Commons Sitting of 11 March 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 as asked—
  ENVIRONMENT, FOOD AND RURAL AFFAIRS

    Single Farm Payments
    Mr A.J. Beith: What assessment her Department has made of the likely impact of her proposals for single farm payments on (a)tenant farmers and (b) livestock farmers in Northumberland. [160276]
    The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): My Department will publish shortly an analysis of the economic impact on the English farming industry of the decoupling of common agricultural policy direct payments and the decision to allocate entitlement on the basis set out in my statement to the House on 12 February.
    Mr. Beith: Did the Secretary of State have that analysis before her when she made the original decisions about payments? Did it take account of the position of hard-pressed tenant farmers, for whom quota is the only capital asset for retirement, or the position of farmers in severely disadvantaged areas—SDAs—where the choice of the SDA line rather than the moorland line means that livestock farmers will be hard hit while the main benefit goes to grouse moor owners, and while their neighbours and competitors in Scotland do not face a similar loss of income?
    Margaret Beckett: Of course extensive economic analysis was available to us, but we continue to develop that as time goes on. We are aware of the concerns about the SDA-moorland split and we are carefully considering the different representations that we have received. I cannot honestly say whether we can make any change, but I assure the right hon. Gentleman that we take the concerns that are being expressed very seriously.
    Mr. David Drew: Will my right hon. Friend hold urgent discussions with the Tenant Farmers Association? The issues raised in the question are linked to tenancy reform, and there is an ideal
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    opportunity to give some guidance and leadership to tenants who are considering their future. There is no better way of doing that than by talking to members of the TFA.
    Margaret Beckett: We are always happy to talk to the TFA. Indeed, I understand and share my hon. Friend's anxieties, especially about the position of tenant farmers. We shall continue to discuss with them what problems arise in particular and what we can do to assist.
    Mr. Michael Jack: When the noble Lord Whitty gave evidence to the Select Committee's inquiry on milk pricing, it became evident that no formal research had been carried out on the impact of the proposals for single farm payments on the SDAs. Will milk producers be included in the work that the Secretary of State is undertaking? A report on "Farming Today", which contrasted two 200-acre farms with 300-odd cows, suggested that the SDA farm would receive £23,000 less in income than a similar farm further down the hill. Will she assure me that she will consider the matter?
    Margaret Beckett: As I said to the right hon. Member for Berwick-upon-Tweed (Mr. Beith), we are continuing to develop the analysis further and we are considering all those issues. We shall do what we can to assess them carefully and take them into account. Of course, the right hon. Member for Fylde (Mr. Jack) will be mindful, as I am, of the potential for major changes for individuals through the different system. That is one of the main reasons for phasing it in over some eight years.
    Andrew George: On the impact of Government decisions on livestock farmers in Northumberland, will the Secretary of State confirm that Mr. Jim Dring, a Government vet, would, on his admission, have prevented the devastating foot and mouth outbreak in 2001 had his inspection of Burnside farm in Northumberland been more rigorous? Does she accept that that vital evidence was withheld from Dr. Anderson's inquiry into the lessons learned from the outbreak? Does she agree that that narrow but crucial matter should be properly investigated—it is the only reasonable thing to do—through an independent inquiry?
    Margaret Beckett: No, I cannot confirm what the hon. Gentleman says. Nor, indeed, is it the case that the issues that lay behind the memorandum—the note that Mr. Dring made for himself was withheld from the Anderson inquiry—were withheld from the inquiry.
    I cannot confirm the hon. Gentleman's allegations and it would be wholly wrong, and very unfair to Mr. Dring, to suggest that in some way—and this is the implication—he was responsible. It was the person who employed certain standards that helped to foster such an outbreak who was responsible. Mr. Dring has done no more than any one of us might do in musing about the matter, examining his conscience and asking, "Oh dear—is there more that I could have done?" It is what any reasonable human being should do. The idea that he should be held guilty for doing that is very unfair.
    Mr. John Whittingdale: Is the Secretary of State saying that, when making decisions on single farm payments, she was unaware that that would lead to up to 5,000 farms in SDAs, such as those in Northumberland, experiencing cuts in support payments of up to 75 per cent.? Does she accept that the loss of those farms will be a disaster not only for the farmers but for the environment? Although I welcome her willingness to examine the matter, does she accept that changes have to be made to the system to avert a potential catastrophe?
    Margaret Beckett: No, I am not saying that I was unaware that there would be an impact. There will inevitably be winners and losers when there is such a change. However, overall we think that about 13 per cent. of present entitlement will be redistributed over eight years. With any change, there are shifts and some individual businesses are particularly affected—however, every business should be able to benefit from the economic opportunities of decoupling. I repeat what I have said before, namely, that one of the chief reasons why we have agreed to phase in the changes over eight years is precisely to allow affected businesses to adapt.

    Rhodia Eco Services
    Mr. Harry Barnes: If she will visit Staveley in Derbyshire to meet local residents to discuss environmental concerns arising from the escape of chlorine at Rhodia Eco Services on 3 November 2003. [160279]
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): I was concerned to discover that the investigation into the escape of chlorine at Rhodia by the Health and Safety Executive and the Environment Agency has not yet been completed, although the incident occurred on 3 November and my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) met inspectors on site on 7 November. I have today asked the Health and Safety Executive and the Environment Agency to complete their investigations urgently and to meet me next week.
    Mr. Barnes: It would be fruitful if I, as the local Member of Parliament, could be involved in next week's meeting, and I hope that that can be arranged. There were similar incidents in 1998 at SARP in Killamarsh in my constituency, where there were escapes of acid gas. At that time, the then Minister for the Environment, my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher), visited councillors and residents, which greatly helped to resolve the situation. Could the same thing happen at Staveley in connection with this COMAH—control of major accident hazards—incident? The town council is holding a public meeting about the matter on 2 April at 7 pm in the Speedwell rooms. That would be a useful occasion for a visit by a Minister, including a visit to the site.
    Alun Michael: I have read my hon. Friend's account of events at Rhodia in Hansard, and I understand his concern about the history of the event, although I cannot make a promise about specific dates. I am told
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    that the investigation is complex and technical, which is why it is taking some time, but that it is being pursued as a matter of urgency. I should be very happy to invite him to attend the meeting to which I have referred.

    Public Health
    Mr. Paul Burstow: If she will make a statement on the work on public health conducted jointly by her Department and the Department of Health. [160280]
    The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): My Department works with the Department of Health on a range of key issues connected with public health, including fuel poverty, poor environment quality, animal health, services in rural areas, food and exercise. It will play its part in "Choosing Health", which is the consultation on action to improve people's health that was launched last week.
    Mr. Burstow: I am grateful to the Secretary of State for that answer. Can she tell us what assessment has been made of how to manage the surplus of fat that results from dairy processing to produce low-fat butter and milk, and what discussions have taken place with the Department of Health at ministerial and official level on that? Given the obesity epidemic that is sweeping our nation, would it not be sensible to bank the health dividend and ensure that that fat does not find its way back into the food chain?
    Margaret Beckett: The hon. Gentleman makes an interesting point. As I have said, my Department is engaged in much work and discussion, including workshops and seminars, and I shall pass on the hon. Gentleman's observations.
    Mr. Mark Lazarowicz: Does my right hon. Friend agree that one of the best ways to promote public health would be for food companies that encourage unhealthy diets in children to stop doing that? Is she trying to persuade her Cabinet colleagues to support recommendations to address the imbalance in television advertising, so that healthier eating, rather than unhealthy eating, is promoted?
    Margaret Beckett: I know that those issues are being considered not only by other Departments but by the Food Standards Agency. People are looking at the concerns that have been expressed on those issues and trying to get the balance right.
    Mr. Russell Brown: There is growing concern that low-level ground vibration from wind farms has the potential to have an adverse effect on public health. Has my right hon. Friend asked the Department of Health or an independent body to examine low-level vibration from wind turbines and its possible effects, or does she intend to do so?
    Margaret Beckett: I have not, but I will.

    Agriculture (West Country)
    Mr. David Heath: If she will visit the Royal Bath and West show 2004 to discuss the state of agriculture in the west country. [160281]
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): All members of the ministerial team attend numerous rural events, including agricultural shows. It is hoped that one member of DEFRA's ministerial team will be able to attend the Royal Bath and West show this year.
    Mr. Heath: I should hope so. There was a time when the Minister for Agriculture would always be at the Royal Bath and West, engaging in a big conversation—probably a loud conversation—with the many dairy farmers I represent, who are facing extremely difficult trading conditions because the farm-gate price of milk is 0not sufficiently high to sustain their businesses. It is clear from the recent report produced by the Office of Fair Trading that the OFT does not understand that point. Is there any evidence that DEFRA understands that farmers need a fair price for milk? Is the Minister prepared to do something about the retailers who are not giving it to them?
    Alun Michael: First, DEFRA is not the Ministry of Agriculture. It has a much wider range of responsibilities, and quite right too. Secondly, attendance at an agricultural show is not the only way to understand the problems of the dairy industry. My noble Friend Lord Whitty meets regularly with the forum that deals with dairy issues, and there is considerable engagement from the Department on those matters.
    Mr. Adrian Flook: When the Secretary of State stood before us and told us how the single farm payment would make Exmoor a winner, did she understand that there were problems involved, such as those raised in the earlier question? Why was Exmoor—which forms part of Somerset and Devon—put forward as a winner when it is actually going to be a loser under the current system as it evolves towards 2013?
    Alun Michael: I am not sure that the hon. Gentleman has properly understood the impact of the proposals on his area. As the Secretary of State said, we certainly understand the problems facing various sectors of the industry, and we are looking very carefully at them as we consider the responses to the announcement that she made a short time ago.
    Mr. Owen Paterson: I strongly urge Ministers to go to the Royal Bath and West show, where they will find, as I have on my recent visits to the west country, that livestock farmers have grave doubts about the Government's commitment to the long-term stability of the livestock industry. Those views are obviously driven by the Government's handling of the tuberculosis issue. Their latest document suggests that they are proposing to spend £2 billion over
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    the next 10 years on not curing TB, while a 20 per cent. increase in the disease will surely be incompatible with a viable cattle industry.
    Alun Michael: I am sure that the hon. Gentleman would like to urge us to attend all agricultural shows; that would keep the ministerial team extremely busy. We try to strike a balance. Attending agricultural shows is one of the ways in which we interface with the agricultural and rural community, but it is not the only one.
    The hon. Gentleman does not seem to have any alternative proposals on TB. He does not seem to have thought about what he would put in place of the sensible and coherent proposals that have been put forward by my right hon. Friend the Secretary of State.

    Nirex
    Mr. Tom Watson: If she will make a statement on the future of Nirex. [160282]
    The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): The Government have stated their intent to make Nirex independent of industry and under greater Government control to allow effective contribution to the work of the Committee on Radioactive Waste Management. We are working to ensure that Nirex continues to discharge its functions for the benefit of the public as well as its shareholders. When we are ready and able to do so, we shall make an announcement.
    Mr. Watson: I thank my right hon. Friend for that answer. We all appreciate the hard work that she and her Department are doing on this issue. Does she agree that the reasons for Nirex's independence—transparency, public acceptability and a focus on the long term—are as valid today as they were when the announcement on this issue was made last year? Does she also agree that there are workable models for that independence on the table, which do not involve the inclusion of Nirex in the nuclear decommissioning agency, and that, with persistence from her Department, we might be able to achieve independence for Nirex sooner rather than later?
    Margaret Beckett: Certainly, I agree with my hon. Friend that the concerns that led us to suggest independence for Nirex remain valid. I share his view that they can continue to play a valuable role. We are examining all the options—which is why the process is taking a little longer than we might otherwise have wished—and I can assure him that we shall continue to seek the best option for the public good.
    Norman Baker: Given that the Secretary of State announced on 16 July last year that Nirex was to become independent, and notwithstanding the comments that she has just made, will she explain why so little has happened since then? Can she, in particular, confirm the story in The Observer of 29 February, which suggested that the reason for that was that the Department of Trade and Industry had, as usual, been lobbied by the nuclear industry and was

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    resisting her sensible proposals? Will she give a guarantee that Nirex will indeed be made properly and fully independent? Will she give a time scale for that, and undertake that DEFRA will, for once, see off the DTI?
    Margaret Beckett: First, I thank the hon. Gentleman for referring to our proposals as sensible—he is right—but I cannot give him a time scale at the moment. We are setting up a new nuclear decommissioning authority and a new committee on radioactive waste management. These are genuinely difficult and complex issues, but we continue to hold the view that it is important to handle them well and to get the right pattern for the long term. As for my colleagues in the Department of Trade and Industry, we have an extremely productive and cooperative relationship.

    Peak District National Park Authority
    Mr. Patrick McLoughlin: If she will make a statement on the composition of the Peak District National Park Authority. [160283]
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): As the hon. Gentleman will know from last week's Adjournment debate, I have concluded that a membership of 30 is an appropriate size for the Peak District National Park Authority. I now intend to consult on that proposal.
    Mr. McLoughlin: I thank the Minister for responding to the request that I and other Members representing the Peak park made by striking the right balance in terms of future membership of the authority. Is he aware, however, of the growing concern among Peak district farmers, in the light of the Secretary of State's announcement on 12 February, about the future viability of long-term farming in the Peak district, which is essential to that area? Bearing in mind what the Secretary of State has just said and her statement of 12 February, when can we expect the final announcements to be made, so that farmers can know whether they have a secure future?
    Alun Michael: Given that the hon. Gentleman moved on very rapidly from the national park authority to other issues, it is clear that I have satisfied him on that front. Detailed regulations and other work needs to be done before these matters can be finalised. As he will know from earlier exchanges, my right hon. Friend the Secretary of State fully understands the challenges that certain parts of the farming industry face, and it is clear that some of those fall within national park authority areas.
    Andrew Bennett: Will my right hon. Friend make sure that in composing the national park board, outside users, particularly those in Sheffield and Manchester, are fairly represented on it, especially given that many of them use the park as walkers, rock-climbers and tourists?
    Alun Michael: I am happy to underline the fact that national parks are a national asset. It is obviously right that there should be local representation, and engagement with local representatives and local
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    authorities that are directly affected. That is why the final figure for the Peak district was rather higher than that for other authorities. Of course, some of those representatives represent urban areas as well as park areas. We will shortly renew and refresh the remit for national parks, as recommended in the recent review, and in doing so we will underline the existing range of interests, including those of the users to whom my hon. Friend refers.
    Sir Nicholas Winterton: As the Minister knows, part of my constituency lies within the Peak park. Following up the highly relevant question from my hon. Friend the Member for West Derbyshire (Mr. McLoughlin), are livestock farmers being properly represented within the Peak park authority, and will the Minister take seriously the issues raised by my farmers in the Peak park in the light of the recent Government announcement? In their view—a view shared by their representatives and by me—farming in the severely disadvantaged marginal and hill areas will come to an end. That would be a disaster for farming and for our economy.
    Alun Michael: We have a template for considering, through the Secretary of State's appointees, representation on the national park authorities. That template takes into account farming and landowning interests, as well as those of users. In addition, all national park authorities provide representation—through parish councils, for example—for those with a direct farming interest. In every case, the interests of farmers within the landscape of the national parks are important. The Peak park involves a particularly complex set of relationships, and we do understand the connection between support for farmers and farming's impact on the landscape

    Common Agricultural Policy
    Hugh Bayley: If she will make a statement on the prospects for further reform of the common agricultural policy. [160284]
    The Secretary of State for Environment, Food and Rural Affairs (Margaret Beckett): Following the historic reform of the common agricultural policy last June, the European Commission has proposed reforms of the cotton, olive oil, tobacco and hops regimes. We hope that Agriculture Ministers will agree them on 22 March or thereabouts. We are looking at options for reform on sugar, and hope to see proposals this summer.
    Hugh Bayley: As we reach the end of Fairtrade fortnight, may I ask whether my right hon. Friend agrees that there is no chance of our achieving global justice in trade unless the rich world reduces the absolute level of its agriculture subsidies? She has made great progress in shifting emphasis to non-trade-distorting subsidies, but to secure a deal at the World Trade Organisation meeting the European Union will need to table further proposals for reducing the overall burden of subsidies.
    Margaret Beckett: I hear what my hon. Friend says, but dealing with trade-distorting subsidies is the key to

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    achieving fair trade. There are separate issues. As my hon. Friend knows, we are addressing the issue of what support is given to the farming community, and on what basis, by pursuing reforms that have been agreed. I do not consider it helpful for those who want a successful outcome, and a trade deal that will benefit developing countries in particular, to continue to focus on what is happening to non-trade-distorting subsidies. Let us keep our eye on the ball and try to secure as good a deal as we can for developing countries. We can indulge in philosophical speculation on ideal worlds at a later stage.
    Mrs. Theresa May: Farmers will be sceptical about further reform of the common agricultural policy unless the Secretary of State and the Government get the current rerforms right. The Secretary of State's answer to valid questions about the impact of her payments for severely disadvantaged areas was very disappointing. My hon. Friends the Members for Maldon and East Chelmsford (Mr. Whittingdale) and for North Shropshire (Mr. Paterson) have written to her asking whether they can bring a delegation of hill farmers to meet her. Will she now give a commitment to meet that delegation, and also a commitment to review the payments for severely disadvantaged areas, with a view to changing them to ensure that the 5,000 farms that are expecting to go out of business as a result of those payments will not do so?
    Margaret Beckett: I note that yet again Conservative spokespeople are calling for more funds to be invested—
    Mr. Dennis Skinner: No, she is not.
    Margaret Beckett: If the hon. Lady is not asking for more funds, she must be asking for funds to be taken from someone else.
    When resources are redistributed—although in this instance the total is about 13 per cent. and it will happen over eight years—there is bound to be disappointment and concern, and people will want to make sure that the full impact on their own circumstances has been taken into account. As I have said, we are giving careful attention to the concerns that are being expressed. I cannot give the hon. Lady the undertaking that she seeks—I can only say that we will continue to keep these issues under review. We believe—and I think most people in agriculture believe—that the steps we are proposing are taking farming in the right direction. We are trying to employ a manageable time scale so that people can make decisions that are right for their own businesses.
    Mrs. May: I am sorry that the Secretary of State is not willing to agree to meet that delegation of hill farmers and hear directly from them about the problems that her proposals will cause. Farmers need to have confidence in the system that the Government are introducing. The Rural Payments Agency has only about nine months in which to establish a radically different system. Given the Department's track record—the cattle passport scheme lost 100,000 cattle, and the fallen stock scheme has been
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    delayed yet again—what confidence can farmers have they will receive their single farm payments at all, let alone receive the right amount, on time?
    Margaret Beckett: The hon. Lady referred to correspondence that I have yet to receive. When I receive it I will of course give it consideration, as the hon. Lady and the House would expect.
    Mr. John Whittingdale: It was sent on Monday.
    Margaret Beckett: In my experience, people frequently claim to have sent letters that have not actually been dispatched yet. I say to the hon. Lady that it would be quite wrong to give the impression—I am sure that she is not under such an illusion—that hill farmers as a group are all bound to lose. That is not the case. Indeed, some may well benefit considerably.
    The hon. Lady referred to the track record of my Department. I freely confess that the information technology systems available required considerable investment, and that no parts of the IT systems in the new Department could talk one to another. As I said, a huge amount of investment is going in and much work is being done. When she says that the scheme that the Rural Payments Agency has to administer will be radically different, that may be true to a certain extent. but let us not forget that in the first year there will be only a 10 per cent. shift in payments, so the great bulk of the payments in that first year—not until 2005—will be made on the same basis as those today.
    Mr. Kelvin Hopkins: First, may I congratulate my right hon. Friend on her recent statement on CAP reform? It was welcome and took a significant step forward. It came as something of a surprise that, on this occasion, the French agreed to the reforms. I wonder whether that might be a good augury for the future, and that more rapid progress might be made towards the eventual dissolution of the CAP and the return of agriculture policy to member state level, which would be a great step forward.
    Margaret Beckett: With great respect, I fear that one of the things that would not help us achieve further reform of the CAP is creating the impression that we were about to move to its dissolution. I also tell my hon. Friend that it would be more accurate to say that my colleague the French Agriculture Minister accepted the reform rather than agreed to it. I accept, however, my hon. Friend's basic assertion that there is a great need for reform of the CAP. We accept that and I believe that everyone in the British Parliament accepts it. Most people recognise that the steps we have taken will take us further in the right direction. To be fair, successive British Governments have sought to follow that direction, but the present Government are delivering.
    Bob Spink: But does the Secretary of State accept that the reforms have neither reduced the costs of the CAP nor helped to reduce protectionism in Europe? If the Government are serious

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    about promoting international development and helping consumers in this country, should not the Secretary of State accept that the CAP is now well past its sell-by date and that it is time to get out of it?
    Margaret Beckett: It has been a long-standing aim of successive British Governments to curtail expenditure in this area, but the hon. Gentleman will know that under the agreement there is now a ceiling, which will not be exceeded. If expenditure tends to drift above that ceiling, it will be brought back. One aspect that is now completely different—many people believed that we would not be able to secure it—is that resources will be made available to secure what the public want, such as landscape protection, improvements to the environment and so forth, rather than merely to subsidise an industry.

    GM Maize
    David Taylor: What assessment has been made of the possibility of growing GM maize in England; and if she will make a statement. [160285]
    The Minister for the Environment (Mr. Elliot Morley): My right hon. Friend the Secretary of State made an oral statement in the House on Tuesday. The statement covered the issue of commercial growing of a type of GM maize.
    David Taylor: Given the doubts of the Environmental Audit Committee about the robustness, validity and relevance of the farm-scale evaluation results and the view of the British Medical Association that insufficient research into the impact on human health of GM foodstuffs has been conducted, does the Minister agree that few, if any, conventional or organic farmers will be able wholly to escape the impact of GM contamination of their crops, and that the GM industry should conclude a legal liability regime not only with farmers but with the ultimate consumers of the food they produce?
    Mr. Morley: My hon. Friend has raised a number of points. First, let me deal with the British Medical Association report. In fact, the report made it clear that the BMA supported the Government's approach of considering each application on a case-by-case basis. Furthermore, the BMA conceded and recognised—again effectively supporting the Government—the thoroughness of the detailed work on GM herbicide-tolerant maize. On the issue of liabilities, my right hon. Friend the Secretary of State has made it clear that this summer we will consult on the shape of a liability scheme and the consultation will include any potential consequences in relation to GM crops.
    As for growing the crops, consultation will also be held on a coexistence regime to ensure that GM crops and conventional and organic crops are cultivated separately. These are important matters, and the Government take careful note of Select Committee reports. Much of what was in the EAC report was not new, and a report published in Nature on the same day—of which the Committee was not aware—addressed many of the points that the EAC raised.
    Mrs. Caroline Spelman: Tuesday's statement authorising the planting of GM maize in this country was an historic occasion, as it brought to an end this country's GM-free status. Does the Minister accept that to make such a decision before the House had had a chance to debate the outcome of the trials was to put the cart before the horse, and that it served only to aggravate the public's widespread concern?
    Mr. Morley: The hon. Lady talks about this country's GM-free status, but may I remind her that the first authorisation for GM products and crops was given by the previous Conservative Government, before 1997? This Government negotiated a commercial moratorium while we carried out the largest and most detailed field-scale evaluation of its type ever held. No country has been as thorough in its examination of GM, which has been the subject of much discussion and debate in this House. I assure the hon. Lady that there will be a debate in Government time on the outcome of the FSEs, and on the Government's approach to the matter.
    Mr. Colin Challen: May I declare an interest in that, being a vegetarian, I have probably eaten more GM food than many other hon. Members? As far as I am aware, I have not yet shown any ill effects. [Interruption]
    Paddy Tipping: But my hon. Friend has a green beard.
    Mr. Challen: Yes, I have.

    I hope that the Government can give a more positive response on the question of health effects on humans. A report that emerged only last week from the Philippines detailed the possible very bad effect on villagers living adjacent to a GM maize crop. Should we not take that very seriously, and listen to the BMA's concerns—albeit on a case-by-case basis?
    Mr. Morley: I accept the points that my hon. Friend raises. It is important that we should not be complacent about any report. The BMA report was helpful: it said that there had been years of evaluation of the consumption of GM foods, especially in the US, and that no discernible ill effects had been found. As for the research in the Philippines, the scientist involved has conceded that he has offered his interpretation, and that more work needs to be done. Also, the findings have not been published yet, nor subject to independent peer review. When that happens, we will look at them very carefully.

    Dairy Industry
    Mr. Simon Thomas: What steps she is taking to support the dairy industry. [160287]
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): In line with our strategy for sustainable farming and food, we are facilitating industry action, most notably through the dairy supply chain forum chaired by my noble Friend Lord Whitty. The forum seeks to improve efficiency and

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    increase innovation, and to help the industry adapt to the new environment created by the reformed common agricultural policy.
    Mr. Thomas: The milk price report that DEFRA published yesterday showed that, even before this year's spring flush, milk prices have fallen over the past six months. In light of that, may I commend to the Minister the idea embodied in my private Member's Bill, which proposes the establishment of an independent milk ombudsman? That ombudsman would be a watchdog rather than a regulator, able to monitor the industry and report on its state, and to keep an eye on what the supermarkets are doing. In that way, the ombudsman would be able to determine whether a fair price was being paid to dairy farmers, in west Wales and throughout the UK. If the Minister is not in favour of that idea, what steps will he take to bring more transparency to the industry?
    Alun Michael: I do not think that the hon. Gentleman will get far with that idea, especially given the Opposition's promise of a bonfire of the tsars. However, I point out that farm-gate milk prices have been rising since last June. The average price for deliveries in December was 19.54p per litre—1.81p above the price in December 2002. We must be careful not to treat a single month as having massive significance.
    Secondly, we are working closely with the industry. I point out to the hon. Gentleman that the causes of low farm-gate prices are identified in the KPMG report, which examines the matter in detail, and are mainly for the industry to address. We seek to assist the industry in addressing those issues.
    Paddy Tipping: The real problem is that the industry is fragmented—relationships are often antagonistic and the operation of the supply chain is not transparent. Is not the Government's important role to bring all the parties together so that they can find a solution to the problems that they undoubtedly face?
    Alun Michael: My hon. Friend is right, and that is the purpose of the forum chaired by my noble Friend Lord Whitty to which I referred. There are a number of explanations for low farm-gate prices—for instance, the low value of the product mix, the low level of product innovation within the UK compared with some other European states as well as the structure of the UK industry to which my hon. Friend the Member for Sherwood (Paddy Tipping) referred. The forum is addressing all those points.
    Mr. Ian Liddell-Grainger: As the Minister knows, a proposal to reclassify yoghurt is going through Europe. Yeo Valley Organic yoghurt is based in my constituency, and dairy farmers throughout Somerset and the west are concerned that if the proposal goes through not only will they be unable to sell organic milk because yoghurt will be reclassified, but the dairy industry will have trouble selling milk into other yoghurt producing companies because of the reclassification in Europe. Will the Minister guarantee that the British Government will stand up to the proposal and not allow Europe to reclassify yoghurt?
    Alun Michael: The hon. Gentleman may be referring to accounts of ongoing discussions rather than a
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    conclusion, and I am happy to write to him on the detail of the position. I congratulate him on representing not only his constituents but a very fine product in Yeo Valley Organic yoghurt.

    Dee Cockle Regulation Order
    Mr. Ben Chapman: If he will make a statement on steps towards the implementation of the Dee cockle regulation order. [160289]
    The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): We will get on with the job of making a regulating order for the Dee estuary once the prospective grantee, the Environment Agency Wales, has submitted a formal application for an order.
    Mr. Chapman: Does my hon. Friend agree that regulation is needed to control the numbers of people involved, to license individuals and to control the times at which cockles may be exploited and the number of cockles that may be exploited? Does he agree that that would allow us better to monitor and control the beds and to protect the environment and the individuals concerned? Given that my hon. Friends and I have literally been raising the matter for years, is it not time for some urgency to be injected into the process?
    Mr. Bradshaw: Yes. I share my hon. Friend's frustration at the rate of progress. As he will understand, however, getting a regulating order off the ground is a complex matter. In particular, there is the need to consult so many different parties. There are still problems with one or two of the landowners concerned, including a couple of his local authorities, which he may like to encourage to speed up the process.
    Mr. Andrew Miller: My hon. Friend will be aware of the progress that was made last year by strengthening the data protection legislation surrounding applications for permits to exploit cockles on the Dee estuary commercially. That significant change enabled the Environment Agency to transfer data to the Department for Work and Pensions and others to cut out some of the attempted frauds. Will my hon. Friend ensure that that principle is carried forward into the regulating order when it is introduced?
    Mr. Bradshaw: I will certainly examine whether that is practicable. I would like to take this opportunity to congratulate my hon. Friend on the role he played in helping to sort out the problem with the Data Protection Act 1998, which has helped to speed up the process.

    Waste Management
    Sandra Gidley: What steps she is taking to reduce the amount of waste generated by (a) households and (b) businesses. [160290]
    The Minister for the Environment (Mr. Elliot Morley): Current action to encourage waste reduction includes the waste and resources action programme on waste minimisation, funding for local authorities for waste minimisation through DEFRA's waste minimisation

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    and recycling fund and the envirowise programme, jointly funded by DEFRA and the Department of Trade and Industry, which aims to reduce the environmental impacts, including waste, of businesses and industry.
    Sandra Gidley: The Minister mentions minimisation several times, and I hope that he agrees that that is an important part of the strategy, but the issue is a double whammy. Some years ago, the Women's Environmental Network highlighted the fact that a large percentage of packaging, particularly in supermarkets, is unnecessary. Some supermarkets have made great strides forward by introducing crates instead of generating cardboard waste, but what will the Minister do to put more emphasis on that? Would he support a repeat of the "wrapping is a rip-off- campaign, in which people were encouraged to leave excess waste at the checkout?
    Mr. Morley: It is useful to raise awareness of the unnecessary use of wrapping and packaging; the Women's Environmental Network has done an excellent job on that and I meet its representatives regularly. The Government published a waste hierarchy in our strategy, and waste minimisation is at the top. The waste packaging directive applies to supermarkets and manufacturers and it is having an impact. However, I accept that there is more to be done, and we are addressing the issue.
    Chris Bryant: Can the Minister get into a bit more of a campaigning mood on this issue? There is an almost impossible quantity of packaging from Sainsbury's, Tesco and—most importantly—the Co-op, and it is difficult for pensioners, many of whom do not have the manual dexterity of a younger person, to get into some of it. The worst example is CD packaging.
    Mr. Morley: I accept that some packaging, especially bubble-wrap packages, are hard to get into, and it must be difficult for elderly people. The priority must be to minimise waste, and that means a change of culture in the way that products are packaged and offered to the public. Some big retailers have made genuine progress, and the Co-op is a case in point. We need to do more, including raising awareness and tackling the issue at every level—individual, company, retailer and manufacturer. I shall look seriously at what more we can do to support awareness-raising programmes.
    Mr. Boris Johnson: Given that the ban on swill feeding is imposing extra costs on hotels of up to £1,000—not least in south Oxfordshire—and given that that necessitates the employment of a new council tax-funded waste inspector and that landfill sites have room for only another three years of waste, can the Minister say what steps he is taking now to reduce the baleful effects of that ill-thought-out, vexatious and bossy piece of legislation?
    Mr. Morley: I was not aware that the pigswill industry was so important in Henley, but I will bear it in mind. However, whether we like it or not, there are major risks associated with the pigswill sector. I acknowledge that some people in that sector have acted responsibly and professionally, but the risk is considerable. On the issue of compensation, I have sympathy with the industry,
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    whose representatives are talking to the Department at present, but I remind the hon. Gentleman that it was a former Conservative Government who did not compensate the cattle head deboners for the ban that was applied to their work.
    Mr. Peter Pike: Does my hon. Friend agree that while we need to continue to address the issue of packaging, one of the big growths in waste is the generation of paper by e-mails? Often, only one page is wanted but a whole mass is produced and tipped into waste bins.
    Mr. Morley: My hon. Friend makes a good point. E-mail has the potential to enable us to make progress towards paperless offices. That is an issue for all of us, especially in how we deal with constituency cases. We all have a responsibility, as individuals—not just companies and organisations—to think of what we can do to minimise waste, and utilising new technology is one way to do so.

