Westminster Hall Sitting of 30 January 2001

Preamble
[MR. MICHAEL LORD in the Chair]

Area Cost Adjustment
Motion made, and Question proposed, That the sitting be now adjourned. —[Mr. Mike Hall.]
9.30 am
Mr. Andrew Lansley: Good morning, Mr. Deputy Speaker. Thank you for allowing me the opportunity to initiate this debate.
Area cost adjustment is regarded as a somewhat esoteric subject. However, it is not esoteric in its effects—they are very real and are felt by my constituents in the amount of grant distributed to Cambridgeshire and, indeed, to South Cambridgeshire district council. The area cost adjustment substantially reduces the amount of grant that would be available under a different system of distribution to support local government services. I hope to demonstrate during my introduction that area cost adjustment is important both in its financial effects for local government and its impact on local government services and also because of what it tells us about the way in which the Government have dealt with their election promises during this Parliament.
Immediately before the previous general election, on 30 April 1997, the Cambridge Evening News published an interview with the then Leader of the Opposition—the present Prime Minister. The right hon. Gentleman was rightly asked about area cost adjustment because of its impact on Cambridgeshire. He said:
"We will review the area cost adjustment in time for the next financial year … Changes in line with the recent Elliot review would bring the county an extra £10 million."
Even at that time, I was keen that the issue of area cost adjustment should be pressed to a conclusion as soon as possible, because of the large financial consequences for Cambridgeshire county council; and that in pursuance of the right hon. Gentleman's commitment before the election, it should be reviewed in time for the next financial year—1998ߝ99. As a result, I secured an Adjournment debate on 18 July 1997, when I pressed the Government to deliver such a review and to reform the area cost adjustment.
Unfortunately, in the space of two months, the Government had already found that it was not as convenient to deal with promises two months after the general election as it was to make them two or three days before. At that time, the Minister for Housing and Planning, then Under-Secretary of State, Department of the Environment, Transport and the Regions, said that a review would take place, but that the matter would be very difficult and he could make no promises about the outcome.
The story has continued in much the same way—with expressions of concern, references to technicalities and so on. Those technicalities will have to delay us for a few moments, because it would be unfair to Ministers if they
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were not described. No one has ever pretended that there are no difficulties associated with reform of the area cost adjustment. It is useful to remind ourselves of the series of obstacles and hurdles placed in the path of securing reform of the local government distribution system.
In November 1997, the Government showed that there had been problems with the Elliot review. That review advocated a general labour market approach to setting the area cost element in the distribution of grant—thus the grant would be varied by reference to the general labour market in which local authorities were expected to hire staff. There were several problems—for example, with the data to be used for such calculations in the standard spending assessment. There was potential for overcompensation: many local authorities were employing staff on national pay rates, so to compensate such authorities through the grant distribution as though they were simply buying their labour in the marketplace might overcompensate them if the difference between authorities was not so great because of the impact of national pay rates. However, it was always clear that local authorities were employing staff, using national pay scales and their discretion within pay scales in a way that tried to adapt to the labour market and the pay costs in their area.
Geography also posed problems. Cambridgeshire offers a good example. To operate at county level, as the Elliot review proposed, would not necessarily have correctly compensated for the cost of providing a service in all parts of the county. For example, in south Cambridgeshire, there is, in effect, a London labour market as regards not only costs, but some pay and recruitment pressures, whereas in Peterborough, or other parts of the county, the pressures on costs and pay are different. That illustrates the desirability of operating below county level.
That is why I have no substantial problem with the Government's attempts to pursue what was known as the specific cost approach—looking below county level and considering the way in which authorities adapted in practice the use of national pay scales to their labour costs. However, although—in the Government's view—that necessitated a delay in the implementation of a review for the period beyond 1998ߝ99, the specific cost approach led to the publication, in summer 1998, of 21 options for reform of the area cost adjustment. It would have been perfectly possible—if difficult—to settle on one of those options in time for the 1999ߝ2000 financial year.
At this point, I have to depart from the Government's approach because they failed to deliver on their election commitment. In December 1998, the Deputy Prime Minister said that he was not proposing to make a change; he proposed to change some aspects of the SSAs, but not the area cost adjustment. Indeed, he said that he would impose a three-year moratorium, which would take us up to the financial year 2002ߝ03. He did so based on the fact that local government had been consulted about the 21 options—even though it might be argued that such a large number of options precluded meaningful consultation —and there was no consensus.
To complete the chronology, in spring 2000, a document was published on central-local partnership between Government and local government. By late summer 2000, a local government Green Paper had been

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issued that told us almost nothing about the Government's plans for reform of the area cost adjustment, although it told us a certain amount about their desire to reform the grant distribution system in general. That would doubtless encompass the area cost adjustment, but we have no idea how. Yet again, there was no agreement about how such matters were to be undertaken, so there was a proposal for further delay. Another year was to be added to the moratorium, so that we would reach 2003ߝ04 before the Government proposed to initiate any reform of the area cost adjustment.
It is not only that the Government have delayed and, by so doing, have failed to meet the Prime Minister's election promise to review the area cost adjustment in time for the financial year after the previous general election; the date has been moved five years on—with every prospect that the Government will continue to fail to meet their commitment. That, in a sense, is the injury. However, the insult as well as the injury is that not only have the method and data used continued to change in the most recent local government financial settlement, but the consequences are hitting authorities such as Cambridgeshire.
I shall give three specific examples. First, the differential between those authorities that receive the area cost adjustment and those that do not Cambridgeshire is just off the cliff edge in that respect—has increased because new data have been incorporated into the financial settlement. However, people do not agree about that data, because hourly rates of pay, without overtime—not total weekly earnings—are used in the area cost adjustment. That apparently recondite difference has a significant impact on authorities outside the area cost adjustment, such as Cambridgeshire.
Secondly, the change in the area cost adjustment must be financed by others. Not only is the differential greater so that Cambridgeshire is more disadvantaged relatively, but it must finance the cost to the tune of £1.6 million in this financial settlement. Other authorities are in a similar position. Thirdly, the Government have proposed to try to offset some of the consequences, so floors and ceilings have been introduced in the percentage change in SSA. Those mechanisms do not benefit Cambridgeshire, as it did not have an abnormally low or high percentage increase.
As a consequence of the compensation offered, Cambridgeshire suffered an additional loss of £300,000 in its financial settlement because that money was used to finance the floors and ceilings. So there has been a £2 million overall reduction in the grant available for Cambridgeshire. Alongside other authorities, Cambridgeshire has had to compensate for the alterations in the benefits derived from data changes for other authorities—principally those that benefit from the area cost adjustment.
Far be it from me to say that the Government should not consider reality, and I do not dispute that, in reality, changes in relative labour costs impose costs on local authorities. If the Government are to deal with reality, however, they must consider the changed labour market circumstances outside the area cost adjustment
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mechanism as much as within it. We must consider adjusting the grant distribution system if it is to take account of costs.
Have the Government simply moved the goalposts? Back in 1998, the SSA, on which all this hangs, was viewed as a mechanism for assessing how much councils needed to spend to provide their services. Indeed, the plain English guide to the local government finance settlement—clearly, an heroic task for the Department of the Environment, Transport and the Regions to undertake—stated, in February 1998, that the SSA assessed how much each council would have to spend to provide its services. Therefore, the cost of providing those services formed an essential part of the SSA calculation.
Interestingly, without any announcement or song and dance at DETR, the SSA was not defined in that way by February 1999. It was defined as being the Government's way of dividing up total standard spending between local authorities. In effect, the Government have shied away from the SSA calculations representing a realistic effort to measure what it costs a local authority to provide its services in the light of its costs and needs. So the Government have compounded their inability to reach a decision on the area cost adjustment, and the unfairness continues.
There is absolutely no logic in trying to divide the cake—the grant available to local authorities—without reference either to what it costs them to deliver services or to the needs that must be met. I shall not go too far down that path, but the Government have elevated local authorities' needs, as they have defined them, above costs. It is therefore easier for the Government to justify diverting money away from shire districts into metropolitan areas for their own political purposes.
The consequences can be seen in Cambridgeshire. My constituency includes the border between Cambridgeshire and Hertfordshire and that between Cambridgeshire and Bedfordshire. Both of those authorities receive the area cost adjustment. Hertfordshire is the best funded local education authority. Cambridgeshire is among the worst funded, with the lowest SSA per head of population for education. If Cambridgeshire were to receive the area cost adjustment on the same basis as Bedfordshire, about £20 million would be added to its SSA, which would have a beneficial effect on the grant. In Cambridgeshire, that represents additional resources for schools of more than £200 per pupil.
Those of us in Cambridgeshire know perfectly well that a comparison of the labour market shows that it is nonsense to suggest that Bedfordshire has higher labour costs than south Cambridgeshire. In fact, the reverse is the case. So, year after year, Cambridgeshire has to spend more than its SSA, which suggests that it is a higher spending authority; but, in fact, its services are being chronically unfunded because of the SSA's departure from reality.
On Saturday, 27 January, the Cambridge Evening News reported the fears of parents with children at St. Alban's Roman Catholic primary school in Cambridge that the school may not be able to continue to provide the same service and may consider reducing its staff. The chairman of the governors is reported as saying:

