution, given that every single party in Scotland and every single party in Wales is opposed to the proposals?
As an ex-president of the National Union of Students, is the Secretary of State not ashamed of, or at least slightly embarrassed about, introducing a policy that was considered regressive and divisive even by the Thatcher Administration?
Mr. Clarke: Those of us who represent English seats were entirely happy for the Scottish Parliament to decide what system of student support to choose. These matters are devolved, and rightly so. Let me, however, refer to something that I know the hon. Gentleman is seriously considering. One thing that the Bill will do is to devolve higher education student support to Wales, and if it falls that too will go.
Geraint Davies: Does my right hon. Friend agree that the introduction of a time limit for the repayment of student fees will make the proposals much more progressive from the point of view of low-earning graduates? For example, someone earning £17,000 a year for 25 years because of child care and career breaks will pay only £4,500, the maximum being £9,000. If the fees rise, that person will still pay £4,500. Poorer graduates will meet a falling proportion of the total fee costs over time. However, I urge my right hon. Friend to reduce the 25-year time limit if he can.
Mr. Clarke: The proposals will indeed have the effect described by my hon. Friend. Let me take this opportunity to thank him for, and congratulate him on, the consistent work that he has devoted over past months to supporting the policy that I have announced today.
Mr. Christopher Chope: How will the Secretary of State ensure that students who defer their university entry from 2005 to 2006 in order to do voluntary work at home or overseas during their gap year are not penalised?
Mr. Clarke: After Royal Assent, I shall ensure that all students and all families understand the implications of the policy for their own circumstances. The decisions that they make on the basis of that information are a matter for them. I am not going to start telling every student in the country what to do.
Joan Ruddock: I thank my right hon. Friend for his response to concerns raised by people like me, but may I tell him that the £15,000 threshold for repayments is still too low for graduate workers in London, especially those in the public sector? As for variability, I must tell him with great regret that he has not convinced me; but I am prepared—and I hope we shall be given time for this—to consult sixth-form students and students at Goldsmiths college to establish whether the package will deal with concerns about the future of poorer students.
Mr. Clarke: I am grateful to my hon. Friend for what she has said. We did indeed discuss the matter, and I have tried to take account of some of the points that she made to me then. I think it important for Members to follow her advice and discuss with schools and colleges in their areas what they expect the implications for them to be.
Having raised the threshold from £10,000 to £15,000 we considered raising it further, but decided that it would be better to put the money into increasing the maintenance grant. There is an argument to be had about that, but that was our judgment, and others will have to make their own judgments.
What is significant for my hon. Friend's constituents and for students living in her London constituency is my announcement about increasing the maintenance loan in line with the expenditure survey.
Paul Holmes: Most Members—including many who will, with heavy hearts, do what the Whips tell them and vote for this measure—believe that the introduction of a £3,000 variable fee is the thin end of the wedge. They fear that the limit will be removed, and fees will soar to the astronomical levels that we have seen in the United States. The Secretary of State has conceded that he can guarantee the £3,000 limit only into the next Parliament. What would he say to vice-chancellors such as the vice-chancellor of Imperial college London, who said this week that he would like to charge £10,000 a year in tuition fees to all students and £20,000 a year to medical students?
Mr. Clarke: I will say to those vice-chancellors in public, here in the House, what I have said to them in private: it will not happen. Let me also say to them that they should consider very carefully what support they can provide in the form of bursaries and grants. I made that point earlier in relation to Cambridge university, but I think other universities should do the same.
Mr. Jon Owen Jones: I agree with much of what the Secretary of State said in his statement, and I think he has the agreement of the House in general, but I do not agree with him about variable fees and I do not think the House does either. May I suggest that, in the time-honoured tradition, he establishes a commission—perhaps under the chairmanship of Sir Ron Dearing—to report in 2006 prior to legislation for 2008? Universities would then lose, at most, two years of extra funding, and the Secretary of State would lose one hell of a problem.
Mr. Clarke: Let me tell my hon. Friend of a problem that neither he nor I would lose. The problem that we share—he may experience it more than any other Member because of the large number of students in his constituency—is the need to secure the future of our universities in all respects, and to establish a student support system that is strong and effective. We can try to duck that problem for a while—not that my hon. Friend suggested that—but the country as a whole will still have to face up to it. One of the jobs of any Government, certainly a reforming Government, is to face up to such questions and to try to create a climate that meets the needs of the country. That is, I believe, what our policies are about.
Mr. James Clappison: The Secretary of State says that universities, not OFFA, will be responsible for admissions, but does not the funding mechanism that he has established, together with what he has said today about the focus of OFFA's work, put the strongest possible pressure on universities not to admit applicants strictly on the basis of academic merit, but to take account of other considerations about their backgrounds? That would be wrong, would it not?
Mr. Clarke: No, in no way.
Tom Levitt: I welcome this package, as I welcomed the original package. My local university, Derby, will certainly support it as well.
Will my right hon. Friend confirm that when a student is entitled to a higher education grant and a bursary and when the sum of those is more than the balance of the fees due, the student will still receive the money and will thus be a net beneficiary of the system?
I agree that it is important to maintain the principle of variability, but is not the effect of my right hon. Friend's proposals likely to reduce the amount of variability that exists in practice, as more universities opt for the £3,000 fee?
Mr. Clarke: The answer is yes to my hon. Friend's first question. I also agree with the second question, but I think that one will find a scattering of courses across

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the country in different universities, with some degree of variability. That deals with the situation, and is in fact desirable.
Mr. Andrew Robathan: What does the Secretary of State understand by the statement:
"We will not introduce top-up fees"?
Mr. Clarke: I shall say again what I have said before: a manifesto is for a Parliament. That is the situation.
Mr. Clive Betts: I welcome some of my right hon. Friend's proposed changes, but I still think the £15,000 limit too low and the 25-year period too long. However, my fundamental problem is with variability and the bringing in of a market-driven higher education system. Does he accept that if he were prepared to make concessions on variability, he would gain a widespread consensus among Labour Members? Without that, he will find it very difficult to win the support of many of his right hon. and hon. Friends, including me, for the total package that he is asking us to accept.
Mr. Clarke: The first point is that I have discussed variability today, and I hope that people will consider carefully the meaning of what I said. Secondly, through the support that we provide in a direct series of ways, I have established a position for the third of students from the poorest families whereby variability in the fees that they have to pay, or deal with, is effectively eliminated. Thirdly, I know that some colleagues—my hon. Friend may be among them, I am not sure—think that there should be no variation on a principled, ideological basis: that variation in part-time student fees, postgraduate fees and so on is okay, but variation in full-time undergraduate fees is not. But I believe that many of those who have been worried about variability are actually worried about a high fee level for students from poor backgrounds and its disincentive effect. I have sought to address that point very directly in today's statement.
Mr. Owen Paterson: What will be the annual cost of the concessions and the administration, and what, therefore, will be the net sum passed on to universities?
Mr. Clarke: It is not a net sum passed on to universities—it is the money that they raise by charging fees themselves. I gave the estimated answer to that question a moment ago. According to the estimate of 75 per cent. at £3,000 and 25 per cent. at the existing level, the income to universities would be some £1 billion to £1.2 billion.
Mr. Martin Salter: I welcome the extra help for poorer students announced by the Secretary of State, although I regret the lack of any movement on thresholds. None of the concessions would have been achieved but for the campaign run by Labour Members in the past 12 months. Does he accept that, despite the concessions and the movement made,
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he is asking an awful lot in asking us to play fast and loose with our own manifesto, on which he, I and every other Labour MP was elected?
Mr. Clarke: The request that I make to my hon. Friend and to all our colleagues is to assess the situation facing universities and student support, and to make a judgment, as I have done and as he will have to do. That is what we are about. The one thing that would not be acceptable would be to refuse to face up to these questions, which are important for the future of the economy and of our society. It is true that such active engagement in this debate—call it campaigning or whatever—has been a very important aspect of the evolution of these policies. We have tried to listen to the points made by my hon. Friend and by many others in these discussions.
Mr. Michael Clapham: I recognise that my right hon. Friend has gone a long way to meet many of our fears, but I should tell him that I cannot swallow variable fees. I am also very concerned about the issue of trust. May I encourage him, at this eleventh hour, to consider taking up the idea of a commission, rather than reviewing the situation in three years? Such a commission could report before the next election, so that we could have a guided manifesto commitment.
Mr. Clarke: I will think about everything, of course, but I want to emphasise that the Dearing commission looked at this issue seriously and came up with some serious proposals, which we are seeking to implement. That is the right way forward in addressing the problems that my hon. Friend describes. As he knows in respect of his own constituency, for people in the families whom he represents the accessibility of some universities is very low. We need to set about changing that right now.
James Purnell: As someone who got a grant to go to university and then campaigned on the streets of Westminster against its being removed by the hon. Member for Daventry (Mr. Boswell), I should tell my right hon. Friend how glad I am that a Labour Government are bringing it back. But does he remember the then Conservative Government putting an artificial cap on student numbers of some 33 per cent., and will he promise that this Labour Government will never cap young people's aspirations, and that anyone who gets the right A-level results will be able to go to university?
Mr. Clarke: I will give that commitment, and I should say to all Conservative Members that it is very important that they face up to the issues, just as I am asking my colleagues to do. The list of evasions that are part and parcel of the position of Tory Front Benchers is outrageous. They have explicitly said that they want to reduce the number of students going to university. They are wrong, and that policy will be deliberately rejected by their constituents, as it should be.
Mr. Harry Barnes: The writing-off of student debts after 25 years is presumably intended to attract those of us who have criticised this measure, but is it not peculiar to operate

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in such a way? For most graduates, those are the years of marriage, raising children and having a 25-year mortgage. Surely it would make rather more sense to say that they should pay off the debt after 25 years, rather than during that period.
Mr. Clarke: My hon. Friend is always creative in his policy approaches, and I welcome that in every respect. The point that he eloquently makes about family responsibilities has formed a very important part of our consideration of what constitutes the right thing to do. It is precisely because of those issues that the threat of a debt to be repaid over a lifetime ought to be removed by introducing the cap of that 25-year limit.
Mr. James Plaskitt: I thank my right hon. Friend for his statement and for the improvements that he has made through his proposals. However, I draw his attention to the comments of Lord Butler of Brockwell, the master of university college, in his letter to Members. He says that
"the general view among universities appears to be that the Government should get its top-up fees legislation through as a first step. There will certainly have to be further steps".
If—or, as I suspect, when—universities want to raise the cap, what will he require from them in return?
Mr. Clarke: If I may say so, Lord Butler has not been in the university world for very long, and his knowledge of it is perhaps not as great as that of some others. I have talked to many universities about these policies, and I know that some would like to have a higher fee cap than the £3,000 that we propose. But I also know that those same universities say—in my view, they will continue to say it—that this is a step towards meeting the funding need that has been identified, and they will welcome it. I say to Lord Butler, to Mr. Richard Sykes and to everybody else concerned that this is the position.
Mrs. Joan Humble: In his proposed introduction of variable fees, my right hon. Friend seems to be assuming that most undergraduates will be studying either single honours or combined honours degree courses. However, there is a real concern among the new universities, which offer modular degree courses, that they will be unable to offer variable fees should they wish to do so, because students are encouraged to choose modules across different departments in the first semester, and other modules across other departments in the second and third semesters. How can universities price variable fees in that context, and how can students possibly make choices?
Mr. Clarke: If there were a fixed fee of, for the sake of argument, £2,500, as has been suggested, the universities that my hon. Friend mentions would be unable to make any dispensation whatsoever to deal with the prices of the different modules in operation. I know of the concerns that she describes, which is why I have made today's statement on increasing the grant. The implication is that a much higher proportion of fee income generated, particularly by the new universities of which she speaks, will be able to be used for increasing academic standards in those areas. However, if she talks to many of the vice-chancellors, as I have done, they will
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tell her that they want the power to look at different fee levels for sandwich courses, four-year courses, foundation degrees, science degrees and so on. Without that power, which would be removed if there were no variable fees, their ability to drive their universities forward to meet the economic needs of their localities and the social needs of their students would be very severely inhibited.
Mrs. Betty Williams: My right hon. Friend will be very aware that variable fees is the main concern of a majority of Labour Back Benchers. I welcome the concessions that he has made in today's package. For example, he says that there will be an independent review, working with OFFA, at the end of three years. Does he agree that if things do not work out, a great deal of harm will have been done to higher education, and can he tell the House today what he really means by this independent review?
Mr. Clarke: I have suggested the independent review in response to the arguments advanced by a number of people. It is fair to say that we need to see and understand how the policy works. I have suggested that we should do that for a period of three years, after which a report should be made to the House so that hon. Members can discuss the arrangements. That is the right way to go. I do not believe that variable fees will damage this country's university system, for the reasons that I have set out. However, we need to have an informed and independent consideration of the issues involved so that we can make our judgment.
Mr. lain Luke: My right hon. Friend will understand that there is much concern north of the border about the possible introduction of variable top-up fees in England and Wales. The major worry of university principals in my city has to do with the impact on universities, both north and south of the border, that are less well endowed financially. They will be less able to attract quality research staff and, as a consequence, their research programmes will suffer. What guarantees can my right hon. Friend give that the playing field will remain level in respect of access to research resources, given the huge imbalance that exists between universities?
Mr. Clarke: First, I can guarantee that cross-border discussions will continue to address that problem. My right hon. Friend the Secretary of State for Scotland has discussed the proposals with the Scottish Executive to determine how to move forward in those circumstances. I can confirm that research will remain a national responsibility, but I cannot state that there is no difference between the two systems. The meaning of devolution was that different systems would be created. That is what has happened, and those different systems have different implications. However, the Government and the Scottish Executive are obliged to work together as closely as they can to deal with the different implications in a positive and constructive way. I can make a commitment to ensuring that the Government do just that.
Several hon. Members rose—
Mr. Deputy Speaker (Sir Michael Lord): Order. I appreciate that a number of hon. Members have not

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been able to catch my eye on this important statement. However, we must move on as there is other important business to protect. I remind the House that this issue can be revisited when we consider the Bill on Second Reading.

BILL PRESENTED
  HIGHER EDUCATION
  Mr. Secretary Clarke presented a Bill to make provision about research in the arts and humanities and about complaints by students against institutions providing higher education; to make provision about fees payable by students in higher education; to provide for the appointment of a Director of Fair Access to Higher Education; to make provision about grants and loans to students in higher or further education; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Monday 12 January, and to be printed. Explanatory notes to be printed [Bill 35].
Orders of the Day

  Horserace Betting and Olympic Lottery Bill
  Order for Second Reading read.
  Mr. Deputy Speaker (Sir Michael Lord): I advise the House that Mr. Speaker has not selected for debate the amendment tabled by members of the Scottish Nationalist party.
  2.32 pm
  The Minister for Sport and Tourism (Mr. Richard Caborn): I beg to move, That the Bill be now read a Second time.
  The Bill covers two distinct subject areas, both of which are of considerable interest to the House, and I shall deal with each in turn. First, it deals with the Government's remaining involvement in the financing and administration of horse racing. Part 1 of the Bill covers the sale and dissolution of the Horserace Totalisator Board, normally known as the Tote. It provides for the vesting of the Tote's assets in a successor company wholly owned by the Crown, and the subsequent sale of that company. The Bill will enable the Government to deliver our manifesto commitment to sell the Tote to a racing trust, and to do so in a way that is fair to racing and to the taxpayer.
  The Tote was established as a corporate body in 1928, with an exclusive statutory right to conduct—or to authorise others to conduct—pool betting on British horse racing. It was set up to provide an alternative to fixed-odds betting, and to provide a source of income to the sport of racing.
  The Tote's profits, over and above what is required for reinvestment, remain within racing. The Tote is a long-standing symbol of British horse racing, but it is no longer necessary for it to remain a public body. Its present status is not appropriate for an organisation with commercial ambitions that are likely to conflict with the accountability and constraints required of bodies in the public sector.
  In March 1999, a review of the Tote's status recommended that the whole of its business should be sold in a single entity. The Government agreed with that recommendation, and we announced in March 2000 our intention to sell the Tote to a racing trust—a consortium representing British horse racing interests. The Bill will enable that to be achieved.
  The Government's intention is to sell the Tote to a racing trust. If that is not possible, we will explore other sales options. However, I know that the will of both Houses of Parliament is that we fulfil our manifesto commitment.
  Mr. Robin Cook: My right hon. Friend follows these matters very closely, and will be aware that considerable work has been done to prepare a shadow racing trust. There is no doubt that that body exists and will make a bid, but I am a little unsettled by his reference to the possibility that the Tote could be sold elsewhere if a sale to the racing trust cannot be achieved. That possibility is not mentioned in the Bill. For the avoidance of doubt, will my right hon. Friend

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  confirm that it is the Government's clear intention to sell the Tote to the racing trust, and that there is no reason at the moment why that should not happen?
  Mr. Caborn: I can give my right hon. Friend that confirmation, and I have said already that there is a considerable amount of good will. The shadow racing trust has been up and running for a considerable time, and it has already proved itself. I see no reason why the sale of the Tote to the racing trust should not go ahead, but it would be wrong if the Government did not make provision for other eventualities. In the event of the Tote's sale to the trust not being completed, we would have to come back to the House with new legislative proposals to secure the Tote's transfer away from public ownership. The measure is precautionary, but my right hon. Friend is right that the Government want to sell the Tote to a trust not dissimilar to the one that has been in existence for some considerable time already.
  Mr. Laurence Robertson: I welcome this long overdue Bill, but I agree with the right hon. Member for Livingston (Mr. Cook) that the Bill does not guarantee that the Tote will be sold to the racing trust. The Minister says that he cannot foresee any circumstances in which that would not happen, but one factor that might prevent such a sale would be if the Government asked for too much money. No Government have ever put money into the Tote, so this Government cannot expect to make too much money from its sale.
  Mr. Caborn: The hon. Gentleman has gone a little beyond the point made by my right hon. Friend the Member for Livingston (Mr. Cook), but I shall deal with his questions as I make progress with my remarks. However, if the hon. Gentleman catches your eye, Mr. Deputy Speaker, I am sure that he will be able to say more about these matters later in the debate, and also in Standing Committee.
  We believe that it is in the long-term public interest to open up the pool betting market to effective competition, but we also believe that a reasonable period of preparation is necessary if the Tote, when it is owned by the racing trust, is to continue to provide a reliable income stream for the sport. I assure the House that I, my right hon. Friend the Secretary of State and our officials would not have spent as much time trying to secure a satisfactory arrangement if we did not believe that the Tote would be sold to a racing trust.
  The sale will bring benefits to the betting market through safeguarding a competitive pool, and it will benefit the public by increasing consumer choice and consumer protection. That is why we announced to the House, on 27 November last year, our plans to sell the Tote to a racing consortium. Our current intention is to issue the successor company with an exclusive licence to operate horse race pool betting for British racing for seven years.
  Mr. John Greenway: Those of us who have followed this issue closely are grateful to the Minister for his efforts in ensuring that the Bill provides for a licence exclusivity period of not less than seven years. However, does he accept that alternative points of view have been raised elsewhere, and that the future of
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  racing faces uncertainty as a result of the Office of Fair Trading rule 14 notice? Would not it give the industry some reassurance if the provision for seven-year exclusivity were to be included on the face of the Bill?
  Mr. Caborn: I do not believe that that needs to be included on the face of the Bill. What I am saying today at the Dispatch Box is, according to the conventions of the House, a clear statement of the Government's intentions. That is why I do not believe that the provision needs to be included on the face of the Bill. I hope that the House will agree that a seven-year exclusive licence strikes the right balance between the two priorities that I have outlined. I am convinced that it is the best way forward for racing, the betting industry and the punter.
  Mr. Ian Cawsey: Will my right hon. Friend give way?
  Mr. Caborn: This is the last time I shall give way, because I would like to get past the third page of my brief.
  Mr. Cawsey: My right hon. Friend has been very patient. I take his word about all the people who will benefit from the Bill, but I wish to make a point about the horses involved. Some animal welfare groups have said that the current system raises funds for the longterm welfare and care of racehorses, and they want a guarantee that any new legislation will maintain that system in the future.
  Mr. Caborn: If I could get past the third page, I might answer hon. Members' questions before they are asked.
  The Bill gives the Secretary of State the power to require the Gaming Board to issue the licence and be responsible for the regulation of pool betting on horse racing. If during the licence period Parliament approves our plans to reform the general law on gambling, it will be for the new Gambling Commission to take over the job of regulation. The seven-year licence will not he extended, and at the end of that seven-year transitional period there will be a new regulatory regime that will allow other operators to provide pool betting as well.
  Part 2 of the Bill provides for the abolition of the Horserace Betting Levy Board and its associated levy appeals tribunals. It provides for the transfer of its assets, the abolition of the horserace betting levy system and the issuing of certificates of approval to race courses by the Gaming Board. The Government's intention is that local authorities will take over the Gaming Board's proposed responsibility for the licensing of race courses for betting purposes in due course, as set out in the draft Gambling Bill that is currently undergoing pre-legislative scrutiny by a Joint Committee of both Houses.
  The Government undertook two consultation exercises in March and November 2000 to consider whether a statutory system for funding horse racing was necessary. I am sure hon. Members will agree that it should not be for the Government, or another body, to dictate how much bookmakers should pay racing for the use of its product. Therefore, we recommended the abolition of the levy board and the levy system, to be replaced by commercial agreements between the horse racing industry and betting companies.

