Westminster Hall Sitting of 21 November 2000

Preamble
[MRS. SYLVIA HEAL in the Chair]

EU Sugar Regime
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Clelland.]
10 am
Mrs. Gillian Shephard: I am extremely grateful to have been given the opportunity to introduce this debate. The issues involved are urgent and require immediate attention, and I hope that the Minister will be able to respond to the many that will be raised. As I shall illustrate, time is of the essence. The European Union sugar regime is an all-party issue and representations have been made about it from many political parties. Four former Agriculture Ministers and the former Chairman of the Agriculture Committee are present, as are its current Chairman and many hon. Members with a deep interest in African, Caribbean and Pacific countries in the developing world. The issue is truly broad-ranging.
The European Union sugar regime covers both domestic EU beet sugar and cane sugar production. In addition, a fixed quota of cane sugar imports is provided, principally from the African, Caribbean and Pacific—or ACP—countries. That access is provided for by the Cotonou agreement that succeeded the Lomé convention. The objectives of the regime are to ensure stability of employment and production for EU and ACP producers. The regime is usually reviewed every five years, the next review to be completed before 1 July 2001.
Everyone present and those involved in the sugar industries agree that the sugar regime must be reviewed and updated regularly. Indeed, in October this year, the European Commission proposed that it should be extended, with some changes, for two years from 1 July 2001, while studies were undertaken on the scope for reform. However, in September this year, the Commission also published proposals to include sugar in the list of commodities that should be allowed duty-free, quota-free access to European Union markets for the 48 least developed countries in the world. Most significantly, the EBA—everything but arms—initiative is to be introduced through amendments to the European Union's generalised system of preferences, so it will not be considered by Agriculture Ministers or the European Parliament, but by the General Affairs Council. Thus, the impact on agriculture domestically, and in the ACP countries, has not been debated by the European Parliament, nor has there been consultation about it.
Mr. Bowen Wells: Is my right hon. Friend aware that the European Commission has authorised an impact study, which is to be concluded and presented to the General Affairs Council
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by the end of November? Does she agree that that means that there will be no time for adequate consultation with either the beet sugar producers or the ACP countries?
Mrs. Shephard: I agree. Moreover, there is equal consternation about it among beet sugar producers in this country and other EU countries, as well as cane sugars producers in the ACP countries, many of which figure on the list of 48 least developed countries. We know that from a meeting that was arranged most helpfully last week by my hon. Friend. Other hon. Members will want to address the impact of such an undemocratic approach on the economies of the ACP countries.
The hon. Member for Hackney, North and Stoke Newington (Ms Abbott),who is here, attended the meeting that we had last week, at which she explained graphically her views on the way in which the matter is being handled. The ACP countries have made many representations through their own Governments to the Commission, the French presidency and our Government, describing the effect that the EBA initiative would have on their sugar industries. In some cases, it would threaten already fragile economies with total disaster.
Of course, there is broad agreement that adjustments to trade agreements over time should help the least developed countries. However, the initiative is hasty and ill thought out, combining disaster for the United Kingdom sugar beet industry with almost no improvement or, in some cases, a worsening of circumstances for the cane sugar industry in ACP and other countries. Worst of all—the Minister may be able to dispel the impression—the way in which the initiative is being introduced seems to deny proper democratic scrutiny and accountability.
The Minister will be aware of the importance of the sugar beet industry to agriculture in this country. The Parliamentary Secretary, Privy Council Office could not be here today but, by most ingenious means, he took the opportunity to state his concern about the problem in last night's debate on procedures. My hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) is also unable to be here, because he is occupied by his role as a member of the Treasury Committee. If they had been able to attend, the cross-party representation at this debate would have been even larger.
A study by Reading university published by British Sugar states that 23,000 jobs in the United Kingdom depend on the beet sugar industry. In my own constituency, the Wissington sugar factory, which the Minister is to visit, accounts directly for 320 jobs, and 6,000 more in the wider economy. That figure includes producers, hauliers and other service providers.
Mr. Peter Luff: It may help my right hon. Friend if I remind her that that figure is larger than the number of jobs recently at stake at Longbridge.
Mrs. Shephard: That point will not be lost on the Minister.
The other sugar factory in the region, at Cantley, is in the constituency of my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) and directly employs 180 people. About 3,500 jobs are dependent on that factory.

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The two factories together take beet from a total of 2,700 producers and account for almost 40 per cent. of United Kingdom beet sugar production.
The beet industry is the cornerstone of the increasingly fragile agricultural economy in East Anglia—an economy that has recently been weakened by the impact of swine fever. A survey published in the Eastern Daily Press on 18 September shows that farm incomes have fallen by 50 per cent. in the past four years, even before the effects of swine fever and fuel taxes are taken into account. That figure also takes no account of the impact of rushing through European Union proposals for sugar beet. I am sure that the Minister will agree that an industry in which many farmers earn less than the national minimum wage is hardly in a position to take more hammer blows, but those blows will be delivered unless she and the Government can stop the proposals taking effect.
British Sugar and the National Farmers Union have calculated that, under the EBA proposals, every tonne of sugar entering the European Union will result in a 1 tonne quota cut. That could ultimately result in a 25 to 40 per cent. quota cut affecting European Union and ACP producers. The weakness of the euro has already resulted in a 30 per cent. reduction in beet and sugar sterling prices, and sugar support prices have fallen by about a third since 1996. The senior agronomist at the Morley agricultural research centre, which I am sure is known to the Minister, has written to me to say that the
one crop that is still making reasonable money is sugar beet, and quota-free sugar from poorer countries is likely to reduce the British farmers quota by up to 40 per cent. This would decimate the UK sugar industry and UK growers.
Miss Anne McIntosh: Is my right hon. Friend aware of the contribution that the sugar beet crop makes to crop rotation in an arable sector that has been badly damaged, especially in north Yorkshire?
Mrs. Shephard: I certainly am aware of that. My hon. Friend's intervention is useful because it allows me to take more time to discuss the matter that she has explained so well.
The agronomist continues:
Sugar factories have already been rationalised to meet lower demands and this would undoubtedly result in further closures.
I agree. I cannot see any alternative. Which of the two Norfolk factories does the Minister think should close? Wissington factory in my constituency is the largest in Europe and, with a great deal of investment, has recently been expanded by 50 per cent. The Cantley factory is close to Great Yarmouth, which has recently had a large and welcome injection of cash to help with its deprived status. Would the closure of the Cantley factory help that?
Mr. Edward Leigh: I am sure that my right hon. Friend will want to stress that the impact of the measures could apply throughout the country. As she knows, the Bardney sugar beet factory lies within my constituency: Norfolk is not the only area affected. I am
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sure that she will also want to point out that, should the measure go ahead, the impact on farmers throughout Lincolnshire could be very grave indeed.
Mrs. Shephard: My constituent, Mr. Archibald, of Wimbotsham, wrote to the Prime Minister, and makes the point for all those affected when he says:
Time is not on our side. I understand the first meeting of the General Affairs Council when EBA may be discussed is due to commence on November 20th, so your prompt action is requested. Agriculture is an industry under…threat. These two proposals could easily destroy one of the last crops worth growing. With it…many lives and futures. Mine included.
That is a bleak cry indeed, and one to which I hope that the Minister will respond.
Like other hon. Members, I have received many letters from farmers, hauliers and others whose lives would be affected by the decimation of the sugar beet industry. All stress that they understand that help must be extended to the economies of the world's poorest countries. However, they also understand that unless more time and consideration is given to the EBA proposals, sugar production will be damaged, not only in the UK but in the rest of the EU and the ACP countries, and in a way that would not improve the economies of the less developed developing countries.
Ms Diane Abbott: Does the right hon. Lady agree that, given that the pretext for EBA is to help the least developed countries, it is a huge irony that it will capsize the economies of very many poor countries, in relation not only to sugar but to rum and bananas. That makes nonsense of the supposed justification.
Mrs. Shephard: The hon. Lady makes her point very effectively, as usual. It is echoed by Mr. Stephen Collett, of Garboldisham, who writes:
The only real winners would be the confectionery and soft drinks manufacturers. The losers would be UK and other EU farmers and the environment and economies in some of the most sensitive parts of the world.
Mr. Gooderham, of Kenninghall, writes:
Unless these proposals are modified, I see sugar factories closing down and most sugar beet farmers giving up growing beet. The consequences for employment would be catastrophic. In our case, over half our staff would be made redundant as sugar beet is the most labour intensive. I cannot believe that the Minister is so short sighted as to close down a whole industry.
Mr. Douglas Hogg: Will my right hon. Friend also take the opportunity to acknowledge that there is no natural correlation between reductions in the price paid to producers and reductions in the price paid by consumers? Since 1996, although sugar prices have gone down in the sense that producers are paid less, the price of products has risen.
Mrs. Shephard: That is exactly right. Consumers have not benefited in any way. I am sure that the Minister will take that point, and explain what the Government intend.
Mr. Christopher Gill: As a former Agriculture Minister, does my right hon. Friend recognise that although sugar beet factories are closing

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in her part of East Anglia, there is a greater threat to the remaining factories in the west midlands, where the industry is more fragile and where farmers' incomes depend on sugar beet to an equally great extent?
Mrs. Shephard: I agree.
The impact of the proposals is more than serious. My constituent, Mr. Wright, of Brettenham, says:
These proposals will have a very serious impact on employment in agriculture and the other industries allied to the sugar crop. We at present employ 5 tractor drivers and 2 lorry drivers. These would be drastically reduced. It is already concerning to us how many people have left agriculture recently, this will only compound the matter if the above is implemented.
Mr. Keith Simpson: It may help my right hon. Friend to know that, according to a survey of Members of Parliament conducted only last week, the proposals will directly or indirectly affect approximately 150 constituencies across all parties.
Mrs. Shephard: That is a good point that the Minister will note. She will already have noted that this Adjournment debate is unusually highly attended. The figure that my hon. Friend cites will make her realise that a high level of anxiety is spread throughout the House.
Mr. Geoffrey Clifton-Brown: As a grower of sugar beet, I know only too well the fragile economies of the areas that will be affected by the proposals. Given those fragile circumstances, and that Great Britain has the largest sugar trade deficit of any European country, will my right hon. Friend press the Minister to ensure that, if the proposals are to be adopted, this country should at least have a derogation to allow time for implementation?
Mrs. Shephard: The essence of the matter is time. I hope that the Minister will explain why the proposal seems to have jumped over the review and study on the future of the sugar regime and why it seems to be being fast-tracked through EU procedures without being considered by the European Parliament and subjected to proper democratic and accountable scrutiny. I am sure that that will worry her, but she may have some words of comfort for us. She will certainly hear expressions of anxiety, not only from colleagues with agricultural constituencies, but, as the hon. Member for Hackney, North and Stoke Newington has demonstrated and the hon. Member for Poplar and Canning Town (Mr. Fitzpatrick) will demonstrate, from other colleagues who are worried about employment in their constituencies or the impact of the proposals on developing countries.
Mr. David Prior: As my right hon. Friend knows, my constituency contains many sugar beet growers. Those growers are entirely dependent for the future of their farms on the sugar beet crop, as every other crop that they grow is losing money.
Mrs. Shephard: I hope that the Minister will reassure us that she and her colleagues at the Ministry of Agriculture, Fisheries and Food will consider the impact on our domestic agricultural economy and that
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they will at least press for time for that impact to be measured and taken into account before the proposals are pushed through the European Union. I hope that she will tell us what her Ministry's stance is on the matter and what she intends to do or has done to prevent such an undemocratic change being steamrollered through the EU machinery. Is her Ministry's view at odds or in tune with the overall Government stance? As she will hear today, a great deal hangs on her answers.
10.18 am
Dr. George Turner: I congratulate the right hon. Member for South-West Norfolk (Mrs. Shephard) on having secured the debate. As a fellow Norfolk representative, I am sure that the size of our postbags on the subject has been comparable. I have had more letters in a shorter time on this issue than on any I can remember, including fox hunting. It is clear that major anxiety is felt.
Norfolk produces a large proportion of the nation's sugar beet. A mixture of fact and extrapolation—as I suspect and hope that my right hon. Friend the Minister will reassure us that it is—means that farmers believe that their livelihoods will be threatened imminently. It is clear from my postbag that that is the farmers' impression. I have received at least 60 letters from farmers who grow sugar beet, expressing the full range of opinions, some of which, I suspect, come from the excellent briefing pack that I received from the National Farmers Union and British Sugar. I hope that my right hon. Friend will assure us that the issue will be addressed at a time when events can be influenced rather than merely complained about.
It would bore hon. Members if I were to quote from many letters, so I have selected a few that illustrate the range of problems for my constituents. I received a letter from Dave Rust, a farm manager of Parsonage farm in Magdalen. He points out that his farm could lose a sizeable chunk of its income, and that alternatives to the sugar beet crop would be much less labour intensive. I received a plea from the heart from Robert Fox, who has one of two farms in my constituency, in East Rudham. He says that because farming is in its worst ever depression and that the proposals will ruin farmers' business and cost the nation thousands of jobs. He also presses me to do everything that I can. I am here now to make sure that the Government understand that need.
I received a letter from Ian Roy, the director of Cradle Hall Farms Ltd. in Burnham Market. He points out not only the dramatic drop in price, which could be expected, but that the consumer—who might be seen as the beneficiary of such proposals—is unlikely to benefit. He writes:
If the argument is to bring down the cost of sugar to the consumer this is not valid as time and time again when the prices we receive for our produce have reduced these have not been passed on. In fact the value of our Sugar Beet crop has dropped by over 30 per cent. since 1996 but the cost of products that use the vast proportion of Sugar has risen: by 4.8 per cent. on cakes and biscuits, by 7.7 per cent. on soft drinks and by 9.9 per cent. on sweets and chocolate. As you can see we are yet again forced to accept a smaller slice of the pie having already had to swallow price cuts on grain and milk, this cannot go on.
I agree. The timing of proposals that would damage the sugar beet industry in my constituency could not be worse. My right hon. Friend will be aware of that,

