Westminster Hall Sitting of 21 June 2000

Preamble
[MR. MICHAEL J. MARTIN in the Chair]

Supermarket Competition
[Relevant document: Second Report from the Environment, Transport and Regional Affairs Committee, Session 1999–2000 (HC 120).]
Motion made, and Question proposed, That the sitting be now adjourned.—[Mrs. McGuire.]
9.30 am
Mrs. Gwyneth Dunwoody: Planning in a small island is not a bureaucratic idea or an idiosyncratic response to some people wanting to build wherever and whenever they can; it is an absolute necessity. Throughout the planning history of this country, there have been determined attempts to create civilised and cultured towns and cities, and a positive balance has been sought to ensure that our industry and commerce live alongside our residential areas in peace and harmony. One would have thought that that was a straightforward and useful idea.
During the 1950s and 1960s, we saw the evolution of sensible planning policies. When we moved on, it became clear that some commercial interests regarded aspects of planning as inimical to their economic development. That was a misleading approach, but some people regarded the decision to consider where development took place as a positive bar to them.
The Select Committee on the Environment, Transport and Regional Affairs was concerned when it heard some of the arguments about supermarkets. Supermarkets are ubiquitous; a person would have to be unusual to say that he had never benefited from or enjoyed their services. They are like rhododendrons, in that they may be attractive and interest people in large numbers but they destroy every other plant.
During the 1980s and 1990s, the positive rash of supermarkets that were built out of towns had an immediate and destructive effect. When we look around many of our smaller towns and villages and see so many charity shops and boarded-up properties, we realise that supermarkets can be not only competition, but destructive competition. They are like a series of private monopolies built on the outside of our cities. With their free car parking, they encourage people to come and buy not only one aspect of their shopping, but everything. As a result of the influx of American marketing techniques, the supermarket may increasingly seek to provide more than our weekly shop in terms of groceries, wines and beers, by providing textiles, household goods and other important items in our weekly budgets.
It became clear that if we were to rescue and improve the centres of our rural towns and cities, we would have to do something serious about the supermarket. That was an agreed policy, and we began to accept the fact that trade in the centre of a town was distorted if the area became over-supermarketed. That has happened to one town in my constituency, which has at least seven supermarkets on the edges of its small rural community.
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It was a welcome development when it was recognised that supermarkets could not be allowed to continue becoming larger and attracting an increasing amount of trade away from the centres of our towns and cities. I should have thought that that was a straightforward conclusion that was not difficult to support. Unfortunately, however, there seems to be a body of opinion among some economists and management consultants—such as McKinsey & Company, the Department of Trade and Industry and even, possibly, some Treasury officials—that more out-of-town supermarkets and more competition would bring down prices. That flies in the face of the fact that most supermarkets fight one another for only about 3 per cent. of the business and are prepared to commit murder to change their overall figures by an extremely tiny amount. I am afraid that consultants who say that there should be more non-food retailing have not thought through the implications.
The Committee decided that some anxieties were even more pressing. Last summer, the Director General of Fair Trading referred supermarkets to the Competition Commission, asking it to consider matters related to the planning regime. When the Committee began to inquire into the circumstances, it was worried to learn that that had been done without any evidence being taken from planning consultants or anyone involved, on the basis of the fact that some people thought that it might be a good idea to change the planning laws on science clusters.
If we are to make major changes in how we develop our towns and cities on the basis of some people's opinion, without having taken evidence, I can recommend to the Government a series of my own particular prejudices, not only in relation to the Department of the Environment, Transport and the Regions. I could give them a shopping list of the changes that I feel should be made, without any evidence to back it up. It is worrying that that decision was taken without any advice from planners.
We asked the Department about its attitude to that development. The Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), who gave evidence to us, should be comprehensively praised. Not only was he clear and decisive, but he made it plain that no major change in policy had taken place. That makes it even more difficult to understand why we face such circumstances. I trust that the Government will not change their policy.
Mr. James Gray: Does the hon. Lady agree that the clarity of the evidence given by the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Greenwich and Woolwich, contrasts starkly with the complete muddle of evidence that we received from the Under-Secretary of State for Trade and Industry, the hon. Member for Leicester, West (Ms Hewitt), on the same subject?
Mrs. Dunwoody: I believe that the problem was that the Department of Trade and Industry got into a bind, which was slightly bizarre.
If the Treasury is dictating that changes be made to planning law on the basis not of planning evidence but of having been told by one of its consultants that in

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future some science industries might like to be treated differently from other industries, everyone is in trouble. I trust that that is not so, and that the Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Stretford and Urmston (Ms Hughes), will make it clear that such decisions will be taken by the Department of the Environment, Transport and the Regions on the basis of the aspects that are most important to us.
The Competition Commission published a remedies statement, which states that the commission does not at present believe that major changes should be made to the planning regime. However, the commission seems to be considering recommending a system of selective planning permission, whereby, for instance, in cases in which Sainsbury is the major company, Sainsbury would not be able to obtain planning permission for new stores, but others could. That is the very antithesis of planning law, which has always been based precisely on such difficulties.
The Committee considered all those questions, said that it was extremely worried, and made several plain and unequivocal statements:
We support the Minister for Planning's statement on competition. It is a well-established principle of planning control that planning decisions should not favour one company against another but should be even-handed between firms…We are appalled that before referring planning matters to the Competition Commission, the OFT took no evidence from planning experts and did not consult the DETR. In failing to take into account such expert evidence, it has behaved irresponsibly.
If the commission suggests that it can distort the planning rules to profit one particular section, it is being shortsighted and irresponsible. We cannot understand how we have got into such a situation. The Government must say what is meant by the reference in planning policy guidance note 6 to
sites in town centres which are suitable, viable and available within a reasonable time period.
What is suitable for the size of store and format, and who decides those aspects?
We do not believe that there should be any more super supermarkets built outside towns. The decisions that have resulted in the growth of smaller supermarkets in city centres are already beginning to pay dividends. The large supermarkets that have followed that trend, including Sainsbury and Tesco, are responding to some very real worries. To confuse that issue or fudge the lines would not only put that process into reverse but make our aims unclear in the long run. In all but very exceptional circumstances, supermarkets should be in urban centres.
Supermarkets should also be better designed. Let us consider the quality of the buildings in our towns and cities. We all have to live with those erections, so let us not imagine that we can go on blithely irritating the eye and depressing the spirit with the most sad and unimaginative architecture.
The report is good; it is short, but says plainly that we do not know how or why we got into the situation in which we find ourselves. We believe the Minister for Housing and Planning when he says that he is clear in his mind about the Department's aims. However, if that is
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true, why was he not consulted? Why was the decision about the reference taken without anyone asking on what basis it was made? If the Office of Fair Trading now takes two or three steps back and says, "Oh well; we didn't really mean it, guv," I would not regard that as evidence of a responsible or balanced approach.
It would not be acceptable if the Competition Commission's findings were published in late July after the House has risen. It would fuel the view that the decision was taken in a hole-in-the-corner manner, for the worst reasons and on the basis of prejudice rather than evidence. The final results of that decision may be to hasten the demise of our smaller towns and cities. It does not provide a balance across a commercial field so that customers can get what they want when they want it. The development of a duopoly or even of three or four large supermarkets will not, in the long run, act in the customers' interest. The Committee has set out its worries in plain terms and I hope that the Minister can put our minds at rest.
9.43 am
Miss Anne McIntosh: I am most grateful for the opportunity to contribute to the debate and am privileged to follow the hon. Member for Crewe and Nantwich (Mrs. Dunwoody).
I make my comments against the backdrop of the balance in my constituency between small market towns and 30 per cent. of a major city—the outskirts of York. The results of the inquiry that the Environment, Transport and Regional Affairs Committee conducted into the environmental, impact of supermarket competition, which are published in our second report, encapsulate the problem. I wholeheartedly agree with the hon. Lady about the part of the report that suggests that, although the planning regime serves the planning system well, we could tweak it and improve it. It was clear from the evidence that we received that planning policy guidance note 6 has the support of leading experts in planning and retailing, planning associations, local authorities and supermarkets.
Parking standards is probably the area of competition that impinges most on market town shops and corner shops on the outskirts of major cities. A major superstore on an out-of-town site is bound to have a clear advantage over those shops by offering greater car parking facilities that will attract people into the store. The Select Committee must ensure that planning policy guidance note 13 is observed and is as tightly construed as possible. It must not be interpreted in too lax a fashion.
Design is important. The high standard of evidence in the Select Committee report shows the importance of design and of not using the rhododendron scenario to attract people into the store. If we are now considering how to attract more supermarkets on to town sites, it is important to ensure that their designs blend in with the surroundings.
We did not have the opportunity to investigate in depth the impact of the unified business rate in market towns. It is significantly high and affects shops in small market towns and corner shops on the outskirts of major cities. A high unified business rate compounded by a high rent makes it difficult for those shops to compete effectively with out-of-town superstores.

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We are all conscious of the development of charity shops, which we welcome to a large extent. We appreciate their special contribution to the community and the role of the volunteers who man them, but we do not want sites to be left empty for long periods. When we took evidence in Thirsk for the urban White Paper, we found that one shop had been empty for two or three years—almost as long as I have been Member of Parliament for the area—as a result of the combination of a high unified business rate and a high rent. We should pursue such matters, perhaps in the next stage of the competition report if we are fortunate enough to be able to do so before the recess.
I was struck by the evidence that we received from Mark Wood Associates about the margins of food store operators. The company said:
Moreover the extract also shows that…the four leading operators (Tesco, Sainsbury, Asda and Safeway) increased their combined market share from 59.4 per cent. in 1996 to 61.4 per cent. in 1997, a rise of 2 per cent. in just one year. Total sales from these four operators amounted to over £40 bn.
The average sales per store is continuing to increase at a significant rate equating to around £2 m. per store for Tesco and over £3 m. for Asda.
That increase puts the shops competing for business with supermarkets—especially out-of-town superstores, at least one of which I represent in my constituency—at an almost unfair competitive disadvantage because of the size of the superstores and factors such as parking facilities. I hope that we can pursue several of the issues that we highlighted in that valuable contribution. It must be ensured that PPG6 continues to be respected and built on, and that we forcefully consider the evidence from the Competition Commission against the backdrop of the planning regulations. To ensure that the competitive advantages enjoyed by out-of-town superstores are not repeated in future, we must integrate future supermarkets into market towns, having regard to the design of surrounding buildings.
I believe that the way forward is to meet a balance of interests, consumer needs and minimum competitive standards. I hope that we can put more supermarkets with better designs where required in town centres. That would allow sufficient competition in our market economy between supermarkets and, more important, between supermarkets and the market town and corner shops that I shall continue to hold dear.
9.50 am
Mr. Bill O'Brien: I welcome the opportunity to take part in the debate. I hope that the Competition Commission, in addition to studying the report of the Select Committee on Environment, Transport and Regional Affairs, will read the comments of hon. Members on the subject. The concerns voiced by the hon. Member for Vale of York (Miss McIntosh) about the effects of supermarkets on small urban areas, corner shops and small communities are shared by many of my constituents.
Out-of-town supermarkets have been the cause of many problems in town centres and the countryside. They increase car use, and the resulting congestion creates problems for people in the countryside, as some of the supermarkets are built in the green belt and on the edge of cities. I am, therefore, pleased that planning policy guidance note 6 restricts the development of supermarkets outside cities and urban areas.
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The Government's aim in the planning policy guidance is to concentrate retail development in existing urban areas. I hope that they will push that policy and ensure that applications for supermarkets to be built outside towns will be firmly rejected, so that there is no misunderstanding of what the Government mean in the planning guidance.
I am not anti-supermarket. I would welcome and support supermarkets where needed, in towns and urban areas. I want good, structured planning, which means developing our town centres. The growth of out-of-town shopping developments over the past 20 years has had a traumatic effect on town centres, villages and corner shops.
There are small urban communities, such as Ossett, Horbury and Normanton in my constituency, that have suffered because shopping centres have been located on the borders of Leeds and Sheffield. Access to those centres is easy by car, which has an effect on the smaller towns. Much of their retailing trade has disappeared as a result of closures caused by the large developments.
Car parking is also a factor. Local authorities are advised that they must capitalise on land use for car parking—hence charges. Such charges are an anomaly, given that supermarkets have free parking. I hope that planning policy guidance note 13 will address that, and that local authorities will take it into consideration when they consider the application of integrated transport policy.
PPG6 deals with out-of-town shopping and greater protection for town and city centres. I want the Minister to provide assurances that there will be an increased focus on planning aims within urban areas, and a restriction of developments outside. Applications are being made to extend large supermarkets outside town and city centres, especially by Asda. The Wal-Mart principle is being developed—the desire to extend an existing unit and develop the larger supermarket.
In relation to applications for out-of-town developments, we are witnessing the phenomenon of architects submitting, on behalf of a supermarket chain, proposals for a small, compact unit on the edge of the town, so as not to give offence, but then, when the request is granted, applying to develop the unit further. We are all aware that that is happening in our constituencies. I hope that the Minister, who is familiar with such scenarios, will accept that such applications should be rejected, regardless of their size, because of the impact on urban areas.
Dr. Alan Whitehead: Has my hon. Friend come across the phenomenon whereby applications initially state a particular area for development, but a mezzanine floor is added later? The space above the site is thereby occupied, apparently in breach of planning conditions, but in circumstances which the planning regime is apparently unable to stop. Is that a further example of the phenomenon that my hon. Friend describes?
Mr. O'Brien: I am pleased that my colleague has drawn attention to that matter, as it has an impact on car parking provisions. When a planning application originally included car parking to meet a certain ground floor development, and extended developments follow

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in the form of mezzanine or additional floors, greater car parking problems are created. The Minister should address that issue and strengthen PPG6 to ensure that such piracy cannot happen. Measures to make our towns and cities more attractive must, therefore, be an important part of the strategy of the Department of the Environment, Transport and the Regions.
Furthermore, I should like to draw attention to the fact that, a great deal of money has been spent on introducing pedestrianisation and traffic-free areas in our towns and cities. That is part of the revitalisation of town and city centres. Losing retail outlets in those areas is a significant blow to such developments, which had the agreement of the communities concerned. The issue of supermarkets is not the be-all and end-all of retail shopping. If we want small, competitive retail units in urban areas, we should impress on local authorities the desirability of introducing covered markets, which would allow market traders to develop trade in various areas, so that competition and town centre development is generated through market procedures.
I am advised that, as a result of the closure of retail trades in the town of Ossett, no one can buy a pair of shoes. Ossett has a population of 20,000 or more and it is sad that people cannot buy shoes because of the demise of retail units in the area. We must persuade local authorities to reintroduce covered markets in small towns. I put it to the Minister that there is much to be learnt from the Select Committee report, as there is from the contributions of members of that Committee and others who have an interest in supermarket competition. I hope that they will influence the Competition Commission, which will present a report on the subject in the near future. Good planning is needed. We must reject bad planning. Will the Minister have regard in his response to the argument that small urban areas need regenerating?
We need more traffic-free centres. There must be a curb on planning applications to introduce traffic into pedestrian areas to facilitate supermarkets or other businesses. It is easy for supermarkets to offer planning gain to local authorities. We should put a stop on that, because some local planners can be influenced if they think that they can recruit a social or road development from an application for a supermarket to be developed.
I impress on the Minister and my colleagues that there is much to be said and done about out-of-town shopping. We must insist that PPG6 is applied firmly. Its aim is to strengthen the role of local planners to ensure that there is no further development on the edges of our towns and cities to the detriment of town and city centres.
10.2 am
Mr. James Gray: I was struck by the analogy used by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) when she said that supermarkets were like rhododendrons. She is right. When rhododendrons are young and fresh, and flower in the spring, we are all attracted to them like bees to the honeypot. That applies equally to supermarkets. While they are young and fresh and necessary, we all use them. But those of us with a passing interest in gardening
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know that when rhododendrons have been around for a year or two, they become gross, overgrown and in need of major hacking back. We may be approaching that situation with regard to supermarkets, too.
We all use supermarkets. There are 20,000 adults in Chippenham, the main town in my constituency. It has three supermarkets, including Safeway, Sainsbury and Somerfield. I am told that 88,000 people pass through the tills at Safeway each month, so everyone in Chippenham uses Safeway four times a month, in addition to Somerfield and Sainsbury. Eighty-six per cent. of all food shopping in the United Kingdom is carried out at supermarkets. The average weekly shop is six supermarket bags, weighing 84 lb.
Mrs. Dunwoody: All carried by women.
Mr. Gray: Yes, and nearly all by car. I accept the argument about the use of cars; none the less they are needed to carry six supermarket bags weighing 84 lb. As my hon. Friend the Member for Vale of York (Miss McIntosh) correctly pointed out, supermarkets turn over £44 billion a year in groceries—an enormous turnover.
Whatever else we may say about them, all of us in the nation use supermarkets to do our daily shopping. It is wrong to pretend that we do not. Our expectations, way of life and standard of living have increased greatly as a result. We presume that we can go to a supermarket on Christmas day and buy avocados, which were not even heard of in this country until 20 or 30 years ago. We can get fresh strawberries and vegetables all the year round—and not the sort of vegetables that I remember as a child. We used to have a bit of soggy cabbage in the winter and, if we were lucky, something slightly better in the spring. Now we can expect pre-packed, pre-washed, high quality, first class vegetables, eggs, meat and so on all the year round. The standard of beef that we buy in supermarkets is second to none. The quality, colour, size and texture of the fresh food that we get is first class. Our standards have increased enormously as a result of the supermarket revolution, and it is luddite to suggest anything else. We need them and rely on them.
In 1986 there were only 457 superstores in this country, but by 1997 that figure had increased to 1,102. I remember the debates that we had about that increase when I became a special adviser in the Department of the Environment in 1992, when my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) came into the job. He considered whether we should allow that exponential increase in supermarket sites to continue. The decision was taken at that time, with the first draft of planning policy guidance note 6, that we should control the increase in supermarkets because it was not sustainable.
We all use supermarkets and like them, and the nation depends on them. None the less, in recent years, we have begun to move against them—the rhododendron is becoming overgrown. In that context, the Competition Commission has loomed on to the scene. Most people would agree that the damage done to village shops, town centres and our environment as a result of the use of cars, and of the lorries that take goods from depots to supermarkets, is a bad thing. Most would agree that we should save our green belts by restricting supermarket