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  The Bill helps to end the Government's unnecessary involvement in funding horse racing, while still safeguarding the important work that the levy board does to support veterinary research—much important work is done around Newmarket—and the improvement of breeds of horses. We seek to ensure those are maintained to at least current levels after the abolition of the board. Therefore, the safeguards that my hon. Friend the Member for Brigg and Goole (Mr. Cawsey) requested will be in place, as he will see if he reads the Bill carefully.
  Hugh Bayley: My right hon. Friend will be aware that race courses have benefited from loans at favourable rates from the levy board capital fund. Indeed, every major capital development at York race course, even though it is one of the biggest and best in the country, has been supported by the fund, including a third of the cost of its new Ebor stand. When the levy board capital fund is transferred to a successor body, can my right hon. Friend give me an assurance that it will enjoy the same tax advantages as at present, so that the benefits to race courses can be maintained at the current level?
  Mr. Caborn: I shall take that point on board. I do not wish to give a misleading answer now, but I will ensure that that question is answered fully in the course of proceedings on the Bill. I know that it is important for race courses such as York, which has done a fantastic job of upgrading.
  I would like to make it clear that the decision to sell the Tote and abolish the levy board is in no way a reflection on their performance. The staff and board members of both bodies have carried out their duties to a very high standard and I am grateful for their efforts.
  I turn now to the other subject area covered by the Bill. Part 3 will enable dedicated Olympic lottery games to be established as part of the national lottery, in the event that London is chosen to host the 2012 Olympic and Paralympic games. It also creates the necessary structures for holding the proceeds from those lottery games and a distribution mechanism that will enable those proceeds to be used to meet expenditure in connection with the staging of the Olympic games.
  As hon. Members will be aware, we announced the Government's intention to support a London bid for the 2012 Olympic games in a statement to the House on 15 May 2003. Staging the Olympic and Paralympic games in London in 2012 would bring the opportunity to inspire greater participation in sport, increase the medal success of our elite athletes, and, importantly, leave a lasting legacy of community facilities across the country. But it would also bring benefits beyond the sporting sector. A London games would have a positive impact in terms of regeneration, investment and tourism, and we want as many of those benefits as possible to extend across the UK.
  Mr. Andrew Love: I strongly support the London bid for the Olympics, but as the Member of Parliament who represents Picketts Lock, I am aware of what an uphill task it will be for the Government to win the bid. If we are to gain the
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  advantages that my right hon. Friend has outlined, we need to ensure that we win the bid. The first part of the Bill will set up a trust for the betting levy board, and I suggest the advantages of a mutual trust. The Football Foundation is a perfect example. We need to mobilise public support for the Olympic bid to turn it into—
  Mr. Deputy Speaker: Order. Interventions are becoming mini speeches, which means less time for genuine speeches later. I would be grateful if interventions could be brief and to the point, and if the Minister's responses could be in the same vein.
  Mr. Caborn: If my hon. Friend catches your eye later, Mr. Deputy Speaker, I am sure that he will be able to develop his point further. It will be discussed during the proceedings on the Bill, in any event.
  Chris Bryant: We need to ensure that the benefits of a London bid accrue to the whole country. If we are to win the bid, it will be essential for the Government to be involved in ensuring that every part of the country supports it, and that will require proven benefits for every part of the country, not least Wales.
  Mr. Caborn: I do not wish to go into too much detail, but I assure my hon. Friend that we have worked with every regional development agency and all the devolved Administrations. The chair of the Olympic 2012 bid committee, Barbara Cassani, is already touring the country. She has been to Scotland and she has a date in her diary to visit Wales to meet the decision makers and discuss how the staging of the Olympics in London can benefit the regions and the devolved countries. We will ensure that we engage with the decision makers in every part of the UK to ensure that there are benefits from the Olympic and Paralympic games being held in London, as well as from the major cultural festival that would run alongside the games in 2012. That would have a major impact on tourism, regeneration and the development of regional economies, and we are making every effort to put proper communications in place to achieve those aims.
  New Olympic lottery games would represent the first time that the national lottery has been dedicated to a specific cause in that way. Staging the Olympic and Paralympic games is an exceptional occasion. It represents the greatest sporting spectacle in the world, and is a unique national opportunity. It is a cause unlike any other, and the measures proposed in the Bill would enable people to buy a ticket knowing that the money would directly contribute to staging the UK Olympic and Paralympic games. That is very important.
  Some people will choose to play Olympic lottery games instead of existing national lottery games. However, Olympic lottery games, as part of a wider strategy for growth, have the potential to invigorate interest in the lottery in general, and therefore benefit all the existing good causes. Camelot will, of course, continue to launch non-Olympic lottery games, and more generally we should seek ways to maximise the benefits that hosting the Olympics can bring across all the funding sectors.

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  It is envisaged that new Olympic lottery games, as provided for in the Bill, would generate an estimated £750 million towards an overall £2·375 billion public funding package. That total includes a substantial contingency.
  Pete Wishart: Has the Minister made an assessment of how much good causes and charities will lose as a result of the Olympic games?
  Mr. Caborn: Yes; if I remember correctly, it is 5 per cent., but I shall write to the hon. Gentleman and place a copy of my letter in the Library. The assessment was made by Camelot and was announced to the House, so it is on the public record. I cannot recall the exact figure now, but as I said, I will write to the hon. Gentleman to confirm the figure.
  In addition to the £750 million from new Olympic lottery games, £340 million will be sought from existing sports lottery distributors. How that is spent will be a matter for discussion with those bodies. Up to a further £410 million will he met, should it be required, by changing the percentage shares going to existing good causes after 2009. My hon. Friend the Secretary of State announced that to the House when she presented the funding package. The balance of the £2·375 billion funding package will be met by money raised through a London council tax, and, if required, by funding from the London Development Agency. It is right that London, as a leading beneficiary, should bear its share of the costs.
  Broadly speaking, it is the intention that lottery funding should be directed to sports investment, Olympic facilities and event staging, and that money raised from the Olympic council tax should address the capital requirements of the games, including transport infrastructure.
  The Bill will establish an Olympic lottery distributor to make grants in connection with staging the 2012 Olympic and Paralympic games, if London's bid is successful. The new distributor will be lean and focused, with minimal bureaucracy and a small and expert board. A separate distributor is essential to ensure that effective and informed decisions are taken on Olympic expenditure.
  All those involved in the bid believe that we have a very strong chance of success for London in 2012, and we will be working to ensure an extremely high standard bid that meets all the International Olympic Committee's criteria. By allowing new dedicated Olympic lottery games, the Government are showing their commitment to do everything possible to bring the Olympics and Paralympics to London in 2012.
  I should also like to say that I genuinely welcome the cross-party support that we have received so far in the House. I believe that that support is vital if we are to have the best chance of winning. I also thank the press—it is not often that we do that from the Dispatch Box—but I have noted a unanimity of purpose that is second to none. It has been in evidence right across the board in respect of Olympic decision makers, which will hold us in good stead when we make the final bid in July 2005.
  The Bill before the House covers two distinct and important areas. The sale of the Tote and the abolition of the levy board will end the Government's remaining
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  involvement in the administration and financing of horse racing, while ensuring the best deal for racing, the taxpayer and the betting industry. The provision for a new dedicated Olympic lottery game will generate revenues that will be a vital part of the overall funding package for the 2012 Olympics, if London's bid is successful. I commend the Bill to the House.
  2.53 pm
  Mr. James Paice: For the record, I have no declarable interests but, as many hon. Members will know, I have considerable constituency interests in many aspects of the Bill.
  The Opposition welcome the Bill in principle, and the core elements of all three parts of the Bill as described by the Minister have our support, but we will need to explore many elements of detail in Committee. Most especially—the right hon. Member for Livingston (Mr. Cook) started this ball rolling—we shall need to debate the absence from the Bill of countless assurances and statements previously made by Ministers.
  Parts 1 and 2 relate to horse racing, which is a huge industry, and I know that many of my hon. Friends are as interested and committed to it as I am. I always say that the few minutes of the race that are witnessed live or on television are the tip of a huge pyramid of activity underpinning the few minutes of equine competition. There are 59 race courses in the country, about 14,000 horses in training and 9,500 owners. There are bookmakers, groundsmen, vets, saddlers, stable staff and others—a total of about 100,000 jobs dependent on horse racing.
  As my hon. Friend the Member for Ryedale (Mr. Greenway) said, it is a period of great uncertainty for the industry with both Office of Fair Trading and European Court decisions outstanding. There is particular concern that the OFT does not understand racing properly and about the interdependence of its many elements. The original rule 14 notice of April last year would, if carried through, lead to the closure of many courses. That is almost everyone's view. That might not make much difference to the punter who only ever sees racing from his front room or in the betting shop, but it would be disastrous for jobs in many areas, particularly some remote rural areas, and for the public who actually wish to go racing, for whom a few days a year at their local course provides the only opportunity.
  The European Court of Justice is considering a reference by the Court of Appeal following a robust High Court judgment in support of the British Horseracing Board's database rights. That judgment is not expected until autumn when it will go back to the Court of Appeal, so the issue may not be resolved until late this year. Although parts 1 and 2 are important, I have to tell the Minister that their impact on racing cannot be fully estimated until the uncertainty over the Office of Fair Trading and the European Court of Justice decisions is clarified.
  Part 1 deals with the Tote, which can be traced all the way back to 1926 and to the Racecourse Betting Act 1928, which was sponsored by the Jockey Club. In its last financial year, the Tote contributed £10.7 million to racing, excluding its levy contribution. It operates 450 betting shops as well as pool betting throughout the country. It is a key point that the whole of the racing

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  industry—including, I believe, punters—believes that the Tote is part of racing and is for racing. Any suggestion that its contribution to racing could cease or be reduced would be met with universal hostility.
  That brings me to the question about ownership raised by the right hon. Member for Livingston. I take as a good starting point a written answer of 26 May 1999 provided by the then Home Office Minister, the hon. Member for Knowsley, North and Sefton, East (Mr. Howarth), who stated:
  "The Horserace Totalisator Board is a non-departmental public body whose members are appointed by the Home Secretary. The Board is responsible for the assets owned by the Tote but the Tote itself is owned by no one".—[Official Report, 26 May 1999; Vol. 332, c. 152W.]
  We have a clear, unambiguous Government statement that the assets are owned by the Tote and that the Tote is owned by no one. Yet the Bill creates the power for the sale of those assets, first by taking them into public Ownership—nationalization—and then selling the company that owns them—privatization—leaving the Chancellor with a cash sum.
  Will the Minister confirm whether it is true that the National Audit Office does not consider the Tote as a Government asset? That raises the question whether the Government should take any proceeds from its disposal at all. On what basis will a price be calculated? Will it allow for pension liabilities? I know that the Minister understands the point, but bear it in mind that the more the Tote is forced to borrow to pay for itself, the less will be available for investment in the business.
  That leads me to my next point—the exclusive licence. The Bill is silent on the period of exclusivity. We know that the Treasury and the Department of Trade and Industry both wanted a very short period, which underlines their lack of understanding about the relative balance between the licence length and value of any operation. We also know—the Minister reminded us again this afternoon—that the Department wants a seven-year licence. I must ask again: why is that not in the Bill?
  After the end of the licence, the Bill envisages a free-for-all on pool betting for any licensed organisation, so if the Government's genuine intention is that the Tote continues to provide a flow of money into racing, it is essential that it is given every opportunity to develop a strong enough business to compete in that environment.
  There is nothing in the Bill about future ownership of the Tote; there is not even a requirement for it to be sold to someone with an interest in racing or horses. I hope that the Minister will understand that despite his assurances the industry is a bit distrustful of the Government for not dealing with the question of the shadow racing trust and the future ownership of the Tote in the Bill. Under the Bill, there would be nothing to stop the Secretary of State or any future Secretary of State deciding to sell the successor company to the highest bidder—someone who may have no interest in racing or in putting the profits back into racing.
  The picture is even less clear when we consider the levy, due to the uncertainty relating to the ECJ and the OFT. The Opposition accept that in today's world the levy is anachronistic especially, as the Minister has said,
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  in respect of the Government's role in determining it in the event of an impasse in the bookmakers committee. We support the concept of commercial arrangements as the proper means for the provider of a product—the racing industry—to generate an income from those who exploit that product, that is, the bookmakers.
  The sale of data and media rights is, in principle, correct, but it would be wrong for us not to point out that bookmakers are opposed to the end of the levy. They argue that, due to the change to a gross-profits taxation basis and a straight 10 per cent. levy, there is much, much less likelihood of the Government ever needing to make a determination in the future. They also argue, understandably, that whereas the levy is VAT-exempt the commercial arrangements that replace it will of course carry VAT, so the cost to bookmakers or, indeed, to the industry will be higher.
  It must also be emphasised that because bookmakers have a place on the levy board they have some involvement in how the proceeds are spent. Will the Minister tell the House how he intends to proceed if either the OFT or the European Court, or both, decide that the present commercial arrangements are unacceptable? There is little doubt that, if the sale of data has to be negotiated with lots of smaller groups, proceeds will fall and racing will lose out, which will result in the closure of race courses. If the OFT so rules, is it still the Government's intention to abolish the levy?
  The current uncertainty also raises the issue of timing. The plan was for commercial arrangements to take over from 1 April 2005 with the levy board being wound up over the following six months. However, planning for the 2005 fixture list is already under way and by March the levy board must have devised its incentives scheme for that year so that the BHB and race courses can finalise their fixtures by the summer, yet OFT uncertainty means that no one can be sure of what the money flows will be after 31 March 2005. We would thus have no incentive scheme for three quarters of next year and no fixture list could be drawn up.
  I understand that the levy board and the BHB have agreed to defer the end of the levy until 2006 in the hope that the OFT dispute and the European Court case will have been resolved. Do the Government accept deferment of the ending of the levy until those disputes are resolved?
  The levy board owns two institutions, both of which are in my constituency: the Horseracing Forensic Laboratory, which is at the cutting edge of scientific investigation and the integrity of the racing industry, and the National Stud. Obviously, the transfer plan envisaged in the Bill must include proposals for their future ownership and I know that in principle it has been agreed that the laboratory should go to the BHB and continue to provide integrity services to the Jockey Club while the National Stud will become a freestanding charitable trust. However, as with the Tote, none of that is included in the Bill.
  There is understandable concern among the staff of the levy board about their future employment and pension arrangements. Will the Minister give us an undertaking that no transfer scheme will be approved that does not ensure the protection of existing pension arrangements, especially if the end of the levy is deferred?

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  On the Olympics and the lottery, as the Minister kindly pointed out, the Opposition wholeheartedly support London's bid for 2012 Olympics. There is no reason for us not to do so; we expect to be in office by the time that the decision is made.
  Mr. Caborn: The hon. Gentleman is dreaming great dreams.
  Mr. Paice: We also dream about gold medals—perhaps that is an even stronger dream.
  Despite the Minister's kind remarks, we have some reservations about the level of support from the Government and from their Mayor of London—as he now is. Will they provide the real public support that we need for our bid? It is not yet seen as a whole-London bid, let alone one for Wales and the rest of the UK—the hon. Member for Rhondda (Chris Bryant), who spoke about Wales, is no longer in the Chamber. Many people see the bid as the Mayor's regeneration scheme for the lower Lea valley. Although that scheme is important, it should not be the justification for the Olympics.
  There is no better evidence that the bid is not seen as a pan-London one than the comments of the Government's spokesman in the House of Lords, Lord Davies of Oldham. When he was asked about the use of the dome, he replied:
  "My Lords, the Dome is on the wrong side of the Thames in relation to the proposed bid."—[Official Report, House of Lords, 18 September 2003; Vol. 652, c. 1048.]
  So much for the claim that the whole of London is involved if even the dome is too far away.
  A further problem is that at present there is almost no private sector involvement in the bid, which gives it all the appearance of a public sector activity funded by lottery funds and council tax payers, and even national taxpayers through the London Development Agency.
  My hon. Friend the Member for Surrey Heath (Mr. Hawkins) will address further aspects relating to the Olympics when he winds up. One thing is clear: there will be a very serious cash flow problem if, as we hope, the bid is successful. We must assume that the lottery proceeds will be received on an even basis after a successful bid and that the council tax contributions are to continue until after the games have been held, possibly until 2016. However, it is my understanding that the Government have yet to come up with any ideas about how we could overcome that cash-flow problem.
  We proposed that the lottery begin this summer to coincide with the inevitable surge in public interest during the Athens games. The Government say that the International Olympic Committee has forbidden the start of any lottery until it has taken a decision about the location of the 2012 games, yet they have provided no evidence for that claim. Even if the Government are not allowed to run a lottery specifically to fund the Olympics until a bid is successful there is no reason that the game cannot be started beforehand if there is another purpose. That is the view not only of the Opposition, but also of the British Olympic Association. It is clear that some organisations are already considering the possibility of running scratchcard games to coincide with this year's Olympics if the lottery has not started.
  The Opposition propose that even if the London bid fails—we hope it does not—the money raised by then should be used to support our Olympic and Paralympic
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  competitors or, if that were not possible, it should be directed to the British Paralympic Association to provide a trust fund for disabled athletes. We are concerned that the bid does not yet give much publicity to the Paralympics—although the Minister referred to that event. They are a crucial part of the overall Olympic games and a critical part of our bid for public support.
  My final point about the lottery relates to the tax that the Government will receive from the sale of Olympic lottery tickets. We believe that they should hypothecate that tax so that the extra funds go directly to the staging of the games. At the current 12 per cent. rate of tax, that would raise about £320 million over seven years, which equates to about half the amount that it is anticipated will be raised by the precept on hard-pressed London council tax payers. I note that they face a further rise of 12 per cent. under their Labour Mayor. We hope that the Government will look carefully into that matter.
  In conclusion, I repeat the Opposition's support for the three core intentions of the Bill. However, the Government have shown that they cannot always be relied on to deliver their promises—only about an hour ago, the House saw plenty of evidence of that—so in Committee we shall try to ensure that the Government's commitments are included in the Bill.
  Over recent years, every Bill that has come before the House has provided increasing freedom of movement for Ministers—this Bill is exemplary in that regard—with more and more enabling legislation. The Bill gives the Secretary of State powers to close the Tote at any time, to sell the successor company to anyone and to set the price at any level. It will give her the power to wind up the levy board when she thinks fits and to break it up in any way she wishes—save that it must be in the interests of racing, and even then there is nothing in the Bill to stop her retaining the capital fund of £50 million for other purposes. Yet she and the Minister have said—they repeated it today—that all those details are already settled and announced. All I can say is that, if they are so clear and finite, why are they not in the Bill? The Opposition believe that they should be, and that is our determination throughout the process of the Bill.
  Several hon. Members rose—
  Mr. Deputy Speaker: Order. Before I call the next hon. Member to speak, may I remind the House that Mr. Speaker has put a 12-minute limit on Back-Bench speeches and that it applies from now onwards?
  3.10 pm
  Mr. Robin Cook: I should declare two interests. First, I have a consultancy with the Tote, which is registrable. Secondly, I have a lifelong passion for horse racing, which is not registrable because it rarely produces sufficient net profit to be of any interest to anyone else. It has, though, given me an insight into the growing popularity of horse racing as a leisure industry. It is perhaps worth drawing the House's attention to the fact that, in the past year, we have had more punters going through the turnstiles at British horse races than at any time for the past 50 years, so we would be wise, as politicians, to treat the horse racing industry with the respect that it is due, given that degree of public interest.

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  Against that background, it is right that we should transfer the Tote to be run by racing, so that the benefits of the revenue from the Tote go to racing. That principle has the enthusiastic support of the Tote staff. In fairness to the Tote, we should acknowledge that it has shown phenomenal growth in recent years. In the past two years, the staff of the Tote have managed to take up total pool betting by one third—a remarkable degree of growth.
  I congratulate, my right hon. Friend the Minister on introducing the Bill and on having secured a place for it in the Government's timetable. The interest and support that he and my right hon. Friend the Secretary of State have shown in the horse racing industry are warmly appreciated by that industry. They will understand if I then have to say that my welcome for the Bill is guarded because of the omission of two key figures, both of which are necessary if we are to achieve the success for the Tote that the Bill deserves to produce.
  The first missing figure is what will be the price for the sale of the Tote. The shadow racing trust, which will take over the Tote, I hope, in the fullness of time, is a new animal. It has never traded before. It has built up no capital. It has no money of its own. It will have to borrow every penny for the purchase of the Tote. It will therefore have to repay every penny for the purchase of the Tote. The higher the price, the greater its problem in making a go of it and the less revenue there will be for racing. It is therefore very important that the Tote be sold at a reasonable price.
  What might be a reasonable price is a sensitive point. Some may argue that any price is a windfall for the Treasury, since, after all, the Treasury has no right to sell the Tote at all, unless we pass the Bill and, rather curiously, nationalise the Tote, so that it can then be sold. I warn my right hon. Friend the Minister that he is likely to be pressed on that matter as the Bill passes through Parliament. In particular, many of us would feel more comfortable if we could write it into the Bill that the Tote's successor company should be a racing trust, thereby removing any risk that we are approving a procedure in the Bill that could end up with the Tote being sold at a price that only commercial bookmakers could pay.
  The other missing figure, which would give us some comfort if it were in the Bill, is the period for which the racing trust will enjoy an exclusive licence. What makes it slightly strange that that is missing from the Bill is that we all know what it is. Indeed, my right hon. Friend the Secretary of State and her colleague the Minister are to be congratulated on securing that figure—I know how tough that battle was—and it is to their credit that they did hang firm and secured a seven-year period of exclusive licence for the new racing trust. It nearly vanished altogether thanks to the intervention of the OFT.
  I find it rather strange that anyone should imagine that opening up pool betting to competition helps the punter, because the whole point of pool betting is that the bigger the pool, the more attractive it is to the punter. The greater the competition and the more pools there are, the less attractive it is to the punter. The logic of that, of course, is that I personally would prefer it if we retained an exclusive licence indefinitely, but I
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  recognise where we are at and I applaud my right hon. Friends' success in securing a period of exclusivity. I would just stress that seven years is the very minimum that would make this operate.
  We need the racing trust to establish its brand in the market. It will need to change the commercial culture of the organisation, and it will need to be able to offer security to staff of top quality if it is going to succeed. None of that can be achieved in anything less than seven years. We should be under no illusion how tough the competition will be at the end of that period of exclusivity. I do not mean any disrespect to Ladbrokes when I say that it is likely to enter into competition. I can say that with some confidence because it has made no bones about the fact that it will be its intention to bid for pool betting when the licence expires. If it were to be successful in displacing the Tote as a provider of pool betting, paradoxically, we would end up not with more competition, but with more monopoly and less competition in the betting market. It is therefore very much in the public interest, as well as in the interest of the racing trust, that there should be that minimum seven-year breathing space for it to establish itself.
  I should like to add a word about the abolition of the levy. May I tell my right hon. Friends that I fully recognise that, in the modern world, the era of corporate Britain in which the levy is rooted has passed? Relations between the racing industry and the betting industry will always be characterised by what we might describe as creative tension, but it is not acceptable in the modern world for a Cabinet Minister to try to hold the ring and adjudicate between them. I therefore accept the principle in the Bill on the abolition of the levy, but I echo the note of caution that the hon. Member for South-East Cambridgeshire (Mr. Paice) has just scored.
  The assumption when we agreed to the abolition of the levy was that the income from the levy would be replaced by revenue from the commercial sale of data by the race courses to the bookmakers. That assumption has now been thrown into chaos by a parallel intervention by the OFT, which is showing an unwelcome interest in the racing industry generally. If the rule 14 notice stands, racing will have great difficulty establishing a method by which it can have a collective sale of data from all race courses. If each race course has to negotiate with the bookmakers separately, that will make it very hard for small provincial race courses to secure a fair return, since they have little market leverage on their own. That, of course, it is a matter of concern not just to them, but to the racing industry generally because we depend on the smaller courses to produce the stars of the future for the grand occasions.
  Mr. Laurence Robertson: Does the right hon. Gentleman, like me, find it rather curious that the Government, quite rightly, should want to shed the responsibility of effectively running racing; but are we not, in effect, seeing that responsibility passed to an unelected quango called the OFT?
  Mr. Cook: The hon. Gentleman tempts me into wider waters, which may cause me some difficulty with the occupant of the Chair, but there is a bona fide issue of accountability. If the OFT is intent on making such controversial and dramatic interventions in the future, it may quickly find itself being asked about its