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because, at my invitation, she was kind enough to spend seven or eight hours in my constituency last week. She met a range of farmers who expressed similar views to those that I have quoted this morning.
I want to quote one more letter, which illustrates, by example, a point already made this morning, that not only those who are directly employed on the farm will be affected and there are many knock-on implications for jobs. Many jobs other than growing or processing sugar beet will be at risk. At the beginning of this month, I received a letter from Nigel Mountain, who pointed out the danger to his small, family-run, rurally based manufacturing company, which my right hon. Friend was unable to visit last week. The company is an important part of the village of Harpley—which is very small and has had to fight to maintain its village school for many years—providing employment in the village so that people do not have to travel to nearby industrial estates. It has been there for 200 years, and for the past 50 years it has served mainly the sugar industry by supplying specialised equipment such as cleaners and loaders. It provides the majority of the United Kingdom market with that equipment, which accounts for 75 per cent. of the company's turnover.
Last week, I went with my right hon. Friend the Minister to see Nigel Mountain, who realises that small companies must look to the future and be willing to change and to introduce new equipment and methods. His company initiative has recently been awarded a Government grant and we were delighted to meet students and staff at the Anglia Polytechnic university, which is involved in a joint scheme with the company in applying new technology to sugar beet cleaners and loaders. I want that small company to be protected and I ensured that my right hon. Friend could see for herself that we in Norfolk are not asking to live in the past, glorious though that may be in agriculture. We are willing to change, but problems would arise if what we have heard this morning were to come to fruition and draconian changes in the sugar regime were introduced quickly and without amelioration.
I hope that my right hon. Friend will assure us that the Government's position is not what some of those who have written to me have been led to believe—that the Government are firmly behind the everything but arms proposals. Last week, we visited John Askew at his farm at St. John's Fen End where we met a number of representatives and members of the National Farmers Union. They spelt out the practical implications in detail and my right hon. Friend provided some reassurance, which I hope will be repeated this morning. We also met others who are concerned and I was pleased that Sir Jeremy Bagge, who chairs the agricultural group that is examining the shaping the future agenda in Norfolk, was able to join us in the evening with Richard High, the west Norfolk economic development officer, to explain the general nature of the problem for our community. It has attracted 5b funding in the past but is disappointed that it received only transitional funding under the current regime.
Mr. Prior: Was it agreed during the hon. Gentleman's discussions that if there were any reduction of quota in
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Europe, it should fall on those countries that produce a surplus and not on countries such as Britain, which has a deficit in its production?
Dr. Turner: That was a helpful intervention, because I intended to make that point. It was emphasised on several occasions and I believe that my right hon. Friend Minister was the first to say that the United Kingdom has something to gain from reform of the EU regime. Anyone who has examined the mix of the A, B and C quotas and tried to understand their logic will understand that there is little logic in the existing situation. I accept—as have the Government—that reform is needed, because the sugar industry was not among those reformed in the earlier rounds and its regime is due to expire at the end of this calendar year. That is why consultation is taking place.
As the hon. Member for North Norfolk (Mr. Prior) reminded us, the British economy is already one of the largest importers of sugar. We produce only about 50 per cent. of our nation's sugar. Last week, we were given figures showing that some European nations produce well over 100 per cent.—in some cases approaching 200 per cent.—of the quantity of sugar that they consume.
Although we are rightly concerned with our constituents' interests in respect of the effects of change, we must recognise the need for changes, some of which we may not want. I hope that my right hon. Friend the Minister can assure us of the strength of the case for British farmers. Accepting the fact that a substantial proportion of our sugar is already imported is a strong negotiating hand. Sufficient time and care must be taken in introducing any changes. If European Union imports are to displace home production, we should be at the back, not the front, of the queue for having to reduce local production. I hope that the Government will be batting on the side of Norfolk farmers during arguments about reform within the EU.
My brief is to represent the sugar beet industry in Norfolk. However, I am impressed by the number of people who have gone out of their way, angry as they are, to write to me to say that they want help to be given to the least developed nations. That was the mood of the meeting last week. We should find a way forward that produces a system that British farmers can cope with and adjust to, but that does not lead to the Caribbean nations being brought down from a little above least developed status into impoverishment.
It is unfortunate that the debate was delayed for so long that we are now close to the end of the current regime. It seems to be in the nature of politics that difficult decisions and proper debate are left until change is imminent.
This is a difficult and complicated issue that requires careful consideration. I hope that my right hon. Friend the Minister will assure me that the interests of my constituents will be carefully looked after. Farming in west Norfolk has suffered—she heard about the problems in person last week—and is not in a position to have further blows inflicted on it. Reforms must be made with care, giving proper time for adjustment.
10.34 am
Mr. John MacGregor: I declare an interest, which appears in the register. I am a non-executive director of Associated British Foods, the parent company of British Sugar. That gives me a clear insight into the issues on that side of the industry. However, I speak today from the farmers' point of view, because, like other right hon. and hon. Members, my constituency contains a large number of sugar beet growers, for which Norfolk is one of the main counties.
Because this is a short debate, I shall not repeat the points that were made so admirably by my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard). In light of the comments made by the hon. Member for North-West Norfolk (Dr. Turner), I am glad that there is an all-party approach to the matter. However, I want to explore as fully as possible one or two points that have been raised.
I stress to the Minister—and I am sure that she fully understands this—that the current state of farming is desperate. I have represented my South Norfolk constituency for 27 years, and like other former Ministers who are here today, I cannot recall when there has been such despair and uncertainty about the future of farming. We have often had to face uncertainty in the past, but even hitherto optimistic farmers are telling me that they do not know where agriculture is going and that matters are getting desperate. The problem is linked to the relationship between the euro and sterling, and the subsequent effect on prices. That has contributed to some of the difficulties in the past few years.
Few farmers are making any money on any crop except sugar beet. As my right hon. Friend said, the price of sugar beet has already fallen by 30 per cent., and the loss of a crop that is important to the technological aspect of agriculture would also have serious consequences. The plain fact is that if the Lamy proposals go through, the only crop from which farmers currently make a profit will cease to be profitable. That would be a desperate situation for any industry to face. She also pointed out that 23,000 jobs are at risk, but because they are scattered across the country, the problem is not recognised in the same way as the collapse of a firm in the west midlands, for example. Nevertheless, the proposals will have serious consequences for rural areas. Unless the matter is resolved, one can forget most of the proposals in the rural White Paper. The problem is extremely serious.
My constituency contains one of the biggest pig farming areas in Britain, and the Minister will know that many of its pig farms have unfortunately been affected by swine fever. Like other hon. Members, I am receiving desperate letters and representations.
I am astonished that the Lamy proposals have advanced through the EU processes without recognition of the serious implications for the ACP countries and the future of sugar beet in the EU. The Ministry of Agriculture, Fisheries and Food understands that issue, but other UK Departments do not. The EBA proposal would undercut and undermine efforts to reform the sugar regime. We have to debate such reform, but if this
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proposal goes through in December, we can forget it. The proposal would have the most significant impact on the entire sugar beet industry and the ACP countries.
Miss McIntosh: Rather than taking one product in isolation, would not it be more appropriate to consider the matter as part of a review of the common agricultural policy as a whole?
Mr. MacGregor: I agree entirely with my hon. Friend, and I shall consider that briefly in the context of reform of the sugar regime.
Unless the Government take a strong position in the General Affairs Council in December, we can ignore and forget much of what will happen in respect of the sugar regime, because the damage will have been done. We are discussing the possibility of a 25 to 40 per cent. reduction in UK sugar beet production. I am glad that the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) has re-entered the Chamber, because last week's meeting with the EC ACP spokesman impressed me. The interests of the ACP countries are aligned with those of the UK sugar beet producers. In fact, matters are worse for the ACP countries and their economies will be decimated. I am astonished that that point has not yet been made properly in the European debate.
Mr. Luff: Will my right hon. Friend confirm that, perversely, including sugar in EBA could help those countries that we might not wish to assist? Countries such as Sudan will benefit at the expense of our traditional friends in the Caribbean.
Mr. MacGregor: That is absolutely right. I am not sure that many of the countries at which the EBA proposal is aimed will benefit. I would not be surprised if some international traders were to find ways through the new proposals, which would have a bad effect on the ACP countries without benefiting the least developed countries.
Mr. Keith Simpson: Does my right hon. Friend agree that, as has been said, it is incredible that the European Parliament has been unable to debate the matter? That point was also made by our colleague, Robert Sturdy, who is a Member of the European Parliament.
Mr. MacGregor: I entirely agree. I was about to make that point myself, and I am glad that my hon. Friend has done so, given that not everyone will be able to contribute to this short debate.
The financial consequences for the European Union sugar beet regime have yet to be discussed. At present, the regime's net cost to the EU budget—the total cost of exporting surplus sugar, minus levies on production—is 800 million euros. That figure represents the cost of re-exporting ACP imports, so it is, in effect, a charge to the EU's development budget rather than the CAP regime, and should be regarded as such. In terms of sugar beet production in the EU, there is therefore no net cost. However, if the Lamy proposals are accepted and the amount of sugar beet produced in the UK and other EU countries is massively reduced, there will be an additional cost to the CAP budget in the form of arable

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payments and other measures taken by farmers to find an alternative crop. Support would have to be provided in the way that is currently provided.
If the Lamy proposals are accepted, there will be a net cost to the EU budget. In addition, it is highly likely that compensation will have to be paid to ACP preferential quota holders. Indeed, in an earlier draft of the Commission's proposals it was suggested that, for each 10 per cent. sugar support price cut, ACP suppliers will face an income loss of 100 million euros, for which they will be expected to demand compensation. The financial consequence of the proposals is therefore considerable—a point that has yet to be brought out.
I believe that Ministers in the Ministry of Agriculture, Fisheries and Food understand these arguments perfectly well. The problem is that the arguments have not got through to the Department of Trade and Industry, which is taking the lead on the Lamy proposals, nor have they got through to the Foreign and Commonwealth Office, which is taking the lead in the General Affairs Council. They have also failed to get through to the Treasury, which ought to face up to the proposals' financial consequences. I hope that the Minister will use this debate to put those points to her colleagues in those other Departments. She should emphasise that it would be outrageous to accept the proposals without full consideration of their impact on ACP countries, and on the sugar beet industry in the UK and other EU countries. The European Parliament has not discussed them, and I cannot understand why proposals that will have such devastating consequences have been allowed to progress in this fast-track method without such discussion.
The British Government should take the view—which, I believe, MAFF wants to take—that the proposals have not been thought through and their consequences are not understood. At least as far as sugar is concerned, they should be put on ice until they have been properly considered. I am not commenting on other proposals, although it is clear that rum, rice and bananas are also affected. Sugar should certainly be taken out of the Lamy proposals, so that there can be full discussion and understanding of the consequences.
In the light of current events and the enormous consequences for jobs, agriculture and the ACP countries, it is clear that the review of the sugar beet regime should not be rushed at this stage but should be viewed in the context of the overall review of arable areas within the CAP in two years' time. That is the plea that I make to the Minister, and I hope that she will use this debate to bring home those points to her colleagues elsewhere in the Government.
10.44 am
Mr. Alan Hurst: I congratulate the right hon. Member for South-West Norfolk (Mrs. Shephard) on bringing this matter before us today. The compactness of her speech was also admirable, given that so many want to speak.
It is clear that there is general, all-party agreement on the matter. There are representatives here from each of the three major parties, as well as from each region of the country, and both town and country are represented. I
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am impressed, if not somewhat daunted, by the serried ranks of former Agriculture Ministers in the Chamber. To paraphrase Ray Gunter, it is a bed of thorns on which they invariably sit. The problem is so acute because it is yet another horror coming out of the box of horrors that agriculture has faced over the past two years. It was only two weeks ago that some of the same right hon. and hon. Members were here to discuss the swine fever in East Anglia. That was an additional factor in the burden that agriculture carries.
It would helpful to contemplate why we have a sugar regime, its origin and the origin of the practice of growing sugar beet. I can claim some small connection with that because Maldon, which was once part of my constituency, was the site of one of the earliest experiments in growing sugar beet in the country, although Norfolk invariably claims most of the credit. We adopted sugar beet because it protected us against the hazards of the wider world. That became particularly apparent during the first world war, when our supplies of sugar cane were cut off and we began to appreciate how important it was to have stable home supplies. That sort of disaster is not within our ready contemplation again, but climatic disaster or political upheaval could cause difficulties that would make us grateful for a secure home supply.
Both Government and Opposition Members make the point that there is too much of a hurry to alter matters that have provided some security. We live in a world that believes in the benefits of change for its own sake. My party's principle is that change for some purpose is of benefit, but change for its own sake is not. No doubt economists—if economists were bookmakers, they would be out of business—may predict this, that or the other, but this is such a vast and complex subject, involving virtually the four corners of the world, that to rush headlong into the unknown, as we now seem to be doing, is unwise.
It has been well said that domestic growers and those in other parts of the world would not benefit from the changes, and the right hon. Member for South Norfolk (Mr. MacGregor) rightly pointed out that the regime currently costs the public Exchequer nothing. If we move to the scheme that is now being contemplated, there would be a cost because of the change to other crops being grown. The most remarkable thing of all, however, is that while the growers in this country have, in real terms, received less over time, the consumer has paid more—for products made with sugar bought at a lower price.
Agriculture needs a period of peace and regrouping. It does not need the helter-skelter of a crisis every week that may be the final crisis to bring down growers and farmers. The matter should be—to use a current American phrase—taken under advisement. We should have a period—I would imagine one of five years—for the matter to be fully studied. We should examine the consequences not only for this country but for the fragile economies that, up until now, we have sought to help. They would be put into the same jeopardy as our own growers.
10.49 am
Mr. Douglas Hogg: My right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) is to be congratulated on