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"We have been cushioned for some years by the combination of reserves, income derived from letting school premises, and support from the Parents and Friends Association."
Cambridgeshire county council rightly said:
"The decision by Government to divert £2 million from Cambridgeshire's funding to support other local authorities—
the combination of factors that I have mentioned—
"has meant schools are getting less growth this year than planned."
That shows the direct impact on schools.
In early 1997, I took the opportunity to raise the issue in the hope that the Government would do something about it. They had promised to do so, and I wanted a resolution of the issues that arose under the previous Government, who instituted the Elliot review, as well as under the incoming Government. We now approach the end of the Parliament, and the Government are presumably proposing to enter the election campaign having failed to meet their promises. Far be it from me to suspect that the Government will pull a rabbit out of the hat between now and the election if it is only months away, so a Conservative Government may well have to pick up where we left off in 1997 and use the Elliot review and subsequent reviews to take decisions on the structure of local government finance because the unfairness continues.
I am a vice-president of the Local Government Association. I value what the LGA does in many ways, but I continue to be disappointed that the creation of a single, national voice for local government has not enabled it to cross the bridge and reconcile the different views on the issue among its membership, although it has tried heroically. In a letter, dated 19 October, to DETR officials, Mr. Kinghan, the LGA's director of local government finance, wrote:
"In the longer term, we suggest that the Government should provide additional resources to deal with the entire issue of ACA, so that the support goes to authorities with recognised higher costs without funds being taken from those authorities which do not benefit from ACA."
In a sense, Mr. Kinghan is right—it is inevitable that a mechanism to deal with the area cost adjustment will, in effect, top-slice the local government financial settlement and benefit those authorities with higher costs outside the area cost adjustment. There are two better ways to address the issue of the local government financial settlement more honestly. We either compensate accurately for costs or, if we continue to have a formula-based system—the Government are proposing various formula or plan-based systems—we must deliver a realistic assessment of an authority's relative resources, its relative needs and its relative costs. In the absence of either of those alternatives, no grant system will be fair even if it is predictable.
We want the system to be not only fair, but simple and predictable. It is certainly possible to do that, but it is impossible to do so while we continue to have an area cost assessment that is so obviously perverse in its effects. Despite what the Government have said about a moratorium, the way in which they tinker with the system year on year and introduce new data exacerbates the unfairnesses that derive from the present position.
Although I have been tediously technical in my speech, it is not a technical issue but one of political will. Before the election, the Prime Minister made promises
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that he must have known contrasted with those made by the previous Government. When the previous Prime Minister, my right hon. Friend the Member for Huntingdon (Mr. Major), was asked about the subject by the Cambridge Evening News, he made it clear that it was a difficult issue and that a review should be conducted that would result in winners and losers. My right hon. Friend said that he could not make any promises even though he was a Member of Parliament for a Cambridgeshire constituency.
When the Prime Minister was the Leader of the Opposition, he did not feel so constrained. He felt that he could make promises and try to gather votes in Cambridge, Peterborough and elsewhere on the basis of them. However, he has failed to deliver on them. The responsibility for that cannot be shuffled on to local government by claiming that councils should have mysteriously arrived at a consensus. The formula for distributing grant to local authorities from Government will essentially be a Government responsibility until we arrive at the day, fondly to be sought, when local government to a much greater extent raises and spends its own money according to its priorities. I hope that day comes.
Mr. Christopher Gill: Hear, hear.
Mr. Lansley: My hon. Friend and I perhaps recognise that that day is some way off and may be difficult to arrive at. However, until we get to that happy day, the Government must take responsibility for the manner in which they support local government and the fairness or otherwise of the system. The responsibility cannot be shirked, but it has been. We shall arrive at the election with a Government who have broken their promises. As at the beginning of this Parliament, I return to an issue that is vital to my constituents. It illustrates the prevarication and broken promises that have characterised so much of the Government's activity.
9.53 am
Mr. Christopher Gill: I congratulate my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) on securing a debate on what many Conservative Members regard as an important issue.
For as practically as long as I have been the Member of Parliament for Ludlow, I have campaigned against the formula that determines the amount of money that goes each year to our shire hall. As my hon. Friend said, the formula causes his county similar problems.
To put the issue into perspective with regard to Shropshire, I shall give the House the figures that I obtained in November 1999 and that have not changed substantially in the meantime. The standard spending assessment per pupil means that a primary pupil in the London borough of Southwark attracts the sum of £3,396 while a primary pupil in Shropshire attracts only £2,220. The figure for a secondary pupil in Southwark is £4,377, but for Shropshire it is only £2,837. The differences are dramatic—a 50 per cent. difference in the standard spending assessment for pupils in Shropshire and Southwark.
In a letter to me of 15 December 2000, the Minister for School Standards said that the main cause of the differences in funding per pupil between Shropshire and other authorities was the area cost adjustment. She added that