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  accountability for the consequences of the actions that it is taking. Indeed, we are already approaching a situation in which there is a possibility that the National Audit Office may be invited to second-guess the public expense accounts and consequences of the OFT's decisions.
  There is, however, an odd asymmetry about the current rule 14 notice. The OFT has decreed that the race courses should be open to be picked off one by one in negotiation on the sale of their data. The OFT has not turned a hair, however, about the idea that the bookmakers have a cartel for the purchase of that same data. I would not want to do an injustice to Ladbrokes, Hill or Coral, particularly as I am wearily aware that Ladbrokes is very quick to pick up on any sense that it has been misrepresented and to register its objection. It may be that, even as we meet, those three great powers are reflecting on the aesthetic beauty of competition theory as set out by the OFT, and they might come forward with proposals that in future they will buy separately racing data from race courses and bid up the payment against each other. I rather doubt it, however.
  I suspect that in future years the racing industry will be faced with the bookmakers putting up a collective body for the purchase of data, and as long as that is the case, racing would be wise to absorb the same lesson and make sure it also has a collective authority for the joint sale of racing data. I know that my right hon. Friend the Minister for Sport and Tourism appreciates that point, and his support is welcome, but the House will be put in a difficult position if we are asked to pass a Bill that abolishes the levy when, thanks to the OFT intervention, we currently have no idea of what will replace the levy in the longer term.
  I began by saying that racing is a popular sport and is growing in popularity. We should also remember, however, that this Bill is a sober and important measure affecting what is a major industry on which many people depend for their livelihoods. The hon. Member for South-East Cambridgeshire mentioned a figure of 100,000 jobs in the stables, on the race courses and in the betting industry, which is a large number of the employed population of Britain. It puts the racing industry in the same league as the motor car industry and other major manufacturing concerns. We have a responsibility as legislators to do all that we can to make sure that that industry stays healthy. With the reservations that I have expressed, I believe that this Bill will help us to make sure that racing remains a popular sport at home and a centre of world-class excellence abroad.
  3.21 pm
  Mr. Don Foster: Although the Bill is unlikely to get a great deal of media coverage, it is undoubtedly important both for horse racing and for our bid for the Olympics and Paralympics in 2012, which my right hon. and hon. Friends and I support wholeheartedly. We entirely accept the point made by the hon. Member for South-East Cambridgeshire (Mr. Paice): while we, too, fully support the Bill in all its aspects, we have several concerns about some of its finer details, although we can rightly raise those points in Committee.
  I am delighted to follow the right hon. Member for Livingston (Mr. Cook), whose knowledge of racing is legendary, and who points rightly to the crucial
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  importance of this Bill to horse racing, and to the importance of horse racing in the country. As we have heard, horse racing employs more than 100,000 people in this country, but it is also worth reflecting that some 6 million people went racing last year, and the number is growing year on year. In my constituency of Bath, for example, we have an excellent race course which is booming and at which figures are improving. The number of racing fixtures has increased year on year. This year, we have our highest number ever—18—and on average there are 3,400 racegoers at every event. That is an increase of 30 per cent. in just two years. Not only does the race course in Bath create employment, as do all other race courses, but it is an important tourist attraction, and provides a range of facilities that can be used on non-race day events.
  The Tote, which is the main focus of part 1 of the Bill, is crucial to racing. After all, its turnover last year was more than £900 million, and it makes a significant contribution to various aspects of racing, including the work that it does to improve horse breeding, to support veterinary medicine and veterinary education, and to help improve the facilities in the 59 race courses around the country.
  We are not therefore dealing with trivial issues. I am particularly grateful to the staff in the Library of the House for preparing such an excellent brief to cover and help to explain many of the issues. One of the things that became clear from reading that and many other briefs that we have been sent in preparation for this debate is the Bill's long gestation period, which reflects in part the complexity of the issues and no doubt the difficulty that Governments have had in finding a way of tackling them. During that gestation period, we have had Select Committee reports, industry reports, debates and statements in the House, consultation documents, the establishment of the British Horseracing Board, manifesto commitments and even a change of responsibility from the Home Office to the Department for Culture, Media and Sport.
  Despite all that, as other Members have said, what we have before us is only the skeleton of a Bill—an enabling Bill with many blanks left unfilled. As we have heard, we know with absolute certainty, I hope, that the Government intend an industry body, the racing trust, to take over the running of the Tote. That was made clear in what the Minister said today and in the Government's 2001 manifesto, and a shadow racing trust has been established under the excellent chairmanship of Lord Lipsey. There is no mention of any of that, however, in the Bill.
  We know that the Government have been in extended negotiations with the racing industry, which have led to the compromises whereby the new Tote owners will be given an exclusive licence for a period of seven years. As the right hon. Member for Livingston said, however, that is not mentioned in the Bill. We know that the Government want to make money out of the deal, as has been made clear, and we have been given a rough idea of the mechanism by which they will achieve that. None of that is mentioned in the Bill, however. As the right hon. Member for Livingston also pointed out, we know that the Government intend to abolish the horse racing

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  betting levy and the levy itself, which is covered in the Bill, but although we have a rough idea of what is intended to replace that income, the Bill contains no reference to any source of alternative income.
  The Bill therefore has a large number of gaps that remain to be filled by secondary legislation and by decisions by the Secretary of State. I am not entirely critical of that, however. I understand some of the difficulties. For example, the current issues surrounding the recent OFT report mean that it is difficult to decide what mechanism should be introduced to replace the levy. I was pleased to hear the Minister say in the Chamber on Monday that he was confident that if various parts of the industry get together, a solution can be found. I noted that he said that the Secretary of State has written to the OFT on that matter, and I wonder whether he might make public the contents of that letter so that all Members might see what the Secretary of State said. It strikes me, like the hon. Member for South-East Cambridgeshire, that the OFT approach has been one of treating horse racing purely as an industry and totally ignoring the sporting element, the horse breeding element. and its contribution to veterinary science. I also understand why there is no mention of the racing trust in the Bill. I would not want the Government to be put into a situation in negotiations with the racing trust if the only bid that they knew that they could accept was whatever the trust had to offer them.
  Given that I appreciate the difficulties, I am sure that the Minister will recognise the importance of what he has said in the House today and what he will he say in Committee to give people the assurances that they want. They want to know that some of the things that they assume will happen are very much Government intentions.
  I and my party agree that the decision to hand over the responsibility of the Tote to the racing trust is absolutely correct. However, the Minister will be well aware that many people disagree with that line. For example, the bookmakers committee has proposed that the sale of the Tote should be by flotation or by auction. It has argued that that could make a greater sum of money available to racing. I remain unconvinced by that argument and certainly unconvinced by the large sums of money that some bookmakers suggest could be realised from the sale of the Tote. Nevertheless, it is important for the Government to make clear the estimates that they have carried out as to the likely effect of such an approach, so that the evidence is clearly before us to show us why they have rejected it.
  As I have said, I understand why the Government have not put anything in the Bill about the period of time for which the new body will have the exclusive licence for running pool betting. However, this is one issue on which I believe that the Government may have got things wrong. I am not at all convinced that it is sensible to have an irrevocable seven-year time limit, particularly when much of the Government's research suggests that such a limit could be damaging to the sport.
  I understand entirely—the right hon. Member for Livingston referred to this—that there has been considerable pressure from the OFT, the Department of
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  Trade and Industry and from the Treasury to have as short a period as possible. However, I am concerned that the Government are categorically saying that the exclusivity of the licence cannot be renewed after that seven-year period. There is the very real possibility that that could plunge the sport into difficulties after that period has come to an end.
  Let me explain the reasons for my view. It is odd for the Minister to say that the temporary exclusive licence
  "is needed to safeguard the revenue racing receives from the Tote"
  and then simultaneously to abandon any chance of prolonging that licence should the revenue not be safeguarded in the next seven years. What evidence is there for the Minister's claim that
  "it's in the public interest to open up the pool betting market to effective competition"?
  After all, the Department's own regulatory assessment paints a rather different picture. Page 22 shows that the loss of an exclusive licence could lead to the
  "possible loss of pool betting at some race meetings and racecourses"
  and to lower Tote contributions to racing.
  I am not convinced that anyone would benefit from the removal of the exclusive licence. That view was expressed clearly by the Home Affairs Committee report of 1991 which argued that horse race pool betting is an area in which monopoly might actually be in the consumer's interest.
  The Minister will be well aware of the popularity of pool betting with small punters and family racegoers. Forcing pool betting into the open and into the competitive market could lead to the establishment of a large number of very small pool systems that could lead to erratic dividends that would undermine public confidence in pool betting. Surely if it is in the public interest and in the interests of racing, as the Government report seems to suggest, for pool betting to remain a monopoly, it is crazy to end it even with a seven-year transitional period without at least taking any regard of what might happen in future.
  Others Members have asked about the mechanism for determining the price. We get some guidance from the regulatory impact assessment, which states:
  "The Government has indicated that it regards the taxpayer as one of two interests in the Tote, the other being the racing industry. Consequently, the Government would expect proceeds equal to around one half of the Tote's value at sale."
  We have no set formula; it is around a half. What is the justification for that? What will the figure be? We do not have a clear statement as to what the valuation process will be, or as to when and how the valuation will be carried out. There is a great deal of uncertainty. The Minister will be well aware that the Tote is buying new betting shops at a rate of knots. I understand that it has bought 12 in Scotland in the last month alone, and all that has to be taken into account. We need to know how that will be done.
  It is not surprising that the British Horseracing Board, which will be a principle stakeholder in the new trust that will buy the Tote, argues in its briefing that the
  "Minister must make clear on what basis the price for the Tote will be determined prior to the completion of the passage of the legislation".

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  I entirely agree that we need to know that as soon as possible. We have heard from other hon. Members that there is some uncertainty about the legitimacy of the Government's obtaining any receipts from the sale of the Tote. Although I do not support that specific line—I certainly argue that there is legitimate justification for the Government to receive money from the awarding of the exclusive licence—the Minister must make clear the basis on which the Government justify taking money in addition to that which they could expect to get for the awarding of that licence.
  Reference has already been made to rule 14 and the Office of Fair Trading. It is increasingly clear that until that matter is resolved, it will be difficult to find an alternative to the Horserace Betting Levy Board and the levy itself. We know what the intended mechanism was to have been and the way in which the OFT's decision made that almost certainly impossible. The Racing Post quite rightly summed up the situation when it said:
  "The government is hardly likely to sanction a transfer to racing while there are still fundamental uncertainties."
  Surely it makes absolute sense for Minister to make it clear in his winding-up speech that the levy board will continue until the issue has been resolved and a clear alternative has been agreed.
  The first two parts of the Bill are movements in the right direction, but there are nevertheless many gaps to be filled and many issues to be considered in Committee. Part 3, which will establish the new lottery game, is also important. The establishment of the game will be an important element of our bid. Liberal Democrats support part 3 of the Bill only because of our total commitment to support the Olympic and Paralympic bid and because there is a need to demonstrate to the International Olympic Committee that robust funding procedures will be in place if our bid wins. In offering such support, I am conscious of the many worries that Liberal Democrats and others have about the likely impact of such a move on other good causes and the fact that the measure represents further Government interference in the way in which lottery funds are distributed. However, exceptions must be made at times when the entire UK comes together to celebrate and promote what our country has to offer.
  The Olympic project is enormously exciting. Some 11,000 athletes will compete in 300 events over 17 days with something like 500,000 spectators attending every day. The sheer scale of a successful Olympic bid would provide huge potential for social regeneration in London and nationally, for the development of our transport infrastructure and for the growth of tourism throughout the entire United Kingdom. Of course, it would also inspire future generations of athletes from England, Northern Ireland, Wales and Scotland. I was delighted when the Government announced their support for the London 2012 Olympic bid in May last year, and I know that many hon. Members on both sides of the House have welcomed the decision and spoken sensibly in support of the bid. I was surprised to hear the recent snide remarks made by the mayor of Paris about the London bid. He is wasting his time, because I am convinced that the country that wins the process will do so on the merits of its bid alone. Mr. Delanoe's comments will not influence the IOC and will only tarnish his reputation. Our ability to demonstrate sound
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  financing will be crucial to winning the bid. The inclusion of an element of lottery funding will help the bid to be successful.
  Normally, as I have said, we would be inclined to oppose the use of national lottery money for Government spending priorities, and we are prepared to make an exception in this case because we know how popular the hid is and how much cross-party support it has. Coming to that decision has not been easy, because we believe that the Government have a pretty bad record on grabbing lottery funds for their own purposes. A recent YouGov poll demonstrated that one important matter for the public is ensuring that lottery funds remain independent of Whitehall interference. The creation of the new lotteries fund to make grants in line with Government priorities on health, education and the environment was a blow to the independence of lottery funding. The proposed merger, for which legislation is about be introduced, of the New Opportunities Fund and the Community Fund could soon be a further such blow.
  In addition, and I hope that no one would deny this, the inclusion of a new lottery game will have a direct impact on the other good causes. It is therefore vital, as we heard in an intervention, that all parts of the country benefit from the use of the Olympic lottery game receipts. After all, those receipts will be generated by people in all parts of the country. It will be much easier to persuade people in Bath, Belfast, Bangor and even Banff to get behind the new game if they know that their area will benefit, and that London will not get all the rewards.
  I hope that the Minister appreciates that, given all our concerns about the independence of lottery fund distribution and the possible impact on the other good causes, Liberal Democrat support for this part of the Bill is a major contribution towards maintaining the all-party consensus on support for the Olympic bid.
  The Bill is just a skeleton, and I urge the Minister to continue as he started in his introductory remarks, by giving us as much detail as he can on those areas where it is desperately needed. We broadly agree with the principles regarding the future of horse racing and the funding of the Olympic bid. The Bill has had a long gestation and many false starts, but at last we have something to get our teeth into. We will help the Bill to clear its first fence by giving it a Second Reading.
  3.42 pm
  Jeff Ennis: I am grateful for the opportunity to contribute to this important debate. Like most Members who have spoken, I declare an interest: I am joint chairman of the all-party racing and bloodstock group. I am sure that my co-chairman, the hon. Member for South-West Hertfordshire (Mr. Page), will also make a contribution. Ours is one of the biggest and most active all-party groups, and that is reflected in the number of Members who want to speak in the debate.
  I congratulate the Secretary of State and her team on introducing the Bill. There have been calls for the measure since I joined the all-party group in 1996, and indeed, as the hon. Member for Bath (Mr. Foster) pointed out, the Home Affairs Committee called for it as long ago as 1991. I hope that I am not being too

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  presumptuous in saying that my experience of discussing this matter in the all-party group, which we have done a number of times since 1996, indicates to me that the Bill will have a fair passage. I think that there is agreement to it in principle on both sides of the House, and it is just a question of trying to smooth its rough edges as it wends it way through the various parliamentary stages.
  Many of my concerns, which relate to the involvement—or should I say interference—of the Office of Fair Trading in the future of racing, have already been eloquently expressed by the hon. Member for South-East Cambridgeshire (Mr. Paice) and my right hon. Friend the Member for Livingston (Mr. Cook), and we all look forward with trepidation to the likely outcome of that involvement. The future success of racing could well be prejudiced by the outcome of the OFT's deliberations. Like the hon. Member for South-East Cambridgeshire, I welcome the Government's decision to retain the levy board until at least 2006. That is desperately important in light of the OFT report.
  The meat of the Bill is about bringing the Tote under the Secretary of State's control with the intention of selling it on. The Minister gave a commitment today to set up a racing trust for the benefit of racing which is important, given the abolition of the levy board. It is eminently sensible to take both those issues together, as that will allow the Government to withdraw from their direct involvement in horse racing. Over the years, the Tote and the levy board have done a first-class job in channelling funds from betting into racing, but it is in racing's interests to break the link between direct Government involvement and the racing industry, as that will permit the racing industry more control over its destiny and allow it to continue to flourish.
  As one or two Members have mentioned, racing in this country is a growing and successful industry and can stand comparison with the racing industries of other countries. In my opinion, it is the best in the world. The Bill does not deal specifically with the onward sale of the Tote, but hon. Members have referred to it. We do not want to get bogged down in the issue today, but it is important that the sale is pitched at an affordable level to allow the Tote to be successful in its new guise. If anything, the price should be lower rather than higher. Hopefully, the Treasury will deploy common sense when it looks at the issue.
  The Bill deals with the Tote's exclusive licence on pool betting, which will eventually become non-exclusive. We have already been given a commitment that there will be a seven-year licence, which has been agreed with the industry, and a new regulatory structure will be set up under the supervision of the gaming board. Like the hon. Member for Bath, I have reservations about whether that seven-year period is long enough, but I congratulate the ministerial team on securing that agreement.
  As for the successor body, it must have the ability to provide low-interest loans for future race course improvement, as was said in an intervention by my hon. Friend the Member for City of York (Hugh Bayley). A lot of race courses have benefited from low-interest loans, particularly those that they have received from the levy board. My own race course at Doncaster holds
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  the oldest classic in the world, the St. Leger, which has been held since 1776. It wants to redevelop the course so that its facilities are comparable with those at York and Ascot, and has put together a development package totalling £55 million. If the loan scheme fell by the wayside, race courses, particularly the small ones, would experience problems finding alternative ways of financing redevelopment. I hope that the Minister will take on board the need to extend the scheme and continue to offer loans through the new racing trust.
  The League Against Cruel Sports has two concerns that are directly relevant to the abolition of the levy—equine welfare and the future of the racehorses that retire every year from racing. I am glad that, in his introductory remarks, my right hon. Friend the Minister gave a commitment that the funding of vet attendance at tracks will be enshrined in the new arrangements, and the Bill indeed makes provision for that. The League Against Cruel Sports estimates that there are some 4,000 former racehorses. The racing industry has a proud record of dealing successfully with such horses, but according to the league, there are roughly 300 former racehorses for which new homes need to be found. It is important that when the new racing trust assumes responsibility, it ensures that funding is provided to deal with the welfare of former racehorses. I hope that the Minister can make some pronouncement on that in his winding-up remarks.
  I hope that the measure has support in all parts of the House. It is not a party political matter. It is important to the future success of the industry, which, as my right hon. Friend the Member for Livingston pointed out, is one of the biggest industries in the country. It is also important for the future of the country.
  3.51 pm
  Mr. John Greenway: I declare a longstanding love affair with the Tote, which began in 1991 when, as one of the co-authors of the Home Affairs Committee report which recommended the very action that we are putting through today, I hoped that one day we would have a debate when those measures came before the House. Indeed, as the hon. Member for Barnsley, East and Mexborough (Jeff Ennis) said, it has been argued long and hard many times that we should have the Bill.
  Similarly to the right hon. Member for Livingston (Mr. Cook), I have a consultancy with a City public relations company, one of whose clients is the Tote. I was the sponsor of the last Tote Bill in 1996, when we extended the ability of the Tote betting shops to offer fixed-odds betting to other sports, not just to racing. Like a number of hon. Members, I suspect, I am a regular investor in the Tote on course and a less regular investor in the Tote through my Tote credit account.
  I also have a considerable constituency interest. Although none of the nine race courses in Yorkshire is in my constituency, Malton is one of the long-standing historic centres of racing excellence through training and breeding, and if the appropriate persons are listening to the debate, I sincerely hope that before the levy is abolished, we will get a £100,000 grant or loan for the laying of a polytrack at the Langton Wold gallops, which we very much need to attract more horses.