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triggering this debate. I am sorry to add a critical note, but it is a pity that the Government have not provided time for a full-dress debate in the House. I raised the matter with the Leader of the House last Thursday, and it was clear that she was not sympathetic to the request. I regard that as a serious matter, especially as these proposals were first tabled on 20 September, so there has been ample time for a debate on the Floor of the House. None the less, I congratulate my right hon. Friend.
It was also a pleasure to listen to another of my predecessors at the Ministry of Agriculture, Fisheries and Food, my right hon. Friend the Member for South Norfolk (Mr. MacGregor). There have been several contributions from Norfolk, so I hope that the interests of Lincolnshire will be expressed, and I am glad that my hon. Friend the Member for Gainsborough (Mr. Leigh) is in the Chamber.
Production and consumption are broadly balanced in the United Kingdom, so we do not contribute to a surplus, which means that the proposals are especially damaging and unacceptable to us. It is plain and can be historically established that when there is a reduction in the price paid to the producer, there is no automatic reduction in the price paid by the consumer. Since 1996, there has manifestly been no such link, so we must be critical of the assumption or argument that the proposals will benefit the consumer. I certainly doubt it.
I entirely agree with the hon. Member for Braintree (Mr. Hurst) that British agriculture is simply not in a position to take any more economic knocks. As my right hon. Friend the Member for South Norfolk said, and to judge from my experience too, British agriculture has not suffered such a difficult period since the war, perhaps not since the first world war. It is a serious time for British agriculture, and 23,000 jobs or so depend on the sugar industry.
We must keep it firmly in mind that it is absolute nonsense for the proposals to be considered by the General Affairs Council independently of a review of the sugar regime by the Agriculture Council. There should be close links. I am surprised that the Agriculture Council in Brussels has not taken a grip of the matter. It would be perfectly proper to put the matter on its agenda, in informal if not formal session. I know full well, as does the Minister, that there is an informal discussion at every lunch—and most dinners, too. I would like to think that there would be discussions of the sugar regime along with the red wine and patisserie. Perhaps she could reassure us on that.
As we move from those general assumptions, we can make some statements with absolute certainty. The proposals will be extremely damaging to the British sugar industry. They will certainly lead to an effective reduction in quota. My right hon. Friend the Member for South-West Norfolk gave the figures, with which I agree. A reduction in quota, especially when associated with a reduction in price, will reduce farmers' income substantially. As my right hon. Friend the Member for South Norfolk and I have said, what makes the proposals so offensive is that sugar is one of the few parts of British agriculture that makes money. To deprive British agriculture of such an important source of income is nothing short of lunacy.
Although there may be benefits to the EBA countries, where do our paramount duties lie? I make no bones about the fact that my paramount duty is and always
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has been to Britain, and in this case it is to the British sugar producer. The Minister and her colleagues should consider that question. I have great sympathy with the African, Caribbean and Pacific producers, and I am grateful to the hon. Member for Hackney, North and Stoke Newington (Ms Abbott), who is sitting behind me. That is an unusual place to find her, but it is nice to see her there. The interests of the ACP countries are important, but more important are the producers of Lincolnshire and Norfolk, so I hope that their considerations will be taken into account.
Mr. Gill: Does my right hon. and learned Friend recognise that growers in the west midlands have an added interest in the growing of sugar beet? The byproducts are used as feeding stuff, which enables us to maintain livestock production in a way that we probably could not do if that nutritional but relatively cheap stuff was not available.
Mr. Hogg: My hon. Friend is right, and the point is well made.
Mr. Prior: Sugar beet is not only a profitable crop, it is the only bankable crop. For many farmers, the sugar beet quota represents a real financial asset, which is important to them in their discussions with their bankers.
Mr. Hogg: I am sure that it is one of the few securities that they can currently offer.
Mrs. Shephard: Does my right hon. and learned Friend agree that the value of farm land is affected by whether a farm has a sugar quota? That is yet another knock-on effect.
Mr. Hogg: Yes, and my right hon. Friend will know also that a reduction in the quota will diminish the value of agricultural land; and, taking up the point made by my hon. Friend the Member for North Norfolk (Mr. Prior), that will diminish the security that farmers can give to guarantee any overdraft that they may require.
The Government should seek to exclude sugar from the EBA initiative—there is no justification for its inclusion—and we need to push for a proper inquiry into the sugar regime. Those two actions should proceed together. There should be no disjunction between the consideration of the General Affairs Council and the Foreign Affairs Council; they should consider them together. Any inquiry should also take account of the ACP position; I suspect that my right hon. Friend the Member for South Norfolk was right when he said that substantial compensation would need to be paid to ACP countries, and that is profoundly undesirable. I believe that the present sugar regime should be rolled forward for at least five years. That would give the industry the underpinning that it requires.
The European Union has dealt with the proposals in its usual chaotic and undemocratic manner. They were introduced only recently, on 20 September, and no proper consultation or inquiry was undertaken. They have not been debated by the European Parliament or the Agriculture Council, as they should have been. What on earth is the General Affairs Council doing having to

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lead in an agricultural matter? The Government have got their priorities wrong. They should get a grip on the matter, assemble a blocking minority and save the British sugar industry.
10.57 am
Mr. Jim Fitzpatrick: I congratulate the right hon. Member for South-West Norfolk (Mrs. Shephard) on securing this important debate. Tate and Lyle operates the world's largest cane refinery at Silvertown in my constituency in the east end of London. It employs 700 people directly and about 800 others on site are performing other services or working on capital projects.
I shall not repeat the concerns expressed about the contradictory nature of the two EU proposals and their impact on the sugar regime: that point has been well made. However, Tate and Lyle is sensitive to the principle of helping the world's 48 poorest countries. Nevertheless, although it understands that some may want to kick-start the WTO negotiations, the company is critical of the way in which the proposal has been handled. It is difficult to understand how two contradictory proposals could be announced within one week that are incompatible with the maintenance of the sugar regime.
The present and previous sugar regimes have been supported by import controls. Tate and Lyle is able to import raw sugar under special arrangements established under the sugar protocol, which provides quotas for duty-free access and some reduced-duty access to the EU market for sugar from specific African, Caribbean and Pacific countries. The new proposal was made without consultation with the EU's existing preferential suppliers. The European Commission has subsequently mentioned some figures but has declined to expose them to public scrutiny, the critical factor being that no impact analysis has been made.
Another complication is that the EBA proposal is under discussion in the General Affairs Council while the sugar regime proposal is under discussion in the Council of Agriculture Ministers. There is apparently no link between the two Councils for the purpose of the discussion. The sugar regime has been submitted to the European Parliament for an opinion. The EBA proposal has not been referred to the European Parliament. As it is being introduced through an amendment to an existing regulation, it is not necessary to submit it to the Parliament for an opinion. Therefore, the Parliament will not have an opportunity to examine the two proposals together.
Dr. George Turner: The British Government did not put the matter before this Parliament—we, the Members, did. I am confident that there must be a means by which Members of the European Parliament could debate the matter rather than issuing press releases on it.
Mr. Fitzpatrick: I would not disagree at all with that.
I am disturbed that one implication of what is going on could be a threat to the margin aid of approximately £21 million that Tate and Lyle receives under the current
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sugar regime and which it and other EU cane refiners have received since an in-depth analysis was conducted in the late 1980s by the Commission and EU member states. Those funds are essential to sustain Tate and Lyle's ongoing business.
At this stage it is difficult to estimate with any precision the sort of damage that the EBA policy could inflict on the United Kingdom refining operation in Silvertown. The confusion between the two sugar proposals cannot be overemphasised. British Sugar has been able to produce some figures for the potential level of beet quota cuts. The basic differences between Tate and Lyle's and British Sugar's businesses mean that Tate and Lyle has not been able to produce the same sort of projections as British Sugar. However, Tate and Lyle is certain that it will be damaged by the proposal, which is not being handled in the right way to plan for the evolution of the EU's external or internal sugar arrangements. At even modest levels of increased imports—combined with the price that the EU requires Tate and Lyle to pay for its existing raw supplies and the marketing disadvantage already suffered by Tate and Lyle, which makes it the weakest seller in the market—the business will be damaged. The impact of that will be in my constituency.
I know that Tate and Lyle, and others who will be adversely affected throughout Europe and the African, Caribbean and Pacific countries, are trying hard to secure arrangements that will enable the two contradictory proposals to be considered coherently, and a coherent sugar policy established. Tate and Lyle proposes that sugar should be excluded from the everything but arms project, as it has been to date, and that an in-depth assessment should be made on the impact of duty-free and quota-free access.
The Foreign and Commonwealth Office, the Department of Trade and Industry, the Department for International Development and, it is to be hoped, the Treasury should agree that sugar be excluded from the EBA initiative, thus allowing the proposal to proceed to the WTO. Those Departments should support the preparation of a detailed impact analysis of the effect of introducing duty-free and quota-free access for sugar. The analysis should be wide ranging and should include: effects on existing supplies; the benefits that might accrue to the industries in the potential new supplying countries, the least-developed countries; the potential for fraud; the adequacy of the safeguard mechanism for the EU market and the likely impact on the EU market and budget.
The Ministry of Agriculture, Fisheries and Food should ensure that no change is made to the sugar regime until the several studies proposed by the Commission on several aspects of sugar reform are completed. Those studies should be undertaken alongside a study of the implications of quota-free and duty-free access. The Minister engaged in the sugar regime negotiations should be asked to adopt a stance that will not endanger the UK's ability to secure the necessary arrangements to maintain a balance between beet and cane under the regime. The Minister of State has already given an assurance that maintenance of the balance between beet and cane is Government policy. Tate and Lyle is fearful about the Government's ability to achieve that balance.

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As has been mentioned, the debate this morning is neither urban nor rural and does not favour cane or beet. It is a cross-party issue and a serious problem exists. The outcome of the discussions will affect 1,500 jobs in my constituency. We are hopeful about the Minister's response and look forward to urgent Government action.
11.4 am
Mr. Colin Breed: I have benefited from the collective wisdom of many right hon. and hon. Members on this subject and, of course, we have all seen some excellent briefings. It is clear that several worries exist that require our urgent attention and time is of the essence. It was nonsensical that two European Union proposals whose impact would be contradictory were introduced within a week of each other. The lack of proper time for a real study of the proposals and for consultation before their implementation is unacceptable. Their potential impact on the agricultural community in East Anglia and in the United Kingdom generally—at a time when it is trying to recover from disastrous problems—will cause even more of a problem. Furthermore, their impact on less-developed countries that currently produce sugar for export could be catastrophic.
Given such circumstances, it is difficult to understand why such proposals were introduced. However, I suppose that reform has to be considered regularly and perhaps that is necessary. Clearly, before any changes are made, we should ensure that such a process is carried out with the benefit of a proper in-depth and carefully considered study into the widest policy implications. The current situation has a good chance of filling a lengthy chapter in that growing volume entitled, "The Doctrine of Unintended Consequences." Surely the sensible way forward is to give breathing space to enable proper study and consultation, as well as scrutiny from the House and the European Parliament before implementation is considered.
If reform is to take place, it should provide net benefits, and not hasty and precipitate action that could decimate existing successful businesses and throw hundreds of people out of work without providing any real tangible benefits—except, perhaps, to a small part of the sugar chain. I hope that the Minister will recognise the strength of feeling that is felt not only in the Chamber but throughout the country. We seek proper time for study and consultation; the Minister must stress that most strongly to our European partners.
11.6 am
Mr. Malcolm Moss: I congratulate my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) on securing the debate. I agree with my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) that such an important issue should have been discussed fully on the Floor of the House.
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The EBA proposals are completely incompatible with the continuation of the EU sugar regime. That regime should continue unchanged for at least two years until the entire arable sector is reviewed as part of a long-term review of the common agricultural policy.
Miss McIntosh: Will my hon. Friend press the Minister for a change in the legal basis, using her specialised knowledge of European affairs? I gather that the use of article 133 is the reason why the European Parliament could not effectively be involved in the procedure.
Mr. Moss: My hon. Friend makes a valid point and, hopefully, the Minister will deal with that issue when she responds to the debate.
In the immediate term, the Opposition oppose the Commission's proposed cuts in quota because, as has been said this morning, they discriminate against British producers.
Mr. Clifton-Brown: Does my hon. Friend agree that, if there are to be any cuts in the European Union sugar regime, no asymmetric cuts should be made whereby Britain bears a disproportionate burden?
Mr. Moss: I was about to make that very point. Only when surpluses have been exhausted should the quota of countries such as the United Kingdom, which does not produce a surplus, be cut.
The Conservative party supports an increase in free trade with less-developed countries. In principle, the everything but arms proposals are a move in that direction. However, it is vital that, before EBA is introduced, a full impact assessment is made of the effect of its introduction on producers in the European Union and ACP producers. In particular, the EBA proposals should not be introduced while the sugar regime remains unreformed.
Thirdly, it is outrageous that the EBA proposals are being slipped in through the back door. That point has been made many times this morning. It is vital that Parliaments in member states and the European Parliament have an opportunity to examine the proposals in full. Will the Minister assure us that the proposals may be put on hold, or that she will press for sugar to be excluded from them? A detailed, comprehensive and all-embracing consultation should commence with all the interested parties, and in particular with the ACP countries, which believe that they face ruin if the proposals go ahead.
11.10 am
The Minister of State, Ministry of Agriculture, Fisheries and Food (Ms Joyce Quin): This morning, I listened to "Yesterday in Parliament", in which this Chamber was described as a venue for raising issues of local concern. The speech made by the right hon. Member for South-West Norfolk (Mrs. Shephard) reminded us powerfully of her concern for her constituency and constituents. However, it is clear from the wide-ranging nature of the debate that the issue is