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"this is a problem we have inherited from the previous Government."
This Government were elected on 1 May 1997, but, as has been alluded to, they intend to do nothing about the formula and the area cost adjustment until 2003ߝ04. That means that, throughout the whole of this Parliament and the first Labour Administration, nothing has been done, and they forecast that, even if they win the next election, nothing will be done for a further two years. For a six-year period, the problem that they identified before they came to power will not be tackled at all.
I simply cannot accept that any reasonable person examining the problem objectively would be impressed by the lame excuse that the present position is a result of a problem that the Government inherited nearly four years ago. Four years is an enormously long time, and time enough for any Government to rectify a problem that they identified at the outset of their term of office. However, the extraordinary fact about the Labour Government is that they have legislated in many areas where there have been neither recognisable problems nor public demand for change. They have gone full steam ahead in many areas where they need not have legislated and where there has been no consensus for legislation. However, on this issue, in which many people have identified a huge problem, they have done absolutely nothing and intend to do absolutely nothing for a very long time.
It is not an excuse for the Government to say that they inherited the problem from the previous Government. They came to power promising to put right all sorts of things that, in their estimation, the previous Government had got wrong. They stand indicted by the fact that they have failed badly to do that.
In a letter to me of 18 January 2001, the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Stretford and Urmston (Ms Hughes), wrote that
"we do understand the strength of feeling caused by local government finance issues, and in particular the Area Cost Adjustment."
There is no doubt in the Government's mind as to the problem; they know what it is. Why have they not done anything about it? The letter adds that
"replacing the existing system with a better system is not straightforward. We have tried reviewing the ACA in isolation—in 1998 we considered 21 different options. But local authorities were unable to agree on the best way forward.
Is it satisfactory for the Government to fail to legislate on this issue because there is no consensus when they have legislated on all sorts of other issues on which there has not been consensus? Does the Minister ever expect to achieve consensus among local authorities when some authorities, such as mine and that of my hon. Friend the Member for South Cambridgeshire, are heavily disadvantaged by the system and many others, particularly in the south-east, are advantaged by it? The Minister speaks with a forked tongue when she claims that the Government would like to achieve consensus. It is apparent that consensus is not forthcoming and is unlikely ever to be forthcoming in circumstances in which some local authorities benefit from the system and others are penalised by it.
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The reference to consensus was repeated only last week on 22 January by the Minister for School Standards. She told me that
"there was no consensus amongst groups of local authorities about the way forward."
Are the Government saying that no progress will be made until they get consensus among local authorities? If that is the case, it reveals that they do not intend do anything about the problem. The truth is that there is no political will to solve the problem, as my hon. Friend the Member for South Cambridgeshire so eloquently explained.
I said that I have been concerned about the issue for almost as long as I have been a Member of Parliament. The problem for my county of Shropshire dates back to 1990, when the grant-related expenditure allowance was replaced by the standard spending assessment. Since then, Shropshire has found itself more and more disadvantaged, to the extent that in 1995, the then Member for North Shropshire, now my noble Friend Lord Biffen, and I were obliged to vote against our own Government on this very issue.
The problem is not new. As my hon. Friend the Member for South Cambridgeshire conceded, it was identified in the previous Parliament. The Prime Minister picked up on it before to the election when he said:
"We will review the area cost adjustment in time for the next financial year."
My hon. Friend reminded the Chamber of the Prime Minister's commitment. He also rightly said that it is another broken promise by the Labour Government.
I can guess what the Minister will say. She will explain that the problem is not as bad as we are making out because funds are directed to our counties by other means. However, the fundamental problem remains: the formula is defective. The area cost adjustment is unfair, which means that Shropshire, Cambridgeshire and other counties are severely disadvantaged compared with many other counties. Voters in my constituency cannot understand that.
I want to remind the Chamber that, as my hon. Friend said at the beginning of this debate, the incoming Labour Government undertook to review the workings of the SSA. We all knew that and hoisted it on board. However, at a meeting with the Minister in her office on 28 June last year, I and many other Members of Parliament from all parties heard her say that it was unlikely that anything would be done in this Parliament. That has been confirmed subsequently and we have been told that nothing will be done this side of 2003ߝ04. That is in spite of innumerable letters, speeches, questions and deputations that I have led to Ministers. No one can pretend that the problem does not exist or has not been identified.
Why have the Government not acted? As my hon. Friend rightly explained, there is a total lack of political will to correct the obvious deficiencies of the system. I am not interested in hearing the Minister say that she recognises the problem and that something should be done, because we have heard that before. I hope that she will say when the Government will correct what is, by anyone's standards, a most unsatisfactory situation.
10.4 am
Mr. Malcolm Moss: I shall be brief. I congratulate my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) on raising the issue of area cost adjustment. As my hon. Friend the Member for Ludlow (Mr. Gill) said, this is not the first time that it has been raised. I have been a Member of Parliament for nearly 14 years and the thorny issue of area cost adjustment has been debated every year.
People in Cambridgeshire are severely disadvantaged by the disproportionate way in which local government finance is apportioned. For the past decade, it has been one of the fastest—if not the fastest—growing counties in the United Kingdom. The pressures on the local authority budget have been immense. Despite representations to do something about the area cost adjustment, the situation has become more perverse because the differential between the funding to Cambridgeshire and those counties over its border—Bedfordshire, Hertfordshire and Essex— has worsened.
At one end of the spectrum, there is pressure on our schools. Only last week, my local newspaper reported that six schools were bursting at the seams and that there was no money to accommodate the rising number of children who were entering primary classes at those schools. At the other end of the spectrum, there are phenomenal pressures on our social services, which has a significant knock-on effect on the health service because it causes bed blocking. We do not have the resources to give proper community care to our people or to ensure that the elderly can move from hospital into residential or nursing home care.
It is also unacceptable that, despite representations, the Minister has ignored our pleas. In fact, she turned down a meeting with Members of Parliament for Cambridgeshire constituencies and county council officials. It is unacceptable that we cannot put our case on behalf of our constituents to the Minister responsible. The Government's arrogant refusal to face up to the problems and issues that people want to put to them is another sign of the way in which they treat local authorities and Members of Parliament.
We have said that the system is totally unfair. Despite the Prime Minister's assurances and promises when he came to Cambridgeshire, we have made no progress. The Government might be hiding behind the excuse that consensus is necessary, but we know that it will never occur because it requires political will on behalf of the Government to impose a settlement that is deemed fair. That might mean robbing Peter to pay Paul, but it cannot be right that, within 10 miles or less, children at some schools in Hertfordshire receive hundreds of pounds more per pupil than we do over the border in Cambridgeshire.
Another perverse outcome of the area cost adjustment is the inexorable rise in council tax—one of the Government's stealth taxes. That means that we have to put our hands in our pockets to fund the services that are essential for our people in Cambridgeshire.
It behoves the Government to address the problem of the area cost adjustment. I look forward to what the Minister will say, but I suspect that nothing will happen before the election and that the promises that were made before the last election will prove empty and worthless.
10.9 am
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes): I congratulate the hon. Member for South Cambridgeshire (Mr. Lansley) on securing the debate. I thank him for his courtesy in indicating that he would use the debate to attack the Government—I would have expected nothing less from him.
We have had an interesting debate about the area cost adjustment and local government settlements more generally. The hon. Gentleman argued that his constituency should receive the area cost adjustment as long as it exists. He said that it is unfair that his constituency does not receive it at present because it puts his constituents and his council at a disadvantage compared with neighbouring authorities that do receive it.
The hon. Member for Ludlow (Mr. Gill), however, said that we should not have an area cost adjustment because it is totally unfair to councils in the north that there is a mechanism that takes account of extra cost pressures on councils in London and the south-east. We also heard from the hon. Member for North-East Cambridgeshire (Mr. Moss), whose constituency borders only places that do not receive the area cost adjustment. I am not sure what his argument is. I do not know whether he wants the area cost adjustment or whether he agrees with the hon. Member for Ludlow that we should scrap it altogether.
Mr. Gill: Let me get one thing straight—I did not say that we should scrap the area cost adjustment. I said that the present formula is grossly unfair, and the whole formula must be revised. Does not the Minister accept that it works perversely against counties such as Cambridgeshire and Shropshire because the amount paid is top-sliced against the money that would otherwise be shared equally among local authorities throughout the country?
Ms Hughes: I should have thought that the hon. Gentleman understood that any system that distributes money is a zero sum game, and compensation for higher costs in some areas comes out of the total pot. That is the way in which previous Governments have handled the matter, and it is the only way in which it can be handled.
Mr. Lansley: If it is always a zero sum game, will the Minister remind us who has paid for the increase in the area cost adjustment in this financial settlement? In the past week, the Government have provided between £150 million and £160 million in additional financing for authorities that might otherwise have lost out under the settlement, so who has paid for that? Who has lost out as a consequence?
Ms Hughes: No one has lost out as a result of the additional money being made available.
Mr. Lansley: So it is not a zero sum game.
Ms Hughes: It is a zero sum game in terms of the total pot, whatever the size of the pot.
Mr. Moss: So increase the pot.
Ms Hughes: Hon. Members should let me speak because they have had their time. We have had a period

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of consultation on the settlement, and the total pot has increased as a result and additional resources were made available to respond to pressures. However, it is still the case that a mechanism that compensates authorities for higher costs must be paid for out of the total pot.
Mr. Moss: I am interested in the Minister's argument about higher costs. In education, for example, the bulk of costs for local authorities, particularly the shire counties, are teachers' salaries, which I understand to be the same throughout the United Kingdom. Likewise, local government employees' salaries are the same throughout the country. What, then, are the massive additional costs that mean that Hertfordshire, Bedfordshire and Essex receive huge sums above those received by Cambridgeshire?
Ms Hughes: I am surprised at the hon. Gentleman's question, as I am sure the hon. Member for South Cambridgeshire is, because the subject of the debate is the area cost adjustment, a mechanism introduced by the previous Government to recognise the higher costs to local authorities of many of their employees in London and some of the south-east. I cannot in this debate go back to the basics of why that mechanism was set up; I should have thought that whatever the hon. Member for North-East Cambridgeshire thinks about the current system, he had greater knowledge of the arguments and principles that underpin the recognition that the costs, particularly of employment, to local authorities in some areas are higher than elsewhere.
Distribution is important, and it exercises many councils, which are as interested in what other authorities are getting as in what they themselves are to receive in any individual settlement. However, most important is the amount of investment given to local authorities to improve services and to meet needs in their area. In that regard, the big picture since the last general election is very different from that before the election, and I speak from personal experience in local government at that time.
I remind Conservative Members of the figures. In this year's settlement, the Government grant and business rates will increase by 7.2 per cent., compared with a 5.8 per cent. increase last year. There is an additional £3 billion in the Government grant to local authorities, an 8.3 per cent. increase for education and a 6.2 per cent. increase for social services. We have also announced additional neighbourhood renewal fund money, and yesterday my right hon. Friend the Secretary of State announced £52 million to help education authorities that are under pressure.
In the past three years, the real-terms increase in investment in local authorities is almost 14 per cent. That compares with a real-terms cut of 7 per cent. in the three years leading up to the election. There has been a massive change in the experience of local authorities and in the investment given to them. That demonstrates the importance that we, unlike the Conservative Government, attach to local authorities and the extent to which we recognise their needs and the pressures on them.
Mr. Lansley: The Minister is getting ahead of herself. We have not yet formed a Government, but I promise
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her that we will do so shortly. As she is in the business of giving us the broad history of local government financing, does she recall that the consequences for local authorities in the past three years include an average increase of £150 in band D council tax throughout the country?
Ms Hughes: The hon. Gentleman knows well that as the investment in local authorities increased over that period, the increase in council tax has been reduced from 8.6 per cent. to 6.1 per cent. last year. We expect that, as a result of this year's very generous settlement, the increase will be further reduced. Cambridgeshire county council has done rather well out of this year's settlement, with an increase of 4.1 per cent., which is well above the rate of inflation.
I want to scotch one of the political points that the hon. Gentleman made, which is that the settlement has been tinkered with to ensure that additional money goes to metropolitan authorities at the expense of the shire counties. In the past two years, the increase in the standard spending assessment for metropolitan authorities was 3.8 per cent; it is 3.9 per cent. in 2001–02. The increases for the shire areas were 4.7 and 5.1 per cent. Within those shire areas, the counties did much better, with increases of 5.1 and 5.3 per cent.
Those figures are entirely the reverse of the hon. Gentleman's contention, and settlements for shire areas have been significantly higher than those for metropolitan areas in the past three years. That is because we have not manipulated SSA methodology, as the hon. Gentleman contended. We said that we would introduce data changes, and we have done so, but the methodology remains largely the same.
Over the years, numerous projects have tried to find a better method of recognising that there are higher costs in some areas. As Conservative Members said, the previous Government commissioned research from Professor Elliot of the University of Aberdeen. He worked out a model for calculating regional pay based on labour costs for all employees in the local economy. That research was undertaken in July 1996, so there would have been plenty of time for the previous Government to introduce the new method if they had demonstrated the political will to reform the whole system that this Government have shown. However, the Conservative Government balked when it came to implementing Professor Elliot's review. They prevaricated for so long that they were still dithering and deciding that they could not do anything when they lost the general election.
Mr. Gill: Will the Minister take the opportunity of putting on record exactly what will have been done during the duration of the Labour Administration in respect of the area cost adjustment?
Ms Hughes: The hon. Gentleman should recognise that the Government have been dealing with a wealth of neglect and dithering that is the legacy of the Conservative Government. We are systematically working through all policy areas, not only local government finance, to put things right. I shall outline what we have already done and what we intend to do.