    Abandoned Cars
    Mr. David Rendel: What steps are being taken to reduce the number of abandoned cars. [160291]
    The Minister for the Environment (Mr. Elliot Morley): The Government have introduced comprehensive measures to tackle vehicle abandonment—including tightening and stepping up enforcement of the vehicle licensing system and ensuring swifter removal of abandoned vehicles. From January 2007, owners of end-of-life vehicles will be able to hand them over to authorised treatment facilities free of charge.
    Mr. Rendel: Why does this country insist on the end of-life owner disposing of a vehicle, even free of charge, when often the vehicle, was taken over when it had little value, now has no value and the owner might be quite poor? Why not do as other European Union countries do—place a duty upon manufacturers to meet the cost of disposal?
    Mr. Morley: It is our intention to put that arrangement in place in 2007. At present, there is a responsibility on the final owner of an end-of-life vehicle to deal with it responsibly. The irresponsible abandonment of vehicles has posed problems for some local authorities, but we are applying a range of measures—including the introduction of continuous registration from January 2005.
    Mr. Barry Sheerman: Does my hon. Friend agree that the number of abandoned vehicles is a major problem and may worsen until 2007? It is easy to get rid of a vehicle's scrap metal at the end of its life but cars have some nasty components, with no sensible answers to their recycling or reuse.
    Mr. Morley: My hon. Friend is right that there is an issue around the de-polluting of vehicles, which involves skills and facilities that vehicle dismantlers are increasingly able to offer. That is being tightened up in

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    the regulations. We are by no means complacent about the period between now and 2007. Other issues, such as the price of scrap, influence the volume of abandoned vehicles; recent scrap prices mean that vehicle dismantlers are interested in taking vehicles free of charge.
    Mr. John Gummer: Many of my constituents must have a car to get to work, and they tend to be old cars owned by poorly paid people. Are not the Government terribly complacent in not insisting that manufacturers pay the cost of vehicle disposal much earlier, which the Government could have done under the current regulations, instead of leaving it until 2007 or beyond.
    Mr. Morley: The new measure, which we much support, is a big change to manufacturers' responsibilities—but the necessary facilities must be put in place to ensure a network of dismantlers. We have negotiated with the car industry the issue of marque responsibility and there is also the matter of how to deal with orphan vehicles whose manufacturers no longer exist. A range of complexities is involved, which will take time to resolve. I share the right hon. Gentleman's desire to see the scheme up and running as soon and effectively as possible, disposing of end-of-life vehicles in an environmentally sensible and sound way.

    Dairy Industry
    Steve Webb: What the latest estimate is of the proportion of the retail price of dairy products sold in supermarkets that is received by farmers. [160292]
    The Minister for Rural Affairs and Local Environmental Quality (Alun Michael): Given the range of products that contain milk, it is not practicable to estimate the proportion of supermarket prices that farmers receive for all dairy products. However, their share of the value of supermarket sales of fresh liquid whole milk is currently estimated at around 40 per cent.
    Mr. Webb: I am grateful for that estimate, but does the Minister accept that farmers in my constituency and elsewhere are angered when they compare supermarket prices of their dairy products with the money that they received? Consumers would be angry, too, if they understood how little money goes to farmers. Will the Minister place an obligation upon stores above a certain size to display next to the dairy cabinet the percentage of the price of the milk that has gone to the farmer? Would that not name and shame?
    Alun Michael: The hon. Gentleman might wish to encourage the industry in that direction but I would be surprised if the prospect of greater regulation won much support. Price negotiations between producers and processors or between processors and supermarkets are a commercial matter, in which the Government cannot get involved as long as competition rules are respected. The profit margins on milk for supermarkets and middle-ground retailers have increased currently between 25 to 30 per cent. I referred earlier to research—
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    the Competition Commission report in 2000 indicated that supermarket profit margins on dairy products were in line with overall grocery margins. As I indicated in an earlier response, it is a complex issue and there is no magic wand that will suddenly produce an end to the profit margin problems that the hon. Gentleman describes.
    Mr. Huw Edwards: Can my right hon. Friend appreciate the concerns of my constituent, Mr. Brian Parry, who is the largest milk producer in Monmouthshire and who says that he cannot make a living from producing 5,000 litres of milk a day at 18p per litre? What efforts are being made to strengthen the code of practice for the supermarkets, and are other options being considered?
    Alun Michael: As I said earlier, we recognise the difficulties caused by low farm-gate prices for milk over the past few years and the challenges that the sector will face with the reform of the common agricultural policy. On the other hand, we have seen an increase in farm-gate prices, and I have already referred to the work under way with the industry in the forum chaired by Lord Whitty. We believe that there is a viable future for the industry but it requires action by the industry, as the KPMG report showed.
    Mr. David Cameron: Does the Minister agree that one way in which dairy and other farmers can capture a larger share of the value of their produce is through farmers' markets and farm shops? However, does he agree that there are still problems for those taking part in farmers' markets, and especially for those opening farm shops, in terms of the regulatory burdens? I am thinking in particular of Foxbury farm shop, near Brize Norton, in my constituency. When a farm shop starts to stock any other kind of produce, it can be hit by a very substantial rates bill. What will the Minister and his Department do specifically to ensure that farm shops and farmers' markets can continue to thrive, as they do in many parts of the country such as west Oxfordshire?
    Alun Michael: I accept that there are regulatory requirements for farmers and, indeed, for retail outlets, but many farmers are extremely successful in ensuring—exactly as the hon. Gentleman said—that there is a greater return for the primary producer. Farmers can do a range of things; marketing is part of that, with direct sales and the use of farmers' markets. I have also seen some good examples of farmers working together, getting their local produce into local hypermarkets and outselling national brands. There is much that the industry can do, and we are seeking to encourage those things.

    Foot and Mouth
    Paul Flynn: What her most recent assessment is of the role that vaccination may play in a future outbreak of foot and mouth disease. [160293]
    The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): Emergency vaccination would be considered as an additional tool to the culling of susceptible animals on infected premises, and those animals that were epidemiologically linked.
    Paul Flynn: Only "considered", when to protect an export market of only £500 million the taxpayer spent £9 billion slaughtering 7 million animals, many of them unnecessarily? We now know that vaccinated animals are perfectly acceptable in the marketplace. Should we not have a firm policy—not merely consider it—that we shall never again slaughter millions of animals without good reason? If there is another outbreak of foot and mouth, the great danger is that we shall be subject to the waste, futility and cruelty of mad cull disease.
    Mr. Bradshaw: It was not without good reason. Indeed, if that action had not been undertaken, the epidemic would have lasted much longer and would have been much more serious.
    The Minister for the Environment (Mr. Elliot Morley): It would probably still be going on.
    Mr. Bradshaw: Yes. There are eventualities—for example, if a new strain of foot and mouth were to hit us, for which no vaccine was available—when it might not be practicable in a short space of time to use vaccination.
    Lawrie Quinn: Given the important role undertaken by the veterinary profession during the last outbreak and the shortages in that profession, what strategic discussions or reviews
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    have been conducted by the Department with vets to ensure that we have enough vets in the right places, able to respond to the outbreaks that none of us wants to see?
    Mr. Bradshaw: All those things were considered in the Government's response to the Anderson inquiry. As my hon. Friend may know, we intend to hold a contingency exercise this summer—in case of a future foot and mouth outbreak—in which vets will play a central role.

    Recycling
    Mr. Jim Cunningham: If she will make a statement on the United Kingdom's progress towards the introduction of home-based waste separation for recycling. [160298]
    The Minister for the Environment (Mr. Elliot Morley): Waste management is a devolved matter. In 2001–02,58 per cent. of households in England received a kerbside collection of recyclable materials separate from the residual waste. The Household Waste Recycling Act 2003 requires all waste collection authorities in England to collect at least two recyclable materials separate from the residual waste by the end of 2010.
    Mr. Cunningham: I thank my hon. Friend for that answer. What is he doing to encourage local authorities to sort out waste management, and, in particular, to deal with the large number of refrigerators stored in various places? Nothing is being done to recycle them.
    Mr. Morley: New measures have been brought in to encourage local authorities to develop more kerbside collection. They include additional funds through the challenge fund and the waste minimisation fund. With regard to the separation of dry recyclates, there has been enormous progress in the past couple of years by local authorities, for which they deserve great credit. I very much hope that those local authorities that have not made as much progress will recognise the standards of the best and bring their standards up to them.

Business of the House
12.30 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): With your permission, Mr. Speaker, I would first like on behalf of the whole House to convey our deepest sympathy and condolences to the relatives of all those many, many people who have been so shockingly killed or injured by the bombings in Madrid today, in Europe's worst-ever atrocity. We are outraged and angry, and stand shoulder to shoulder with the Spanish people and their Government in the fight against this evil kind of terrorism.
The business for next week will be as follows:
MONDAY 15 MARCH—Proceedings on the Consolidated Fund (No. 2) Bill. Remaining stages of the Fire and Rescue Services Bill.
TUESDAY 16 MARCH—Remaining stages of the Traffic Management Bill, followed by, if necessary, consideration of Lords amendments.
WEDNESDAY 17 MARCH—My right hon. Friend the Chancellor of the Exchequer will open his Budget statement.
THURSDAY 18 MARCH—Continuation of the Budget debate.
The provisional business for the following week will be:
MONDAY 22 MARCH—Continuation of the Budget.
TUESDAY 23 MARCH—Conclusion of the Budget.
WEDNESDAY 24 MARCH—Opposition Day [7th allotted day, part 1]. There will be a debate on an Opposition motion, subject to be announced. This will be followed by a debate on the Equitable Life inquiry on a motion for the adjournment of the House, followed by, if necessary, consideration of Lords amendments.
THURSDAY 25 MARCH—Consideration of Lords amendments, followed by a debate on defence policy on a motion for the Adjournment of the House.
FRIDAY 26 MARCH—Private Members' Bills.
Mr. Heald: I start by joining the Leader of the House in expressing condolences and sympathy to the victims of the bombs in Madrid and their families. I understand that so far it is reported that 170 people have died. It is an appalling tragedy, and we should express our feelings of sympathy and solidarity to the whole of the Spanish people. I also join the right hon. Gentleman in his remarks about fighting terrorism and standing firm in the west on this vital concern and issue.
I thank the Leader of the House for the business, and particularly for the debates on defence and Equitable Life—both of which I have been calling for a long time.
Yesterday, my hon. Friend the Member for New Forest, West (Mr. Swayne) asked the Prime Minister why the Government are trying to reverse the ban on the export of live horses. That will result in many ponies facing a miserable journey, only to be killed in southern
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Europe. The Leader of the House, kind-hearted as ever, in contrast to some of his colleagues, immediately shouted out, as reported at column 1522 of Hansard, that it was an issue of animal welfare. Indeed it is, and it is a matter of concern to animal lovers across the country. Yet the Prime Minister claimed not to know about the issue. That is surprising, given that he received a 65,000-person petition about this widely reported issue only last week. Is it not clear that we need a statement clarifying matters, preferably from the Prime Minister himself?
In his article in The Guardian this week the Leader of the House claimed that Labour had made an effort to lose its image as centralising control freaks, but that Back Benchers still felt marginalised. Is not the right hon. Gentleman guilty in all this, with his refusal to allow proper time for debate on important issues such as tuition fees, the Hutton report and the local government finance settlement? Has he forgotten the Government policy announcements saved up for the recent recess, referred to in early day motion No. 742?
[That this House notes with regret that the Government chose to save up many policy announcements, such as the reform of the examination system, substantial changes to the Civil Service and drug testing for school students, so that they could be made outside Parliament during the half-term recess; expresses its concern at this downgrading of Parliament and abuse of the stated purpose of the half-term break; and calls on the Government to make important announcements in Oral Statements to the House, so that honourable Members have the opportunity to hold the Government to account.]
That was done so that the right hon. Gentleman's colleagues were simply unable to question the decisions made. It is not just that they feel marginalised; the fact is that they are marginalised.
Has the Leader of the House considered further my request that there should be a full review of the way in which the Government treat our Select Committees, as set out in early-day motion 760, given that that is based on the comments of Labour Members, as well as those of other parties? Is it surprising if they feel marginalised, when he refuses to do anything about it?
Has the Leader of the House any news about the timing of the debate on the aviation White Paper—something that hon. Members on both sides of the House care about? Is the reason for the delay that the decisions made were so unpopular? If so, is it not wrong that such an important debate should be kicked into the long grass for the Government's convenience? Can the right hon. Gentleman understand why hon. Members feel marginalised?
Mr. Hain: May I first express my gratitude to the hon. Gentleman for his statements in joining me in condemning the terrorism in Madrid? What has happened underlines the threat from terrorist attacks of that kind that we all face here in Britain, as well as elsewhere in Europe—not just in the United States— and we must be vigilant about them. The Government intend to remain vigilant about the danger of such attacks.
The hon. Gentleman was kind enough to describe me as kind-hearted: I will take that both as a compliment and as a damaging attack on my career prospects.

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On the export of horses and ponies, the Prime Minister responded as he did, but he also said that he would reply, and there is absolutely no inconsistency about that.
On policy development both in the Labour party and in the House, I am in favour of opening up policy debate. Indeed, we are encouraging that process in the House of Commons. This Government are more accountable to the House than any previous Government. The Prime Minister has spent more time in the House answering questions, making statements and leading debates than his predecessor, a Conservative Prime Minister. He attends the Liaison Committee regularly. He is accountable there. No Prime Minister has ever been in that forum before. That is accountability. That is opening up the policy debate.
In addition, Ministers are more open than any of their predecessors in opening up the policy debate. That is what the big conversation is about. This Government, unlike the Conservatives, will face up to the country's future challenges by travelling across the country, as I will be doing later today, when I go to Birmingham to engage in a policy debate with the people about the future challenges that the Opposition refuse to confront.
On Select Committees, we have a proud record in strengthening their resources and in putting them right at the heart of parliamentary accountability, so I will not take any lessons from the hon. Gentleman about that.
On the timing of the debate on the aviation White Paper, the hon. Gentleman has quite properly been asking for such a debate, and there is concern throughout the House. We will hold the debate as soon as it is proper to do so, but we are embarking on a long-term strategy, which the Secretary of State for Transport announced, on the future of our airports and aviation over 30 years. Getting that right is important. Debating it is equally important, and we will do so when the time is right.
Mr. Paul Tyler: On behalf of my colleagues and myself, may I entirely associate us with the remarks made by the Leader of the House? We share his dismay and his horror, as well as the sympathy that he expresses to the people in Madrid. As I came into the House, I was not aware whether any perpetrator had been identified. Can the Leader of the House give us any indication of whether it would be possible, if and when the perpetrators are identified, for a Minister to come to the House to make a statement? Of course if those in al-Qaeda, rather than the Basque separatists, are the perpetrators, there are implications for our security in the House and in this country, as part of the European Union. I hope that he will agree to that.
We are delighted that the Leader of the House has agreed to hold a short debate on Equitable Life and the Penrose report, but may I suggest that we need a full day's debate in Government time on the whole issue of the regulation of financial services and the protection of consumers? The extremely damaging and very important report on endowment mortgages from the Treasury Committee today shows that the financial services sector is simply not well regulated. Regulation,
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which is a Government function, is simply not doing the job. It is not just a question of Equitable Life because, as the Select Committee has told us, 60 per cent. of those receiving advice about endowment mortgages might have received inadequate—mis-selling—advice. The Select Committee identifies a black hole of £40 billion.
The whole regulatory regime is now on trial, and I think that the Leader of the House would agree that it is no longer possible and desirable simply to blame the regulatory regime under the previous Government. We must consider how the regime is operating now. Can we therefore have an indication from him as to how soon we can have a full day's debate in Government time on the whole regulatory regime?
Mr. Hain: I thank the hon. Gentleman for his remarks about the Madrid atrocity. We do not have any evidence about those responsible, but the atrocity was of such a scale that that point needs to be taken into account.
On the hon. Gentleman's important questions about Equitable Life, he will know that the events in question happened under the previous Government and they were very serious. That is why Lord Penrose issued his report, why the Financial Secretary to the Treasury made a statement earlier this week and why Lord Penrose will appear before a Select Committee of the House next week to take the matter forward. We are also having the debate that I just announced.
The regulation of financial services has constantly been kept under review and I very much welcome the Treasury Committee's report on endowment mis-selling. People have suffered from mis-selling over the years, and the problem goes back many years before our term of office. However. I make no party point as it includes our term of Office, and that is why, soon after coming to office, we reformed the whole regulatory system by setting up the Financial Services Authority. That has resulted in action against 24 firms charged with endowment mis-selling leading to their paying £673 million to 430,000 customers. Complaints by individuals have resulted in a payment of a further £200 million. As a result of the new regulatory regime, extra action is being taken, but we will keep the matter constantly under review, especially bearing in mind the Select Committee's report.
John Austin: May I draw the attention of the Leader of the House to early-day motion 254?
[That this House welcomes the decision to terminate Connex's ownership of the South Eastern railway franchise and that this service will now be run by the public sector, through the Strategic Rail Authority; further welcomes the fact that this is the first passenger service to be brought back into public ownership since privatisation; is concerned, however that despite the poor record of privatised train operators, the SRA is proposing automatically to re-privatise this service by inviting private sector tenders for this service without considering a public sector option; and urges the Government to use its powers under the Transport Act to retain the South Eastern franchise in the public sector to help promote an integrated public railway system and ensure a better deal for the passenger and tax payer.]

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The motion relates to the rail franchise for south-east London and Kent, and the Leader of the House will be aware that my constituents have the only passenger rail service that has been taken back in to public ownership. Has he seen today the report published by the Strategic Rail Authority on national rail trends? It shows figures on punctuality and that the publicly owned operator, South Eastern Trains, has had the best improvement of any of the train operating companies in London.
Given the improvement to the service that the public sector has begun to deliver, could the Leader of the House request that the Secretary of State for Transport come to the Chamber to make a fresh statement on the future of South Eastern Trains now that we have clear evidence that there is no need in the public interest for the Government to re-privatise that franchise?
Mr. Hain: My hon. Friend has made his case in a compelling way. He will also agree that 1,400 more train services run every day compared with when we came to office. More than 2,000 stations have been improved; 19 new stations have been opened; bus use is up by 15 per cent. since 1997; and more than 1,500 new rail vehicles are already in service. That shows all the investment that we have been putting in and will continue to put in over the 10-year programme of our investment plan.
Mr. Roy Beggs: My colleagues and I join in expressing our sympathy to those who have been murdered and seriously injured in Spain. We have had to live with this kind of atrocity. Fortunately, we now share a measure of peace.
The Leader of the House will be aware of the recent great black Britons poll in which the Crimean war nurse, Mary Seacole, emerged as the winner. The courage and service of this West Indian-born original lady of the lamp has, however, largely gone unnoticed. For that reason, I tabled early-day motion 744.
[That this House recognises the results of the recent 100 Great Black Britons poll organised through the Every Generation website; notes that the poll plays a vital role in celebrating the United Kingdom's black culture and heritage; further notes that the campaign is an excellent medium through which citizens of the United Kingdom can learn about the contributions made by black people to the country; pays tribute to the poll winner, the late Mary Seacole; recognises the valuable work undertaken by the West Indian-born nurse tending to wounded soldiers during the Crimean War; further recognises that her dedication to providing assistance to the wounded is exemplified in the effort she made to overcome discrimination and prejudice which led her to travel to the Crimea at her own expense; notes that other than being awarded a Crimean medal for her work, Mary Seacole has been largely unrecognised for over a century; supports the recent calls by the Royal College of Nursing for a statue to be erected in London in her honour; and calls on the Government to provide funding for such a statue.]
The motion calls on the Government to provide funding for a statue in honour of the late Mary Seacole. I am delighted that, to date and in a very short time, 74 colleagues in the House have signed it. It also has the full support of the president of the Royal College of Nursing, Mrs. Sylvia Denton OBE. Will the Leader of the House take note of the early day motion, bring its
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contents and broad-based support to the attention of the relevant Government Departments, and ask for consideration of the feasibility of, and funding for, an appropriate statue of that great lady?
Mr. Hain: I would be happy to take the hon. Gentleman's eloquent request forward. I wish the Mary Seacole memorial statue appeal, which has been in existence for a while, every success at securing a suitable site and statue to honour her memory.
May I also thank the hon. Gentleman for his statement on the Madrid atrocity? He is quite right to remind the public that we have been through experiences of terrorism ourselves in the north of Ireland and also on mainland Britain. However, we must bear it in mind that the scale of this atrocity is so huge and horrible that the Spanish people deserve not only our condolences, but our support in dealing with the problem.
Mr. Tony McWalter: Does my right hon. Friend agree that given that the Penrose report showed that Equitable Life was a mutual in name but not in nature, perhaps we need a longer debate so that we can consider how we could implement some of the recommendations made by the Cooperative Commission? It suggested that if a body claims to be a mutual, it should actually be a mutual. I hope that my right hon. Friend will draw the attention of his fellow members of the Cabinet to the fact that we will need to do more to implement the commission's recommendations if the honourable term "mutual" is to be properly respected in the future.
Mr. Hain: My hon. Friend makes a strong point. I know that those in government who are responsible will want to take careful note of what he said and to bear it in mind for future policy development.
Sir Nicholas Winterton: The Leader of the House rightly indicated the Government's support for Select Committees, but there is no point in Select Committees producing reports unless they are debated. May I raise with him again two reports by the Procedure Committee, which I chair, namely those entitled "Procedures for Debates, Private Members' Bills and the Powers of the Speaker" and "Sessional Orders and Resolutions"? Both reports are important to the House, so can he give any indication of when the Government will reply to the reports and when—hopefully—we may get a debate?
Mr. Hain: Yes, it is quite legitimate for the hon. Gentleman to chase me on the matter because some time has elapsed since the two important reports were published. I have written to him about this, and I am consulting the Home Secretary on the demonstrations outside the House. I hope to be able to give the hon. Gentleman some welcome news in the not-too-distant future.
Ms Julia Drown: May we have a debate on Niger and Ethiopia, both of which are due to have top-up debt relief yet are not receiving it because it is being blocked by the US, with which we are supposed to have a special relationship, as well as

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Germany and Japan? Ethiopia stands to lose $35 million of support every year, and that support is desperately needed for life-saving services. The country has faced a historical drop in coffee prices and another mammoth drought. Please may we have a debate on the matter so that we can find out what else can be done to relieve the desperate suffering of many people in Ethiopia and Niger?
Mr. Hain: It is now 20 years since "Live Aid", so it is quite appropriate for my hon. Friend to point to the continuing tragedy that exists in Ethiopia and, I am afraid, too many African countries. She will be aware that there has been a massive expansion of British Government aid and development assistance to Ethiopia. That went up from £19 million to £57 million over two years, which indicates our firm commitment to tackling world poverty, ensuring that we tackle the wider issue of debt, and trying to resolve the problems to which she draws our attention.
Bob Spink: The Leader of the House spoke movingly about the scale of today's Spanish atrocity. Is he aware that 16 March is the anniversary of Halabja, when Saddam Hussein slaughtered 6,250 men, women and children and commenced the Anfal destruction of 4,000 Kurdish villages, during which 182,000 Kurds were murdered and slaughtered in an unbelievable act of genocide in which chemical weapons of mass destruction were used on civilians? May the House have a debate in which we can remind people why it was right to remove Saddam Hussein and the evil that he continued to perpetrate?
Mr. Hain: If I may say so, that was an excellent and well-put question. I echo everything that the hon. Gentleman said, and in the ensuing debate about process, comings and goings and the difficulties that terrorist attacks continue to create for the stabilising of Iraq we should remember that the Halabja atrocity, as he said, showed not just what Saddam was capable of but what, in fact, he committed. We should also remember that Saddam Hussein is the only tyrant in history to kill 1 million Muslims. Nobody else has done so, and we should bear that in mind when we debate the Iraq war and its aftermath.
Mrs. Alice Mahon: The Leader of the House will be aware that the Government are redeploying 60,000 Government jobs to the regions. He will know that in Halifax we have a wonderful business and arts complex called Dean Clough, which was once the largest carpet factory in the world. Nearly 3,000 people are already employed there, but there is space available for more. Could we have a debate on redeployment to the regions so that Members can say that there are wonderful places in their constituencies for jobs to come to?
Mr. Hain: That would be a well-attended debate. Halifax is wonderful, and has a wonderful Member of Parliament, but I do not think that it is as wonderful as Neath, which, I am sure, will bid for its share of those jobs. To be serious, yes, the Government are committed
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to making sure that as many jobs as possible are transferred from congested London and the south-east to English regions such as my hon. Friend's and to the nations of the United Kingdom.
Sandra Gidley: Given that the right hon. Gentleman represents Neath, he may not be aware of problems with NHS dentistry in the south-east, particularly the abhorrent practice whereby a new NHS dentist opens, attracts a client list and, a year or two later, decides to go private. Children will only be treated if their parents sign up as private patients. Will the right hon. Gentleman find Government time to debate that issue, so that we can consider whether there should be a minimum length of contract when an NHS dentist sets up?
Mr. Hain: The hon. Lady will have an opportunity to table a question at Health questions next week, and I hope that she takes advantage of that. The issue is clearly important, but she will bear in mind the fact that after long years of decline in dentistry, we have 2,000 extra dentists and are continuing to invest in the service and train more people to make sure that a first-class dental service is available to everybody in the country.
David Winnick: On 25 February, I supported the Government's position on those detained at Belmarsh, and I believe that I was right to do so. However, does my right hon. Friend accept that there is bound to be concern about the way in which the remaining four United Kingdom citizens held by the Americans will be tried—if, indeed, they are to be tried? There is a strong feeling in this country that a military commission is not the most appropriate way to try such people. Will he therefore find an opportunity for a statement, if not a debate, on the subject. because it is essential that in the war on terror we do not lose the fight for hearts and minds? Justice must be done and, as they say, must be seen to be done. A military commission to try those four UK citizens is not, as I said, the most appropriate way of dealing with the matter.
Mr. Hain: I understand my hon. Friend's point, and am at one with him about the fact that justice must not be compromised in the war against terrorism. That is one reason why the Home Secretary launched an open consultation. As a Government, we must confront the need on the one hand to guarantee security from terrorist attacks of the kind that took place in Madrid today and which could occur in Britain at any time—we must be very aware of that—and on the other the need to safeguard individual rights. That balance is extremely difficult to strike in today's world, and we must continue to pursue that consultation with, I hope, understanding and contributions from all interested parties.
Sir Teddy Taylor: Would the Leader of the House be willing to have a debate next week on graft, corruption and fraud in the European Union, which is out of control? Instead of laughing, Members should consider the individual who was appointed co-director of a campaign to help poor people in Paraguay and spent £1.5 million of the money on the purchase of cars, houses and women. Is it not

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scandalous that public money, which costs us £1.4 million every hour of the day, is used in that way, and that nobody seems to be able to control it?
Mr. Hain: Any fraud or corruption anywhere, including the European Union, whether in Brussels or elsewhere, must be stamped out, which is one reason why Commissioner Neil Kinnock undertook an effective programme of work to reform the structure of the European Commission and tackle the bureaucratic sclerosis that led to the problems described by the hon. Gentleman. We will continue, however, to be vigilant in tackling those problems.
Mrs. Lorna Fitzsimons: May I, too, send condolences from my constituents and myself to the families of those killed in those horrific attacks in Madrid and wish Godspeed to the injured?
Would my right hon. Friend secure time for a debate on the growing but undiagnosed problem of the use of drugs in the British Muslim Community? I bring to his attention an insightful piece for "Newsnight" last week by the journalist Imran Khan that highlighted programmes by drug action teams in constituencies such as mine. They are jointly funded by the police and the local council, and target young Muslims who conceal their use of drugs from others because of cultural and religions considerations and do not use the well-funded services that the Government have provided to fight the pernicious menace of drugs. Does my right hon. Friend accept [Interruption.]
Mr. Speaker: Order. The hon. Lady should leave time for the Leader of the House.
Mr. Hain: I pay tribute to my hon. Friend's vigilant work on the problem of drugs infecting proud communities that have not previously been infected by that menace. She does her best to tackle that problem, and it is crucial to maintain, spending on drugs programmes operated by the Home Office and the NHS to counter the spread of drugs. The planned cuts announced by the shadow Chancellor in Home Office spending of up to £1 billion in the first two years, together with the fact that the NHS would be robbed of £2 billion under the patients passport scheme, would put such projects under strain.
Mr. Andrew Mackay: The Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Sunderland, South (Mr. Mullin), when replying to a recent debate on Zimbabwe in Westminster Hall, made it clear that the Foreign Secretary wanted a debate on the Floor of the House and was discussing that with the usual channels. I thank the Leader of the House for his positive response to my question last week, but can I push my luck by pursuing the issue of Zimbabwe a bit further on a slightly different field and urge him to arrange time for a Minister at least to make a statement on the cricket tour? After the meeting in Auckland this week, it is essential that the Government state categorically that the English cricket team should not go to Zimbabwe That would put an end to the matter, and would be appreciated by Members on both sides of the House.
Mr. Hain: I thank the right hon. Gentleman for continuing to bring to the attention of the House the dreadful situation in Zimbabwe under the misrule of Robert Mugabe. As for the cricket tour, we made it clear that that is ultimately a decision for the English cricket authorities, and there has been regular contact with them as they have sought advice on the situation. I wish to make it clear, as other Ministers have done, that I do not support the tour. If I were in the unlikely position of being selected, I would not go, and many cricketers up and down the land feel exactly the same way. I am sure that Lords will bear that in mind when it makes that decision—I am referring to the respectable face of Lords, not the problems that we have been having in the upper House.
Mrs. Gwyneth Dunwoody: The Prime Minister is to be warmly congratulated on his decision to come to the Liaison Committee twice a year, and I hope that he will consider expanding the number of his visits so that we can have more sessions. The purpose of Parliament is to study legislation and to ensure that it is of the very best quality. Is the Leader of the House content with the fact that so many timetabled Bills seem to need amendment at various stages because we do not appear to be discussing legislation in the Chamber in the way that we once did?
Mr. Hain: We are always looking to improve the scrutiny of legislation and to address any problems that might arise from time to time. I am sure my hon. Friend will understand that through the introduction of pre-legislative scrutiny, which is an historic move, there is now the opportunity to scrutinise Bills in advance to a greater extent than there ever was. Under the existing rules of procedure and timetabling motions, there is a great deal of scrutiny. It has put an end to the endless filibustering in which we have all indulged in opposition, and focused discussion on the real issues involved in Bills before Standing Committees.
Sir George Young: What has happened to the Government's Bill to reform the upper House, or is the Leader of the House losing his appetite for constitutional reform? Can he give me an assurance that when we do get the Bill, the long title will be broad enough to permit an amendment in this House to enable an elected element to the upper House, or is this to be another occasion when the views of Back Benchers are marginalised?
Mr. Hain: I have certainly not lost my appetite for constitutional reform—on the contrary. I urge the right hon. Gentleman to hold his horses for a while, and he will find out that the Bill will be published. As to the amendments that will be selected for debate, that is not a matter for me. That is a matter for the Speaker and the House authorities. We shall have to await the publication of the Bill and see what amendments do or do not arise.
Mr. Tom Watson: In the spirit of the big conversation, will my right hon. Friend consider a debate on how we involve young people in political parties? Will he also agree to meet the

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officers of Young Labour and Labour Students, who were a little taken aback to read of his comments supporting the wholesale reform of their institutions? Is he prepared to distance himself from the comments of his special adviser, who told me yesterday that he thought those organisations were fundamentally undemocratic?
Mr. Hain: As my hon. Friend knows, I have spoken to many meetings of Young Labour and Labour Students throughout the country. I think that they are great organisations. We ought to encourage them and bring them much more into the mainstream of the party. We ought to encourage a better link between Young Labour and Labour Students so that when students leave university, they stay in the Labour party rather than peeling off. I shall, of course, be happy to meet them, although I am not sure that that is a responsibility of the Leader of the House.
Mr. Elfyn Llwyd: On behalf of my party and my Scottish colleagues, I fully associate myself with the remarks of the Leader of the House regarding the outrage in Madrid. The right hon. Gentleman will know that the Richard report is imminent, and I know that he will be thinking about the way in which it should be debated. There are concerns—legitimate concerns—throughout the House about what may or may not be in the report. Will he consider not only holding a Welsh Grand Committee debate, but securing Government time for a full debate so that all Members representing Welsh constituencies may air their views fully?
Mr. Hain: I shall obviously take full account of what the hon. Gentleman says. As he knows, the Richard Commission report is due at the end of the month. I have no idea, nor does the hon. Gentleman, what its recommendations will be. We have discussed the matter, and I shall take note of what he says and of any opportunities to discuss it. He will understand that it is a report to the National Assembly for Wales, not to the House, although the Assembly, the Welsh Assembly Government and its First Minister, Rhodri Morgan, may well make representations to us following the report as to any changes that might need to be implemented by way of legislation in the House. We shall have to wait for that period before we decide how we handle the matter.
Kevin Brennan: May we have a wider debate about the financial services industry, particularly the almost daily scandals that are the legacy of an era when laissez-faire went mad, leading to the modern equivalent of the South Sea bubble? Will my right hon. Friend take the opportunity to make it clear that there is a difference between scandals such as Equitable Life and the mis-selling of endowment mortgages, and the issue of the Allied Steel and Wire workers and others in occupational final salary pension schemes? They were compelled to join their schemes, they were never given any sort of health warning, and
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they have no means of redress other than the Government. Does my right hon. Friend recognise the difference in that case?
Mr. Hain: Policyholders of Equitable Life and members of pension schemes like that of the ASW workers and many others have been severely short-changed, and in the case of ASW workers, robbed of pensions to which they may have contributed over a period of 30 years and which, after all, are deferred wages. The Government are aware of the scandal that led them to suffer and we are seeking to address it. We have to be careful of the read-across of potentially billions of pounds to claimants right across the field. That is where the difficulty arises.
Mr. Heald: So?
Mr. Hain: So, as regards Equitable Life, there will be a debate and we will continue to take the matter forward. The shadow Leader of the House makes facial contortions and heckles me from the Front Bench. What does he suggest? Does he suggest that potentially hundreds of millions and billions of pounds are lavished in that way? If so, how does that square with his party's commitment to cut public spending in order to make room for tax cuts? That is the question he will have to answer one day.
Mr. David Heathcoat-Amory: As the Leader of the House knows, in a few weeks 73 million people from eastern Europe will get an unrestricted right to come and live and work in the United Kingdom. The Government have very belatedly introduced a requirement that those migrant workers register with the Government. Will he confirm that the office that will administer the new scheme is the same Sheffield office that earlier this week was discovered to be running a covert immigration policy, about which the Minister for Citizenship and Immigration, the right hon. Member for Stretford and Urmston (Beverley Hughes), apparently knew nothing? Will the Government organise an early debate on the matter and introduce the regulation governing the scheme so that we can examine it and prevent another immigration scandal?
Mr. Hain: I understand, as my right hon. Friend the Minister for Citizenship and Immigration made clear, that those problems arose in that office without any authorisation from any Minister, senior managers or the director general. Without authorisation from any of those senior figures, guidance was issued locally to staff. I am interested to see that the individual who has now been suspended, and who appeared shoulder to shoulder with the Leader of the Opposition, is reported in The Independent this morning as having sent e-mails to the BBC suggesting that Islamic fundamentalists should
"be silenced by nuclear weapons".
I suggest to the Leader of the Opposition that he should be a little more careful about the people with whom he walks shoulder to shoulder in future.
Jim Sheridan: I bring to the attention of my right hon. Friend the recent decision by the Automobile Association to withdraw its only