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development, and that PPG6 is right, even when they continue to use supermarkets. That is not a controversial view.
The Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Greenwich and Woolwich (Mr. Raynsford), said that there was no question that the planning policy would be changed. He said, "We are passionate supporters of PPG6. There will be no more supermarkets built out of town. That is certain, so do not worry about it, ladies and gentlemen. Everything is tickety-boo." As the hon. Member for Crewe and Nantwich said, he made a robust defence of the PPG6 measure initiated by my right hon. Friend the Member for Suffolk, Coastal.
The following week, the Minister for Small Business and E-Commerce, the hon. Member for Leicester, West (Ms Hewitt), gave evidence before the Committee. We asked her what the purpose was behind the referral of competition of supermarkets to the Competition Commission, to which she answered that she was not certain, but she was sure that it was a good thing. Like the hon. Member for Crewe and Nantwich, I hope that the commission reports before the House rises; otherwise, some serious questions must be asked about the machinery of government.
Let us imagine that the commission says, "We have a problem in Chippenham because Tesco has no site there. The town uses supermarkets to a huge degree and prices are slightly higher there than in London. We believe there may be a competition problem. If we can find a site for Tesco, the prices may be brought down again. The extra competition might depress the prices a little bit, so maybe that is a reason for relaxing the stringent planning controls around Chippenham to allow Tesco to have a site. Tesco is seeking sites in Chippenham, Malmesbury and Tetbury and trying to find a toe-hold throughout the Cotswolds; it is desperate to get in somewhere. Asda is seeking sites all the time. Perhaps we should relax planning controls to accommodate that perfectly sensible competition."
If that is the case, what are we to make of the assurance by the Department of the Environment, Transport and the Regions that PPG6 must remain sacrosanct? That is what the Department said, robustly and straightforwardly—that there will be no increase in the number of supermarkets in our countryside. If that is the case, what on earth is the purpose of the referral to the Competition Commission? What shall we do with the commission's report if, for example, it refers to Chippenham in the way that I described? However, if it says that there is plenty of supermarket competition and no reason to change planning, what would be the point of the referral?
When the Minister replies to this debate, which is useful and timeous in the light of the report, she must tell us precisely why the Department of Trade and Industry referred the matter to the Competition Commission, when the commission will reply and what consultations there were between planning Ministers in the Department of the Environment, Transport and the Regions and the DTI before that referral.
More important, the Minister must tell us why the referral was made. What will happen if the report says that there is a restriction on competition between supermarkets in England? What will happen if it calls
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for a relaxation of PPG6 in order to accommodate that concern? Does the hon. Lady think that PPG6 can be relaxed, or does she agree with the hon. Member for Greenwich and Woolwich that it cannot? Alternatively, if the Competition Commission says that it has wasted its time and that there is no supermarket competition problem, will she tell us why public money was wasted on an unnecessary inquiry?
Leaving aside the pros and cons of supermarkets, there is some confusion in the machinery of government. The Minister must at least try to shed a little light on what seems to be a murky subject.
Mr. Deputy Speaker (Mr. Frank Cook): Before I call Front-Bench speakers at half-past 10, I should like to be able to fit in the three remaining speakers. Hon. Members should, therefore, be concise and alert in their contributions.
10.11 am
Dr. Whitehead: It seems to be the form that we should preface our remarks with references to rhododendrons, and I shall not fail the Chamber in that. The analogy, which was made by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), is a good one inasmuch as there can be many different colours of rhododendrons and selective breeding increases the number of colours and types available to gardeners. None the less, they are still rhododendrons and still do what rhododendrons do. That seems to be the nub of the problem.
The owners of supermarkets say in public and to the Select Committee that there has never been a more intense period of competition, that the public are tremendously served for choice and that everything is great. There is a conundrum, however. Although there is greater competition between supermarkets, in wider and subtler ways there appears to be a diminution of competition at the same time. I am concerned about the approach of the McKinsey report, and to some extent that of the Office of Fair Trading, whereby the definition of competition is based on the narrow principle of price. My contention, which is reflected by the Select Committee report, is that supermarket competition is much more widespread and subtle.
The assumption of space has already been mentioned. Supermarkets are all generally dedicated to larger units wherever possible, although there has been some welcome variation with the rise of inner-city supermarkets as a result of planning policy guidance note 6. Common assumptions have been made about location and what is in the store. Recently, I read an interesting book called "Consuming Passions", which sets out the psychology of retailing. It mentions supermarket layout, anti-clockwise movement, different temperatures, products at certain heights and smells from the delicatessen and the bakery section. Those are always the same for every supermarket in order to homogenise the overall product but, within that, competition is available.
Secondly, a logistical assumption is made. Methods of supply are based on just-in-time management. The product must be in the store by the following afternoon. If the supply does not fit the requirement that the product be in the store the following afternoon, the

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product is excised. Therefore the product available for competition is one that can be delivered by truck to the supermarket by 4 o'clock in the afternoon, to be put on the shelf immediately. Bakeries increasingly conform to that pattern, whereby products are delivered just in time, using frozen ingredients; if a product cannot be baked within a limited time, it is not made available.
The relationship with suppliers has fundamentally changed. There has been an inversion of the traditional brand-to-shop idea. Now it is the shop that decides which brands will be stocked. Deals that are made with brands can require exclusivity clauses. Under a contract to supply a brand to a particular supermarket, the supermarket can prevent the supplier from providing brands to competitors or non-supermarkets. Consequently, a brand that should be available to anyone in competition has effectively been captured by the method of retailing and the consequent restrictions placed on that brand.
An interesting by-product of that process is the introduction of clones in the form of own brands. We do not need to think very deeply to realise the consequences. Brands are pioneered in the open market, to which a substantial number of brands are still supplied, but 40 per cent. of products sold in supermarkets are own brands and, overwhelmingly, not brands that the supermarket has pioneered. Supermarkets wait until a brand has become successful and then copy it to capture its market. We have witnessed, for example, the extreme coincidence of the rise of a particular corn chip called Doritos and its imitation by a corn chip called Amigos in particular supermarkets. Head & Shoulders dandruff shampoo has resulted in various clone dandruff shampoos appearing on supermarket shelves. If it goes any further, we do not need a great deal of insight to realise that if supermarket own brands are all that remain, there will be no innovation and choice among the brands that are developed and available.
The combination of own brands, the power of purchase and exclusive deals has, in addition to planning constraints and out-of-town developments which we discussed earlier, led to a reduction in independent grocery outlets, as the report, significantly, highlights. The number has decreased from 116,000 in 1961 to only 20,000 in 1997. We may have a great deal of choice among the four brand leaders, but do we as consumers have choice outside those brand leaders?
I conducted a personal investigation into supermarkets' increasing monopolisation of fresh food and vegetables, from the beginning of the supply chain up to the supermarkets. Supermarkets increasingly require their fresh fruit and vegetables to be supplied by a decreasing number of producers, to allow for economies of scale and just-in-time management. Consequently, those who produce fresh fruit and vegetables are becoming large, agro-industrial companies in their own right, effectively pushing out varietals and smaller farmers in the process.
Interestingly, the hon. Member for North Wiltshire (Mr. Gray) underlined that point. He mentioned that we now have fresh fruit and vegetables all the year round. However, that is at the price of one-third of the vegetables produced in this country simply being left to
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rot in the field because they do not conform to what the supermarket wants for its purposes. Particular varietals are difficult to place within those production purposes. The fir apple potato is now virtually extinct as a brand on suppliers' shelves.
In capturing producers, supermarkets now require producers of fresh fruit and vegetables to provide what are known in the business as over-riders. That is a nice term that means that the producer gives the supermarket money in order to be allowed to continue producing fruit and vegetables for it. If that continues, the margins of the company are reduced, as a result of which the innovation of that company in trying to produce a product for the supermarket is taken out of the process and it becomes a machine-like supplier to the supermarket.
I mention those points because they are additions to the planning process, which was highlighted in the report and referred to in the Chamber today. The extent to which supermarkets can effectively dictate the workings of the market seems to be a factor well beyond planning. Whether it serves the British public in the long term with regard to choice is a big question. I urge those who consider such matters, especially the Minister who is to respond to the debate, to assure us that the complexity of competition is active in the Government's mind and that the protection of the consumer will be featured in future debates.
10.20 am
Mr. Hilary Benn: We are having this debate principally because supermarkets have been successful. The hon. Member for North Wiltshire (Mr. Gray) did us a service by reminding us of that fact. Like others, I welcome planning policy guidance note 6, as I do the report, because it fires a powerful warning shot across the bows of any person who is contemplating trying to row back from the decision taken by the previous Government, which I hope that the current Government will continue to support with equal vigour.
The hon. Member for North Wiltshire referred to the fact that the average weight of a load of family shopping is more than 80 lb. We must make it easier for people to continue to benefit from the service offered by supermarkets without necessarily having to use their car. I should like there to be more home delivery services in operation. Tesco leads the field in a modest way; 250,000 people have signed up to its service. I have used it twice and, speaking from experience, I would be keen to give up the pleasure of that weekly trudge up and down the aisles if my purchases were delivered to my home. Let us be imaginative. Why cannot we build into the planning system for new developments a requirement on the supermarket owner to provide a home-delivery service? Some people would welcome the chance not to drive their car to the supermarket, but to have their purchases delivered by van. That may release a few parking spaces.
One characteristic of inner-city areas is the absence of shops, especially in those areas that are in severe decline. The few shops that remain in such areas symbolise the problems that they face, given that they are steel-shuttered and, in a sense, as beleaguered as the communities that they try to serve. I represent a

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constituency with one of the lowest levels of car ownership in the country. The debate about people's freedom to use their cars for shopping does not arise for many of my constituents. If they cannot go by bus to shop, they are denied the range of choice that supermarkets provide, including the right to low prices.
Early this year, the Joseph Rowntree Foundation published an interesting study into the extra costs of being poor in Britain today. A representative bought 20 goods from a supermarket at a cost of £17.88. He then went to the local shop where the same basket of goods cost £29.11. Shopping is 50 per cent. more expensive for poor people who live in areas that do not give them access to a choice of goods at low prices than it is for others. The poorest fifth of households spend nearly a quarter of their income on food; the richest fifth of households spend 14 per cent.
The Leeds Co-op recently opened two stores in my constituency, one of which is a refurbishment in the Selby road. The other is on the Lincoln Green estate, which was the subject of Fergal Keane's "Forgotten Britain" documentary on BBC television about a month ago. The arrival of the store, which is in a former public house—in which there may be some symbolism—has given a lift to the area. It is a small, modest shop, which opens long hours. It has a range of produce, such as fresh fruit, which may not have been available in such quantity previously. It has given a boost to the area, and has played a part in the redevelopment and regeneration process of a run-down inner-city community. I never thought that I would regard the Co-op or any other supermarket as an instrument of inner-city regeneration in that sense. In this modest example, however, that is unquestionably the case. Other supermarkets should recognise that in addition to providing successfully for the market, about which other hon. Members have spoken, they have a responsibility to inner-city areas.
To the extent that PPG6 has encouraged more supermarkets to consider developing inner-city areas, it has been well worth while. To the extent that the report encourages supermarkets to do more of that—and the Government to ensure that they do more—it will also have been extremely useful.
10.25 am
Mr. Tom Brake: I am pleased to have the opportunity to speak in the debate. I join hon. Members in congratulating the hon. Member for Denton and Reddish (Mr. Bennett) on securing it. The subject of supermarkets is important, and Liberal Democrats used an Opposition day debate last year to discuss it.
The rapid expansion of out-of-town superstores and the concentration of market share has undoubtedly hit town centres. Supermarket purchasing and pricing policies have hit farmers but not led to lower prices for consumers. As the report highlights, a new wave of larger superstore developments, predatory pricing to gain market dominance and a squeeze on local producers and traditional retailers has had a heavy impact on town centres. Traditional food retailers and other retailers in town centres have closed, and many jobs have been lost.
The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) likened supermarkets to rhododendrons, and I, too, shall use a gardening
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analogy. I am currently fighting a running battle in my garden with ground elder, which I think that I am losing. Supermarkets can be likened to ground elder, as they continue to spread and strangle anything in their path.
In January 1998, Boots sponsored a report for the national retail planning forum, which showed how great has been the impact of out-of-town food superstores on local retail employment. It studied 15 catchment areas of 93 superstores that opened between 1991 and 1995. Although 10,500 full-time equivalent jobs had been created, no fewer than 25,000 jobs were lost in local specialist food retailers—a net loss of 15,000. A further 10,000 jobs were lost in other non-food retailers. That is an average job loss of 276 employees for every supermarket that had opened. That report was backed up by a study produced by the Department of the Environment, Transport and the Regions.
Supermarkets have not just had an impact on town centres. They have had a wider impact on the environment, to which many hon. Members have referred. For instance, the Government rightly say that they want to develop brownfield sites in town centres. What happens, however, when such sites are not available? The sequential test, which has been praised in the report, leads supermarkets to push for development on the edge of or even outside town centres, but there is nothing in the test to say that that cannot be done. The larger the store, the more likely it is that it will not be able to find a town centre site. It will, therefore, claim that it must rely on an out-of-town site.
Since the last Select Committee report on the matter, three years have elapsed, during which the Government could have defined what constitutes a suitable site. I hope that the Minister can give us that definition.
I believe that everyone agrees with the policy that has been in place since 1996 and the need for the sequential test. However, I am afraid that, once options in town centres are exhausted, supermarkets move out of town. A report published in 1998 by the Environment and Science Research Council said:
Since the mid-1990s…the major food retailers increased floor space by nearly 2.5 million square feet a year, much the same as in earlier years.
It would be nice to think that the vast majority of that new floorspace had been developed in town centres, but I suspect that that was not the case.
Many members touched on the issue of traffic and congestion. The royal commission on environmental pollution producing its report last Friday, and the issue needs to be tackled quickly. The report called for a 60 per cent. cut in CO2 emissions, much of which will have to be achieved by reducing traffic and congestion. I, therefore welcome the new planning policy guidance note 13 and the fact that it will contain maximum, not minimum, parking standards. I hope that they will be tough; the Select Committee was worried that they would be too lax. The Minister will have the opportunity to reassure us that she has not gone soft on congestion.
In one respect, I am disappointed by the Government's response. They point out that, under the Transport Bill, it will be possible to levy a charge on workplace car parking at out-of-town stores. That is positive, but will not apply to customer parking. My hon. Friends the Members for Bath (Mr. Foster) and for

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Tweeddale, Ettrick and Lauderdale (Mr. Moore) tabled several amendments to the Bill suggesting the inclusion of out-of-town shopping complexes. If the Government are not prepared to entertain such proposals, perhaps the Minister could outline how they intend to level the playing field between out-of-town shopping centres without a charge and town centres, where charges often apply.
The development of out-of-town shopping centres leaves dereliction in town centres. There is a role for a greenfield development levy in trying to redress the balance and make the development of derelict sites in town centres more attractive. Value added tax has been mentioned as well, and it could help in levelling the playing field between out-of-town developments and the redevelopment of town-centre premises.
Even if those reforms were implemented, there would be a need for local authorities to make much more of compulsory purchase order powers to assemble sites, as the Select Committee report suggests. That would mean that, if the owners of a possible site in a town centre had different views about its future, the local authority would have the role of pulling all that together to make available a site that might not otherwise be available.
I am happy to endorse the report's views on design and PPG6. Supermarket design leaves much to be desired; there is an example in my constituency where the car park has been put on the high street and the store frontage has been set back. All that one can see when walking down the high street is the concrete of the underground car park. I hope that sometime we may consider not only the visual impact of building design, but the wider environmental impact. Much can be done about the environmental impact of supermarkets. The report's title is misleading, as the report concerns not only the impact of competition but the overall environmental impact of supermarkets.
The Committee report is rightly robust about competition, and I share its worry about the referral by the Office of Fair Trading to the Competition Commission. A relaxation of the planning rules would be disastrous, and I hope that DETR Ministers will hold their ground and insist on pursuing existing policy, if the Secretary of State for Industry has to consider adverse findings.
My time is up, I am told. I finish by saying that I welcome the report and its recommendations on Compulsory Purchase Orders, design, car parking and other aspects of supermarket development. However, I am disappointed by the Government's weak response, and hope that the Minister will enlighten us about their stance on the issue.
10.35 am
Mr. Damian Green: As the world's worst gardener, I will not extend the rhododendron analogy that has dominated the debate; given the greater expertise of other hon. Members, I would not add anything new. I commend the Committee on its report, which deals seriously with a range of serious and complex issues, as the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) showed when she opened the debate.
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I should like to comment on the Committee's discoveries and recommendations and the Government's response, and to question the Minister on some matters. I hope that she can reassure the chamber about the Government's actions so far and their intentions.
First, I congratulate and thank my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), who introduced planning policy guidance note 6, which the Committee report commends. In fact, that is its most clear-cut commendation and it has often been mentioned in the debate. The Secretary of State whose policy is regarded as popular and right not only on the day on which it is introduced but four years later, should be a happy man. It is a rare accolade that he must want to savour. The special adviser in the Department at the time was my hon. Friend the Member for North Wiltshire (Mr. Gray). As his sage advice contributed to a policy that has received universal commendation this morning, he should share in the glory.
We all agree that supermarkets cause a range of problems. The existence of a nearby supermarket is likely to accelerate the closure of village shops, and out-of-town superstores make shopping in town centres more difficult. Because of their buying power, supermarkets can cause problems for farmers, who feel that they are dealing with a leviathan and do not have the countervailing power to extract a fair return for their products.
However, the hon. Member for Normanton (Mr. O'Brien) was right in saying that it is absurd to be anti-supermarket. We all use them and find them convenient, as do millions of our constituents. They have improved the quality of life in this country over the past 30 or 40 years, by providing a range of goods at prices that most people can afford. I was fascinated by the price comparison referred to by the hon. Member for Leeds, Central (Mr. Benn), which shows that, by driving prices down, supermarkets can provide a wide choice of goods, some of which would usually be regarded as luxury goods by the less well-off.
Like the hon. Gentleman, I would be delighted by a growth of home delivery through internet shopping, as it would be an enormous pleasure to give up that weekly routine. I have also discovered that it is a weekly routine that many of my constituents find convenient as a way of finding their Member of Parliament in the supermarket on a Saturday morning. It is a good way of getting things off their chest.
The report does not explain why supermarket competition is the problem, and I remain unconvinced. The quasi-monopoly characteristic of supermarkets is often the real problem. Many difficulties highlighted by the report relate to the areas in which supermarkets can effectively behave as a monopoly or, at best, as an oligopoly, instead of competing with one another. The Minister will have to deal with that central point.
I hope that the Competition Commission reports its findings when the House is sitting, given that the matter is important and controversial. It would be good to have an early and timely debate about it in one form or another. A balancing act must be clearly defined between consumer interests and wider environmental and social interests. At best, the Competition Commission will contribute to achieving that balance. It must be struck and I am sure that we shall continue to take a close interest in it.