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The Government, too, have conducted research openly, and with local government, about local government finance settlements, and especially about the area cost adjustment. As promised by my right hon. Friend the Prime Minister when he visited Cambridge in 1997, we have conducted a thorough review of the calculation of the ACA before the 1999–00 settlement.
The contention of Conservative Members that a promise is not being delivered is inaccurate. We promised a thorough review, one much more extensive than that which Professor Elliot undertook, and it was undertaken. That review produced a range of different options in the form of models and generated a great deal of debate. Unfortunately, there was no consensus on the preferred option. However, it is interesting that this morning three Conservative Members cannot arrive at a consensus in a debate that was supposed to be about attacking the Government. The three of them cannot get their act together. The chances of local authorities arriving at a consensus were probably much more remote.
The hon. Member for South Cambridgeshire referred to the specific cost approach, which featured in several of the models that were the result of research. As he knows, some of the models would not have helped South Cambridgeshire. At least he acknowledged that the outcome of the review was possible if difficult to implement. I shall pick up that comment and explain why implementation is difficult. I shall explain also why we are taking the route on which we have decided, which is to examine the entire local government finance system and the role that the Green Paper, and events subsequent to it, will play in dealing with the issue that is before us. As the hon. Member for Ludlow rightly said—it is the one point on which I agree with him—the entire system needs reviewing, not only the ACA.
The system has become outdated and it is opaque. Local authorities and members of the public cannot understand how they end up with the settlement that applies to them. The system is intricate and complex and it is impossible for the average person to understand the outcome of the settlement for his or her council.
As for the ACA, one of the issues is geography. Difficult issues arise. Where should boundaries be drawn for any mechanism that recognises higher costs in certain areas? The hon. Member for North-East Cambridgeshire said that ACA should apply to the area that he represents. However, that area is in the middle of an area that at present does not have ACA. It is some distance away from councils that some would argue face the most pressures as a result of higher costs.
As we could not proceed on the basis of the review, we published the local government finance Green Paper. Conservative Members will be pleased to know that our review of the distribution system that that document catalysed is making excellent progress. We shall not make hasty solutions. As Conservative Members have said today, these are extremely important matters for councils and local people in terms of the money that is made available to provide services and meet needs. We are taking a long and hard look at our shared objectives for the system and the best way in which to deliver them.
The issue goes much further than fighting about slicing the cake. We need to build into the mechanism the right sort of support for local democracy and for front-line services. We need to ensure, as set out in some of the
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principles outlined at the beginning of the Green Paper, that there is transparency in the system. People might not like the result, but at least they should be able to understand how the result was derived from a formula or another process.
We do not expect consensus, but working and moving along with the local government community on these matters is critical if we are to arrive at a system that has enough support for it to be sustainable for a reasonable period. The last thing that we want to do is constantly to change the mechanism. Local authorities have said that they appreciate the stability that we have introduced into the system. There have been broad parameters of settlement for three years. We said that we would not tinker with the system.
There is still a great deal of work to be done and we are eager to press ahead. That is why we are proceeding with a provisional work programme for developing further the Green Paper proposals with the central-local partnership. We are working towards a White Paper that will explore the issues in some detail by the end of the year.
The hon. Member for South Cambridgeshire said that the Green Paper did not discuss specifically the area cost adjustment. In reforming the grant distribution system in a much broader way, we shall need to reflect the fact that some areas need to pay more to recruit and retain staff than other areas. The precise calculation of the pay cost top-up, as it were, will be considered as part of the overall system. Despite the considerable body of research findings that has been amassed on ACA alone, no robust solutions emerged from Professor Elliot's review or our review. That is why we decided that it would be wrong to change only the ACA element. There was an insufficient consensus among local authorities. On that basis, we felt that we were unable to proceed in the way that we are now proceeding.
We are not rushing to make hasty solutions, but I want to assure all hon. Members that we are working as fast as we can. We want to see the process concluded. The next stage will be a White Paper, which will appear towards the end of the year. Unlike the hon. Member for South Cambridgeshire, I am sure that the outcome of the next general election will enable us to bring forward that White Paper.
The local government finance system deals with huge amounts of money and supports vital public services. It is important that in any significant change to the area cost adjustment, let alone to the whole system, we get things right. It is important also that any change commands sufficient support so that the mechanism is sustainable for the foreseeable future. That is why we have returned to some first principles in our research for a better system, and why we were keen to carry out the review in partnership with local government and other stakeholders or other interested parties. We are conscious of the need to move as quickly as we can, but we should not rush and make mistakes or set in place a system that is not sustainable.
Mr. Gill: In the few moments that remain for the debate, will the Minister assure us that, in examining carefully the formula that governs settlements, she will take real cognisance of the sparsity factor that affects counties such as mine, where the population is spread over a wide geographical area?
Ms Hughes: The hon. Gentleman does not seem to be aware that the Government introduced, among minor

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changes, a sparsity factor into the existing formula. I think that I am right about that. Clearly, that is an important issue.
The big picture is the amount of investment in local government, and that has increased significantly. For all their political reasons, Conservative Members have none the less raised some important issues. The Government are taking those issues seriously and we will reform the system as a whole.

Bus Services
10.30 am
Ms Joan Walley (Stoke-on-Trent, North): We hear a great deal about the role of Back-Bench Members. I cannot say how grateful I am to have the opportunity to raise the issue of urban and rural bus services, which greatly affects my constituency. I am pleased to have the opportunity to have a debate attended by the Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Streatham (Mr. Hill), as he takes great interest in transport and, I know, in transport in Staffordshire. I well remember an interview that he gave when he visited Stafford to look at transport plans being agreed by the county council in conjunction with district authorities and unitary authorities. I very much look forward to a constructive and positive debate arising from this opportunity to put the issue on the parliamentary agenda.
Why this debate and why now? In raising the issue with the Minister I want first to do what one does in a maiden speech and take a little tour around my constituency. Stoke-on-Trent, North is part of north Staffordshire and is in the Potteries. It is very much a place where urban areas meet the countryside. For that reason, it is important that the Government look closely at the way in which the urban network makes decisions on bus services. Clearly, when urban and rural areas are side by side, and people are travelling from one to the other and back again, it is crucial to plan transport where it is most needed.
The local bus company in Stoke-on-Trent is Potteries Motor Traction, which is part of First Group. It changed the service serving Hill Top, which is on the edge of Staffordshire and, as the name suggests, is a rural hill-top community and is about half a mile from Brown Edge. In the thrust to make services commercially viable, PMT removed part of the 69A service, which goes from Brown Edge to the Potteries, so that it no longer went up to Hill Top, where quite a significant number of elderly people and those who use buses to go to school and work live. The effect of the withdrawal of the 69A service left people in that rural part of my constituency stranded.
Those people did not think that that was right and nor did I. As any hard-working Back-Bench Member does, I subsequently arranged meetings with the city council and the county council, bearing in mind the fact that the community needed access to both rural and urban areas. I did a lot of research and contacted people in the area, who were clearly angry about the fact that the bus service had been withdrawn. When I met local authority transport officials, it was clear that the best that we could get—which I do not underestimate in any way, as I pay tribute to the work that the officers did—was four bus trips a week, two into the market town of Leek in the constituency of my hon. Friend the Member for Staffordshire, Moorlands (Charlotte Atkins) and two into the city centre of Stoke-on-Trent.
That was a huge step forward, but was nowhere near meeting the transport needs of people in Hill Top. The experience of the 69A led me to take a particular interest in bus issues in the past couple of weeks. We have a short-term solution of four bus services paid for by local authorities out of their transport subsidy. It seems that we cannot make a bid for a rural subsidy challenge grant because there are strict guidelines about cut-off dates. Because the route