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one of not only local but national and international concern. I welcome the way in which hon. Members have approached this serious and important issue.
Members have made use of a wealth of detail, but I will first make some important general points. I emphasise very strongly that the Government understand the depth of concern among United Kingdom sugar interests about the proposals. Those interests include the beet and cane industry referred to by my hon. Friend the Member for Poplar and Canning Town (Mr. Fitzpatrick). I should mention, too, our long-standing commitments to ACP countries and friends mentioned by my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott).
We recognise that the proposals are being made at a time when agriculture has gone through a series of acute difficulties. My hon. Friend the Member for Braintree (Mr. Hurst) referred to the prospect of further change and upheaval. Currency movements have decreased returns from sugar and other crops, as the right hon. Member for South Norfolk (Mr. MacGregor) said. In addition, as the hon. Member for Vale of York (Miss McIntosh) said, the industry has been affected by recent bad weather.
Miss McIntosh: Why has the European Parliament not been involved in the matter, given that it has a joint assembly with the ACP countries?
Ms Quin: I am coming to that point.
Many people think that the Government should resist the proposals because of the pressures to the industry. However, we should consider the proposals in a broad context; they may contain threats, but opportunities exist also.
Hon. Members referred to contacts between the Government and the various sugar interests involved. My hon. Friend the Member for North-West Norfolk (Dr. Turner) referred to the visit that I made to his constituency in the past week, when I met several sugar beet producers and people working in related jobs, including those employed by an innovative cleaner-loader firm. I assure hon. Members that I am in regular discussion with representatives from across the industry.
The right hon. Member for South-West Norfolk mentioned that I hoped to visit Wissington, in her constituency. I set out for Wissington two weeks ago; after four hours, I managed to get as far as Darlington before I abandoned the effort. That is bad progress for someone who is coming from Tyneside. I am meeting representatives of British Sugar this afternoon, and I was hoping to visit Wissington today. However, the timing of this none the less welcome debate meant that it was impossible to get there and back in the time available, so the visit was postponed. I have also recently visited Tate and Lyle, and discussed the issue with the company. I have observed its facilities and operation at Silvertown. A number of contacts have therefore taken place, and, like other Ministers, I have received a great deal of correspondence on the issue, to which we are responding.
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Several hon. Members mentioned the procedures involved in the way in which the everything but arms proposal was introduced, and the parallel procedures relating to the Commission's proposals on the reform of the sugar regime. First, a number of references were made to the role of the General Affairs Council and the responsibility of Ministers other than agriculture Ministers in the process. Having served on the General Affairs Council, I assure hon. Members that Ministers who attend it liaise with their colleagues across Government. The council does not act in isolation from other councils, and British Ministers on the council do not act in isolation from Government consideration of the issues. I have batted for Britain on the issue of bananas, in relation to which, as the right hon. Member for South-West Norfolk pointed out, we have an important ACP consideration to take into account. I therefore would not want to give the impression that there is not co-ordination across Government on the issue.
The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) said that the Agriculture Council had not discussed the issue. That is not the case. The Agriculture Council had its initial discussion of the Commission's proposals for reform of the sugar regime at its October meeting. I and other Ministers referred to the inconsistency between the Commission's proposals on reform of the sugar regime and the everything but arms proposal. Several Ministers referred to that point, about which there was considerable discussion. In the General Affairs Council and the Agriculture Council, it was pointed out that impact studies were needed on a number of specific areas. The General Affairs Council will certainly want the impact study to be properly discussed and considered, and British Ministers will make that point. In relation to proposals for the reform of the sugar regime, the Commission proposes to make a number of studies of competition in the European Union sugar industry, and of the transmission of cuts in sugar prices to consumers, which the right hon. and learned Member for Sleaford and North Hykeham mentioned. We shall press the Commission hard on those issues. I assure the hon. Gentleman that I do not have to wait for the red wine and patisseries to raise such issues.
Mr. Keith Simpson: The people who work in the sugar beet factory in my constituency, at Cantley, are worried about this issue, as are farmers. Is the Minister suggesting that there will be a period of consideration, or will the proposals be implemented?
Ms Quin: I am saying that the Commission must address the inconsistency between what is happening on the everything but arms proposal and the related proposals on reform of the sugar regime, which are modest by comparison. The Commission must provide information and impact studies on a number of areas. We are looking at those closely to ensure that our concerns are addressed. The right hon. and learned Member for Sleaford and North Hykeham mentioned other countries in the European Union and their attitude to the issue. Those countries with important and large-scale sugar industries are also raising their concerns, and the Commission must address them.
Mr. Hogg: I am sure that hon. Members are grateful to the Minister for the way in which she has detailed her

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response. Ultimately, however, we still do not know what the Government will do at the General Affairs Council. Do the Government intend to exclude sugar from the EBA regime or not?
Ms Quin: We do not intend to exclude sugar from the EBA regime. To give effect to the EBA proposal, however, the consequences for the European sugar industry and for our legal obligations to the ACP countries need to be taken into account. In relation to the Commission's transition proposals for the next three years, we must consider in detail the impact on those two issues.
Several hon. Members rose—
Ms Quin: Hon. Members are seeking to intervene, but I have only a few minutes in which to respond. I shall give way to my hon. Friend the. Member for Hackney, North and Stoke Newington. I apologise to the right hon. Member for South-West Norfolk, who introduced the debate, but she has at least had the opportunity to speak at length.
Ms Abbott: The Minister will be aware of the great concern in the Caribbean about EBA in relation to sugar, bananas and rum. Everybody knows that change is inevitable; the issue is the time scale. We have been briefed to the effect that it is intended that EBA be brought into operation by December. That is regarded with horror in the Caribbean. Will she provide assurances about the time scale?
Ms Quin: The Commission proposal envisaged a three-year phase-in to allow more access to the sugar regime for less-developed countries. In view of the interest in this point, it might help if I were to place a letter in the Library to provide hon. Members with information. I imagine that the Commission's documents are already in the public domain. Given the nature of hon. Members' questions, however, some of their concerns seem not to have been addressed.
Mr. David Curry: Will the Minister give way?
Ms Quin: Before I give way to the right hon. Gentleman, I shall refer to the point about the European Parliament, which several hon. Members mentioned. External trade matters under article 133, to which the hon. Member for Vale of York referred, do not involve consultation of the European Parliament. The right hon. Member for Skipton and Ripon (Mr. Curry) was, like me, a Member of the European Parliament for several years.
When the European Parliament is not formally consulted on a proposal, there are other ways in which the matter can be raised, whether through own-initiative procedures or through the fact that European Commissioners attend the European Parliament and answer questions during Question Time. In addition, MEPs are consulted on the sugar reform proposals. As the everything but arms proposal has a direct read-across to the Commission sugar reform proposals, matters can be raised in that context.
Mr. Curry: I appreciate the difficulty of being a Minister in one Department, in an area in which several
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Departments have a legitimate interest. I do not want to misunderstand what the Minister is saying. The impression that I have formed is that the Government are in favour of the proposals in principle, but that that might change, depending on what an impact study reveals. Is that a correct interpretation of the Government's position? Will the Foreign Secretary say to the General Affairs Council that the Government are in favour of the proposals subject, perhaps, to certain niggles and transitional periods, or do the Government take the position that it is a bad proposal both for the ACP countries and for our own industry? If he says that, will he find allies? I do not want to commit the Minister to giving an impression that she may not intend.
Ms Quin: The principle of access for least developed countries has guided the Government in our approach to trade issues. We recognise, however, that in the case of products such as sugar, we must be clear about the effects on a range of interests, including other developing countries that could lose out heavily under the proposals. That is why we are pressing for the impact studies along the lines that I suggest.
Mr. Curry: If the studies reveal a severely adverse impact, is it a fair interpretation of the Government's position to say that they do not rule out demanding that sugar be exempted?
Ms Quin: The right hon. Gentleman is asking me to respond to a hypothetical question, which is a dangerous thing for a Government to do, especially when a number of Departments are involved, as he rightly pointed out. We must ensure that change is evolutionary, not revolutionary. We are not against change or the principle of access for less developed countries, but we are against creating turbulence that would cause huge upheaval in the European Union or that would have an enormous effect on ACP countries.
It is not the principle that we are contesting. Indeed, as my hon. Friend the Member for North-West Norfolk mentioned, the principle is something about which there is world agreement. Rather, the practical effects must be fully taken into account.
Several hon. Members rose—
Ms Quin: I will not give way again because I have already done so on several occasions.
My hon. Friend the Parliamentary Secretary, Privy Council Office, who is now present, was referred to by a number of colleagues in the course of the debate. I accept the point that he made yesterday—that we are dealing with international proposals that could have a very real impact on farmers in his area of Nottinghamshire as well as in Norfolk and, indeed, the west midlands and other parts of the country. Reform of the sugar regime was strongly supported by the previous as well as the current Government; indeed, the right hon. Lady who introduced the debate is on record as having spoken up strongly in favour of it on a number of occasions.
However, I accept that in looking at reform, British Ministers have a responsibility to assess it and to ensure that it does not discriminate against UK interests. The

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point must be made strongly. As the hon. Member for Cotswold (Mr. Clifton-Brown) mentioned, it is our responsibility to ensure a non-discriminatory effect as far as the UK is concerned. We must also ensure that there is a balance between beet interests and cane interests, to which my hon. Friend the Member for Poplar and Canning Town referred.
Mr. Nick Hawkins: Will the Minister give way?
Ms Quin: No, I will not give way as I have only one minute left. I want to make it clear that the
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Government—and that includes all the Departments responsible—are mindful of the interests of beet and of cane sugar, and of the sugar-using industries, which should also be mentioned in this context. Some big food companies in the UK have written to us in support of reform. We must also be mindful of the interests of the consumer. Because of all those interests, there is a complicated balance to strike. We do not intend to do that by sacrificing one interest for the benefit of others. We must move forward in a way that meets the concerns that were expressed by right hon. and hon. Members from all parties.