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major operations centre in Scotland, with the loss of 240 quality jobs in my constituency. Will he join me in calling on the company, which is committed to consultation with its employees, to hold a wider consultation with those in the rural communities, whom that organisation uses to advertise its services? The membership should also be consulted before the decision is put into practice.
Mr. Hain: I am sure that the Minister and the Secretary of State will take careful note of what my hon. Friend says. In my view, prior consultation in such circumstances is always not just the wisest, but the only policy that should be adopted.
Mr. Alistair Carmichael: I commend the Leader of the House for the strong and timely sentiments that he expressed earlier in reply to the question from the hon. Member for Castle Point (Bob Spink) about the persecution of Kurds in Iraq.
The right hon. Gentleman knows that those who campaign in Iran for Kurdish autonomy have also suffered persecution and occasionally been put to death. May I therefore draw his attention to the growing public concern in Scotland about the case of three Kurdish refugees in Glasgow, who are entering a life-threatening stage of their hunger strike in protest at the decision to send them back to Iran, where they believe that they will be put to death because they were activists who sought autonomy for Kurdish people in Iran? May we have time next week for a Home Office Minister to explain the Government's policy on the three men?
Mr. Hain: Obviously, the situation is serious and potentially tragic, and the Home Secretary will monitor it closely. However, the hon. Gentleman will understand that to drive down the number of illegal asylum seekers—I do not comment on the case that he raised—the Government have to be vigilant and would come under attack from his constituents, let alone other hon. Members, if we were not.
Andrew Mackinlay: Will the Leader of the House find a parliamentary occasion on which to celebrate widening the European Union on 1 May? Perhaps it could coincide with the state visit of President Kwásniewski. We could thereby bring some balance to the current debate by reminding hon. Members that in the darkest days of 1940, of the few pilots who fought above this place, 13 per cent. were Poles and Czechs, and 17 per cent. of the kills were by Poles and Czechs. If that was so pivotal, not only for us but for democracy, the men who made the blood sacrifice above here won for their grandchildren the right to participate in the free club of the European Union and the free market. It ill behoves us to say for 50 years. "Look how wonderful things are this side of the curtain, with the market economy and capitalism", but when asked, "Can we join?", to reply, "Hang on. Not so fast. Hold back." That is happening. We need to remind The Sun, the Daily Mail and The Daily Telegraph that, but for those people who fought in 1940, there would be no The Sun, The Daily Telegraph or Daily Mail
Mr. Hain: I say, "Hear, hear" to that. I hope that those newspapers' editors will bear my hon. Friend's
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comments in mind. He is right that it is a historic occasion—we are witnessing the reunification of Europe, which was so bitterly divided by the second world war and the cold war. All our friends—the Poles, the Czechs, the Hungarians and many others from the 10 accession countries—are joining us in the rest of Europe where they should always have been allowed, tasting the freedom and smelling the free air rather than being trapped in the shackles of the Soviet empire.
Mr. Andrew Mitchell: Following the assertion of the Leader of the House a few moments ago that the Government are the most accountable in living memory, will he provide a debate on ministerial standards? In the past few days, I have received a response from a Home Office Minister to a letter that I wrote on 8 January 2003. Does the right hon. Gentleman agree that it is unacceptable for Ministers to take such a slap-happy approach to correspondence with Members of Parliament of any party? Will he emphasise to Ministers that that is not only unacceptable but that we have a right to insist on timely and informative responses from them on all occasions?
Mr. Hain: Of course, the hon. Gentleman, like every other hon. Member, has that right. I know nothing of the case that he raises although I understand that it came up in a debate in Westminster Hall. The Government have a pretty good record of responding promptly to Members' letters and questions. If the odd slip-up occurs, it clearly should not happen.
Paul Flynn: May we debate early-day motion 625?
[That this House expects the proposed war on Afghan drugs to replicate the anarchy that similar action caused in Colombia; recalls that destroying drug crops in Colombia has not cut production but has created a state of permanent civil war involving three armies, two of which are funded by drug money; notes that the reduction of 90 per cent, in poppy cultivation achieved by the Taliban has been reversed with this year's record crop; asserts that any future interruption in the supply of Afghan heroin will be immediately replaced by increases from Pakistan, Myanmar and Kazakhstan, leading to the bloody chaos of the Colombia-isation of a huge area of central Asia; and declares that the only practical way to reduce heroin use is by cutting demand.]
The perverse result of our invasion of Afghanistan is not a reduction of heroin poppy production but the biggest crop that it has ever had. Similarly, military action in Colombia has left that country in a state of anarchy and permanent civil war, with increases in drug production in Peru and Bolivia. Is not there a grave danger that, if we pursue our current policies in Afghanistan, and a reduction in production were achieved there, it would mean only an increase in growth in Pakistan, Kazakhstan and Myanmar? Is not there also a danger of that leading to a Colombia-isation of a large part of central Asia?
Mr. Hain: My hon. Friend makes a serious point but I am sure that he would not suggest that our objective of a free Afghanistan with no drugs could have been achieved by allowing the Taliban to stay in control,

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backed up, as they were, by al-Qaeda, rather than by action to liberate the Afghans. Serious problems always arise, as they have in Iraq, when one confronts a despotic regime and tries to rebuild a country, especially from the bottom upwards. That applies especially to Afghanistan, where there was no proper system of government.
I cannot dispute my hon. Friend's point about poppy growing, but our aim is a democratic, free Afghanistan, which is also drugs fee.
Dr. Julian Lewis: May I take the opportunity to thank the Leader of the House for the help that he gave those of us who asked a few weeks ago whether Her Majesty the Queen and the Prime Minister would go to Normandy to attend the 60th anniversary of D-day? I ask him to work the same magic for 4 June—two days before the D-day events—when celebrations in Rome will mark its liberation. That was one of the culminating points of the Italian campaign, which cost 45,000 British, Commonwealth and allied lives. Would not it be a wonderful gesture if, on their way to Normandy, the Prime Minister and Her Majesty showed that the people who were fighting to free Europe, even a year before D-day, had not been forgotten?
Mr. Hain: The hon. Gentleman's point is well made and I am grateful for his comments. I am not sure whether any magic was weaved on my part in respect of the decision, but the Prime Minister's office will have taken note of his comments and important point about 4 June.
Mr. David Drew: Last Thursday, the trustees of the Lister-Petter plc pension fund in my constituency announced that they would start to wind up the pension fund. That is likely to result in workers, who have paid in for as long as 38 years, losing 90 percent. of their pension provision. I sign up totally to the campaign that my hon. Friend the Member for Cardiff, West (Kevin Brennan) is waging. He has been relentless in his support of Allied Steel and Wire workers. I stress to my right hon. Friend that the problem will not go away. Labour Back-Bench Members will continue to campaign until we consider not only what we should do for the future but retrospectively. It is unfair that those workers should be thrown on the scrap heap and have no future. Will he consider methods of drafting something that can be included in the Pensions Bill to ensure that we overcome that serious problem?
Several hon. Members rose—
Mr. Speaker: Order. There must be brief supplementary questions if I am to call all hon. Members who wish to ask a question today.
Mr. Hain: I am troubled by my hon. Friend's comments. It sounds as though he has described what may tragically be another appalling case. The Pensions Bill will provide protection for the future, but he is right about the current predicament. That is why the
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Secretary of State for Work and Pensions is continuing to explore every opportunity to deal with such cases in a way that does not expose the taxpayer to a literally limitless bill. That is where the problem lies.
Mrs. Patsy Calton: Does the Leader of the House agree that reopening on 16 March the inquest into the depth of Dr. David Kelly will allow detailed answers to be sought to the questions that remain after the Hutton report? Will he allow a debate on them at a later date?
Mr. Hain: More questions have been asked and answered on that unhappy affair than on almost any other matter that I can think of.
Mr. Clive Betts: Would my right hon. Friend arrange for a wide-ranging debate to be held on the improved services to local communities that have resulted from the significant increases in funding to local councils up and down the country during the past few years? He will not be surprised to hear that when I go round my constituency, I find that people want more police officers on the beat, an improved environment and cleaner streets. Will he acknowledge that such a debate would give Conservative Members the opportunity to explain how their policies would produce significant cuts in the services that the public most value?
Mr. Hain: Yes, that would be a good opportunity, and if it is possible to organise that, we shall try to do so. That would allow us to contrast the different approaches of this Government and the Opposition to local government funding for the years ahead. Opposition policies would result in £2.5 billion worth of cuts in the first two years of a Conservative Government, were they to be elected. That would have a devastating effect on local government not only in Sheffield but right across England, Wales and Scotland. It is very important that the people of this country realise the choice before them.
Mr. Eric Forth: The Leader of the House is fond of boasting, as he did today, about Ministers who come to the House to answer questions, but he has neglected to say that when Ministers give answers, they are either inadequate or non-existent. Will he conduct an exhaustive search throughout the Government to try to find a Minister who gives adequate, straightforward answers to questions in this place? If he finds such a person—I shall be impressed if he can—will that person then conduct a seminar for other Ministers, with the Prime Minister present, so that we might have some hope in the future of getting answers of any kind from Ministers?
Mr. Hain: I wonder whether that might include Ministers from the period when the right hon. Gentleman was a Minister. For example, on the Equitable Life issue, he did not advocate the improvements in the regulatory system that might have prevented the desperation now felt by Equitable Life

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policyholders. I understand that that matter was debated in Westminster Hall, although I do not know whether he took part.
Mr. Forth: No, I was not there.
Mr. Hain: The right hon. Gentleman did not take part in that debate because he is conducting a one-man boycott of Westminster Hall. The debates there continue with or without him, and although I am sure that they would be much more colourful if he were present, if he chooses to boycott them he cannot expect any justice from me when he asks such questions.
Chris BryantMay we have an urgent debate on devolution? The Leader of the House will know that some politicians in this country argue that we should completely change the way in which the national health service and the education system are run, by introducing vouchers or passports for schools and hospitals. Can he tell us how those schemes would apply in Wales and Scotland, where those matters are devolved? Would the Conservative party, if it came to power, have to dismantle the whole devolution settlement to impose those schemes on Wales and Scotland?
Mr. Hain: That is an interesting question because, as my hon. Friend said, the devolution settlement has devolved responsibility for education delivery and policy to Wales and Scotland. If the Conservatives, or anyone else, sought to bring in a schools voucher system, of which we saw a poor example in the old nursery schools voucher scheme—we abolished that immediately when we came to office—there would be a revolt in Wales, Scotland and the whole nation, including every part of England. People do not want to see our schools robbed of money so that children can be taken down the road to private schools, nor do they want to see their hospitals robbed of up to £2 billion because people can take money out of the national health service to go down the road to private hospital provision.
Rev. Martin Smyth: Following that answer, is the Leader of the House aware that the draft disability discrimination Bill refers specifically to England, with references to Wales and Scotland, but explicitly states that it does not extend to Northern Ireland? Is he aware that the disability lobby in Northern Ireland and the Equality Commission for Northern Ireland are concerned about that? Will he consult his colleagues to see whether the Bill can be extended before it passes through the House, so that people with disabilities in Northern Ireland can have the same facilities as those in the rest of the kingdom?
Mr. Hain: Ministers are aware of that matter and will have taken note of the hon. Gentleman's question. We want to see protection right across the United Kingdom, but it cannot always be delivered in the same Bill, given the Northern Ireland settlement, as I know that he will understand.
Richard Younger-Ross: Will the Leader of the House ask the Deputy Prime Minister to come to the House to make a statement on the working of permitted development orders? Those orders are allowing the despoliation of the English countryside and seaside. Railtrack is currently completing what I accept is essential safety work and fencing along the beautiful red-stone cliffs of south Devon, which many Members who have used the train to the west country will have seen. The design of the work is an eyesore, involving galvanised steel fencing and posts that can be seen for miles from the sea. If permitted development orders were revised, we could stop such despoliation.
Mr. Hain: The cliffs of south Devon are indeed beautiful, and the hon. Gentleman is lucky if they are in his constituency. Obviously, the reconstruction of our rail network and the investment that we are putting into infrastructure across the country are designed to improve standards, but not at the expense of the environment. I am sure that his point has been noted.
Mr. Peter Luff: May we have an urgent debate on planning policy in relation to telecommunications masts? I do not know what the experience of the Leader of the House as a constituency Member is, but in Worcestershire there has been a sharp increase in concern, probably because of the new generation of masts. Such a debate might enable Ministers to provide reassurance on health issues and to listen to practical suggestions for improvements in the planning process that would ensure that local people's voices were better heard.
Mr. Hain: I agree that it is important that the voices of local people from Worcestershire and the entire country are better heard. There is a balance to be struck between the important extension of new mobile communications and local environmental impact, as the hon. Gentleman will agree. We must get that balance right.
Mr. Alan Reid: I draw the Leader of the House's attention to the National Audit Office report on "Estimating the Level of Spirits Fraud" that has just been published. It concludes:
"Neither survey estimate can be accepted as unequivocally reliable, and great care is needed in determining what reliance can be placed on the results at present available."
In next Wednesday's Budget, the Chancellor is considering introducing a strip-stamp scheme for whisky bottles, and his justification is previous Customs and Excise estimates of fraud. The NAO report, however, has quite clearly rubbished the methodology used by Customs and Excise. Will the Leader of the House convey to the Chancellor the view that it would be totally unacceptable to introduce such an expensive, strip-stamp scheme, which would have dire consequences for an important Scottish industry? He cannot possibly introduce such a scheme based on the results of such a dodgy survey.
Mr. Hain: I am sure that, as a Scot, one of the last things that my right hon. Friend the Chancellor wants to do is to damage the Scottish whisky industry, and he will have noted the point that the hon. Member for

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Argyll and Bute (Mr. Reid) has made. Perhaps I can take the liberty of telling the House that a wonderful Welsh malt whisky, Penderyn, was recently launched as the first such Welsh single malt whisky. I hope that the hon. Gentleman and his fellow Scots will taste it in due course, to see what a competitive rival has come from Wales.
Dr. Jenny Tonge: Thank you for calling me and for giving me this exercise, Mr. Speaker—as you can see, I need it.
When Members voted on the motion to go to war with Iraq, we were promised progress on the middle east peace process. In view of the high-level visits that we have had in the past week from Israeli Ministers and Palestinian Ministers, and in view of the deteriorating situation in that area, could the Leader of the House arrange for us to have a debate on the middle east peace process in this Chamber, in Government time?
Mr. Hain: The hon. Lady is right to continue to draw our attention to the tragic stalemate—if I may call it that—between Israelis and Palestinians in the middle east, with its awful consequences of terrorism, killings and continued tension and violence. We must never forget what is happening there, which is why the Prime Minister is engaged almost daily in trying to unlock the problems and move forward. If there is a chance for such a debate, we will take it. Of course, the hon. Lady has the opportunity to apply for such a debate at any time.

Point of Order
1.29 pm
Mr. Oliver Heald: On a point of order, Mr. Speaker. As you will know, the Opposition have campaigned long and hard to try to provide some support to Allied Steel and Wire workers and others who have lost out in pension wind-ups, and we strongly supported the Bill that the right hon. Member for Birkenhead (Mr. Field) introduced. In those circumstances, is it right for the Leader of the House to be able to turn to me in the middle of business questions, when I cannot respond, to ask me what my party has done or would do about those wind-ups? There is a clear answer, but I am not able to give it in those circumstances. Is it in order for the Leader of the House to behave in that way, or is it possible that I have the right to ask a further question when specifically challenged in that way? One way or the other, it is wrong that the impression should be given that the Opposition do not have policies in an area where we have been leading the campaign.
Mr. Speaker: This is an hour devoted to business questions. If the questions and answers were about the business of the House, we would not get into these difficulties.
Mr. Peter Luff: But no one would come to business questions.
Mr. Speaker: Exactly. Then it would be less than an hour.

ESTIMATES DAY
[2ND ALLOTTED DAY]
ESTIMATES DAY
  SUPPLEMENTARY ESTIMATES, 2003–04

    Aviation Servives
    DEPARTMENT FOR TRANSPORT
    [Relevant documents: Sixth Report from the Transport Committee, Session 2002–03, on Aviation, HC (2002–03) 454—I, and the Government's response thereto, Cm 6047; and The Department for Transport Annual Report 2003, CM 5907.]
    Motion made, and Question proposed,
    That further resources, not exceeding £1,377,992,000, be authorised for use during the year ending on 31st March 2004, and that a further sum, not exceeding £41,854,000. be granted to Her Majesty out of the Consolidated Fund for the year ending on 31st March 2004 for expenditure by the Department for Transport—[Mr. Heppell.]
    1.30 pm
    Mrs. Gwyneth Dunwoody: When a country neglects one of its most important weapons for economic development— transport—it gets into considerable difficulty. For well over 20 years, this country has ignored the fact that its aviation industry is vital to our development. It is not only a multinational industry, but one that brings in large numbers of people, their money and their interests. It also provides for the British an essential means of developing their industries and their relationships with other countries of the world.
    The estimate that we are debating today is one of the most important, and the Government are to be congratulated on having produced a White Paper after so many years of drift and indecision on the part of successive Governments. It is therefore disappointing that their response to the Select Committee's report on aviation was mildly grudging. There are many aspects of aviation policy that need to be debated in considerable depth, but this afternoon I would like to concentrate almost entirely on the gap that the Select Committee has identified in the thinking of Her Majesty's Government.
    Let me make it clear that I sympathise with a Government who are seeking to undo 20 years of neglect across the transport system. They are continually being asked to come up with new ideas and new investment on a large scale for the whole industry across the United Kingdom. The reality, however, is that aviation now needs some pretty clear decisions and, above all, some very clear leadership at Government level, not least because we have reached the point at which what we do now—or, even worse, what we do not do—will dominate our economy for the next 10 to 20 years.
    I turn first to the development of airports. Whether we like it or not, people are going to continue to move around, and they are going to continue to use aeroplanes to do so. The development of the airports in the south-east of the United Kingdom is directly relevant to our economy. Without an efficient means of moving industrialists, those working in industries and those contributing to our tourist industry, we are going to suffer economically.
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    The Government seem still not to have faced up to a number of awkward political decisions. We have to decide which of the airports in the south-east are going to be developed, and who is going to develop them. We also have to decide—when I say "we", I mean all of us—who is going to pay for that development. We have to accept that, if we run away from those decisions, a state of happy neglect will not deal with the chaos that will ensue, and the whole of the United Kingdom's economy will pay a very high price.
    I want to address one or two simple points. The first is the ownership of the major airports in the south-east. My Committee has considered, in a number of reports, the complex situation that now exists in relation to the remains of what were state-controlled agencies. The Government are in an odd situation, because BAA—formerly the British Airports Authority—which controls the major airports in the south-east is a private company with a need to respond to the interests of its shareholders. Its decisions will be taken on the basis of its relationship with its shareholders, yet it is required to advise the Government on how we should develop our airports and which developments we should push to the top of the queue.
    That represents a basic conflict of interest, as my Committee has highlighted, not least because if BAA is not prepared, for its own internal economic reasons, to make clear how it is going to fund the development of airports in the south-east, it will almost inevitably be taking decisions, by default, that will affect the United Kingdom at every level. If, on the other hand, it bases its decisions son where it wants to see development purely on its own economic interests and on the charges that it can level on the airline industry, it will almost inevitably not be capable of handling the advice that it gives to the Government impartially or independently. That is inevitable; it is built into the system.
    My Committee suggested that we should consider the existing ownership of BAA and whether the need to produce results for its shareholders had influenced its decisions on where future development should take place. We also suggested that we should consider whether the taxpayer is best served by allowing BAA monopoly control of all the major airport machinery in the south-east. Whether we like it or not, those of us who are concerned about the future of regional airports know that if anything goes wrong with the slots at the major south-eastern airports, the first people to suffer will be those who are flying from the regions of Britain. BAA has a responsibility to maximise the profits that it receives from its airports in the south-east, but it also makes decisions about slot control, about how particular runways should be developed and about whether that would restrict access for regional air traffic. Inevitably, its interests will not be the same as those of the people outside the south-east.
    Mr. David Wilshire: Before the hon. Lady moves on from the reasons why BAA might or might not want to take particular decisions, does she accept that there is another consideration that BAA must take into account—namely, the interests of the people who work for it? More than 25 per cent. of my constituents who are in jobs depend on Heathrow.

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    Surely it is not selfish of BAA to say that it is vital to protect the jobs not only of our employees but of all those who use Heathrow.
    Mrs. Dunwoody: I accept that totally, but the reality is that there is no problem with protecting jobs at Heathrow. Many of us would say that it is a viable and developing economic asset to the country, and that it ought to be protected simply because of the amount of business that it generates, alone and unaided.
    Mr. Brian H. Donohoe: Does my hon. Friend also recall the evidence that the Committee took from the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart)? He made it plain that, unless there was a continuation of the route served by jet from Inverness to either Gatwick or Heathrow, many of the businesses in the highlands would be badly affected and would relocate as a consequence of not having that direct route.
    Mrs. Dunwoody: Indeed. We were told time and again that in taking a business decision about where a new factory should be built or where a new business should be expanded, transport—almost inevitably—was one of the first priorities of any of the managements concerned. We took evidence that showed that in some instances, the ability of foreign managements to get to a regional destination not just by changing planes—even though that might be a convenient system—but by flying direct, would influence their decision about where their developments should go. We were constantly told of Japanese managements who, when faced with the alternatives of a site that could be reached easily and a site that could be reached only after experiencing certain difficulties, inevitably chose the site that had mainline connections and offered easy ways of flying in and out of the region. So it is terribly important that we understand the absolutely direct link between access to airports in the south-east for those in the regions, and the decisions that are taken about where developments will be located in future.
    I do not want to take too long as I know that many Members want to speak, but I want to consider the hazards that will arise if the Government appear to be influenced by some of the decisions being taken by the European institutions. At the request of the European Commission's transport commission, a study was undertaken of the feasibility and impact of adopting market mechanisms to allocate slots at congestion category 1 airports. Even though most people are not interested in the minutiae of airport administration, they understand that there is no use in having the best and most comfortable plane in the world if it cannot actually be landed at the airport of one's choice at the time when one wants to arrive.
    So the allocation of slots at airports, particularly in the south-east, is not only a very fraught matter but an absolutely vital one for airline passengers. The European Union—for reasons that are fairly acceptable in theory, but which will cause enormous difficulty in practice—seems to be moving towards a system through which the only way of deciding whether airline
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    passengers can land at a congested airport will be the price that the airline in question is prepared to pay for the slot, or pairs of slots, on offer.
    There are those in this House who believe very strongly that capitalism red in tooth and claw is the only way to plan our transport system. Having looked at the results of some years of that total lack of overall guidance, I beg leave to differ very strongly. But more than that, in a congested island the decisions that are taken about airline slots become even more vital. My Committee has produced a detailed report on the effect on the regions, but we should think about the report produced by National Economic Research Associates, in conjunction with Leiden university and Consultair Associates. That report appears to conclude that, although planned investments may ease the situation, there will be more and more congestion in the next five years, and that the only way to deal with it is to open up the slots to market forces. That is not only very dangerous; it will have an immediate knock-on effect on all regional passengers who want to get to the south-east.
    It is extraordinary that I should have to ask Parliament not to accept a policy that will make it virtually impossible for people who live outside the south-east to travel easily and efficiently to their capital city, yet that is what we are talking about. We are not talking simply about ways of expanding the profits of a private company called BAA, but about the right of people who do not live in the privileged south-east to access the city in which most decisions—whether we like it or not—are still taken. Be they decisions in government, law or commerce, such decisions are almost inevitably determined by what goes on in the capital city of the United Kingdom.
    We seem to be saying that it is not necessary to plan to ensure a sensible allocation of resources for regional airports; instead, we can just leave it to the market. But the market has already demonstrated that the control of slots at Heathrow, for example, is an absolutely stunning money-maker. We are talking about not £1 million or £2 million, but £ £5 million and even £10 million. We are talking gold bars. To those who seriously think that we can say to regional airports, "Don't worry about it. Your local authorities will have the right, if they so choose, to subsidise transport that will get you to even the most congested south-east airports", I can only say that that is the most unlikely scenario that I have heard, even in this Chamber.
    The reality is that the Government are being advised on airport development by a private company that is committed to making an enormous profit. As far as I can see, such decisions will be governed not by the political, economic and demographic interests of the UK regions, but by a series of political decisions that are all about making money and applying the simple measurement of money to a vital asset.
    Mr. Gerald Howarth: I am slightly disappointed that the hon. Lady's Committee was unable to address the issue of business aviation, which has a contribution to make in relieving prime slot times at our major hub airports. Here, I am making a small plea of behalf of Farnborough aerodrome. It is Government policy, as the Minister has reiterated, that Farnborough should be the business airport serving the

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    south-east. There has been huge investment in Farnborough, and such business airports have a serious contribution to make in relieving congestion at the major hubs.
    Mrs. Dunwoody: I do not in any way disagree with the view that business aviation will not only be a burgeoning field, but will provide very real support to some industries at certain times. But the hon. Gentleman is surely not seriously suggesting that the question of access to major airports for large planes that seat perhaps 150 to 200 people is quite the same as that of offering opportunities for smaller aviation elsewhere in the region. I agree that that issue is vital, but it is not comparable with access to major congested airports.
    Mr. Howarth: The hon. Lady seems to have completely misunderstood my point. Farnborough has the capacity for up to 28,000 business aircraft movements per annum, and taking such movements away from Heathrow and Gatwick, for example, would relieve some of the congestion on the very regional access routes that the hon. Lady is keen to defend.
    Mrs. Dunwoody: I am glad that I misunderstood the hon. Gentleman, because that gave him a further opportunity to advertise the facilities available at Farnborough. What happens in general aviation at large airports must affect the amount of movement and the opportunities for using other aircraft.
    I hope that the Government will come out fighting on a number of fronts. We are up against a fairly tight time scale. If we do not decide which airports in the south-east are to be expanded, it will not simply be a question of airports becoming full, because they are already filled to their upper limits. We cannot deal with the expansion in passenger numbers simply by pretending that they are not there. We shall find that many people are inconvenienced, and start trying to avoid the London airports and taking their business and money elsewhere. We must also resolve to protect the interests of the regions, and ensure that people have the right to fly into the south-east. Those decisions muse be made, and made public, as soon as possible.
    We must tell the European Commission that we are not clear about its reasons for taking this line in its research, or about the weight that the document carries. If after five years there has been no major development of the south-east airports and regional airlines have been squeezed out of their areas with a significant impact on the number of people who can fly in and out of the south-east, we shall be left with the worst of all worlds. I do not doubt that a great deal of profit can be made from the buying and selling of slots, although it is extraordinary that we do not even admit that they have a monetary value. It is clear to the airlines concerned that they do.
    The Government have started well. They have set the parameters, and have begun to deal with difficult questions from which people have run away for more than 25 years. Unfortunately, we cannot allow the situation to continue. We certainly cannot allow a lack of decision-making to decide where we are to go in aviation. Aviation is a number one industry, capable of
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    producing jobs, money and economic demand. We need to be in the lead; we need to be number one among European countries in deciding how best to serve the interests of our constituents. I think we can do it, but let us understand that we do not have a long time in which to make our decisions.
    1.52 pm
    Mr. Paul Marsden: On 11 February, I told the Minister in Westminster Hall:
    "I also hope that he will deal with the demand for a much wider debate to be held on the Floor of the House as soon as possible."—[Official Report, Westminster Hall,11 February 2004; Vol. 417, c. 447WH.]
    I realise that today's debate is probably being held thanks to the Select Committee on Transport rather than the Minister, but I welcome it none the less.
    Following the formidable performance of our Chairman, the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), let me say that I understand how important it is to jobs, the economy and tourism that the air industry should cater for future demand. In the short time available to me, however, I shall concentrate on the environment and on sustainable development of the industry, which are issues all too often overlooked. Liberal Democrats believe that airport expansion should be a last resort, and we mean a last resort. There may well be demand for another runway by 2017, although some environmental groups would argue that that should not happen before 2030, but there are many options for us to try before then in an attempt to limit and manage demand.
    The problem is that the Government are simply following the last Tory Government's predict and provide policy. They have tried to deny that in Westminster Hall debates, but the White Paper makes it clear that it is precisely what they are doing. They are estimating the probable number of passengers and the volume of goods to be shifted, and trying to build more and more capacity. We must take a stand. If the Government are right in their prediction that by 2030 there will be 500 million passengers and prices will be cut by up to a third, more runways will spring up over the south-east. That would be a disaster for the environment.
    What have the Government's experts said? Sir Tom Blundell, chairman of the Royal Commission on Environmental Pollution, said on 16 December:
    "The White Paper fails to take account of the serious impacts that the projected increase in air travel will have on the environment. Earlier this year the government published an Energy White Paper setting out its strategy for tackling global climate change, and set challenging but necessary targets for greenhouse gas emissions."
    Mrs. Louise Ellman: The tenor of the hon. Gentleman's remarks suggests a restriction, or indeed a reduction, in air travel. Does he deny the importance of increasing air travel opportunities for the regions, particularly the Liverpool area of the north-west?
    Mr. Marsden: Absolutely not. I was going to point out that expanding regional capacity was one possible