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  I had hoped that when we had this debate, we would be able to use the gushing language of a red-letter day in the 75-year history of the Tote and the 300-year history of racing, and I hope that that is how we will look back on these proceedings. However, I am slightly cautious about that because, as the right hon. Member for Livingston so adequately put it in his speech, although the future of the Tote and the racing industry without the levy has long been on the agenda, we never expected that when we came to debate it the future of racing would have been plunged into such uncertainty by the Office of Fair Trading rule 14 notice. The disputes that that brings with it over the ownership, sale and purchase of media and data rights add to our feeling of uncertainty about what the future holds.
  I hope that we can conclude that, despite those uncertainties, it is right for us to proceed now. We have waited a long time for this slot in the parliamentary calendar. I hope, too, that my right hon. Friend the Minister will understand the need for caution in implementing some of the measures which he, or his successor in the years to come, will be given the power to implement, if the Bill goes on to the statute book.
  As I have said, the concept of a sale of the Tote to a racing trust has long been accepted as the best option, and I welcome the fact that the Minister accepts that we should be talking about the sale of the whole of the Tote's business, including the betting shops, which contribute substantially to the profits that the Tote ploughs back into racing.
  The features that the Minister outlined in his speech, which he has agreed with the industry and which form the basis of the potential successful implementation of the measure, still need to be given stronger force by being included in the Bill. In my intervention, I paid tribute to the fact that he has really fought his corner extremely hard to ensure that the exclusivity will be for seven years, not less. I would have preferred it to have been for longer, and I share the uncertainty of the hon. Member for Bath (Mr. Foster) on what will happen at the end of that seven years. However, our concerns are not about the nature of the promises, but their absolute delivery. In that, we must also have regard to the fact that nothing in the Bill says that the Tote will be sold to a racing trust, although we welcome the shadow trust chaired by Lord Lipsey.
  The more important missing ingredient is the price and what formula will be used by the Government to negotiate that. Every penny that is paid is money that would otherwise have gone to racing. We understand and accept that, but unless the price is reasonable, we could be faced with a situation where even at the eleventh hour the Tote may say that it cannot recommend going ahead on this basis. I hope that, in Committee, the Minister will at least be able to give some indication of what the price will be and how it will be calculated.
  The affection that racing enthusiasts and people in the industry have for the Tote largely reflects the fact that they feel ownership of it already and their gratitude for the fact that all the profits from the Tote go to racing. That is in sharp contrast to the levy, which is paid by bookmakers. That is always subject to tough negotiation, as the Minister knows, and all too often it has been the subject of eventual determination, first by the Home Secretary and now by the Secretary of State
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  for Culture, Media and Sport. I mean no unfair criticism of bookmakers, but the levy was originally voluntary, and it is not unfair on them to say that they have to fight their corner every time that the levy is negotiated. But both racing and bookmakers have long felt that a commercial negotiation was the better option, and that still has to be the best long-term option.
  There are now obstacles in the way. As my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) said, the issue of VAT on bookmaker payments, some £16 million or so a year on the current levy, has not been resolved, and from the racing perspective there is the question that many in racing are asking themselves, which is whether they as an organisation are in a sufficiently strong position to achieve not just more, but at the worst, no less than they get now through the levy by a commercial negotiation.
  When the Home Affairs Committee considered the matter in 1991, it said that there was no organisation within racing capable of making that negotiation. Now there is, through the British Horseracing Board, but the OFT rule 14 notice—its unwelcome intervention—is hugely damaging to the negotiation. Until that is resolved, and until the EU interest, to which reference has been made, is resolved, it is not clear to me by whom and to whom the data rights are being sold.
  If we end up, God forbid, with each race course having to sell its own data, there will not be 59 race courses within five years of that event taking place, and it will be national hunt courses in the north of Britain, particularly in Scotland, that will suffer. I cannot believe for one moment that anyone in racing or bookmaking could possibly want that to happen.
  On balance, therefore, and in spite of those uncertainties, the Government are right to seize this historic opportunity to ask Parliament to pass into law the structural measures needed to achieve what we have all long wanted to see. I hope, however, that the Minister will continue—not just today but as the Bill progresses—to give the assurance that, if necessary, some of these events will be postponed until we are absolutely certain that we are doing the right thing and that the future of racing is secure. That is what everyone in the Chamber wants, and with that spirit of good will in mind, I hope that the cross-party consensus can continue and that we can achieve these long-awaited measures. I wish the Minister and all those who work on the Bill in Committee every success as they attempt to bring that about.
  4 pm
  Mr. Brian Wilson: In view of all the sporting implications of the Bill, I cannot help but reflect that it is a wee bit of a pantomime horse, in the sense that its front end is not very well connected to its back end. That is also a fair description of the horses that I tend to back. I think that most Members who are waiting to speak want to join in the very interesting and necessary dialogue on the future of the Tote, so I apologise for the fact that I am going to talk about the back end of the Bill—the part that deals with Olympic lottery funding. In mitigation, I would say that I want to make just a few brief points.
  I warmly welcome the Olympic and—it is always important to remember that that term includes this—Paralympic bid being made in London's name.

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  Logically, therefore, I strongly support the measure that is being introduced today to provide the necessary funding to support that bid. This will obviously have implications for other beneficiaries of lottery funding right across the country. I know that that point has already been made on Scotland's behalf by its First Minister, Jack McConnell, who has had a meeting with the Secretary of State and, doubtless, my right hon. Friend the Minister.
  Perhaps my next point is so obvious that it does not need saying, but the corollary of the fact that the bid will have national implications is that it should bring national benefits to every part of the United Kingdom. A number of people have raised that point today, and it is surely non-controversial, involving, as it does, common sense and common justice. The reason why I thought that it was worth emphasising is that over the Christmas period, I heard the first murmurings of what I am afraid is the inevitable response from a political minority in Scotland that cannot see a gap without trying to drive a wedge into it. We have heard the first utterances to the effect that this is really not Scotland's business, that Scotland it going to lose out, and that it has nothing to do with Scotland. That is all utter rubbish.
  My general feeling that I should say something about that was reinforced a few minutes ago, when I was sent a copy of a press release put out today by the Scottish nationalists under the inspiring headline, "Scotland Faces" Olympian Rip-Of?". It contained a sentence that, even in the mean-minded world of nationalism, is something of a classic:
  "if London wants the Games, London should take financial responsibility"
  for them.
  Pete Wishart: Hear, hear!
  Mr. Wilson: That is the hon. Gentleman's point of view. It is not, however, the point of view of the vast majority of people in Scotland. It is a narrow-minded piece of thinking that should not be allowed to make an inch of progress in the House or anywhere else. I was pleased to find that the only survey, so far as I know, carried out to determine support for the London Olympic bid showed that 80 per cent. of people supported it nationally, and that two parts of the United Kingdom in which support was at its highest were Scotland and Northern Ireland.
  That might seem surprising if we approach this from a narrow political perspective, but for anyone who knows anything about these societies and their commitment to and interest in sport, it is entirely logical. For the vast majority of people in Scotland, Northern Ireland, Wales and any of the English regions, this is the closest that they will ever get to having Olympic and Paralympic games on their doorstep, so of course they want them to come to the United Kingdom. Of course London is the only credible standard bearer for the United Kingdom, so let us all get behind it, from every corner of the United Kingdom.
  The Scottish nationalists' approach is not only wrong in terms of generosity of spirit and recognition of what is best for the United Kingdom, but wrong for Scotland,
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  and profoundly so. Scotland can, and I have no doubt will, get substantial benefits if the bid succeeds. Here, I want to move on to my more parochial, constituency point. Most attention concerning the possibility of locations around the country being used has tended to focus on football and using the best stadiums in the United Kingdom for that competition. Incidentally, I also welcome the prospect of a British team being in evidence there. Let us see how a British team compares with those in the rest of the world. There is nothing new about that concept, as has been suggested somewhere, because, historically, it was always a British football team that took part in the Olympics.
  Mr. Doug Henderson: Queen's Park.
  Mr. Wilson: As my hon. Friend says, to all intents and purposes the team was Queen's Park with a couple of Corinthians thrown in to make up the numbers. As football was amateur, nobody thought it remarkable that a British team was involved. The idea of having a professional British team taking part in the modern Olympic context is very exciting. I hope that we see those games in Scotland as well as in other parts of the United Kingdom.
  Football offers the obvious opportunity, but my constituency point involves sailing, as there is real potential to bring some events, and certainly a good share of the preparation, to the firth of Clyde. I want to put my remarks in an historical context, because there is nothing new about that idea. Indeed, at the last but one London Olympics—I emphasise that they were held in London—in 1908, when, fortunately, there was nobody putting out press releases with noble-minded headlines such as, "Scotland Faces? Olympian Rip-Off?", the sailing events were shared between Ryde on the Isle of Wight and the firth of Clyde. Obviously, the scale of the event and the infrastructure required have changed beyond recognition.
  Mr. Adrian Sanders: I do not know whether the hon. Gentleman knows this, but in 1948 the yachting events were in Torquay, in my constituency.
  Mr. Wilson: There is nothing against a tripartite split.
  Mr. Sanders: But the events will be going to Weymouth.
  Mr. Wilson: Perhaps the hon. Gentleman's constituency could have a run-off with the Isle of Wight and Weymouth.
  The point is straightforward: the scale of the event has changed beyond recognition since 1908, or indeed 1948, but the firth of Clyde was used because it is one of the best sailing areas in the United Kingdom and Europe—and, some say, the world.
  Pete Wishart: Perhaps the hon. Gentleman would like to read out my press release headline once again in case anybody in the Press Gallery missed it.
  Mr. Wilson: I do not quite catch the wit and wisdom of that point. The only other line that I will quote from the hon. Gentleman's press release is this, said through gritted teeth:

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  "I am happy to support the Olympics going to London."
  I suspect that the truth is that he would be happy to support the Olympics going anywhere in the world except London, but that is the rather miserable political philosophy that he represents.
  To return to the point about the firth of Clyde, although the scale of the event has changed, the area's quality as a sailing venue has not. I make no overblown claims or demands, but the firth of Clyde should be considered seriously to see whether it is still possible to hold events there. Largs in my constituency is a well-known centre for major international sailing events, and the Isle of Cumbrae is the Scottish Sports Council's chosen location for its water sports centre, so this possibility is real. Even if events are not held there, the strong possibility should exist of preparation being carried out there.
  Let me point out to Members from throughout the country that this will not be a one-off "big bang" event in London. It will require long-term preparation, and an infrastructure allowing a couple of hundred teams from all over the world to make their own preparations. The arrangements must be of a high standard, and there is no reason why they should not be decentralised. I believe that when the Olympics were held in Australia much of the preparation took place in Queensland, and the distance between Queensland and Sydney is every bit as great as any distance that could be conceived of in the United Kingdom.
  For all those reasons, this is very much a national undertaking. Although it is in the nature of the Olympics that bids are presented in the name of a city, every corner of the country can benefit—and "the country" includes the four nations of the United Kingdom. Let us all get involved, let us all benefit and let us all support the bid. I welcome the Bill.
  4.10 pm
  Mr. Richard Page: I have been involved with horses virtually all my life. They have given me a great deal of pleasure, a great deal of frustration and a sizeable dent in the wallet. As was mentioned by the hon. Member for Barnsley, East and Mexborough (Jeff Ennis)—I was about to call him my hon. Friend, but I do not want to damage his chances—I am also joint chairman of the all-party racing and bloodstock group.
  I welcome the Bill. The Minister dealt with it in three parts and I shall do the same, but in reverse order. I regard backing for the Olympics as a legitimate use of lottery money. I may be a bit more interested in this than most Members, because Camelot is on the edge of my constituency and employs several hundred people, and the success of the lottery affects their employment prospects. The trouble is that in my view, the Government have not always used lottery money for the right purposes in the past: things that should have been funded by a central exchequer have been foisted on the lottery.
  We all know that lottery, raffle and tombola ticket sales are enhanced if people think they support a good cause, and reduced if they think it is a bad cause. Unfortunately, in one or two instances people have thought the latter, the Dome being an example. When that happens, sales fall and Camelot gets the blame,
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  although it is not Camelot's fault at all. I hope that people will consider backing for the Olympics to he a legitimate use of lottery money and will flood in, buy tickets and improve my constituents' employment prospects.
  Let me make a specific point about the general subject of bureaucracy. Over the years, various lottery distribution groups have grown up. I am sorry to say that I feel they are hoop-builders. There are so many complicated forms to be filled in that a sub-industry of lottery application advisers has evolved. I therefore welcome what the Minister said about the development of a lean and mean bureaucracy. I only hope that that will rub off on the existing lottery money distributors.
  As many Members have pointed out, we are taking the Bill very much on trust when it comes to the levy board and the Tote. I am pleased with the work that the levy board has done: I think that the improvements to race courses and the veterinary work have been marvellous, and must not be lost to racing. Many is the time that I have gone to a race meeting and stood on a concrete slab under a leaking corrugated iron roof, with the wind whistling around me, watching my horse come last again and telling myself that I am enjoying it when I am not. The levy board has behaved very responsibly in raising standards for all racegoers.
  I have had ponies and horses for some 54 years, and I have attended one or two of the seminars run by the levy board. I now realise how little I know about racing and racehorses—but I do know why, all other things being equal, a second foal from a dam will probably be the best. If any Member would like to know the details, I am available for consultation.
  However, I certainly understand why the Secretary of State wants to get shot—if I may use that phrase—of the levy. I agree with the Government's natural reluctance to remain involved in what is a commercial arrangement, so I welcome all the lovely words in clause 16, which effectively says that the Secretary of State can direct how such a transfer scheme might be operated. It states:
  "The Secretary of State shall not make or approve a transfer scheme … unless satisfied that any property or rights to be transferred will be used"
  for certain specific purposes. That is fine, but here I detect a little problem coming, as other Members have suggested. I can do no better than quote from the Racecourse Association, which might be thought to benefit from the administration of the Office of Fair Trading. It says:
  "we have a number of concerns that arise from the current OFT inquiries into racing that have resulted in considerable uncertainty for the commercial future and governance of the industry."
  It continues:
  The Office of Fair Trading's decision to rule against collective selling threatens to undermine the commercial relationships that both the British Horseracing Board and the Racecourse Association have entered into with bookmakers."
  In examining the arrangements, the thought is that the levy board will be passed to a commercial operation, which will be administered and run by the British Horseracing Board. But if the BHB is to be hamstrung by rule 14, it will not have the money to continue to fund the levy. If so, racing will suffer, and none of us wants to see that. I am afraid that the problem originates from the ignorance of the OFT, which just does not understand.

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  The right hon. Member for Livingston (Mr. Cook) used the phrase "creative tension", and that is absolutely right. Racing is a series of strong elastic bands pulling in all sorts of directions, but those bands do create stability. Through its actions, the OFT is cutting one of them, and heaven knows where racing could go. The BHB's revenue source comes from the allocation of fixtures, and from data rights. If that is lost, the funding for racing will be put seriously at risk.
  I am not going to discuss the value of racing to this country, which other Members have mentioned, but it certainly numbers among our top 10 industries. That indicates how important it is, and it must not be lost. I bear scars that were caused by the OFT back in the early 1990s, when it introduced its beer orders. For those who are devotees of Harvester, Chef and Brewer, Blubeckers and so on, that was marvellous. But those who, like me, welcomed the different styles and qualities of our public houses throughout the country regarded the beer orders as a disaster. I am desperately worried that exactly the same thing will happen if the OFT is allowed to lurch on.
  It was stated in 1928 that the Tote was to be created in perpetuity. I have often wondered how long perpetuity was, and I now understand that, from the Government's point of view, the definition is 75 years.
  Mr. Greenway: Plus seven.
  Mr. Page: Indeed. I am not going to get too involved in how the money aspect should be calculated, but the Government have put no money in. They have given a de facto monopoly, which obviously has a value over the years. Equally, we must not forget that the Tote has given racing more than £100 million. Indeed, that was the very purpose of the Tote, and such money could be regarded as an effective rent over the years. As other Members have pointed out, there can be trade-offs, and the greater the cost of purchase, the less will be available for racing. We should remember that the entire object is to give money to racing.
  I must congratulate the Minister on resisting the suggestion—I believe that it came from my favourite organisation, the OFT—of a proliferation of pool betting companies and the separate sale of Tote shops. I cannot go into that subject because of lack of time, but the suggestion shows a worrying lack of appreciation of the whole principle of Tote betting.
  I am schizophrenic in these matters, as I have argued in many Standing Committees for privatisation and denationalisation. Now I am saying that we should nationalise something, but we all know that the Government intend to transform the Tote caterpillar into a state-owned chrysalis and then into the butterfly that will be the racing trust. I hope that the House is impressed by my metaphor, which I have only just thought of. Even so, that transformation is what we all want.
  I shall not rehearse the arguments about what the Bill should contain in respect of licence fees and time periods, but there is no reason why the Minister should not come forward with the mechanism for the calculation of the Tote value while the Bill is proceeding through the House. After all, he has already been able to
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  do a great deal of work on the licence period, so there is no reason why he should not also produce that mechanism, which would give a great deal of comfort to hon. Members. I trust the Minister, but he is a politician and I know that political life is not secure. I have confidence while the Minister is in post, but we all know how people in government get moved around. I sincerely hope that he will be able to deliver on all the promises that he has made.
  I shall draw my remarks to a close by saying that we need to consider what will happen after the seven-year period. This Government were responsible for the dome for the year 2000, and then did not have a clue about what to do with it afterwards. I hope that the Minister will be able to say what will happen to Tote and pool betting at the end of the seven years.
  I have made clear my natural concerns and reservations, but I welcome the Bill and congratulate the Minister on what he has achieved so far. I hope that the Bill successfully completes its Committee stage and becomes law as soon as possible
  4.21 pm
  Mr. John Grogan: I am delighted to contribute briefly to this debate, for three main reasons. First, there is a certain novelty value about being asked, as a Labour Back Bencher, to support a full-blown nationalisation measure, even though it is only temporary.
  Secondly, Yorkshire is one of this country's great horse racing centres, with about 15 per cent. of the country's 59 courses situated there. The world's oldest horse race, the St. Leger, is held in Doncaster, and York—part of which I represent—is looking forward to welcoming Ascot in the north in 2005. The Tote has expanded turnover at all the nine courses in Yorkshire considerably in recent years.
  Like many hon. Members who have contributed to the debate, I am an active punter. I tend to do my case work on a Saturday afternoon while watching the racing on television. I inherited my love of racing from my late father, who sadly died last year. I think that he would have been very proud of the last statement of his account at William Hill's, as it showed a profit of £3.33. After a lifetime's gambling, that is a considerable achievement.
  Horse racing in Britain punches well above its weight. If one goes into a betting shop in Hong Kong, Singapore or Brussels, it is likely that one will end up watching racing from Wetherby, Sedgefield, Doncaster or somewhere else in Britain.
  My third reason for wanting to make a brief contribution to this debate arises from the Bill's association with the Olympics and the establishment of the Olympic lottery fund. I was one of only two Yorkshire Members who belonged to the all-party Commonwealth games group a couple of years ago. The games held in Manchester were a great success, for the north of England and for the whole of the country. That success gave us the confidence to make a credible Olympic bid for the year 2012. The effects of the Commonwealth games were felt in my constituency of Selby, which twinned with the Cook Islands. Before the games started, a bowling match was held between teams from the Cook Islands and Selby. The event was won by Selby's finest, and will be remembered for many years.

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  I want to make four points about the Tote aspects of the Bill. First, the Tote has always had a dual purpose. We have heard a lot about funding, sponsorship and prize money in racing, and a good deal about providing a fair deal for punters. We need to think about the origins of the Tote. We have heard about the Racecourse Betting Act 1928, which, incidentally, was a private Member's Bill promoted by Major Glyn. Winston Churchill, as Chancellor of the Exchequer, replied to the debate. Much of the impetus was the determination to provide a fair deal for punters, and I hope that that will not be lost under the new set-up. Punters' interests must be represented on the racing trust.
  It is worth briefly quoting Major Glyn's peroration in promoting the 1928 Bill. He referred to the saying that all men were equal on and under the turf. I quote him directly:
  "We are not equal on or under the turf to-day, because the poor man is hunted and harried and pushed about if he tries to make a bet in the street, whereas the rich man, who has a banking account, has opportunities to bet on credit with starting price bookmakers in the big centres such as the poor man has not got. By the establishment of the totalisator your millionaire and your poor man out for a day's fun will back their fancy with the machine, and the machine, being inhuman, recognises nothing but cash and treats all men, rich and poor, alike, and pays out accordingly." —[Official Report, 16 March 1928; Vol. 214. c. 22851.]
  The instinct of those promoting the Bill was to ensure a fair deal, which is an important part of the heritage of the Tote.
  My second point is to recognise the opposition of the bookmakers. That is nothing new. The betting industry was greatly opposed to the establishment of the Tote in 1928. Winston Churchill's reply was, basically, "Tough". Clearly it would create competition for the bookmakers of the day and, equally, today, selling the Tote to the racing industry reinforces such competition. However, the betting industry might be protesting too much. It has not had a bad deal in recent years. When the Bill was introduced in 1928, the betting duty had just been brought in. Now, of course, it has been abolished. There has been massive potential for expansion of the major bookmakers in recent years, and I believe that they should accept the overwhelming consensus that the Tote should go to the racing industry.
  My third point about the sale of the Tote is that the racing industry faces a great challenge to get its act together. The Home Affairs Committee, to which several hon. Members have referred, published a report in 1991 that laid the groundwork for many of the measures in the Bill. The report stated:
  "If, under the changes we propose, racing mismanages the Tote, it will bear the consequences of doing so … But our vision is not a gloomy one. We are confident that the racing industry, if united, will be able to create a modern organisation which will run the industry, own the Tote and negotiate with bookmakers an adequate and appropriate fee for racing's services."
  There is now no hiding place for the racing industry. Traditionally, politics in the House has been mild in comparison with the politics of the racing industry, which has seen many knives in the back over the decades. Recently. the industry has begun to get its act together, but that challenge still remains.
  Fourthly, I agree with many hon. Members who have spoken and with the Home Affairs Committee in 1991 that there is a good case for pool betting being a
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  monopoly. It has a monopoly in many other countries. I understand that in Australia the equivalent of our Tote has a complete monopoly, which I am not suggesting. If, however, we want to attract a large pool that is worthwhile and will attract bets, a good economic case can be made—in terms of public goods and so forth—for a Tote monopoly to continue. That may not be possible, but I believe that seven years is essential.
  It will be worth discussing in Committee how the Tote will be valued and what should happen if the Office of Fair Trading and the racing industry do not reach an amicable agreement. Could the levy be extended beyond 2005 if we were at that stage in chaos?
  My hon. Friend the Member for Barnsley, East and Mexborough (Jeff Ennis) referred to the grant that currently comes from the levy board to assist the horses retraining fund. It is a small but important point that 300 horses are supported by that fund at the moment, and racing has a proud record—especially compared with the greyhound industry—in looking after animals when they retire. It is important that that continues.
  Finally, I end with a word about the Olympic bid and the lottery fund, both of which I thoroughly support. Displacement is an issue and, as other hon. Members have suggested, the Government could provide tax concessions to make up for that. However, if we are to make a credible Olympic bid, the opportunity cost will fall somewhere. Funds for the preparation and implementation of the bid will have to come from somewhere. As someone from the north of England, I think that that is worthwhile. The knock-on effects on participation in sport, the country's profile, and the statement that we can do such things in the 21st century and not just in 1908 and 1948, would be so important.
  I will be 50 in 2012 when, we hope, the Olympic games will be staged in London. People of my age could probably only hope for gold medals in shooting events, but for the two weeks of the games I would feel not 50 or even 40, but 21. That is how inspiring it would be to have the Olympic games in our country. I fully support the Olympic lottery fund and I broadly support the Bill.
  4.31 pm
  Pete Wishart: I shall confine my remarks exclusively to the part of the Bill that deals with the Olympic lottery fund, but I wish first to thank the hon. Member for Cunninghame, North (Mr. Wilson), who is unfortunately no longer in his place, for previewing my press release so significantly. I am sure that members of the press are already poring over every word after his thrilling preview.
  I have no problem with London hosting the Olympic games. In fact, I hope that London secures the games for 2012. That would be great for London, but my problem is that I do not believe that the rest of the nation should pay such a significant part of the cost of the games. We certainly should not pay through our good causes and our charities, but that is exactly what will happen if the Bill becomes law.
  Mr. Page: Does the hon. Gentleman agree that people have a choice about whether to buy an Olympic ticket? If they do not agree with the bid, they can buy an ordinary lottery ticket. His argument does not stand up.
  Pete Wishart: The hon. Gentleman makes a good point, but I do not agree that people buy lottery tickets