Cornish Students (Allowances)
11.30 am
Mr. Matthew Taylor: I start by saying that I have a bad cough. If I descend into a coughing fit, I hope that the Minister will intervene briefly to help me out.
I want to raise a serious issue that I have discussed with Ministers over the past few months, which is badly affecting a group of people whom I would have thought the Government would most want to help.
The educational maintenance allowance scheme is currently being piloted, and Cornwall has been a pilot area from the beginning—rightly, because it is an area of very low incomes and high need. Liberal Democrats strongly support the process of giving assistance to 16 to 19-year-olds to enable them to go to college and continue their education in the county in which their parents are on low incomes and find it difficult to support them. That is in line with proposals that we made, and I was delighted to see the scheme piloted in Cornwall.
The scheme is targeted at people from low-income families to encourage them to stay on full-time at school or college and to attend regularly. The Department has described it as a genuine experiment to test whether paying a weekly allowance increases post-16 participation, retention and achievement. According to Cornwall local education authority, it has been extremely successful. The authority told me:
The EMA Scheme is of great benefit to Cornish students and their families who are receiving financial support at a level which enables them to access further education and which could not have been provided from the Authority's diminishing discretionary awards budget.
A substantial number of students in the county are receiving such support; nationally, some 14,000 young people are benefiting.
It should be clear from what I have said that I have no disagreement with the principle of the scheme; I welcome it and believe in its importance. I requested the debate because a specific problem has hit some of the county's neediest families this year. Initially, I assumed it to be a result of a direct change in the rules. More accurately, however, it stems from the fact that, last year, Cornwall local education authority decided to interpret the rules in a certain way—legitimate and right in the context of the needs and circumstances of single-parent families—and the Department's officials told it that it could not continue to do so this year.
Last year, in the first year of the scheme, the LEA took the absent parent's income into account if the income was known and declared in accordance with the regulations. If the absent parent was paying maintenance—for example, through the Child Support Agency—the eligibility of the student for support was assessed taking into account the amounts that were paid and not the income of the absent parent, which might bear no relation to the amounts paid. In cases where income was not known but maintenance was being paid, evidence of the maintenance was taken into account.
When a family has broken up and one parent is absent, perhaps never having been part of the family unit, the absent parent—often a man, but not always—is frequently on a much higher income than the parent
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who is caring for the young person. Taking the absent parent's income into account can lead either to a substantial drop in the allowance payable or—if it takes the joint income to over £30,000 a year—nothing being paid at all.
At the beginning of this academic year, the Department told the county that it was unlawful to take maintenance payments into consideration and that the absent parent's income had to be included in the calculation where it was known. In 1999-2000, some 3,500 students in Cornwall received EMA, 75 per cent. of whom receiving the full amount. However, some 123 current cases have been refused because both parental incomes were taken into account and the £30,000 threshold was thereby crossed. Of those 123 cases, 55 received EMA last year, so in terms of payments made, new and existing students have been affected.
Cornwall education department confirmed what parents have been saying. It stated that the provision
has caused financial hardship to this group of students whose single earning parent may be on the lowest of incomes.
I want to make clear to the Minister what is happening. This is an example of Government thinking that is in no way joined up. In many cases, the CSA is already assessing the absent parent for a contribution. All Members, including the Minister, will be aware of the controversy surrounding CSA assessments. The EMA system assumes that the absent parent will, in some cases, pay substantially more than any CSA assessment. However, the parent with care and the student have no means of requiring that payment, so there is no way to obtain the money if the absent parent refuses to pay. If the Minister's work load of CSA cases is anything like mine, he will know that many such people refuse to pay. Either they are not co-operating with their former partner and family, or they claim that they cannot afford the payments. Moreover, there is no other system for accessing such money.
The CSA system specifies a particular amount—which was established by the Government—that the absent parent should contribute, but the EMA system specifies a different amount. Why do those amounts differ, and how will the absent parent be forced to pay? To put it simply, they cannot be forced, and some of the most needy people are being left without support.
I want to discuss some of the people who have written to me on this issue. I shall not mention their names, although I have given details on a substantial number of these cases to the Minister. In the first case, the parent with care said:
My own situation is this. I am divorced with three dependent children who all have the same father. I work part-time as a nurse and receive the maximum amount of working families tax credit to bring my salary up to a living wage.
My ex-husband earns a great deal more than I do and, under the terms of my divorce settlement pays the mortgage on the property in which I and the children live. I get no other financial help from him or anyone. As you may imagine, money is extremely tight and it is a struggle to get by each month. When my eldest son was considering his options post-GCSE, I was told of the EMA scheme and that, due to my financial circumstances, he would almost certainly be eligible for this. It has come as a bitter blow to learn that he will not be able to get this help. It has left me wondering if I will be able to let him continue his A-level studies due to the expense involved.
I do understand the basic principle under which the EMA operates—that of parental responsibility—and that is all well and good if both parents accept that responsibility. In my own

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situation it is of no help at all. I understood that one of the purposes of the EMA scheme was to encourage young people to stay on in further education and realise their potential. My son achieved 10 GCSEs—seven of them at grade A—and now there is the very real possibility that I will have to withdraw him from college study.
In the second case, the parent with care—who earns just £106 a week—said:
I have recently been informed that my son won't be in receipt of this allowance because his father earns too much. My son lives with me and his father is absent, I am unable to work because I am disabled and so I am in receipt of income support and disability living allowance. We live on the bread-line, scraping by each week.
My son's father pays Child support each week that is paid to the Child Support Agency—I do not receive this money in addition to my income support…
From the income we have I am already paying £75 per term for his bus fares to and from college and also money for courses he needs to do which adds up to about £5 a week, then there is money for his lunch each day…£10 per week…My son was going to pay these from his allowance every week.
If this allowance was meant as an incentive to keep young adults in further education it won't work. My son will now be feeling the need to not be a burden on our already stretched budget. What am I supposed to tell him?
In the third case, the parent with care said:
I am a single parent working part-time and claiming working families tax credit and also Housing Benefit. I also receive maintenance for my daughter from her father via the CSA.
On my total income, Karen should have been entitled to the full amount of EMA which is £30 a week, but because of the unfair way in which it is calculated, Karen will only be receiving £18.15 a week, a drop of almost 45 per cent. The rule that governs this drop is because her father's income has to be taken into account, regardless of whether the father is still at home or divorced or separated. It makes no difference to them, which is totally ridiculous…
I have spoken with the CSA—
as, incidentally, have many of these people, who thought that, if the EMA system assumes that the father should pay more, they can get the extra money from the CSA—
and according to their rules he is already contributing the maximum that the law allows, so how can the EMA expect him to pay another £12 a week and not even make it compulsory.
I feel the system is totally unjust…There isn't even an appeal system in place. The only thing I was told I could do was to write and complain and maybe things will change next year—but what use will that be to us?
I have encouraged Karen to stay on in further education (as I believe the Government has also encouraged) but with the mounting cost of books etc. required for the course I am uncertain whether I will be able to afford for her to complete the course.
In the final case, the parent with care said:
I understand from the young lady on the telephone that the Government has now decided that my ex-husband's income must now be taken into account when calculating my daughter's EMA, despite the fact that I have sent you a Court Order as proof that all we receive frm my ex-husband is £15 per week maintenance…
It is incredulous that an income which I do not receive can be used in any calculation to assess my income and used as a basis for calculating my daughter's EMA. I see that for my daughter to receive the amount of £17.59 my income has been assessed as between £20,000-£22,000 and, as you can see from my application form, my income does not even reach the minimum, so surely it is grossly unfair to penalise my daughter for her father's income which we do not benefit from. He has a new family now and they benefit from his income, not us.
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Those cases illustrate several key points. First, it has been suggested that the EMA is up for review, and although it will not be changed this year, it might be changed next year. However, the problem is that the EMA is currently affecting people at college who have to decide whether they can afford to stay on. In one case that I have taken up, a child had to withdraw from college as result of that inaction. Incidentally, they withdrew not because the parent wanted them to, but because the child felt unable to continue to ask for support from a parent who was on benefits and unable to support them adequately.
Secondly, the cases that we are discussing concern single parents on low incomes. They are not on sizeable incomes, and cannot afford to make a contribution. Obviously, the people that I have discussed are extremely needy—indeed, they are the very people that the scheme is aimed at—which is why the Liberal Democrat party welcomed the scheme in the first place. Presumably, if the Government thought that the payments were unnecessary, they would not have introduced the scheme.

Thirdly, we are not talking about attempts by parents with care to protect absent parents from making payments. If they could get the money from absent parents, they would. In many of these cases, the family circumstances are such that the parents are not on speaking terms, and where they are speaking the terms are not polite. As a result, the parent with care cannot extract money from their former partner. Several of my constituents have approached the CSA in an attempt to force absent parents to make up the difference. The CSA said that absent parents should make up the difference, but that it had already assessed them at the maximum amount. As I suggested to the Minister, that begs the question why the Department for Education and Employment says that absent parents should pay more than the Child Support Agency requires them to pay. If the CSA believed that they could pay more and that it was right to do so, it would ask for more. One Department is saying that absent parents are paying as much as is reasonable and another is saying that they should pay more towards maintenance.
The Government's policies are contradictory, but it is worse than that. When absent parents have been assessed by the Child Support Agency, they will say volubly that they have been assessed and are paying as much as they should. If the parents with care then say that the Government require another £15 to be paid, the parents without care will refer back to the CSA assessment. Without a CSA assessment, it might be possible to persuade absent parents to pay, but with a CSA assessment, it is almost guaranteed to be impossible because, not unnaturally, parents without care will say that they are already doing all that is required.
Ms Candy Atherton: I have a great deal of sympathy with the hon. Gentleman's arguments, but does he agree that there are other issues? For example, a student who does not attend for a full week does not receive a full week's payment. There is also the issue of non-sickness-related absence. A web site winner in my constituency could not

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come to Westminster for a day last week because his EMA would have been stopped. I hope that my hon. Friend the Minister will examine that.
Mr. Taylor: There are several issues but, to be fair, it is a pilot scheme and I am sure that all hon. Members in Cornwall have received similar comments from their constituents.
I sought a meeting with the Minister's Department but, unfortunately, my request was declined. I am pressing the matter because the Government's policy seems to contradict their policy in other Departments. Losing money for a week or two because of sickness may be annoying, and the policy hits some of the neediest parents and students from difficult backgrounds for whom the educational opportunities for 16 to 19-yearolds are the gateway to breaking away from those difficulties in their families. I hope that the Minister will consider whether something can be done about this genuine issue this year.
I first raised the matter at the start of term. We are now well into the term, but some people are hanging on in the hope that there will be a satisfactory resolution of the problem. The Government have accepted the case when CSA payments are not being made and I hope that, having made one change, they can make a slightly more substantial change. The problem affects around 123 students; that is not a vast number, but it is important for them.
Mr. Andrew George: Although there are only a few such cases, does my hon. Friend agree that it would be helpful if the Minister could engage local Members of Parliament in the review because they have a lot of casework that could help in completing that review?
Mr. Taylor: That is why I proposed a meeting, but I hope that this debate will have the same effect.
11.48 am
The Parliamentary Under-Secretary of State for Education and Employment (Mr. Malcolm Wicks): I am grateful to the hon. Member for Truro and St. Austell (Mr. Taylor) for raising this important matter. We are actively involved with it, not least because it is a pilot scheme, and I am happy to meet the hon. Gentleman and his hon. Friends at any time to discuss it. We need to balance the strategy and principle with the casework that we all receive.
I shall start by commenting generally on educational maintenance allowances, not least in Cornwall, and then turn to the complex issues of equity. EMAs have the potential to make a real difference to the life chances of many thousands of young people. The hon. Gentleman acknowledged that we are only discussing the matter and the inevitable complexities of any means-tested scheme because there is a scheme in place. A year or two ago there was no scheme to discuss, so we are making progress. We are at an early stage. I know that there is more to be done, but we are encouraged by what we have seen so far.
I shall start with a reminder of why we introduced EMAs and the pilot scheme. It was simply because too many young people from certain socio-economic
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backgrounds left education at 16. More than 90 per cent. of young people from professional and managerial families stay in education or training after they are 16, compared with only 60 per cent. of those from unskilled and semi-skilled families. Many of those who leave school at that stage do so for financial reasons, as the hon. Member for Truro and St. Austell acknowledged. They feel that they cannot afford to stay on. Often there is family or peer pressure to get a job, sometimes any job. However, many of those young people end up doing nothing, or at best enter low-skilled work with little or no training and no real prospects. They do not have the opportunity to reach their potential. Many end up with severe long-term social and economic problems, and most never return to learning.
Of those who stay at school or college, too many drop out before the end of their courses and so do not achieve the qualifications for which they set out. Recent research showed that more than one third of college students considered dropping out of their courses for financial reasons. A similar proportion felt that they worked too hard in part-time jobs while they studied, and that that had adversely affected their studies. As a nation, we cannot afford to waste such talent.
Before we introduced EMAs, the system of financial support for young people was not good enough. It was inconsistent, unresponsive and mainly discretionary. Most young people received little or nothing. That was the background to our decision to pilot EMAs in 15 areas, including Cornwall, in September 1999.
Some 70,000 young people now benefit from EMAs. The first-year findings have been encouraging. Post-16 participation in EMA pilot areas went up by more than five percentage points, compared with two percentage points nationally. That was all the more impressive given that many year-11 students had already made up their minds what to do before they knew about the allowance. In Cornwall, more than 400 extra young people stayed on at school or college in 1999-2000 than in the previous year. I want to give the full information, so I should say that the extra take-up was rather less than in the country as a whole.
According to the 1999 careers service activity survey for post-16 participation in Cornwall, participation went up from 75.2 per cent. to 77.7 per cent., which is an increase of 2.5 per cent. When the hon. Gentleman and his colleagues come to see me, it might be interesting to discuss the situation in Cornwall.
Mr. Taylor: For the record, I should say that I spoke to the county council about participation, so I am aware of the facts. Participation levels were already quite high in Cornwall because of high unemployment. Some of those young people do not have the same opportunities to find jobs as young people in other parts of the country.
Mr. Wicks: That is an important factor. There might be an issue in Cornwall and other similar areas about retention, perhaps due to holiday jobs. Again, it would be useful to have such information. The schemes are pilots and we genuinely want to learn from them.
We have been even more encouraged by the fact that the allowance seems to be having such a major impact on students' attendance and effort. That is because it is