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I commend two points in the report, the first of which relates to the need for small supermarkets in town centres. The report says that planners are sometimes relatively inflexible and consider that all supermarket development is bad. The Committee feels strongly that smaller supermarkets in a town centre can help to regenerate the community and keep the town centres alive—something that we would all welcome. The second point concerns design, which was mentioned by my hon. Friend the Member for Vale of York (Miss McIntosh). Paragraph 23 of the report quotes the urban taskforce on the problems of "monotony of design". Planners should pay attention not only to the general design, but to the desirability of using proper vernacular materials. One depressing aspect of many town centres is that, if we were led into them blindfold and then had the blindfold removed, we would have no idea where we were. Far too many towns look like one another. We have lost much of the regional and local vernacular feel in our town centres. We should try to get it back; it is one of the glories of this country.
Much mention has been made of Wal-Mart and its takeover of Asda. Will the Minister say whether there are on-going talks between senior management at Wal-Mart and the Government? At the time of the takeover, we all read the reports of meetings with the Prime Minister. Is Wal-Mart having an effect on future planning regulations? What will be the planning implications if the Competition Commission makes an adverse public interest finding on the issue of competition? We have heard how strong the Minister for Housing and Planning was on the issue, but it would be a different situation if the Competition Commission concluded that the public interest was being damaged. What would be the Government's response to that?
I was slightly disturbed to read paragraph 28 of the report, in which the Minister for Housing and Planning said that there had been
substantial inconsistency between individual local authorities.
That smacks of a desire for centralising micro-management that would not serve the planning process well. Can the Minister give us assurances about that today? Giving local authorities more power to take their own decisions is a good, rather than a bad, move.
The appeals system has not been mentioned this morning. It is widely held to be loaded in favour of the big battalions of the large shops as opposed to community groups that oppose big developments and it is regarded as one of the big problems with the system. It would be interesting to know whether the Government have any plans to change it.
Paragraph 12 of the Government response to the report is extraordinary. It refers to the compulsory purchase policy review advisory group, which will report to Ministers at the Department of the Environment, Transport and the Regions in the next two months. It says:
A decision will then be made whether, and when, to publish it.
I cannot believe that the report will be so sensitive that Ministers will not want to publish it. I assure the Minister that it is highly unlikely that the matter will form a central part of the Conservative party's manifesto at the next general election. If the advisory group makes such sensitive comments, it is all the more
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important to publish the report. I am sure that there are no reasons for not doing so, and I hope that the Minister will assure us that she will.
The final point to which I should like the Minister to respond relates to car parking. This is a good opportunity for her to clarify the Government's position on parking at superstores and, in particular, workplace charges, which have been mentioned. Has the Department done any work on the possible effect on pricing of the introduction of workplace charges at out-of-town superstores? Clearly, that may have an impact on the economics involved.
It seems to us that the long-term solution is decent and sensible guidance from the centre and greater devolution of power to local communities, because there may be a genuinely different balance to be struck in different communities between the advantages and disadvantages of supermarket development. We feel that Ministers should allow local authorities to take more of those decisions, as those decisions would then be more likely to reflect the needs of local communities. I hope that the Minister will reassure the Chamber about those points.
10.46 am
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes): This has been an important debate in both substance and timing. I congratulate my hon. Friend the Member for Denton and Reddish (Mr. Bennett) on securing the debate, and the members of the Environment, Transport and Regional Affairs Committee on their thorough report. I thank hon. Members for their unequivocal support for our policy of encouraging new retail development in town centres.
We very much value the Committee's continuing vigilance and interest in town centres and shopping. I know that the Committee, rightly, takes great pride in the important role that it played in convincing the previous Government to change their disastrous stance and the outcome of that stance on the issue. The revision of planning policy guidance note 6 was due largely to the Committee's inquiry into shopping centres.
I very much welcome the debate, the timing of which is important because it provides an opportunity to reaffirm the Government's position directly to the Chamber and to confirm the robust defence of Government policy for which the Committee commended my hon. Friend the Minister for Housing and Planning. I shall give hon. Members most of the assurances that they want and I shall try in the limited time available to deal comprehensively with all their arguments.
My hon. Friend the Member for Normanton (Mr. O'Brien) graphically outlined the impact of decisions taken during the 1980s and 1990s. In a debate last night my hon. Friend the Minister for Housing and Planning informed us that half of all post-war out-of-town developments were approved between 1985 and 1990, which illustrates what a step change in practice we witnessed during that period. That step change was not positive. It left a legacy for many of our small towns and city centres, as many hon. Members discussed today. One of the Government's central policies is to start to reverse those destructive trends and to renew, enhance

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and support the role of small town centres and inner cities in the rejuvenation of economic and social life for many of our people.
Mr. Gray: I am sorry to interrupt the hon. Lady; I know that we are short of time. She is trying to make what sounds to those of us in the know like a strong party political point that in the 1980s everything was bad and that this Government are changing that. Will she acknowledge that in 1993 my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) changed the policy, which was coincidental to the Select Committee's report? To try to suggest that the new Labour Government are putting right the planning wrongs of the previous Government is incorrect and lowers the tone of what has been an interesting debate.
Ms Hughes: I do not believe that it lowers the tone. I acknowledge the change of policy and when it occurred, and I said as much. I am sorry that the hon. Gentleman has distracted us from the Select Committee's role at that time in drawing the Government's attention to the effects of their practices, if not policies, in town and city centres. In my constituency, the right hon. Member for Suffolk, Coastal approved the largest out-of-town retail store in Europe some time after the apparent policy change. The policy is not the only important aspect; the way in which it is implemented and the rigour with which local authorities and Ministers take decisions in the final analysis makes a difference.
The Committee's inquiry was prompted by Wal-Mart's takeover of Asda, which has been mentioned by one or two hon. Members, including the hon. Member for Ashford (Mr. Green). At the time, the Opposition tried to suggest that agreement had been reached with Wal-Mart for a relaxation in the planning regime. Despite reassurances at the time, that claim continued to be made. Nothing could be further from the truth, and the passage of time has vindicated our reassurances. I hope that that satisfies the hon. Member for Ashford.
All supermarkets now face a level playing field in planning terms. That is the outcome of the current policy position and the way in which we are trying to implement it. They all face the challenge of finding more central sites for new stores and of adapting their formats. My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) raised an important point on the subject. Supermarkets need to adapt in terms of scale, design and car parking to try to fit their formats into existing centres. We are mindful of the possibility of applications in which a developer says that a community needs a store of such a size that it can be placed in only one location. We are not stupid; we can see that for what it is, and will not accept that argument as a reason for avoiding the sequential approach and the need to consider whether a small supermarket in a town centre could equally fit the need. We shall not accept the one-model approach of the large-format superstore. We expect supermarket operators to adapt their offers and possibilities to local circumstances. The Committee asked for clarification on the issue; we gave it in our response and I am happy to affirm it strongly today.
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The subject of extensions was raised by my hon. Friend the Member for Normanton. All extensions require applications for planning permission and so will be subject to the test of PPG6. We shall not allow large superstores to be created by increments, in the way that my hon. Friend feared and believed to be possible.
There has been a great deal of discussion this morning about the Competition Commission's inquiry, and of whether it might impose a relaxation of the Government's planning policy. Although I understand those concerns, planning is not a central focus of the inquiry. I must correct the hon. Member for North Wiltshire (Mr. Gray), in that the Department of Trade and Industry did not refer the matter; the Office of Fair Trading did. The commission's report will be given to my right hon. Friend the Secretary of State for Trade and Industry for consideration on 31 July. It will be published two months later—a time that is much more conducive to the sort of parliamentary debate for which hon. Members have called. The timing is not necessarily the problem that it has been thought to be.
Mrs. Dunwoody: My hon. Friend must forgive me, as I am not terribly bright. Is she saying that the report will be published, but that the Government's reply will be made in the recess? Although she may think that more convenient for Members of Parliament, I have a strange old-fashioned idea that we are more useful in this place than when dissipated throughout the country.
Ms Hughes: On that point, I could not agree more with my hon. Friend. The Secretary of State will have two months to consider the report submitted to him on 31 July, which will be published two months later, at the end of September—closer to the parliamentary Session.
Mrs. Dunwoody: In the recess, but closer.
Ms Hughes: I think that that date is preferable to 31 July, if Parliament rises on 28 July. I share my hon. Friend's views and take note of them. I understand and welcome the fact that hon. Members want to discuss the report, and hope that they will press for such discussion.
Hon. Members have expressed concerns about the Competition Commission. Competing objectives are in the nature of planning and balancing different Government policies, but the protection and enhancement of our towns and city centres is a top priority for the Government. I can only endorse again the robust statement that my hon. Friend the Minister for Housing and Planning made to the Committee. The Government regard the policy for the siting of supermarkets as a crucial lever for the wider policy of revitalisation of small market towns and city centres, and we are determined not to relax it. I place that on the record as the view of Ministers, from the Secretary of State downwards, in the Department of the Environment, Transport and the Regions. We will continue to hold that position.
My hon. Friend the Member for Leeds, Central (Mr. Benn) raised another important point. Some people in inner cities are excluded from access to low-priced, good quality shopping with a wide choice. That is the area that we are considering, in so far as we may want to develop PPG6. We are following up the

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proposals about access to shopping made by one of the policy action teams, because we need new approaches to help local communities to develop retail strategies, and to give them choices.
Mr. Chris Ruane: Will the Minister give way?
Ms Hughes: I beg my hon. Friend's pardon, but I believe that he has just come in. I have three minutes to deal with the remaining points that have been raised.
We are firm on PPG6 and intend to consider the matter. The hon. Member for Vale of York (Miss McIntosh) and others have raised the issue of market towns and rural areas. I agree that, although the issue affects inner cities, it also affects the vitality of smaller towns, on which the siting of out-of-town supermarkets has sometimes had a disastrous effect. That affects those people who are least able to go out of town, because they are elderly or disabled or have no car or resources to do so.
Several hon. Members raised the question of supermarket design and the Committee called for an improvement in that respect. Although there are exceptions, we are all familiar with the shed-like structures sited in acres of tarmac that seem to be the hallmark of many of our supermarkets—certainly in out-of-town situations. When supermarkets are located in town centres, their design is often incompatible with the buildings around them.
We want good design to be an aim of all those involved in new development, and we have published new guidance called "By Design", which the Commission for Architecture and the Built Environment helped us to produce. It is not just an average guidance, but provides practical assistance for local authorities to help developers to improve the quality of the designs submitted in applications. The Government are pressing the issue of design, which is important, not only for supermarkets but for housing and public building, and affects the quality of the environment for local people.
Car parking is another important issue that has been raised. We have created a more level playing field for parking through planning policy guidance note 13, which imposes maximum standards as opposed to the minimum standards required previously. Workplace charging will assist in that matter, when local authorities want to introduce it.
In short, we are dedicated to retaining our robust approach to PPG6 because, as I said, it is so important for the achievement of wider Government objectives for regeneration.

EU Structural Funds
11 am
Mr. Martyn Jones: European structural funding is probably the most important issue affecting Wales's economic future for perhaps the next 10 or 15 years. I think that the Welsh Affairs Committee's report reflects the concern of all hon. Members from Wales to realise the opportunity to obtain for Wales possibly £1.2 billion in European funding, which would be a tremendous boost for the Welsh economy and a huge asset for Wales. Although the funding would go to only a part of Wales, Wales as a whole would benefit hugely from it.
The Committee began its inquiry on the matter in 1998–99 when it became apparent that west Wales and the valleys would qualify for objective 1 status in the 2000–06 European structural fund round. The Committee was very concerned to ensure that everything that could be done to prepare for the round would be done. In March 1999 we took evidence from the Wales European taskforce. On 1 July 1999 responsibility for social and economic development in Wales went to the National Assembly for Wales, but there is not a clear dividing line between devolved and non-devolved matters. Additionally, there was widespread concern that, because of UK Government funding restraints, Wales would not be able to benefit fully from the available European funds. The Committee, therefore, decided to continue our inquiry, focusing primarily on UK funding issues.
We took evidence at Westminster from the Secretary of State for Wales. In November 1999 sitting for the first time in the National Assembly building, we took evidence from the chairman of the Assembly's Economic Development Committee. We also took evidence from the Wales European task force and from the Assembly Secretary for Economic Development.
The Committee emphasised throughout our proceedings that we were taking evidence from the National Assembly not to scrutinise how it handled devolved responsibilities, but to obtain information that would enable us more effectively to scrutinise the UK Government. We greatly appreciated the spirit of cooperation shown by Assembly Members in responding to our inquiry.
The report was agreed unanimously on 8 February 2000 and published on 17 February. In it, we attempted to clarify the funding issues, many of which are very complex. There was much confusion about the concepts of public expenditure cover, match funding and application of the Barnett formula. The additionality rules and the UK rebate also confused the issue. We recommended that the Government and the Assembly should jointly publish a simple but authoritative guide on public expenditure and on obtaining UK and European funding.
Public expenditure cover—an authority to spend public money—is required for European funding and for any match funding, which is the local contribution to project costs, that is provided from public sources.
We reported some concern about public expenditure cover for 2000–01, noting that in the first year structural fund payments are expected to be few. As funding for

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projects is effectively scheduled over five to six years, most funding comes in the third or fourth year, so although very little funding was likely to be needed in the first year, there was some doubt that the funding available would be sufficient. We have urged the Government to allow, for additional public expenditure cover in Wales for 2000–01, if structural funds are greater than expected.
Real problems may arise in 2001–02 and beyond if a significant increase in public expenditure cover is not agreed. It is not possible for Wales to meet the costs of objective 1 from its current budget, which has been formulated and allocated to meet the costs of services already being provided by the Assembly. The concern is that, if we do not receive additional funding, we shall not be able to access the £1.2 billion of European funding.
Mr. Nigel Evans: The hon. Gentleman has said that he is happy that there is sufficient funding for year one, although that is only a small sum. Is he really happy that sufficient funds are available? I understand that various local authorities have proposed various projects but have been told to scale them down to only one project each. Could the hon. Gentleman say something about that?
Mr. Jones: I have no knowledge of that, but should be concerned if it were true. All the information that the Committee has received is that money set aside in the Assembly's budget is sufficient to cover foreseen projects. As I have no other knowledge of the matter, I cannot comment further on it. The Committee has to accept that what we have been told is correct—that £25 million will cover the first year's funding. It seems likely that that sum will be sufficient. The evidence that we received on the spending profile over six to seven years supports the view that very little other than, perhaps, seedcorn funding—which is provided for in the £25 million—will be needed.
The Committee is more concerned about the period 2001–02 and beyond. I am sure that at least all hon. Members from Wales will appreciate that some services will be lost if the block grant has to cover expenditure additional to expenditure on the services—such as health and housing—for which it was formulated and the Assembly is responsible. We know that extra public funding will have to be provided to Wales if we are to obtain a percentage of the £1.2 billion. We also know that some of the funding will come from private expenditure. Although that is all to the good, a substantial percentage will still have to come from public expenditure.
The objective 1 area covers 65 per cent. of Wales's population, and objective 2 covers another 9 per cent. In the comprehensive spending review, the Assembly is arguing for an increase in its departmental expenditure limit to provide additional public expenditure cover for all the anticipated European receipts. We urge the UK Government to make a clear and early commitment to increasing Wales's public expenditure cover to allow a full take-up of European funding.
The Assembly will also have to find money for match funding. The situation is confusing, as there are two factors in the calculation. In addition to public
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expenditure cover, which is the authority to spend money, there is a cash element to the extra funding. The Committee believes, as I have implied, that it would not be possible for Wales to raise the estimated extra £885 million of public sector match funding from existing resources. We have therefore urged the Government in the next comprehensive spending review settlement to increase the funding made available to Wales, to meet in full the public sector element of match funding.
In the Government's response, which was published in our fourth special report, we were told essentially that we would have to await the outcome of the spending review. Ministers reiterated their assurance that they fully appreciate Wales's needs and the importance of objective 1 funding. Both as members of the Committee and as hon. Members from Wales, we were very glad to receive that assurance, and at least some of us appreciated that we would have to wait to see the outcome of the comprehensive spending review.
Mr. Elfyn Llwyd: Is the hon. Gentleman aware that, last week, the Minister for Local Government and the Regions gave cast-iron assurances that money would be available to the English regions, whereas such assurances have not been given to Wales?
Mr. Jones: I was not aware of that. If it is true, I am happy that the English regions have received such an assurance, although it would be nice if Wales could receive a similar assurance. The problem may be that it is not as easy for such assurances to be made under the Barnett formula. I look forward to my hon. Friend the Minister responding on that point.
The report's conclusion is clear. It states:
The award of Objective 1 status to West Wales and the Valleys is a sign of how far parts of Wales lag behind the rest of Europe in economic development. The next few years offer an unprecedented opportunity to transform this situation … Unless the UK Government provides a substantial increase in the Assembly's expenditure limits in the Comprehensive Spending Review, Wales will not be able to take full benefit of the European funds available. The current CSR negotiations are a test of the Government's commitment to Wales, and indeed of the Devolution settlement.
That statement still holds good, but if we accept the restraints we must therefore accept the Government's answer that there are problems with the CSR. We understand that it is those problems that have caused the delay, but we hope that the Minister will continue to press the case very strongly for maximum public expenditure cover and maximum match funding for Wales.
We have a unique opportunity to access European funding, which will not come again. The Committee is aware of what objective 1 funding did for Ireland's economy.
Mr. Evans: I understood that, when the proposals were resubmitted to the European Union, a cast-iron guarantee was sought that match funding would be made available by 31 March. That date seems to have disappeared. Has the hon. Gentleman been given any indication that the Government have guaranteed to the

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EU that the £1.2 billion will be match-funded throughout the entire period of the EU structural fund grants?
Mr. Jones: I was not aware of that either, but it seems odd that the Commission would want such an assurance. European funding is project-based: if the projects do not exist, anticipating and accounting for the destination of every penny, ecu or euro of that £1.2 billion would require a crystal ball. If such a demand had been made, I would be concerned, but I do not think that the European Union could have imposed it on the Government. Given that any such demand would have required the assurance that it sought, but that no such guarantee has been given by the Government, I am certain that no demand was ever issued.
Wales has a unique opportunity. I believe that the Government are committed to getting as much money as possible into Wales. I hope that today's debate will strengthen Ministers' collective arms in their negotiations with the Exchequer.
I look forward to the Minister's response.
11.13 am
Mr. Elfyn Llwyd: The Select Committee report derives from a wide-ranging piece of research undertaken in a short space of time. I shall not dwell on the report's conclusions, which were highlighted by the hon. Member for Clwyd, South (Mr. Jones), but its main thrust is to urge the Government to give some cast-iron assurances on the additional funding and match funding that are prerequisites for drawing down moneys for successful structural fund projects.
We also said that we supported
the initiative of the Assembly Secretary for Economic Development in seeking to exempt Structural Funds from the operation of the Barnett Formula.
That is an important point, as about 5 per cent. of the moneys coming to Wales do so under the Barnett formula. That 5 per cent. would be imposed on the total structural block moneys coming to the United Kingdom and, as a result, Wales would, in effect, be sold short.
The hon. Member for Clwyd, South said that about 65 per cent. of the population of Wales reside in the area now given objective 1 status. The funding is therefore more important to Wales, pro rata, than any other part of the UK.
The Committee also urged the Government to respond swiftly to the report. Over the past few years, we have been disappointed in the content of the responses from Governments to reports, and in the fact that there have been delays of nine, 10 or 12 months before such responses have been made available. Those delays have been something of a scandal. On more than one occasion, the Committee has had to write a firm letter to the Wales Office asking for an urgent response. Those request have been totally ignored for another three or four months.
That is not good government. It is an affront to the Select Committee on Welsh Affairs, and to the parliamentary process. However, the Committee urged the Government to respond swiftly to the report by making a clear public commitment that they will
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provide Wales with public expenditure cover for the anticipated European grants, and with additional funding to meet the full costs of the public sector match funding requirement.
Swift response there was, in this particular case—indeed, it came the same day as the report was published. In a press release, the Secretary of State stated that
it is my view that the report is incorrect in its conclusion.
Somehow, the Secretary of State had prejudged the report's conclusions, or had received a leaked copy of the report. Clearly, he knew the contents of the report, and the Wales Office press release was issued on the morning of the press conference held by the Select Committee.
The press release continued:
In these circumstances I believe it would be entirely wrong to separate one aspect of funding of the Welsh block grant from all the others. We cannot afford to prejudge decisions about funding of Welsh schools and hospitals by considering one aspect of the Welsh budget in isolation.
The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): The hon. Gentleman has made the very serious allegation that the report was leaked to my right hon. Friend the Secretary of State. I hope that he will clarify that in his contribution, as it is a serious allegation against my right hon. Friend and members of the Committee.
Mr. Llwyd: In return, will the Minister explain how the press release came to be issued at the time of the Committee's press conference?
Mr. Hanson: My right hon. Friend the Secretary of State expressed a view about the report's conclusions.
Mr. Llwyd: Without seeing the report?
Mr. Hanson: He had certainly seen the report's conclusions at the time of the press conference.
Mr. Llwyd: I dispute that, as the press release was issued at the same time as the press conference was being held. That is a matter of record. However it happened, the Secretary of State gave an urgent response—that much is true.
Mr. Martyn Jones: I think that I can clear this up. Press copies of reports are sent out under embargo, 24 hours before their official publication. The Secretary of State would therefore have had 24 hours notice of the report's conclusions.
Mr. Llwyd: The hon. Gentleman confirms that the Secretary of State would have had prior sight of the report, in which case it is good that he gave his response within 24 hours of receiving it.