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to Hill Top was, until recently, a so-called commercially viable route, it cannot be looked at within the context of the additional rural money that is being made available for rural bus services.
We need to look at that. When the Select Committee on the Environment, Transport and Regional Affairs made its investigation on the transport White Paper and looked at the existing subsidy that was already spent, it questioned whether there should be a review of that cut-off date at some stage so that local authority money could be used to make good the services withdrawn in that way. The time for the review may have come, and I hope that my hon. Friend the Minister will look closely at that. The four trips from Hill Top are just a short-term solution, but that is the best that we could do under the circumstances.
We now have the rural subsidy grant, which is most welcome, and perhaps we could in a new way in the short and medium term arrive at more flexible solutions for getting people from outlying areas to existing fast, efficient, reliable, quality partnership networks. It is too late for Staffordshire county council to include an opportunity for that kind of flexible proposal in the rural subsidy challenge bid that the Minister is considering and on which an announcement will soon be made. Things like this crop up, and even if the Minister does not want to reinstate the old bus service, will he look at other solutions, such as a flexible taxi service using the investment that he has already invested through the rural subsidy grant in outlying areas of Staffordshire, Moorlands? Could he not invite the county council to make a little additional bid that could cover the rural community of Hill Top?
We need to look at the way in which maps determine rural and urban areas. I have set the scene, but the outrage that I experienced concerning the withdrawal of the 69A service was nothing compared with the subsequent meeting that I had with city and county council officers. During that meeting, I was told, almost incidentally, that PMT had started to deregister other services, which affected urban bus services in my constituency. I immediately took up that further issue with the company and local authority officers. The reply that I received from PMT's chief executive in Burslem stated:
"our resources are continually stretched and we are struggling to maintain the full commercial network we have run up to now when faced with increasing costs and declining revenue. Unfortunately, the continual wet weather throughout the Autumn, followed by the snow at Christmas has depressed our revenue in the area. This has been further exacerbated by the number of businesses in the area declaring redundancies in the last few months."
That is in the context of First Group making operating profits of £73 million in 1999, and £94.2 million in 2000. Suddenly, however, the wrong kind of weather causes it to reduce the commercial viability of its bus services. The chief executive of PMT also refers to increasing operational pressures in relation to wage inflation and fuel price rises. Will the Minister have regard to that, as I accept that point?
Further changes were made by PMT to service 86, which goes from Chell Heath to Chell, Furlong road and Tunstall. That loss-making hourly off-peak service has been withdrawn, and Stoke-on-Trent city council is considering whether to replace it. I campaigned strongly for that service because, before its introduction, we had no bus service to take people to a major health clinic in my constituency. It is not right to have NHS facilities that people cannot access.
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To the north of Stoke-on-Trent, service 92 goes from Newcastle-under-Lyme to Burslem and Brown Edge schools. That service has been withdrawn and replaced by a half-hourly service from Newcastle to Norton Canes, which divides hourly; one part goes to Ball Green and the other to Endon via Brown Edge. In effect, the route along Sytch lane and Church lane in Brown Edge has been withdrawn because of the small number of passengers using it.
I refer my hon. Friend the Minister to an e-mail that I received from the head teacher of the Brown Edge school. It states:
"Dear Joan,
We have just been informed that the PMT is to withdraw the service 92 which terminates at Brown Edge. This service was the only convenient way some of the Norton Green children got to school, albeit 10 minutes late. The old 69 service used to arrive at 8.55. The new 69 service either arrives for 8.30 or 9.30, leaving the children on the playground unattended for 20 minutes or 30 minutes late for school."
I am sure that the head teacher will not mind if I quote him further, as he continues:
"Please could you stir something up as the company seems to take no notice of anything we say to them."
There have also been cuts to service 94, Newcastle-Burslem-Bradeley, and service 96, Newchapel-Furlong road-Tunstall-Middleport-Burslem. There has been a great public outcry, which was taken up by the local BBC radio station, Radio Stoke, in which I know my hon. Friend the Minister takes a great interest, having been interviewed by that station. I have a summary of the comments made by people who telephoned the radio station. The campaign clearly struck a chord. Similarly, the local newspaper, The Sentinel, has been campaigning for integrated public transport, for which I applaud it.
There is a sense of helplessness, which is best summed up by one of my constituents who wrote to me:
"Dear Mrs. Walley,
I thought it was government policy to get people to use public transport, so can you please tell me why the PMT is allowed to cut the bus services in the way that they are?"
I want to find a way forward on all these issues, which are so dear to the heart of my constituents, and explore with the Minister how, through the existing legislative and fiscal framework, solutions can be found for people who have been left stranded as a result of those decisions.
After so many years during which there was no transport planning, the Government's plans for integrated transport are to be welcomed, as is the Transport Act 2000. I welcome also the strategy for urban renewal set out in the urban White Paper and the neighbourhood renewal policies announced last week. As a result of the comprehensive spending review, extra money is being transferred, but too often for additional capital spending, rather than revenue. The extra money being targeted on areas of greatest need, and the Government's response to the urban White Paper and to the local government standard spending assessment settlements are all part of the solution.
What advice and reassurance can my hon. Friend give me and my constituents, and the PMT bus company and local authority officers in Stoke-on-Trent and Staffordshire, that our problems are being tackled within the existing framework? While preparing for the debate, I read extensively, including the Select Committee on the Environment, Transport and Regional Affairs inquiry into transport.

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The Socialist Environment and Resources Association considers that many warm encouraging words have been heard about the need to address social exclusion, but, apart from the welcome proposal to cut fares for pensioners, few measures are directly designed to help socially excluded people.
In some respects, the Government have come a long way since the Select Committee inquiry. I am pleased to tell my hon. Friend that his report, "Social Exclusion and the Provision and Availability of Public Transport", sets out the agenda extremely well. For people who are socially excluded, those who do not have a job, the elderly, women who do not own a car, people who are retired and can no longer afford to drive or keep a car, people who cannot afford transport, and people who simply believe in public transport for its own sake, to cut down on the emissions that contribute so heavily to global warming, it is crucial that we match our concerns about social exclusion with the transport agenda when decisions are made.
That issue was flagged up by the Audit Commission report, "All Aboard", which reviewed local transport and travel in urban areas outside London. It is clear why local authorities want to support social objectives in transport. We know how public transport can contribute to attaining some of the key objectives and improve people's quality of life, by giving them access to family, shops, doctors, work, training and so on, with reduced congestion and pollution.
In the letter that I have from PMT, the company cites a further reason for withdrawing services that are no longer commercially viable: traffic congestion across Stoke-on-Trent is slowing services and making it more difficult to maintain their reliability. The company estimates that because of delays, it requires 12 more vehicles in north Staffordshire than were required five years ago. That is an absurd vicious circle. The more traffic there is on the road, the more difficult it is to operate a bus service, so the buses are withdrawn and more people use their own vehicles, thereby increasing congestion and social exclusion.
Car ownership is not particularly high in Stoke-on-Trent. One third of households do not have a car. A survey would show that we depend heavily on local bus services. Because of cuts to local services, we cannot reach hospitals and clinics. One the services that PMT has adjusted does not affect my constituency directly, but it takes people from Stafford to Newcastle direct to Stoke-on-Trent main railway station, on which a huge sum is at long last being invested. The station is still served by local bus routes, but we need as many bus routes as possible serving the main places that people need to get to.
I applaud all the work that has been done on quality partnerships, which has increased the use of buses. However, that has been done in a way that prevents people from getting to other parts of my constituency, which they need to access just as much as they need to reach the destinations on the agreed quality partnership routes.
How can we achieve good quality services when, almost on a whim, at six weeks' notice, a company can withdraw a service? As bus services are unregulated, little can be done, other than the local authority trying to make good that service.
The Association of Transport Co-ordinating Officers has conducted an extensive survey of the occasions throughout the country when bus services have been
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withdrawn in that way. The report's conclusions are alarming. It states that the cost of replacing expired public bus contracts is rising well ahead of inflation, although it is less than it was last year. None the less, it is 16.7 per cent. and authorities estimate that by April 2001, they will have increased their local bus support by an average of 5.2 per cent. over last year's figures. They predict a need for further expenditure growth of 9.4 per cent. next year if they are to retain existing levels of service. Almost half of local authorities will have cut supported bus services by the end of the financial year to stay within their budgets.
I suspect that the issue is not isolated to Stoke on Trent. Indeed, my hon. Friend the Member for Southampton, Test (Dr. Whitehead) recently made clear in Environment questions that his constituency has similar problems. A great deal of priority is being given to the partnership routes, but other services can be withdrawn at whim. The revenue for local authorities is not keeping pace with the removal of services. Yes, more passengers are travelling on fast, efficient and rapid routes, but such routes cannot easily be accessed by people at the margins. I know that my hon. Friend the Under-Secretary has already commissioned research into other aspects of bus services. However, could the problem to which I am referring be further considered? A pilot project might even be conducted in Stoke-on-Trent to consider how to deal with the withdrawal of services that are not affected by quality partnerships, but which are equally important to local people.
It is critical for us to consider all the issues. There are revenue implications even for quality partnerships. Local authorities can invest in traffic-calming measures and build new bus shelters, but further money is needed for repair and maintenance. If the shelters are vandalised, as has unfortunately happened my constituency, from where does the money come to repair them? People should be able to travel from Bradeley village, whose population includes a large number of elderly people, to the new wonderful NHS walk-in facility at Haywood hospital, which cannot currently be reached directly from Bradeley. As my constituents need to travel to doctors' surgeries, health centres, the main railway station, Burslem and Tuntsall town centres and to schools, we must deal with more than merely the north-south route across a 13 or 15-mile-long city. All transport needs must be considered.
I know that that is precisely what the local transport plans are meant to do and I look forward to working on the issues with the planning officers and the council. However, we desperately need a level playing field. The former metropolitan authorities spent a significant amount on bus services and public transport, but I am mindful that there is a disparity between the per capita amount that is available to the passenger transport authorities, and the amount that councils, including unitary authorities, can use for public transport. That gap must be considered and consolidated.
My hon. Friend the Under-Secretary is currently engaged in talks with the Local Government Association about what action to take on the withdrawn services. Will he draw on the experience of the passenger transport authorities and consider how some of that expertise could be applied to unitary authorities such as Stoke-on-Trent and to county councils such as those of Staffordshire and Northamptonshire? The Northamptonshire branch of the Association of Transport Co-ordinating Officers has had a great deal to say on the matter.