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a something for something measure, under which no money is paid for any week in which the student does not stick to the commitments in his learning agreement. The decision that my hon. Friend the Member for Falmouth and Camborne (Ms Atherton) mentioned seemed harsh, having an adverse effect on a young person who wanted to come to Westminster but I am afraid that the matter is for local discretion.
If the allowance is to be a success, we cannot be satisfied solely with increases in participation: they must be accompanied by improvements in retention and achievement. Many young people who qualify for the allowance may have stayed in education anyway, and we want to be sure that the allowance makes a positive difference to them. Early evidence suggests that it does, because they are attending more frequently and working harder.
I shall set out some more facts about the impact of the education maintenance allowance in Cornwall. More than 3,000 students in the county received the allowance during 1999-2000, and we expect that figure to double this year. More than two thirds received the maximum £30 a week. In 1999-2000, an extra £3 million went into the Cornish economy, and we estimate that it will be nearer £6 million this year.
I realise that the hon. Gentleman is particularly concerned about the question of natural parents, and I want to deal with that point. However, I do not pretend that we are at the end of the story; we are still listening and learning. For me, however, as an American baseball coach once said, it is déjá vu all over again. For 10 years, when I was directing the Family Policy Studies Centre, it was grappling with the complexity of a change in family structure and its implications for public policy. The general conclusion was that it is not easy to ensure equity. In an earlier era, I was a shadow Social Security Minister with some responsibility for child support and I recall that then, too, I had to grapple with those extraordinarily difficult issues.
We believe that it is just and fair that natural parents should continue to provide financial support for their children. It should not be for the Government—that means taxpayers, many of whom are themselves parents—to pick up the tab for absent parents who are perfectly capable of supporting their children financially
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but choose not to do so. As a general principle of social policy, most of us would subscribe to that view, but translating the principle into practice is not always easy.
I understand the concern that we should take the full income into account rather than only the maintenance payments. The reason is that maintenance, particularly when assessed by the CSA, merely reflects the contribution that the parents would have provided from income had the family stayed together. It is a matter of equity, because we obviously take account of the income of parents who support their children from within the family. We must consider the impact on the stable family of support being provided through the maintenance payment system.
In summary, education maintenance allowances are a radical approach to a difficult problem. The allowance already makes a real difference for many people, in Cornwall and elsewhere. We must move to a national system that takes account of such complex issues. With regard to student finance—a not unconnected matter, in which my Department needs to be more consistent—we must remember that we do not take account of the absent parent's income. The Department receives letters from concerned Members of Parliament writing on behalf of constituents in stable families who ask why they do not have access to free tuition fees when, further down the road, a family is receiving free tuition fees because the father has left the home, despite the fact that he may have a high income and that he may be supporting his family by the back door. It is such questions of equity, which the hon. Gentleman did not touch on, that we need to grapple with.
Mr. Taylor: The key difference, if the CSA enforces the rule, is that the parent with care has no access to the money if the absent parent says no. Will the Minister hold open the possibility of some change this year?
Mr. Wicks: The pilot took a fairly simple means-tested approach, under which both incomes were taken into account. However, if no maintenance is being provided, despite intervention from the CSA, we will not penalise the young people. In such circumstances, only the caring parent's income will be assessed.
I repeat that the pilot affects only a third of the country. We are learning a lot. The EMA system is a great success but we are considering some of the crucial, technical issues that affect people, not least the matter of absent parents. I am happy to meet any hon. Members in this regard and would welcome their advice on achieving the right result for this complex issue.

Coastal Environment (Eastern Region)
12 noon
Mr. Bob Blizzard: I fear that I shall have to test the microphone system to its limit this morning, but I hope that you, Mr. O'Hara, and other hon. Members, will bear with me and my cold-affected voice.
I am grateful for the opportunity to discuss this subject. It is an appropriate moment for such a debate, as the world's nations are in the Hague deliberating on climate change and global warming. As inhabitants of an island, people in this country cannot but be concerned about rising sea levels, and in East Anglia, which is a low-lying peninsula, we need to be more aware of the consequences than most. However, I regard myself as fortunate to represent a constituency in coastal East Anglia.
One of the best things about the East Anglian coast is the great value of its wildlife, which is much enjoyed by many of my constituents and by the growing number of visitors. There are wonderful wetland nature reserves to visit on the Norfolk and Suffolk coasts, which happily bring in much-needed revenue and provide jobs, benefiting the local economies. Much of East Anglia's coast is estuary. The Wash in Lincolnshire and estuaries in Essex and Suffolk are, with hundreds of thousands of wintering wading birds and wildfowl, internationally important for wildlife.
As the Environment Ministers of the world ponder climate change, many people in this country clear up after the floods and wonder whether there is a link. It is not appreciated as widely as it could be that climate change is already having a tangible, measurable effect, in rising sea levels and coastal erosion in eastern England. I want to describe the effect of that process on the coast and estuaries of eastern England and what is being done in response, and to discuss future action.
Above all, we need a much speedier programme to create new inter-tidal habitats, salt marshes and mud flats. Eastern England is sinking and the high tide mark is moving progressively landwards. The most recent predictions are that the relative sea-level rise in the east of England will be between 21 cm and 76 cm by the 2050s. Coasts are, and always have been, places of dynamic change. Erosion in one place leads to accretion elsewhere, which is in part how the landscape and wildlife value of the coast has been created by the sea.
I may have the only coastal constituency in the east of England that is actually getting bigger. On the credit side, at Kessingland Ness, there is an accreting shingle area, which is moving northwards into my constituency and growing faster than anywhere else in the country. On the debit side, the cliffs at Pakefield, like sand cliffs elsewhere, are eroding, as they are at Corton. I know that my hon. Friend the Minister has fond memories of Pakefield from younger days. If he returned there today he would find that the sea is somewhat closer to the establishment where he once worked.
If left alone, the profit and loss account for the coast and its wildlife habitats would, broadly speaking, break even. Normally, with rising sea levels, the coastal habitats would move inland. However, the coast of eastern England is no longer a pristine wilderness. Intertidal mud flats, sand flats and salt marshes are squeezed
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and eroded between fixed flood defences and rising sea levels. That process is exacerbated by increasing storminess. Freshwater habitats and coastal lagoons, often on famous bird reserves such as Minsmere in Suffolk, and Cley and Titchwell Marsh reserves in Norfolk, are more prone to salt water flooding, and in the long term are unlikely to survive where that happens.
The impact of what I have described is not always easy to see. The most obvious aspect of coastal losses on many estuaries is erosion of salt marshes. Salt marshes are expanses of vegetation, such as sea purslane, salt marsh grass and sea lavender, adapted to periodic salt water flooding. They are a valuable wildlife habitat. For example, redshanks nest on salt marshes in high density. Above all they are a scarce habitat. Some 12,500 hectares between north Lincolnshire and the Thames constitute a third of the UK's salt marshes. They are home to more than a million wildfowl and wading birds. When the last national survey was done, Essex alone had 10 per cent. of Europe's salt marshes, but erosion in recent years has reduced that to 7 or 8 per cent. That sounds like a rapid loss, and indeed it is. Net losses of salt marsh on the Essex estuaries between 1973 and 1998 ranged between 12 per cent. at best on the Colne estuary to 59 per cent. on the Stour estuary. Erosion on the Stour has been exacerbated by dredging in Harwich haven. The figures paint a bleak picture.
The projections for the loss of coastal habitats in eastern England are worrying. It is predicted that 31 per cent. of salt marshes and 37 per cent. of coastal lagoons will be lost by 2050. It is generally true that what is scarce is precious, and that is no less so in the natural world. The value of those habitats goes beyond the value of biodiversity. It is important to take action on biodiversity grounds alone, but the loss of salt marshes also has an impact on coastal defences because they bind together sediments, absorb and dissipate the force of the sea and reduce risks to people and development. Their economic value for flood and coastal defence is huge—a sea wall may cost up to 10 times more to build if it does not benefit from a wide fringe of salt marsh in front of it. They also have a value for tourism. For example, visitor spending linked to Cley and Titchwell nature reserves totals £4.3 million a year, supporting the equivalent of 91 jobs.
Dr. George Turner: My hon. Friend raises some serious issues. He mentioned Titchwell, which is in my constituency and has 100,000 visitors a year. The constituency has many other visitors who want to use coastal resources. Does he accept that as well as looking to nature we must also protect people? Work on the sea defences is very important. Does he understand the concern of my constituents in Heacham and Hunstanton that, despite four years of debate and discussion, the sea defence work has still not been started? We have not even had a decision.
Mr. Blizzard: I thank my hon. Friend for that intervention. I must emphasise that this is an environment debate rather than a Ministry of Agriculture, Fisheries and Food debate, so I have to be careful. Coastal habitats can provide an important element of coastal defence. However, they are no good on their own—we clearly need other measures.

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Another value of coastal ecosystems is that they provide a source of food and shelter for commercially exploited shellfish stocks, which I believe are also important in my hon. Friend's constituency. Those ecosystems play a critical role in maintaining water quality, because they lock up and process pesticides and other pollutants that come off the land.
Coastal habitats are vanishing at a frightening rate, with drastic implications for the wildlife that depends on them and for sea defences—and for the people and businesses that depend on the wildlife or the sea defences. All that has serious implications for our best wildlife sites. Most of the coastal areas of east England are designated as internationally important wildlife sites—special protection areas under the European Union's bird directive, internationally important wetlands under the Ramsar convention and candidate special areas for conservation under the EU's habitats directive. Those designations carry obligations, one of which is to maintain the overall coherence of the Natura 2000 network. That is EU jargon for protecting and maintaining our internationally important wildlife sites.
The overall coherence idea is useful. We must recognise that as coasts change there will be losses in some areas, and the challenge is to ensure that they are equalled or exceeded by gains elsewhere. Losing coastal habitats is not inevitable. New habitats can be created by working with coastal processes. That goes under the fancy name of managed realignment. It is already happening, but not nearly enough. There are many historic examples of unplanned retreats or realignments of the coast that have created excellent habitats, but we should not rely on accidental breaches to create them. There may not be enough, they may damage freshwater habitats behind sea walls, or they may threaten life and property.
Combining sound economics engineering and environmental practice, especially on the Essex coast, has led to several managed realignment and foreshore recharge projects. Foreshore recharge involves spraying harbour dredgings of sand and gravel on to vulnerable parts of the coast, which is an experimental but increasingly successful way of re-cycling valuable sediments, although it is unlikely to be a widespread or long-term solution to coastal erosion. Both managed realignment and foreshore recharge create soft sea defences and wildlife habitats, so how can we achieve more of them?
A recent study undertaken by the Royal Society for the Protection of Birds showed that the greatest potential for inter-tidal habitat creation is on the Wash and the Essex coast. The RSPB identified 6,664 hectares of land on the coast of eastern England where inter-tidal habitat creation may be a realistic option. An example of that is the 65 hectares of salt marsh that are being created at Freiston Shore on the Wash in a partnership between the Environment Agency, the Prison Service and the RSPB, but even that took six years to come to fruition.
Unfortunately, less than 100 hectares of new habitat have been created in the past 10 years, while more than 10 times that figure has been lost to coastal squeeze. A university of Newcastle report, commissioned by the Environment Agency, states:
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The annual amount of salt marsh re-creation required in order simply to make good anticipated losses from this day forward is greater than the total amount of managed salt marsh re-creation that had by 1998 been undertaken in Essex.
That is so, despite international recognition for the coast's wildlife value and the obligations under the European Union's habitats directive to "avoid deterioration" of key habitats.
Government Departments and agencies are planning, step by step, to manage the coast more sustainably. New guidance PPG 25 is being prepared on development in areas at risk of flooding. That needs to take account of when realigning the coast is the way forward. In the longer term, some development may need to be moved out of the flood risk zone. The Ministry of Agriculture, Fisheries and Food has agreed that there will be grant aid for sea defences for internationally important freshwater wetlands, when it is practicable to protect them in situ. It is recognised that, when losses occur, new habitats will have to be created elsewhere. That principle has been applied already at Burnham Norton in the constituency of my hon. Friend the Member for North-West Norfolk (Mr. Turner) and will further benefit Cley Marshes in the constituency of the hon. Member for North Norfolk (Mr. Prior).
The Environment Agency and English Nature are preparing coastal habitat management plans—ChaMPs—for key coastal sites, which should start to tackle the need to create new habitats. However, creation of new habitats takes time from planning to reality, so much more needs to be done or the losses will continue to outweigh the gains. A much faster programme of action in the future is needed to keep pace with coastal change. Actions have been proposed by the RSPB, the wildlife trusts for Norfolk and Suffolk, the National Trust and the Worldwide Fund for Nature, which is campaigning most effectively on the issue. It is proposed to give greater recognition to the value of coastal habitats. Our flood defence strategy should give greater weight in project planning and appraisal to the multiple benefits that arise from healthy coastal habitats.
It is proposed to undertake extensive hydrodynamics studies to inform action. We urgently need them to show where it will be beneficial to create new inter-tidal habitats. We must provide effective mechanisms to create such habitats. The new inter-tidal habitat component of countryside stewardship needs to be effectively targeted and resourced to promote uptake. In addition, the Government should grant aid land purchase in conjunction with flood defence schemes when that will increase the sustainability of the coastal defence and contribute to the delivery of the United Kingdom biodiversity action plan targets.
We need to show what inter-tidal habitat creation means in practice. Such projects in Essex have highlighted the importance of demonstration sites to show habitat creation in practice to local people and organisations. Those sites increase the understanding and acceptability of sustainable coastal management. Site projects are vital to a change in attitudes, so that inter-tidal habitat creation becomes widely accepted. We need supportive land use planning policies in regional planning guidance, country structure plans and local plans that recognise the need for the creation of inter-tidal habitats and presume against development in