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However, the content of the Secretary of State's response is far from good, as he made it clear that he believed that the report was "incorrect in its conclusion".
Mr. Hanson: Will the hon. Gentleman withdraw what he said?
Mr. Llwyd: I will not.
Mr. Deputy Speaker (Mr. Frank Cook): Order. I remind hon. Members that there is a Chair here. It is occupied, and must be recognised.
Mr. Llwyd: I am obliged, Mr. Deputy Speaker.
There was a swift response to the report, saying "Wait for the CSR," and that the Committee's conclusions were incorrect—even though the report was consensual and its conclusions had been agreed by members of all parties involved.
Last week, it emerged that the English regions qualifying for objective 1 status—Cornwall, South Yorkshire and Merseyside—had been assured that they would receive match funding from the Government. The Minister for Local Government and the Regions has struck a deal with other Government Departments. Those Departments' budgets will be treated with more flexibility, so that cash can be freed up to match funds from the EU.
As we have heard, the issue of match funding for Wales is still to be resolved. We must have assurances that we will receive the necessary amount of match funding, over and above the Barnett block, to enable organisations in Wales to draw down money from the European structural funds.
Mr. Chris Ruane: Does the hon. Gentleman agree that it is easier for the three English regions with objective 1 status to get money as they represent only 6 per cent. of the English population? They can go to the Government and say, "We represent only 6 per cent. of the population. Can you spare us just a few extra pounds"—or millions of pounds. It is harder to do that in Wales, where 76 per cent. of the population live in objective 1 or objective 2 regions.
Mr. Llwyd: I hear what the hon. Gentleman says and I dismiss it utterly.
We must ensure that the First Secretary and the Secretary of State for Wales do all that they can to put pressure on the Treasury to deliver on this crucial issue. Without adequate funding it will be impossible to draw down funds from Europe, rendering objective 1 status worthless and a Pyrrhic victory.
Why are Welsh Ministers failing when those representing the English regions have been able to do deals with the Department of the Environment, Transport and the Regions, the Department for Education and Employment, the Department of Trade and Industry, the Ministry of Agriculture, Fisheries and Food and so on and are able to give cast-iron assurances?
Mr. Richard Livsey: I am interested in what the hon. Gentleman is saying, as I
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understand that the English regions have clearance for expenditure from 1 January 2000, which gives them a significant advantage. Does that not also highlight the fact that the Barnett formula has a stranglehold on the issues of public expenditure cover and match funding?
Mr. Llwyd: I agree entirely. The hon. Gentleman, as a member of the Select Committee, is fully aware of the problems that we face.
Mr. Evans: Does the hon. Gentleman also accept the fact that, because so much of Wales is covered by objective 1 and 2 status, there is a greater need for the Government to take an urgent decision instead of hiding behind the smokescreen of the comprehensive spending review?
Mr. Llwyd: I agree entirely. The hon. Member for Vale of Clwyd (Mr. Ruane) said that objective 1 regions in England represented 6 per cent. of the population, whereas in Wales they represent 65 per cent. according to my figures, and 76 per cent. according to his. Obviously, the decision is urgent and in any event it represents more people pro rata.
It is not just my party that is making this point; so are the hon. Members for Ribble Valley (Mr. Evans) and for Brecon and Radnorshire (Mr. Livsey). We are all ad idem on this and we need to get it clear. We have been asking for a decision for months now. This situation led to the downfall of the First Secretary in Cardiff and we are still no nearer a decision. I wonder when we will know what is happening.
Many projects are on hold and will not wait for much longer unless some assurances are given. People who are prepared to make inward investment are not prepared to wait for ever for assurances to be given. For all I know, some projects will switch to the English regions, once again denuding the Welsh economy of much-needed inward investment.
Mr. Ruane: Match funding is a key issue. It is not just the three Opposition parties that want an assurance on that; the Labour party does, too. There are rules, however, and announcements will be made in July. Does the hon. Gentleman accept that going on exclusively about match funding is scaring investors away from Wales? We are talking Wales down and people are afraid of getting involved because the only issue that they hear about is match funding. We need to talk up projects in Wales.
Mr. Llwyd: With respect, we can talk up projects in Wales till the cows come home. If we are unable to persuade inward investors that the economic conditions are right and the money is there, we can talk up Wales from now till kingdom come without any benefit to anyone.
The Government have failed the people of Wales in this matter. I understand that the final strategy and programming document will be with the Commission on 4 July and that the shadow monitoring committee will meet on 16 and 29 June and 21 July. The fast-track procedure will operate for two weeks in July with the possibility for every local partnership/regional package to submit applications.

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There is great concern that only large-scale projects involving bodies such as the Welsh Development Agency will be considered as part of the procedure. Small voluntary and community organisations are concerned that they will be left out. Further, there are serious concerns that only one project per application can be considered, since many local partnerships already have 50 to 100 projects lined up. All other project applications will have to wait until the end of September to be submitted and, in reality, will not start until November or December when the money starts to come through. That means that nearly a year has been lost since west Wales and the valleys have been eligible to receive objective 1 funding.
There are fears that only a small number of projects will be able to get into the fast-track procedure in July and that only a few will be able to claim under that process. Retrospective funding is the term for claiming back money that has been spent after a project has been approved. That, too, is in danger. The leader of Gwynedd county council told me yesterday that he has been informed that there will be no retrospective approvals and payments in respect of some projects already undertaken. I specifically ask the Minister to give us an answer on that when he replies to the debate. It does not have to wait for the comprehensive spending review.
My party and others represented in this Chamber have the best interests of Wales at heart. Objective 1 funding has been designated simply because the GDP of Wales is below that of the rest of the United Kingdom and below the European Union average. That is not a matter of pride. We are all concerned about that, but we are equally concerned that this is our last chance to draw down the funds. Six years from now there will be further integration into the European Union, probably involving eastern European states, and objective 1 funding will no longer be available, so we need to make as much as we possibly can of the current opportunity.
As I have said, it is undeniable that we have lost 12 months already and crucial issues still need to be resolved, such as the relationship between what can be delivered through regional and local packages and actions plans. Will there be a lead body or accountable body responsible for projects under such packages? Who will have financial control over those projects?
Many organisations and partnerships complain that they are being held back by the lack of guidance from the Assembly on such issues. Lack of guidance from the Government of Wales is doing enormous damage to preparations for the launch of such projects in all objective 1 regions. I believe that that was intentional on the part of the Government as they have allocated only £25 million for such projects during the first financial year.
We have been saying for the past six to nine months that we have been let down by the Government of Wales. The achievement of objective 1 status may well turn out to be a Pyrrhic victory if we are unable to maximise the structural funds that we can obtain. The Government have handled the matter in a deplorable way and we will get nothing like the benefit that we could have achieved.
Mr. Martin Caton: We have heard on many occasions in the past few months that the Government
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are letting Wales down. Can the hon. Gentleman give us a figure that he would expect from the comprehensive spending review that would not result in a statement the following day from Plaid Cymru to the effect that the Government had let Wales down again? How much does the hon. Gentleman expect from the comprehensive spending review?
Mr. Llwyd: I am no more privy to the comprehensive spending review than the hon. Gentleman is. It is one of the problems to which the Minister will refer in a moment. I do not know what is in the comprehensive spending review. I say simply that we should have additional funding and match funding sufficient to allow us to use all the allocated structural funds that have been designated for the poorer parts of Wales.
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Mr. Chris Ruane: I am concerned about the contribution of the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd), which contrasted greatly with his more collegiate, co-operative approach in the Select Committee on Welsh Affairs yesterday. Perhaps someone has had a word with him—he is usually an amiable character, yet he said that the Government's record on objective 1 was deplorable.
Was it deplorable when the former Under-Secretary of State for Wales, my hon. Friend the Member for Neath (Mr. Hain), accepted the hon. Gentleman's county and my county into the Welsh Office bid at the last hour? If he had not, 7,000 people in the hon. Gentleman's constituency would not have benefited. Was it deplorable when the former Secretary of State for Wales, my right hon. Friend the Member for Caerphilly (Mr. Davies), argued in Cabinet—quite often with Cabinet members from other regions with objective 1 interests—that Wales should be accepted, and that it should be the largest region in the United Kingdom to be accepted? Was it deplorable when the Prime Minister went to Berlin, argued through the night for the UK bid to be accepted and then flew back to Hawarden airport to announce that to the Labour party conference?
Labour has delivered on these three key points, yet the Welsh nationalists have used objective 1 as a political football—a political cosh with which to bang Labour over the head time and time again. They have neglected the true interests of the people of Wales; they have sought party political gain at every opportunity—at the local elections last year, at the European elections and at the Assembly elections. They sacked the First Secretary, conniving with the Opposition parties in Wales to achieve that narrow political goal. They were after a political scalp, not objective 1 or match funding. They have used the subject of structural funding time and again for their own narrow political ends.
Match funding is a critical issue, and no one in Wales has tried harder than I have to ensure that objective 1—
Mr. Evans: Does the hon. Gentleman not accept that if the Government had come forward with the match funding, Plaid Cymru, the Conservatives and the Liberal Democrats would not have united in the interests of the people of Wales and removed the First Secretary?
Mr. Ruane: I am not accepting a criticism like that from the hon. Gentleman. When the previous

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Government came to power in 1979, of the 13 regions in the UK, Wales was mid-table as far as gross domestic product was concerned. When they left office in 1997, Wales came bottom of the league table. It is thanks to the previous Government that Wales achieved objective 1 status—they took us from the middle of the table to the bottom. They sacked the miners, they sacked the steelworkers, they put nothing in their place and they did not get the structural funds for objective 1. So I will have no truck with the hon. Gentleman when it comes to objective 1 funding. The Conservatives did nothing, and they continue to carp and do nothing.
As I was saying, match funding is a key issue. The way to achieve it is not along narrow party political lines, but through a collegiate approach. We should forget our political objectives and work together to put a cohesive, cogent case to the Chancellor of the Exchequer for match funding. That is what the Welsh Affairs Committee report does. It is critical, and it has all-party support. We want match funding.
I should have liked the Chancellor of the Exchequer to announce last year, or even in December, in the middle of the comprehensive spending review, that Wales was a special case and that the Government would stop the comprehensive spending review and guarantee the people of Wales objective 1 funding.
Mr. Llwyd: Can the hon. Gentleman confirm that Treasury Ministers were invited to give evidence to the Select Committee but declined?
Mr. Ruane: I am disappointed that they did. I should have preferred them to give evidence. I should have preferred the Chancellor of the Exchequer to announce in the middle of the comprehensive spending review that money for Wales—for the objective 1 regions in the UK—had been guaranteed. The report says that, and I support that view. However, we live in a political world, and if my right hon. Friend had guaranteed Wales that money for objective 1 funding, every other Department in Whitehall would have demanded the same. So that is what I wanted, but it was not to be. It will happen in July.
You have threatened us with all sorts. You have sacked the First Secretary.
Mr. Deputy Speaker: Order. I have threatened no one.
Mr. Ruane: I am sorry, Mr. Deputy Speaker.
Mr. Llwyd: Is the hon. Gentleman aware of the last Budget speech made by the Chancellor in which he departed from the purdah on the comprehensive spending review in no fewer than three instances, saying that extra expenditure would be forthcoming? If he can do it in those cases, why can he not do it for Wales?
Mr. Ruane: The Budget, as the hon. Gentleman knows, is fine tuning for the economy. The comprehensive spending review sets spending patterns for a three-year period. The objective 1 spending pattern
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is over a nine-year period. We do not need fine tuning; we need a strategic approach for the next nine years. That is why the funding has not been announced.
Mr. Robert Walter: Will the hon. Gentleman give way?
Mr. Ruane: This is the last time I shall give way—unless it is to one of my hon. Friends, of course.
Mr. Walter: I thank the hon. Gentleman for giving way. I am a little concerned by what he says. Is he suggesting that when we do get the announcement of the comprehensive spending review, the Prime Minister's commitment not to let Wales down may not be fulfilled, and that the money that is necessary for the first three or four years of objective 1 will not be provided?
Mr. Ruane: I take the Prime Minister at his word; I take the Chancellor of the Exchequer at his word. If the money is not delivered, I will be the first to criticise. On the flip side of the coin, I hope that if—or, rather, when—the money is delivered in the comprehensive spending review in July, the Opposition parties will apologise for sacking the First Secretary and for using objective 1 as a political cosh. I will criticise, and I hope that they will apologise, when we have the result in July.
I have concerns about the objective 1 plans for Wales. I have concerns that information has not percolated through to our communities over the past two or three years. Like the hon. Member for Meirionnydd Nant Conwy, I am concerned that the agencies that have paid employees on £25,000 and £30,000 a year will cut the cake before the community projects can get up and running.
In Cornwall, a 27-page full-colour brochure was sent out to all 450,000 households.
Mr. Livsey: Because of the Liberal Democrat council.
Mr. Ruane: The hon. Gentleman's party political point is well taken. However, such action has not been taken in Wales; it has certainly not been taken in Denbighshire and Conwy, which entered the bid late. We have had 40 meetings in Denbighshire on objective 1—people know about it, but there is more to be done.
I am also concerned about something else that the hon. Member for Meirionnydd Nant Conwy said. The procedure for applying for objective 1 bids is not clear to the communities, especially for community projects. What do the application forms look like? We need a general outline—if they are not ready yet, let us look at the sort of things that should be included. What is the line of command? Where is the local responsibility? Will it be too complicated? I believe that there are 32 strands, including strands for the development of tourism, small and medium-sized enterprises, agriculture, and so on.
I am also concerned at the slow pace this year. I hope that, once the comprehensive spending review is announced, and match funding is in place, there will be rapid action. I have been evangelising and enthusing about this in my communities; I have organised numerous events giving information in my constituency. My constituents are expectant—they want results. I want results, and I hope that we will see them soon.

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The Committee's report is an excellent document—it is critical, comprehensive and readable. It has strong conclusions. I hope that the Ministers who read it will take the feedback from the Committee and the people of Wales right to the top so that it will influence the Chancellor of the Exchequer when he makes his announcements on the comprehensive spending review in July.
11.39 am
Mr. Martin Caton: I want to focus first on the Select Committee's recommendation, in paragraph 12, that
the Government and the Assembly, jointly publish a simple but authoritative guide to public expenditure in Wales, setting out in simple terms how both UK and European funding operate in Wales.
When I reconsidered the evidence taken by the inquiry, I was reminded what a difficult and painful process it is to get one's head around the whole subject of European structural funds.
Most of that pain and aggravation is unnecessary, however. Yes, the issue is complex; to get on top of it, one has to become familiar with terms such as departmental expenditure limits, PES—public expenditure survey—cover, match funding, additionality, single programme documents and so on, as well as the organisational structures and grant criteria applied under a particular programme. However, one cannot help but wonder whether some smoke and mirrors have not been chucked in to make life even more complicated.
Last October, Jane Hough, of the House of Commons Library, attended an informal briefing of the Committee to try to lighten our path through the structural fund jungle. She provided us with an extremely useful background paper, although she acknowledged that it was not definitive. She pointed out:
There is an absence of any substantive explanation of the process either from the Treasury or the territorial departments. I have, however, discussed this matter with an official at the Treasury. While he was unable to add to the notes below, he confirmed that my understanding of the subject was "as accurate as it could be for someone outside the Treasury".
I do not know about you, Mr. Deputy Speaker, but those words sound to me like those of the high priest of an obscure cult, protecting the mysteries of the inner sanctum from the common worshipper. That is not good enough. Structural funds are an instrument of public policy and should be open to public scrutiny and democratic influence at every level. It is not merely a matter of producing helpful brochures and booklets to enable individuals or organisations to submit grant applications—although, of course, that is vitally important. Information about how the funds are designed and how they work should be available to anybody who is prepared to undertake a little study. At present, that is not the case. I hope that soon the Assembly and the Government will work together to produce a guide, as we have requested them to do.
The inquiry was the Committee's first attempt to fulfil a liaison and communication function between the National Assembly in Wales and the Government in Whitehall. There are clear responsibilities for both forms of government. Early on, ways were established
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for the Executives in Whitehall and Cardiff Bay to communicate and to reach decisions. Joined-up government can work between different tiers and in different geographical locations. Many members of the Select Committee hope that we can help to achieve joined-up scrutiny and joined-up accountability by working with the National Assembly on such issues.
We have not yet completed a mechanism to achieve that, but our inquiry did not make too bad a start. We took evidence from the First Secretary and the Chair of the Economic Development Committee in Cardiff, as well as from the Secretary of State.
The focus this morning has understandably been on match funding and public expenditure cover. However, the report made other significant recommendations—on the possibility of advance payments in certain circumstances; on shifting administration of the social fund from the Department for Education and Employment to the National Assembly for Wales; on operating aids—a matter which needs further exploration; and on urging extra funding from the UK Government if it was shown that there were a higher number of claims than were predicted when the allocation was made. The recommendations were all important; they have in part informed the consideration of structural funds at both tiers of government.
There has been a lot of huffing and puffing on spending cover and match funding this morning. That comes over as rather unconvincing theatre. As my hon. Friend the Member for Vale of Clwyd (Mr. Ruane) said, our report made a bid for a commitment to match funding. I certainly support that, although we did so more in hope than in expectation—aware that, in all likelihood, the Welsh block would have to be considered together and as part of the comprehensive spending review.
Mr. Walter: From talking to Commission officials in Brussels, my perception is that, if the money is not additional to the Welsh block, it will not fulfil the requirements of the objective 1 programme. Is the hon. Gentleman aware of that?
Mr. Caton: I do not know what the hon. Gentleman heard in Brussels, but I certainly agree with the spirit of what was said. We need the money to be additional. If the rules permit us to receive it only in that way, I have no problem with that. The money should be additional to the block grant.
We are within weeks of learning what the comprehensive spending review will reveal about Wales. My view of the matter has become firmer over the months; we shall hear a good-news story for Wales. However, the problem is how will the Opposition parties assess whether it is a good-news story? That is why I put my question to the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd). One cannot help but feel that, whatever is announced in the CSR, the day after, we shall hear that the Labour Government have let Wales down again. If Opposition parties do not have a figure in