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Local authorities cannot be expected simply to pick up the bill, but neither should the bulk of non-essential services be withdrawn for commercial reasons when they are as important as other services. We must consider revenue spending and the six-week notification period for withdrawal of services. We must have time to plan what should be done during the next financial year. I welcome the fact that the Government have shifted transport expenditure and other investment to local authorities, whose plans should operate in terms not only of 12 months ahead, but of three years ahead. The requirement for a bus company to provide to the traffic commissioner a six-week notification of the withdrawal of a service makes no sense, as it does not give any local transport plan or partnership an opportunity to get the key players together and sort out access for all the areas that need it.
I am sure that when my hon. Friend the Under-Secretary replies, he will rightly refer me to the urban bus challenge. I see him nod. The £40 million extra investment that is being provided over three years is wonderful and I welcome it. It is far more than we have ever had before, but I point out that the amount currently available for revenue services in the Stoke-on-Trent area is about £270,000. That money is not ring fenced. I shall encourage those concerned to bid for urban bus challenge, but will my hon. Friend explain his timetable for the scheme? Will people be invited to apply, or will everybody apply and only a tenth of applications be successful?
I have a more fundamental point for my hon. Friend. Of course we want innovation, and I hope that the bus challenge funds will be used for innovative work that produces new solutions and addresses the Government's modernisation agenda. However, if the money is restricted and cannot be used to make good some of the essential services that are not affected by quality partnership and cannot otherwise be assisted, how can the basic minimum standard of service be achieved? Unlike my hon. Friend, I did not have the advantage of considering in Standing Committee the Bill that became the Transport Act 2000. However, should not we consider the contracts spelt out in that Act? Might not that be a way of ensuring cross-subsidy between the so-called commercially viable routes and other services that are equally important to local people?
I do not necessarily want an answer now, but will the Government think in detail about commissioning research and even establishing a pilot project in north Staffordshire, as I have suggested? Such work could identify optimum structures and contractual arrangements, as it already has done in respect of quality partnership routes. I am mindful that the Select Committee commented that the bus companies are
"better skilled in trimming resources to match declining demand than in attracting new passengers and encouraging repeat trips".
I have met the chief executive of PMT, which says that it is willing to work in partnership as such an approach is in its interests. To do so, however, it must have the trust of people in north Staffordshire. Will my hon. Friend provide some guidance on how we can benefit from the urban bus subsidy, to give us some hope of finding a way forward?
I am most grateful for having had the opportunity to initiate this debate. We rely enormously on public transport, throughout urban and rural areas. I know that the Government care greatly about public transport, but, despite the new legislation, we have still not achieved a means of delivering the local bus services that people need
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and the new reliance and dependence on public transport that we so desperately want. I understand all the problems and I feel for people whose lives are seriously affected. However, so much is on offer that surely my hon. Friend can give hope on getting some of the bus services reinstated, not only in the short term, but in the medium and long term.
10.59 am
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Keith Hill): I congratulate my hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) on securing the debate. I also thank her for her courtesy in giving me notice of her main anxieties. My hon. Friend has a long and distinguished record of involvement in transport matters. I listened with interest to her knowledgeable speech, and I shall consider her comments and suggestions most carefully. I shall respond shortly to as many of the specific points as possible. However, given the broad scope of the debate, it is important that I set out the context by making some general remarks about our policies for improving local bus services in both urban and rural areas throughout the country.
In developing and implementing a modern, integrated transport policy, we have recognised from the outset that bus services have a key role to play. Improvements to bus services have therefore been central to the policies in the transport White Paper in 1998, the Transport Act 2000 and the 10-year strategic plan for transport.
We have introduced major changes in the legislative arrangements for bus services. The Transport Act 2000 received Royal Assent last November and much of it will be effected in two days' time. The Act gives local authorities a range of new powers and duties to help ensure proper provision of public transport services and facilities. It provides for statutory local transport plans and bus strategies, which give authorities a clear strategic role in local transport planning, in conjunction with the private sector bus operators.
The Act gives local authorities new powers to establish enforceable quality partnership schemes, allowing them to determine the quality of bus services in exchange for providing facilities such as bus lanes, other priority measures and high-quality stops and shelters.
Authorities also have a new duty to ensure that local bus information is properly provided in their area—if necessary, by arranging it themselves and recovering reasonable costs from bus operators. There are new powers to promote joint bus ticketing, including through-tickets and reciprocal arrangements between bus operators, and to work with train operating companies on bus-rail ticketing.
We are guaranteeing a minimum half-fare reduction for elderly and disabled people on buses, with authorities retaining the freedom to offer more generous concessions. An estimated 7 million people stand to benefit from that change.
When a case can be made, subject to ministerial approval, the Act provides for quality contract schemes: the comprehensive tendering of bus services and networks to a local authority specification—an issue which my hon. Friend raised. Quality contracts are likely to be applicable only in cases of clear market failure. Such contracts will effectively confer local