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areas at risk of flooding and suitable for habitat creation. I hope that the Department for the Environment, Transport and the Regions will give guidance to planning inspectors to take a firm line when they examine the plans produced by local authorities.
In August 1998, the Select Committee on Agriculture expressed support for that approach, and in responding to the Committee's report the Government agreed that the response to sea-level rise should not be the construction of ever higher defences that commit future generations to unsustainable levels of investment. The Government's strategy for sustainable development "Quality of Life Counts", published in 1999, determined the indicators. It was significant that the rise in global temperature, sea level rise and biodiversity in UK coastal areas were all defined as core indicators, with wild bird population being a headline indicator.
Evidence suggests that the Government understand and are willing to act. However, time is running out. All the signs suggest that such a strategy for coastal defence would be economically as well as environmentally efficient. It is certainly helpful that coastal defence and environmental needs are moving in the same direction, but we should go further than the practicalities of what is best for coastal defence. With past losses still to catch up on, and year-on-year erosion of internationally important wildlife habitats on the coast, we need a coordinated drive to create new coastal habitats. That should involve all Government Departments, the Environment Agency, English Nature and other agencies. Anything short of that and the value of the coast for wildlife and people will continue to decline.
Whatever is agreed this week at the Hague will be for the long term. Reversing climate change will take a long time. It is the ultimate supertanker to turn around, if indeed it can be reversed; perhaps it can only be slowed. That is why we need action on coastal habitats as a matter of urgency.
12.16 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Chris Mullin): I have a distant acquaintance with my hon. Friend's constituency, having worked there as a waiter at Pontin's 33 years ago. Since then my career has nose-dived.
My hon. Friend raises an aspect of what is surely one of the most important long-term issues with which we will have to grapple in the coming years—the impact of climate change on our natural environment. As he said, it is especially appropriate that we are debating this matter in the week when discussions are taking place in the Hague.
I emphasise that a great deal of work is already in hand, as my hon. Friend acknowledged. Whatever the outcome of current discussions in the Hague, we have concluded that we must prepare for some inevitable climate change in the coming decades and put in place the most effective responses to what we judge to be its most likely effects. Anyone who needed convincing about the scale of the problem need only have watched the recent "Panorama" programme on the floods.
The impact of climate change on our biodiversity is a major issue. My Department, the Ministry of Agriculture, Fisheries and Food and English Nature are
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all focusing on that issue as part of our extensive research programme on the effects of climate change. Only a couple of weeks ago, the DETR sponsored a wide-ranging workshop on the subject that brought together all the major interests involved.
I shall discuss three aspects. A project on climate change and nature conservation that is being carried out for us by the consultants ADAS and is sponsored jointly by my Department and MAFF is considering the species and habitats most likely to be affected by climate change, along with possible policy responses. One of the environments that it identified as most vulnerable is the soft coastal habitats to which my hon. Friend referred, which are typical of the part of the country that he represents. Such habitats are vulnerable because of the direct impact of sea level rise and the effects of greater storm frequencies that we expect to accompany climate change. Our responses to other impacts may add to the pressures on them. The need to respond to the increased possibility of floods may aggravate the processes of natural change. The final report of the project was published only last Friday.
We are also considering the specific effects of climate change on biodiversity through two complementary projects. First, the Monarch project, which is being carried out by a consortium of nature conservation agencies throughout the British Isles, is considering possible specific responses to the impact of changes on key species and habitats. Secondly, the Regis project, run by the Ministry of Agriculture, Fisheries and Food, is examining the broader impact of climate change on two test regions, one of which is East Anglia. We expect the results of both projects to be published in early spring next year.
That work will assist us to develop strategies to cope with the effects of climate change on biodiversity. However, I am aware that we already have evidence for that change. My hon. Friend referred to the situation on the east coast, graphically described in the report produced by the Royal Society for the Protection of Birds, the World Wildlife Fund and the wildlife trusts. That report highlights the consequences of the process for his part of the world, so I acknowledge that he does not exaggerate when he speaks of the drastic implications for wildlife. However, I believe that—belatedly, perhaps—we are developing the tools that may assist us to address the issues identified by the report.
We are well advanced in identifying and protecting habitats of national or international importance. In the next few months, we are hoping substantially to complete our contributions to the European Union's network of special areas of conservation and special protection areas under the directives on birds and habitats. I hope that my hon. Friend is aware of the policy statement, launched last week, on our commitment to internationally important wetlands, many of which are on the coast and notifiable under the Ramsar convention.
On the domestic front, the Countryside and Rights of Way Bill, which I hope will soon be on the statute book, will substantially strengthen the protection and management of our most valuable wildlife sites—those of special scientific importance. Furthermore, the biodiversity action plan identifies a series of priority coastal habitats. Last October, we published all the

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action plans dealing with those habitats. The plans are costed and contain medium-term targets over the next five to 10 years, including, where appropriate, for habitat recreation.
All those measures point to the fact that we are ensuring that coastal habitats are given the recognition that they deserve. We must also put in place better mechanisms for more effective interaction between coastal defence programmes and habitat protection. We have made a good start. The Ministry of Agriculture, Fisheries and Food already has a general policy towards coastal defence proposals of no loss of habitats covered by biodiversity action plan priorities.
Furthermore, we are considering the development of coastal habitat management plans to establish how we can better reconcile coastal change with our obligations to protect important habitats. Those plans are being implemented by English Nature and the Environment Agency, although Departments that have legal or funding responsibilities—especially my Department and the Ministry of Agriculture, Fisheries and Food—are also important partners. We have been heartened by the support given by a range of other interests, both commercial and conservation. Six pilot management plans are being undertaken: at west Sussex to the Solent, Dungeness to Pett levels, north Kent estuaries and marshes, Essex and Suffolk coast and estuaries and Winterton dunes. They are due for completion in 2001.
Coastal habitat management plans are designed to reflect the fact that we may not be able to defend every hectare of valuable coastal habitat that is under threat. We will need to take account of other issues, such as the proper protection of coastal towns and villages and human health and safety. The plans specifically address the potential for offsetting habitat creation when loss is inevitable. They provide the potential to construct a strategic policy for the management of coastal habitats as a response to climate change. We will look to those plans to provide important input into future revisions of MAFF's shoreline management plans and the proposals and policies of coastal defence authorities.
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Thirdly, we must address relationships to other policies. As my hon. Friend acknowledged, we are currently revising planning policy guidance note 25, which deals with development and flood risk, including coastal flooding. We hope to publish a revised PPG in the new year. We are also considering the need, in the long term, to revise PPG 20, which deals with more general coastal planning issues. That is in the context of continuing interest in integrated coastal zone management, which was stimulated by last month's European Union communication. We intend to respond positively in the new year.
I do not underestimate the difficulties that we face. I am aware that the difference between habitat loss and creation during the past decade has been unsatisfactory. I share my hon. Friend's view that only a programme of managed realignment can successfully address those problems. However, we must recognise that the procedures involved in any decision to realign existing coastal defences are bound to be complex—land long held by individuals or their families might be allowed to be flooded. We should not assume that our knowledge of the science underpinning the process of habitat creation is satisfactory. As my hon. Friend said, we need to understand the underlying hydrodynamic processes better. Under MAFF and the Environment Agency, extensive research is taking place into those issues.
I also agree that we must show how strategies can be turned into action through viable local pilot projects. We need to consider current policies and statutory processes in this country and in the context of our European obligations. Climate change is one of the issues being addressed by the European Environment Agency, and the United Kingdom is as well placed as any country to influence that work and its consequences for the provisions of European directives.
We may be faced with difficult decisions, but I assure my hon. Friend that we are taking steps to ensure that we take those decisions in the light of the best available scientific information. We have a clear obligation to protect important coastal habitats, and we are introducing measures that will give us the tools to cope with the pressures with which we are faced.
I therefore hope that some of what I have said will be of comfort to my hon. Friend. I thank him for raising such an important issue.

Post Office Closures
Mr. Steve Webb: I was among those present in Central hall, Westminster as the National Federation of Sub-Postmasters held its rally to mark the culmination of a nationwide campaign to try to address the long-term demise of the post office network. It is important to set the context of my remarks, as I do not wish to pretend or imply that the problem is of the current Government's making. Clearly, the decline of the network has been happening for decades, under Governments of both the larger parties. I sought this debate because of a sense that time is passing and not enough is being done. I want to provide the Minister with an opportunity to put on record what progress has been made. Various reports have been published and promises made, but the closures continue and—the Minister may correct me—appear to be accelerating.
My starting point for the debate—and my reason for seeking it—was the written answer given to me by the Minister on 2 November. According to that answer, 333 post offices had closed in the first six months of the current financial year. Shortly before arriving at this Chamber, I received a tip-off from a journalist that that was not the right answer, and that the Department had the wrong data from the Post Office. I was told that the figure was 'only—I say "only" with heavy irony, which does not translate well in Hansard—299 closures. Leaving aside the fact that I was slightly startled to receive such information from a journalist, not from the Department, the fundamental point is that post office closures are happening at an alarming rate. If anything, they are accelerating. I was puzzled by the Secretary of State's response to a written answer tabled by a Conservative Member on 17 November. He said:
Post office closures remain below past peak levels.—[Official Report, Westminster Hall, 17 November 2000; Vol. 356, c. 810W.]
That is true in the sense that, in the year ended March 2000, the high figure for closures was below one of the Conservative record years, but if the first half of this year is anything to go by, 300 closures, bar one, in the first six months, does not lend confidence. Indeed, although one cannot extrapolate to a full year with any certainty, there must be a fear that this could be one of the worst years ever for the Post Office.
What action has been taken so far? Since the rally in April, a petition initiated by the Western Daily Press and other newspapers attracted millions of signatures, which I believe that the Prime Minister received personally. Promises were made and expectations were raised. The performance and innovation unit reported in June and various responses were made, yet the closures continue. I cannot put it any better than the Minister put it in his letter to the chief executive of the Post Office on 17 November. He said:
A pre-requisite for the modernisation of the rural network is that there should be a network to modernise.
My worry is that, at the present rate of closures, there may be no network by the time that such new initiatives have come in place.
I refer to some of the initiatives promised by the Government and proposed in the PIU report, which were supposed to come to the rescue of the Post Office. I also draw the Minister's attention to a particular post office in my constituency at Oldbury-on-Severn, which
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is threatened with closure in the week before Christmas. I invite him to take a personal interest in that post office to make it a test case of whether the Government will prevent such closures from happening.
The Government have promised and the PIU report proposed that a universal bank was part of the answer to the problem—a universal bank designed to help people with no access to conventional bank accounts to obtain financial services and to benefit from discounts on direct debit, for example, that are not currently available to people without accounts. Such a product would clearly be a welcome innovation. If it brings people into post offices, so much the better. The PIU stated that the Post Office
needs to take forward rapidly more detailed work.
I hope that the Minister can give us a progress report because press leaks suggest that things are not going smoothly. Some underlying tensions about the idea are beginning to surface. The Post Office is being asked to provide a service that will cater for the unbanked, for people to whom commercial banks have said no to or for those who do not want conventional bank accounts. Yet, given that commercial banks are not interested in that section of the market, the Post Office will not find it viable only to cater for unbanked customers. Presumably, it will want a wider spread of customers. Indeed, there must be a wider spread to avoid its becoming the poor man's bank. It needs to be a universal bank, but that will make it a potential rival for the commercial banks. Such tension has been inherent in the negotiations. The Minister must tell us whether such a proposal is still on course. I am aware that it is not due to come into effect until 2003, but if it is being introduced to bring people into the post offices and save the network makes me wonder. As Colin Baker of the National Federation of Sub-Postmasters said, the need exists now—can we wait until 2003?
The Minister and the Government have talked about two kinds of subsidies: subsidies to deprived urban areas and subsidies to keep the rural network going. In the summer, the sum of £270 million—presumably to be spread over a number of years—was announced as part of the comprehensive spending review. That was welcome. The Government also said that they
were prepared to add substantial amounts to that sum—[Official Report, 2 November 2000; Vol. 355, c. 818.]
That is a rather mysterious phrase. As several months have now gone by, can the Minister tell us when the £270 million will be spent, and on what? When will payments reach sub-postmasters in my constituency and elsewhere? How will the money keep post offices open? How many more will have closed before it comes through? Does he have a clear idea of what "substantial amounts" means and what the additional money might be spent on?
The Government have floated the idea of post offices being Government general practitioners. That phrase has not yet caught on, but it is potentially a good idea for the post office to become a friendly face for the public sector—a first port of call for people to go to get advice and information. However, since the PIU report came out, the Post Office has failed to win a tender to be one such public face of Government in terms of changes of address. Will the Minister clarify the position?
The fundamental question—the spectre at the feast—is the threat to withdraw the present system of benefit payment and replace it with compulsory payment by