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mind—how much they expect in order to provide match funding—when we are within weeks of that announcement, it is most disturbing.
Mr. Livsey: The answer to the hon. Gentleman's question is simple. We know that we need £885 million for match funding from public expenditure. We shall judge—
Mr. Deputy Speaker: Order. I should be much obliged if hon. Members would address the Chair rather than the wallpaper.
Mr. Livsey: Mr. Chairman, I shall never do that again—
Mr. Deputy Speaker: Order. Perhaps I should remind hon. Members that when the House took the decision to adopt this modified form of debate, it also decided that those who regularly occupy the Chair in Westminster Hall were to be addressed as Deputy Speaker. Those to be addressed as Mr. Chairman—or Miss for that matter—would be those who were reserves. I am not a reserve.
Mr. Livsey: I take your comments on board, Mr. Deputy Speaker.
The judgment that has to be made is about whether the Government come up with the amount of match funding required to meet that provided by the EU—as we know that is £885 million. That is surely how the matter should be judged.
Mr. Caton: It is interesting that the hon. Gentleman has not mentioned the fact that match funding for our existing structural fund money has not taken into account the current DFEE payments through the social fund. I am sure that he will enlarge on how he arrived at that figure when he makes his speech.
Mr. Evans: Will the hon. Gentleman tell the Chamber what figure he expects in the announcement, so that we can judge whether the Government were successful or inadequate in their provision?
Mr. Caton: My assessment will be based on the type of formula that I had begun to outline in response to the hon. Member for Brecon and Radnorshire (Mr. Livsey). After taking into account the existing match funding for our present structural funds, and after taking out the money currently controlled by the DFEE—which should eventually be controlled by Wales—the amount should match the remainder. It is as simple as that. I hope the amount will be better than that, and that we shall hear a good announcement about the block grant.
To conclude, Mr. Deputy Speaker—I apologise for my failure to address you correctly earlier—I am sure that there will be a good-news story. When we receive that announcement, we need to get on with the job of exploiting objective 1 in west Wales and the valleys to the benefit of constituencies such as mine, which desperately need it.
11.49 am
Mrs. Betty Williams: I had hoped that we would have had a constructive debate about European structural funds. However, I am sorry to say that, having listened to the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) in particular, it sounds as though the nationalists' campaign continues as it has for the past eight to 10 months. I would like us to work together constructively to put a strong, sound case forward, so that, in a few weeks time, my right hon. Friend the Chancellor of the Exchequer will make a favourable announcement for all the people of Wales and not just one section of society.
My hon. Friend the Member for Vale of Clwyd (Mr. Ruane) referred to the comprehensive spending review. However, we do not receive answers from the nationalists' representatives when we try to pin them down on how much funding they seek. They have mounted a long campaign, but I do not accept that we should expect any Chancellor, Minister or Prime Minister to sign an open-ended cheque to any organisation without knowing exactly what sum we are talking about.
The comprehensive spending review will tell us the Government's plans for the next three years. That must be separated from any Budget announcement, because that is the whole point behind having a comprehensive spending review.
Mr. Llwyd: Did the hon. Lady hear me earlier refer to the fact that the Government departed from that general rule in no fewer than three instances in the latest Budget statement? Furthermore, did she not listen when I said that the Minister for Local Government and the Regions has already given cast-iron assurances via the Treasury to the three English regions now getting objective 1 status?
Mrs. Williams: I am not a Minister, but I am sure that my hon. Friend the Under-Secretary of State for Wales will address that point when he winds up. However, my hon. Friend the Member for Vale of Clwyd attempted to give the hon. Gentleman an answer on that point.
At the height of the nationalist campaign to talk Wales down, prospective applicants raised certain questions. However, Labour Members and the Government were able to persuade those applicants to put packages together. I, as the Member for Conwy, was asked by members of the Federation of Small Businesses, voluntary organisations and local authorities whether it was worth their while to put packages together if they would be disregarded at the end of the day. They had accepted the nationalists' view that the money would not be available. I am confident that, in a few weeks time, we will hear a favourable announcement from my right hon. Friends the Chancellor of the Exchequer and the Prime Minister and that they will not let Wales down. It is wrong for any politician to consider this issue only in a political sense when the rest of us sincerely feel that the whole nation should be considered when we make our case to Government for match funding and for additional resources for Wales.
My hon. Friend the Member for Gower (Mr. Caton) referred to paragraph 12. The absence of a simple guide has left the door wide open for opposition parties to

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make use of the fact that people are unclear as to what additionality and match funding actually means. The opposition parties have grasped that opportunity and made the most of it in their 10-month campaign.
We must now persuade Government that the need for the funding exists. I refer to a meeting that we had at the Welsh Office some time ago at which the hon. Member for Meirionnydd Nant Conwy was present. We tried to persuade Government that Conwy and Denbighshire should be included on the map for objective 1 status. We succeeded in doing that, and the Prime Minister then succeeded in his attempt when he spoke on behalf of the United Kingdom later that year.
We need to work together on this at the last minute before the announcement is made. We need to persuade the Prime Minister, the Cabinet and the Chancellor that Wales deserves additional resources so that we can consider closely all the packages and projects that have been prepared in the past few months. I am confident that my right hon. Friends the Prime Minister and the Chancellor will not let Wales down and that we shall have a favourable announcement shortly.
11.54 am
Mr. Richard Livsey: The Welsh Affairs Committee has produced an important report. It is important because it is an all-party report and it was well received, not least by Members of the National Assembly, as an effective contribution to the debate and to ensuring that Wales receives a fair deal.
The report primarily deals with objective 1 funding and, in particular, with the raising of public expenditure for match funding. It highlights the importance of advance payments and it asks for a clear and early commitment for full public sector funding. We identified the amount of match funding that is required, and I referred to that figure earlier. We also asked for the exemption of structural funds from the operation of the Barnett formula and for funds for European social fund payments to be transferred from the Department for Education and Employment to the National Assembly. That is an important issue. We also want to ensure that private sector match funding is adequate.
We also asked what new structures for overseeing and monitoring plans after the wind-up of the Welsh Office task force will apply. I am sure that hon. Members will remember that we were critical of the way in which the task force was wound up, because that caused a significant delay to objective 2 plans which cover 9 per cent. of the population of Wales.
We also asked for a renegotiation of the objective 2 map, but that has not occurred. The answer that we received in the Government's response about additional public expenditure survey cover was to wait for the comprehensive spending review. That is a case of jam tomorrow and I believe that it is strongly connected with the next general election campaign. It demonstrates the iron grip by an iron Chancellor on such information. However, as has already been pointed out, he was prepared to make three exceptions only the other day.
I wish to deal in particular with the problems confronting objective 2, because much has already been said about objective 1. First, I congratulate the East Wales Partnership, which produced a single programming document that has already received
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approval from the European Commission. Although it still has to go over several internal hurdles, it has been approved in principle as a result of much hard work by civil servants in the National Assembly and by councils within the partnership, driven, not least, by my county council in Powys.
What worries us in particular is that there appear to be inadequate numbers of staff in the National Assembly to deal with the programming document. I understand that every expectation was given that the document would be in place and ready to go by November or December of this year. However, we found out only yesterday that the process has been delayed to March or April of 2001. The right hon. Member for Wokingham (Mr. Redwood) slashed the number of staff in the then Welsh Office and that has contributed to the delay. None the less, why cannot consultants or competent members of county councils be drafted in to speed up the process? The delay has slowed everything down. When I was in America with the Welsh Affairs Committee last week, I saw a fast-food restaurant called Mr. D. De-lay!, but the only problem was that it had been shut down and looked decrepit. That is what could happen to objective 2. The problem is serious.
The English regions have already had approval for objective 2 and that will be effective from 1 January. As of yesterday, we understand that objective 2 will not be effective in Wales until a starting date of 26 May and we must remember that the money is disbursed by the "M plus 2" rule. In other words, the money must be spent within two years. The position is therefore very unsatisfactory.
To achieve objective 2 status, we need £80 million of match funding against a contribution of £50 million from the European Union. The programme is extremely important. In my own area of Powys, the gross domestic product in 1995 was 76 per cent., of the average, which is only 1 per cent. over the 75 per cent. qualifying threshold for objective 1. It is now well below that threshold, even though we are receiving objective 2 funding, which concentrates on 60 per cent. of business development, entrepreneurship initiatives, help for small and medium enterprises and growing indigenous businesses, all of which are vital to our local economy.
I draw the Chamber's attention to a report produced last week by the Alliance for Regional Aid which addresses the problem of additionality that we discussed this morning. The report highlights the fact that additionality does not apply so much in England because of the Barnett formula. It says that the Treasury does not allow public expenditure to rise in Wales, but should do so. That is a huge issue. Indeed, the report proposes a matching finance fund. It states that there are two problems, the first of which
concerns the additionality of EU grants. This is about the public expenditure cover for the grants themselves. At the present time additionality is primarily a problem in Wales—
in the context of a comparison with what is happening in England—
where the fixed public expenditure total has not been adjusted to reflect the extra money coming as a result of Objective 1 status. The net effect is therefore that extra EU grants in Wales threaten to displace an equivalent amount of other Welsh public expenditure—on schools, hospitals, social services etc.

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That point cannot be made often enough. The report goes on to recommend a way of ensuring additionality and states:
One way of averting the immediate problem of non-additionality in Wales would be for the Treasury to allow Welsh public expenditure to rise by the value of the additional grants coming from the EU. That way, the extra grants would no longer displace other Welsh public expenditure.
The disadvantage of this one-off solution is that it is likely to provoke a reaction from other areas. A better way forward is to provide Wales with the extra spending it needs but within a framework that treats all EU grants equally and provides fairness for all parts of the UK. There are two simple ways in which this could be done.
The first way is to
take all EU regional grants right out of departmental spending totals.
The second way is to
give automatic extra spending consents, equal to the value of the grants to bodies in receipt of EU funding.
That is common sense and should be done. We expect it to be included in the comprehensive spending review; indeed, we should have had this information far sooner.
12.3 pm
Mr. Nigel Evans: First, I welcome the fact that we are having this debate. I have read the report and I congratulate the Welsh Affairs Committee on its comprehensive work.
The subject of objective 1 status is vital to the vast majority of Wales. As the map shows, whole swathes of Wales will now be covered by objective 1 status. We recognise that there are pockets of deprivation, even in those parts of Wales that are not covered by objective 1 status. It is therefore important that we do what we can to get this money through to the most deprived and disadvantaged areas of Wales as quickly as possible.
We have already given money in connection with these European funds. We are net contributors to the European Union and, as we are getting back our own money, the matter is doubly urgent. I agree with much, if not all, of what the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) said.
Mr. Evans: It is just as well that the hon. Gentleman is not running for his party leadership, as that might have been a critical blow to his campaign.
Mr. Llwyd: It would have been fatal.
Mr. Evans: What the hon. Gentleman said was important. Criticism of the Government is useful when their actions are wrong. There is nothing improper about such criticism. Indeed, in the first five years of my being a Member of Parliament, I was critical, both publicly and privately, of my Government when they did things that were wrong.
Mr. Ruane: Name the issues.
Mr. Deputy Speaker (Mr. Nicholas Winterton): Order.
Mr. Evans: There is nothing wrong in being critical when things are going wrong. Indeed, it is a strength to
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be critical of one's own Government. Similarly, we are not talking Wales down when we discuss deprived and disadvantaged areas, but are recognising problems that need to be recognised.
We have already heard a little about the fast-tracking of some bids that have come through in the first year. I was led to believe that any local authority that came forward with such projects would be match funded within the first year. We heard that £25 million would be made available, but were then told that the authorities could look at only one project in each area. Caerphilly has 90 projects; Blaenau Gwent has 40; Swansea has 20; Carmarthenshire has 10, and Gwynedd has seven. However, those areas will now have to reduce their projects to one each. If objective 1 is to be important for such areas, surely all the projects that have come forward should be examined. One should not just say that £25 million will be sufficient in the first year, as clearly it is not. I accept that the First Secretary is busy, as he is also a Member of Parliament and, I understand, has four jobs. The problem may be that he cannot give the necessary time and attention to objective 1 funding. Perhaps that should be re-examined.
I sat on the Standing Committee that considered the Bill that became the National Lottery etc. Act 1993. The Committee was told that lottery funding would all be additional funding, and we have heard the term "additionality" being used. However, it seems that some of that money will go into funds that the Government would normally provide. Again, we learn that we must wait for the comprehensive spending review. Is that a smokescreen? Going back to the subject of the lottery, it seems that the dome can ask for as much money as it likes. Cheques are written there and then as it needs the money straight away. Yet, whenever Wales asks for money, it has to wait for the comprehensive spending review. It seems that if Wales is now playing second fiddle to a failing theme park in Greenwich.
Mr. Ruane: Is the hon. Gentleman seriously suggesting that match funding should come from the lottery?
Mr. Evans: As I understand it, the Government have said that they are seriously considering using lottery funding, which will be part of the match funding to win funds from Europe. If the hon. Gentleman is critical of that and wants to intervene again, it would be breath of fresh air to hear him criticise his Government on anything. The lottery and lottery funding will be vital in gaining funds from the European Union.
Time and again, the Government use the comprehensive spending review as a barrier to prevent those funds getting through. Yet the dome can use lottery funds and goes back, cap in hand, time and again, and there does not seem to be any problem with that. The funding of £1.2 billion will be critical to parts of Wales and may be the last of its kind. As has already been said, several eastern European countries want to join the European Union and some of them are very poor indeed. I do not doubt that they will seek large cohesion funds from the EU to assist them with their problems.
Mr. Ruane: As a representative of the Conservative party, does the hon. Gentleman take credit for taking

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Wales from mid-table to the bottom of the league? We got objective 1 funding because we were at the bottom of the league for the whole of Europe.
Mr. Evans: That is a typical tactic by the hon. Gentleman, who is not prepared to address the problems of whether the Government will guarantee match funding, which we are here today to discuss. He just looks back at the past, and he must recognise that the Conservative Government did a great deal for Wales over 18 years, but, in 1997, despite the fact that more than 300,000 people in Wales voted for us, we paid a price. We are listening, and it is about time that the hon. Gentleman started listening to what people in his heartlands in Wales are saying. He should look at the results in the European, local government and Assembly elections, because the people in Wales are shouting, and he is refusing to listen.
Mr. Ruane: I am listening.
Mr. Deputy Speaker: Order. I enjoy and encourage interventions, but they should be interventions to which the hon. Member has given way. I deplore sedentary interventions that interrupt the flow of the debate.
Mr. Evans: As ever, Mr. Deputy Speaker, I am grateful for your protection.
The £1.2 billion will be vital to Wales, but what has been achieved so far? We are six months into the programme, and not a single project has got off the ground. All that we have had is the scalp of the First Secretary for Wales, and I will not let Plaid Cymru take all the credit for that because the support of all the opposition parties in the Assembly was necessary.
Mr. Llwyd: May I assist the hon. Gentleman by pointing out that half of the Labour Members of the Assembly wanted to get rid of the First Secretary as well?
Mr. Evans: I am looking forward to reading autobiographies as they emerge. Perhaps we will then get the full story of exactly what happened on that day; it could not have been only the Prime Minister who did not know what was going on.
I am concerned that projects could be lost. We do not know whether any have been lost to date. We know that a firm in Ceredigion in west Wales said that it was looking for objective 1 funding so that it could expand. We have to accept that inward investment into Wales might now go somewhere else. It has been suggested that the investment might go to England, but, with the European Union single market, it could go to Germany, France, Spain or Portugal. I cannot imagine Germany, France or Ireland—which has done very well out of the EU—hiding behind their comprehensive spending review and failing to get EU money.
The single programming document was sent to Brussels and criticised roundly by the European Union, and by businesses and by local authorities, because of the lack of guidelines that the hon. Member for Gower (Mr. Caton) has mentioned. In January, it emerged that the European Commission had been critical of the way in which Wales had handled its bid for objective 1
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funding. It stated that the bid was flawed in several ways, including a lack of vision and innovation, a weak sense of ownership of the programme by some of the partners, and the barrier caused by match funding.
The Commission said that the weaknesses of the submission were more comprehensive than the strengths. It concluded that
the Commission needs to be satisfied that future financial resources will be available to provide public funding for the whole programme and cannot be satisfied that this will simply be reviewed in the forthcoming CSR.
The Commission has made the same criticism as we have.
Mr. Livsey: By contrast, will the hon. Gentleman congratulate the East Wales partnership, which was not criticised? Its single programming document was accepted, but it is subject to even greater delay. We wonder whether some of the match funding due to go to objective 2 areas may, as a result, find its way into objective 1 areas, and that may be a reason for the delay.
Mr. Evans: Of course I accept that, but we are all keen to make sure that the funding comes through as soon as possible for all the regions of Wales, so it must be tackled as a matter of urgency. The Prime Minister said that he would not let Wales down. He said, "Trust me, I'm Tony," but we are still waiting. We have to ask why Wales is being let down. The Government state that this summer they will publish a clear, simple guide to the funding policy, and we look forward to that.
As many hon. Members know, I have a business in Swansea which I am expanding at the moment. When I borrowed funds for that, I was told, "And here is £500 from the European investment bank." I did not ask for that and it was not critical to my investment, but of course I am grateful for it. There are many areas in which such funds are available, and in many cases they may be critical to investment by a business. It would be extremely useful if the Government produced guidelines in simple language so that people knew exactly what funds were available and what projects they might be able to develop to get EU funding.
Mr. Caton: Do I take it from what the hon. Gentleman is saying that a Labour Government are good news for the economy of Townhill?
Mr. Evans: No, but I can tell the hon. Gentleman that the Evans family are good news for the economy of Townhill.
Perhaps the Minister will tell the Chamber when those guidelines will be published.
We know that the Chancellor of the Exchequer has a war chest, and we are all wondering what he is going to do with it and when he is going to spend it, but some areas of Wales are deprived now and they are asking for that money. The Chancellor is getting £22 billion for mobile phone licences, and people in Wales are wondering why they have to wait for the comprehensive spending review.
The Select Committee report is critical of the involvement of small businesses. The Federation of Small Businesses made several comments to the