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    solution. Too much is funnelled through the south-east at present. As one born and bred not far from Liverpool, I agree with what the hon. Lady said about that part of the country.
    Sir Tom Blundell continued:
    "Today's White Paper undermines those targets and continues to favour commerce over vital carbon dioxide reduction measures.
    Baroness Young of Scone, chief executive of the Environment Agency, said:
    "The Government has committed to a 60 per cent. reduction in CO2 emissions by 2050."
    That seems a long way off, but if we do not make progress soon, we will not meet those vital targets when it comes to climate change. Lady Young went on:
    "The Government's own forecasts suggest that by 2030 aircraft fuelled at UK airports could have a global warming impact equivalent to at least 30 per cent."—
    one third—
    "of current CO2 emissions from all UK domestic sources. This is a massive growth",
    and it will pose a serious problem for the future.
    Mr. Mark Francois: Is the hon. Gentleman aware of the so-called irradiative forcing effect, whereby chemicals released into the atmosphere by aviation engines do much more harm to the ozone layer at altitude than they would if released at ground level? In fact, the problem is even more serious than many people realise.
    Mr. Marsden: I entirely agree. The White Paper acknowledges the achievement of technological advances, for which the industry should be praised, but, as the hon. Gentleman says, serious effects in the stratosphere have yet to be fully recognised.
    I should like to know the Government's response to the recommendations of the Royal Commission on Environmental Pollution. It wants the Government to
    "impose climate protection charges for aircraft taking off and landing within the EU; restrict airport development to encourage greater competition for available take off and landing slots…develop major airports into land-air hubs…support technological development to lessen the damage done by air travel".
    Another important suggestion is that international aviation agreements should include an amendment to the Kyoto protocol in regard to the emissions trading scheme.
    We must look to the future. The White Paper speaks, worryingly, of a wish to
    "maximise the economic benefits whilst minimising/mitigating the environmental impacts".
    That does not sound to me like protecting people and the environment first, which is what, in the knowledge of the consequences, I think we should aim to do.
    There have been many criticisms from a number of environmental organisations over the last few months. I hope that the Government will begin to address them. The Royal Society for the Protection of Birds has said it recognises that aviation has
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    "contributed beneficially to the economic development and social life of the UK. However, this was not without considerable costs to the environment … Adverse impacts include: Climate change"—
    through greenhouse gases—
    "stratospheric ozone reduction leading to increased surface UV radiation; local pollution—both noise and decreased air quality"
    and, obviously, the effect on the ground. That includes the impact on wildlife of expansion,
    "airport construction and related infrastructure".
    Friends of the Earth has been extremely critical of what the Government have been saying. According to Tony Juniper:
    "The Government has sacrificed its environmental responsibilities to satisfy the demands of the aviation industry."
    Today's announcement, which is based on the White Paper
    "is yet another missed opportunity to put the air industry on a sustainable course."
    Mr. Graham Stringer: Will the hon. Gentleman define "sustainable"?
    Mr. Marsden: It is that which is not to the detriment of the environment and which can be planned for the future in terms of growth. In relation to managing demand, it is something that balances against demand that is to the detriment of the environment. The Government are not approaching the matter in that way. They are accepting from the outset that there must be a massive expansion in passenger growth, and they are not even beginning to offset that in terms of environmental taxes
    Mr. John Wilkinson: While the hon. Gentleman is on the subject of growth, do he or his party envisage any growth in employment in civil air transport? Is that an aspect of his party's policies to which he attaches any importance? Is not civil air transport a major source of jobs and prosperity in many parts of the country?
    Mr. Marsden: I agree totally. That is why I started my speech by recognising its importance for employment, which is recognised particularly in the regions of this country, and perhaps in the highlands and islands. That is the point of trying to find ways to expand regional capacity rather than just increasing capacity in the south-east. As I was about to say, Tony Juniper of Friends of the Earth, with whom I concur, said:
    "If the aviation industry was taxed fairly",
    and we are not talking about punitive taxes,
    "rather than letting it pay no fuel tax"—
    although some Labour Members seem to favour giving such advantages to the aviation industry—
    "and no VAT, then we would not need any new runways anywhere in the country. But it seems that for this Government and the aviation industry, not even the sky is the limit".
    I hope that the Government will rethink their policy, as it will be our children and our children's children who will pay the penalties, if we get it wrong.
    Mr. James Plaskitt: Will the hon. Gentleman outline the tax proposals that he has in mind?
    Mr. Marsden: Certainly, and I am glad to have taken that intervention. Rail operators pay about 3p a litre in

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    duty on fuel. Private motorists pay about 45.8p a litre in duty on their fuel. Currently, airlines pay no such duty. I suggest, as recommended by the Government's experts, that 3p a litre would not be an unfair tax.
    Mr. Donohoe: Having examined this matter in some detail, I think that one of the differences between an aeroplane and a train, a car, a bicycle or any other form of transport is the extent to which an aircraft goes abroad. If it goes far enough abroad, it can pick up fuel, and in those circumstances, it would be able to avoid the consequences of the hon. Gentleman's proposals. What he says does not therefore make an awful lot of sense.
    Mr. Marsden: At the end of the day, the reality is that long-haul jets arriving at Heathrow or Gatwick are pretty unlikely to try to hop over the channel to refuel. Yes, some airlines may well try to avoid any fuel tax duty. We must make a stand, however, put our environment first and say that there are times when the polluter should pay. We believe in that for other forms of transport, so why do we let airlines off the hook?
    Mr. Greg Knight (East Yorkshire) (Con): Is it not a flaw in the hon. Gentleman's argument that he is against further runway development? Is it not the case that one of the current difficulties is that airports are being used at a level above their efficient capacity, which causes problems? Does he accept, for example, that the scheduled block time on the flight between London and Edinburgh was 60 minutes 10 years ago and is now 90 minutes? Planes are therefore circling airports, adding extra pollution to the environment. If we do not build extra runways, that can only increase.
    Mr. Marsden: I totally agree, but a Conservative Government were told about 20 years ago that there would be serious expansion and serious environmental problems in the future, and they did nothing. They continued with predict and provide, with which this Government are also continuing. Had they responded differently, perhaps the right hon. Gentleman's argument would have a little more validity, but we must try to tackle the problem now and manage the precise demand to which he refers. That is why I believe in various environmental management methods, including considering tax increases, that would enable us to do that.
    As for the Government saying, "Well, this is what people want," let me quote to the Minister what the Campaign to Protect Rural England says on its website:
    "The aviation industry's own figures show that the poorest 10 per cent. of people rarely fly."
    In terms of trying to open up the adventures of this world, therefore, it seems that the poorest are the last to be able to benefit. It continues:
    "Most of the growth predicted for 2030 by the Department for Transport is by the wealthiest 10 per cent. flying overseas at weekends."
    Mrs. Dunwoody: With the greatest respect, I must say that the hon. Gentleman is talking an awful lot of nonsense—and I do not want to be unkind. He is worrying about the wealthiest 10 per cent., but frankly they will not be using congested airports. They will be doing precisely what the hon. Member for Aldershot
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    (Mr. Howarth) suggested: they will have their own planes, or lease or part-lease their own planes, they will fly from small local airports, and they will not be a bit worried about facilities at our major airports. If the hon. Gentleman genuinely thinks that working-class people do not travel on planes, he is more out of touch than I realised.
    Mr. Marsden: With the greatest respect to the Chairman of the Select Committee, on which I sit, I may say that if she is seriously suggesting that 6 million out of the 60 million people in this country fly by private, chartered plane, she is sadly mistaken. The figures demonstrate that even Posh and Becks fly occasionally from normal airports like the rest of us.
    The point is that I am quoting not my party's figures but the Minister's. He must explain why the bottom 10 per cent. of people—another 6 million in this country—rarely fly. [Interruption.] In response to the remarks shouted across the Chamber, I say that nothing will be solved by lowering prices. When it comes to expanding current capacity, every citizen in this country will be extremely concerned about the damaging impact on our environment. To those who mock, I say that we will reap the impact for generations to come unless we start to do something about it.
    2.8 pm
    Mr. Graham Stringer: The hon. Member for Shrewsbury and Atcham (Mr. Marsden), my colleague on the Transport Committee, shares with the Secretary of State for Transport, Dr. Jonathan Porritt and every other person whom I have asked, an inability to define what is sustainable in relation to aviation. If we look at the original consultation document, we find "sustainable" on almost every page. In the White Paper, however, I found "sustainable" only once, although it may be hiding on other pages. The reason for that is that the Government have realised that "sustainable" cannot be applied to aviation. One simply cannot burn tonnes of kerosene in a huge machine and pretend that that is in some way sustainable, if sustainable means that one will regenerate at the end of the process what one started with. It is not a word that should be used. We can talk about "environmental improvement" or use other words, but it would helpful if we omitted "sustainable" from the debate and concentrated on aviation. I was not going to say that, but I do so having listened to the hon. Member for Shrewsbury and Atcham, who, having sought asylum in the Liberal Democrat party now seems to be seeking it in cloud cuckoo land, as far as understanding what is happening in the world of aviation is concerned.
    A good definition of predict and provide is to assess capacity and build to it. If the Government had used predict and provide in aviation over the last 60 years, there might have been something in the fantasy of the hon. Member for Shrewsbury and Atcham, who spoke of the Government building runways all over the place. Not a single new runway has been built in south-east England, and only one has been built in the whole of the UK—at Manchester airport, for which I was partially responsible. What he described simply will not happen. The Secretary of State provided a good definition of why

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    predict and provide did not apply and set out a framework in which the commercial parts of the aviation industry would take decisions about whether to invest in new infrastructure.
    I have a final criticism of the speech made by the hon. Member for Shrewsbury and Atcham, and it goes to the core of the false arguments underlying much of the environmental debate. Members must decide whether we get a better environment in a richer country than we do in a poorer country. If we invest in wealth-creating industries such as aviation, which support other industries, will we get wealthier? If we do, will we get a cleaner, better environment? I believe that we will, and I do not believe that the environment—I accept what the hon. Gentleman says about it being a global problem—will be improved by forcing aeroplanes out of the UK so that they have to fly further to European hubs, which will burn more kerosene, more aviation fuel and put more CO2 and NOx into the atmosphere.
    Mr. Paul Marsden: The US has been one of the fastest-growing and wealthiest nations on the planet. Is the hon. Gentleman seriously telling me that it has the most environmentally friendly policies to reduce the environmental damage it has done over the past 50 or 60 years?
    Mr. Stringer: I would say that a poor country such as Russia or China does not even have the potential to improve its pollution and environmental mess. The United States is a huge country and some of the environmental responsibilities rest with state and city governments. Some of the toughest environmental legislation anywhere in the world can be found in California and all the way down the west coast, including Washington and Oregon.
    Mr. Marsden: In that case, the hon. Gentleman would surely join me in castigating the current American Government for refusing to sign the Kyoto protocol. [Interruption.]
    Madam Deputy Speaker (Sylvia Heal): Order.
    Mr. Stringer: I would like to continue with my speech; I know that other hon. Members want to speak.
    I wanted the White Paper to respond to two major questions, the first of which is how London—by which I obviously mean Heathrow—is going to maintain its premier position as a major international hub. The second is how we should deal with the obvious imbalance in this country whereby 20 per cent. or more of traffic originating from the regions is forced into the already overcrowded south-east system. Those are the two questions that I wanted answering more than anything else. We have had 20 years of silence in respect of transport policy, so I congratulate the Government on introducing clear proposals in the White Paper, although I do not believe that they have answered those two difficult questions.
    I believe that a third runway at Heathrow airport is absolutely vital for the economy of London and the UK. Heathrow is in direct competition with Frankfurt,
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    Schiphol, Charles de Gaulle and, increasingly, with Brussels and Copenhagen. As a result of overcrowding, the number of destinations that Heathrow serves is already reducing. As passenger numbers go up, the number of destinations goes down. Connectivity within Heathrow—some hon. Members will not like that word, but it has become current—and the punctuality of passenger transfers are worsening. Heathrow has been the premier European hub, but in five or 10 years' time it will not be the premier hub either for destinations or for passenger numbers. Indeed, it is no longer the premier airport for destinations within the UK, because about half of the destinations that it used to serve have gone.
    Why is that important? It is vital because of the City of London, which forms the core of the UK economy, and because of tourism in London and the rest of the UK. If people cannot get into London, they will choose to do their financial business in Frankfurt—a major competitor of the City of London—or start their travels around Europe in Paris, Copenhagen or somewhere else.
    I am often accused of being too pro-Manchester and too anti-London—I have been accused of worse things in my political life—which is rather unfair, because I believe that London should have all that is appropriate for a capital city to have, and one of its major needs is to maintain its position as having the premier airport. It cannot do without a third runway, and I am afraid that the decision had bee n dodged on a very strange basis— pollution and NOx figures. If the Minister considered the evidence seen by the Transport Committee, he would find that various professors cast doubt on the objective basis of the evidence. They pointed out that the NOx measurements were a worst-case scenario— they were taken some way from where most people lived—and that all the other projections were done by modelling and calculation, not by direct measurement. The third runway is crucial.
    I will not move on from London and the south-east without making two other points. First, the Government—I mean all Governments over the past 60 years—bear the responsibility for not having provided runway capacity in the area, but since privatisation BAA has been a regulated monopoly. If Gatwick, Stansted and Heathrow had been separate and competing airports, there would have been more pressure on the Government to take more sensible decisions about runway capacity. The fact is that BAA can make a profit by providing a worse service by flying bigger and bigger aeroplanes to fewer places. That is not good for London or for UK plc.
    The regulation of London airports is also perverse. When many people want to use a scarce resource, it is a perverse regulatory system that charges less and less for that resource. Passengers went to Heathrow because the internal financing of the major airlines meant that, until the funding requirements of T5 came along, it was cheaper to land there. That cannot be a sensible way to proceed.
    London is congested and needs another runway, so how can we use the capacity in the regions? That is a difficult question. The Government no longer have the power, as they did when the previous White Paper was written, to direct where aeroplanes land and take off, but I believe that two things can be done.

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    First, the infrastructure of the major regional airports at Birmingham, Manchester and Glasgow can be improved. Increasing from four to six the number of tracks leading out of Manchester Piccadilly station to Manchester airport by way of Oxford Road station would benefit the airport and allow more heavy rail access to it. It would also remove one of the 16 or 18 pinch points from the national system, with the result that the system would be improved. That is good, sensible politics in respect of the environment and transport, which I commend to the Government. Such an approach would give people more incentive to use the capacity available in the regional airports.
    I am grateful to my right hon. Friend the Secretary of State for Transport for allowing me to discuss privately with him the possibility of extending the light rail link to Manchester airport. I hope that some positive announcements will be made about that, but ground transport to the regional airports needs to be very good if we are to promote extra use of their capacity.
    My second point is more controversial. The industry has been privatised and in Europe operates in a deregulated environment, yet the Department for Transport retains a protectionist approach when dealing with airlines whose ownership is based in the UK. However, I see no reason why the skies should not be opened up for any of the regional airports, if that is what they want. Although it is unlikely that those airports will get many intercontinental routes, I think that aeroplanes from the Indian subcontinent and elsewhere should be allowed to land there, pick up passengers, and take off again. In that way, those regional airport routes for which there is relatively small demand would be able to become more substantial and thus work in commercial terms.
    I understand that the only reason why the Government do not adopt that approach is because BMI, Virgin and BA do not like it, but they have nice protected slots at London Heathrow. Opening up the skies would be a good way to ensure that the economic benefits that accrue from aviation go to the regions and that some congestion is taken out of the south-east.
    I do not like to refer to good behaviour by the previous Conservative Government, but when the right hon. Member for North-West Cambridgeshire (Sir Brian Mawhinney) was a transport Minister he opened up the skies from the regional airports to north America. That helped a little bit: some services have arrived here that would not have done so otherwise. The changes that I propose would not be so dramatic that BMI, BA or Virgin would go bankrupt, but they would ease the congestion a little and help the economies of the regions.
    I turn now to an example of how the Department is not being very helpful, and I should be grateful if the Under-Secretary of State for Transport, my hon. Friend the Member for Harrow, East (Mr. McNulty), would agree to a meeting on this matter if he cannot reply directly today. Pakistan International Airlines has applied for fifth freedoms to all the regions. That would allow them to fly from Karachi, or elsewhere in Pakistan, stop at Manchester, Glasgow or—most likely—Birmingham, and then fly on to Toronto, Chicago and Houston.
    I do not think that that would inflict much competition on BA. Most of the passengers involved would originate in Pakistan. One or two people would
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    get on and off when their plane landed at one of our regional airports, and then the flight would continue on to north America. That would not amount to competition in BA's market—partly because PIA does not serve alcohol on flights—but it would mean that more destinations could be served from airports such as Manchester.
    I have spent a long time on my feet, but it is good to have this debate. Aviation is vital to this country, and it is very important that people understand how it works. We are not at the 12th hour today—we are past that. Heathrow is losing its position in international aviation, because the regional connections do not go there. People are going to the European hubs—probably causing more pollution in the process—and they are taking their money with them.
    When he came before the Select Committee, I asked my right hon. Friend the Secretary of State for Transport whether an analysis had been made of the negative economic impact resulting from those passengers being lost to the UK economy, and the lack of capacity. I understand that no study has been done. It would be useful for us to understand how much past the 12th hour we are. That would provide an incentive to investing in runways and giving the planning permissions necessary to support the transport infrastructure and the country's economy.
    2.25 pm
    Mr. John Wilkinson: The House is most grateful to the Chairman of the Select Committee, the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), whose magisterial influence made this debate possible. I regret that we are not having a full debate on the aviation White Paper, which is long overdue. I trust that the Government have not delayed that necessary debate for any considerations stemming from the forthcoming mayoral and European elections.
    The Parliamentary Under-Secretary of State for Transport (Mr. Tony McNulty)indicated dissent.
    Mr. Wilkinson: Heaven forfend: I see the pained look on the Minister's face. Even so, the debate is welcome, and I especially approved of the statement by the hon. Member for Crewe and Nantwich that there was a need for clear decisions on the part of the Government. That is true. We need clear and urgent decisions, but we also need them to be correct. In that regard, I am not over optimistic.
    The first of the Government's decisions that I bewail is the decision to allow the EU to be responsible for air service agreements. The right to conclude such agreements with other countries is one of the aspects of national sovereignty that a country such as our own, with so many overseas connections, should hold most dear. I fear very much that our continental partners—if that is the right word—will be very glad that we have handed the British golden goose over to Brussels, so that it can be carved up in their interests, and so that we, and the goose, can be thoroughly stuffed.
    The UK is the premier destination in Europe for north Atlantic transatlantic travel. Our economy and our airlines have benefited immeasurably from that. However much the Prime Minister may hobnob in

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    Berlin with the federal German Chancellor and the President of France, I suspect that they and their friends in the European Commission will ensure that there is a more equitable—in their eyes—distribution of air services across the north Atlantic that would favour Frankfurt and Paris.
    The main problem then would not be congestion at Heathrow, but the direction of the European Commission. We would have no redress against that, and I hope that the Government will reflect on what they have done. In addition, I ask my right hon. Friend the Member for East Yorkshire (Mr. Knight), the shadow Minister on the Opposition Front Bench, to consider the possibility of a manifesto commitment to reverse the evil that the Government have done.
    However, I shall not be too scathing about of the Government. At least they have adopted a gradualist approach in the White Paper, which I think is wise, as none of us knows how civil air transport will develop. We cannot predict the oil price, and we do know the full impact that ultra-wide bodied aircraft such as the A380 will have on the patterns of air transport. On a day when we mourn with our Spanish friends a horrific terrorist outrage on the train system of Spain, who knows what the consequence of another terrorist episode directed towards air transport would have upon the industry? We cannot preclude that possibility.
    The gradualist approach is right and the Government are correct to make the best use of existing runways. Although the second runway at Manchester is necessary—and I would not argue against another runway at Birmingham and another runway is certainly required at Stansted at an early date—we should nevertheless make the best use of the existing airport system.
    We have not yet made the best use of Stansted, which has the greatest potential in the medium to long term. Heathrow is in an ultra-over-congested part of London, where there are serious environmental considerations, which cannot, as the Liberals suggest, be addressed by 3p on a litre of aviation kerosene. Stansted is nearer than Heathrow to the Thames gateway and the East Anglian corridor of economic development, and low-cost carriers such as easyJet and Ryanair have been able to expand there. We should put most of our future development at Stansted and not at Heathrow.
    Mr. Stringer: Will the hon. Gentleman give way?
    Mr. Wilkinson: No, I will not because I want to be brief. I appreciated the hon. Gentleman's speech, which was serious—unlike that of the Liberal spokesman, the hon. Member for Shrewsbury and Atcham (Mr. Marsden)—but I am conscious that other hon. Members want to speak.
    Since the Crossrail project is not yet envisaged for Heathrow, surface transport access will remain poor. The Government admit that a sixth terminal will be required, which will cause ever more congestion to the surface transport system in that area. Although we may have mixed-mode operations, which will help to get more utilisation out of Heathrow, there is a risk that Heathrow's development may be somewhat diminished
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    by a slot auction imposed by the European Union. I hope that the Government will think again about Heathrow.
    There is the possibility of air traffic conflicting with traffic out of Northolt, and the Government admit that this is a debateable point. We saw with the arrival of the former detainees from Guantanamo bay in a C-17 how important Royal Air Force Northolt is for the security of the country, and I would not want the development of a third east-west runway at Heathrow to preclude that.
    If there is further runway development, it should be at Gatwick. Gatwick has two terminals, and its full potential has not been utilised. The Government are correct to consider the possibility seriously and make preparations by safeguarding space for a new wide-spaced runway at Gatwick. I hope that another runway at Gatwick has priority over any question of another runway at Heathrow.
    Finally, I echo the wise sentiments of my hon. Friend the Member for Aldershot (Mr. Howarth), whose constituency includes Farnborough. In using existing facilities, the Government emphasise the importance that the White Paper places on using airports for regional development. It is noteworthy how far point-to-point services, rather than services out of hub airports, have grown in recent years. That tendency will accentuate, particularly with the fuller utilisation of Luton, which we look forward to, Southampton, Manston, London City and all the airports in the midlands and the north—a new one is starting at Finningley. Further developments are envisaged in the north of England, Scotland and Wales, which are all to the good.
    In that process, I hope that Her Majesty's Government recognise the benefits of business aviation. My hon. Friend the Member for Aldershot pointed to Farnborough, and I say to him that RAF Northolt's primary function is its critical RAF role, and therefore if there is any overspill of business aviation, it should go to airports such as Farnborough, Biggin Hill and Luton. If the Government continue with their gradualist approach but take the key decision to go ahead with the second runway at Stansted as soon as possible, we can get the balance right. The worst thing that we could possibly do is not only to put the golden goose at risk by handing it on a platter to Brussels, but—this is what the Liberals would do—to actually kill it off with over-taxation.
    2.35 pm
    Mrs. Louise Ellman: I, too, welcome the publication of the aviation White Paper after a gap of 20 years. I particularly welcome the parts of the White Paper that dwell on the points highlighted by the Transport Committee report on aviation, which examines the connection between the development of regional economies and transport in general, and aviation in particular.
    I note that the estimates refer to
    "Promoting a modern integrated and safe transport system"
    but I wonder whether the references to resources for aviation services take account of regional aspects, whether the Department for Transport links up with other Departments to examine joined-up action to enable regional economies to develop to their full

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    potential and whether the Department recognises the importance of transport links in general and aviation links in particular.
    The Select Committee report stresses the importance of air links to regional development and discusses the inadequacy of spending billions of pounds on regional development without making that link. Indeed, the report states:
    "There has to be cohesion between regional economic policy and transport policy. It is absurd to put billions of pounds in the regional aid budget and yet not to give any assurance to provide guaranteed air access".
    There is nowhere to which that is more relevant than Liverpool and Merseyside in general.
    Liverpool and Merseyside are objective 1 areas. That means that they receive large amounts of European funding, which is then matched by public and private sector funding from this country, to promote the regional economy. That funding has already achieved some success: the economy of Liverpool in particular and Merseyside in general is indeed being transformed. We have a major opportunity because Liverpool has been designated European city of culture for 2008, which is a tribute to Liverpool's achievements and recognition of its potential. In fulfilling that potential, it is vital that in the years up to 2008 and beyond we facilitate easy access to Liverpool for the many tourists and business visitors from not only the rest of this country and Europe but, indeed, across the world.
    Liverpool John Lennon airport has already shown how to bring success to air travel It is the fastest-growing airport in the country and has served 3.18 million passengers in the past year. I know that in comparison with other airports, including Manchester International, that might seem a relatively small number of passengers, but the dramatic increase in business is a great tribute to the work of the management and owners. Those numbers are destined to increase significantly to 5.5 million by 2015 and 8.6 million by 2030.
    The airport's success has been built on the great increase in its scheduled flights as well as in its charter flights—there are scheduled flights to destinations such as Dublin, Alicante, Geneva, Amsterdam, Madrid, Paris and Barcelona. I say to the hon. Member for Shrewsbury and Atcham (Mr. Marsden) that the rapid expansion of John Lennon airport has opened out the opportunities for air travel for people from middle and lower-income groups, which is welcome and should be built upon—it should not be penalised and seen as something detrimental. That increase in opportunities is welcome and should be encouraged
    During the past month, Liverpool has restored a direct flight to our capital, London, with a VLM Airlines flight to London City airport. That is a success, but it is a shame that Liverpool lost its access to a hub airport in London when British Midland withdrew its flights—for the very reason set out in the Committee's report and mentioned in the debate—not because they were not profitable, but because it was more profitable for the company to use its aircraft for other European flights.
    John Lennon airport has shown what it can do to develop the local, sub-regional economy, to bring visitors and to encourage business. What Liverpool now
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    needs, to enable us to make that major leap forward and grasp the opportunities provided by the city's designation as European capital of culture, is access to a huh airport, which would provide interlining, direct bookings and no repeat check-ins from airports all over the world. People could then come to Liverpool easily, from Shanghai to Sydney, New York to New Delhi, Los Angeles to Lagos—in other words, from throughout the world. It is essential that we have that link with a hub airport.
    The Government's response to the Committee's report suggests that they recognise the importance of linking regional airports with hub airports in our capital and it suggests some measures to try to make that possible. While I welcome those measures, I do not think that they go far enough. The White Paper mentions public service obligations—PSOs—and the possible introduction of such measures to link up airports such as Liverpool with London hub airports. The White Paper mentions consultation on the detail of what would enable an airport to qualify for a PSO, but there has been no consultation so far. Nor has any guidance been issued on what the criteria might be. Perhaps my hon. Friend the Minister could say when such consultation might start and when the criteria will be issued.
    I welcome the reference in the White Paper to the role that regional development agencies might play, including the route development fund, but that is not enough. We need to know more about the resources available, and I would like to see the Bill on the powers for the anticipated directly elected regional assembly for the north-west, which will be published shortly, include some clearer transport powers, so that the assembly would be able to facilitate a direct link.
    It is clear that the Government have recognised the points that have been made by the Committee and others about the importance of transport and aviation to regional economies, and the Government have made some suggestions. It says in the White Paper:
    "Airports are an important focus for the development of local and regional economies. They attract business and generate employment to open up wider markets."
    That is an accurate statement for many regions, especially Liverpool. I hope that my hon. Friend the Minister can say what further steps the Government will take to make their aspirations a reality and enable John Lennon airport—and other regional airports—to play a full part in developing the local economy, to support jobs and prosperity for the people of the region.
    2.44 pm
    Mr. Mark Francois: I am delighted to be able to participate in this debate on aviation services, as I wish to raise several issues relating to aviation in the county of Essex. Since the Committee published its report, we have also had a reply from the Government and the subsequent White Paper on air transport, published in December 2003.
    I am pleased that in the White Paper the Government abandoned plans to build an airport at Cliffe, on the Hoo peninsula. As someone who campaigned against Cliffe from the outset, I believe that that was the correct decision. I was always opposed to Cliffe on environmental grounds, particularly because of the

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    potential adverse effect on my constituents from 24-hour operation of the so-called crosswind runway, which could have taken night flights directly over my constituency. In addition, I was also opposed because of the effect on wildlife habitats in the Thames estuary, including the bird populations in the area and the related risk of bird strike for aircraft safety. The right decision was reached on Cliffe, and I hope that the matter is now closed.
    Bob Spink: Does my hon. Friend share my concern at reports in the press recently that suggest that the campaigners against expansion at London Heathrow and Stansted now threaten to take the Cliffe decision to the High court to have it reopened? Would not that be a retrograde step? Indeed, it would spoil the arguments of those campaigners, because we in Essex should stand shoulder to shoulder against the inappropriate expansion of our airports.
    Mr. Francois: I thank my hon. Friend for that intervention. He was also an active campaigner against any development at Cliffe. I have some sympathy with the protestors against Stansted, and I shall give them some support later in my speech, but reopening the issue of Cliffe is not the way to solve that problem. The right decision was taken, and we should accept it and move on.
    The White Paper also encouraged development of smaller regional airports, including Southend. Southend airport is actually located at Rochford, just over my constituency boundary. It has a proud history, having served as a forward operating base for Fighter Command during the Battle of Britain, something that I know will be close to the heart of my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson). The airport has developed more peaceful uses over the years and now specialises as a repair and maintenance centre for aircraft, which accounts for more than 80 per cent. of the airport's turnover.
    Southend airport's owners, Regional Airports Ltd., and the airport director, Roger Campbell, have done a good job of turning the airport round financially in the last few years, and I pay tribute to them for that. Southend operates a small number of passenger flights, domestically and to the continent, but that may be curtailed in future by new Civil Aviation Authority regulations governing safety zones at the end of runways. Southend's runway has a medieval grade I listed church—St Laurence's—at one end.
    To put it mildly, that is a complicated situation, but to cut a long story short, the airport operators applied for planning permission to pick up the church and relocate it several hundred metres away, in order to try and comply with the new regulations. The airport owners insist that the technology is available to do that. However, the idea has not proved popular with the local population and the planning application was resoundingly turned down by Southend council. After careful consideration, the airport operators have subsequently decided not to appeal against that decision, which is a welcome development. However, it raises the question of where we go from here.
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    Given Southend airport's relative proximity to Stansted, I cannot see it ever becoming a major passenger hub. Realistically, the bulk of the airport's future business is likely to remain in the repair and refurbishment of aircraft, which is already its core business. However I hope that it may be possible to achieve some compromise that does not involve relocating the church, but would allow passenger flights to continue from Southend. One option, which I suggest directly to the Minister, might be to utilise passenger aircraft such as the BAe HS146—the so-called whispering jet—and the later generation RJ series of aircraft. Those aircraft are already used at London City airport, because they can operate from a short runway and they also have the added advantage of being relatively quiet. If the CAA can interpret the new regulations sensibly and without risking safety, then RJ series aircraft might be able to provide passenger services from Southend without the need to relocate St. Laurence's church. That would be a classic British compromise and I hope that it may yet come to pass.
    The Government's proposal for a second runway at Stansted, theoretically available from 2012/2013, would increase the airports capacity from 20 million passengers per annum to 80 million—a gigantic fourfold increase. The White Paper is extremely prescriptive about the location of the second runway, some distance from the existing one. Consequently, the expanded airport would have a massive footprint, equivalent to the size of Heathrow or larger but deposited in the heart of rural Essex. Expanding the airport's footprint that way would cause severe environmental damage—which, even though my constituency lies south of the county rather than to the north—greatly concerns me. As my hon. Friend the Member for Castle Point (Bob Spink) remarked, it is incumbent on all Members of Parliament for Essex constituencies to stand shoulder to shoulder on this issue.
    If a second runway were to be developed at Stansted, Essex would lose a number of beautiful villages for ever and there would be severe consequences in terms of noise and pollution. The proposal is linked with plans for building a large volume of new housing in northwest Essex. Although we are not debating housing—Madam Deputy Speaker would rapidly call me to order if I attempted to do so—there is considerable anger in Essex at the scale of the new housebuilding proposals— which would eventually bring about the concreting-over of large swathes of countryside around Harlow and Saffron Walden. I commend our excellent parliamentary spokesman for Harlow, Robert Halfon, for speaking out strongly against the proposed over-development.
    BAA estimates that the cost of expansion—including the new runway, additional terminal space, hard standing, fuel facilities and the panoply of buildings that go with airport growth on that scale—would be between £3 billion and £4 billion. The Government have repeatedly said that there will be no significant public subsidy, so the cost would have to be found from the private sector—chiefly by the BAA itself. However, as many so-called budget airlines use Stansted, they are unlikely ever to pay the higher landing charges that realistically would be, needed to recoup the massive cost of expansion. The major carriers, which might in theory

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    be able to afford increased landing fees at Stansted, have made it plain that they wish to remain at Heathrow and Gatwick.
    Moreover, the CAA is opposed to any BAA proposals to allow cross-subsidy from Heathrow or Gatwick to fund expansion at Stansted. The major airlines would understandably be angry if they had to pay even higher landing fees at Heathrow and Gatwick to fund Stansted's expansion for the benefit of their competitors. An article in The Daily Telegraph today, headlined "BAA may fight for cross.-subsidies", quotes Sir Roy McNulty, chairman of the CAA:
    "It seems entirely reasonable that the working assumption should be that the CAA will continue to regulate BAA's designated airports on an individual—or standalone—basis, both up to 2008 and beyond."
    Already the proposals seem to be in financial trouble and the business case on which they are based is in danger of unravelling before a single tonne of concrete has been poured.
    Partly because of the weakness of the financial case for the expansion, partly because the White Paper is so prescriptive about the second runway's location, and partly because of fears that as the two runways would be so far apart, at some point in the future there might be an attempt to add a third runway between them. Essex county council—supported by other local authorities—spearheaded an attempt to subject the matter to judicial review. I hope that the application will be successful and that, as a result, a second runway at Stansted will not be built.
    Mr. Stringer: I basically agree with the logic of the hon. Gentleman's argument, but does he agree with the Select Committee that a solution would be for the BAA to be broken up—so that the three airports would be freestanding commercial enterprises?
    Mr. Francois: I will not comment specifically on the BAA's commercial future but leave that for others. My belief is that it is not feasible for the BAA as currently constituted to redevelop Stansted in the way proposed, for all the reasons that I have attempted to elucidate.
    There is a way out. Stansted currently accommodates 20 million passengers per annum. Not long ago, permission was granted to increase that number to 25 million. The BAA is currently working on a proposal to increase the figure to 35 million passengers per annum. The maximum capacity of Stansted's existing single runway equates to 40 million passengers. Although there would have to be some expansion of the terminal and other supporting facilities, good design would make it possible to accommodate that number of passengers without the airport's current footprint. Capacity at Stansted could be doubled without building a second runway, so the people of Essex could play a part in helping to expand the overall capacity of UK airports.
    I am not suggesting that people who live around Stansted airport would be overjoyed by an increase in passenger capacity from 20 million per annum to 40 million, as that would still present them with a number of challenges—but I believe they would find that preferable to the building of a second runway, with an increase in passenger numbers from 20 million to 80 million.
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    I accept that, as the Government have said repeatedly, doing nothing is not an option, but facilitating a growth in passenger numbers at Stansted from 20 million to 40 million using the existing runway would be far from doing nothing. It would involve the people of Essex paying an environmental price but not such a tremendous price that they would find it impossible to accept. The compromise solution would mitigate the environmental impact by allowing some economic development around Stansted—but not to an extent that would be unacceptable to people living in Essex and across the border in Hertfordshire.
    I repeat: there is a way out. The people of Essex are not being NIMBYish in any way. I hope that the Minister will take my suggested solution on board, so that expansion can occur at Stansted with one runway— without despoiling the Essex countryside in such an awful way.
    2.58 pm
    Mr. James Plaskitt: It is a pleasure to follow the hon. Member for Rayleigh (Mr. Francois). He and I have spent many Thursday afternoons in each other's company. It is nice to continue our association, even though the Higher Education Bill has finished its time in Standing Committee.
    I want to praise the Transport Committee, of which I am not a member, for its report—which provides a comprehensive analysis of the challenges facing the Government in addressing the future of aviation. I congratulate the Government on their White Paper, which is a brave undertaking. It offers a strategy and framework for addressing aviation's future that was previously sadly lacking. The Transport Committee was entirely right to ask the Government to present a strategic view of managing growth in aviation, to think long term, to avoid piecemeal development, to make the best use of existing facilities, to assess existing airports on a case-by-case basis and to reject new airports on greenfield sites.
    I was pleased that the Select Committee report referred approvingly to remarks made by the Secretary of State for Transport in 2002, in the run-up to publication of the White Paper. He said that
    "people living near to possible airport development or existing airports want to know where they stand…and do not want to be in a position where their uncertainty is prolonged any longer than necessary".
    On behalf of my constituents, I wholly endorsed that sentiment, so when the consultation process started, my constituents reacted with some consternation to the inclusion of an option to build a new airport on a greenfield site near Rugby. The effect of that suggestion was to produce blight and much worry and uncertainty, which lasted for about 18 months. The proposal was opposed vigorously by everyone in the local area. There was thus a sizeable measure of relief for my constituents and those in surrounding constituencies when the White Paper declared that the option would not be pursued and that the Select Committee's recommendation to avoid greenfield sites would be accepted.
    That experience confirmed exactly the Select Committee's forecast:
    "Identifying sites where development is possible in the next 30 years may be unpopular in the short term but it will remove blight and uncertainty for many areas."