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automated credit transfer into an account. The PIU conducted some research—the results of which are perhaps not earth shattering—into why rural post offices close. Page 39 of its report states that reasons why a replacement sub-postmaster cannot be found include
uncertain future financial prospects, which mean that no-one is willing to take on the role of sub-postmaster.
That is clearly what is happening. When people see that the sub-postmaster wants to resign or give up, they think, "Do I want to invest my money in a sub-post office when its future finances are so uncertain—especially given that the third of its income that comes from handling benefit payments is in jeopardy?"
The Government's line is that the world is changing and that, by an inexorable process, people are increasingly choosing payment by credit transfer—so all that they are doing is giving the Post Office a bit of a push to make it get its act together for 2003 and beyond—but if people are making that choice anyway, why force the pace? That gives the Post Office less time to adjust.
The statistics in the report show that only about half of all new retirement pensioners are opting for credit transfer—despite a biased form that leads them to assume that it is the norm and to give their bank details. That means that half of newly retired pensioners—who are presumably the most forward looking and have the greatest familiarity with bank accounts—are still saying that they want their money over the counter at the post office.
The Government's policy goes against the free expression of half of all newly retired pensioners and many more than half the stock of pensioners. These arguments will be familiar to the Minister, but we have never received a satisfactory response to them. If the Government's view is that people are making the choice anyway, they should let them do so of their own free will.
I want to draw the Minister's attention to two cases of sub-post offices under threat in my constituency. One had a happy ending, whereas the other remains in the balance. The happy example was that of Marshfield post office, where the sub-postmaster was about to retire and wanted his property—from which the post office was run—to be returned to him. The post office's future was thus placed in doubt. The local parish council pursued the matter vigorously, a neighbouring sub-postmaster from the village of Wick was willing to help to keep the post office going and a local butcher was willing to have a post office counter at the back of his shop. I worked with Post Office Counters Ltd. and twisted a few arms and the result was highly satisfactory. There is now a shiny new post office counter at the back of Artingstalls butcher's shop and the community is pleased with the outcome. It would be pleasing if that pattern could be repeated.
The case on my mind at the moment is that of Olbury-on-Severn post office. It is a small post office combined with a small shop and the postmaster is about to retire, so the post office will close in the week before Christmas. In his letter of 17 November, the Minister urged the Post Office to do everything possible when rural post offices are threatened with closure and to be innovative. Post
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Office Counters Ltd. deserve credit for doing exactly that at Olbury-on-Severn. We had a dialogue and it is considering all the options, including alternative premises, community shops and so on. I welcome that and hope that it will be the pattern.
However, I question whether there is any cash to back that up. If the answer is to convert existing premises in the village—for example, the village hall or pub—to what extent could Post Office Counters Ltd. provide money? Would any of the £270 million promised by the Minister find its way to Olbury-on-Severn? I suspect not, because I do not believe that the money is earmarked to be spent in that way. If the money does not find its way there and if there is no other solution, that post office will close. By the time it could be reopened, its remaining customers would probably have made alternative arrangements and it might never reopen.
The thrust of my message to the Minister is urgency. South Gloucestershire council is proposing 100 per cent. rate relief, which will be a useful contribution, but the serious money must come from central Government. It has been promised but not yet delivered. Meanwhile, dozens of post offices continue to close. I have read the PIU report, but I have no clear idea of the Minister's long-term vision for the size and nature of the post office network. Clearly, it is intended for mergers to take place in towns, but I am not clear of the scale or what network is envisaged.
I shall draw my comments to a close to give the Minister as much chance as possible to set out where matters have got to. I am aware of what has been going on behind the scenes, and I am not suggesting that nothing has happened. My main concern is that the rate of closures is accelerating. That acceleration may be slightly less in rural areas this year, but it is greater in towns, where the number of closures is well up. There seem to be useful initiatives in the pipeline, but the danger is that the shadow of compulsory payment into accounts is hanging over the post office network and threatens to be the death knell of that network unless urgent action is taken. The action so far has not been sufficient or fast enough, and I hope that the Minister will give an alternative view.
12.42 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alan Johnson): I am pleased to have the opportunity to discuss this crucial matter. The hon. Member for Northavon (Mr. Webb) said that we were all in Central hall, Westminster in April. I was not in Central hall, Westminster, I was here in Westminster Hall, because that was the last time we debated the matter in this Chamber or in the House. The campaign of the National Federation of Sub-Postmasters mirrors a campaign in 1980 when the previous Government first introduced ACT for the payment of pensions and benefits. It also mirrors a campaign during the early 1990s, when the previous Government extended ACT to a series of new pensions and benefits.
The concerns of the National Federation of Sub-Postmasters were genuine. It was worried that moving to ACT would create an increasing trend. There were differences of opinion about how quickly that would happen, but not about the fact that more and more people would move to ACT and that that would reduce

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the amount of work coming across post office counters. There was a huge and unhealthy dependency on one area of work, the disappearance of which it could foresee.
It is important to find a permanent solution, not one that lasts for 10 or 15 years or that doubles every seven years. We thought that there was at least the prospect of a solution when the previous Government introduced their well-intentioned benefits payment card. It was only a seven-year solution for the period of the contract with the Benefits Agency. There was no doubt that at the end of the seven years we would have returned to the argument about moving to automated credit transfer. In any case, the benefits payment card project was based on a public finance initiative that was blighted from the start, as the all-party Select Committee on Trade and Industry said.
The National Federation of Sub-Postmasters and its staff expressed understandable concerns at an effective rally in April. In June, a joint vision for the future was developed through the publication of the PIU report, which we had all waited for with bated breath. It contained 24 recommendations, and the Government accepted them all. I cannot find a response from the hon. Member for Northavon, but I presume that he was mildly pleased.
The Post Office said:
We are delighted that the Government recognises the network's strengths and is determined…to harness the full potential of the network.
A representative of the Village Retail Service Association said:
It is not only a well composed comprehensive report but also very positive. I am pleased that the Government has accepted the recommendations without reservation.
The NFSP said that the report was
a first class analysis of the post office network and…an excellent foundation upon which to start building the new network of sub post offices.
The Women's Institute, an important body in relation to the matter, said:
We congratulate the Government on commissioning the PIU report and on not only agreeing to implement its recommendations in full but also promising to back this up with funding.
Lord Dearing, a distinguished former chairman of the Post Office, said:
I congratulate the Government on their immediate and positive response to the PIU report. It is such an excellent report in its recommendations on rural sub post offices that it would be well to see the Government's wishes incorporated into legislation.
In June, the cavalry came over the hill. It would have been good to have had such detailed analysis of the problems of the network and ideas for its future 20 years ago.
The hon. Gentleman says that time is going by and that not enough is being done. I shall come to the issue of closures in a moment. We are meticulously following the PIU recommendations. On 28 June when they were published and a statement was made in Parliament, no one said that it was an instant solution and that no other post office would ever close. The NFSP did not say so; in fact, its line was that it was the start of the road that had to be travelled. No Minister said so. The hon. Gentleman was wise enough to say that the problem did
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not start on 1 May 1997. In the past 20 years, 25 per cent. of the network has gone. The PIU report was about giving the Post Office network a secure future. Every recommendation was detailed and on a time scale, with a series of discussions to lead to a conclusion.
The hon. Gentleman says that nothing has happened, but what has happened was due to happen under the PIU report. The Post Office was due to present a business plan for the universal bank by 1 September, and it did so. We were due to enter negotiations with the banks, and our negotiations were due to conclude by the end of the year. All the temptations to hold the negotiations in public, or make them semi-public through Hansard or the media, must be resisted. The banks are being extremely constructive in their discussions with the Government.
So that it is understood how central the universal bank is, it is as well that I state that it is the key element of the PIU report. It will neither only attract new network banking work into post offices, nor be only a vehicle for people to access the basic bank accounts that are being set up by all the major banks and building societies. It is key to our setting out this firm pledge: even after the switch to ACT between 2003-05, any pensioner or benefit recipient who wants to receive the money in cash, in full and undiluted by bank charges—across a post office counter and not at the nearest bank, wherever that may be, or through an ATM, hole-in-the-wall cash machine—will still be able to do so. It is a matter of personal choice—which was the point raised by the hon. Gentleman.
Mr. Webb: Is not that promise worth only the paper on which it is written—and then only if a post office is available? The worry is that by the time we reach that point, the Oldbury-on-Severns of this world will have gone. The promise comes too late. Yes, things are going on, but the Minister seems to have no sense of urgency.
Mr. Johnson: I shall attempt to leave the hon. Gentleman with a sense of urgency, but he should not try to move the goalposts. His said that the start of ACT in 2003 would be the focal point for the decimation of the network; but if was not for the move to ACT, we would not be having this debate. There have been no 7.10 am "Today" interviews during the past 20 years about the network gradually drifting away. The focal point is 2003. The PIU's recommendations were widely welcomed. Indeed, I have some wonderful quotes from Opposition Members welcoming the fact that the report set out a clear time scale that was geared up to 2003. I shall come in a moment to what happens before then.
The hon. Gentleman cited my letter to the Post Office, but we must have a network to preserve. The key elements for the change are geared around 2003, and nothing will happen until then except for the half a million people a year who are already volunteering to switch to ACT. A new generation of pensioners and people coming up to pensionable age are used to cashless pay, and that trend will continue.
I turn to the problems that we face today. The letter that the hon. Gentleman cited relates to a PIU recommendation. The PIU said that the Post Office has always gone to extraordinary lengths to keep post offices open in rural areas. It was a specific recommendation.

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However, the PIU said that the Post Office did it out of the kindness of its heart and that its policy could change because it has been given commercial freedom in the public sector under the Postal Services Act 2000.
The PIU said that the Government should place a formal obligation on the Post Office to continue to prevent avoidable closures. As the hon. Gentleman knows, 18,000 of the 18,500 rural post offices are run by private business people on their own premises. When they retire, those people may want their premises back for their own domestic use, and if the Post Office cannot find a suitable alternative sub-postmaster or venue, the sub-post office is closed as a result of force majeure. We have placed that obligation on the Post Office, it will be written into the social and environmental guidelines under Postal Services Act and there will be money to back it up.
The hon. Gentleman asked how that money could be used, but it is linked in the PIU report uo 2003. The report said that we should place the obligation on the Post Office in the autumn of 2000 and that we should talk to the Department of the Environment, Transport and the Regions and others about how to channel financial assistance to the rural network. The PIU report suggested a number of alternatives, including through local authorities, central Government or the Post Office itself. It said that discussions should be concluded by the autumn of 2001 and that the changes should be ready for 2003. It is the PIU report's recommendations that we are carrying out.
I do not know who the hon. Gentleman spoke to, but this is my opportunity to set the record straight on the closures so far, which is what I intend to do. We published a couple of weeks ago the information that there had been 333 closures at the six-month stage of this financial year. Because of the written question, we needed to obtain the Post Office's response quickly. It told us that some verification was needed. Now that that has been obtained, I can inform hon. Members that in a matter of two weeks I have saved 34 post offices, because the number has come down to 299. That is ahead by seven on the closures for the same point last year, when there had been 292 at the six-month stage. It is not possible to extrapolate a full year outcome from the six-month figure.
Interestingly enough, rural closures are down by 20 per cent. and not the 10 per cent. that I first cited. A disturbing increase in urban closures has emerged. As I think I said in the written answer that I gave, we are asking for a very detailed analysis. We recognise that the universal bank, Government general practitioner and all the PIU recommendations are not yet on stream; they are not due to come on stream yet. What is being done is not an instant solution. We are working on all the things that I have mentioned. The analysis showed that only 6 per cent. of closures were due to the financial non-viability of the outlet. The number of people resigning has declined from an average of between 10 and 12 per cent. a year to about 4 per cent.
One of the problems—and I am not trying to duck the issue—relates to people buying into the network to replace retiring sub-postmasters and sub-postmistresses. A tremendously professional campaign has been run by the NFSP—which I do not criticise,
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having been part of its campaigns in the past—but, given that people have been standing outside post offices asking for signatures to petitions, and saying that they are sure to close without a campaign to keep them open, people are bound to have the idea that the network is condemned to decline and collapse.
Mr. Webb: On the point of urgency, the Minister is suggesting that I tell my constituents in Oldbury-on-Severn that talks about how the money will be used in subsidy will end in autumn 2001, with a view to implementation in April 2003. Can he imagine the reception that I will be given?
Mr. Johnson: I hope that the hon. Gentleman will tell his constituents that the Post Office will consider ways of dealing with Oldbury-on-Severn in the same way as Marshfield. It would have done so even without the letter, but it will now redouble its efforts. Some of our suggestions, such as consulting the parish council, are being carried out in Oldbury-on-Severn.
Those who have accepted the PIU report and congratulated the Government on accepting every dot and comma of all 24 recommendations should not then criticise us for following those recommendations. Next year, when we have decided how to channel the money, will be the time to decide whether we need to act faster. As to rural post offices, the measures that the Post Office is taking, all over the country, are less matters of finance than they are to do with fostering confidence in the idea that buying into the business means a secure future.
We have mentioned the figure of £270 million and have said that we are prepared to add to it substantially. That is because some of that money is being spent on pilot schemes, such as GGP. Perhaps it is not the snappiest title in the world, but we picked the idea up from the National Federation of Sub-Postmasters, which suggested that we reward and train sub-postmasters, sub-postmistresses and their staff for something that they already do without training or reward, although their role is appreciated and cherished by their communities. We should make them the centre for distribution of Government information and build on the back of the Horizon network. We have converted 14,000 post offices, computerising a counter position once every five minutes. That is the biggest IT programme ever and is on time to be completed next spring. That will provide us with the opportunity for Government gateway, to provide people with Government services across the post office counter. The Post Office has already begun work on matters such as e-commerce. A trial in 1,000 post offices in the west country was announced a couple of weeks ago.
All the PIU recommendations are being attended to. We are ending the complacency and neglect of the past and aiming to restore faith in the future. Yes, sub-postmasters and their staff want the PIU report to be implemented. I assure hon. Members that among my officials and the Government there is no complacency, and the NFSP, whose executive I addressed recently—and whose members I have spoken to all over the country—understands that.
It being One o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.