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Committee. Will the Government re-examine that involvement, because it is the small businesses in Wales that will create new jobs, as they did in the 1980s?
The report says that the Committee will continue to monitor the situation of objective 1 funding, and I welcome that and wish it well. I hope that lessons will be learned for the future. Although it will be several years before we find out how much of the £1.2 billion will be taken up, will the Minister tell the Chamber exactly what percentage he believes will be taken up?
Paragraph 20 of the report says that the "trust us" approach is not enough, and I agree. The Government are all spin and no delivery, and style and no substance. They have gimmicks galore, but the people of Wales will not be fooled and will not forgive them if they do not stop the spin and deliver where Wales needs it most, in its deprived and disadvantaged areas.
12.17 pm
The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): Anyone who had arrived from the planet Zog and listened to this debate would think that objective 1 was a bad news story for Wales. I state categorically that it is a good news story for Wales, whatever criticisms have been made this morning about a range of issues, in the report and by hon. Members. Wales will benefit from objective 1 and, with the Government, will maximise that benefit. I shall try to respond to all the points that have been made, but I hope that hon. Members accept that the Government are acting in good faith on objective 1.
This is the first time that a Welsh Affairs Committee report has been debated in Westminster Hall, and I welcome the contributions that have been made and the partnership approach that the Committee has taken in discussions with the National Assembly. I welcome also the work of the staff in producing the report, which is comprehensive. We have had an enjoyable and interesting debate, which has strayed into party political issues.
Mr. Llwyd: How strange.
Mr. Hanson: Well, the report was consensual, and the debate has strayed into party political points to which I shall respond accordingly.
It is important to say at the outset that Europe matters to Britain and to Wales. Over 50 per cent. of our trade in goods and services is with the European Community; one seventh of all UK income and production and millions of jobs depend on sales to EU countries, and Wales is home to many mainland European businesses. The EU's 380 million consumers make it one of the largest and richest markets in the world.
The Government are pro-Europe, but it is not all about the market or working with our colleagues in Europe—there is also a common social objective. It is through the European social partnership and structural funds that we can make progress on achieving our common aim of reforming and modernising Wales. The voluntary and private sectors have an important role to play in Wales to make sure that we can look outwards to the UK, European and global economies.
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The hon. Member for Ribble Valley (Mr. Evans) is slightly out of tune with the shadow Chief Secretary, the right hon. Member for Wells (Mr. Heathcoat-Amory), who does not believe that structural funds are of value. However, the Government believe that European structural funds provide a real and tangible benefit to the people of Wales and to our membership of the EU. They are of particular significance to Wales.
As my hon. Friend the Member for Vale of Clwyd (Mr. Ruane) said, my right hon. Friends the Prime Minister and the Chancellor negotiated through the night at Berlin to reach agreement on the eligibility rules across the EU for objective 1, so that Wales can benefit from objective 1 status. That is why west Wales and the valleys have been designated as an objective 1 area and allocated 1.85 billion euro in the seven years 2000–06. The Government are committed to the receipt of structural funds and taking the issue forward.
As hon. Members have said, objective 1 covers areas that have less than 75 per cent. of average EU per capita gross domestic product and is intended to stimulate proper economic growth, enabling Wales to catch up. Given the political nature of the discussion, I have to say that the hon. Member for Ribble Valley has a bit of a brass neck to say that objective 1 is an important issue when the Government have been able to secure objective 1 partly because we have had to return to the EU and raise the Conservative Government's failures; they increased deprivation and the disparity between wealth and prosperity in Wales.
It is vital that such a huge injection of money is spent wisely and that the priorities correspond to the real needs of all the different sectors of the Welsh population. The EU resources must go where the real need lies, not just to established projects, partners and bidders for money. The widest possible partnership is needed, involving all sectors with an interest, from the National Assembly to the United Kingdom Government and the organisations on the ground. The rejuvenation of the economy of west Wales and the valleys is a vast and worthy task, and we must show that we are up to the job.
My hon. Friends the Members for Gower (Mr. Caton) and for Conwy (Mrs. Williams) and the hon. Member for Ribble Valley asked whether the Government would produce, with the Assembly, a report and authoritative guide on the European process. We shall produce an updated version of the statement for funding policy that was first published in March 1999. It will be published in the summer, shortly after the comprehensive spending review reports. I hope that it will help to clarify precisely the roles and responsibilities of the National Assembly and the Government.
The Welsh Affairs Committee report on European structural funds clearly shows the seriousness that it attaches to the matter, which I welcome. Objective 1 is immensely important to Wales and, as hon. Members have said, represents a once-in-a-lifetime opportunity. As the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) has said, the enlargement of the EU before the next structural funds round means that this will almost certainly be the last chance for Wales to receive the economic boost that objective 1 funding will bring.

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That is why the Government are committed to grasping this opportunity firmly and ensuring that it makes a real and lasting difference to Wales.
The report was thorough, comprehensive and raised several serious and important matters. My right hon. Friend the Secretary of State and I particularly welcome the recommendation on the importance of making the objective 1 programme a success in Wales. As my hon. Friend the Member for Vale of Clwyd clearly said, it is imperative that we move the debate on from funding and consider how to use the money. Hon. Members understand where we are coming from; we have explained the position many times. We have a commitment from Brussels, and the Government are committed to examining the issue in the comprehensive spending review. My right hon. Friend the Prime Minister has clearly and publicly said in Wales and in Parliament that he will not let down Wales. It is important hon. Members take that commitment in the good faith that my right hon. Friend gave it and in which I repeat it today. We await the outcome of the comprehensive spending review shortly so that we can consider how to use the money and resources to transform the Welsh economy.
Mr. Walter: Before the Minister moves on, several questions have been asked about funding, but I am not sure that we have heard any answers. Why is it necessary to negotiate something to which the Government have allegedly agreed? Will those funds be in addition to the Welsh block grant?
Mr. Hanson: As the hon. Gentleman will know, the Welsh block grant, objective 1 funding, additionality and other issues will be considered in the comprehensive spending review. It is important to take the Government in good faith and to await that announcement in due course. Hon. Members have understood that to be the position for many months and have continued to ask those questions—it is their legitimate right to do so.
Mr. Llwyd: If it is clear that, following the CSR, the Chancellor will commit £60 million in additional funding to Wales, together with £190 million direct from Brussels without taking any money away, that good faith will have been well invested.
Mr. Hanson: I take the hon. Gentleman's point. The CSR is due shortly. The Government's decision to include objective 1 funding in the current spending review does not put programmes at risk in any way. The hon. Member for Ribble Valley said that programmes and projects are threatened, and other hon. Members have made similar points, but projects cannot be brought forward in Wales until the Commission has approved the plans. The plans will not be approved until next week at the earliest, so no project has been approved or can be supported.
The hon. Member for Meirionnydd Nant Conwy, among others, mentioned retrospective payments. It is difficult—in fact, nigh impossible—to approve payments that have been made already on potential projects, because the Commission has not approved the plans. Some hon. Members have spoken about projects not being brought forward or allowed, but that is tosh
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because, to date, the document has not been approved and, therefore, the Government are as yet unable to consider it.
Mr. Livsey: Will the Minister give way?
Mr. Hanson: Time is pressing.
Mr. Livsey: What about objective 2?
Mr. Hanson: I must deal with the points that have been made.
As hon. Members will know, the spending review is a thorough, on-going examination of all Government spending plans. In those circumstances, it is wrong to try to separate one aspect of Welsh funding from the others. European structural funding is not new to the United Kingdom; it is well known. The comprehensive spending review constitutes the normal procedure for reviewing the spending needs of Wales and all Departments, including those for structural funds. My right hon. Friend the Chief Secretary to the Treasury has recognised that objective 1 is new to Wales and that that has to be considered in the current spending round.
When the objective 1 plan has been approved in Brussels, which is imminent, we will have a strategic framework in place. At that point, the Assembly will be able to draw down the payment on account and then submit claims to the Commission to reimburse payments that have made on account. That money will go straight to the Assembly, without delay. Britain would be in breach of the Commission's regulations if that did not happen. From then on, the success of objective 1 will be driven by the excellence of the projects and packages proposed for funding. The vision and local ownership of proposals produced by the Welsh partnership, tailored to meet Welsh needs, will be fundamental elements.
I give a clear commitment that the outcome of the spending review will be announced before the end of next month. It will include overall spending limits for Departments and the Assembly, as well as the other devolved administrations. I cannot pre-empt that announcement—as hon. Members would expect, negotiations are still continuing—but spending limits will be set from April 2001.
It is time to look ahead. We must consider what we must achieve for Wales—promoting community regeneration, employment and developing a competitive environment for business, a learning society and the sustainable use of natural resources. That involves a step change for Wales, and we shall use objective 1 funding to help to make that step change. We need to get on with that job.
The Welsh Affairs Committee report is welcome. Considerable allegations have been made and concerns have been expressed today, but I hope that the Government's intentions will be taken in good faith. The Labour Government have negotiated and achieved objective 1, and we shall deliver it for Wales when the time comes.
Mr. Deputy Speaker: I congratulate the Minister on responding in the time available. We now come to the next debate.

Marine Pollution
12.30 pm
Mr. David Chaytor: The annual meeting of the commission of the Ospar convention on marine pollution in the north-east Atlantic does not usually attract a great deal of advance publicity. Nevertheless, during this brief debate I want to highlight proposals that will be put to the annual meeting next week in Copenhagen, which could have significant implications for the United Kingdom and to which the Government have to give a clear response.
The Ospar convention, as it is commonly known, originates from two previous conventions relating to marine pollution: the 1972 Oslo convention on marine pollution caused by dumping, and the 1974 Paris convention on marine pollution from land-based sources. In 1992 those were merged; hence the name Ospar. The 15 member countries and the European Union form the 16 contracting parties to the convention, which meets annually. Every five years there is a ministerial convention.
The first Ospar ministerial convention at Sintra in Portugal two years ago agreed to establish strategies to eliminate hazardous substances and eutrophication from the north-east Atlantic, to provide protection of ecosystems and biodiversity and to agree a policy on the disposal of offshore installations. It was also agreed to end the British and French opt-out on radioactive dumping at sea. However, the most wide-ranging proposal was the elimination of radioactive discharges to close to zero by 2020. The intention to achieve that was reiterated at the 1999 annual meeting in Hull. My hon. Friend the Member for Mansfield (Mr. Meale), the then Minister, responded to that meeting by saying:
On the strategy for radioactive substances, the Contracting Parties agreed to intensify their efforts to implement it by focusing on the principal sources of discharges, emissions and losses, including the reprocessing of nuclear fuel and some other nuclear and non-nuclear activities; where action by the operators of nuclear installations is required, the Contracting Parties agreed to ensure that this is taken without delay.—[Official Report, 5 July 1999; Vol. 334, c. 377W.]
The consequence of that is this year's convention in Copenhagen. There will be proposals on the table from Ireland and Denmark, supported by other countries, which would require the participating countries to end their discharges simply by ending nuclear reprocessing; the reprocessing industries in the United Kingdom and France contribute the largest proportion of all discharges. It is well known that the Nordic countries and Ireland, in particular, are long-standing opponents of the reprocessing industry because of the effect on their fishing industries. Radioactive isotopes have been found in lobsters and other fish in the Irish sea—that is a matter of enormous concern in Ireland—and the isotope technetium-99 has been found as far north as the fishing grounds of Norway and Iceland. Indeed, traces have been found in the Arctic circle.
The consequence for the United Kingdom, where nuclear reprocessing has been a major and lucrative industry for many years, could be significant. I shall dwell on three aspects. The first is the implications for the thermal oxide reprocessing plant at Sellafield and the international trade in plutonium, which British Nuclear Fuels has developed in recent years. I do not want to
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rehearse the history of THORP, which has been contentious from the concept's origins in the 1970s, through a delay in the 1980s, to its final commissioning in the early 1990s. It is now well understood that the original rationale for the reprocessing industry and for THORP no longer apply.
It was assumed that there would be a gradual expansion of nuclear power as each year went by. That has clearly not been the case. It was assumed that the rising price of uranium fuel would mean that the reprocessing option was cheaper. In recent years, uranium itself has become cheaper. It was assumed that plutonium would have an enormous value, largely for nuclear weapons, but for other purposes as well, in the manufacture of further nuclear fuel. The end of the cold war and the reduction in the weapons programmes of the major nuclear weapons states have led the value of plutonium to become highly questionable. Last year, a House of Lords Science and Technology Committee report concluded that much of Britain's plutonium stockpiles, which are currently about 60 tonnes and, it is estimated, will reach more than 100 tonnes by 2010, should be declared to be waste.
It was assumed that the fast-breeder reactor programme would become successful and that endless supplies of plutonium would be needed for that. Fast-breeder reactor research has been stopped in Britain and France, and continues only in Japan. It was assumed that the alternatives to recycling nuclear fuel were not feasible. In recent years, the alternative—the dry storage option—has become much more feasible, and is quite practical and far cheaper than the reprocessing option.
The question mark over THORP has been intensified by the recent decision of the German Government—one of BNFL's biggest customers—to phase out its nuclear power programme within 20 years. The effect of the falsification of data scandal related to mixed oxide fuel exported to Japan, along with the nuclear accident at the Tokaimura plant there last September, has contributed to a rapidly changing climate of opinion in Japan. That country has also been one of BNFL's greatest customers. The issue is whether we can assume that reprocessing at THORP will continue much beyond the period of the base-load contracts, which end in 2004.
The second aspect of the proposals that will be put to the Ospar conference next week relates to the other reprocessing plant at Sellafield—the B205 plant, which reprocesses fuel from Magnox reactors. I and many others welcomed BNFL's announcement some weeks ago that all but two of its Magnox stations would be closed before 2010—thus, arguably, allowing the B205 reprocessing plant to close by 2012. However, there are major concerns as to whether that an be achieved, largely because of the total volume of spent fuel that still needs to be reprocessed, but also because of the time scale between deciding to close or switch off a reactor and decommission the plant, and the possibility of starting to reprocess the spent fuel. I shall give an example.
Currently, we have about 7,200 tonnes of spent reactor fuel from Magnox reactors either in reactors or in storage ponds. Only 465 tonnes were reprocessed in 1998–99. Therefore, on current throughput it will be at least 2015 before the existing fuel is reprocessed, regardless of any spent fuel generated by Magnox reactors between now and when most of them will close.