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    The House might thus have expected that my constituents and I would be rejoicing at the removal of that blight and uncertainty. We are not. The climate of concern that prevailed during contemplation of an airport at Rugby has returned in full measure. All the doubts and worries about the long-term strategy, which were supposed to be dispelled by the White Paper, are back in force for many of my constituents, thanks to the activities of Coventry airport.
    On the very day the White Paper was published, Coventry airport announced the launch of a budget airline operation. It was claimed that the announcement was coincidental, but some of us doubt that. In a debate in January, I had the chance to raise with the Minister the concerns of my constituents about the airport, so I do not need to rehearse all of them now. However, I point out to my hon. Friend that we are but 20 days away from the commencement of the Thomsonfly operation at Coventry airport. It will use Boeing 737s and there will be 150 flights a week, on a schedule that includes night flights.
    There is a range of concerns, including noise, the increase in the number of night flights and conflict over airspace, due to increased activity at both Coventry and Birmingham airports. I have already reminded the Minister that the runways at those airports are at right angles. Surface connections with Coventry airport are poor and there is already road congestion around the airport. There is a considerable lack of facilities at the airport to cope with the passenger movement that is envisaged; for example, there is no car parking. The issue that continues to vex us is whether that development is necessary at all, given that Birmingham airport is only 13 miles away in one direction and East Midlands airport is only 30 miles away in the other.
    David Taylor: My hon. Friend refers to East Midlands airport, which is in North-West Leicestershire. Would he be surprised to learn that at regional airports frameworks for environmental controls over night flights barely exist? A rapidly growing airport such as East Midlands, with 5 million passengers—albeit mostly during the day—has no such framework. Does my hon. Friend support the national pressure for an environmental framework for regional airports with equivalent designation to that for the London airports in terms of CAA control?
    Mr. Plaskitt: My hon. Friend is right and I am grateful for that contribution. He puts his finger on one of the issues that causes my constituents grave concern—the problem of trying to ensure that there is any control over what is happening at Coventry airport. I shall come to that point later in my contribution.
    Mr. Edward Garnier: The hon. Member for North-West Leicestershire (David Taylor) has lighted on an important point for those of us representing Leicestershire constituencies. However, I hope that the hon. Member for Warwick and Leamington (Mr. Plaskitt) will remember that Leicestershire Members were instrumental in assisting those in Warwickshire to resist the worst effects of the
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    expansion of that county's Rugby airport. I trust that we can rely on his assistance as we try to mitigate the worst effects of the expansion at East Midlands airport, especially of cargo night flights.
    Mr. Plaskitt: I am inclined to answer "Only one miracle at a time", and not to intrude in another debate that will, I suspect, take place shortly.
    When the new service was proposed, Coventry airport submitted a planning application to build a new terminal and appropriate car parking facilities, but as the Minister knows, the airport intends to get the service under way before any of those developments are in place. Things are even worse than that. Although the planning application had still to be determined, the owners extended the runway and erected a new terminal building, both of which are outside their permitted development rights.
    When I discussed the matter with the Minister previously, he rightly pointed out that it was up to Warwick district council, as the local planning authority, to determine the application in the first place. However, since our debate, a major development has changed the situation. Back in January, the then airport owner, Air Atlantique—losing a large amount of money—did a deal with Thomsonfly to offer a cheap platform for its budget airline operation. However, Air Atlantique was unable to deliver its side of the deal; it appears to have suggested to Thomsonfly that it could run roughshod over planning constraints, but is now finding that it cannot do so.
    Last month, in only a few hours, Thomsonfly purchased the airport, so the airport operator and the airline are now the same entity. The planning application is still in place, but determination is repeatedly deferred owing to the complexities involved. The unauthorised development on the site is being reversed and a new environmental impact assessment is being drawn up. However, the intention of the new owner, backed by plenty of cash, is entirely clear. The new owner is the TUI group, which also owns Lunn Poly, Britannia Airways and other commercial operations. The company has an annual turnover of €15 billion and it made a profit of €500 million last year—a very different proposition from the previous owner.
    Representatives of the group visited the House yesterday to meet me and Members representing adjacent constituencies. The new managing director of Coventry airport is Bill Savage. There is a slight irony in his arrival on the scene as the new promoter of the scheme, because he worked with the Government on the consultation paper and helped them to assess the responses to the consultation process.
    The new owner clearly has it in mind to build activity at the airport up to an operating level of 2 million passengers a year. The existing freight operation might be expanded, as might business usage. Taken together, the whole operation would be close to the scale of that at East Midlands airport at present, which would be a complete transformation in the historical nature of such a small rural airport. After all, the White Paper says that Coventry airport has
    "a niche role catering for airfreight and flown mail".

    1701
    However, under the new owner, backed by that company's resources, the airport will go from a relatively placid rural airfield to a semi-East Midlands in only a few years.
    The Select Committee said:
    "Creeping development over the last two decades has increased uncertainty for people living near airports. It has led to uncoordinated, piecemeal development."
    The Committee said that such creeping development had to stop, and I understood that to be the purpose of the White Paper. Indeed, the White Paper claimed to provide
    "greater certainty for all concerned in the planning of future capacity".
    I suggest that the Coventry airport development as envisaged would be contrary to the White Paper strategy. It has a seemingly unrestricted operational licence. It is not designated. Section 106 agreements can do little more than to ameliorate its impact. Therefore, at present all that stands between my constituents and a semi-East Midlands airport on their doorstep is the planning department of Warwick district council, which is understandably overwhelmed by the scale of the task and the growing level of public opposition. I expect that bigger forces will have to become involved at some point to help us resolve this matter.
    In my area and region we recognise the pressure for more air travel throughout the midlands. The White Paper does, and it is absolutely right, but it sets out the strategy for dealing with it: expansion at Birmingham with the possible second runway in due course and some expansion at East Midlands airport. It does not envisage significant expansion at Coventry or indeed any other small airfield in the region.
    The Select Committee report says that publication of the aviation White Paper will only be the beginning. When the decision not to proceed with the Rugby option was announced, my constituents felt that that was the end of our beginning. Now, with the Coventry proposals looming large, we feel as though we are facing the beginning of our end, unless it can be stopped. The question is "How?" The airport has an unrestricted operating licence. Its ownership can change hands within a few hours, and completely in private. It seems able to launch a budget airline operation with no consultation whatsoever. Indeed, the first that I or any of my constituents knew about it was seeing advertisements on our regional television.
    My hon. Friend the Member for Manchester, Blackley (Mr. Stringer) urged us not to use the word "sustainable", but I would say to my hon. Friend the Minister that these circumstances are not sustainable, and they are not compatible with the planned growth of air travel.
    I am grateful for this opportunity to put my concerns to my hon. Friend again. I urge him to take note of what is happening at Coventry, to assist us and to assess what is going on in the context of the aviation White Paper.
    3.12 pm
    Mr. Alan Reid: The islands and other remote communities on the west coast of Scotland have suffered population decline for centuries. In order to reverse that decline, we need to increase the
    1702
    frequency of transport and cut costs, in order to improve economic activity and public services in the area. Clearly, aviation has a central role to play, since getting to an island means either using aviation or taking the very slow ferry journey.
    That is why I want to use the opportunity of this debate to speak in favour of proposals by HITRANS—the Highlands and Islands Strategic Transport Partnership—to create a network of frequent and affordable integrated air services throughout the highlands and islands and to other destinations, such as Glasgow and Edinburgh. The proposals would also mean improvements in the infrastructure of airports in the islands and new construction work to provide, for the first time, scheduled air services to Oban and from Oban to the small islands of Coll and Colonsay. The market alone cannot build up and sustain such a network. Clearly, Government financial support is required. The scheme already has strong support from local government throughout the highlands and islands, and HITRANS will submit its proposals to the Scottish Executive.
    I have high hopes that the Scottish Executive will support the proposals, but, because they will require public service obligations to be put on the routes, they also need the support of the UK Department for Transport. That is because the decision to apply to the European Union for permission to impose PSOs on routes is a reserved power, vested in the Department for Transport. I hope that the Government here will support this exciting new initiative. I stress that it will not cost them a penny; all the costs will be met by the Scottish Executive and local councils, but Government support is necessary when the proposals are submitted to Europe.
    The use of PSOs to secure regional air services at affordable fares is commonplace throughout the rest of Europe. France, Spain, Portugal and Norway use them for that purpose. Given that the highlands and islands is the most sparsely populated area of Europe, surely we can do the same here. I believe that the scheme will do a great deal to regenerate the economy of the highlands and islands and reverse centuries of population decline.
    Given this exciting new proposal and the need to reduce costs, it is very depressing that exactly the opposite will happen on 1 April, when air fares to the small island airports and to Campbeltown, on the Kintyre peninsula, will go up. Return fares will rise by almost £20 from Glasgow to Tiree and by almost £12 from Glasgow to Campbeltown.
    The increase is to pay for security at those small airports. Government policy is that security costs must be met by the aviation industry itself. Clearly, though, if the industry then passes the costs on to the passenger, the increase on each ticket will be far higher at small airports than at large international airports. For each of the airports at Tiree, Campbeltown and Barra the annual cost of security is about £50,000. Until now Highlands and Islands Airports Ltd has absorbed the costs, mainly by putting them on to landing charges at its largest airport, Inverness, thus avoiding putting the costs on to the small airports. However, the big airlines that use Inverness—British Airways and easyJet—have complained about that, so HIAL is being forced to apply the costs to each individual airport, with the result that passengers using them are forced to pay the full cost

    1703
    of security there. The increasing costs will be disastrous for the economies of the island of Tiree and for the Kintyre peninsula, because £20 extra on a return ticket to Tiree and £12 extra on a return ticket to Campbeltown will put a tremendous extra burden on those airports and on the local economy.
    I was pleased that the Minister told me on Tuesday, in answer to an oral question:
    "We propose, however, to introduce a regime tailored for smaller and lighter aircraft and the airports from which they operate, commensurate with the nature of such operations and the risk that they pose. We shall consult the industry shortly."—[Official Report, 9 March 2004; Vol. 418, c. 1374.]
    That is a welcome step forward, but the matter is urgent. The economies of Tiree and Campbeltown will suffer if the higher costs are in place for long. I urge the Minister to ensure that the review goes forward urgently, and I hope that he can tell the House when he expects it to be completed.
    Of course, it is vital that security be stringent and that nothing slip through the net at small airports. I am sure that the promised consultation and investigation will result in a less costly security regime, though one that is still stringent. However, I am concerned that even if there is a small reduction in security costs, passengers at the small airports will still be paying a very high cost for security, far higher than passengers at big airports will pay.
    It is important to remember that baggage loaded at Tiree or Campbeltown can subsequently be loaded on to international flights at Glasgow airport, and the security of the whole network is therefore at stake. Accordingly, it is only fair that the cost of security should be spread across all air passengers, rather than the brunt being borne by those who enter the system at small airports. All passengers benefit from security at small airports, because of the baggage put on to onward flights.
    My suggestion to the Government today is that the proceeds of air passenger duty should he used to pay for the cost of security at small airports. Only a minuscule amount of the proceeds would be required. Air passenger duty brings the Government £800 million a year, yet, as I have said, the cost of security at small airports is only £50,000. Since the whole airline system benefits from that security, my suggestion would be fair and greatly beneficial to small, remote communities. I hope that the Government will seriously consider it.
    3.19 pm
    Mr. Kelvin Hopkins: I shall be very brief, as we are short of time.
    We were absolutely delighted by the Government's decision to permit the expansion of Luton airport. We have lobbied for that for a long time, and we think that that decision is very sensible. Luton airport could accommodate 30 million passengers in time, as opposed to 7 million now, with an extended runway and parallel taxiway and better access to the airport.
    I want to emphasise that there are problems with access to the airport. The eastern corridor route is already planned and will be built, but I ask the Government to give serious consideration to pressing for the northern bypass route to be built right round
    1704
    from the A5, across the M1 and the A6, to the A505 and around to the airport. That would enable traffic to come from the north on all those routes direct to the airport, thus taking a lot of traffic off the southern M1 junction in particular.
    Another aspect of Luton airport is that it could be developed as a kind of satellite to Heathrow, with a rail link. There is a possibility of an electrified rail link between Luton Airport Parkway station and Heathrow. An existing line goes off at Cricklewood, joining the midland to the western regions. All it needs is a little electrification to become a Luton-Heathrow flyer.
    Laura Moffatt: Does my hon. Friend agree that, to get the, best from all our airports, it would be a good idea to link Gatwick, Heathrow and Luton to ensure that we get the best capacity from the existing runways, thus moving aviation forward?
    Mr. Hopkins: I agree entirely. Indeed, I support Gatwick second after Luton. We need a planned approach. We have had problems because of BAA's dominance, and the Government have resisted the pressure from BAA and produced a good solution, putting Luton first.
    Luton airport can be developed quickly, easily and cheaply. I have written to my right hon. Friend the Secretary of State for Transport to press him not just to permit, but to urge the expansion of Luton airport as soon as possible. Such things cannot be done consecutively—we cannot just expand one airport, see how it goes and then look at the other options—but they could cascade, with Luton being the first. We could then take account of the possible downgrading of passenger forecasts for the future.
    The forecasts may not be quite as large as we expect, although there will be substantial expansion. If Luton is expanded quickly, we could get some measure of how far we need to expand the other airports, while we are still in the planning stages. That is essentially what I want to say. I hope that my right hon. Friend the Secretary of State and my hon. Friend the Minister, who has been so helpful, will urge, not just permit, the expansion of Luton. so it can expand very quickly in the near future.
    3.23 pm
    Mr. John Randall: As a member of the Transport Committee, I know exactly what we are talking about when slots are being squeezed out, so I shall speak very briefly. I thought it a great privilege to be appointed to that Committee, until I found that it was a bit of a poisoned chalice because we were discussing aviation. Having Heathrow in my backyard and Northolt in my front garden, I found myself surrounded by people who were advocating doing all sorts of terrible things in my immediate vicinity. I tried very hard to listen to the evidence in an even manner, and it was very interesting.
    The Minister, who has been very kind to all the groups around Heathrow and listened to what we have to say, has said that there will be a debate on the aviation White Paper. That will be the time for me to argue why Heathrow should not be developed. He probably knows a lot of the points that I will make, and I do not envy his position one bit.

    1705
    It is a shame in a way that we have not been able to discuss in depth a lot of what is in the Select Committee report. Perhaps the Minister could consider consumer protection—the bonding of scheduled airlines—as it does not exist at the moment, the principle of fining off-track aircraft, which is still to be looked at, BAA ownership, which we discussed earlier, and air traffic control. All those matters are vital, but we unfortunately tend to get sidetracked, naturally, as they mean a great deal to our constituencies and us, into talking about individual airports and their needs. We have to face up the real problems. Although I would love to live in the never-never land of Peter Pan—the hon. Member for Shrewsbury and Atcham (Mr. Marsden)—we have, unfortunately, to live in the real world and the fact is that people want to travel by air. I would love to restrict that in some way, but we cannot do so by taxation.
    3.25 pm
    Mr. Greg Knight: I welcome this debate and thank the Select Committee for producing its report. I compliment all hon. Members who have taken part for the high quality of their contributions.
    I emphasise to the Minister what my hon. Friend the shadow Leader of the House said at business questions earlier: we look forward to an early debate on the aviation White Paper. If the Minister finds that he cannot answer some of the questions that have been asked today, we hope that we will hear the answers from him during the debate on the White Paper.
    It is right to remind the House that we have recently celebrated the centenary of powered, sustained flight, and I congratulate the UK aviation industry on playing a major role in both civil and military aviation during that period. We believe that aviation is crucial to the UK's prosperity. We recognise that air travel is essential for business and economic success, and we appreciate that almost 180,000 people in the UK are directly employed by the industry. Moreover, well over 500,000 jobs depend on UK aviation, and much of our tourism depends on the availability of air travel. Many people in the more remote parts of the country, which we have heard about in the debate, require air services for essential journeys. I therefore applaud the industry for competing successfully in a deregulated market in recent years and opening up air travel to all through lower fares.
    The Committee's report is welcome and poses many pertinent questions for those developing our aviation policy. As the Committee reminds us, the UK is the second largest aviation market, after the United States. If that position of strength is not to be threatened, we need to ensure that we make the right decisions.
    A number of hon. Members have rightly referred to the environment, and emissions trading is possibly the way forward. The airline industry has accepted the need to look at the environmental costs involved in flying. As the Committee's report makes clear, emissions trading has the support of a number of environmental groups and the Government's technical advisors. Emissions trading would allow airlines to buy and sell permits to a capped quantity of greenhouse emissions, and the Government should certainly continue to pursue the development of such a system. Indeed, with the UK's
    1706
    upcoming European Union presidency, this would seem an opportune time for the Government to push for EU-wide support in that respect, and I hope that the Minister will grasp that opportunity.
    I disagree completely with the comments made about taxation by the hon. Member for Shrewsbury and Atcham (Mr. Marsden). In our view, a system of taxes and fines introduced unilaterally in Britain without international agreement would be catastrophic for the industry and one of the worst examples of gesture politics that I can think of, so I hope that the Minister will join me in dismissing that possibility. The Conservative party agrees with the Transport Committee that a fuel tax on aviation could be imposed only internationally, and the likelihood of that happening is extremely remote at present, and it looks as though it will remain remote for the foreseeable future.
    The report highlights the importance of striving for better air transport management. As I said in an intervention, it should not he assumed that doing nothing is the answer. As I pointed out to the hon. Member for Shrewsbury and Atcham, a shortage of capacity can in itself harm the environment. The pollution costs of aircraft having to wait in stacks or on airport aprons must be taken into account. The Government must constantly ensure that existing capacity is used efficiently.
    We should appreciate that the airline industry, like the motor industry, has made use of developments in new technology to improve efficiency. I understand that the fuel efficiency of aircraft doubled between the 1960s and the 1980s. That trend must continue. There must always be incentives to encourage investment in research and in new aircraft design to help new technology to bring about savings and more environmentally friendly aircraft.
    The White Paper accepts that noise from aircraft operations, particularly at night, is widely regarded as one of the least acceptable aspects of those operations, and my hon. and learned Friend the Member for Harborough (Mr. Gamier) is concerned about that. The Government say that their aim is to reduce the number of people significantly affected by aircraft noise, but that any night restrictions must be considered in accordance with a balanced approach. A commitment has been made to introduce new legislation to clarify and strengthen noise controls powers, and I hope that the Minister will say something about the time scale that he envisages.
    The report questions the reliability of air quality assessments at Heathrow and other sites. The current assessments may not be sufficiently sound to enable the Government to make crucial decisions about future expansion plans.
    Mr. Randall: I hope that my right hon. Friend will agree that the comments of the hon. Member for Manchester, Blackley (Mr. Stringer) about the environmental reasons at Heathrow being dubious were in themselves extremely dubious.
    Mr. Knight: I agree. The hon. Gentleman should buy a house near Heathrow, and see whether he still takes the same view after living there for a year. We need to take such issues seriously, and the Government time

    1707
    scale may be a little over-ambitious. It assumes full implementation of a tough package of measures to improve air quality, and the Government also talk about road charging. I am not sure that they will achieve that.
    Before consideration is given to constructing new airports, it is surely common sense to concentrate on making better use of existing facilities. It is a matter of great concern to a number of us that the number of slots at Heathrow and Gatwick allocated to regional routes has been drastically reduced, a problem was mentioned by the hon. Members for Crewe and Nantwich (Mrs. Dunwoody) and for Liverpool. Riverside (Mrs. Ellman). In the past few years, regional services have certainly been curtailed from various regional airports, including Plymouth, Norwich and my local airport, Humberside. I find that distressing, because services were economically viable, but were dropped because of capacity constraints. Scarcity of slots at the major airports has led to more profitable routes pushing them out. We cannot allow that to continue unchecked, and I would like to know what the Minister is doing about it. Is he having discussions with the industry to see whether progress can be made, either without recourse to using the law or ahead of any use of the law?
    The Select Committee report questions the entire structure of the industry, and the Committee was highly critical of the position taken by BAA, which strongly denies all arguments of that kind, although some would say, "It would, wouldn't it?" It stresses the high levels of investment that it brings to the industry, but it is right that there should not be an automatic assumption that BAA, in its present form, is the correct arrangement for all time. I can see why many hon. Members on both sides of the House feel that there is a case for a constructive review.
    There are many other things that I would like to say, but I shall have to leave some of them to another occasion because of the shortage of time. However, the hon. Member for Argyll and Bute (Mr. Reid) made important comments about security. It is obviously crucial that all airports, large and small alike, maintain and combine high security with efficient procedures to reduce delays. We will support anything that the Government seek to do on that. The need to keep an eye on security has been brought home to us by the tragedy that has occurred today as the result of an act of terrorism.
    I would like to ask the Minister some questions before I conclude. What judicial reviews have been notified to the Government about airport expansion plans since the White Paper was published? Are any discussions taking place between the Government and the bodies involved? Does the Minister accept that demand for slots at Heathrow and Gatwick has exceeded supply for the last four years and that, under his proposals, there will be a wait of another 10 years before anything is done to alleviate the shortage? Does he accept that the loss of access from the regions that I have mentioned could have a damaging effect on the UK economy if speedy action is not taken?
    In some ways, air travel has provided a refreshing contrast to the growing problems that have beset surface transport, largely because it has the freedom to respond
    1708
    to increases in consumer demand that Government direction or inaction has denied elsewhere. The air travel industry has shown the fastest growth of any type of travel in recent years, with dramatic reductions in fares and charges. Those improvements have been the direct result of the increased competition made possible by liberalisation of the European air market.
    Whatever the Minister says when he addresses the House, I am sure that we all wish the industry well in facing the challenge; that need to be addressed as it goes towards its second centenary.
    3.37 pm
    The Parliamentary Under-Secretary of State for Transport(Mr. Tony McNulty): It will be nigh on impossible to address all the serious issues raised by all hon. Friends and most honourable colleagues in the 10 or so minutes that I have to speak. However, I shall do my best to do justice to many of their comments.
    As I think the hon. Member for Uxbridge (Mr. Randall) said, I would welcome a full day's debate on the White Paper. There are several reasons why it has not yet been held. The House may be assured that I am at the front of the queue of those exhorting the business managers—of whom I was once one—to hold such a debate.
    I welcome the Committee's report. Although it predated the White Paper by some months, many of the issues in it are, as my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) said, as germane today as they were when it came out. In fact, they are even more germane after the White Paper.
    As others have said, the White Paper starts from the premise that the best starting point is the greater utilisation of existing capacity. That must be the right and logical place to start. We will work from there to see where we need to go beyond that. I am heartened by the response to the White Paper, which sets out the framework for the next 25 or 30 years. I agree about the importance of aviation not just to our economy and to regional development, but, in the broadest terms, to the whole country and not just to the south-east.
    Although the hon. Member for Aldershot (Mr. Howarth) is not in his place, I shall say in passing—I did not want to forget this—that the White Paper recognises the importance of the smaller sectors of aviation, such as business aviation. I was going to tell the hon. Gentleman that I was grateful to him. I have lost count of how many times I have read the stuff, but this is the first time I have noticed a mistake in it. He exhorted us to remember the importance of Farnborough to business aviation, but paragraph 11.101 on page 132 states that we recognise that there is
    "additional capacity to cater for business aviation demand: Farnborough, Biggin Hill, Blackbushe, Fairoaks, Farnborough, Northolt and Southend."
    To paraphrase the song, Farnborough is so good they named it twice.
    Much of what my hon.. Friend the Member for Crewe and Nantwich said about the aspects of where, who and who pays is important, and it is addressed in the White Paper, as is the importance of regional airports and of route development, which many hon. Members mentioned. We can consider how that could be based on

    1709
    the Scottish model, with public service obligations, and how it fits within the European context. The interconnectivity—another fashionable word that we probably should not use—of all our regions with the economic hub of London is terribly important and is also recognised in the White Paper. I was not sure about what my hon. Friend said about coming out fighting, saying which airports will expand and balancing that with protecting regions' interests. Perhaps I shall discuss that with her later because I think that we have probably done that. She rightly said that there would be no major development in the next five years. The new runways and additional capacity identified in the White Paper will certainly not happen within five years—a time scale of 10 years has been indicated. However, to pursue the point made by my hon. Friend the Member for Luton, North (Mr. Hopkins), that does not mean that existing capacity cannot be optimised in a shorter time, so I wish Luton airport well in that regard, as I have before.
    It is unusual in such an important debate for two Liberal Democrats to express about four different views. I take seriously the point raised by the hon. Member for Argyll and Bute (Mr. Reid)—as I did in Question Time on Tuesday—on the connection of what is such a peripheral region with the rest of Scotland, let alone the rest of the United Kingdom. We tried to address such points in the White Paper. Both the Scottish Secretary and the Secretary of State for Transport are speaking to HITRANS and others involved with the highlands and islands.
    I take the hon. Gentleman's point about security at smaller airports seriously. To be perfectly honest, I do not have on me the details of the time frame for the consultation that has just started, but I shall write to him about that. We are considering tailoring a package for smaller aircraft that use smaller airports to take account of some of the cost aspects that he mentioned. Security must be absolutely paramount, in the first instance, but there must be scope for tailoring the package to the size of the airport and the planes that utilise it. That is an entirely fair point and I shall write to him about it.
    I disagree with the hon. Gentleman's point that someone other than the aviation industry should pay for security. I also disagree with a further point that he blithely put. He suggested that given that there is cross-integration among security measures, we should use air passenger duty to pay for them. However, not two weeks ago, on 1 March, the hon. Gentleman's leader—if I may use that phrase—said that the Liberal Democrats would abolish air passenger duty. The hon. Gentleman would spend it on his local airport, but his colleague, whose constituency is not a million miles away from his in the north of Scotland, would abolish it. That does not really make sense. When the White Paper was published on 16 December, my right hon. Friend the Secretary of State said that it was apparent—this is certainly true of the hon. Member for Shrewsbury and Atcham (Mr. Marsden)—that
    "Liberals are in favour of air travel but not airports."—[Official Report, 16 December 2003; Vol. 415, c. 1441.]
    Mr. Paul Marsden: Will the Minister give way?
    Mr. McNulty: I shall not, given the time constraints.
    The environment is a serious matter. The environment is taken seriously throughout the White Paper and the balance between the environment and the
    1710
    growth of aviation is mentioned constantly and clearly throughout it. However, the way in which the hon. Member for Shrewsbury and Atcham developed his case was so flawed, simplistic and empty-headed in all regards that it is not worth debating at all. [Interruption.] Well, here is the real nub of it. The hon. Gentleman cited serious organisations that we hold in high regard and with which we work closely, but he misquoted them. He then made simplistic extrapolations from their cases in such a fundamentally flawed way as to harm and undermine the environmentalist case. He made probably the weakest and most flawed contribution to the debate, which is a shame because the debate was otherwise useful.
    I did not agree with everything that my hon. Friend the Member for Manchester, Blackley (Mr. Stringer) said—I am sorry about the other night's Porto result, but that is by the by. There is a goal called sustainable aviation towards which we can work. We must mitigate impact, even though that cannot be totally absent, but the goal is worth pursuing. I agree about the need to open up skies more readily for some of our regional airports—that is clearly set out in the White Paper—and I shall happily meet him to talk about Pakistan International Airlines, fifth freedoms, Manchester airport and everything else.
    I am sorry that the hon. Member for Ruislip-Northwood (Mr. Wilkinson) bewails the EU—well, the EU full stop. I was sorry that he bewailed the EU air service agreements. We are moving toward a stage at which there will be a massive break up of the national carriers—a national carrier is the model of the past. I do not agree with what he said about sovereignty. Given that there are now trans-national and trans-European families of airlines rather than individual families, it must be right to move towards EU designation while retaining the bilaterals until that comes into play. I accept the points that the hon. Gentleman made in his constituency capacity. The hon. Member for Uxbridge also made such points. As he kindly said, there is an ongoing ménage à quatre —me and the "Three Johns from Hillingdon"—in which we discuss Heathrow at length.
    The hon. Member for Rayleigh (Mr. Francois) made some interesting points about Southend airport. Happily, or otherwise, I was on top of Southend town hall the other week to have a look at Southend airport, among other things. I know that Freddie Laker ran flights from the airport to the Channel Islands back in the 1960s. I flew on one of the last Laker flights to America, but then the company went bust, so I could not fly back by Laker—that is by the by. His point about the further development of maintenance and other refurbishment facilities, which are the strength of Southend, was well made.
    The hon. Gentle man asked me to comment on judicial review—that also goes back to what the right hon. Member for East Yorkshire (Mr. Knight) said. He asked whether we had spoken to anyone and how many reviews were ongoing. With the greatest of respect, I will not go there in any way, shape or form. People are fully entitled to put forward cases for review. They need to be taken seriously, but I say "No comment", and move on.
    My hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) has already made good points about Coventry airport that need pursuing. In

    1711
    the first instance, the points are matters for the planning authority, but if we need to discuss the situation further with him and other hon. Members, we will. Before the hon. and learned Member for Harborough (Mr. Gamier) starts flapping about, I am still happy to meet him and my hon. Friend the Member for North-West Leicestershire (David Taylor) to talk about East Midlands airport and the way forward on capacity and a new voluntary local network, and the options for full designation such as that of the airports in London and the south-east.
    Mr. Garnier:rose—
    Mr. McNulty: I will not give way to the hon. and learned Gentleman; I said that to obviate giving way to him at all.
    David Taylor: Will the Minister give way?
    Mr. McNulty: I will not, with the greatest of respect, but having said that, I will—briefly—because I will then sit down.
    David Taylor: When the Secretary of State for Transport launched the White Paper several months ago, he used the phrase
    "stringent noise and environmental controls"
    on several occasions in the context of growth at regional airports. Is the Minister now able to tell us what shape those stringent controls will take? Will they be based on a national framework, or will they emerge from the fog of some Dutch auction with airports and planning authorities underbidding each other to ensure that the greatest growth takes place in their areas?
    Mr. McNulty: It is very rare that I regret giving way to a colleague, but I do on this occasion, as my hon. Friend's question was far too long. It is a question of balance—we must consider whether we are satisfied with voluntary noise restrictions at East Midlands airport, whether we are happy with arrangements if it expands and whether we need to legislate for noise within a national framework, as has been suggested. Those are all in the mix, but it is only two or three months since the first real White Paper—other documents have been called White Papers, but they are not—which strives to achieve a balance between the interests of business, the community, the aviation sector and, crucially, the environment, and goes far beyond the Mickey Mouse suggestions of the Liberal Democrats. We want a substantive package at national, European and international levels so that, contrary to what my hon. Friend the Member for Manchester, Blackley said, the goal of sustainable aviation over the next three years is achievable and the country can go forward with a proud aviation record.
    "Debate concluded, pursuant to Resolution [3 March].
    Question deferred, pursuant to Standing Order No. 54(4) and (5) and Order [29 October 2002], until 6 pm.