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  on the basis of the type of game. They buy tickets because they want to play the lottery. Money will be lost, as we have already heard from the Government, and an assessment of the amount has already been made.
  If London wants the games, London should pay for the games. It is not as if London is short of a bob or two. It is the most prosperous city in Europe. It has more millionaires per square mile than anywhere else in Europe. In the City of London, it has the most dynamic and prosperous financial market outside New York, and it can more than afford to pay its way. In gross domestic product alone, it outstrips anything in the regions or nations of the UK. It even outstrips some of our allies in Europe. For example, the GDP of London is more than that of Austria, Sweden, Finland and Belgium. Nor is London short-changed in the public money that it already secures. For example, 80 per cent. of all public spending on transport is in London and the south-east. The cost of extending the Jubilee line was £3.5 billion and the overspend alone on that project was more than the spending on the transport infrastructure in the rest of the United Kingdom that year.
  Mr. Love: The hon. Gentleman will be aware that London makes a net contribution to the rest of the United Kingdom of some £20 billion a year and it is proposed that Londoners should make a specific contribution to any successful Olympic bid through their council tax. Is he asking for even more?
  Pete Wishart: The short answer is yes. As London is the most prosperous city in Europe, I maintain that it can more than afford to pay for the games. Londoners will pay, but London will accrue benefits from the games.
  London's claim that it does not receive its fair share of public expenditure was knocked on the head by Professor Maclean of Oxford university, who found that Londoners received £5,177 per head, compared with £4,724 for people in Yorkshire, and that is only identifiable public expenditure. When we enter the realms of non-identifiable public expenditure—the amount spent on Departments, Whitehall, the BBC, the quangos and the headquarters of many large multinationals—London does very well. That money is unnoticed and unaccounted. Why should the rest of the UK pay for an Olympic games that London can more than afford to finance?
  The proposal is based on the spurious assumption that the games will be good both for London and for the rest of the UK. I have no idea on what that assumption is based although I have no doubt whatever that the games will be very good for London and the south-east. However, it is debatable whether there will be benefits and advantages for the rest of the UK.
  The Government have already commissioned the engineering consultants, Arup, to assess the benefits of the games for London. Arup concluded that the regeneration of east London would create 3,000 jobs. There would be a further £70 million benefit from the fiscal impact of growth in the local economy, and as much as £507 million extra could be generated from tourism for London.
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  I have seen no quantifiable study of the benefit of the London games to Scotland. Wales and the rest of the UK regions. So far in Scotland, all that has happened is that Barbara Cassani has been running around our chambers of commerce and attending business breakfasts telling us that the games will be good for Scotland, so we had better get our finger out or we will lose out. She made the spurious claim that Queensland did very well from the Sydney Olympics, yet she failed to mention that the other Australian states were extremely unhappy and lamented the loss of so much tourist traffic during the Sydney Olympics.
  We are also given the sop that Scotland may host the football games if the Olympics are held in London. Well, whoopeedoo, Madam Deputy Speaker. Unless the Olympic football tournament changes into something remotely interesting between now and 2012, it will not be worth a hill of beans. A local derby in my constituency between the mighty Brechin and the mighty Forfar would be a bigger draw than Azerbaijan versus the Cayman Islands. We do not even have a United Kingdom football team, although I am pleased about that—a United Kingdom football team would be no good at all for us in Scotland. I can just imagine the UK team in their Union jack strips running on to the pitch at Celtic park. What a raucous response they would get.
  The total funding package for the games is to be £2.375 billion; £875 million of that will be borne by London through a £20 increase in council tax and there will be a contribution of about £250 million from the London Development Agency. However, half that money will be paid by the rest of the nation, through our good causes and charities. True, London will pay extra council tax, but we shall pay through our good causes and that is an unacceptable way to pay for the London Olympic games.
  It is estimated that Scotland will lose about £41.8 million of lottery funding for its good causes and charities. That will inevitably lead to long-term damage to Scotland's charity work. A small amount of money goes a long way in a small community, and a lot of good causes can benefit from £41 million. I do not know how the feel-good factor from the London Olympics will help charity work in Scotland.
  Voluntary organisations in Scotland have expressed massive concern about what is being suggested. The Scottish Council of Voluntary Organisations stated:
  "If the Olympics bid is successful, it will inevitably lead to the long-term damage of Scotland's charity work as lottery funds are diverted from good causes here to bankroll another 'Millennium Dome' type project there … SCVO has serious concerns that a new game would divert the already decreasing number of people playing the National Lottery away from the main game further reducing the funds available to 'good causes'."
  I hope that answers the point made by the hon. Member for South-West Hertfordshire (Mr. Page). There are huge concerns about the effects of a London Olympic bid on our good causes and charities.
  In the past few months, we have learned that not only will we pay for the Olympic games through our good causes and charities but also that the UK taxpayer will have to underwrite the total cost—to any amount. We shall have to underwrite the games at any cost, even if it exceeds £2.375 billion.

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  In the DCMS response to the paper on the London Olympic bid, the Government said that, in the unlikely event of the games needing more than £2.375 billion, the extra burden should be shared between the Mayor of London, through the council tax precept, and the lottery fund. Now, all of a sudden, we find in an internal memorandum that was rushed through just before Christmas that the UK taxpayer will underwrite the total cost. When was that decision taken? Why has the underwriting of the Olympic games changed? The Minister owes us an explanation because, for example, the New South Wales government, not the Australian taxpayer, underwrote the Sydney Olympics. There is no obligation to make the national taxpayer pay for the games. According to the IOC rules, a city government could do so and London should therefore be the authority that underwrites the Olympic games.
  The Government tell us that the cost is unlikelytexceed£2.375 billion. Iama Scottish Member—it mightsurprise hon. Members to learn that fact—and when the House decided that the Scottish Parliament would be assembled disastrously at the Holyrood site, we were told that the cost would not exceed £40 million. It is now £450 million. We also have the example of the disastrous millennium dome. The UK taxpayer is still paying for the mistakes of that massive white elephant that sits by the Thames. The simple fact is that our recent history on large infrastructure projects is not very good. Surely, if London gets the games and it all goes pear-shaped financially—there is a very good chance of that happening—the general taxpayer will, once again, have to bail out London.
  I return, however, to the basic, central premise, which is that the games will be good for the whole UK. We are told, for example, that the games will boost sports at local and grass-roots level, but the simple and surely obvious fact is that, if the money is diverted from our grass-root projects supported by lottery funding into large infrastructure projects in London, those grass-roots project will inevitably suffer. I can see no other consequence.
  In Scotland, we have massive health and lifestyle problems. Much of our population is obese and, unfortunately, many of our children are obese, yet for years we have been selling off community and school recreational facilities throughout our land to bolster our public finances. Money needs to be invested in our grass-roots projects, not in massive infrastructure projects in London. Our team sports are in decline. We have nothing in the way of youth academies. We do not invest in community sports facilities. Again, I maintain that, if money goes into the London Olympic bid, it will take money away from good causes and charities in Scotland and, once again, those Scottish charities will be damaged.
  I conclude by saying that I hope that London is successful. I wish London all the best—[Interruption]. I mean that most sincerely. I really do hope that London secures the bid, but London is the most prosperous city in Europe. London can more than afford to pay for the games. If London wants the games, London should pay. Unfortunately, if the Bill suggests anything other than that, we will have to oppose it.
  4.42 pm
  Mr. Doug Henderson: I will return to the contribution made by the hon. Member for North Tayside (Pete Wishart), but first, may I congratulate the Minister and the Department on securing legislative space to introduce these important proposals?
  I want to address the Olympic games issue, but I should first mention the part of the Bill that relates to horse racing. Newcastle race course is in my constituency. I am not hugely knowledgeable about the horse racing industry, although I enjoy my visits to the course, especially for the Northumberland plate in late June. I am happy to know that my right hon. Friend the Member for Livingston (Mr. Cook) has been present there, but after his admission this afternoon that he is a net disinvestor, I shall be just a little bit more hesitant about accepting his tips.
  I should declare some interests, although they are not registrable. I am a member of a number of sports clubs that are lottery recipients and possible lottery recipients. I am a member of Durham county cricket club, Falkland cricket club in Fife and Cambuslang Harriers in Glasgow. I am also a very active member of Elswick Harriers, in my constituency, in Newcastle. I am a strong advocate of sport, and I have strong views about sport. I do not believe that it is right to proselytise about sport, however. The approach needs to be gentle—if we start forcing our views down people's throats, they are less likely to listen to us. In that context, therefore, I am hesitant about over-emphasis.
  Sport does many things for society, which we all recognise. It is hugely important in terms of health, which is a point that the hon. Member for North Tayside missed in his contribution. It is hugely important in bringing together communities, in terms of comradeship between individuals, and in terms of international links. The reason I am hesitant about mentioning the other aspect of enjoyment is that it might be difficult to try to explain to my constituents that it is enjoyable to stand in a huddle of Alf Tuppers on the top of some dale, in a reclaimed pit heap in County Durham, in wind and rain, half-covered in mud and half-covered in liniment. A number of iconoclastic enthusiasts such as me, however, do find that enjoyable. Much of sport is a little like that—it is all about the activism, which must generally be encouraged.
  The hon. Member for North Tayside, who made a lamentable, pessimistic speech, displayed a lot of ignorance about sport—I say that as a Falkirk supporter who went to Brechin City about two years ago and got beaten, so I know a little about his territory, too. It is vital to try to enthuse people. I do not believe that the young girls in his constituency who might be 1500 m winners in the 2012 games do not find Paula Radcliffe an inspiration. That is absolutely key in sport. Sport is about a balance between the elite and the activists. That balance is crucial in allocating public expenditure, which we recognise. Not all Olympic sports, however, are associated with elitism. Many Olympic sports are very participative, and Members who are not interested in a particular sport would probably not know the name of one participant in them. Many Olympic sports, such as swimming, boxing, athletics, gymnastics, the horse events, the sailing events

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  and others, develop elite talents, which is crucial in changing the attitudes of young people, making them more sports-conscious and more health-conscious.
  As I said at the beginning of my remarks, I do not want to ram this message down people's throats, but we need an educational crusade in society to raise health standards and fitness standards. I am not asking everyone to stand up at the top of the reclaimed pit heap in County Durham. It would be nice, however, if people did a little activity and a little sport, in which the Olympic games are crucial in terms of providing inspiration.
  The lottery has now become a crucial part of expenditure in my right hon. Friend's Department. Lottery funding is now a larger part of the funding in the Department than the funding that is raised by taxation, borrowing or other Government sources. Therefore anything that happens to lottery funding ultimately affects all funding. If lottery funding falls, that puts greater responsibilities on non-lottery funding, and if lottery funding improves there is less strain on the rest of the funding.
  As was pointed out in one of the Opposition contributions, if we are to be successful in raising the lottery moneys, we must have a cause with which people associate themselves. If people around the country begin to think that this is a stitch-up to allow a few elite athletes and a few Londoners to have a good time, they are much less likely to support the lottery. That is why we must argue positively about the strong case for holding the Olympic games—I say that as a north-eastern Member of Parliament who did not support the Wembley development, as I thought that there were better solutions in the case of football.
  I very much support the Olympic bid and the development of east London and the location of the facilities there. I also support part funding from the lottery, which is important. However, to carry public opinion with us, we have not only to make the case for sport and for the Olympics, but as hon. Members on both sides have said, we must make sure that we take care of the arguments about it all being for London. I do not believe that it all should be for London. I want some of the investment for the Olympic games to be spread around the country, and I know that we shall all make bids for the venues in our areas. It is important to make the argument for the national and regional distribution of resources.
  It is also important, however, to counter the argument that the Olympics are all about giving money to the elite at the expense of those in the Elswick Harriers, the Falkland cricket club and so on. It is important that the funding for the hundreds and thousands of such organisations around the country continue in at least the proportions that they receive at the moment. If people begin to get the idea that the ordinary bowler on the bowling green in Lemington in my constituency is subsidising the bowlers who are trooping around the world for an Olympic games event, the wrong impression will be created. We must ensure that local investment continues.
  This is not just a matter of public relations, although that is crucial. The people in every sport who, I hope, will take part in London in 2012 could now be 10, 11 or
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  12 years old. If we are to develop their talents so that they become good competitive athletes in 10 years' time, we must make the investment now. In fact, we must make the investment in local sports permanent if we are to achieve our joint ambitions of developing elites and encouraging everyone in the community to be more active.
  Those who support the London bid must be vigorous in ensuring that the bid comes together and in making sure that all the arguments in favour of it are put forward. We must also dispel the reservations—some have been expressed in the debate—of those who are hesitant about the bid. The Bill plays an important contribution towards doing that, and I know that the Department has been vigorous in supporting the Olympic bid. It can be assured of any support that I can offer in the months and years ahead.
  4.52 pm
  Mr. David Rendel: I am delighted to have a chance to take part in the debate, not least because my constituency probably has the second greatest interest in the racing industry in the entire country. Because of our race course, gallops and many training stables, we are perhaps second only to Newmarket. I am also joint vice-chairman of the all-party committee on the issue. As a member of that committee, I took part in a delegation some time ago to ask the Minister to introduce legislation on the Tote. I am therefore delighted that it is being discussed on the Floor of the House today.
  The all-party committee has always worked well and, indeed, I suspect that the whole industry has strong all-party support in the House. The only speech against the Bill was not from a member of the three main parties, and it had nothing to do with racing anyway. There is strong all-party support for what is happening and I am delighted that, on this issue at least, we can work together in the best interests of the people in the racing industry and those who enjoy the sport.
  Given the strong support that there usually is in the Conservative party for the racing industry—I give it credit for that—it slightly surprised me that it came up recently with a set of principles that included one that stated that it did not believe that
  "one person's poverty is caused by another's wealth".
  Anyone who knows anything about the relationship between the punter and the bookmaker knows that that principle does not always hold.
  I had thought that my first speech in the House this year would be against a Government Bill. As a spokesman on higher education, I suspected that I would not necessarily be able to support all the Government Bills this Session, but it is nice that we can at least support this Bill, not least because, as other Members have said, the industry is doing very well. There is no question but that the number of people going racing is increasing and has increased over the past few years, which is welcome to those of us with a strong racing interest.
  It is also true that the racing industry feels vulnerable for several reasons, many of which have been explained this afternoon. It is vulnerable because the situation in which it finds itself is somewhat volatile, especially

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  owing to the questions of the future of the Tote and the betting levy, and what the replacement for the betting levy will be. Additionally, the rule 14 notice from the Office of Fair Trading—I and other hon. Members have made our objections to that known to the Government for some time—has caused considerable unrest in the industry because the future of its financing could be under threat. As the bookmakers appear to be those who are most strongly in favour of the rule 14 notice and its possible effects—if anyone is—they are in danger of killing the goose that lays the golden egg. As many people have said, from the bookmakers' point of view the egg is indeed pure gold. The bookmakers would be sensible to think twice about supporting the notice because their livelihood depends on a strong and vigorous racing industry, but that industry is under threat at present.
  To be fair to the bookmakers, they also face a slightly uncertain future because of the question of how betting exchanges will affect the betting industry. That matter could make them feel under greater threat and perhaps more likely to support the effects of the rule 14 notice. However, that should make us all wary of bookmakers' pronouncements on the matter and of allowing the OFT to get away with its current position.
  As many hon. Members have said, although the Bill's basic principles are correct, it is unfortunate that it lacks detail on how to overcome several of the dangers that hon. Members and I have outlined. I share the worries of the hon. Member for South-East Cambridgeshire (Mr. Paice) and my hon. Friend the Member for Bath (Mr. Foster) about what will happen when the exclusive licence ends in seven years. However, I shall concentrate on one of the problems by picking up a theme on which the hon. Member for South-West Hertfordshire (Mr. Page) was beginning to elaborate: what we can do straight away to try to clarify the price for which the Tote will he sold, and how that should be decided.
  The Government are being perhaps a little feeble—I hope that the Minister will think fit to respond to that in his winding-up speech—by failing to include a statement in the Bill on the principles by which the price of the Tote and the proportion of that price payable by the racing trust will be decided. The racing industry would be given a lot of help and satisfaction if the principles behind the calculations were in the Bill. I do not understand why the Minister cannot negotiate with the racing trust straight away to decide those principles so that they could be added to the Bill in Committee. I hope that he will guarantee in his winding-up speech that he will negotiate with the trust on how the Tote should be valued and the proportion of the value that should be paid when it is sold to the trust, because it could, and should, be done straight away.
  4.59 pm
  Mrs. Jacqui Lait: Long experience has shown me that whatever I regard as a racing certainty rapidly turns into a three-legged nag; indeed, the only time that I went to the grand national was the one time that the race did not start. I therefore feel no compunction in talking only about the Olympics. The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) argued that, as someone involved in sport, he could not proselytise about it, and on the other side of the coin, as I am palpably not someone involved in sport, perhaps I can.
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  I have gone from being very sceptical about the Olympic bid, because of what I originally thought would be a significant lack of political will, to being an enthusiastic supporter. I can see absolutely no reason why the UK, and London in particular, should not host the Olympics in 2012. I thought that we saw a typically mean-minded display of nationalism from the hon. Member for North Tayside (Pete Wishart), who could not see the benefits that the Olympics would bring to Scotland. As someone who learned what little I know about sailing on the firth of Clyde, I believe that everybody should be practising their sailing there because they would then beat the pants off any competitor down at Weymouth.
  There are, obviously, benefits for people throughout the UK from the Olympics, but what has not yet been truly appreciated are the opportunities for setting up training camps throughout the country. Regions, towns, cities, universities and sporting facilities of all sorts should get together and make a bid to the countries that want to compete and need to do three to six months' training before the Olympics take place. That is the most obvious way in which people throughout the country will feel a long-term benefit from the games.
  I welcome and support the introduction of the lottery to help to finance the Olympics, and I support my Front-Bench colleagues in the suggestion that, if possible, the game should be introduced this summer on the back of the Athens Olympics, when enthusiasm can be built up. I recognise that there may be technicalities to sort out with the International Olympic Committee, but I am sure that we can get round those if the will is there.
  As a London Member of Parliament, I think not only that we have to consider how the UK can benefit, but that Londoners need to feel that they own the Olympics. After all, they are the ones who will have a special, hypothecated council tax laid on them, ranging from £13.33 for somebody in band A to £40 for somebody in band H. Those are not inconsiderable sums, particularly as the new Labour Mayor of London is planning in the year after the Greater London assembly elections, which I sincerely hope he does not win, to impose on Londoners increases in his precept of 76 per cent., just to pay for the Greater London authority.
  The problem is that people in many places in inner and outer London do not feel that they will benefit from the council tax increase; it is often seen as Ken Livingstone's project to regenerate the Lea valley. Exempting Crystal Palace, because I shall come on to that in a moment—
  Mr. Caborn: Again?
  Mrs. Lait: Again.
  Exempting Crystal Palace, there are areas in outer London that can see absolutely no benefit to them from the Olympics, but they will have to deal with the extra traffic and people in the city.
  The Secretary of State said that there should be benefits to all grassroots sporting facilities from the Olympics. I hope that the Minister can give us some indication of what will be the practical improvement in sporting facilities throughout London. We have to bear it in mind that if we assess a broad range of facilities in London, we find that there is not a high standard of provision.