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The possibility of meeting the Ospar target to reduce radioactive discharges to close to zero by 2020 is becoming increasingly remote.
The third aspect that concerns me is the role of the Environment Agency in the consideration of the reprocessing industry. I note that the important report by the Select Committee on Trade and Industry on the future of BNFL, published last month, contained some comment about the relationships between the Environment Agency and BNFL not being of the highest order. However, my concern is that the agency has insufficiently challenged the assumptions put forward by BNFL—and accepted by the previous Government and, to some extent, by the present Government—about the inevitability of reprocessing and the feasibility of the alternatives. The significant point is that the 1994 Sellafield discharge authorisation required the Environment Agency to review the whole question of discharges and alternatives to reprocessing. That should have been done by 1997, but it is only starting to be done this year.
The scope and methodology for the review appear to rule out any consideration of dry storage options as a way to manage spent fuel. Although the agency accepts that Magnox could be reprocessed at THORP, thus allowing the closure of the B205, it still insists that dry storage is not an option. That is unusual, because at the power station at Wylfa about 100 tonnes of Magnox fuel have been kept in dry storage for the best part of 20 years. The whole question of the technology involved in the dry storage—rather than reprocessing—of Magnox fuel was confirmed as viable by the former Central Electricity Generating Board in its evidence to the Select Committee on the Environment in 1986, and by a more recent statement by the Radioactive Waste Management Advisory Committee in 1990. There is now a solid body of scientific evidence that maintains that it is feasible to deal with the potential corrosive problem of Magnox spent fuel through dry storage.
Several issues arise from the facts that I have laid out. The Ospar negotiations, although not widely understood by the public, are crucial for the future of one of Britain's major industries. The Trade and Industry Committee commented in its report that it was remarkable, both in this Parliament and in the previous Parliament, how few debates had been held about the nuclear industry. If we compare that industry, and its strategic importance to Britain, with the car, coal or textile industries, it is obvious that Parliament has scrutinised those industries much more than it has the nuclear power industry. The fact that the nuclear power industry has operated with that degree of secrecy, and that lack of accountability and scrutiny, has perhaps contributed to some of the difficulties that it has recently experienced.
The Government cannot ignore the feelings of other European countries or the scientific evidence of the radioactive pollution in the north-east Atlantic. Nor can they ignore our treaty obligations under Ospar. We are firmly committed to seeking discharges close to zero by 2020—and under our current policy, that cannot be achieved. A change of policy will therefore be necessary.
It is indisputable that reprocessing is the main cause of radioactive pollution in the Irish and North seas. If we are serious about our environmental commitments and our broader environmental policy, we must be
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prepared to act. I do not argue that the Government should immediately declare that reprocessing should end and Sellafield must close, because the issue is complicated, and Sellafield is important to the economy of west Cumbria, with many jobs at stake. However, the Government should now prepare for the inevitability of the closure of the reprocessing plant at Sellafield, which is likely to happen sooner rather than later, given the way in which nuclear power policy is changing, especially among key customers in Germany and Japan, and also given the requirements of the Ospar convention.
We should take careful note of the fact that the new chief executive of BNFL said to the Trade and Industry Committee that the time had now come for BNFL to think the unthinkable and withdraw from reprocessing as a key part of its business strategy. We should also take careful note of the comments by the chief executive of British Energy, who said recently that reprocessing was economic nonsense and should stop immediately. It is also in the long-term economic interests of the UK, and of BNFL, to grasp the nettle of preparing to withdraw from reprocessing and concentrate on dry storage and decommissioning, which has huge potential for the expansion of global business. That would be good for British business and for the environment. It is also an enormous opportunity for the Government to take the lead on a crucial environmental issue, by making a statement to that effect in Copenhagen next week.
I have several questions for my hon. Friend the Minister. I appreciate that he may not be able to answer all of them, but I would be grateful for an answer in writing in due course. First, what action has the UK taken since the ministerial Ospar meeting in 1998, which agreed the policy of reducing emissions close to zero? Secondly, what assessment have the Government made of last week's announcement by the German Government that they have now reached an agreement to phase out nuclear energy in Germany within 20 years? What will be the impact of that on the future of reprocessing in the UK? Thirdly, what consideration has my hon. Friend given to the statements by the chief executives of BNFL and British Energy on the likely future of reprocessing?
Fourthly, will my hon. Friend actively support the renegotiation of reprocessing contracts, both between BNFL and British Energy and between BNFL and foreign customers, into dry storage contracts? That issue is also flagged up in the Trade and Industry Committee's report. Fifthly, in view of the current backlog of spent nuclear fuel from Magnox reactors, does he believe that the timetable given by BNFL for an end to Magnox reprocessing by 2012 can be achieved?
Sixthly, does my hon. Friend agree that the Environment Agency has to get a serious grip on the issue? Why does its current review of discharges contain no consideration of the dry storage option? I may be mistaken on that point, but if it is true, will he challenge the Environment Agency and ensure that it gives equal consideration to dry storage of spent fuel and to reprocessing? Finally, I would be grateful for a concise statement of the British negotiating position at next week's meeting, and of the proposals by the Irish and Danish Governments.
12.48 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Chris Mullin): I shall do my best to provide answers to the questions that my hon. Friend the Member for Bury, North (Mr. Chaytor) has asked. However, as he said, some of them may have to be pursued through correspondence, partly because I have only 12 minutes left in which to reply to the debate. I am pleased to have this opportunity to set out our thoughts on the annual meeting of the Ospar commission, which will be held next week in Copenhagen.
The Ospar process is one to which the Government continue to attach great importance. My right hon. Friends the Deputy Prime Minister and the Minister for the Environment both participated in the original meeting in Sintra in 1998 and fully supported the agreements reached there. The main work of next week's meeting will be to consider progress on the work agreed in Sintra. In particular, as my hon. Friend has said, the meeting will consider the strategy on radioactive substances, but it will also discuss progress with the implementation of the hazardous substances strategy and the overall assessment of the state of the marine environment of the north-east Atlantic, as well as a number of other issues.
My hon. Friend referred to issues relating to radioactivity. He also mentioned the two draft decisions put forward by the Governments of Ireland and Denmark, which will be considered in Copenhagen next week.
It may be helpful if I remind hon. Members of some of the background to Ospar's consideration of radioactive discharges. As my hon. Friend explained, the Oslo and Paris commission was set up to protect the marine environment of the north-east Atlantic; it came into force in 1998. The UK is a contracting party and supports the commission's aim of reducing discharges of radioactivity. In 1998 at the meeting in Sintra, all the contracting parties, including the UK, agreed to a radioactive discharges strategy covering the period to 2020. The strategy provides that the commission—which means all the member countries—should reduce radioactive discharges, so that, by 2020, concentrations of radioactivity in the marine environment in excess of historic levels as a result of such discharges are close to zero.
I should make two points about the agreement. First, all the contracting parties accept that it does not state that discharges of radioactivity should be reduced to zero. The Sintra agreement does not mean that contracting parties are in any way obliged to close their nuclear industries, or any part of them, to meet their commitments. My hon. Friend asked about the Government's attitude to the announcement by Germany that it would phase out nuclear power generation. That is entirely a matter for the German Government. I can confirm that the UK Government have no plans to make a similar announcement.
Secondly, it has to be recognised that the terms "historic levels" and "close to zero" have not been defined. In technical level meetings since 1998, there has been some discussion of those terms, but considerably more work needs to be done before agreed definitions are available. The UK has pressed strongly to engage
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with our Ospar partners on that subject, but has not met with much enthusiasm from other countries for grappling with the definitions. However, it is clear that progress must be made, so that reductions in radioactive discharges can be properly monitored.
To demonstrate our commitment to reducing radioactive discharges, the UK is publishing a 20-year radioactive discharges strategy: it is being published in draft today and copies will be placed in the Library. The purpose of publishing the strategy in draft form is to enable us to consult other Ospar members and interested parties both at home and abroad about our proposals. After taking account of their comments, the Government intend to publish the final version of the strategy towards the end of this year. The UK is the only Ospar contracting party to have announced that it is preparing for publication a strategy charting how discharges are expected to decrease over the next 20 years. I am sure that hon. Members will acknowledge the seriousness with which the Government take their Sintra commitments.
The Government will shortly publish a second consultation document—a draft of guidance that we propose to issue to the Environment Agency on radioactive discharge authorisations. The purpose of the second document is to ensure that the agency's decisions on individual applications to discharge radioactive substances are consistent with the overall strategy.
My hon. Friend talked about radioactive discharges arising from the reprocessing of spent nuclear fuel. It is true that discharges from reprocessing operations are higher than those from other parts of the nuclear industry; However, hon. Members will recall that, last month, BNFL announced a closure programme for the Magnox nuclear power stations. The closures will contribute substantially to the reduction of radioactive discharges, but, more importantly, they will enable the reprocessing of Magnox fuel to be brought to an end. It is currently estimated that that will be achieved by about 2012, so an important step in reducing discharges will be accomplished well before 2020. Discharges from the only other reprocessing plant in this country—the THORP plant at Sellafield—are very much lower in radiological terms than those from the Magnox reprocessing plant. The Government are satisfied that the continued operation of the THORP plant will not in any way jeopardise our meeting our Sintra commitments by 2020.
My hon. Friend asked about the Government's view on reprocessing in the light of the recommendation by the Trade and Industry Committee that we should clarify our position. My right hon. Friend the Secretary of State for Trade and Industry is considering the report and will reply in due course.
It is important to bear in mind the fact that, as a result of strict regulatory action in this country, discharges of radioactivity are kept well below internationally agreed limits. The Environment Agency is carrying out a review of all radioactive discharges from Sellafield, and consultation on any proposed new limits is expected to start in spring next year. The agency is also carrying out a review of discharges of technetium-99 on a faster track, and the outcome of that part of the review will be known in the autumn. The Government have made it clear that we support the aim of bringing the limit for

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technetium-99 down to 10 terabequerels a year. The strategy being published today will reaffirm this commitment, but we cannot, of course, pre-empt the outcome of the agency's review.
My hon. Friend asked why the Environment Agency was not considering the dry storage alternative. My understanding is that the design of Wylfa is different from that of the other Magnox stations, and that important safety considerations that prevent dry storage apply to the remainder of the stations. The Environment Agency has explained its reasons for not considering alternatives in its current review: they relate to a change in European law and to proposals that the issue of justification should pass to the appropriate Secretary of State. Any more detail on that point will have to be provided in correspondence.
The Environment Agency has published a document setting out the scope and methodology that it proposes to follow in carrying out the review. The Health and Safety Executive has already consulted on a proposal that, following the coming into force of the new Euratom basic safety standards directive, reviews of the justification of practices will be a matter for the appropriate Secretary of State. A further announcement will be made in due course.
It may be helpful to set current discharges from Sellafield in context. Discharges are already only 20 per cent. of what would be considered acceptable under internationally agreed dose limits. Our strategy indicates that we are on target to achieve a 90 per cent. improvement in that already low figure by 2020. The draft strategy published this week will give detailed information about how that is to be achieved. I should add that those dose figures relate to people who live close to Sellafield and whose eating habits expose them to higher than normal effects, and that those most exposed people are already well within internationally agreed dose limits. Anyone living further afield, especially people living in other countries, have nothing to fear from discharges from Sellafield.
The Governments of Ireland and Denmark have submitted for discussion at next week's Ospar meeting in Copenhagen draft decisions that call for a cessation of reprocessing. As I have already said, the reprocessing of fuel that gives rise to the highest discharges will cease by about 2012. The UK can meet its Sintra obligations without shutting the THORP plant, so we do not think that it would be appropriate for the Ospar meeting next week to agree a decision in the terms of the drafts submitted by Ireland or Denmark.
All Ospar contracting parties will, I am sure, study the draft strategy that we are publishing today. I hope that it will persuade them that the UK is committed to achieving reductions in radioactive discharges that are fully in line with the 1998 Sintra agreement. At the Copenhagen meeting we shall seek agreement on a decision that renews our commitment in a form acceptable to all contracting parties.

Government Websites
1 pm
Mr. Robert Maclennan: I sought this debate—I am grateful for the opportunity to hear the Minister's reply—because I am concerned that use by the Government of websites to communicate with the public is ineffectively regulated.
The Public Accounts Committee reported last week on managerial and technical issues arising from the Government's use of websites. Although it was a damning report, to which the Government will no doubt respond in due course—I am not attempting to preempt that formal response—the focus of my concerns is different. My concern is with the threat to the integrity and propriety of Government information flowing from what I perceive to be weak accountability, which is leading to inadequate control of advertising and sponsorship on Government websites. I am also concerned about the absence of effective guidelines and policing to prevent the Government's abuse of their valuable access to the public by the dissemination of politically controversial and tendentious assertions as public information on the net.
The Minister will be aware, I have no doubt, that I have tabled a substantial number of written questions to different Departments on the cost of the Government's websites and on sponsorship and advertising on those sites. I have been dismayed by the responses that I have received. Some questions have still not been answered; some have been answered misleadingly, and some inaccurately; other answers are incomplete. In sum, I take this opportunity to ask the Cabinet Office to recognise that it needs to take a grip of the situation and require conformity with rules that are open and properly adhered to.
I remind the Minister—I am grateful for his presence—of the recommendations of the sixth report of the Neill committee, particularly recommendation 35, to which the Government have not yet formally responded, although they are expected to do so quite soon, which states:
There should be disclosure in departmental annual reports, and to the public on request, of the details, including the value received, of sponsorship of government activities by the private and voluntary sectors.
I am afraid that it is clear that that is not happening. No such indications are given in departmental annual reports and it has proved extraordinarily difficult to elicit information, even by means of parliamentary questioning.
The lack of candour, I am sorry to say, starts in the Cabinet Office. So it is perhaps unsurprising that it is not exercising the control that one might look to it to exercise over other Departments. In replying to the debate, the Minister might make plain his view of the role of the Cabinet Office in ensuring the integrity and propriety of Government information on websites.
I should like to draw attention to certain advertisements that the Cabinet Office is hosting on the Government's principal site, www.open.gov.uk, such as by Lycos, which is a search engine, and IBM. I also draw attention to advertisements of what are called "Government Opportunities", owned by private limited

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company Business Information Publications Ltd. That is to be found at another site used by the Cabinet Office, www.bipcontracts.com, which is described as
the only officially sponsored UK source through which government service contracts are advertised.
That site has logos of companies that provide technical services—Ultraseek Server and Cable & Wireless Communications Ltd.
The Ministry of Defence began by denying that it carried advertisements or sponsorship-acknowledging advertisements that generate revenue and that such advertisements appeared on its principal websites. However, it includes on its website the Peregrine Trophy, which is named after Peregrine Associates. The Ministry explains, however, that sponsorship of major service events or, for example, the Royal Navy submarine museum, which recognises British Aerospace Systems and Equipment Ltd., may lead to advertising with company logos.
The Department of Health claims that there is no advertising on departmental, agency or non-departmental body websites. However, there is a live link on the NHS Confederation website to the American pharmaceuticals firm, Merck Sharp Dolme, which is a large supplier of the NHS. The NHS Confederation comprises 95 per cent. of NHS hospitals and health authorities. Although a charity, it is directly funded by NHS hospitals and health authority members and therefore clearly receives departmental money. To deny that that is an agency over which Government rules ought to apply must make one highly critical of the extent of coverage of the rules.
The Foreign and Commonwealth Office has come closer, but not all the way, to an admitting the facts. It states that two companies—Eagle Star and Glaxo Wellcome plc—have contributed £35,000 and £6,000 respectively to the Planet Britain website, www.planet.britain.org, on which the companies' logos appear. That site is linked to many groups that provided information for the site, including I D Magazine, Rough Guides and Millennium Products. Cable & Wireless is also there, presumably for technical services rendered.
The most remarkable case that I found was that of the Treasury. It appears that, although the Treasury claims not to have accepted advertising or sponsorship for its websites, that disclaimer does not cover the Treasury's private finance initiative taskforce, which is accessible through the Government's main portal, www.open.gov.uk. The taskforce was set up by the Government to oversee negotiations on PFI deals, in which hospitals, schools, roads and other projects attract private money. The taskforce's website is www.treasury.treasury-project-taskforce.gov.uk. It is sponsored by none other than Berwin Leighton, the City solicitors who specialise in private finance initiative projects. The site, which has the firm's own logo, is linked live to its website, which discloses that it is involved in 16 PFI deals with the Department of Health alone—those deals are valued in total at more than £473 million.
According to the taskforce website:
The taskforce has become the focal point of all PFI activity.
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Therefore, it follows that that firm of solicitors has been allowed to sponsor the website of a taskforce that directly impacts on the company's commercial interests as it has handled the legal side of dozens of PFI deals with the Government. Will the Minister say whether what has happened in that case, which received a little publicity earlier this week in The Observer, reveals—as I believe it does—that the rules, if they exist, are not biting sufficiently tightly?
Government websites have developed to such an extent that the Government have effectively become a broadcaster. The appearance of sponsors and advertisers on those sites makes that a commercial activity. I searched in vain to find any adequate guidelines from the Government on how that activity should be regulated. One can find general guidance about matters of propriety, but nothing is targeted on websites. The "Government Information and Communication Handbook" contains a section entitled, "Toolkit". Although there is also a section on sponsorship propriety, the only section on websites—that headed "Building Websites"—includes nothing on the propriety of the content. Nor is there any reference to the propriety of the content in the "Framework, policy and guidelines for Government websites", which is to be found on a such a website. The document "Guidance on the work of the Government Information Service" does not deal with sponsorship or advertising on websites.
The underlying failure of the Government appears to be their complete unwillingness to acknowledge that sponsorship involves mutual endorsement—endorsement of the Government by the company and vice versa. As the Neill committee report pointed out, one of the aims of sponsorship is to achieve credibility. It is worth asking where that credibility would come from if not from implicit endorsement by the recipient of the sponsorship. The Cabinet Office general guidelines lack the understanding that endorsement is intrinsic to the nature of sponsorship.
The need for a rethink by the Government on the issue is demonstrated by the flawed statement by the Department of the Environment, Transport and the Regions in reply to my question, which concluded:
Above all, acknowledgement of any sponsorship—
on websites—
would not imply any endorsement of the sponsor's goods or services, nor be open to misinterpretation as influencing policy making.—[Official Report, 19 April 2000; Vol. 348, c. 489W.]
I submit to the Minister that that statement from that important Department demonstrates a complete failure to grasp the nature of sponsorship and the risks to the perception of objectivity.
From the parliamentary answers that I have received, it is clear that the average annual costs of Government websites are expected to run at more than £4.5 million. I have not yet received answers on the matter from several significant Departments, including the Treasury.
Some Departments are recording the number of hits. The Department of Trade and Industry received 67 million hits in the year to May, averaging 1.3 million per week. The Treasury website receives around 20 million hits per annum. I am advised that it is commercially calculated that 1,000 hits are considered by the industry to be worth £25. It appears—however difficult it may be

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to quantify—that the value of the advertising space of the Government's webs must run well into millions. What is not clear is how the Government are seeking to evaluate that and what they are giving in return for sponsorship and advertising facilities on the websites.
My conclusion is that since the rules, in so far as they exist, seem incapable of ensuring openness and preventing abuse—never mind delivering value for money to the taxpayer—it would be appropriate for the Government to end advertising and sponsorship on their websites.
Finally, on a different aspect of guidelines for the use of the websites, the Mountfield report made the general recommendation on political propriety that the aim of the Government Information and Communication Service should be
to retain a politically impartial service and sustain the trusted values of the service embodied in its rules of guidance.
That was stated by the service to be merely a restatement of essential principles in its third annual report. Unfortunately, none of the handbooks or existing codes are working to ensure that those principles are sustained on Government websites.
I shall give one broad example from the No. 10 site where, under "facts" the site purports to track the progress of all 177 manifesto commitments of the Labour party. The information there imparted is certainly not regarded as incontrovertibly factual and, indeed, would be contradicted by much information that has been obtained from the Government, the House of Commons Library and other objective sources. The information is highly tendentious and certainly does not accord with statistical information from the sources that I mentioned. Worse perhaps, are the press releases, which are often placed on websites and are highly partisan and undoubtedly breach the guideline on objectivity.
The guidelines indicate that information should always be directed at informing the public. I shall cite a few examples that fall short. The Financial Secretary to the Treasury issued a press release headed,
A good way to explain what the Government is trying to do is that we want to build a new Britain that will be modern and decent.
I question whether that could be regarded as providing either information or objective information.
In a press release of 30 March, the Home Office announced:
Straw announces an "increase" in the funding of police authorities to reflect the enlarged size.
In fact, that was a transfer of funding from the authorities with decreased areas of responsibility. It was a highly misleading statement, and certainly not objective. It is a rule of Government publicity that it should be objective.
Finally, let me cite an example from the Department for Education and Employment. One of its press releases was headed "World Class Guides for Employers launched—Hodge". No objective justification is given for the use of the phrase "world class" in that press release.
The problem is far wider than I can hope to tackle in the ambit of a short debate, but I hope that I have at least opened the subject. I look forward with great
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interest to the Minister's remarks. We are at a formative stage in dealing with websites, and it is extremely important that the independence and objectivity of Government information on sites are secure; that advantages are not improperly given to sponsors; and that the public's right to be informed is protected.
1.20 pm
The Minister of State, Cabinet Office (Mr. Ian McCartney): I thank the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) for providing us with the opportunity to discuss websites and for the intellectual case that he made in respect of some of the relevant issues.
In the 10 minutes available to me, I cannot deal with all the issues that the right hon. Gentleman raised, but I give him an assurance that I will write to him and place my reply in the Library, so that other hon. Members who take an interest in the matter can link that to the debate. I will consider the right hon. Gentleman's comments in the same way as the Government are considering the issues around the reports that he mentioned, to which we shall respond.
I am clear that my role is to ensure the best possible access for the citizen to Government services, and to ensure that we have in place appropriate guidelines and working arrangements and that the system is transparent and cannot be abused by Departments, individuals or, for that matter, politicians. It is crucial that the information provided by Government websites is trusted.
The right hon. Gentleman made a general complaint about the cost of development of Government websites. It has always been the task of Governments to provide information to citizens—information about taxes and benefits and employment regulations; personal information about insurance records or tax details; records of change of address or change of circumstances; information about payments to Government by the citizen, such as vehicle licensing, general taxation or council tax payments; and information about payments by Government to the citizen, such as benefits and student grants.
By using new technology, we are opening up access to every citizen far more effectively. That means that the right hon. Gentleman's constituents in Caithness and Sutherland can access information and services from the Government as readily and as quickly as someone who lives in central London. It is vital that communities in the highlands and islands, in the mountains and in large tracts of rural England have the same opportunity to do business with the Government or to seek information from the Government. Information technology provides such an opportunity.
In the process of establishing websites or service delivery modules, it is important that we listen to customers. As the Government introduce a new service or a new link-up to a portal, it is essential that we continue to consult our customer base, and that we produce guidelines on the basis of consultation. Guidelines must be regularly updated, so that they incorporate the improvements in practice for which the right hon. Gentleman called. We will soon be going out to further consultation on the revision of our website guidelines, as I promised a few months ago.