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monopolies, and the Secretary of State has therefore set a high threshold for their introduction. My hon. Friend will understand those important conditions on introducing quality contracts.
The 10-year plan provides new investment in services through increased funding for rural transport and the new urban bus challenge—about which I shall certainly say more shortly—and, of course, additional funding for investment by local authorities in schemes to help bus services. On the latter, we have substantially increased capital funding through the local transport plan settlement announced last December, which is worth a total of £1.3 billion to local authorities in the next financial year. That is set to rise to £1.7 billion in 2003–04. Public transport improvements feature heavily in local authorities' forward plans. They include quality bus corridors, bus lanes and other traffic priority measures to assist buses.
My hon. Friend will have noted that, as a result of the recent settlement, Stoke-on-Trent's block allocation for implementing its local transport plan was nearly doubled. That is an excellent outcome, which my hon. Friend has warmly welcomed. It provides the basis for a major improvement in local transport provision in Stoke-on-Trent in the next few years. I emphasise that it is up to local authorities such as Stoke-on-Trent to find local solutions to local transport problems in the context of generous financial support from central Government.
The local transport plan settlement deals only with capital. However, the position on local authority revenue spending is also relevant to my hon. Friend's anxieties. That local authority revenue spending includes support for subsidised bus services and concessionary bus fares. In the recent distribution of revenue support, the standard spending assessment for transport has been increased above inflation. We took account of the pressures resulting from increases in the prices of contracts for subsidised bus services that are being experienced in many areas. An extra £54 million a year has been injected into revenue support to fund the mandatory improvements in concessionary fares.
The overall revenue support settlement was undoubtedly good. It constituted a substantial growth in funding for the third year running, and a national average increase of 4.4 per cent. in general grant for the coming year. That is in addition to the extra funding through the 10-year plan for rural bus schemes and the urban bus challenge.
When considering financial support for buses, it is also relevant to note that the Government are providing substantial sums—£300 million this year in England—through the fuel duty rebate for local bus services. We made an early decision to remove the previous Government's freeze on the level of rebate. Since we took office, fuel duty increases have been matched by increases in the rebate thus ensuring that they were not a burden on bus operation. We have asked the Commission for Integrated Transport to examine financial support for bus services and I await with interest the commission's interim conclusions on the scope and level of fuel duty rebate. I expect to receive them shortly.
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Let me deal more specifically with my hon. Friend's anxieties. I know how keenly transport issues are followed in Stoke. Indeed, I was recently interviewed about local bus services on Radio Stoke, by my old friend Sam Plank. First, I want to speak about the urban bus challenge. I was able to assure my hon. Friend when answering a question from her a fortnight ago at DETR questions—I am happy to do so again today—that I believe that the new scheme will offer opportunities for Stoke-on-Trent. As I said, we will support the best projects for which bids are made, and we intend to start the first round later this year. We have allocated £40 million for funding successful bids over the next three years.
The aim of the new scheme is to contribute to the regeneration of deprived urban areas by improving transport provision. Combating social exclusion is therefore a key aspect of the urban bus challenge. We are now finalising proposals on criteria and bidding requirements. Consultation will shortly take place with relevant bodies on those proposals. I am sure that hon. Members will appreciate that, before consultation, I cannot announce final decisions on the guidance today.
Ms Walley: Will my hon. Friend reassure me that he will try to ensure that areas where services have been withdrawn in the way that I described will not be ineligible for money simply because it will be used to replace an existing service, as is the case with the rural transport subsidy? Will my hon. Friend take into account that our bus services are seriously depleted, irrespective of the quality bus partnerships, about which I have no complaint? If services are withdrawn, and the rate of withdrawal is such that even more services are withdrawn nationally by the time the criteria are set, it is essential to consider providing a minimum standard of local services.
Mr. Hill: I hope to offer my hon. Friend assurances about new arrangements for the rural bus subsidy grant and the rural bus challenge. I hope that we will be able to take those provisions into account when we finalise our arrangements for the urban bus challenge. I fully understand my hon. Friend's point.
I want to give hon. Members some broad indications of our thinking on these matters. First, we envisage a wide range of projects that offer innovative and imaginative solutions to transport problems in deprived urban areas. Secondly, we will not be over-prescriptive in defining deprivation for the purposes of the scheme or the types of area to be served. However, we will expect bidders to describe in their proposals the characteristics of the area to be served and how the bid will contribute to tackling deprivation in that area.
Thirdly, we are considering providing that bids can be made under the scheme for any area that is not classified as rural for the purposes of the rural bus grant. We will also draw no distinction in eligibility between outlying urban areas and inner-city areas. That satisfactorily covers the anxiety that an area might fall between the urban and rural schemes. I am glad to see that my hon. Friend indicates her assent from a sedentary position. I hope that she, and Stoke-on-Trent, will examine carefully the potential of the urban bus challenge in the context of local needs.

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My hon. Friend voiced her anxiety about recent bus service cuts in north Staffordshire. She linked that with the development of the quality partnership for the area. I welcome much of the progress that has been made to implement the partnership. It offers substantial improvements—better-quality vehicles and investment in new bus service infrastructure—on several important routes. Having said that, I note the concern about recent cutbacks, which I know my hon. Friend has discussed in detail with the city council and the operator, PMT. I understand that PMT felt it necessary to withdraw the services in question because they were performing poorly and because problems in recruiting drivers were adding to operating difficulties.
Local authorities have an important role in subsidising services when such services are not provided by an operator on a commercial basis. I understand that, in this case, the city council has been able to find resources from its budget to restore at least some of the service withdrawals, though not necessarily to provide the same frequency of service as before.
My hon. Friend referred in particular to service 92. I am informed that that service is to be retained in a slightly modified form, though re-numbered as service 98. My hon. Friend also referred to service 69A. I understand that that service is to be partially restored at a reduced frequency, although, unfortunately, it will no longer serve some 50 homes in the Brown Edge area. I recall corresponding with my hon. Friend last autumn about the eligibility of Brown Edge with respect to rural bus support, and I would again suggest that the possibility be explored of a joint approach with the county council, bearing in mind the fact that the resources for such support are now to be substantially increased.
Ms Walley: I should like to inform my hon. Friend that that has already been done. As a result of that co-operation, we now have four bus trips a week instead of two. However, the real issue is that there is no way of reinstating regular bus services. I pay tribute to the way in which Stoke-on-Trent city council and, in particular, its transport officer, have done their best to make good the deficit, but they cannot make good the whole deficit. The problem is that this is a revenue matter.
Mr. Hill: I am pleased to hear that that initiative has been taken, and that it has led to at least some improvement in bus services.
In a broader context, let me say two things. First, it is sad but true that in public finances, resources are scarce. However, we have doubled the funding available to local authorities by means of support for local transport plans from this year to next, and that sum will increase. That is a significant commitment on the part of central Government.
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Secondly, as I have mentioned, we have also made provision for increased revenue support for bus services, which has been warmly welcomed by local authorities. However, in addition to such initiatives and support from central Government, there is also a role for hard-nosed negotiation at a local level. I offer that advice to my hon. Friend and to local authorities in Stoke-on-Trent and elsewhere, although I do not for a moment wish to imply that Stoke-on-Trent has been anything other than extremely rigorous in its approach to negotiations with the local operators.
I turn to the more general issue of the rural bus subsidy grant. As announced in the recent rural White Paper, not only are we increasing the funding for this grant by some 45 per cent. over the next three years, as compared with the past three years, but we are broadening its scope to take in services in and around towns of up to 25,000 people—as compared with the previous figure of 10,000. The grant has already been a success, with some 1,800 services being supported and patronage being increased: some 16 million journeys were made on such services in 1999–2000.
The criticism has been made that the grant cannot be used to support existing services. I know that my hon. Friend will be pleased to hear that we have already listened to that criticism. I was pleased to announce on 16 January that we have decided in principle that up to 20 per cent. of the grant may be used to support existing services. We are now discussing the details with local government, and new arrangements will be in place for the next financial year. I am sure that the House, and local authorities, will welcome the additional flexibility that that measure will provide.
I again emphasise our commitment to the improvement of bus services and to carrying forward the measures I have outlined today. I do not underestimate the difficulties, and I take seriously the problems and concerns that my hon. Friend. has raised. However, there are already encouraging signs that the long-term trend of decline in bus use has been halted. Bus use in England rose by 0.5 per cent. last year—an encouraging increase when viewed against the background of decline in patronage over the past half-century.
There are also many examples of local growth prompted by the schemes that the Transport Act 2000 and 10-year-plan funding are encouraging. We shall continue to work closely with the industry and local authorities to bring about the continuing improvements that are necessary if buses are to play their full part in a modern transport system.
11.15 am
Sitting suspended.