Biofuels

  DEPARTMENT FOR ENVIRONMENT, FOOD AND RURAL AFFAIRS
  [Relevant Documents. Seventeenth Report from the Environment, Food and Rural Affairs Committee, Session 2002–03, on Biofuels, HC (2002–03) 929)-I, and the Government's response thereto, HC (2003–04) 270; and the Department for Environment, Food and Rural Affairs Departmental Report 2003, Cm 5919.]
  Motion made, and Question proposed,
  That further resources, not exceeding £1,251,750,000, be authorised for use during the year ending on 31st March 2004, and that a further sum, not exceeding £613,478,000, be granted to Her Majesty out of the Corsolidated Fund for the year ending on 31st March 2004 for expenditure by the Department for Environment, Food and Rural Affairs.—[Joan Ryan.]
  3.50 pm
  Mr. Michael Jack: I am grateful for the opportunity to open our debate on biofuels. The motion deals with an estimate of expenditure for the Department for Environment, Food and Rural Affairs, and the Minister for the Environment, who will reply to our debate, could deal with all outstanding issues on biofuels if the £1.25 billion mentioned in the motion, or at least part of it, could be veered towards biofuels. It is a substantial sum, and I would love to have a debate on everything that that expenditure covers. However, if a small amount could be spared for biofuels, everyone would leave the Chamber feeling even happier.
  It is always a pleasure to learn that events are moving in the right direction, as was demonstrated by the front page of the business section of The Daily Telegraph. Most of the newspaper is printed in black and white, but there is a pink section in the middle covering business, where a headline said, "Whitehall warms to 'fuel from crops' initiative". I took that as an omen of a positive debate, as we consider the biofuels report by the Select Committee on Environment, Food and Rural Affairs, which is cited as a relevant document. The Order Paper says that the estimate is
  "to be considered in so far as it relates to biofuels"
  and I am delighted by that close link.
  May I put on record my appreciation of everyone who contributed to the production of the report? The subject of biofuels attracted a great deal of interest from people in the fields of agriculture and fuel, the general public, and people with environmental interests, many of whom kindly gave evidence. None of our reports could be produced without the hard work of the Clerks and others who support us, and I thank in particular our specialist, Kate Trumper, for her contribution. I am delighted that the hon. Members for Stroud (Mr. Drew) and for Sherwood (Paddy Tipping) are in the Chamber this afternoon, as they serve on the Committee and take a particular interest in the subject, as does my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard). She was a member of the Committee when the report was produced, and has since been a leading player in subsequent debates on the subject in the House. She serves her constituency and East Anglia well in continuing to advance the cause of biofuel, as does my hon. Friend the Member for South-East

  1713
  Cambridgeshire (Mr. Paice) and other Select Committee members who have worked hard on the issue.
  The timing of our debate is propitious, because it is just a week before the Budget. We live in hope that the Chancellor is prepared even now to say something about further encouraging the use of biofuels. Far from holding out the begging bowl to the Treasury, I want to set out an alternative strategy for developing a genuine biofuels industry in Britain. As I shall outline, the transformation of oilseed rape—raw material which is indigenous to the United Kingdom —into biodiesel is sadly almost non-existent. Production plants currently in operation use the residues of cooking oil to produce biofuels. It is good that some biofuels are produced, but given that British agriculture would benefit from a revolution in fuel production, we appear not to be taking advantage of opportunities to produce and develop a facility for biofuels in this country.
  The first comment in our report is that biofuels
  "are the only source of renewable power currently suitable for road transport".
  Given the Government's understandable commitment to reducing carbon dioxide emissions, we would say that the two naturally go together. In a moment I shall review what the Department for Environment, Food and Rural Affairs says by way of justifying further activity in this area.
  I remind the House of a second and crucial conclusion that arose from our report. We pointed out that
  "the Government's biofuels policy, to the extent that it has one, appears muddled and unfocused."
  It is important to see what the Government said in reply to our Select Committee report. They did not address the issue, apart from disagreeing with us in the nicest way. They stated:
  "The Government does not accept that its policy is muddled and unfocused",
  yet one has only to consider the number of Departments with a finger in the pie—the Department for Transport, the Treasury, DEFRA and the Department of Trade and Industry. There appears to be no champion of biofuels. Perhaps when the Minister replies, he will put on the champion's hat and tell us how he intends to translate his Department's very positive view of biofuels into a UK biofuels industry.
  When Lord Whitty came to give evidence to the Committee, he made it clear, with his usual remarkable candour, that his Department was not only in favour of biofuels, but frustrated at the barriers to developing an indigenous industry that were being put in place by the Treasury.
  DEFRA, together with Peter Clery of the British Association for Biofuels and Oils, have produced an excellent little leaflet, which begins is by reminding us that biofuels

  "can cut emissions of carbon dioxide, a greenhouse gas, by 50–60 per cent. compared to fossil fuels and so can contribute to meeting UK targets for alleviating climate change."
  The document goes on:
  "The production of biofuels from arable crops would provide a useful new market for rural Britain".
  Well, we are cheering, and we have only got to page 3. Then we come to some more telling analysis. Under the heading "Are they available?", the document reports:
  1714
  "About 700,000 litres (around 600 tonnes) of biodiesel are currently sold each month"—
  then comes the let-down—
  "produced mainly from recycled cooking oils and available as a 5 per cent. blend from around 100 filling stations. No bioethanol is yet available commercially."
  In the same document is a beautiful picture, probably taken in a field in the constituency of my right hon. Friend the Member for South-West Norfolk, of a sugar beet harvesting machine, giving the impression that that is the way forward, but sadly there is no facility to take that harvest of sugar beet and turn it, in this case, into bioethanol.
  On the following page the document continues:
  "Producing biofuels costs (pre-tax) about twice as much as fossil fuels, depending on the cost of feedstock and crude oil."
  DEFRA recognised the need for help, but as our report pointed out, a 20p duty derogation was all the help that came. We put that to the Treasury Minister, the Economic Secretary, who came to speak to the Committee. That number was selected—it was not worked out. I received a parliamentary answer that said that it was chosen—it was selected. The figure could have been 19 or 21, but the Treasury selected 20 because it wanted to give some encouragement, but not to encourage a biofuel import industry.
  I am a simple man, and I looked at the logic of that. If there is no indigenous industry, where will biofuel come from as the country moves towards meeting its EU obligations? By definition, it will be imported. Can we not make a virtue out of the necessity of the DEFRA analysis, and start to find ways of producing an industry at home? The document goes on to say:
  "In the wider context, the EU has adopted legislation which will require the UK and other European countries to set indicative targets for the use of biofuels. The EU's reference targets are 2 per cent. by 2005 and 5.75 per cent. by 2010."
  It is not long until 2005. The Department for Transport, which is in charge of the consultation exercise on the targets for biofuels, knew last May that such an exercise would be held, but nothing has been produced.
  Mr. Mark Francois: I thank the Chairman of the Select Committee for his courtesy in giving way. May I lend weight to his arm by telling him that farmers in Essex, not least in my constituency, are keen to encourage biofuels? Does he agree that, contrary to the claims of some lobby groups, most farmers are environmentally aware? They care about the environment; the beauty of that is that it represents a win-win for farming and the environment.
  Mr. Jack: I am delighted that Essex farmers are so perceptive. They recognise the potential of their set-aside land to grow the crop. I am sure that they are aware of a key finding in the Select Committee report: we asked DEFRA to do more work on the environmental impact of increasing the amount of oilseed rape that is grown under the circumstances that I outlined. I am also sure that perceptive Essex farmers realise that there is more work to do on that. My hon. Friend's comments show the genuine enthusiasm of British farming, at a time of immense change and transition, to seek new opportunities.

  1715
  The challenge for farming—the Secretary of State referred to it in Question Time—of having to think through more carefully what it will do in the regime of the single farm payment means that farmers will look to the marketplace for opportunities. Here is a gigantic opportunity. Biodiesel production in the United Kingdom is currently approximately 25,000 tonnes a year. Half of that comes from cooking oil and the balance from imports. That clearly shows that we have the potential to do something about the matter.
  Mr. David Heath: I am listening to the right hon. Gentleman carefully. Does he agree that one of the prerequisites of a viable agriculture industry is a secure market to which to sell? Does he believe that, for bioethanol, a component of that might be a regulatory approach to substituting it in conventional petrol rather than fiscal support, which is the alternative mechanism?
  Mr. Jack: The hon. Gentleman makes an important point, which I want to develop shortly. There are several ways of achieving the objective that I hope we all share, and they do not necessitate a high cost to the Treasury.
  Let us put the production and the targets to which I referred earlier into some sort of context. Cargill produced some interesting data. A document that it sent to me stated:
  "If the Government were to follow EU guidelines targeting 2 per cent. biodiesel by 2005, this 400,000 litres per month must be expanded 80-fold to 32 million litres per month."
  The first figure reflects the current position. The document refers to the plant in Motherwell where some production of biodiesel will take place. The document states that
  "the Motherwell plant will add some 4.5 million litres per month, leaving a further requirement of 27 million litres"
  in the United Kingdom to meet the 2 per cent. EU target by 2005. Again, to provide some context, Germany already produces 700,000 tonnes of biodiesel.
  The Motherwell factory is an investment by the Argent Energy Group, which has a turnover of some £230 million. The plant is designed to produce 45,000 tonnes a year of multi-feedstock biodiesel. Unfortunately, it will use cooking oil and fats as the initial feedstock. There are signs of investment in the capital to produce the product, but not sufficient to persuade the industry in the United Kingdom.
  How do we persuade the Government to move the argument forward, given the targeting required by the European Union, the enthusiasm of UK agriculture to produce the feedstock and the desire of companies such as Cargill and British Sugar to invest respectively in biodiesel and bioethanol? I shall rehearse with the House an argument that I first made last year during debates on the Finance Bill, in which I applied the logic that is used on the renewables obligation in electricity to the parallel situation in road fuels. The House might recall that the renewables obligation requires electricity producers to take a proportion of their generated output from renewable sources, blend it with electricity from other sources and sell it at a uniform price. Although consumers cannot distinguish the sources, because
  1716
  electricity is a homogeneous commodity, they thereby encourage the renewables because of the slightly higher total electricity price that they pay.
  My first thought was that the Treasury could apply the same logic to fuel. If there were a derogation of 30p to encourage more investment—which the industry deems sufficient—let us consider what the cost per litre at the pump would be if the Treasury spread out the costs of providing biodiesel. Concentrating first on biodiesel, the 2 percent. target, with a 30 per cent. derogation, would have a duty cost of £120 million a year, which would in effect require the pump price to rise by 0.6p per litre. If we did the same with bioethanol and petrol, the total cost at the pump would be a further 0.6p per litre. With the 5 percent. diesel target, we would be looking at a cost increase of 1.6p per litre if the £300 million cost were funded through duty derogation.
  That simple piece of mathematics would in effect provide the Treasury with a free good because the users of fuel would pay, as do the users of electricity, for the renewables obligation. However, the argument may have moved forward, because a further development has now been suggested in the context of the Energy Bill that is before the other place. Although the amendment to that Bill to which I am about to refer has been withdrawn, the Minister might care to know that it will return on Report.
  The amendment, which has all-party support and was tabled by the noble lords, Lord Ezra, Lord Carter and Lord Palmer, has at its heart an obligation that would
  "require all producers selling road transport fuel in the United Kingdom to show that over the course of a calendar year a specified proportion of such fuel was biofuel."
  The novelty of that amendment is that it would not legally require blending but would set a target with the force of law behind it. leaving the fuel company to decide in what way it wanted to fulfil the obligation. Users would have to accept an uplift in the cost of the fuel, but it would be up to the fuel company to decide what that would be, commensurate with the inevitable additional costs and investments.
  Evidence supplied to me ahead of today's debate suggests that such a move would not attract a tidal wave of imports, and that imports might move to easier fuel duty markets than the United Kingdom. That simple amendment none the less raises the possibility of having biofuels—both bioethanol and biodiesel—at a cost that would be paid by the user, not the Government, although the Government's support would be required to put the obligation to meet the target into law. That possibility should be investigated very carefully.
  I return to my starting point, because in his comments on recent meetings with Treasury Ministers on that matter, Mr. Peter Clery, the chairman of the British Association for Biofuels and Oils, has said that he was encouraged by those discussions, in which he had something of a meeting of minds with the Economic Secretary to the Treasury. It seems that this possibility was considered feasible and that the Government may have indicated a degree of support for it. I should be grateful if the Minister would be kind enough to address that issue when he winds up.
  On the implementation of the biofuels directive, the European Union has said in a letter to Mr. Clery dated 8 March:

  1717
  "Member States are free to require each fuel supply company to achieve a given proportion of biofuels relative to the quantity of petrol and diesel fuels that it places on the market on the Member State's territory (without specifying how this should be achieved in terms of blending)."
  There we have permission to say to member states, "This is a possible way forward." In simple terms, the Government could adopt the amendment that might come back on Report. The reason why it could come back is that a penalty clause could be applied to fuel companies that do not meet their obligations, and the resulting revenue could go back into a pot to help those that do. It seems simple that all users of road fuels could, through a modest increase, pay for the generation of a new industry in British farming and the production of a fuel that would help us further to reduce 2 emissions and meet our global obligations on greenhouse gases, particularly through the reduction of road fuel gases. That would give biofuels a kind of parity with what appears to be the Government's favoured choice, liquefied petroleum gas, which has a 40 per cent. derogation.
  I campaigned for assistance with the development of LPG on health grounds. The Government, by giving 40p a litre for LPG, seem to be saying that they value those gains at a greater monetary amount than they value the reduction of CO2. I find that a difficult intellectual position to accept, when both objectives appear to be of equal merit.
  Mr. Andrew Miller: I have been listening to the right hon. Gentleman very carefully. In the context of the comparison with LPG, does he agree that there is one fundamental difference, namely the massive infrastructure costs that will have to be borne by the vehicle companies and the fuel distributors? There is therefore justification for a differential.
  Mr. Jack: I am not going to disagree with the hon. Gentleman's line of argument, save to say that the current derogation on biofuels is 20 per cent., while that on LPG is 40 per cent. It is difficult to explain why one is twice as much as the other, in the face of the two sets of important objectives.
  We now have the potential to use agricultural set-aside land productively, to do much to generate new activity in rural Britain, to safeguard companies such as British Sugar that wish to pioneer bioethanol production in this country, and to give a further boost to manufacturing jobs by virtue of producing our biofuels. At a time when we are considering important issues of energy security, we would have the potential for a further secure supply. When all that beckons, and when DEFRA produces arguments that are irrefutably in favour of this proposition, it is time for the Government to be bold, to take up these ideas—which might well not cost them anything—and to give biodiesel the chance to be developed for the benefit of us all.
  4.14 pm
  Paddy Tipping: I am extremely pleased to follow the Chairman of the Select Committee, the right hon. Member for Fylde (Mr. Jack), and I do not disagree with one word that he said. The strength of
  1718
  the campaign for biofuels is the strength of support that exists on both sides of this Chamber, in the other place, and among the people outside the Palace of Westminster who work in this indigenous industry. I have looked at this issue fairly closely, and there are very few people who oppose the argument advanced by the right hon. Gentleman.
  The Government face a serious challenge, which they are indeed taking extremely seriously. They have a good record in moving towards a low carbon economy, and in terms of Kyoto they have been a leader in the field. We will meet our targets, but they will be achieved on the back of reductions in the manufacturing and electricity generating sectors and in the coal industry. If we really are committed to a low carbon economy, the essential task before us is to tackle the transport sector across government.
  Despite a fine record in other fields, this Government—and previous Governments—have fought shy of tackling carbon emissions in the transport sector. That is the big challenge that confronts us all. It is a difficult one, and one of the few tools available to us in the short term is the development of biofuels: biodiesel and bioethanol. The problem, which has already been spelled out today, is that myriad Government Departments are involved in this discussion.
  The Government helpfully replied to the Select Committee report on 21 January, and the opening page of that response makes interesting reading:
  "In common with other policies and issues which are wide-ranging in their impact on the UK, there are a number of Government Departments with an interest in biofuels."
  The rest of that page spells out the involvement of those Departments. It is clear to me that despite the Government's response, there is insufficient joined-up communication, and particularly leadership, in respect of biofuels.
  I say directly to my good friend the Minister, who is keen on this issue, that throughout the world—in France, Germany, Italy, Spain, north America and, particularly, Brazil—biofuels are taking off. By way of comparison, what do we have in the UK? Let me put it crudely: some chip oil recycling. We must do better than that. I am absolutely convinced that if we are to tackle the transport sector, we need to introduce firm policy proposals for biofuels.
  The European Union gives us an opportunity to make some progress. A biofuels directive was published on 8 May last year, but it is still not clear—perhaps the Minister can answer this question today—when the long-awaited Department for Transport consultation document on how we are to achieve our targets will be published. The story is that it will be published in late April. There will be a 13-week consultation period, and the Government should respond to the Commission by the summer, setting out a policy on how we are to achieve our targets of 2 per cent. by 2005 and 5.75 per cent. by 2010. Given the very slow start that has been made in introducing that consultation document, it is clear that we will fall at the first hurdle. We must do better than this.
  Mr. Heath: Why should this have anything to do with the Department for Transport, given that a motorist

  1719
  using petrol with a small substitution of ethanol will not know the difference? Surely it is a matter for Departments dealing with the environment and agriculture, and for the Treasury. Waiting for the Department for Transport to come up with its reasons is clearly a superfluous exercise.
  Paddy Tipping: That may well be so. What is essential is for all the Departments involved to work together. Next week's Budget statement will give us an opportunity to make some progress, and the energy White Paper and the pre-Budget report published last autumn gave biofuels the amber light, but at present we are not moving off the grid. As the hon. Gentleman says, the Department for Transport has yet to issue its consultation paper.
  We need, in fact, to go beyond consultation. We need firm policies to deliver a British biofuels industry, and that could be done in a variety of ways. So far, the focus has been on a 20p duty derogation, although the industry says that another 6p or 8p is necessary. Another approach, which may well be feasible, is to consider capital grant and capital allowance. I have discussed that with the Treasury, and it seems to be a possible option.
  The real option, though—the option that a sensible Government ought to choose—has already been mentioned today. I refer to the notion of a road transport fuel obligation. It is clear to me that our entire existing fleet could run with an admixture of 5 per cent., or perhaps 10 per cent., with no engine modification. That alone would bring about amazing carbon reductions, at no cost to the Treasury.
  We consumers—we who use the car—know, or ought to know, that we are causing serious environmental damage. It must be right for the consumer to bear part of the cost. A small addition, a growing addition, of biofuels creating a fuel mix must be the answer. I have looked carefully at the Lords amendment that has been mentioned. Its content is reflected in early-day motion 538, signed by a number of Members on both sides of the House. It is supported by people throughout the country, throughout the sector and throughout industry.
  I think that there is a danger of sucking in imports from, say, Brazil. Adopting a renewable transport fuel obligation with an escalator attached would give us an opportunity, over a period of years, to move from 1 per cent. to 2 per cent., 5 per cent. and even larger percentages. I am indebted to my hon. Friend the Member for Southampton, Test (Dr. Whitehead), who began to advocate that approach five years ago. At the time it was dismissed with derision, but I think we have moved beyond that now. I think the Government are now committed to a low-carbon economy. They must take up the challenge, and move into the transport sector. I envisage no cost to the Treasury. Consumers—drivers—should carry the cost, and it is a small cost indeed. I hope the Minister will take account of what is said here today, of the voices of those in the other place, and of the emerging consensus across the sector in favour of a fuel obligation.
  It cannot be right for us to use biofuels imported from abroad. Throughout my county of Nottinghamshire, farmers can produce the goods. At Newark, British
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  Sugar has a factory that could be converted to bioethanol production. We can add value to the rural economy. One of the issues facing the Government, on which they are fighting strongly, is that of helping rural economies to emerge from a tough time for farming. By any measure, biofuels bring together a series of policy objectives to meet our need to create that carbon-reduced economy. Let us stop talking about it, and do it.
  4.25 pm
  Norman Baker: First, I congratulate the right hon. Member for Fylde (Mr. Jack) on his introduction to this debate. His argument was most convincing, and unanswerable in its logic. I hope very much that the Minister will agree with the sentiments expressed and the logic deployed.
  I also hope that the Minister will notice that three speakers, from three different parties, have—or will have—taken the same line. The difficulty is that while in the Chamber this afternoon we will agree on the way forward, and even the Minister may agree on it, those who are of a different mind for whatever reason, or who are unable to make the connections, are not present. No Ministers from the Treasury, the Department for Transport or the Department of Trade and Industry are present. The Minister may report back to his colleagues that there was unanimity in the debate, but will that be enough to convince the relevant Ministers and Departments that they must take the necessary action?
  I hope that I am not being too pessimistic, but over the years I have come to conclude that the Department for Environment, Food and Rural Affairs and its Ministers have put forward some good ideas and thoughts, which then seem to run into the sand somewhere in Whitehall and Westminster. Far too often, DEFRA Ministers defend the logical position, but it is not one that they are able to deliver. At DEFRA questions today, the secretary of State set out a sensible policy on Nirex, which the DTI tried to stop, a sensible policy on abandoned cars, which the DTI is trying to stop—
  Mr. Heath: And on milk prices.
  Norman Baker: Indeed. The list of sensible policies put forward by DEFRA to which it secures agreement from all three main parties, but which suddenly disappear—we know not why—is almost endless. We all need an assurance from the Minister as to what process will take forward in Government what I think will be the view of all three parties represented in the Chamber today. How will we learn the responses from the various Departments involved to the comments that will have been made today?
  In particular, I am concerned that we will in no way meet the EU targets—not the 5.75 per cent. one, and, if we are not very careful, not even the 2 per cent. one, which, as the Minister is muttering from a sedentary position, is due shortly. I am not clear as to whether we will meet that, and it would be helpful if the Minister set out the steps that he intends to take to meet that target.
  The Minister has had number of useful suggestions from Members who have spoken so far. I am particularly attracted as, I think, is the hon. Member

  1721
  for Sherwood (Paddy Tipping), to the idea of a road transport renewable fuel obligation. He was much too modest to say that he tabled the early-day motion on that, so I put that on the record now. He is right that it has attracted all-party support, however, and that it has a large number of signatures in support. That proposal seems to me the way forward and the way to achieve the objectives. There are difficulties with the alternatives—that of capital grants has merit, and it may support the domestic industry better than any of other alternative, but clearly there is a cost to that. There is also the differential, but again, I am not quite sure what its impact would be, and it would cost money, so it is less attractive to the Treasury. The fuel obligation is a simple proposal that delivers the goods, and I hope very much that that will be taken forward.
  Genuine concern exists, and not just in the House, about the likely failure to meet that target. Members will have received a letter from the National Farmers Union in advance of this debate.
  It states:
  "As things stand, there is every likelihood that this target—
  2 per cent—
  "will be completely missed, due to the Governments policy on biofuels."
  Sadly, I suspect that that is accurate
  There are two reasons for making progress on biofuels to a greater extent than in the past. The first is the environmental argument. I was going to refer to the Government's response, but I should say: the response of the Department for Environment, Food and Rural Affairs, which is what we are debating today, and I wonder how much influence the Treasury and other Departments had on it. DEFRA's response, on behalf of the Government, to recommendation 9 is that
  "capturing the environmental benefits of biofuels is the principal policy reason for Government support with duty initiatives. Other considerations such as economic and social factors, though secondary, are also taken into account in the Chancellor's fiscal decisions."
  That makes sense—the main objective is indeed environmental. We must do something about climate change, but there is no one big lever we can pull to deliver all the benefits. A selection of levers has to be pulled across various sectors, which all do their little bit to meet our Kyoto targets.
  In the road transport sector, we are clearly in some difficulty. Industry has done quite well at cutting its carbon emissions, but the same is not true of road transport, where emissions are rising rapidly and, frankly, the Department for Transport has no plan to deal with them. The 10-year plan, which talked about road traffic reduction—we should remember that that was a Government commitment—has all gone, and we are now seeing big increases in road transport throughout the country. The last figure I saw was about 7 or 8 per cent., and in a parliamentary answer of a couple of weeks ago, the Department for Transport projection was for a 25 per cent. increase in road traffic by 2010. That is in free fall; there is no handle on that from the Department at all. If it cannot control the number of vehicles, then my goodness, it must control the emissions from all the vehicles on the road, if there is any chance of reducing—or even levelling out—the carbon emissions.
  1722
  If I went on for long about aviation, you would rule me out of order, Mr. Deputy Speaker, but I want to say that our previous debate was a disgrace in respect of the Government's commitment to dealing with carbon emissions from aviation. It is another matter that must be taken into account.
  I pay tribute to the Environment, Food and Rural Affairs Committee for its extremely well argued and sound report, which demonstrated that considerable CO2 emission savings could be achieved through bioethanol. The representations from British Sugar—I imagine that many Members will have received them for today's debate—referred to a possible 70 per cent saving of such emissions, so there is a great deal to play for. These are big games; I only wish that we move forward and accomplish them.
  The Under-Secretary of State for Environment, Food and Rural Affairs probably articulated the Department's position when, in a debate of 15 October 2003, he said:
  "Biofuels can provide significant life-cycle reductions in carbon dioxide emissions".[Official Report, Westminster Hall, 15 October 2003; Vol. 411, c. 89W1.]
  Those were his words, so DEFRA is clearly signed up to the concept that it could be a sensible way forward to tackle the problem of climate change. If so, however, we have to ask why we are not making more progress. That is the key question for this afternoon's debate.
  I have talked about the environment, but there are also benefits for agricultural and rural communities. The right hon. Member for Fylde said that there would be a marginal increase for road users—frankly, it would not be much, but even a marginal increase would have to be offset by the gains to the rural economy from the creation of many jobs. It is not clear precisely how many jobs might be created, but in a previous debate of 20 November 2003, the Minister for the Environment estimated that 6,000 jobs would follow from meeting the 5.75 per cent. target. That is not insignificant for rural communities. The European Commission report of 2001 said that a UK biofuels industry could create 20,000 to 30,000 new jobs, and my hon. Friend the Member for North Norfolk (Norman Lamb) has been particularly active on that issue. There is some uncertainty about the exact scale of the jobs that will be created, but no one is in any doubt that they will be— and often in areas of deprivation or of hidden rural unemployment. We should not lose sight of those benefits.
  We are always encouraging farmers to diversify, and biofuels represent a classic way for them to do that. Biofuels are good for the environment, and diversifying into them would help protect rural industries and the rural economy. We should encourage that.
  The Minister will be familiar with the Curry report, from both his present and his previous roles. That report states:
  "England needs a long-term strategy for creating and exploiting opportunities in non-food crops, including starch and oils".
  There are therefore two reasons why DEFRA should be active in this area. The first has to do with the environment, and the second with the rural economy. The Department has two main responsibilities, and both would benefit from adopting such a policy, but it is not being introduced in a coherent way. The exasperation

  1723
  felt by the hon. Member for Sherwood (Paddy Tipping) at the failure of the Department for Transport to start even a consultation process was evident. It is shared by many other hon. Members, but why is the process so slow in starting?
  No one so far has referred to the Environment, Food and Rural Affairs Committee report. The summary states:
  "The Government's biofuels policy, to the extent that it has one, appears muddled and unfocused."
  Mrs. Gillian Shephard: My right hon. Friend the Member for Fylde (Mr. Jack) referred to it.
  Norman Baker: I am aware that the right hon. Member for Fylde referred to it and used the word "muddled", but I was quoting directly from the report. In any case, if the right hon. Gentleman did mention the same passage, I am happy to repeat it, as I entirely agree with it. The summary goes on to say:
  "Different Government departments disagree about the main reason for increasing use of biofuels and about what level of Government support is necessary."
  That is the problem. As the hon. Member for Sherwood said, a great many different Departments are involved, including DEFRA, the Department of Trade and Industry, the Treasury, the Department for Transport, and Customs. There are probably a few others as well, and I would not be surprised if the No. 10 policy unit was one of them.
  The fact that there is no lead Department in this area is a recipe for chaos and inaction. The same problem was evident in the previous Parliament, in connection with animal welfare. The breadth of responsibilities on that issue was huge: it was spread across many different Departments, and I was one of those who told the Government that they needed to sort the problem out.
  To the Government's credit, they brought under DEFRA everything to do with animal welfare apart from experimentation, which is a Home Office responsibility. I hope that a draft Bill on animal welfare will move matters forward, but that example shows that changes can be made and a lead Department identified.
  What is the solution in respect of biofuels? Who will bring matters together and identify a lead Department with the clout to take all the measures that the House considers necessary? If we do not give responsibility to a lead Department and sort out the mess in Government, the brutal reality is that the use of biofuels ain't going anywhere.
  If biofuels policy is taken forward, I predict that, very late in the day, someone in Government will say, "We're going to miss this EU directive target. We're on the skids and nowhere near it." That will lead to sudden, jerky decisions being taken, with the inevitable result that imports will have to deal with the problem. We will therefore miss the opportunity to help Britain's rural economy.
  Mr. Roger Gale: Does the hon. Gentleman agree that the driving force in this matter is the Treasury, which is patently not enthusiastic? Nick
  1724
  Tapp is a farmer in my constituency, and his enthusiasm for biofuels has enthused me in turn. I raised the matter with the Treasury, and the Economic Secretary wrote back to me to say that, even with a discount of 20 per cent. per litre, 30 per cent. of such fuels were being imported. The implication was that increasing the discount would lead to higher imports and higher feedstock exports by farmers to Germany, with the result that there would be no gain. Does the hon. Gentleman agree that economies of scale will never be achieved as long as that attitude prevails?
  Norman Baker: I entirely agree. That argument is covered in the report and in the Government's subsequent response.
  Of course, the Treasury is behind everything that the Government do. It need not be worried about biofuels, for the reasons given by the right hon. Member for Fylde. However, if it is going to make decisions on taxation for environmental reasons, it needs to conduct proper analyses of what will happen as a result of the decisions that it takes.
  When the Treasury introduced taxation differentials for liquefied petroleum gas, its motives were good. It felt that it had to respond to pressure for taxation differentials for cleaner fuels, but it did not think through the consequences or weigh the advantages of LPG by comparison with biofuels. The Treasury does not feel able to back down on that, because the LPG industry is saying, 'You promised us the differential. We want some certainty, and you can't move the goalposts." The Treasury has some sympathy with that view. As a consequence, it has got into a bind that it cannot get out of.
  Mr. Miller: The hon. Gentleman must take another factor into account. LPG is particularly popular in some rural communities such as those in Cornwall, where it is more readily available than in many other counties.
  Norman Baker: I take that into account, and it is only right that, having been given some signals, the LPG industry should not be left high and dry. My point is that the Treasury is allowing that particular consideration to get in the way of a biofuels policy.
  Mr. Heath: I do not want to depress my hon. Friend or the House too much, but I fear that the sclerosis on that particular topic has being going on for some time. I clearly remember a similar debate in which the hon. Members for Southampton, Test (Dr. Whitehead) and for Sherwood (Paddy Tipping) participated. In that debate, there was also consensus from both sides on the way forward. In the last Parliament, when the right hon. Member for Gateshead, East and Washington, West (Joyce Quin) was Minister of State in the Ministry of Agriculture, Fisheries and Food, MAFF expressed a clear view that it wanted to progress the issue, yet nothing has happened in the intervening period that could be construed as a viable policy for biofuel, and that is the problem.
  Norman Baker: I agree with that statement, which brings me to my final point—I am conscious that other hon. Members want to contribute, and rightly so. The Minister must tell us what will happen at the end of this