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  That brings me, dare I say it, to Crystal Palace. Having had the opportunity of questioning the Minister about the future of that facility on Monday, I have to say that I came away more confused than when I started. There is an obvious confusion and a difficulty, which is the need to separate the running track from the sports building. I welcome the Minister's acknowledgement of the problem, as well as his commitment to put money into the running track so that grand prix events can take place this July, provided that decisions are made by the end of January.
  There is confusion about the sports facilities at Crystal Palace. The Minister and other Members will know that Crystal Palace is the only site with a 50 m swimming pool. However, its sports facilities are also home to many elite athletes in various sports, including basketball, weightlifting, judo, karate and hockey. It is feared that in any transfer of the lease from Bromley council to the London Mayor—a project that I support—sports facilities will be closed before new facilities are provided. Some of the new facilities will have grassroots benefits, as they are community facilities, but there is also a need for top-level athletes to have training resources in the run-up to the 2012 Olympics. It is not clear whether the sports facilities will be closed before any new facilities are opened.
  At the moment, the development of Crystal Palace appears to be funded, in one form or another, by public sector money, including, dare I say, national lottery money. However, there is a suggestion that there could be private sector involvement to deliver high quality sports facilities as part of a regeneration package for Crystal Palace. The Mayor of London supports that proposal, as he has talked about providing hotels at the top site. That is a controversial subject, but it is not impossible to put together a regeneration package that would provide high quality facilities at Crystal Palace and would retain its existing facilities. It is crucial, not just for people in the five boroughs around Crystal Palace but for all of south London, that the impact of the 2012 Olympics on their facilities is made clear as soon as possible. That will help them to feel involved in the developments and will allow them to understand the long-term legacy after 2012. The Olympics will generate excitement and interest, and I expect the games to be hugely successful in London and the rest of the UK. However, it is important that people grasp the legacy created by the increased council tax that they will have to pay.
  5.7 pm
  Mr. Laurence Robertson: I do not have any interests in racing that have to be registered but, like many hon. Members, I have a long-standing love of the sport. Indeed, I have a serious constituency interest, as Prestbury Park race course at Cheltenham is in my constituency. I must correct the hon. Member for Newbury (Mr. Rendel)—Prestbury Park is the greatest race course in the world. The race course and the activities associated with it have a major knock-on effect throughout my constituency and, indeed, beyond, especially in mid-March when the Cheltenham festival is held. I also have a non-registerable but nevertheless close relationship with the Tote, which is partly a matter
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  of friendship and partly a matter of holding a Tote credit account. Like other hon. Members, I am not very successful in my transactions. This morning, I spoke to a friend who asked me what I was doing today. I said, "I've got the Tote Bill", to which he replied, "How much is it this time?"
  This is an important time for racing, as has been said, with the OFT investigation, to which I shall return in a minute; various changes that the British Horseracing Board is introducing in its racing review; the levy board changes; and the Bill, which I shall call the Tote Bill, although I accept that its provisions are much wider. However, I want to concentrate on the Tote.
  It is important to remember the huge contribution that the Tote has made to the country generally and to racing in particular. It has sponsored the Cheltenham gold cup, which is probably—again, I am being parochial—the greatest steeplechase in the world. The Tote has, as we have heard, put millions of pounds into racing and given us many interesting betting products throughout its many shops. It has the placepot, a popular bet that allows people to win rather a lot of money for a small stake, although in my case it is usually a lot of stake for a little return. Nevertheless, people can bet without putting down a great deal of money. What is called the sport of kings benefits people at all levels, and the Tote is a major contributor to racing in that respect.
  I pay tribute to the Tote staff, particularly the chairman, Peter Jones, and Roger Easterby, who is in close contact with many Members of Parliament to provide a great deal of information not only about the Bill, but about all the events in racing generally. Racing would not be the same without the contribution of the Tote, so it is extremely important that we get the Bill right.
  This is a crucial time for racing. Given the importance of the Tote to racing, we must consider the details of the Bill. I welcome it and congratulate the Minister on introducing it. The Bill is long awaited. Many of us who were at the Tote annual general meeting quite a few years ago—I do not remember how many—heard the then Home Secretary, now the Secretary of State for Foreign and Commonwealth Affairs, the right hon. Member for Blackburn (Mr. Straw), announce that the status of the Tote would be changed.
  As we have heard, there are one or two issues that concern us. The first is whom the Tote will be sold. There is no guarantee about that. What guarantee do we have that it will not just be sold to the highest bidder? What guarantee do we have that the Government's finances at that time, which are deteriorating, will not dictate that the Tote is sold to the highest bidder? We are expected to take it on good faith. The purpose of the Bill is not the nationalisation of the Tote, but to sell it on, yet the only thing certain about the Bill is the nationalisation of the Tote. I do not see why it cannot be written into the Bill that it will be sold to a racing trust.
  Secondly, how much will the trust, if the Tote is sold to the trust, be charged for the Tote? The price will determine who buys it—not who wants to buy it, but who is able to buy it. How will that be decided? Who will

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  decide it? I suppose the Minister and the Secretary of State will decide how much the trust will be charged for the Tote, but how will that be decided?
  Mr. Page: Does my hon. Friend agree that it would give all members of the Committee so much more confidence if the Government were to announce, during the Committee stage, the mechanism for determining the purchase price for the Tote? That would enable us to proceed with the Bill with greater confidence.
  Mr. Robertson: I am certain that the Minister will not decide to put that in the Bill and announce it today. The next stage will be the Committee stage, and it would give the members of the Committee and the whole racing world a great deal of confidence if he would tell us the mechanism for reaching the price, if not the price itself.
  I stress that no Government have ever put a single penny into the Tote, and I am not saying they should. The Government cannot expect any receipts from the Tote. As has already been said, every penny the Government charge for the Tote will come out of racing. There is nowhere else that it can come from. So we will end up with a ridiculous situation where the Tote puts its profits into racing and the Government take those profits out. There is no other way of looking at it. It is as simple as that.
  Part of the mechanism, I suppose, will be the exclusive licence. It is extremely important to the Tote and to racing. The national lottery has been a success most probably because of the large prizes that can be won—again, for very little money. That is how the pool operates, in so much as people can win quite a bit of money for a very little stake, as I have said. I do not think that the national lottery would be successful if it were broken down into any number of smaller lotteries, and not only the Tote but other bookmakers recognise that. I do not know whether it is widely understood—in this House it will be—but they can tap into the placepot bet, for example, which thus makes it less of a monopoly. The seven-year period seems to be accepted throughout the industry, but why is that not in the Bill? The length of the licence equals the value of the Tote business, which equals the price, and all that equals who owns it in the end.
  I want to say a word or two about the levy board, not because I want to get involved in the detail of the winding up of the levy and not necessarily replacing it, but having welcomed the Bill, the timing is rather uncertain, given the OFT's investigation. I am sure that I would not be allowed to proceed too far down the road of discussing the OFT's investigation, especially as I have held an Adjournment debate in the House to discuss that, but this is an uncertain time for the racing industry and the OFT's timing is rather bad in so much as the industry is trying to improve itself. As I have already mentioned, the British Horseracing Board already has its racing review—a root and branch look at racing. It accepts that improvements have to be made.
  To repeat what I said in an intervention, it would be rather curious for the Government to give up control of horseracing, as they should, only for that control effectively to pass to an unelected, unapproachable quango, with no interest in racing, no responsibility to racing and, it seems, no accountability to anbody. The
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  Minister, again to give him his credit, in a written reply to me has said that he has great concerns about what the OFT might come up with. The Minister for Employment Relations, Competition and Consumers has said the same. So Parliament does not seem to have any control over the OFT, Ministers do not seem to have any control over the OFT, racing certainly does not, and we cannot even raise the issue with any great success in this House
  Therefore, we must be extremely careful about what we do to racing. We could get it right and we could get it wrong. The Government are understandably changing the levy system and we could also lose money from racing because of the OFT. If the Government charge too much for the Tote, money will come out of racing in a third way. Together, all that would have a devastating effect. It does not need to be that way. We could look at the matter positively, and that is the way that I would prefer to look at it.
  When the Minister replies, I hope that he will address the points that not only I have made but that many other hon. Members have made. However, in general terms I welcome the Bill and I wish it well.
  5.18 pm
  Mr. Andrew RosindellThank you, Mr. Deputy Speaker, for allowing me the opportunity to contribute to the debate. Contained within the Bill are essentially three substantive proposals: to privatise the Tote, to abolish the levy board and to create an Olympic lottery. All three elements are extremely important to the future of gaming and sports in Britain.
  I wish to focus my remarks on the issue of the Olympic lottery. The reason for that is simple. The proposal to host the 2012 Olympics in London is an important part of the future development of Greater London, including my constituency of Romford. Of course, with that we must couple the fact that in 2012 we will be celebrating the diamond jubilee of Her Majesty the Queen, so I am sure that all hon. Members will look forward to that year as being a great national celebration, both in celebrating the Queen's 60th anniversary on the throne, but also the London Olympics. I sincerely hope that through tourism, regeneration and investment, Romford, the rest of London and the south-east, and the rest of the country can truly benefit from the Olympic games, should our bid prove successful. It is therefore essential that every element of the bid, including the associated lottery, should be carefully examined before being implemented.
  The main body of my speech will concentrate on the Olympic lottery, but I would also like to make a few brief points about the Tote and the levy board. Since 1929, the Tote has formed the backbone of horse racing in this country, not only by providing a forum for those who wish to bet but by raising much needed resources to support the industry. At the crux of the debate on whether to privatise the Tote lies an incredibly simple question. It is the same question that was posed throughout the great reforming era of the 1980s: what is so special about this activity that it needs to be controlled by government? I would suggest that, while we all value the work of the Tote, there is nothing in its remit that could not be achieved in the private sector. After all, there are numerous reputable bookmakers in the private sector.

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  I fully accept that pool betting is distinct from fixed-odds betting, but their regulatory needs are not dissimilar. Indeed, senior officials at the Tote have argued that they are disadvantaged by being outside the private sector because they are unable to make "independent commercial decisions". In some senses, this could be compared to the situation faced by some of our old public monopolies, most of which are now flourishing in the private sector.
  Fundamentally, the proposal to sell the Tote is a good one, although I am concerned that the Government have not put a sale price into the Bill. Many other hon. Members have also made that point. I cannot believe that it is wise to remain ambiguous about that, when we are talking about something as significant as the future of racing and the Tote. Concern has also been expressed about the lack of any real assurance that the proposed sale will be to a racing trust consisting of groups from the racing industry. We have heard the aspiration; now we need the guarantee. I repeat that it is potentially deeply damaging to the racing community to allow this proposal to remain so ambiguous. The Government have a duty to the racing industry to clarify those two points, and I sincerely hope that they will do so.
  The proposed abolition of the levy board suffers from similar problems. Yes, it is right that the changes should be made, but we must remove the ambiguities. Thousands of racehorses rely on the money raised by the board for veterinary costs and care after they retire, for example. It is vital that the Government end the uncertainty and give a guarantee that welfare funding for horses will not be cut. Self-regulation must not become a free-for-all.
  Turning to the Olympic lottery, it concerns me that the Olympic bid will rely to a great extent on the lottery, not because I oppose the idea in principle, but because of the way in which this Government have tarnished the idea of lotteries in general, and our national lottery in particular. It is a widely known fact that the national lottery is falling in popularity and that this has had a serious knock-on effect on the sums raised for good causes. Most people have become disillusioned by the fact that the Government have allowed lottery money to be allocated without regard to the needs of so many real people. A number of very worthy groups have been turned down for funding, only to learn that money has instead been handed to organisations that appear to lack any relevance to the vast majority of British people.
  I hope that by supporting the Olympics we can restore the public's confidence that the money raised for good causes through the lottery is no longer likely to be squandered. If we cannot, the proposal will simply mean, once again, that more and more good causes are competing for smaller and smaller sums. More worryingly still, it will leave a huge budgetary hole that this Government will almost certainly not hesitate to fill with yet another tax hike for hard-working families in my constituency and elsewhere. If the Government do not do that, as my hon. Friend the Member for Beckenham (Mrs. Lait) has already pointed out, the Labour Mayor of London will not hesitate to use his power to raise extra revenue that can fill any deficit that might occur.
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  Again, I issue a warning to the Government: if they do not take action to improve the image of the lottery by making it more relevant to more people, its decline will jeopardise first-rate projects such as the proposed 2012 London Olympics. If we are to have an Olympic lottery game, I firmly believe that we need to launch it when the Olympics are in the national spotlight. What better time than during this summer's Olympic games in Athens? All British people will be inspired to support our British sporting endeavours.
  The problem is, of course, that the International Olympic Committee has said that no scratchcards should be produced and no lottery fund raisers should take place until it has announced which city will host the 2012 Olympic games. That announcement is scheduled for July next year—long after the interest in Athens will have faded. On the face of it, that seems to be an insurmountable problem. We will miss a great opportunity if we fail to capitalise on the Athens Olympics, but even if we want to proceed, it seems that the IOC will not permit it.
  I believe that a compromise could and should be made. We should go ahead and launch the Olympic lottery game at the start of Athens 2004. That money would not be ring-fenced for the 2012 bid. Rather, it would be raised to support the development of athletes whom we hope will compete in the games wherever they are held. I also fully endorse the proposal made by my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice), who suggested that money could be used for disabled athletes. That would be an excellent solution to the problem that we face.
  Under that proposal, sports would benefit either way. If we got the Olympics, we would have more resources; if we did not get them, we would have injected a large amount of money into developing our sportsmen and sportswomen. That would no doubt pay dividends in future sporting competitions.
  The Bill is worth the cross-party support that it is being given, but that is not to say that the Government are getting things completely right. We must have fears regarding the uncertainty over the Tote and the lack of clarity over the levy board. Of course, it also seems that we will miss the best opportunity to launch our Olympic lottery. I urge the Minister, and Her Majesty's Government, to consider those important points of concern before the Bill is dealt with in Committee.
  5.28 pm
  Mr. Adrian Sanders: I rise to support both parts of the Bill. I will talk a little about the Olympics in a moment, but first I want to deal with the Tote. I have one key question. Although I support the Bill, I am not entirely sure why. We know that the Tote is a non-departmental body. It is not owned by anybody. It has an exclusive right to offer pool betting on horse racing. We know that it was founded in 1928 and that the Government intend to sell it to a racing trust with an exclusive licence to run pool betting for seven years.
  We also know from the briefing on the Bill that since the Tote's foundation, there have been numerous proposals to reform it. Many of those are laid out in the substantive document that deals with its history. Nowhere in the document, however, and nowhere in any Government statement issued so far, has anyone said

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  why we are first nationalising and then privatising the Tote. The Government have not made their case. We need to know why we are making such a substantial change to a body whose history shows that it has been a success, in terms of the ethos that established it and in terms of the money it has generated, and continues to generate, for the racing industry.
  In 1991 a Home Affairs Committee report on gambling concluded that horse race pool betting was an area in which monopoly might be in the consumer's interest. There were obvious reasons for its conclusion. As the hon. Member for Selby (Mr. Grogan) pointed out, several pools mean lower jackpots and hence a lower incentive; and that will have a knock-on impact on the overall amount that can be made from one pool. In November 2003, the Minister said:
  "We have concluded that it will be in the public interest to open up the pool betting market to effective competition, but that a reasonable preparatory period is necessary in order to safeguard the policy aims underlying the sale."—[Official Report, 27 November 2003; Vol. 415, c. 18WS.]
  What are the policy aims underlying the sale, other than the fact that the Government can make some money out of it? Is it just about raising revenue? No case has been made in terms of how it will improve the Tote and the service to the customer, certainly after the seven years of exclusivity.
  As for the end of those seven years and the break-up of the pool, there will be a number of knock-on effects. There is no doubt that the bigger race courses will benefit, in terms of the volume of races and of turnover, but smaller courses—such as two in my area, Newton Abbot and Haldon Exeter—could lose revenue as a consequence of losing a single pooled Tote.
  Mr. David Heath: Does my hon. Friend agree that the lifeblood of racing, what makes the whole industry tick, is not the glamorous courses or the glamorous meetings, not Royal Ascot or glorious Goodwood, but the smaller courses that provide National Hunt racing day in, day out, and week in, week out? I am thinking of courses such as Wincanton—and, indeed, courses in my hon. Friend's constituency.
  Mr. Sanders: I could not possibly disagree with that. Some of the smaller courses are part of the attraction of the whole sport. This is not like premiership football. Some of us live hundreds of miles from the nearest premiership club, but we can all participate in horse racing on August bank holidays or on Boxing Day, because there is bound to be a meeting somewhere near where we live. I am not convinced that after the seven-year period consumers' interests will still be served, and I want the Government to make a case.
  I have three big fears about this element of the Bill. First, under European competition law, I cannot see how the Minister can guarantee a sale to a racing trust. I want to know how the Government can do that without any mention of the prospective purchaser in the Bill. Secondly, what is to prevent a purchaser from ending the exclusivity within seven years, if that is not specified in the Bill? Thirdly, if a seven-year licence is enforceable and desirable, why is that no longer desirable after seven years?
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  As for the Olympics, the hon. Member for Cunninghame, North (Mr. Wilson) discussed his bid for yachting events to take place on the firth of Clyde, but unfortunately for him, they will be taking place in Weymouth. The Royal Yachting Association has a major investment in an international sailing school in Weymouth, and has decreed that it wants those events to take place there. That has upset some of my constituents, because in 1948, the Olympic yachting events took place in Torbay, and the yachts were based at Torquay. However, we support the Weymouth bid because it is possible that we could benefit from it.
  All areas need to consider that there are ways of benefiting from the Olympic games, even if they are not the venues for a particular sport. One example is the training of the Olympic teams. The teams will come over here some months in advance of the games, in order to acclimatise themselves and to train. There needs to be a mechanism—I am not sure that the Government have yet established one—to help areas that are bidding to act as training camps for particular sports. Indeed, an entire national team may want to site itself in a particular area or at a particular venue. We need to ensure that there is a spin-off in that regard. Of course, resources will need to be made available in advance, to ensure that the facilities available for those teams and sportsmen and women are first-rate and up to an Olympic standard, even if they are not on the scale of, say, an Olympic-size swimming pool or stadium. We must at least ensure that top-rate facilities are available for them. I hope that the Government will consider that issue.
  From my constituency's point of view, we would have loved to host the yachting. Given that our climate is one of the mildest in the country, perhaps we could bid for the beach volleyball. That could work very well when the tide is out, but not so well when it is in; having holidayed in my patch, the Minister will know what I mean. I hope that all parts of the country will be able to feel that they are part of the games—that they will be not just London games, but United Kingdom games—and that the benefits will be felt throughout the country. I hope that the Minister can respond to the specific questions that I have asked, and I look forward to returning to some of these issues if I am appointed to the Committee.
  5.37 pm
  Mr. Andrew Love: It was not originally my intention to speak in this debate, but given the Minister's suggestion that I should expand on what I said in an earlier intervention, I thought this an ideal opportunity to do so. [Interruption.] I have only a couple of minutes, so I ask Members to keep interventions to a minimum.
  I am the Member for the Picketts Lock area, and having gone through this process, I feel that we face an uphill struggle to win the Olympic bid. We have to have a unique selling point for our bid, which should be that this should genuinely be a people's Olympic games. What do we mean by that? It is a challenging concept, because we have to make it a reality, rather than simply an illusion. A people's games would be a partnership with the people of this country. It would involve their active participation, and there should indeed be a democratic element to that.
  I wrote to the Minister and Ken Livingstone about this issue, saying that there should have been open membership of the bid company to allow individuals to

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  get involved. However, we have now passed that stage, and we need to adapt. But such involvement would allow not only individuals, but communities such as the lower Lea valley, regions such as Greater London and others, and nations such as Scotland and Wales to have a very direct influence on, and say in, what happens. That collective voice, in the context of a mutual structure for the bid company, would make the difference for this country. Elected representatives would he able to represent Scotland, Wales or Greater London directly. Indeed, I suggest that London would need more representation than other parts of the country, simply because there can be no taxation without representation. The bid company would have to recognise that.
  Representation is important for a number of reasons. First, we must mobilise this country's energy and enthusiasm for sport that many hon. Members have noted. In addition, it is commonly assumed that the experts in the field will be the members of the bid company, but the real experts exist out there, in the country. Londoners are greater experts on London than anyone else, and in the same way Scottish people are greater experts on Scotland than anyone else. That is why ordinary people should be represented.
  Most importantly, we need participation. When Sydney made its Olympic bid, it was able to call on 40,000 volunteers. Does any hon. Member have confidence that Britain could produce 40,000 volunteers? We need to produce 50,000 volunteers, and my idea of a people's Olympics with a mutual structure would help us to achieve that. I commend it to the House.
  5.40 pm
  Mr. Nick Hawkins: Like other hon. Members, I want to begin by declaring not so much my financial interests, but my various enthusiasms and links. They may not produce income, but they are of both a personal and a constituency nature.
  I am a long-standing supporter of racing. I have enjoyed many good days at the course, and am an active member of the all-party racing and bloodstock committee. I do not have the detailed knowledge of racing exhibited by my hon. Friends the Members for South-East Cambridgeshire (Mr. Paice), for South-West Hertfordshire (Mr. Page), and for Tewkesbury (Mr. Robertson), but my family has been heavily involved in the sport. My late grandfather, my father's father, spent much of his spare time involved in racing, in various capacities. A number of my farming uncles and cousins on my mother's side of the family have also been involved in racing: one of my uncles was the owner of a horse that won The Daily Telegraph point-to-point championship in the late 1980s.
  I am also a passionate supporter of the bid to hold the Olympic games in the UK. As the House knows, before I took on my present responsibilities, for a number of years I was deputy chairman of the all-party sports committee. I believe that the 2012 bid represents our best chance yet to hold the Olympic games in the UK. I strongly supported the previous Olympic bids, and I was a very strong supporter of the Manchester Commonwealth games.
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  That brings me to a constituency link. Several hon. Members have spoken about the Olympic side of the Bill, and have said that their constituencies could provide training and practice facilities for competitors. However, the national shooting centre at Bisley is in my constituency. If, as we hope, the 2012 bid proves successful, the current state of legislation means that Bisley is the only place where the Olympic shooting competition could be held. For the same reason, there was no alternative venue for the Commonwealth Games shooting competition, even though those games were held in Manchester. That reinforces the point made by several hon. Members that the Olympics could benefit the whole country.
  The National Rifle Association ranges at Bisley straddle the boundary between my constituency and that of my hon. Friend the Member for Woking (Mr. Malins), and I was privileged to be asked to present one of the medals in the Commonwealth games shooting competition. I look forward to the Olympic shooting competition coming to Bisley in 2012, as happened in 1948.
  As my hon. Friend the Member for South-East Cambridgeshire said, we want to improve the Bill. It has received a broad welcome from all parts of the House, but certain gaps remain. We want to fill in those gaps when we consider the Bill in Standing Committee.
  It is regrettable that the Bill's provisions in respect of the Olympic games make far too little reference to the involvement of the private sector. The stage was set for the revision of finances in the modern Olympic movement when Peter Ueberroth and his team made their successful bid for the 1984 Los Angeles games. That bid made extensive use of the private sector, but one of the snags with the Government's planning is that they see the Olympic bid as very much a public sector operation. Given that the potential Olympic sites in the lower Lea valley are so close to the City of London, there is a massive opportunity for increased use of the private sector. We will want to support what Barbara Cassani and her team are doing. I am sure that when the Minister winds up the debate, he will, on reflection, agree with us that there could be a greater role than has so far been revealed for the private sector.
  Conservative Members strongly believe that the new lottery game has to start to coincide with this year's Athens Olympics, when interest in the Olympic games will be at its height. As my hon. Friend the Member for Romford (Mr. Rosindell) said, there must be a way round the difficulties over International Olympic Committee rules. As my hon. Friend the Member for South-East Cambridgeshire suggested, we have an opportunity to start an Olympic lottery game this year to coincide with the Athens games. The funding, however, should not be linked only to the bid itself: the beneficiaries could be Paralympic athletes or sporting competitors in general. That is surely acceptable, even within IOC rules.
  The second major improvement that Conservative Members want to press for in Committee—and it seems to us an acid test of the Government's real commitment to the Olympic bid—is for the Government to forgo what would otherwise be the tax take from the Olympic lottery game. The moneys that would otherwise go to