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The right hon. Gentleman implied that he was worried that the Government's new knowledge network would be used as a party political tool. That is not the case. Strict safeguards and rules have been put in place to ensure that it is not misused for party political purposes. New types of information exchange have been used within Government for years. The only difference is that large amounts of information which were previously accessible only to the Government will now be available to everyone—Members of Parliament and the citizen. It is crucial that access to Government information is opened up. That is the purpose of the knowledge network.
A website without links is a poor website. The Treasury website does not endorse the firm that the right hon. Gentleman mentioned—in fact, it contains a disclaimer. The Cabinet Office website points to other websites, in the same way as other Government websites point to The Guardian for jobs, for example. Do The Guardian or The Observer complain about that? It seems a reasonable approach.
Websites should give people additional information that they can use if they wish to do so. The Government websites merely signpost the way to further information and services, some provided by Government and some not. It is nonsense to suggest that because we provide signposts and access to the citizen, that is a corruption of Government websites. It ensures that the websites maximise the potential for the citizen to obtain information.
Sponsorship on websites is not special. New guidelines to take account of the Neill committee's recommendations are in their final draft. As soon as they are ready, I shall make them available to the right hon. Gentleman for his comments.
Links are what make websites work. For example, the BBC has links on its news pages, but that does not compromise its editorial integrity. For those who use the sites, links provide further opportunity to seek out information or services, and the same is true of Government websites. That is a sensible and reasonable approach.
No Government Departments have advertising on their websites. The Central Computer and Telecommunications Agency—CCTA—is an executive agency and has a banner advertisement clearly distinct from any Government messages. The recommendation of the Neill Committee in January 2000 was:
There should be no ban on sponsorship of Government activities subject to our other recommendations.
The right hon. Gentleman mentioned www.planet.britain.org. I hate having to read out such things—in fact, this is the first time that I have done it. In the past, I have always avoided doing so, but the right
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hon. Gentleman has me in a corner. He referred to it specifically, so I have to read it out for the record. That website is sponsored throughout by various organisations, including the provision of editorial content. It is supported by the Foreign and Commonwealth Office but has no Government content. It is not a Government site.
The Treasury taskforce website is an old one, with links to Brown Leighton, but there is a statement specifically disclaiming any endorsement. In any event, the website is due to be replaced. When that has been resolved, I shall send the details to the right hon. Gentleman.
Guidelines are needed, and they exist. Branding should not detract from a Department's own branding. Advertising should not imply endorsement and should not contradict Government messages. Standard sizes of banners are recommended.
The Committee on Standards in Public Life and the Cabinet Office also publish guidelines on sponsorship. Sponsorship must not appear to place a Department under any obligation, and must not be able to be read as an endorsement by a Department. It must not come from firms that are currently engaged in negotiation with the Department. Sponsors must be suitable and must not appear to contradict Government messages. Sponsorship must not be for the activities of a particular Minister. Other similar companies must have been offered sponsorship opportunities. In accordance with a recent revision, any sponsorship worth more than £5,000 must be listed in the Department's annual report. Clearly, the Government are moving to ensure probity in these matters.
The right hon. Gentleman complained about costs of Government websites and delay in responses to his parliamentary questions. For every avenue of communication used by the Government, there is a cost. The question is whether that represents value for money. The Department of Trade and Industry had 5.6 million hits last month on its website. How much would that cost in postage, telephone calls and other communications with those 5.6 million people? Some of them will have hit the website more than once, of course, so I should speak of 5.6 million communications, rather than people. Traditional methods of responding to those inquiries would have been far more expensive.
The Department of Social Security has 2.5 million hits per month, and the Cabinet Office and The Stationery Office have 1.8 million hits. We are communicating with far more people and providing them with far more detailed information about their rights as citizens.
I take on board the right hon. Gentleman's comments and the spirit in which they were made. I assure him that the Government will ensure that our guidelines operate effectively and that they are drawn up on the basis of consultation.

Peel Hall, Warrington
1.30 pm
Ms Helen Jones: I am most grateful to be given the opportunity to debate the future of the last large open space in the north of my constituency. It is a green space that is important for the well-being of the residents in the area. Development proposals raise serious questions about future planning policies.
Warrington has always accepted the need for development, and the complexity of development issues is well known to us, especially that of balancing the need for housing with the need to protect the environment. Following the development of the new town, large parts of my constituency have been built on what were once green fields, so we are not nimbys. However, as time has passed, we have become increasingly conscious of the need to protect the quality of life of our residents, both old and new. We are all too well aware that building houses without the necessary infrastructure, transport links and regard for people's quality of life is not enough.
That is why there has been local outrage at proposals to build on the Peel Hall site. Indeed, we collected a petition bearing 14,500 signatures, and there was a march to present it to the then mayor. The reason for that is simple. Peel Hall is one of the last remaining areas of open grassland, trees and pond in the north of my constituency. The Warrington nature conservation audit, which was carried out in 1995, placed high value on the variety of habitats found on the site, the wide species diversity and the sheer size of the area. It is one of the few remaining uncompromised wildlife areas that we still have.
The Warrington nature conservation forum has identified at least 67 species of birds, 78 of moths and butterflies, three of amphibians, 10 of mammals and two of bats on the site. Seven of these are red-list species and seven are on the amber list. I am assured that there is the presence of the short-eared owl, which is found on only two other sites in the area. The area comprises also a large area of wet grassland where species such as the marsh orchid and the purple loosestrife are to be found. All these would be wiped out by development.
In addition, an archaeological assessment of the site has suggested that it has some of the most convincing evidence of long-term occupation in Cheshire. It is the site of a mediaeval manor house and moat. It is suggested also that there may be other archaeological remains on the site.
My hon. Friend the Minister will be well aware that as things stand it is difficult to protect local sites such as Peel Hall. Part of it has been designated as a site of importance for nature conservation. However, local councils have limited powers in relation to such sites. I know from an answer given by my right hon. Friend the Minister for the Environment that the Government have a local sites review group that considers how sites can be protected.
It is important that we protect local sites better. It is relatively easy to protect areas of outstanding natural beauty or a site of special scientific interest. It is also
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relatively easy to protect well-known historical sites. However, it is equally important to protect green spaces such as the Peel Hall site, and to protect local history before it is wiped out. That is especially important in areas where there has been intensive development, and where a site may be one of the few that remain.
The need for protection was clear from the inspector's report on the Warrington local plan. The plan had to be abandoned for technical reasons, and a new one is being drawn up. However, we can learn important lessons from what the inspector said. He dismissed the possibilities of the area and talked about it being used for—I think I quote him correctly—
low-level informal recreational activities.
I think that he meant walking. I hope that he did. He said also that the site had no nature conservation value. Bearing in mind the evidence, that is nonsense, and the thrust of the report indicated that the inspector felt that only areas of outstanding beauty were worth preserving. I do not agree with his argument that a wildlife area can be equated to a park. It is important that we maintain proper wild areas. Not everyone wants to see nature tamed and confined. The ability to walk along footpaths in such an area, to watch birds and to enable children to play is especially important to my constituents because they have so few opportunities for these experiences.
The strength of feeling of the residents in the area has already been tested on many occasions when there have been development proposals. Originally, when the plans for the new town were being unveiled, people in what was then the small village of Orford Green were assured that the area between the M62 down into Orford would be preserved as a linear park. Eventually, the development corporation abandoned plans to build on the site generally. It considered it unsuitable because of problems associated with mining subsidence.
There have been many battles since then, which the residents thought that they had won. However, they clearly reckoned without the company called Satnam Investments, which bought the site in the mid-1980s as agricultural land. Satnam operates through a number of subsidiaries. After some local publicity, one of the subsidiaries put in six outline development applications in September 1999, which would have resulted in the building of more than 1,000 houses on the site, with presumably a substantial profit for the company. Residents were outraged and they did all that they could to oppose the applications.
A public meeting was called, at which I was present. I understand from a letter that I have seen subsequently that a representative of Satnam was at the meeting, but that was not known to the residents at the time. That would not be surprising to anyone who attended the meeting. I received a letter afterwards that said that many of the arguments advanced were misleading. I would argue that the most misleading has been done by the company. It has shown itself to be acting as a predatory developer.
From 14 August 1999, people in the area were awoken by the noise of bulldozers and a JCB moving on to the area. They saw shrubs, trees and willows being ripped up. When council officials arrived on the site, having been called by the residents, they were told that the land was being cleared on the order of the owners. The solicitor acting on behalf of the company assured local

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people that the site would be fenced and prepared for planting so that the owners could get some return on their investment. He suggested that a crop of potatoes might be planted. There were reports of a flying pig the same day. Not surprisingly, the potatoes never appeared. Instead, the vegetation that was ripped up was placed in huge mounds alongside the M62, and there was a report that it would be disposed of by burning.
On hearing that, I contacted both the environmental health department and the Cheshire fire brigade. I did so because of worries about the health of people in the area and the potential lethal consequences of black smoke drifting across the M62. It says much about the attitude of the company that it could even contemplate such action.
It seems to be a clear sign of an attempt to discourage people from using the site. Barbed wire has been placed alongside some of the footpaths that cross the site, and they have been blocked in some areas. I know that that has happened because I have walked them myself with someone who lives in the area.
That is a clear attempt to destroy the site's wildlife and nature conservation value and to discourage people from using it. At the moment, there are no sanctions that can be used against would-be developers who behave in such a way and try to pre-empt the planning process by destroying some of the value of a site, and I hope that my hon. Friend the Minister will touch on that point in her reply.
This is a firm which is out to make a large profit at the expense of the health and well-being of my constituents, and that is a real issue here. The traffic in this area of Warrington is already extremely heavy, and, at times, it comes to a standstill. Recently, an air quality survey was undertaken under the Environment Act 1995. I have not yet seen all the figures from that survey, but what would usually be called a reliable source tells me that it shows that the air quality in the neighbouring Poplars ward is extremely poor. That will come as no surprise to anyone as it is bounded by the M62 and A49. It clearly cannot take the increase in traffic that such a development would generate.
People's health is a real issue because two of the wards bordering the site, Poplars and Hulme, are among the most health-deprived wards in north Cheshire. People badly need green space in which to walk and watch wildlife. I hope that they will benefit from the health improvement programmes that the Government are initiating, but such programmes are no use if, at the same time, the quality of people's environment is deteriorating. Our health and planning policies must be much more closely integrated if we are to achieve our objectives.
The development is not in accord with the Government's policy planning guidance note 3, which makes it clear that brownfield sites should be used before greenfield sites, and that local authorities should attempt to reuse existing land and buildings in a process of sustainable development. According to the agreed structure plan, Warrington has 5.7 years' supply of land, and, measured against the draft regional planning guidance rate of development, it has 7.9 years' supply of land.
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Therefore, we do not want or need a development on Peel Hall. Residents, local councillors and I, who also live in the constituency, oppose it. But if we are to implement the Government's planning policy, local authorities need the powers to ensure that that planning policy becomes a reality on the ground. It is nonsense that we should still be talking about building on greenfield sites when property stands derelict in Greater Manchester and Liverpool and inner-city sites need regeneration.
We in Warrington agree with the Government's planning policy, and we support the draft regional planning guidance, which has a regeneration-led agenda. But the Government must ensure that local authorities have the power to make that a reality on the ground, that they can protect local open spaces better, that they can take into account the health of their residents, and that they have some powers to prevent developers from destroying the value of sites before planning applications are determined.
I hope fervently that when the application comes before the local planning committee, it will reject it, and I hope that if it ever reaches my right hon. Friend the Secretary of State, he, too, will reject it. But, most importantly, I hope that we learn the lessons from what has gone on here for our future planning policy, so that communities are not put in such a situation again, and we ensure that we protect our local open spaces and our local wildlife for future generations as well as for ourselves.
1.44 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes): I congratulate my hon. Friend the Member for Warrington, North (Helen Jones) on securing the debate and raising this important issue. My hon. Friend is an assiduous user of Adjournment debates to raise important local issues, and it is right that she should do so. She is performing a proper service as a Member of Parliament for her constituents.
As my hon. Friend has explained, five planning applications have been submitted by Satnam (Millennium) Ltd. for outline planning permission for residential development, access roads and retail and community facilities at Peel Hall. Taken together, the applications relate to a site of around of 55 hectares, lying to the north of the built-up area of Warrington and to the south of the M62.
As my hon. Friend acknowledged, the consideration of the planning applications is, in the first instance, a matter for Warrington borough council, as the local planning authority for the area, and at this stage, it is not clear whether the council will be minded subsequently to grant planning permission. If it decides to refuse planning permission, it will be open to the applicant to exercise his right of appeal, and the matter could, therefore, come before my right hon. Friend the Secretary of State for determination.
If, on the other hand, the council is minded to grant planning permission, I understand that it first intends to refer the applications to the Secretary of State because, on the face of it, the proposals do not accord with the development plan for the area and because they involve residential development on a large greenfield site, as my

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hon. Friend clearly explained. That would allow my right hon. Friend to decide whether to use his reserve powers to call in the applications for his own determination.
I have explained that fully so that it is clear. My hon. Friend will appreciate that I am unable to comment on the merits of the proposals because my right hon. Friend may well have to use his call-in power and I cannot fetter his decision in any way. However, there are some comments that I can make which I hope will be helpful.
The Secretary of State's general approach is not to interfere with the jurisdiction of local planning authorities unless it is necessary to do so. Many hon. Members argue for that principle of local determination. Parliament has entrusted local authorities with responsibility for day-to-day planning control in their areas, so it is right, in general, that they should be able to carry out their duties responsibly, with the minimum of interference.
The Secretary of State's policy is to be selective about calling in planning applications. He will do that only if a case conflicts with national policy on important matters, such as transport, sustainability or regional or greenfield issues; could have significant effects on the locality; give rise to substantial regional or national controversy; raise significant urban design issues; or involve issues of national security or foreign government. Each case will be considered on it merits, so I can assure my hon. Friend that, if the applications are referred to my right hon. Friend, in either of the two ways that I have identified, he will give the most careful consideration to all the issues raised before deciding to exercise his call-in power.
My hon. Friend painted a clear picture of the site and its value to local people in terms of its wildlife, open space and plantlife. She will know that the original applications were submitted last September, but, as they proposed the development of a large greenfield site, the council formally requested the applicant to submit an environmental statement under the Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 1999.
The main aim of that procedure is to ensure that the authority that gives primary consent for a project makes its decision in the full knowledge of any likely significant effects on the environment. That helps to ensure that the public and the local planning authority understand the importance of those effects and the scope for reducing them.
In the case we are considering, I understand that the council has received the completed environmental statement very recently and has undertaken to give it wide publicity. It will therefore be in the public domain. That will give the public an opportunity to present their views about the project and the detailed contents of the statement. The council is required to take account of the statement and the comments and representations on it when deciding whether it would be appropriate to grant planning permission for the development. Doubtless the information will be copied to us in due course; it must be if the council decides to grant permission.
The procedure that I have outlined is one means of considering all the environmental issues, including those that my hon. Friend raised, that pertain to the characteristics of the site and its value to the local community.
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My hon. Friend said that the developer had felled several trees and removed some of the hedgerows on the site, and that questions have been asked about the current route of the public right of way. I understand my hon. Friend's anxiety and that of her constituents about what they perceive as the cavalier actions of the developer towards the wildlife and plant life on the site. At this stage, those are matters for Warrington borough council as the local planning authority. However, I asked my officials to make inquiries on my behalf, and I understand that the council has investigated the matter.
The council's current view on the hedgerows is that no consent was required for their removal and that, after discussions with the developer and the council, the correct route of the public right of way has been reinstated. I take account of my hon. Friend's comments about the need to ensure that councils have the wherewithal to protect sites from such action.
Relevant Government policy is mainly PPG3, which my hon. Friend mentioned, but also policies on development plans. PPG3 is the guidance note that relates to housing. When considering planning applications, the council is required to have regard to national planning policy guidance as stated in PPG3. It sets out the key elements of Government policy, which encourages greater choice for different sizes of household, greater affordability and more mixed development. It specifically encourages less profligate use of land—there has been profligate use of land in some very modern housing developments—and, of course, the use of brownfield sites before greenfield sites.
The national target for the use of brownfield sites is 60 per cent., with some local and regional variations. That is a demanding target because, in previous decades, a rate of between 40 and 50 per cent. has been achieved. The policy also demands the adoption of a sequential approach to identifying suitable sites for applications. Brownfield sites must be identified in preference to greenfield sites.
Local authorities should try to exploit opportunities to locate larger housing developments around major nodes along good quality transport corridors, and to ensure that all housing developments are accessible by a range of transport other than the private car. Public transport should be used positively to shape the pattern of development. New housing development should be used to make public transport services more viable.
We also firmly believe that new housing development, whatever its scale, should not be viewed in isolation. My hon. Friend stressed that point. Design and layout must be informed by the wider context, having regard not only to immediate neighbourhood buildings but to the townscape and the landscape of the wider locality. PPG3 is therefore of great relevance to the application to which my hon. Friend refers. I am sure that the council wants to apply that policy assiduously.
Policy on development plans is also relevant. As my hon. Friend said, Warrington borough council had been in the process of preparing a local plan when it became a unitary authority on 1 April 1998. As a result of its change of status, the council decided in June 1999, after discussion with its lawyers, to discontinue further procedures on the local plan—it had by then been subject to inquiry, on which the council had received the inspector's report—and move immediately towards the

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preparation of a unitary development plan. As a new unitary authority, Warrington is charged with the preparation of a UDP, which includes policies on strategic matters as well as local plan and site-specific matters.
Warrington council is currently consulting widely on the UDP strategic issues and strategy options document, as the first stage in the process of moving towards a UDP. It is unlikely that the UDP will be adopted before 2004. As the UDP moves towards adoption, decision makers will be entitled to attach increasing weight to its content.
Officials tell me that the position in Warrington is unique because there is currently no strategic framework for site-specific preferences for development. That means that there is nothing in council strategic policy to identify suitable or preferred uses for the sites that we are considering. There is therefore no local policy framework to inform decision making on the site. Although the framework does not exist, there are two process whereby my hon. Friend and
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local residents can make their views known about the applications in particular and the future of the site in general.
First, there is a process of development control whereby the council considers the applications. It will apply PPG3 and other relevant national policies to its decision making. Clearly, local residents can make their views known through that process. Secondly, there is the development of the UDP. In that process, the council will have to consider the future use of the site and identify its preferences. Through that process, my hon. Friend and her constituents can express their views strongly.
I apologise for not being able to comment on my hon. Friend's remarks about the merits of the application—I know that she understands the reasons for that. I hope that I have given her some assurances about the policies that we want to be applied in the decision making. I also want to assure her that if the applications are considered by the Secretary of State, we will ensure that the policies that we are robustly pursuing on housing development and greenfield sites are applied, and that the best judgments are made.
Question put and agreed to.
Adjourned accordingly at two minutes to Two o'clock.