  1725
  debate and what he will do with the consensus that he will take away from it. What is the relevant mechanism in the Government? How will he deal with his Treasury colleagues? What clout has he got with other Departments? What will the outcome be? We need to know the process—if he does not know the outcome, at least he can tell us about the process.
  I regularly say that I have got a lot of time for the Minister—I am sure that he welcomes my saying that in front of his parliamentary colleagues. If I can use a metaphor, however, I fear that he has been put at the wheel of this particular vehicle but other Departments have not put the fuel into it, and he must sort that out.
  4.42 pm
  Mr. Anthony D. Wright: The biofuels sector is the least developed part of the sustainable energy industry, largely because the current price of fossil fuel has made further development uneconomical to date. It is essential that we do as much as possible to reverse that. We must ensure that biofuels are supplied quickly and effectively to the transport market where there is significant demand for them. I therefore call on the Government to provide more resources for the development of a fledgling industry.
  Although it is essential that individual biofuels are viable in terms of their environmental impact and the net environmental gain of their large-scale production, we must not undermine the many benefits that such fuels could bring to our environment and economy. As I have said before, the use of bioethanol and biodiesel as fuels for road vehicles could have a large-scale impact on reducing carbon emissions and greenhouse gases in the UK. Bioethanol produces 50 per cent. fewer carbon dioxide emissions than other fossil fuels. According to the Sheffield Hallam study, Biodiesel from oil seed rape produces savings of 72 per cent. to 86 per cent. in carbon dioxide emissions and 56 per cent. to 80 per cent. in greenhouse gas emissions compared with ultra low sulphur diesel. Such savings are in line with the Government's commitment to reducing CO2 and greenhouse gas emissions by 12.5 per cent. by 2008 to 2012.
  The transport sector contributes nearly a quarter of the UK's emissions of CO2 and it is imperative that we set up an effective emissions reduction strategy to counter the 5 per cent. growth in emissions from 1990, cut CO2, emissions and meet urban air quality standards. That strategy must include a greater focus on the potential of biofuels.
  A commitment to fuel diversification through biofuels would lead to the development of a vibrant new industry with a consequent increase in economic activity, job creation—estimated by a June 2003 report by the East of England Development Agency to be in the region of 12,000 new jobs—and associated socioeconomic benefits. Fuel diversification in favour of the sector could provide an alternative avenue to already depleted North sea oil reserves, leading to greater fuel security. That all depends on the sector's growth and the Government's commitment.
  I welcome the fact that the Government will introduce a new rate of duty for bioethanol from 1 January 2005, set at 20p a litre below the rate for sulphur-free petrol. I also welcome the alternative fuels framework
  1726
  introduced in the 2003 pre-Budget report that outlines a clear set of principles to determine future decision making for the development of biofuels across Departments. The rolling three-year period of certainty in the differentials in duty rates for alternative fuels is another welcome and transparent part of that framework. I would also like to note that the Government's reply to the Environment, Food and Rural Affairs Committee's report on the matter is encouraging.
  I was pleased to note that the Government fully accept the Committee's recommendation that DEFRA should, as a matter of urgency, carry out an economic appraisal of the effect that a UK-based biofuels industry would have on farming. Further, I am pleased that DEFRA will publish detailed workings of that evaluation. DEFRA's central science laboratory has already assessed the impact of biofuels on habitats and biodiversity in the UK. It states that
  "biofuel production from a broad mix of arable crop feedstocks will have a neutral effect on the farmed environment".
  However, more scientific evidence must be collected on the effect of the large-scale production of biofuels on the environment and biodiversity.
  I encourage the Government to look for new and innovative ways to turn the sector into a vibrant new green industry in the UK. We must meet the EU Commission's target of 2 per cent. for the volume of biofuel to be used in the UK by 2005, and of 5.75 per cent. by the end of 2010. I hope that DEFRA—and the Department for Transport—will take those targets into account in consultations on meeting those requirements and will provide more resources for the industry, because time is of the essence. We need effective and proactive joined-up Government, not a lack of support for the admirable goals that I have laid out.
  The Government have stated, in response to the Committee's report on biofuels:
  "The Government fully agrees that fiscal incentives should always be considered alongside alternative methods of support, such as capital incentives, grants or regulatory solutions. The Government keeps all types of support under review."
  Clear steps can be taken now by the relevant Departments, in consultation with each other, to build the industry through such measures, quickly and effectively.
  Most important for DEFRA to consider, in my opinion, is the fact that the current regional selective assistance provided by the Department for Transport. while perfectly sensible in its own right, is not flexible enough to encourage national growth of the biofuels industry. It would be far more advantageous to establish a scheme similar to that which is already in place for bioenergy and wind farms. I would be interested to know what the Minister believes the potential of such a national scheme might be, as opposed to the regional assistance that can be provided at present.
  Other problems that must be thought through relate to the common agricultural policy, which allows payments of ₣45 a hectare for growers of energy crops. That will not have any significant impact on bridging cost differentials between bioethanol and fossil petrol. In its consultation with other Departments on that

  1727
  matter, DEFRA must also consider the benefit of other initiatives, such as the renewable transport fuel obligation. That scheme, if introduced, would require producers selling road transport fuel in the UK to show that a specific proportion of each fuel sold over the course of one calendar year was a biofuel. Such a step would be a bold and successful move and must be thoroughly assessed. According to the estimates of British Sugar plc, such a scheme could have a starting proportion of biofuels of 1 per cent. for 2006, increasing annually by 1 per cent. until 2010. The mandatory inclusion of that quota would ensure that the requirements of the EU directives were met, that there was a market for the new product and that oil companies played their part in the development of a new UK industry.
  While the Government should be congratulated on introducing a new rate of duty reduction for bioethanol, they should be bolder in setting a duty reduction in the region of around 30p a litre on that fuel. While it is true that such increasing duty reductions will lead to greater importation of biofuels, a measured introduction of further reductions over time, in conjunction with the establishment of the industry in the UK, would have a positive effect. Certainly, the lack of such an incentive is hampering the industry's growth at present.
  The threat of imported biofuels with lower environmental credentials could seriously undermine the fledgling industry. The real risk, however, is that UK producers with strict environmental standards will be undercut by less satisfactory non-EU imports. I find unsatisfactory the response of the Government to that threat, as outlined in the seventeenth report from the Environment, Food and Rural Affairs Committee. The Government state that they
  "anticipated that there will be limited international trade in refined liquid biofuels in the medium term. However, the Government has always considered that a higher level of duty derogation on biofuels could encourage imports of biofuels."
  They add that
  "auditing the environmental impact of biofuels in the countries in which they are produced is extremely problematic and it is unlikely that a cost-effective and robust system of regulation could be introduced."
  I do not criticise the Government on the specific issues raised in those two comments but question their willingness to consider how to alleviate the threat of an influx of imported goods if the duty reduction is increased. It seems that there is more willingness to forgo the idea of a larger reduction than to tackling the problem head on.
  As to the current exclusion of ethyl tertiary-butyl ether from the fuel duty rebate, experience in other European Union member states indicates that the preferred method of introducing bioethanol into the fuels market is by converting methyl tertiary-butyl ether to ETBE plants. Currently, the 47 per cent. bioethanol that makes up ETBE is not covered by the fuel duty rebate. Does my hon. Friend the Minister believe that addressing that anomaly would be another positive step in developing an effective biofuels market?
  There must be an increase in Government resources for the development of a strong UK bioethanol industry, whose development could be quick and
  1728
  successful. The production technology for such an endeavour is well known, and the industrial will is present. I encourage the Minister to take on board the comments raised today and to examine ways in which more resources can be freed up, to put the bioethanol industry on a sound footing for the future.
  I also hope that the draft transposition strategy for the biofuels directive, including targets for the level of biofuels used in the UK for 2005 and 2010. will indicate clear Government support for the development of the industry. We are not looking for excessive subsidies in the long term but for a promising start. The Government must act expeditiously to ensure that farmers and processors are sufficiently pre-warned of future biofuel targets.
  4.53 pm
  Mrs. Gillian Shephard: This debate illustrates perfectly the cross-party alliance on this issue. The Select Committee report was unanimous, the issue has stimulated several early-day motions and there have been well-supported debates in this Chamber and Westminster Hall. The Minister can be in no doubt about the size of the political lobby in favour of more help for biofuels. Treasury Ministers have also received many delegations. Last week the hon. Member for Sherwood (Paddy Tipping) and I met the Economic Secretary and an all-party lobbying group has been formed in Norfolk, of which the hon. Member for Great Yarmouth (Mr. Wright) is a valued member. That group is supported by Members of the European Parliament, all Norfolk local authorities, the University of East Anglia institute of food research, British Sugar, hauliers, fuel and petroleum companies, the Royal Norfolk Agricultural Association, and others.
  The Government say that they support the case for more help for biofuels. After all, they introduced the 20p a litre reduction in the 2003 Budget, which will be implemented in January 2005. The Government's own Commission on the Future of Farming and Food recommended in the Curry report that duty on biofuels should be reduced.
  The Government have signed up to the European Union biofuels directive, which requires the UK to notify the EU Commission in just four months from now the volume of biofuels that it will use by the end of 2005. The Department for Transport has provided rather coy answers to questions on how it proposes to meet that timetable but it is there. Then there is the Government's energy White Paper, which refers to a commitment to produce
  "an assessment of the overall energy implications of a hydrogen economy and of large scale biomass-based fuels".
  There is no lack of Government commitment but a lack of action. All their commitments and the 20p duty reduction have resulted in very little. Indeed, one witness to the Select Committee rather shamingly described the results as
  "an extremely small cottage industry."
  That is correct. We make biodiesel from used cooking oil, and there is no bioethanol production for road use. That is the situation after all those commitments and the 20p reduction. The system does not work.
  What will happen? It is useful that we are holding this debate a week before the Budget. In his pre-Budget report, the Chancellor indicated that there might be some movement in the Budget. He said:

  1729
  "I propose also to consult on a new framework for the tax treatment of green fuels: that we make a commitment to prior announcements, three years ahead, of incentives to increase usage and thus promote investment in new fuel-efficient technologies. The Budget will announce the way forward on that measure."— [Official Report, 10 December 2003; Vol. 415, c. 1066.]
  Everyone in the House is already in agreement on this matter, so I am sure that we all expect next Wednesday to be an extremely positive day. Let us hope that will be the case.
  The Government could do several other things, as other Members have outlined; they could introduce duty reductions, capital grant schemes or mandatory inclusion levels, which is the subject of an amendment in the other place to the Energy Bill, of which my right hon. Friend the Member for Fylde (Mr. Jack) spoke so fluently. Some of us who lobbied the Economic Secretary gained the impression that the mandatory inclusion route might be announced next Wednesday. In passing, I pay tribute to the patience and courtesy of the hon. Gentleman in his dealings with the many, many lobbying groups that he has met in connection with the issue.
  It is clear that the Treasury has taken charge of the matter, and I have no doubt that the Minister for the Environment will want to explain the strength and vigour of the arguments that he has used, face to face with the Treasury, in advancing the case for biofuels. I hope that he will also be glad that there is such strong cross-party and national support for such moves.
  The Select Committee report had to point out that
  "the departments involved do not speak with one voice … we deplore the fact that the Government has not nominated any one Department to lead on biofuels and consider that this is a prime reason for the slow progress that has been made".
  It noted that the Government had
  "expressed support for biofuels but the mechanisms used to promote their use have had little effect so far".
  That is indeed the position.
  Despite the fine words and the commitments to environmental goals that are repeated so often, production of biodiesel is a cottage industry, and we have no bioethanol production at all. Meanwhile, our competitors are forging ahead and rapeseed is exported from the UK to be re-imported as biofuel—at what cost to the environment, no one dare calculate.
  Next week's Budget will give the Chancellor the opportunity to put all those things right. Time is running out. Imported biofuels are already on sale on our forecourts. I know that the Minister is with us in spirit, and even in action and in bio-spirit. The time for pronouncement is over. He is persuaded of the rightness of the cause, in terms of sustainability, security of supply and consistency of action with the Government's objectives.
  As I said, the time for pronouncement is over—the time for action was yesterday. That should be the message from the House to the Chancellor.
  4.58 pm
  Dr. Alan Whitehead: I think that it was the hon. Member for Worthing, West (Peter Bottomley) who said in a newspaper article some while ago that to get the attention of the House for an idea, one has to enunciate it at least six times. This will
  1730
  be the fifth time that I have spoken in this place about an ethanol escalator, so I am optimistic about the progress of the idea.
  I am gratified that everyone in the Chamber agrees that some such device—an obligation for an escalating mix of biofuels with conventional fuel—might be a way forward.
  The word that has been used this afternoon is "action", but perhaps the right word is "traction". How do we get traction for a series of proposals that perhaps now have the merit of being obvious? That is, farmers can grow biofuel crops; a European Union directive is coming forward; there is a pressing and urgent need for further action on transport with regard to climate change; and we have an industry that in principle could make both biodiesel and bioethanol. The issue is one not of experiment, but of making these things happen.
  The alternative fuels market has been a little confused about what will be the winning fuels. Hon. Members may share my experience of wondering which car to buy in order to be a "goodie"—in order to drive a car that is environmentally more sound than one that I might have possessed before. The messages that have emerged over the past few years would have caused one to buy a different car every six months.
  Simply placing bioethanol into existing petrol tanks and driving about in the same cars, with the immense gain that that would represent in terms of CO2emissions and all the other benefits, is perhaps a much more stable and secure way forward in making a change in fuel. We do not need to imagine that, because we have the experience of Brazil. In its first attempt to introduce ethanol into its market, Brazil set up separate petrol pumps, made arrangements for new cars to be produced and introduced 85 per cent. ethanol into petrol pumps across the state. That did not work very well overall.
  What has worked much better is the escalator method that Brazil has introduced, increasing the amount of ethanol in petrol to, I think, 23 per cent. to 24 per cent.—far greater than anything proposed today. That has been a success, whereas the attempt to introduce a parallel system of fuelling vehicles was not. Therefore, I believe that the escalator that has been suggested this afternoon, and which we have discussed previously, is the right way forward.
  Ethanol is also the right way forward in that it can be not only a fuel in its own right, but a transitional fuel towards a long-term hydrogen fuel economy. When we envisage such an economy, we realise that one of the problems is that many people who talk about it neglect to say that one of the prime ways of making hydrogen, at least for the foreseeable future, is from mineral fuel. Therefore, one does not solve the problem of CO2emissions; one simply places it one stage up the chain.
  Recent work at the university of Minnesota has demonstrated methods of making hydrogen directly from ethanol. Among other things, the use of hydrogen for fuel can be reduced by using ethanol to create it. Therefore, any investment we may make in introducing it now also leads in the long term to a hydrogen fuel economy, if that is the direction in which we are going.
  The other advantage of an ethanol escalator of perhaps 1 per cent. a year over a period of time, as my hon. Friend the Member for Great Yarmouth (Mr. Wright) suggested, is that it would gear up the industry

  1731
  to create the ethanol that can go into petrol. Indeed, bioethanol can be made from a variety of sources and in a variety of ways. Sugar cane is used in Brazil. Sugar beet or wheat is used in the UK. A company called Iogen has recently proposed setting up a plant in the UK—it might not do so because of problems with the market—to make ethanol from the fermentation of straw. So an escalator that would bring that industry on stream and give it the traction needed to bring its products to market would be the right way forward.
  In talking about possible ethanol imports, we might reflect for a moment about the fact that, for a number of years, we in the House have happily talked about importing large quantities of mineral fuels to run our vehicles. We are about to become a net importer of mineral fuel again, yet we do not seem to find that particularly remarkable. Even if we did import some ethanol, it would not come from oil-producing countries. The pattern of importation would be different. Indeed, that could support some economies that are not oil rich and do not have the ability to take oil out of the ground.
  For all those reasons, I believe that an ethanol escalator represents the right way forward. The Government are seriously thinking about those issues, and I am proud of the fact that the energy White Paper identifies, for the first time, the need radically to reduce our carbon dioxide emissions as part of our energy policy. An escalator would be a way to ensure that that policy is pursued in respect of road transport, and I hope that it comes to fruition shortly.
  5.6 pm
  Mr. James Paice: Unsurprisingly, I will join the general consensus about the need to support biofuels, but I want to address the issue from a slightly different angle, by pointing to a fundamental inconsistency in the way in which the Government have dealt with the correct obligations that they undertook at Kyoto.
  My main thesis is my concern about climate change and the need for this country to do all that it can to help to minimise its impact, so I want to consider biofuels as part of the whole energy scenario, rather than concentrate on the narrow issue of road transport. We risk getting it wrong by narrowing our focus to road transport. I want to consider biofuels straightforwardly against the fundamental objective of reducing the impact of climate change. Of course we cannot ignore other issues, such as the security and reliability of supply, the environmental impacts of whatever steps we take and the economics—the cost of saving carbon dioxide and the impact on the rest of the economy of whatever decisions we take—but I start from a fundamental belief that biofuels have a significant role to play.
  The energy White Paper shows that the Government are planning a massive expansion of wind power for electrical generation, yet on 17 September in evidence to the EFRA Committee, the Economic Secretary said that the likely cost per tonne of carbon saved through offshore wind generation is the same as for biofuels. I ask the Minister to take back to the Government a
  1732
  question: why is there such a rush for wind power, yet such reticence about biofuels? Wind power is highly inefficient and unreliable—no one can guarantee that the wind will always blow in any location—and it has high maintenance costs. Most importantly, it has an atrocious environmental impact.
  The environmental footprint of wind power must be considered. I am glad that the hon. Member for Great Yarmouth (Mr. Wright) is here because his constituency contains one of the earliest fleets of windmills, which I have seen on several occasions, and they have a significant impact on the environment. I defy all those hon. Members who represent constituencies where planning applications for wind farms are in the pipeline—there are many of them—not to say that there is huge local resistance to them. They are all opposed.
  There is also the issue of substitution. The Government are running down nuclear power and replacing it with wind power, but they are not actually reducing carbon dioxide emissions at all. Whatever one's views about nuclear power, it does not generate carbon dioxide. I happen to be pro-nuclear but, even if one is not, one cannot pretend that running it down has an impact on the global environment. The rush to wind power is singularly unwise.
  Hon. Members have rightly referred to bioethanol and biodiesel and about the levels that can be put into existing engines. The figure is between 5 per cent. and perhaps 15 per cent. for bioethanol, but I understand that there is no upper limit for the maximum inclusion rate of biodiesel. We have discussed the duty derogation and, although I know that I am probably renowned as a bit of cynic, it really is a piece of green trickery by the Government.
  By introducing a 20p derogation, the Chancellor is able to claim green credentials in the full knowledge that that would not cost him anything. The derogation is not enough to trigger a realistic industry. As the hon. Member for Sherwood (Paddy Tipping) neatly said, all we have got is a bit of chip oil. We have not got a serious industry, and we will not have one with the derogation that we have at the moment.
  The Economic Secretary, in his evidence, seemed to be very worried about sucking in imports and subsidising industries elsewhere. We have discussed agriculture and there has been a substantial increase in food imports, but the self-same Minister said that security of supply was not an important factor. I think he is wrong, but that is what he said. Therefore, worrying about whether the supply is from imports or domestic production would not seem that important. I passionately care about domestic production and, given the right incentives, I am convinced that we could have one.
  Norman Lamb: Will the hon. Gentleman give way?
  Mr. Paice: I am sorry, but I shall not give way because other Members wish to speak.
  I wish to turn to a point that my right hon. Friend the Member for Fylde (Mr. Jack) covered in a different way—the fundamental difference between the Government's policies for power generation and for

  1733
  road transport. The consumer pays for the introduction of renewables for power generation—whether that is wind power, wave, solar power or any other method—but, in the case of biofuels and road fuels, the Government wish to use a duty derogation. That is a total inconsistency from a Government who go on and on about joined-up government and working together.
  Cargill plc has said to me and, I am sure, to other Members that a 2 per cent. market share for biodiesel with a 28p derogation would cost £108 million, whereas a derogation of just 1.5p on a 95:5 blend would cost the same, but would satisfy 37 per cent. of diesel requirements. I put it to the Minister that there are alternative ways of addressing this fundamental problem without necessarily going down the wholesale route of a massive derogation.
  I want quickly to touch on the agricultural impact of an expansion of biofuels. Much has been said about that, and some environmental bodies have questioned whether that would be in the interests of our national environment. My principal concern is climate change, but I shall not debate issues involving the common agricultural policy. However, I believe that the reforms that are in train are, in principle, going in the right direction.
  If we have biofuels, there will obviously be a new market for wheat, sugar beet and oilseed rape. That must be good. Whether it would have a significant impact on the price—that is the fundamental issue for whether there is large-scale expansion in the acreage of those crops—is more questionable. In the past two years, the wheat price has varied by 100 per cent. Two years ago, it was £55 to £60 a tonne, but the price reached literally double that even though it has fallen back a bit now. It is therefore difficult to foresee what will happen to prices, and that is the case without a biofuel industry. It is difficult to be precise.
  For sugar beet, we are looking at the seed quota, but that is a wholly unsubsidised element of the sugar beet crop, so it is not a serious issue. The situation might have the greatest impact on the ultimate price of oilseed rape, but if we went down the derogation route, its price would be constrained by the duty relief. However, it would always be open to the Government to reduce the derogation if that were the way in which things went.
  The hon. Member for Southampton, Test (Dr. Whitehead) referred to our mineral oil imports. No Minister of any Government can ever forecast what the oil price will be, so the questions of the economic impact on agriculture, whether the acreage would expand and the likely cost of developing the industry depend on crystal ball gazing into what the real price of oil will be. If any hon. Member can say what the oil price will be in the next five years, they frankly deserve to be awarded everything available—none of us knows.
  I know that other hon. Members wish to speak. It has been said over and over again that the Minister is on our side, but he must take a message back to the Government. It is his bad luck that he is here to account not only for himself, but for the whole Government's woeful response thus far to biofuels. He must go back to his colleagues and say, "There is great inconsistency in how we are approaching the use of energy vis-á-vis its impact on climate change." It does not make sense to
  1734
  encourage the widespread use of wind power that will be paid for by the consumer—it will not necessarily reduce global warming one iota because it will be introduced largely at the expense of nuclear power—yet at the same time to refuse flatly to do what is necessary to generate a market for biofuels.
  At the end of the day, I do not mind whether the market is achieved through a duty reduction rather than a renewables obligation, although I personally prefer the incentive approach to that of regulation. I do not like the idea of using capital grants because they tend to be regionalised and we are not considering a regional issue, but a national one. Additionally, East Anglia, which is the biggest arable area in the country, receives little money through capital grants because it is reasonably economically prosperous. I am not raising that as an issue, but it demonstrates why regional capital grants are not the way forward. I do not mind which of the other two ways forward the Government ultimately choose, but for goodness' sake let us choose one and get on with it.
  5.17 pm
  Mr. David Drew: I shall make three main points in the small time available, but first I congratulate the Chairman of the Select Committee on the way in which he presented the case in the report. The Committee has a reputation for churning out a certain quantity of reports, but this report shows that we can also produce the quality. The debate has been useful.
  My three points are fairly simple. I want to touch briefly on imports. There is a danger that the Government seem to be uniquely capable of achieving a lose-lose situation. When we heard evidence from the Financial Secretary—I do not want to chide him specifically—we were told that the market was seen to be the main determinant of the best way to produce biofuels, and that if that meant through imports, so be it. That is not good news for the domestic industry. The Government's response to the report, through the Department for Environment, Food and Rural Affairs, argues that it is not terribly interesting to consider the environmental audit of what happens in other countries. We are signed up to Kyoto, which is an international agreement, so perhaps we should take account of not only our domestic industry, but the damage that we might do to other parts of the world. That is a problem, and we should have the strength of our convictions to do things locally—the Government also argue that—and perhaps more effectively.
  For the fifth time of asking, I congratulate my hon. Friend the Member for Southampton, Test (Dr. Whitehead) on pushing forward the bioethanol escalator, but I wish to counterbalance the idea that we can achieve what is possible by simply blending that in with existing supplies of fuel.
  My hon. Friend the Member for Sherwood (Paddy Tipping) and I visited the BMW plant in Sao Paulo., where we learned that biofuel production kick-started the Brazilian motor industry. Brazil will have a great hegemony in future vehicle production, because it is the first country to invest in such fuel. It has proved that biofuels work, and we should learn a lesson from it. However, we should opt for blending, and not pursue biofuels as an alternative.

  1735
  As the hon. Member for South-East Cambridgeshire (Mr. Paice) said, biofuels provide an opportunity to overcome our reliance on traditional forms of energy. The Brazilians, of course, were not environmentally driven initially —they were scared to death that the Americans would turn the petrol pumps off, and wanted something else to increase their energy supply. We should not underestimate either the physical need for such fuels or the need for fiscal incentives.
  Other hon. Members have skated over the need for stability, but I shall be blunt about it, whether it is achieved through financial incentives or exhortation. I visited the Arbre plant with the all-party group on renewable and sustainable energy. We have gone backwards, as we had a state-of-the-art biomass plant near Doncaster, which failed because there were no incentives for farmers to supply raw materials. There were no stable contracts, and we need to overcome that problem. We have taken a backward step, but we need go forward. My hon. Friend the Member for Southampton, Test and I have worked together, and have discovered problems with renewables obligation certificates. We must give producers a guaranteed price so that there are stable conditions for trade and investment in future. That is crucial to biofuels, as it is to other forms of renewable energy.
  5.22 pm
  Mr. Richard Page: I should declare an interest, because for a couple of years I had ministerial responsibility for renewables until I was given a little more time with my family, although not quite as much time as some of my hon. Friends. I am very much in favour of renewables, provided they are introduced in a sensible way and not at a completely uneconomic cost
  The hon. Member for Southampton, Test (Dr. Whitehead) is quite right—hydrogen is the way forward, and the electricity supply need not be a problem. All we need do is introduce a sensible programme of nuclear power. We would then have a base load, and would never have a problem with the electricity supply again. The Government are blinkered about anything to do with nuclear power, but it would be contentious to develop that argument.
  Biofuels form part of the energy pie, but the flipside of that pie, if there can be such a thing, are the costs of pollution, CO2 and global warming. I promise not to be diverted down the route of making general points about renewable energy production, but biofuels play a part in such production. I welcome initiatives to reduce pollution and CO2to achieve climate control, but they should involve an appreciation of the commercial world in which our industry competes. It is fine to say that we want reductions in emissions and carbon trading, but not if countries from which we import do not impose the same burdens— responsibilities may be a better word— on production. If we do not acknowledge that, it would be small wonder if plants continue to relocate to countries that do not operate such levels of control. Do we wish to increase the number of our industries that relocate overseas? Over the past seven years, more than 600,000 manufacturing jobs have gone abroad, and we should consider whether we want gratuitously to increase that figure.
  1736
  Hon. Members have pointed out that biofuels have the virtues of a closed carbon cycle. The crop is grown, thanks mainly to the sun, which itself is a diminishing resource. There is not much we can do about that, but it should not worry even the younger Members of the House. The carbon from the atmosphere is locked into the crop, burned and locked in again— a balanced cycle and everything is hunky-dory. The process has the advantage of low pollution, it does not add to present CO2levels and it can usefully employ set-aside. It could have dramatic price advantages, subject to Exchequer approval. As my right hon. Friend the Member for Fylde (Mr. Jack) said, there is sufficient tax headroom on the cost of fuels to allow the Chancellor to be quite generous.
  The Government have helpfully signed up to the target for biofuel usage of 2 per cent. by the end of 2005. Unfortunately, that is the end of the good news. The target of 10 per cent. renewables by 2010 is, to put it bluntly, for the birds It is completely unrealistic, unless the Government suddenly announce some secret scientific advance, such as that photovoltaic cells will have a conversion rate of three times the present level, or that after all these years a way has been found to harness wave power. I even heard one Minister, who had better be nameless— enough Ministers are in trouble already—say to an audience of energy enthusiasts that if we do not reach the 10 per cent. target by 2010, it will be the responsibility of everybody in the energy business, not of the Government.
  I think that there is a reasonable chance that we can meet the target of 2 per cent. for transport usage in 2005, but if we miss it, I put the blame squarely on the shoulders of Government. The 10 per cent. level for renewables by 2010 is capricious; the 2 per cent. target is achievable. I shall not repeat what my right hon. Friend the Member for Fylde said about the Government's present position, other than to endorse his words when he called it muddled and unfocused. I say amen to that.
  The NFU brief issued to hon. Members has been mentioned. The union believes that farmers, who have had a very rough time, could take advantage of the move to biofuels and put their set-aside land to productive use to reduce pollution levels. I support that
  How do we go forward, following on from what my right hon. Friend the Member for Fylde said? The hon. Member for Sherwood (Paddy Tipping) called us used chip oil recyclers, and he is not far off the truth. Burning fuel oil is not the cleanest activity. As someone with some experience in transport oils, I would regard it as a positive sales pitch to be able to say that there were biofuels in the mix, and that customers would be helping the environment. My hon. Friend the Member for North Thanet (Mr. Gale) mentioned the problem that the Exchequer has with a product going abroad and coming back in the form of biofuel. The DTI has grant facilities and support facilities, and I see no reason why it does not start—through the challenge process, say— competitions to build plants in the UK. Once there were plants, the feedstocks would come to this country, go through those plants and be sold in this country. That would be the start of a virtuous circle.
  We have done that in the past. I remember that we gave support to chicken dropping electricity manufacturing— I think chicken litter is the polite word, although in the Department we used another word,

  1737
  which had better not be used in the Chamber. It works, and we exported some of those plants abroad. Why not support the bioethanol and biodiesel plants? It would overcome the problem of going abroad.
  I should have liked to spend considerably longer on this important subject, but the fact that we are under time constraints shows Members' interest in it. I hope that the Minister will take note of that. I am sure that my right hon. Friend the Member for Fylde is right. Let us blend the biofuel with fossil diesel, with a price obligation in place; let the Government positively support biofuel production plants in the United Kingdom, and— who knows? — they might meet a target. That must be a bonus.
  5.30 pm
  Mr. Andrew Miller: I thank my hon. Friends in all parties for their courtesy in allowing me time to contribute. I want to begin by considering the phrase, "muddled and unfocused" debate, which many hon. Members used. It understates the complexity of the picture.
  I should perhaps technically declare an interest because I shall comment on the benefits of liquefied petroleum gas, from which I benefit as a user. I have also contributed to creating a new carbon sink in my area by planting 850 trees last year. I therefore have a reasonable track record in making some positive contribution.
  We all agree that there is no such thing as clean fuel. Even solar energy requires large amounts of glass to produce it, and that involves energy costs. We must exploit the best available technologies and, in the context of fuel that is used for generation, we must consider a balanced fuel policy. I believe that attempts in the vehicle industry to move towards becoming carbon free can technically succeed. I have had the privilege of driving two hydrogen-powered vehicles. One was a concept vehicle but the other was derived from a body that is used for a people carrier today. I am pleased that it will be in the United Kingdom next month. I hope that members of the select Committee on Environment, Food and Rural Affairs will look at it. It is a Vauxhall-built vehicle
  I praise the work of the right hon. Member for Fylde (Mr. Jack) and my hon. Friend the. Member for Southampton, Test (Dr. Whitehead). However, I want to criticise one sentence in the Select Committee report. Paragraph 53 states
  "In our view, the environmental performance of biofuels is at least as good as that of liquid petroleum gas".
  That does not compare apples with apples. I am grateful to the right hon. Member for Fylde for acknowledging that differences, including the distribution costs of LPG, need to be taken into account.
  I am proud that my constituency makes a big contribution to the good aspects. People view it as the dirty constituency, which makes all the things that pollute. However, recent work by the Environment Agency— it has not yet been published but I have permission to cite it— examines the total local impact figures of several vehicles that are currently on the roads. I am pleased that the first seven models on the list are Vauxhalls, which are built in my constituency and powered by LPG. Those are the cleanest vehicles
  1738
  available today, using today's technology. Taking into account overall pollution, not simply carbon issues— a whole well-to-wheel analysis has to be done—those vehicles come out on top in an urban environment.
  I am certain, on the basis of my knowledge of the industry, that there is an important place for the biofuels technologies that have been discussed today. We need to support those technologies, and I accept the Select Committee's analysis in that respect. However, on our route to an affordable hydrogen economy—I am told that I could not afford to insure the two vehicles that I have driven because their capital costs run into millions of pounds— we must ensure that the transitional steps work. There is a problem with that, because we need to incentivise vehicle manufacturers, fuel producers and consumers, but at the same time, the Treasury has to raise income from somewhere. I say openly that I was delighted that the right hon. Member for Fylde was frank and honest about the possible increased costs of his proposal, but it was only a couple of years ago that Brynle Williams— who is now a Conservative Welsh Assembly Member— and his crew were leading protests against fuel duty. We will have to deal carefully and sensitively with the market issue, but I acknowledge that the right hon. Gentleman's point is important.
  During the past few years, we have achieved just over 1,000 LPG filling points around the country. There are still gaps: LPG is not available down the Worcestershire stretch of the M5, for example, and it is also thin on the ground in rural Worcestershire, as I have discovered when trying to visit my daughter. However, as I said in my intervention on the hon. Member for Lewes (Norman Baker), it is readily available in Cornwall. The gaps need to be filled, and we need to keep the incentives going to fill them
  I am anxious that we should not allow this debate to submerge the importance of maintaining another good, clean, proven technology that involves vehicles made here in Britain and supports British jobs. Just like the jobs in East Anglia that the right hon. Member for South-West Norfolk (Mrs. Shephard) mentioned, those are British jobs, and we must support them. We must ensure that we do not incentivise one part of the market in a way that damages another. We must get the balance right, and the concept that my hon. Friend the Member for Southampton, Test dreamed up, and which the Committee has developed, might provide us with a route forward.
  I urge my hon. Friend the Minister to acknowledge that in determining the best way forward we must continue to provide incentives to both LPG and the other fuels that we have discussed. I have already made that point to my hon. Friend the Economic Secretary. Those incentives must take into account the driving forces—if hon. Members will excuse the awful pun—that encourage fleet buyers to buy, and must also ensure that the costs surrounding the distribution of the fuels are met. If we get those parts of the equation right, we will continue to encourage important work, which UK plc can capture ahead of many of our European competitors, on the transition to a hydrogen economy. I am certain that we can deliver that transition.
  5.39 pm
  Mrs. Caroline Spelman: I should like to begin by paying tribute to the work of the Select Committee in preparing this report, and to all hon. Members present for speaking with such a high level of understanding on this subject. I feel that I am among cognoscenti. Also, I think that this is the first time I have spoken at the Dispatch Box on an occasion when no one has dissented on the matter under discussion. That is quite extraordinary
  If I were to summarise the debate, I would have to say that there has been a tangible sense of frustration on both sides of the Chamber at the lack of progress in this area. The hon. Member for Sherwood (Paddy Tipping) said that we were in danger of falling at the first fence, in terms of making progress on biofuels. My right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) said that at present we have nothing more than a cottage industry and that the time for action was yesterday. The hon. Member for Stroud (Mr. Drew) said that we were in danger of ending up with a lose-lose situation. All those remarks sum up our real frustration. I shall be adding a very positive view of biofuels, so I shall wait with great interest to hear whether the Minister is going to dissent from the consensus that has broken out to the effect that action is long overdue
  I should also like to make it clear that I stand at the Dispatch Box having spoken about this issue to my colleagues on our DTI and Treasury teams, as well as our Transport spokesman, who is part of my multi-departmental team. We speak with one voice on this subject, and I think that that is what is lacking elsewhere. The Chairman of the Select Committee, my right hon. Friend the Member for Fylde (Mr. Jack), called for a champion on the subject. The Chamber seems to be full of such champions, but we have one very big opponent. It is pretty clear that the opposition is coming from the Treasury. All the other Departments have said very nice things about bioethanol, but the plain fact is that they are in hock to the Treasury. This reality reminds me of an old adage that sums up exactly why there has been such inaction: when everyone is responsible, no one is responsible. That certainly seems true in this case.
  I must declare an interest. Twenty years ago, I wrote my PhD setting out the economic case for bioethanol. I said at the time that the price of oil would have to rise to ․35 a barrel before bioethanol could ever be economic on straight competitive terms. It is a sad fact that that situation has not changed. I can hardly believe that so much time has elapsed without any underlying movement in the fundamental economics between the fossil fuel and its equivalent alternative of biological origin.
  Some important facts should lead the Minister to do all that he can to persuade the Chancellor not to dismiss the case for these biofuels on purely economic grounds. The biofuels are from a renewable source, while fossil fuels are not. The incredible reluctance in this country to explore biofuels more positively undoubtedly stems from the fact that we are in the quite luxurious position of having our own indigenous source of fossil fuel. We are therefore in a somewhat different position from our European competitors. It is therefore all the more surprising that one of the economic barriers to considering the opportunity for biofuels should exist in
  1740
  the context of our having the highest percentage of tax on gasoline of any European Union member state, despite our indigenous fossil fuel supply resulting in our having the lowest pre-tax cost of gasoline in the European Union. That seriously reduces the Treasury's room for manoeuvre when considering the biofuels option. Such a contradiction is worth mentioning in this context.
  One of the reasons given for the long-standing resistance to biofuels is the fact that we are a major oil producer. However it is worth noting that in January this year, the UK trade in oil was at a deficit of £37 million for the first time for more than 12 years, and that a deficit has been recorded showing a decline of £416 million from the previous month. So the situation is changing. That underlines the point that biofuels offer a strategic, if not immediately cheaper, alternative. That is another strong reason for their serious consideration.
  Several Members have pointed out that biofuels give the Government an opportunity to reduce carbon emissions by offering a closed carbon cycle. According to British Sugar, a saving of up to 70 per cent. can be achieved through the use of biofuels. The Government signed us up to Kyoto— a decision that my party entirely supports— but as a result of going beyond the Kyoto requirement to cut carbon emissions by 12.5 per cent., to 20 per cent., we as a nation will have to work much harder to find where these carbon savings can be made. That is another reason to look closely at the biofuel option.
  Instead of being clear on this issue, the Government have set this higher target—a gold-plated target— without giving any real thought as to how to achieve it. That is at serious odds with important decisions taken in other departmental areas. For example, we should consider the implications of the aviation White Paper, which will blow our Kyoto compliance right out of the water.
  Today, I received a very interesting answer to my parliamentary question to the Minister about the impact that the aviation White Paper will have on our capacity to reduce carbon emissions. It stated:
  "International flights from the UK do not currently count in the national inventories of greenhouse gas emissions as there is no international agreement yet on ways of allocating such emissions between countries."
  So we have an extraordinary situation whereby all aircraft emissions released into the atmosphere above this country simply do not count. So that's all right then, is it? It clearly is not, and a source of real concern to many Members is how on earth the Government will square the circle of their plans for expansion and their commitment to reducing carbon emissions.
  We have had a substantial discussion, and if we are all agreed that biofuels offer the way forward, the next question is whether they should be imported. It is clear from what a number of Members have said that if nothing more is done, the most likely scenario is that the fuel will be imported from Brazil, where the sugar plantations are enormous and the wages are lower. Because of those factors, it will be very difficult for us to compete, notwithstanding the freight costs. I support those Members who have called for an opportunity to secure a domestic source of biofuel.