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  Her Majesty's Treasury should be hypothecated and go directly to help the success of our Olympic bid. If the Olympic lottery game were introduced on that basis, we would then know that the Government were committed in every way to the bid's success.
  As my hon. Friend the Member for Beckenham (Mrs. Lait) and Labour Members such as the hon. Members for Cunninghame, North (Mr. Wilson) and for Newcastle upon Tyne, North (Mr. Henderson) said, the Olympic bid must be seen to represent the whole of the UK. It is not just about the regeneration of east London with the Olympics as an excuse, which is how the newly admitted Labour Mayor of London seems to view it.
  As many hon. Members have said, we have a great opportunity to establish training camps in different towns and cities throughout the UK. As the hon. Member for Torbay (Mr. Sanders) said, there may be opportunities for sailing practice in Torbay or the firth of Clyde even if the final sailing events take place in Weymouth. For other Olympic sports such as rowing, training camps could be established all over the country. I have already mentioned my constituency interest in shooting.
  The all-party group on the Olympics, of which I am proud to be a member, has visited some of the potential sites in the lower Lea valley. We want to ensure that the whole of London benefits from the opportunity to support the Olympics. Fully germane to that issue are the points about Crystal Palace made by my hon. Friend the Member for Beckenham. Not just east London, but the whole of south London, north London and west London must be seen to benefit from the whole process.
  As to the Tote and the horse race betting levy, we believe that it is crucial for the Bill to make it clear that the Tote should be sold to a racing trust. The whole point of setting up a shadow trust to be run by Lord Lipsey is to bring about certainty on the part of the racing industry. It is not acceptable for the Minister to say that it is not needed on the face of the Bill. The gap must be filled.
  We should recognise that the Minister has worked hard. I pay tribute to him, as have other hon. Members, for securing the seven-year exclusivity, but some hon. Members have expressed the concern that even seven years may not be long enough. Several hon. Members supported the view of my hon. Friend the Member for South-East Cambridgeshire that the bigger the pool, the more attractive is the Tote to the punter. My hon. Friends the Members for Ryedale (Mr. Greenway) and for South-West Hertfordshire might say that it would be better if the exclusivity carried on much longer than seven years. As many hon. Members have said, seven years is really the minimum.
  My hon. Friend the Member for South-East Cambridgeshire drew attention to the fact that one of the big bookmakers has already stated that at the end of the seven years—if it is to be only seven years—it would bid for the Tote. That would clearly reduce competition. The right hon. Member for Livingston (Mr. Cook) referred to creative tension in the racing industry. I pay tribute to him and other hon. Members who have played an important part in promoting the cause of racing in the House.
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  There is a need to support the smaller rural race courses especially, as was mentioned by several hon. Members. A huge threat also hangs over racing from the OFT. It is a great shame that that organisation seems to seek out high-profile sporting cases to try to boost its reputation, without appreciating the damage that could be done to such an important industry. The right hon. Member for Livingston made the point that racing is a huge employer. It employs 100,000 people and is in the top 10 of employers in the country.
  We want the Bill to support racing further, protect the position of the Tote and genuinely assist Britain's success in the 2012 Olympic bid. We support the Bill and we will seek to achieve those aims in Committee.
  5.50 pm
  Mr. Caborn: With the leave of the House, I wish to reply to this excellent debate. Some 16 or 17 Members have been able to contribute, and the quality of the speeches was very high. I do not have time to respond to all the points that were made, so I shall address one or two major areas to provide some reassurances. The other issues can be taken up in Committee.
  On the question of the levy system, we had identified September 2005 as the most likely date for abolition. That would have meant that there would be one more levy, for 2004–05, followed by a six-month period for the levy board to achieve an orderly closure. It is the Government's intention to end the levy system, but because of the uncertainties that have been outlined this afternoon by several hon. Members—and that are still felt by the racing industry—about the deliberations of the OFT, we have decided to extend the life of the levy board to September 2006. We have listened to and taken note of what people have said.
  The concerns of the House about the OFT and its relationship with racing were also raised at Question Time on Monday. My right hon. Friend the Secretary of State has been in correspondence with the OFT, although unfortunately I cannot disclose the details—
  Mr. Don Foster: Why not?
  Mr. Caborn: I am informed by officials that that is how it has been done in the past. [Interruption.] That is all the answer that the hon. Gentleman will get, so let us not waste time. I have written to the racing industry to ask for a meeting to discuss the issue. A solution is possible, and the OFT has not been as intransigent as some believe. It is important to find a solution so that we can bring some certainty back to the industry.
  Hon. Members asked about the sale of the Tote. We set up the shadow trust to answer those questions, and it has had a dialogue with the Treasury. The Tote will be sold in the normal way for an asset of the Government. An independent review will be held and a price set. If we fail to set a fair price for the Tote, we will run into various difficulties. For example, the bookmakers will complain to Europe about state aid and unfair subsidies that could distort the marketplace. When the Bill becomes law—and it has had a fair wind from the House today—we will be able to negotiate a price that reflects the worth of the Tote, with the assistance of the work of the shadow trust. That can be done, as it has been done for the sale of many other Government assets.

  493
  The period of seven years reflects the balance that we have, rightly, achieved through discussions with the shadow trust, the Tote and their advisers. They believe that they can raise the purchase price and provide a sustainable business plan to take the organisation into the marketplace, without fearing the competition, in seven years' time. Some Members, including my right hon. Friend the Member for Livingston (Mr. Cook), have argued that the period should be 10 or 15 years; indeed, some people have argued that we should leave the Tote in the public sector as a monopoly. However, that could be a disservice. If the Tote proved, after seven years, that it could not operate in the marketplace so that it could see off all the predators that might want it, it would not have done its job. We have struck a balance; we took advice and took account of the views of the industry. That is why we argued for seven years and that is the course the Government intend to adopt.
  Whether or not such points are included in the Bill, it is clear that there is not much trust of the Government in the House. That surprises me, as my right hon. Friend the Secretary of State has worked so hard on the seven-year proposal. After the discussions that we have held both with the shadow trust and the Tote, it would be naïve to say that we do not want to proceed in that way. Nevertheless, I can understand, to some extent, why hon. Members have made some of their comments. We shall set up discussions and negotiations about the price with the shadow trust when the Act is on the statute book.
  On the 50 per cent. figure, the Government believe that there are two legitimate stakeholders in the Tote: the racing industry and the taxpayer. It is as simple as that. We intend to sell the Tote to the racing trust; it was a manifesto commitment and we want to honour it.
  I shall deal with some of the points that were made about the Olympic games. I thank the hon. Member for North Tayside (Pete Wishart) for his timely contribution. We took account of the views of people throughout the United Kingdom before we made the decision to go ahead with our bid for the games. As has already been indicated, about 81 per cent. of people in Scotland—one of the highest returns—supported the bid.
  The hon. Gentleman concluded his remarks by saying that his contribution was actually in support of the London bid. My strong advice to him is to keep his mouth shut for the next 18 months and he will do us a tremendous amount of good—[Interruption.] He would be doing us a favour.
  Hon. Members asked what the cost would be and suggested that there would be a displacement from the good causes. I can confirm the 5 per cent. figure that we told the House. On the question of when the new game will start, assuming that the Bill is enacted, a number of hon. Members alluded to the fact that the IOC rules say very clearly indeed that such a lottery cannot begin until after the winning candidate has been confirmed, and I would not dispute that.
  Hon. Members have rightly argued about the displacement from other good causes. That is another important point. Broadly speaking, we have agreed with the other good causes that it is right, in the national
  494
  interest, to use the lottery for the Olympics, but they say, with some justification, that they would not want the new lottery to take place until the arrangements have been confirmed at Singapore in July 2005, when I hope that we will win the bid for 2012. So we have to take that on board as well. Again, there has to be a balance, and the good causes have played ball with us very much indeed.
  On the betting levy, we have produced all our costings with a 12 per cent. levy for the Olympic draw—
  Question put, That the Bill be now read a second time:—
  The House divided: Ayes 348, Noes 5.

  Division No. 24]

  [5.59 pm

  AYES

  Abbott, Ms Diane

  Challen, Colin

  Adams, Irene (Paisley N)

  Chapman, Ben (Wirral S)

  Ainger, Nick

  Chope, Christopher

  Ainsworth, Bob (Cov?try NE)

  Clapham, Michael

  Ainsworth, Peter (E Surrey)

  Clark, Mrs Helen (Peterborough)

  Alexander, Douglas

  Clark, Dr. Lynda (Edinburgh Pentlands)

  Allen, Graham

  Amess, David

  Clarke, rh Tom (Coatbridge & Chryston)

  Anderson, rh Donald (Swansea E)

  Arbuthton, rh James

  Clarke, Tony (Northampton S)

  Atkins, Charlotte

  Clifton-Brown, Geoffrey

  Atkinson, Peter (Hexham)

  Coaker, Vernon

  Austin, John

  Coffey, Ms Ann

  Bacon, Richard

  Cohen, Harry

  Bailey, Adrian

  Coleman, Iain

  Barker, Gregory

  Colman, Tony

  Barnes, Harry

  Connarty, Michael

  Barron, rh Kevin

  Conway, Derek

  Battle, John

  Cook, rh Robin (Livingston)

  Bayley, Hugh

  Cooper, Yvette

  Beard, Nigel

  Corbyn, Jeremy

  Beckett, rh Margaret

  Cranston, Ross

  Begg, Miss Anne

  Crausby, David

  Bellingham, Henry

  Cruddas, Jon

  Benn, rh Hilary

  Cryer, John (Hornchurch)

  Bercow, John

  Cunningham, rh Dr. Jack (Copeland)

  Berry, Roger

  Betts, Clive

  Cunningham, Jim (Coventry S)

  Blackman, Liz

  Curtis-Thomas, Mrs Claire

  Blizzard, Bob

  Davey, Valerie (Bristol W)

  Blunt, Crispin

  David, Wayne

  Boateng, rh Paul

  Davidson, Ian

  Boswell, Tim

  Davies, Geraint (Croydon C)

  Bradley, Peter (The Wrekin)

  Davies, Quentin (Grantham & Stamford)

  Bradshaw, Ben

  Brennan, Kevin

  Davis, rh David (Haltemprice & Howden)

  Brooke, Mrs Annette L.

  Brown, rh Nicholas (Newcastle E Wallsend)

  Davis, rh Terry (B ham Hodge H)

  Dean, Mrs Janet

  Browne, Desmond

  Dhanda, Parmjit

  Bryant, Chris

  Dismore, Andrew

  Buck, Ms Karen

  Djanogly, Jonathan

  Burgon, Colin

  Dobbin, Jim (Heywood)

  Burnham, Andy

  Dobson, rh Frank

  Burnside, David

  Doran, Frank

  Burstow, Paul

  Dowd, Jim (Lewisham W)

  Butterfill, John

  Duncan, Alan (Rutland)

  Byers, rh Stephen

  Edwards, Huw

  Caborn, rh Richard

  Efford, Clive

  Cairns, David

  Ellman, Mrs Louise

  Calton, Mrs Patsy

  Ennis, Jeff (Barnsley E)

  Campbell, Mrs Anne (C'bridge)

  Evans, Nigel

  Campbell, rh Menzies (NE Fife)

  Fallon, Michael

  Casale, Roger

  Field, Mark (Cities of London & Westminster)

  Caton, Martin

  Cawsey, Ian (Brigg)

  Fisher, Mark

  495

  Fitzpatrick, Jim

  Khabra, Piara S.

  Flight, Howard

  Kidney, David

  Flint, Caroline

  Kilfoyle, Peter

  Foster, rh Derek

  King, Andy (Rugby)

  Foster, Don (Bath)

  King, Ms Oona

  Foster, Michael (Worcester)

  Foster, Michael Jabez (Hastings & Rye)

  Knight, Jim (S Dorset)

  Kumar, Dr. Ashok

  Foulkes, rh George

  Ladyman, Dr. Stephen

  Francois, Mark

  Lait, Mrs Jacqui

  Gardiner, Barry

  Lammy, David

  Garnier, Edward

  Laxton, Bob (Derby N)

  George, rh Bruce (Walsall S)

  Lazarowicz, Mark

  Gerrard, Neil

  Lepper, David

  Gilroy, Linda

  Leslie, Christopher

  Godsiff, Roger

  Letwin, rh Oliver

  Goggins, Paul

  Levitt Tom (High Peak)

  Goodman, Paul

  Lewis, Ivan (Bury S)

  Gray, James (N Wilts)

  Liddell-Grainger, Ian

  Grayling, Chris

  Lidington, David

  Green, Damian (Ashford)

  Lilley, rh Peter

  Greenway, John

  Linton, Martin

  Grieve, Dominic

  Lloyd, Tony (Manchester C)

  Griffiths, Jane (Reading E)

  Loughton, Tim

  Grogan, John

  Love, Andrew

  Gummer, rh John

  Lucas, Ian (Wrexham)

  Hain, rh Peter

  Luff, Peter (M-Worcs)

  Hall, Mike (Weaver Vale)

  Luke, lain (Dundee E)

  Hamilton, David (Midlothian)

  McAvoy, Thomas

  Hammond, Philip

  McCabe, Stephen

  Hancock, Mike

  McDonagh, Siobhain

  Hanson, David

  MacDonald, Calum

  Harris, Dr. Evan (Oxford W & Abingdon)

  McDonnell, John

  MacDougall, John

  Harris, Tom (Glasgow Cathcart)

  McFall, John

  Havard, Dai (Merthyr Tydfil & Rhymney)

  McGuire, Mrs Anne

  McIntosh, Miss Anne

  Hawkins, Nick

  McIsaac, Shona

  Hayes, John (S Holland)

  McKechin, Ann

  Healey, John

  Mackinlay, Andrew

  Heath, David

  McLoughlin, Patrick

  Heathcoat-Amory, rh David

  Mactaggart, Fiona

  Henderson, Doug (Newcastle N)

  McWalter, Tony

  Hendrick, Mark

  McWilliam, John

  Hendry, Charles

  Mahmood, Khalid

  Heppell, John

  Malins, Humfrey

  Hill, Keith (Streatham)

  Mallaber, Judy

  Hoey, Kate (Vauxhall)

  Mann, John (Bassetlaw)

  Holmes, Paul

  Marris, Rob (Wolverh'ton SW)

  Hood, Jimmy (Clydesdale)

  Marsden, Gordon (Blackpool S)

  Hoon, rh Geoffrey

  Marshall-Andrews, Robert

  Hopkins, Kelvin

  May, Mrs Theresa

  Howarth, Gerald (Aldershot)

  Merron, Gillian

  Howells, Dr. Kim

  Michael, rh Alun

  Hughes, Kevin (Doncaster N)

  Miller, Andrew

  Hughes, Simon (Southwark N)

  Mitchell, Austin (Gt Grimsby)

  Humble, Mrs Joan

  Moffatt, Laura

  Hunter, Andrew

  Mole, Chris

  Iddon, Dr. Brian

  Moran, Margaret

  Ingram, rh Adam

  Morgan, Julie

  lrranca-Davies, Huw

  Morley, Elliot

  Jackson, Glenda (Hampstead & Highgate)

  Morris, rh Estelle

  Mudie, George

  Jackson, Helen (Hillsborough)

  Mullin, Chris

  Jenkins, Brian

  Munn, Ms Meg

  Johnson, Miss Melanie (Welwyn Hatfield)

  Murphy, Jim (Eastwood)

  Murrison, Dr. Andrew

  Jones, Helen (Warrington N)

  Naysmith, Dr. Doug

  Jones, Kevan (N Durham)

  O'Brien, Stephen (Eddisbury)

  Jones, Lynne (Selly Oak)

  Olner, Bill

  Jones, Martyn (Clwyd S)

  Osborne, George (Tatton)

  Jowell, rh Tessa

  Ottaway, Richard

  Keeble, Ms Sally

  Page, Richard

  Keen, Alan (Feltham)

  Paice, James

  Keen, Ann (Brentford)

  Palmer, Dr. Nick

  Kemp, Fraser

  Paterson, Owen

  496

  Perham, Linda

  Spring, Richard

  Pike, Peter (Burnley)

  Squire, Rachel

  Plaskitt, James

  Stanley, rh Sir John

  Pollard, Kerry

  Steen, Anthony

  Pond, Chris (Gravesham)

  Stewart, Ian (Eccles)

  Portillo, rh Michael

  Stinchcombe, Paul

  Pound, Stephen

  Stoate, Dr. Howard

  Prentice, Ms Bridget (Lewisham E)

  Stuart, Ms Gisela

  Stunell, Andrew

  Primarolo, rh Dawn

  Sutcliffe, Gerry

  Prosser, Gwyn

  Tami, Mark (Alyn)

  Rammell, Bill

  Taylor, David (NW Leics)

  Rapson, Syd (Portsmouth N)

  Taylor, Sir Teddy

  Raynsford, rh Nick

  Teather, Sarah

  Redwood, rh John

  Thurso, John

  Reed, Andy (Loughborough)

  Timms, Stephen

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

  Tipping, Paddy

  Todd, Mark (S Derbyshire)

  Rendel, David

  Tonge, Dr, Jenny

  Robertson, John (Glasgow Anniesland)

  Touhig, Don (lslwyn)

  Trickett, Jon

  Robertson, Laurence (Tewk'b'ry)

  Turner, Dr. Desmond (Brighton Kemptown)

  Robinson, Geoffrey (Coventry NW)

  Turner, Neil (Wigan)

  Roche, Mrs Barbara

  Twigg, Derek (Halton)

  Rooney,Terry

  Tyler, Paul (N Cornwall)

  Rosindell Andrew

  Tynan, Bill (Hamilton S)

  Ross, Ernie (Dundee W)

  Tyrie, Andrew

  Roy, Frank (Motherwell)

  Vaz, Keith (Leicester E)

  Ruane, Chris

  Viggers, Peter

  Ruddock, Joan

  Vis, Dr. Rudi

  Ruffley, David

  Walter, Robert

  Russell, Bob (Colchester)

  Wareing, Robert N.

  Russell, Ms Christine (City of Chester)

  Watkinson, Angela

  Watson, Tom (W Bromwich E)

  Watts, David

  Salter, Martin

  White, Brian

  Savidge, Malcolm

  Whittingdale, John

  Sawford, Phil

  Wicks, Malcolm

  Sedgemore, Brian

  Widdecombe, rh Miss Ann

  Shepherd, Richard

  Wilkinson, John

  Sheridan, Jim

  Williams, Betty (Conwy)

  Short, rh Clare

  Williams, Roger (Brecon)

  Winnick, David

  Simon, SiÔ (B' ham Erdington)

  Winterton, Sir Nicholas (Macclesfield)

  Skinner, Dennis

  Smith, Geraldine (Morecambe & Lunesdale)

  Woodward, Shaun

  Woolas, Phil

  Smith, Jacqui (Redditch)

  Worthington, Tony

  Smith, John (Glamorgan)

  Wright, David (Telford)

  Smith, Llew (Blaenau Gwent)

  Wright, Tony (Cannock)

  Soames, Nicholas

  Soley, Clive

  Tellers for the Ayes:s

  Spellar, rh John

  Joan Ryan and

  Spink, Bob (Castle Point)

  Paul Clark

  NOES

  Ewing, Annabelle

  Williams, Hywel (Caernarfon)

  Price, Adam (E Carmarthen & Dinefwr)

  Tellers for the Noes:

  Salmond, Alex

  Pete Wishart and

  Weir, Michael

  Mr. Elfyn Llwyd

  Question accordingly agreed to.
  Bill read a Second time.

HORSERACE BETTING AND OLYMPIC LOTTERY BILL (PROGRAMME)
Motion made, and Question put forthwith, pursuant to Orders [28 June 2001 and 6 November 2003],
That the following provisions shall apply to the Horserace Betting and Olympic Lottery Bill:
Question agreed to.

HORSERACE BETTING AND OLYMPIC LOTTERY BILL (PROGRAMME)
  Committal
  1. The Bill shall be committed to a Standing Committee.

  Proceedings in Standing Committee
  2. Proceedings in the Standing Committee shall (so far as not previously concluded) be brought to a conclusion on 29th January 2004.
  3. The Standing Committee shall have leave to sit twice on the first day on which it meets.

  Consideration and Third Reading
  4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings are commenced.
  5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

  Programming Committee
  6. Sessional Order B (programming committees) made on 28th June 2001 shall not apply to proceedings on consideration and Third Reading.
  Programming of proceedings
  7. All proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—[Charlotte Atkins.]

HORSERACE BETTING AND OLYMPIC LOTTERY BILL [MONEY]
Queen's recommendation having been signified—
Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a) (Money resolutions and ways and means resolutions in connection with bills),
That, for the purposes of any Act resulting from the Horserace Betting and Olympic Lottery Bill, it is expedient to authorise—

(1) the payment out of money provided by Parliament of—

(a) expenditure of the Secretary of State in connection with the Act,

(b) expenditure of the National Debt Commissioners in connection with the Act, and

(c)any increase attributable to the Act in sums payable out of money provided by Parliament under another enactment, and

(2)the payment of sums into the Consolidated Fund.ߞ[Charlotte Atkins.]

Question agreed to.