  1741
  There is a very real opportunity for diversification that is not to be missed, at a time when farmers face the most radical reform to the common agricultural policy that I can remember.
  We must however heed the National Farmers Union's warning that set-aside payments and payments for the growing of energy crops will simply not be enough to kick-start the domestic industry. It will take more than that, and the Minister has heard a number of constructive suggestions as to how that can be achieved. We urge him to seize the opportunity to get this point across to the Chancellor just before the Budget, because it is clear that that is where the sticking point lies.
  I cannot complete my contribution without pointing out that, if we are all agreed that biofuels offer a way forward for strategic, environmental and wider rural and economic reasons, we must acknowledge that the way in which the crops are produced is very important to the overall economic argument. There are concerns that if biofuel feedstocks are grown en bloc in a concentrated manner, some of the environmental benefits that can accrue could be undermined. I want to pay tribute to the work done by English Nature and the Royal Society for the Protection of Birds in looking at biofuel production's impact on biodiversity—both plant and animal diversity. It is right to record that the question of how we produce such crops is just as important.
  Let me end by challenging the Government. I entirely agree with my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice), who criticised the Government for their obsession with wind farms as renewable technology to the detriment of biofuels. Why the rush to wind power, and why the reticence on biofuels, he asked? There is a distinctly un-level playing field. There is no doubt that wind farms are increasingly unpopular, partly because they seem to cause environmental damage. It is not just a question of their appearance in the countryside; as ScottishPower made plain to me, linking them to the grid would require the building of swathes of pylons. No one could argue that that has no environmental implications.
  I urge the Government to seek the opportunity provided by next week's Budget statement. I urge them to think again about adopting the comprehensible, comprehensive policy on renewable energy that is currently lacking, and to give biofuels the chance that has been ignored for far too long.
  5.51 pm
  The Minister for the Environment (Mr. Elliot Morley): I congratulate the Select Committee on its report, and echo the comments that have been made about the effective way in which its Chairman, the right hon. Member for Fylde (Mr. Jack), put its case. I can honestly say that I have attended few debates during which the case has been made so persuasively, and Members have spoken with such authority. We heard from my hon. Friend the Member for Sherwood (Paddy Tipping), the hon. Member for Lewes (Norman Baker), my hon. Friend the Member for Great Yarmouth (Mr. Wright), the right hon. Member for South-West Norfolk (Mrs. Shephard), my hon. Friend the Member for Southampton, Test (Dr. Whitehead), the hon.
  1742
  Member for South-East Cambridgeshire (Mr. Paice), my hon. Friend the Member for Stroud (Mr. Drew), the hon. Member for South-West Hertfordshire (Mr. Page), my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) and, of course, the hon. Member for Meriden (Mrs. Spelman). All their contributions made a great deal of sense, and I shall try to respond to them. One or two specialist points were made, and I shall deal with those if I have time.
  The right hon. Member for Fylde set the scene very effectively. I was particularly interested to hear what he said about sugar, but let me put this to him and to the right hon. Member for South-West Norfolk. Has the present sugar regime been unhelpful in terms of support for innovation and new markets such as the market for ethanol? It is quota-controlled, which is quite restrictive. Is there an argument for reform? I am thinking of the part C quota, which was mentioned earlier. I was also interested in the right hon. Gentleman's comments about spreading the costs of duty across all fuel duty. There is a good deal of merit in what he said, and I shall return to it shortly. I shall also return to what he said about the Lords amendment.
  I hope I can respond to the main points made today as positively as they were made. The hon. Member for Lewes said that I had been put at the wheel of a vehicle with no fuel. Well, I am often put at the wheel of a vehicle, but it usually contains something that is about to blow up in my face as the vehicle starts moving. In that respect, this debate is a bit of an improvement.
  I am sympathetic to what has been said, as are the Government. Of course some issues need to be addressed, and they are complicated, as my hon. Friends have pointed out; but the Government's objectives for biofuels were stated clearly in the energy White Paper. I agree with my hon. Friend the Member for Southampton, Test that the production of hydrogen from ethanols may have a role to play in the future, along with that of other biofuels. They represent an important potential way of achieving the goal of zero-carbon transport. We have made good progress in relation to industry, but transport poses a big challenge.
  As to why we should support renewables from wind, it is that those will make a contribution. We will need a range of contributions to meet our targets for boosting renewables, to which biofuels can contribute. I do not dispute that for moment. I do not want it to be thought that wind energy is the be-all-and-end-all of the Government's approach, which it is not. Its contribution is perhaps more important than was being argued, however.
  Norman Lamb: Have the Government carried out a recent assessment of the extent to which a domestic industry for bioethanol will be in place when the duty reduction is introduced next January? I understand that no domestic production is anticipated with a 20p reduction in duty.
  Mr. Morley: An assessment has been made of the potential for jobs and the economy in relation to biofuels generally, and I will come to that point in a moment.

  1743
  We recognise that bioethanol and biodiesel from virgin crops can reduce carbon dioxide emissions by about half when compared with conventional fuels. In the case of biodiesel from waste vegetable oil, the life cycle benefits can be even higher. Achieving 5.75 per cent. substitution of biofuels for fossil fuels would save 2 million tonnes of carbon per annum in relation to the indicative targets that have been set by the EU. Environmental considerations are not the only issue, however. There is also the issue of new markets.
  The question is: how can the Government support this process? I am glad to be joined in the Chamber by the Economic Secretary to the Treasury, my hon. Friend the Member for Wentworth (John Healey), which demonstrates the interest of the Treasury in these issues. Members are aware of the existing 20p per litre cut in duty, and it was announced in Budget 2003 that duty on bioethanol would be reduced by a similar amount from January 2005. Those measures have encouraged the production of 2 million litres of biodiesel per month, so it is not right to say that there has been no effect. There is a potential for 115 million litres per year from waste oils, and I am pleased to see the development of new plants such as Argent, which is producing biodiesels from tallow and waste oil, which in turn will make a big contribution. The pre-Budget report in December gave a commitment to a rolling three-year period of certainty for the reduction in the duty rate, which is important.
  Duty incentives, however, are only one way. Support grants exist for capital investment, which is important in relation to new development and new plants, and those are available through regional development agencies. Under last year's common agricultural policy reform agreement, crops for biofuels continue to be grown on set-aside land and will receive payments under the new single farm payment scheme, which is a form of inducement. From 1 January 2004, energy crops grown on non set-aside land can receive an additional ₣45 per hectare energy crops payment, which is another contribution. We also want to see the development of bioethanol from lignocellulosic feedstocks such as straw
  1744
  and wood, as those are expected to reduce the cost of delivering the environmental benefits, which we are committed to support.
  Several Departments have an interest in promoting biofuels, and we work closely together to ensure a coordinated approach. A number of Cabinet Sub-Committees deal with energy policy and consider the issue of biofuels and the implementation of the energy White Paper, including this issue. As to support, I have outlined exactly the kind of approach that we have taken. We recognise that the biofuels directive can have an effect, although the targets are indicative— it should not be assumed that they are currently the Government's targets. Consultation will take place; it will be available soon.
  The biofuels obligation is one of the most important proposals. I want to make it clear that the case was persuasive, and although we could not support the form of the amendment tabled in the other place, the Government are not opposed in principle to some form of biofuels obligation for road transport. We will therefore have to consider the issue in more detail, and weigh the merits of tile obligation against those of other possible options. We will consider that as part of the process of consulting on the implementation of the biofuels directive. When that consultation is made public, therefore, it will include the issue of an obligation, which will be welcomed by many Members. We will explore how we can take that forward. DEFRA is also doing other work on the impact of biofuels on biodiversity, conservation and farming; the central science laboratory work on estimates of jobs that could be created and sustained by the biofuels industry, including ethanol; and work on setting out how the various—
  It being Six o'clock, MR. DEPUTY SPEAKER interrupted the proceedings and the Question necessary to dispose of proceedings was deferred, pursuant to Standing Order No. 54(4) (Consideration of estimates).
  MR. DEPUTY SPEAKER, pursuant to Standing Order No. 54(5)(Consideration of estimates), put the deferred Questions on supplementary estimates, 2003–04.

ESTIMATES

  DEPARTMENT FOR TRANSPORT
  Resolved,
  That further resources, not exceeding £1,377,992,000, be authorised for use during the year ending on 31st March 2004, and that a further sum, not exceeding £41,854 000, be granted to Her Majesty out of the Consolidated Fund for the year ending on 31st March 2004 for expenditure by the Department for Transport.

  DEPARTMENT FOR ENVIRONMENT, FOOD AND RURAL AFFAIRS
  Resolved,
  That further resources, not exceeding £1,251,750,000, be authorised for use during the year ending on 31st March 2004, and that a further sum, not exceeding £613,478,000, be granted to Her Majesty out of the Consolidated Fund for the year ending on 31st March 2004 for expenditure by the Department for Environment, Food and Rural Affairs.

  ESTIMATES, 2004–05 (NAVY) VOTE A
  Resolved,
  That, during the year ending on 31st March 2005, a number not exceeding 45,325 all ranks be maintained for Naval Service and that numbers in the Reserve Naval and Marine Forces be authorised for the purposes of Parts I, III, IV and V of the Reserve Forces Act 1996 up to the maximum numbers set out in HC 283 of this Session.

  ESTIMATES, 2004–05 (ARMY) VOTE A
  Resolved,
  That, during the year ending on 31st March 2005, a number not exceeding 128,195 all ranks be maintained for Army Service and that numbers in the Reserve Land Forces be authorised for the purposes of Parts I, III, IV and V of the Reserve Forces Act 1996 up to the maximum numbers set out in HC 283 of this Session.

  ESTIMATES, 2004–05 (AIR) VOTE A
  Resolved,
  That, during the year ending on 31st March 2005, a number not exceeding 57,415 all ranks be maintained for Air Force Service and that numbers in the Reserve Air Forces be authorised for the purposes of Parts I, III. IV and V of the Reserve Forces Act 1996 up to the maximum numbers set out in HC 283 of this Session.

  ESTIMATES, EXCESSES, 2002–03
  Resolved,
  That resources, not exceeding £15,975,062.02, be authorised for use to make good excesses of certain resources for defence and civil services for the year ended on 31st March 2003, and that a sum, not exceeding £1,188.38, be granted to Her Majesty out of the Consolidated Fund to make good excesses of certain grants for defence and civil services for the year ended on 31st March 2003, as set out in HC 351.

  SUPPLEMENTARY ESTIMATES, 2003–04
  Resolved,
  That further resources, not exceeding £24,448,658,000, be authorised for use for defence and civil services for the year ending on 31st March 2004, and that a further sum, not exceeding £10,013,491,000, be granted to Her Majesty out of the Consolidated Fund to meet the costs of defence and civil services for the year ending on 31st March 2004, as set out in HC 349 and 350.
  Ordered,
  That a Bill be brought in on the foregoing resolutions: and that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. Paul Boateng, Dawn Primarolo, Ruth Kelly and John Healey do prepare and bring it in.

  CONSOLIDATED FUND (NO. 2) BILL
  Mr. John Healey accordingly presented a Bill to authorise the use of resources for the service of the years ending with 31st March 2003 and 2004 and to apply certain sums out of the Consolidated Fund to the service of the years ending with 31st March 2003 and 2004: And the same was read the First time; and ordered to be read a Second time on Monday next, and to be printed. [Bill 71].

  NOMINATION OF SELECT COMMITTEES
  Motion made,
  That the Standing Orders be amended as follows:—

  (1)In Standing Order No. 15 (Exempted business), line 18, leave out from 'committees' to 'which' in line 20 and insert 'to which that paragraph applies'.

  (2)In Standing Order No. 121 (Nomination of select committees), line 10, leave out from 'under' to or' in line 13 and insert 'the Standing Orders of this House (with the exception of the Liaison Committee, the Committee of Selection, the Committee on Standards and Privileges and any Committee established under a temporary Standing Order).'—[Mr. Ainger.]

  Hon. Members: Object.

  Post Office Closures
  Motion made, and Question proposed, That this House do now adjourn.—[Vernon Coaker]
  6.3 pm
  Mrs. Patsy Calton: I am grateful that the Speaker has once again come to my aid in allowing me to raise a matter of concern for communities in my area and across the country. The subject is the role of Post Office Ltd. and Postwatch in taking decisions on post office closures. I believe that it is important to hear whether the Minister feels that he can take action against the injustice and misinformation that abounds around the euphemistically named "network reinvention", which is closing community post office facilities with only passing reference to community needs. I am grateful to my hon. Friend the Member for Hazel Grove (Mr. Stunell) and to the hon. Member for Stockport (Ms Coffey) for their presence. We are all affected by post office closures, and I hope that, with your permission, Mr. Deputy Speaker, they will take part in the debate.
  As far Cheadle is concerned, the process was flawed from the start. The information sheets supplied by Post Office Ltd. were riddled with errors, and Members of Parliament were not consulted in advance. Indeed, Postwatch told me on 4 December that Post Office Ltd. would not start consultation just before Christmas. However, it did just that, on 17 December. I applied for additional time, and was refused. Other areas were given extra time because the effects crossed constituency boundaries, but that was also true of my area. Postwatch appeared to have no powers over the process.
  For more than a year, I have disputed the categorisation of Woodford post office as an urban facility. The 2000 performance and innovation unit report defines an urban settlement as one with more than 10,000 people. Yet Woodford is separated by carefully protected green belt from the urban sprawl to which Post Office Ltd. persists in referring, and it has just over 1,000 inhabitants.
  The map used by Post Office Ltd. is wrong in detail and misleading in its entirety. A glance at the unitary development plan map, or even at an A to Z, would show the errors. The Greenway road post office in Heald Green serves an older and elderly population, and is located in one of the recognised pockets of deprivation in our area. Fortunately, Mr. and Mrs. Saleem, who run the nearby Long lane post office at the junction of Merwood avenue and Wilmslow road, are determined to carry on, even though Post Office Ltd. did not use it as a receiving branch.
  Turves road post office is closing because the sub-postmistress has decided to go. I know that, because she told me that she would be going, whether or not Post Office Ltd. agreed to closure. We do not have an official date for that, although a handwritten notice in the post office states that it will happen on 22 March. Turves road post office was a receiving branch for another closure at Cheadle road. That office closed only six weeks before the present consultation process began.
  The setting for the Turves road branch is such that it could be used as a model for a modernised post office at the centre of its community. It has a large surrounding
  1748
  population and is located in a run of shops as active as any in the area, now that the superstores have taken the weekly shoppers away. Of those responding to our campaign, 80 per cent. are over 55, some 40 per cent. have mobility problems and up to 20 per cent. lack cars. Many people chose to live in the area so that they could remain independent for as long as possible.
  Other shops will suffer after the post office closes. The main receiving branch is up a steep hill, with no public transport and a car park that is full at all times. The post office in Jacksons lane, together with the Macclesfield road and Norbury offices in the constituency of my hon. Friend the Member for Hazel Grove, serves a very large population. Most of the customers are older people, but there are a good number of young people and their parents.
  Saving at the post office is still regarded as an important part of a child's upbringing. The post office to which people will have to go is in a shop and already has queues that take 20 minutes to clear. It is difficult to reach and does not make good provision for disabled people.
  None of that seems to matter to Post Office Ltd. It is driven by the Government to become profitable. Although that is not in itself a bad aim, what is the human and social cost? What will be the cost to other small businesses that are supported by customers paying bills, collecting money and doing their shopping? What will be the cost to the Post Office's customer base? People must be close to avoiding using post office branches. By what process will Post Office Ltd. make itself profitable?
  My office received around 4,000 responses from individuals in the form of petitions and reply slips. Around 350 people came to public meetings. My office put together a 15-page report for Post Office Ltd., which was delivered on 27 January. It is difficult to see how we could have done more to alert Post Office Ltd. and Postwatch to the concerns of local communities. Representatives of Postwatch attended our meetings, and I was grateful for that, but they were dismissive. I was told that they were "not afraid" of me any more, that they were "not impressed", and that they had heard "nothing new". I am, sure that there was a reason for saying all that. We have seen little evidence of any concern for the consumers whom Postwatch is supposed to protect.
  The basic message from Post Office Ltd. in its correspondence with me was that the closures had to be carried out, that Post Office Ltd. was sorry that people were upset, that it was a shame about the inconvenience to customers, and that the closures were going ahead anyway. In my family, we call a response like that "sending out the cockroach letter". That is based on a joke, which we have long since forgotten, about a travel company writing to unhappy customers. Meanwhile, Postwatch sits on the sidelines, like a reluctant referee, giving information only when directly asked. The computer-generated letters come thick and fast, and occasionally someone personalises them with an extra paragraph; the process is a joke.
  I want the Minister to tell us that he will act on the way in which our communities are being treated. He must know that the Post Office ensures that post offices close by offering sub-postmasters and sub-

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  postmistresses deals that they cannot refuse. An average of £55,000 for each sub-postmaster and sub-postmistress was paid out in the quarter to December 2003, and more than £38 million was paid out in total. That money could have been spent on expanding and diversifying the service in line with the performance and innovation unit report of 2000.
  The Minister will be familiar with early-day motion 725, which calls on the Department of Trade and Industry to halt forthwith the network reinvention programme of post office closures while an investigation is carried out into flaws in the notification, consultation and decision-making process. I have written to the Clerk and Chairman of the Trade and Industry Committee asking them to investigate that. I am disappointed that no concessions have been made on the process, which proceeds with unseemly haste in spite of admissions from Post Office Ltd. that changes will be made to future constituency reinventions. That is no comfort to my constituents.
  I am disappointed by the Minister's response to my letter pointing out how Members of Parliament and Stockport metropolitan borough council were misled into thinking that Eddie Herbert from the north-west was working on our consultation responses, when a decision was in fact made the same day in Skipton to close one of the post offices. The Minister's letter states:
  "When Eddie Herbert wrote to you on 16 February that feedback was still being considered, neither he nor his POL colleagues would have known whether all the outstanding issues would be resolved at the first stage meeting that was taking place that day."
  However, Eddie Herbert said on 16 February:
  "I am still considering the feedback received in relation to the closure of Jackson's Lane and Turves Road".
  How could Post Office Ltd. present the case for closure to Postwatch members when the man in charge had not finished considering the consultation responses?
  Meanwhile, Judith Donovan of Postwatch, who was present at the meeting of 16 February, wrote on 23 February to say that
  "an escalation meeting … will be arranged".
  Perhaps she used the wrong tense When the decision was made in Skipton by Post Office Ltd. and Postwatch about our communities' post offices, hon. Members did not have the date, the time or the venue. We did not know and could not know that a meeting was occurring. Post Office Ltd. decided what would be presented to Postwatch committee members. Hon. Members do not know whether corrected information was supplied, what arguments—if any—were put forward, whether public views were put forward adequately, or whether alternatives were examined.
  The primary role of Members of Parliament must be to stand up for their constituents. I call on the Minister to do as my early-day motion asks to halt the flawed process forthwith and to apply the principles of fairness with a dash of imagination, which our democracy depends on. I challenge him to halt the process and to allow all the key players—Post Office Ltd., Postwatch, Stockport metropolitan borough council and the public—to produce the business case and the energy to get behind our local post offices, allowing our community the chance to find imaginative ways to make our post offices thrive. At least some post offices can be
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  made into profitable assets, both socially and in business terms. Post Office Ltd. will destroy its customer base if it carries on in this vein.
  Post Office Ltd. should be required to transmit a clear, strategic, coherent vision of the future of the post offices at the heart of local communities, and Postwatch should have powers to ensure that public money is spent in the interests of the public and more wisely than has occurred so far.
  6.14 pm
  The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms): I congratulate the hon. Member for Cheadle (Mrs. Calton) on securing this debate. She has been very active in voicing her concerns and she has conducted detailed scrutiny of Post Office Ltd.'s proposals for her constituency. We have exchanged correspondence on several occasions in the past year. I am also grateful to the hon. Lady for giving me notice of the concerns that she wished to raise in this debate. I am pleased to see my hon. Friend the Member for Stockport (Ms Coffey) in her place: she has also spoken to me a lot over the past few months about these issues.
  The hon. Member for Cheadle explained clearly and fully her concerns about the impact of the closures that will take place in her constituency and the consultation process that preceded those decisions. The performance and innovation unit report that she mentioned showed starkly that our network of post offices has not kept pace with the changing needs of its customers. Too often, post offices have become dingy and shabby as a result of a lack of investment. Nor has the Post Office been able to take advantage of its highly trusted status as the provider of financial services. It was losing business and facing big challenges. The PIU report made it clear that if it did become apparent that it was necessary to reduce the number of branches in urban areas, it should be done in the way that we have suggested and the House has agreed to.
  I was not entirely clear from the hon. Lady's remarks whether her argument was that in her constituency the wrong offices will be closed, because of problems with the process, or that none of them should be closed in any event. I suspect it was the latter, and we all sympathise with that point of view. None of us likes to see the closure of post offices, which inconveniences people. However, the realities of the Post Office's position are that the process is unavoidable. If we did not do it, branches would shut haphazardly and in an unplanned way, and that would cause far greater problems for her constituents and those in other urban communities than the present arrangements.
  Mrs. Calton: The Minister presents two stark alternatives, but there is—in the words of his leader— a third way. That third way has arisen out of the consultation responses from other shopkeepers and the public. Other alternatives can be examined and it is not necessary to create a desert for whole suburban communities. It would be wrong to treat suburban

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  communities as amorphous, with no defining characteristics. Communities should be respected, but they are not being respected—
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Lady must remember that interventions are one thing, but speeches are quite another.
  Mr. Timms: It is a given of the process that at the end of it at least 95 per cent. of urban residents will be within a mile of their nearest post office. It is not about the creation of deserts. Indeed, the reverse is true: it is to ensure that there are no deserts that we are undertaking this careful process.
  The process itself is unavoidable. Simply moving a post office into another establishment does not tackle the problem. At the beginning of the exercise, there were more than 1,000 urban sub-post office branches that had 10 other such post offices within a mile. The network was too dense, given what has happened to the business of post offices in the past few years. Our response was to acknowledge the need for a reduction in the number of urban branches, and to invest in technology. Banking services are now offered at every post office branch in the country following Government investment of £0.5 billion—unprecedented in the history of the Post Office. Funding has also been provided for improvements at receiving offices. For the first time, there is support for an investment programme for urban sub-offices. Both approaches will give the network the viable commercial future that the Post Office needs.
  Sub-post offices have always been private businesses. The hon. Lady said that sub-postmasters have been offered deals that they cannot refuse. In reality, the payments made are those that sub-postmasters might reasonably have expected if they had sold their businesses a few years ago. Reductions in the use of sub-offices in recent years mean that the prices sub-postmasters may obtain for their businesses have sharply declined. We took the view that it was fair that compensation should reflect the prices sub-postmasters might have expected a few years ago—not more generous prices but comparable, which is fair. The individuals concerned have worked hard in serving their communities over many years. It is not right for the hon. Lady to suggest that compensation payments are excessive. They simply reflect the prices that sub-postmasters would have expected if they had sold their businesses a few years ago.
  Mrs. Calton: My point was not so much that compensation payments were excessive, but that the money could have been more wisely spent.
  Mr. Timms: The hon. Lady referred to a deal that sub-postmasters could not refuse. The payments are based on the reasonable expectations of sub-postmasters if their businesses had been sold not long ago. As for whether that money should have been spent differently, the basis of the House's approval for the programme was that the rationalisation of sub-offices in urban areas would give the whole network a viable future in serving all our communities for many years to come.
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  Postwatch has been critical of some developments in recent months and raised concerns about the consultation experience with me earlier—as did hon. Members. Postwatch has been a doughty and effective defender of communities. In a large number of cases, a decision has been withdrawn or reversed following representations from it or hon. Members. I do not accept the hon. Lady's criticism of Postwatch, which has recognised that rationalisation is indispensable if we are to secure a viable future for the post office network throughout urban communities.
  Ms Ann Coffey: Part of the fundamental difficulty with the consultation exercise is the basis on which, it has been undertaken, because closures were proposed against criteria that had already been set. In future it would be helpful if Postwatch could share its observations on proposed closures with hon. Members. I was not aware of Postwatch's views on proposed closures in my constituency.
  Mr. Timms: My hon. Friend makes a helpful point. I will take it up with the chairman of Postwatch, with whom I regularly discuss such points. I am inclined to agree with my hon. Friend that when Postwatch reaches a conclusion as a result of discussion with hon. Members and members of the community affected, it would be entirely reasonable for that information to be made known to MPs with whom Postwatch has been in discussion.
  As I said, one of the recommendations of the performance and innovation unit was that if the Post Office decided that fewer offices were needed in some urban areas, the Government should consider providing funding to compensate affected sub-postmasters adequately for the loss of their business. Thus, in November 2002, following parliamentary approval of the funding, the programme that we are discussing commenced.
  The network is made up of about 16,000 post office branches, split almost evenly between urban and rural communities—more than all the banks and building societies in the country put together. In many places, that network is dense, with damaging results for the individual businesses of sub-postmasters at a time when the number of people using post offices has been in decline. The heart of the problem was that the Post Office was locked into a shrinking customer base; its task now is to continue to serve those customers with excellence, but also to win new customers. It needs to access expanding banking markets, taking advantage of the technology that the Government's investment has provided, rather that remaining locked into dwindling markets, as in the past. That is the key to future success.
  Mr. Andrew Stunell: Does the Minister agree that social inclusion is an important criterion? The closure of post offices, such as those in Cherry Tree lane and Offerton in my constituency, seriously undermines the Government's intention to promote social inclusion.
  Mr. Timms: In almost every instance, the closure of a particular office causes inconvenience to some people. The purpose of the whole exercise, and why we provided substantial funding to Postwatch and why the Post

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  Office itself is committing so many resources, is to ensure that the right post offices are closed. When Members raise concerns that the wrong office has been chosen and a different one should be closed instead, I always tell them that the case should be put to Postwatch and to the Post Office. As a result of the process, I hope that we end up with the right decisions.
  Those decisions will not be welcomed by everyone. The closure of any post office will cause inconvenience to some people, but I think that the hon. Member for Hazel Grove (Mr. Stunell) will accept that business realities for the post office network over recent years make it necessary to introduce rationalisation of that kind, to give the network a viable future and to ensure that it can continue to serve our communities. As I said earlier, it is a given of the exercise that, at its end, 95 per cent. of people living in urban communities will be within a mile of their nearest post office branch. That is the basis of the exercise.
  Last week, I visited a directly managed post office in my constituency. The staff pointed out that for the first time in many years they can see that the organisation for which they work is being turned around. New customers are coming in to use the Post Office banking services, whereas, in the past, the number of such customers was in decline.
  In a couple of weeks, the Post Office's first financial service products will be on sale at branches throughout the country. Personal loans will be sold through the Post Office, new products will he available and new markets will be opened up. In that way, through the commitment of the new management team at Post Office Ltd.—the staff at my local branch told me that they thought the new team was doing a superb job—through the investment we are making and through the painful, but necessary, process of rationalisation of the post office network in urban areas, we shall see a viable and attractive commercial future for the network in all our urban communities, for the benefit of all the people who live in them.

PETITION

  Consumer Protection (New Homes)
  6.30 pm
  Mrs. Marion Roe: I wish to present a petition, containing over 1,100 signatures, which draws attention to the fact that, at present, buyers of new homes do not benefit from adequate consumer protection, and points out that they should be entitled to have a third-party representative check their home for quality, prior to completion.
  They should also be able to delay completion should the home not conform to standard, and if defects are not rectified they should have a legal right to withhold a retention until the works are completed.
  At the moment, insurance companies set the standards acceptable for new homes, and there are not legal requirements to adhere to these standards.
  My petitioners list their recommendations to Government on how to change this unacceptable situation.
  The petitioners, therefore, request that the House of Commons urge the Deputy Prime Minister to establish an inquiry into the building of new homes, looking at quality standards and consumer protection, investigating the possibility of Government-set standards for new-build properties and the creation of a regulatory body and league tables in this area.
  To lie upon the Table.

  ADJOURNMENT
  Resolved, That this House do now adjourn.
  Adjourned accordingly at twenty-nine minutes to Seven o'clock.