COMMITTEES

  JOINT COMMITTEE
  Ordered,
  That Huw Irranca-Davies be discharged from the Joint Committee on Statutory Instruments and Mr Kevin Hughes be added.—[Charlotte Atkins.]
  6.13 pm
  Mr. Paul Tyler: On a point of order, Mr. Deputy Speaker. I gave notice of my point of order to Mr. Speaker earlier and I understand that you may have a response to help the House on this matter.
  498
  On Tuesday, I participated in a debate in Westminster Hall on a subject that was described on the Order Paper as "Voting rights of honourable Members for Scottish seats". However, while the debate was taking place, I noticed that the Annunciator had transposed this to the simpler title of "West Lothian Question". The debate was then entitled "West Lothian Question" in the Official Report.
  As you will appreciate, Mr. Deputy Speaker, if such a change occurs and what appears on the Order Paper and what happens in this Chamber or, indeed, Westminster Hall is reported quite differently in Hansard, that could be very misleading. I wish to know on whose authority and by what means the change was made.
  I attempted to table a question to find out who could take that decision only to find, on the advice of the Table Office, that there was no one to whom I could pose it. The Father of the House, who also participated in the debate and has a special proprietary interest in the phrase "The West Lothian Question", was taken by surprise, and I suspect that the hon. Member for North Wiltshire (Mr. Gray), who instigated the debate, was taken by surprise too. I understand that the Chairman of the Westminster Hall sitting at the time was also taken by surprise.
  Can you tell us, Mr. Deputy Speaker, who was responsible for the change, on whose authority it was made, and whether there may be important lessons for the future, especially on establishing a precedent about the way in which hon. Members might be misled? I have taken this early opportunity to seek clarification.
  Mr. James Gray: Further to that point of order, Mr. Deputy Speaker. As the instigator, if that is the right expression, of the debate, I have to admit that I had a brief discussion before it with the Hansard Reporter, who asked me whether I thought it more appropriate to use the full title of the debate—"Voting rights of honourable Members for Scottish seats"—or to abbreviate it in one way or another. I made the point to him that I thought that "West Lothian Question" was not exactly identical to the subject that we were debating and that it might be clearer simply to use the full title. I suspect that for the sake of brevity Hansard decided to abbreviate the title to something that approximated very much to the subject that we were discussing, but which was definitely not an accurate representation of it.
  Mr. Deputy Speaker (Sir Michael Lord): I am grateful to the hon. Member for North Cornwall (Mr. Tyler) for giving notice of his point of order. When a debate title is quite long, it is the responsibility of the duty editor of the Official Report to decide on an appropriate abbreviation to use at the head of the columns in the printed volume. I agree that it would have been better to stick much more closely with the words on the Order Paper. The Editor of Hansard has instructed his staff accordingly. In the case of this debate, the heading will be changed in the bound volume.

Bovine Tuberculosis
Motion made, and Question proposed, That this House do now adjourn.—[Charlotte Atkins.]
6.16 pm
Mr. Oliver Letwin: I have a minor emendation, but in this case it cannot be laid at the Hansardistas in any way. When applying for the Adjournment debate, I should have added the words "in West Dorset" to its title because I wish to pose several questions about the situation in West Dorset rather than the wider issue of tuberculosis in cattle. I witness—somewhat to my embarrassment—a vast array of my Front-Bench colleagues in the Chamber whose interest is in the national scene, and no doubt they will interrogate the Minister on that in due course. Indeed, my hon. Friend the Member for North Shropshire (Mr. Paterson) has interrogated the Minister on hundreds of occasions and no doubt further discussions will occur.
I have initiated one or two Adjournment debates a year for the past five or six years about various aspects of farming in West Dorset—alas, I think that you have been forced to sit through one or two of them, Mr. Deputy Speaker. I think that it was three or four years ago when I first mentioned in one of the debates that my farmers were becoming increasingly concerned by TB in cattle. The Minister will be well aware that West Dorset is a dairying area, so it is not surprising that my farmers raised that issue.
In my experience, my farmers conform closely to what Sir Alan Walters described as the "taxi test". I recall working in No. 10 when the Treasury produced enormous reams of computer printouts to prove that there was no problem with the economy. Sir Alan Walters, the distinguished economist who worked for the then Prime Minister, contradicted that information. When the Chancellor of the day asked how that could be, Sir Alan said that he had recently been in a taxi and had inquired of the driver whether he had much custom. He discovered that the driver had not had much custom and decided that that was a better telltale sign of a recession than all the Treasury's complicated computer programmes.
In the same way, I have discovered over the past few years that if my West Dorset farmers register an issue as moving up their agenda, it is a good leading indicator—better, I suspect, than the information available to the Minister from his hundreds, or perhaps even thousands, of officials and experts. That is what has happened. Whereas three or four years ago, in my regular meetings with West Dorset farmers, TB in cattle would be raised low down the agenda as we were about to adjourn for tea, it is now raised first or second. The salience of the issue has risen dramatically, and the reason for that is pretty clear: the prevalence of TB in cattle on West Dorset dairy farms has risen dramatically.
I know that the Minister knows the background to this, but it seems to me important to sketch it out briefly. My dairy farmers are in an extraordinary business, if I can call it that. They have recently achieved the remarkable feat of reaching roughly a zero per cent. return, which is a vast improvement on the past few years. No other business in Britain would survive on a zero per cent. return. It is really for love rather than
500
money that West Dorset dairy farmers remain West Dorset dairy farmers. They have also been through BSE and foot and mouth disease.
If we hit what I insist on calling a serious problem of TB in cattle—a variant that leads to a full-blown crisis—I judge that it will be the last to affect my dairy farmers because I do not think that there would be any West Dorset dairy farmers after such a crisis. The Minister may think that that is somewhat overblown language, but I said some years ago that I thought that what was happening in the pig industry was likely to mean that there would not be much pig production in West Dorset by now, and there is not now much pig production in West Dorset; indeed, there is almost none at all. That is because people did not heed the warnings given then about what was happening to the pig industry as a result of differential regulation and effective dumping from Denmark, Holland and Poland.
Now we face the prospect, if something is not done, of the destruction of the dairy industry in West Dorset. I have to admit that, economically, that will not be terribly important. Britain's economy will not be destroyed by the absence of dairy farming in West Dorset. I have to admit also that other uses will be found for the land. I suppose that is nostalgia on my part, but I will be sad—distraught, in fact, as I suspect others in the country will be—if a land that has had cattle on it for hundreds of years turns into a land destitute of cattle. West Dorset society will change if dairy farming stops.
I accept that if that were the ineluctable result of forces of rationality, we would have to put up with it, but it is not. If it occurs because of a crisis of TB in cattle, it will be an avoidable result of an avoidable calamity, and I do not think that we ought to put up with calamities that are avoidable. Moreover, it is a calamity that we can see coming, and when calamities are both avoidable and foreseeable they really ought to be avoided.
The purpose of our Ministry of Defence is to lay down plans for things that may not happen, and the Ministry has good plans, I believe, for a wide range of contingencies that may not occur. However, this Minister's Department has a long and sorry history of not having plans for things that are almost inevitable. It is only once they occur that the Department realises that the crisis with which it is ineptly dealing is one that, if it had dealt with it some years before, might have been only a problem and possible to tackle with a great deal less public expense and discomfort. We are in exactly that position now.
The national figures are clear, and West Dorset reflects them. We have seen something like a 500 per cent. increase in the prevalence of TB in cattle over the past five or six years. There was a period last year when that was being disguised by the fact that a backlog was being cleared. It has now been cleared, and yet this year we see a vast increase compared with the position some years ago. For my West Dorset farmers, the same bumbling approach to testing that was perfectly tolerable five or 10 years ago still applies. There is a not very effective test and a large number of inclusive results, and farms are then closed for 60 days, with huge, consequential losses for the farmers.

501
From what my West Dorset farmers have said, there is no sense of urgency or crisis in the Department. I do not mean that people are not working hard, or that they are not coming into the office and leaving late. I do not mean to imply that there are not any experts—there are many experts. I do not mean that business is not continuing as usual—there is nothing that the National Audit Office would declare to be a gross inefficiency. However, it is as if people were sitting around just before the second world war and producing a Spitfire every few weeks. That would not have provided a sufficient defence in the battle of Britain. People have to change gear and produce Spitfires at the rate that Lord Beaverbrook managed to achieve. At the moment, the Department is not in war mode on TB in cattle in West Dorset. It is in peacetime mode, but my farmers are fighting a war. It is poor that there should be such a discrepancy.
The Minister is about to conduct a long-term review, which I applaud. Vaccines are expected in due course, but I am told that it may be about 10 years before they are produced. When I first heard about the vaccines, however, I was told that they were expected in 10 years time. People whose experience is greater than mine tell me that, 20 or 30 years ago, effective vaccines were expected in 10 years time. I do not know whether there will be an effective vaccine in 10 years time. In some respects, I hope that there will not be, because there will nothing to vaccinate in West Dorset, as there will not be any dairy farming in 10 years time if things carry on as they are at present. There may not be many badgers to vaccinate either, as they are dying in large numbers in West Dorset. I regularly come across dying badgers on the road as I drive down to my house. They are not dying a pleasant death, and neither, I suspect, are the cattle. This is a very unpleasant business.
The Krebs experiment is under way. I should be aware of that fact as I was an early proponent of that experiment. I had meetings with the people concerned, including Professor Krebs, and argued vociferously with some of my farmers five or six years ago that they should sponsor the Krebs experiment. In my naivety, I said that it would produce conclusive results. Without such results, Ministers would not have the backing for the action that they wanted to take. Just as I supported field trials for genetically modified crops, so I supported the Krebs experiment because I believe that the power of science is considerable. I was gulled into supposing that a simple set of controlled experiments emerging from the original Krebs report—it is not terribly complicated to have assign three different areas of the United Kingdom and treat badgers in three different ways—would expedite a set of concrete results. I do not know exactly what has gone wrong or why the selective cull has been halted. I do not know what the difficulties have been, but as the Department is not on a war footing, any difficulty is likely to have deterred it from proceeding. In any event, the Krebs experiment was meant to be complete by 2003, but it is not.
I know that the Minister was not in post when the experiment began, and has not been in post for most of the period during which it was conducted. He is not personally responsible, but the fact is that this is a shambles. I very much doubt that he will want to give us
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a cast iron guarantee that the Krebs results will be available next year, the year after, or the year after that. Krebs is an interesting commodity—the experiment, I mean; we must not blame Professor Krebs—but when it has been completed and the Department has eventually considered it in its long-term review and come up with a solution, there will be nothing to solve as there will be no cattle in West Dorset, which is an absurd result.
I am not a world expert on these matters. If I were, I would seek employment in the Department. However, it employs enormous numbers of experts who, presumably, know what to do about the problem. I hope they know what to do about it. The National Farmers Union has made 16 recommendations, so it appears to have an idea of what to do. The National Federation of Badger Groups has made a large range of recommendations, some of which, interestingly, overlap with the recommendations made by the NFU.
As in each of the crises that we have faced, which we have not dealt with nationally with distinction, the Department has set up an advisory group. There always seems to be an advisory group, and the advisory group always has a chairman. At this stage in the development of the crisis, before the shambles is fully revealed and the nation mourns the results, the chairman of the advisory group always complains that nothing is being done. True to form, that is what we find in the present case.
Professor John Bourne, the chairman of the relevant advisory group, appeared on "Farming Today" on 20 December and his remarks were illuminating. He was asked what he thought about DEFRA and he said:
"What I get totally frustrated about is … we've been working within the ISG"—
that is, the independent scientific group—
"for five years … we have seen data coming through and we have been trying to get it translated into policy and that hasn't yet happened."
When the interviewer asked:
"Why in your view are they"—
that is, DEFRA—
"still talking and not making policy?"
Professor Bourne said:
"I find the … I just don't know. I find it quite extraordinary that they haven't moved more forcibly in this respect".
So the chairman of the advisory group in DEFRA is in accord with my West Dorset farmers in his view of the speed with which the Department is not moving on an issue that is currently a problem and will shortly be a full-blown crisis. That is not satisfactory.
I hope that the effect of this tiny debate focused on the tiny part of the United Kingdom that I have the good fortune, in all respects except its current state of dairy farming, to represent will enter into the Minister's mind the idea that I wish to plant there—that long-term reviews are of no use. Waiting for Krebs is of no use. Waiting to see whether, at a later time, the Department should move on to a war footing is of no use. We are facing something that is operating as an epidemic operates—on the basis of geometric progressions, but arithmetic activity will not resolve the problem. What is needed is a change of gear to match what nature is doing to us.

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I do not know what the solutions are, but they need to be rapid and effective, otherwise the Minister will face what, if we inherit Government, I as the then Chancellor will face—a mighty great bill for dealing with a ghastly crisis that need not have happened, and which could be prevented from happening now.
6.32 pm
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): I congratulate the right hon. Member for West Dorset (Mr. Letwin) on securing the debate. He ended with a rather refreshing and candid admission that he did not know what the solutions were. The problem with tackling a disease as serious and as long running as TB in cattle is that if I, or previous Ministers from either side of the House, had known what the solutions were, they would have been implemented there and then. I might try to tease some of the solutions out in a little more detail as I reply to the right hon. Gentleman's debate.
I agree that TB in cattle is the biggest animal health problem facing agriculture at present, particularly in the parts of the world that the right hon. Gentleman and I represent. I reread Thomas Hardy's "Tess of the D'Urbervilles" over new year, which reminded me of the historic importance of the dairy industry in Dorset and West Dorset, which he mentioned.
It is right that the problem is at the top of the agenda. This is not the only debate on it that we have had. There have been a number of debates on the subject in the Chamber and in Westminster Hall, and there has been scrutiny in the Environment, Food and Rural Affairs Committee, which has produced reports on it. I begin by reassuring the right hon. Gentleman that I take the matter extremely seriously. We are trying all the time to move forward with solutions to the problem. I always welcome constructive suggestions, wherever they come from, whether from the farming community or from wildlife groups. Where they agree, all the better. Unfortunately, on too many of the difficult questions that we face, they do not agree.
I do not accept that the Government's approach has been bumbling. The issue is extremely difficult and complex, and involves a number of scientific questions that are still not perfectly understood. The Government are determined to tackle it, and a sign of that determination is the fact that we have spent £74 million of public money on TB in this financial year, and we expect to spend a similar sum next year.
It may be helpful to the House if I outline some of the measures that we have adopted in the past 12 years, which I hope indicate that we are not just sitting around on a non-war footing, as the right hon. Gentleman suggested. As he acknowledged, we have reduced the backlog of overdue TB tests, following the foot and mouth outbreak. We have also imposed automatic restrictions on herds with TB tests three months or more overdue, again aimed at reducing the risk of spreading TB. Back in February, we announced a review of the TB strategy. We announced a scientific panel to review the randomised badger culling trial and associated research in April. There was a consultation on a proposal to permit trained and competent non-veterinarians to
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perform skin testing of cattle. There has been consultation on the rationalisation of compensation payments for animals slaughtered for disease control purposes. In December, we published the vaccination scoping study of the independent scientific group on cattle TB, of which the right hon. Gentleman may well be aware. As he also said, in November Ministers made a decision to suspend the reactive culling element of the randomised badger culling trial, and I shall explain later exactly why we made that decision.
We must bear in mind that, distressing and serious as the problem is in West Dorset, Devon and other parts of the country that are badly affected, only about 3 per cent. of the national herd is affected by TB restrictions at any one time. Our major priority at the moment is to try to prevent that geographic spread before we control and reduce the existence of TB in the areas where it is already a problem. I hope that some of the short-term changes that will come out the current consultation will be in place soon, and they will be aimed primarily at trying to restrict the further spread of the disease, which I hope most hon. Members will agree should be any Government's priority.
It will take a bit longer to reach agreement on the longer-term strategy, but we are committed to taking measures that we think will be helpful and necessary, and I hope that we will receive the co-operation of the farming community, the veterinary profession and wildlife groups.
As I have said, we have reduced the backlog on TB testing, and I pay tribute to the work of the state veterinary service, which has done a terrific job in achieving that during the past few months. The movement restrictions on herds with tests three months or more overdue from the start of October has also acted as a powerful incentive to get things done more quickly, and data from November shows that of the overdue tests, 48 per cent. are less than one month and 90 per cent. are less than six months overdue, which is a considerable improvement on the previous position.
There has been some debate and controversy on the lay testing proposal and no decisions have been made at the moment, but there is an argument for suggesting that in order to speed matters up and reduce costs, it may be a good idea to allow lay testing for the simple procedure of the skin test. We are still assessing the feedback from the consultation, and I hope to be able to make an announcement on that to the House shortly.
I suspect that the comments that that right hon. Gentleman quoted from Professor John Bourne on "Farming Today" were in relation to the gamma-interferon test. I have regular contacts with Professor Bourne and he has not made the general point to me that he thought that we were fiddling while Rome burned, but he has had a concern about the speed with which we have extended the gamma-interferon test. The main reason for that is that it has been quite difficult to get farmers to take part in the pilot, partly because they worry that if it is more sensitive it will lead to more breakdowns and more herds being subject to restrictions. But we are making progress. We now have 77 farms that have agreed to take part in the pilot, and we are working hard to increase that number all the time.

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Earlier this year, an Audit Commission report raised concerns about some of the compensation payments made in Wales, which were not necessarily close to market values. As the Government, we have to be responsible for the proper use of taxpayers' money, and we are thinking about how we can ensure that farmers receive the full market value for their slaughtered cattle, as they should. The right hon. Gentleman was right to highlight the difficulties of the dairy industry, particularly in recent years, with the milk price. It is right and proper that farmers should get the full market value for their cattle, but there is disturbing evidence that in some cases, they have been getting considerably more than that. I would like to know why, and to see what we can do to ensure that that does not happen in future.
As for a vaccine, I was not around in politics 10 or 15 years ago, as the right hon. Gentleman was, and I do not remember Ministers in the then Conservative Government saying that a vaccine was at least 10 years away. There is no doubt, however, that although a vaccine would be a holy grail solution, it is not going to happen in the short term, as the vaccine scoping study published in December made absolutely clear. This is not because we are not committing enough resources to the issue. Among the first questions that I asked my scientific advisers when I was appointed were, "Can we speed this process up? Is the problem that we are not spending enough money on it?" I was reassured that that was not the case. The fact is that we cannot force the speed of scientific research. We are also carrying out some very useful collaborations with the Irish and New Zealand Governments on aspects of vaccine research. I hope that, in the medium and long term, vaccines for either cattle or badgers will help us to tackle this disease. The right hon. Gentleman is absolutely right, however, to say that there is no point in raising expectations in the industry that a vaccine solution is just round the corner.
The decision to suspend the reactive culling element of the randomised badger culling trial was taken because farmers could not wait until 2006 for the outcome of the Krebs trials, as was made clear to me by farmers in Devon, among others, when I was first appointed. Ministers cannot pre-empt the outcome of a scientific trial; we cannot jeopardise the authenticity of what that trial will discover. I made it clear to Professor Bourne when I was appointed that if there were any significant interim findings before 2006, I wanted to know about them, because if they were important, we could make policy decisions sooner than that date. However, we had no control over the fact that the interim findings that were dramatic were perhaps not the ones that I, or most people in the farming industry, were expecting. That is science.
There was no doubt, however, about the advice that I was given by my scientists, including the chief scientist in the Department. The research was peer reviewed, and it has since been peer reviewed and published in December's issue of Nature. It found that, in the reactive culling areas, the impact of the culling had been to increase the incidence of TB breakdowns in cattle by 27 per cent. No Minister faced with that figure could sit back and say, "Well, we're just going to carry on and see what happens." The farming industry would have been
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up in arms, and would have said that we were continuing with a policy that was making the problem worse, and the badger rights people would have said that we were continuing with a policy that involved the unnecessary killing of badgers and was also making the problem worse.
We had no choice but to abandon the reactive cull. That does not mean to say that we have ruled out badger culling as a long-term option. The proactive culling is continuing, and I have also said to Professor Bourne that I want to know about any significant data that emerges from that before 2006, which would enable us to make an earlier policy decision.
Mr. Roger Williams: I thank the Minister for giving way, and draw to the attention of the House my interest in livestock farming, which is recorded in the Register of Members' Interests. The implication of the abandonment of reactive culling is surely that there is evidence that badgers are implicated in the spread of the disease between themselves and cattle. That is an advance, and something that farmers have suspected for a long time.
Mr. Bradshaw: Yes, there is a certain amount of truth in what the hon. Gentleman says. There has always been a reservoir of TB infectivity in wildlife, and in badgers in particular. What we have never had is hard scientific evidence relating to the nature of the spread, or the role that badgers play in it, compared with, for example, cattle-to-cattle spread. That is what has fuelled the argument between the industry and wildlife groups. The latter claim that this is all about biosecurity measures and that farmers should bear the main responsibility for ensuring that their cattle do not get infected, while some—although not all—farmers blame the badgers and advocate a badger eradication policy.
The hon. Gentleman is right. The abandonment of the reactive cull has finally shown that there is a connection, although we still do not know the extent. We also know that a reactive culling policy, which many people in the industry prematurely advocated that we adopt before the outcome of the trials, makes matters worse. Those events show that the trials were important, that following the science is important and that it is important not to bow to demands from either side to take premature action. Doing that may give the appearance that one is acting urgently, but it could make matters worse. We have to do the right thing.
We will not only continue to watch carefully the data coming from the proactive trials, but will examine carefully the results of the trials being conducted in Ireland, which we expect to be published fairly soon. They are slightly different in that the Irish have conducted something more like a badger eradication policy over a wider area and they have used snaring, which is a more effective way to cull badgers. We are keen to learn best practice from any other country, because we accept that this is such a serious issue.
In summing up, I hope that the right hon. Member for West Dorset is at least a little reassured that we take this situation extremely seriously. The issue was certainly top of my in-tray when I was appointed about six months ago and, apart from fisheries, I have spent the most time on it, supported by a good team who have

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been working hard to get the consultation out, to get a new long-term strategy adopted and to make changes in the short term, which we hope will help to prevent spread to further areas and begin to contain and reduce infection and herd breakdowns in those areas that are already affected.
I return to the candid way in which the right hon. Gentleman finished his speech: in the absence of a solution, this problem will be difficult for some time. There are no magic solutions. We are as keen as anyone
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else to solve the problem. We do not take the situation lightly as it is serious for farmers and for our Department, which is having to spend a considerable amount of money on TB that we would rather spend on—
The motion having been made after Six o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at fourteen minutes to Seven o'clock.