Medical Research
11.30 am
On resuming—
Dr. Michael Clark (in the Chair): Unfortunately, the hon. Member for Oxford, West and Abingdon (Dr. Harris) is not present. Oh, the hon. Gentleman has just arrived. I think I shall turn a blind eye to his lateness and, if he will take his place quickly, I shall allow the sitting to continue—although this is rather irregular.
Dr. Evan Harris: Thank you, Dr. Clark. I apologise for my slightly late arrival.
I am very pleased to have secured the debate, which was preceded last night by a useful exchange of views on how we can control what is a significant threat to people pursuing legitimate business interests and carrying out legitimate lines of scientific research.
We need to be clear from the outset that what we are talking about is legitimate research—research that is necessary not just to the discovery of insights into human diseases, but to the development of insights into cures for those diseases. Moreover, much of the work done at the institutions we are talking about, and by some of the researchers we are talking about, is required by Government regulations. A particular responsibility is therefore placed on the Government to ensure that the individuals and businesses involved are protected from extreme actions taken against such people by those who resort to direct action.
I shall deal shortly with some of the concerns expressed by the scientific community about the Government's approach. First, however, let me say that direct action should be seen in the light of the fact that this country is a parliamentary democracy. Many of the comparisons that activists make between their actions, involving intimidation and harassment, and the actions taken by "liberation movements" throughout the world are invidious.
There is a parliamentary system. If people feel, as many genuinely do, that there is a basic reason why animals should not be used in this way, whatever the benefits, they have at their disposal methods by which to put their views to parliamentarians. That is why I think it legitimate for a parliamentary democracy not only to express concern about the methods used by activists, but to seek to ensure that, within the law, individuals and businesses carrying on work that is legal are protected from such actions. If necessary, it should be able to do that by improving the law, creating new laws and ensuring that sentences are appropriate, while also ensuring that the forces of law and order are given the facilities, resources and know-how that they need to tackle the problems.
Another curious aspect of the situation, however, is that the very forces of democracy that people can use to seek changes in the law are subverted by the fears of many parliamentarians for not just their own safety but that of their families and staff, because of threats—or perceived threats—from extremists and, indeed, people who are nothing short of terrorists. Several hon. Members, some of whom may be present, have had to
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take additional precautions because they wish to speak out. I myself have had to take advice, in the light of today's debate, to protect myself, those close to me and my staff from the threat of incendiary and other devices sent through the post. In the light of the possible effect on the ability or perceived ability of representatives of local people to put the case for their constituents, both individuals and businesses, the debate is even more important.
I hope that the Minister is aware that the concerns that reach him may amount to no more than the surface of what would reach him publicly if people did not feel so worried about their safety. The easiest option is often not to put one's head above the parapet. That is certainly the view taken by many scientists who are determined to get their work done, and not to put their colleagues and families at risk by drawing attention to themselves.
It is important to recognise that there are legitimate concerns about the use of animals. Some hold the philosophical view that animals should not be used, whatever the benefit to either animal or human health. I do not share that view, but we can accept that it exists. While I do not believe that it is the majority view in the country or that it is shared by many in the rest of the world, we must recognise that there are those who feel that way. for academic, philosophical or ethical reasons, or simply because of a gut feeling.
What is worrying is the fact that those arguments are supplemented by propaganda that, as well as being factually wrong, subverts our education system. Some people grow up with more sympathy than they would otherwise have had for those who oppose the use of animals, because of misinformation that they have been fed about the scientific merits of the work and the results obtained. Other hon. Members may wish to say more about that.
Dr. Stephen Ladyman: Does the hon. Gentleman agree that newspapers have a role to play? Was he as horrified as I was when the Daily Mail devoted two pages to allegations about a breeding organisation, and when, although the allegations were found to be completely bogus and invented, it published not a word retracting them?
Dr. Harris: The hon. Gentleman, who has taken a deep and commendable interest in the issue, is absolutely right. "No Scandal at Scientific Establishment" is not a headline that will sell many papers; the opposite claim, whether true or false, will sell papers.
We face the problem of the media's potential irresponsibility. The media may name people involved in this work when the allegations are unproven, or even make an error of judgment when they are discovered to be well founded, because of the threat of retaliation. The media may also picture people in television footage, which will alarm those people, their immediate families and their employers. There are ways in which the regulatory authorities, which are very strong in this country, can investigate allegations of wrongdoing; we should ensure that that is done, subject to parliamentary scrutiny.
The intimidation is now so widespread, the harassment so frequent and the threats so clear and vivid that it is right for the Government to act. I have

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here a cutting from the Stop Huntingdon Animal Centre newsletter, which was on the web. It is an article entitled "Zero Tolerance", a report from the Kent group. I think it right to put the article on the record so that people know about the actions with which we are dealing—actions which, while falling short of violence, demonstrate a lack of respect for decency and for law and order. It says:
"In Kent, we have a successful zero tolerance policy and great teamwork. All new shareholders have a polite letter sent to them with a factsheet. We obviously do not write our own name and address on the letter but instead give the name and address of another shareholder, so any backlash from our letter is aimed at them and not at us. Meanwhile, we make the first phone call, which is the most important for getting information. They may have both christian names on their answerphone message, or if a child answers and says mum/dad is at work we ask for the work phone number and mobile, etc. This is invaluable for later phone blockades. And initially they are off guard. When we do speak to them, they are either shocked to learn what HLS is all about, or they are obnoxious and tell us they are adamant they will not sell. But they always do in the end. From the list Kent is divided up into three sections, and people are allocated their set of shareholders to flypost. Meanwhile, the girlfriend of an estate agent is busy writing to the ten neighbours of each shareholder from a special computer program. The names, addresses and phone numbers are then circulated to all the active people from our group. The stubborn shareholders have home visits and we set up phone blockades. We also ask other groups to publish their phone numbers in their newsletters. And that is where our zero tolerance policy works, because they are not left alone until they sell their shares. Most of us do our phoning, writing and fly-posting in the evening: while most of us are fast asleep at night, one insomniac amongst us spends the early hours convincing shareholders it would be a good idea to sell. These people are allowed no peace, after all their money keeps HLS in business. We also use the methods suggested by SHAC of parcels …
That excerpt is just one example from one part of the country, showing the extent of the problem. It is important that the Government take a considered but strong view on those matters.
Yesterday, I was very pleased to hear the Home Secretary confirm the statement that he made in a press release last week—that the Government are minded not only to change section 14 of the Public Order Act 1986, but to apply an objective rather than subjective test to the offence of malicious communication.
Other issues have to be considered, and some hon. Members, including the right hon. Member for Huntingdon (Mr. Major), have spoken very eloquently about them. The first question that needs to be answered is whether there will be an opportunity for full parliamentary scrutiny of relevant legislation, to ensure not only that the right balance is struck between the restriction of civil liberties and protection of individuals and the right to free speech, but that all options are considered and there is a full discussion of policing regardless of current legal provision.
The fear is that hon. Members who are not serving in Committee on the Criminal Justice and Police Bill will not have an opportunity on Report to debate those issues on the Floor of the House. Concern about the issues spans all parties and is felt on both sides of the House. I should therefore be grateful if the Minister could clarify the Government's intention on those issues, which various hon. Members raised in yesterday's debate on the Bill.
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It is important also that we are told the Government's thoughts on dealing with the international aspects of campaigns of intimidation and harassment. We know that activists plan to start using methods and techniques with such a dimension.
Ministers will also have to deal with some wider points, although I shall understand it if the Minister cannot specifically deal with them today. However, in the months leading up to recent events in Cambridgeshire and Huntingdonshire, concerns were expressed to me that Ministers, particularly in the Department of Health, were very slow to defend the work being done both in breeding institutions and in laboratories, whereas the bulk of that work was being done to Department of Health specifications. Recently, the Under-Secretary of State for Health, Lord Hunt, has been very clear about the value of that work, and many people want the Government's assurances that Health Ministers' public support will continue regardless of the political climate and public mood.
The Department of Trade and Industry and Lord Sainsbury have been superb in their recent efforts to intervene and help Huntingdon Life Sciences. I am more than happy to commend the efforts of Lord Sainsbury and his staff; the Minister for Science is a true supporter of science.
I ask the Under-Secretary of State for the Home Department at least to consider raising with his ministerial colleagues the issue of what message is sent to shareholders, workers and others engaged in fighting and resisting intimidation and harassment when, at the first sign of a request from the extremists, the Labour party superannuation fund sells its shares in Huntingdon Life Sciences—as it did last year, citing ethical reasons for doing so. That somewhat undermines the thrust of recent Government clarifications on the issue.
I also ask the Minister whether there is any chance of the Government establishing—of their own volition, rather than as a response to requests from extremists—a royal commission to examine the issue. The House of Lords has helpfully established an ad hoc Committee to examine the issue. However, the Liberal Democrat party's view—like that of the Labour party, I thought—is that it is important to create a royal commission to demonstrate that the matter is clearly under review.
I believe that a royal commission would back science, not anti-science propaganda. I also believe that a commission and the associated consultation would provide an opportunity to reassure the public, including people in our schools, that that research work is legitimate, benefits health and science, minimises animal suffering, maintains the world's highest animal welfare standards and is worth continuing. A commission may also discover that, with considerations such as those, unnecessary bureaucracy should not be allowed to impede that work. However, those two issues are separate.
I do not believe that the scientific community has anything to fear from a royal commission. If the Government fulfil their commitment before the general election to establish a royal commission, the debate will be advanced. It is important that the public see that there is such a debate.

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I draw the Minister's attention to the fact that there have been problems not only in Cambridgeshire, but in Oxfordshire. Well before Huntingdon Life Sciences was targeted by the extremists, Hillgrove Farm, a cat-breeding establishment in Oxfordshire, was also targeted. Although it conducted no experimentation work on the premises, had very high animal welfare standards, was inspected by the Royal Society for the Prevention of Cruelty to Animals and met the RSPCA's standards for such an establishment, the business man concerned and local police were unable to prevent continued harassment and intimidation. Consequently, the institute closed, with job losses and a loss of breeding work for the United Kingdom's science base. Another consequence is that more animals may be imported for that work from abroad, where standards are lower.
I should also be grateful if Ministers recognised the fact that Oxfordshire police spent millions of pounds in their attempt to protect that businessman and the people who worked in his establishment, but that they have not had a penny in compensation. Although the £1 million for Cambridgeshire is welcome—I make no Oxford-Cambridge link—Thames Valley police are greatly concerned that they have had to bear the full cost of that operation with no compensation. The operation has had a significant effect on their ability to perform their general work and to protect scientists in my constituency and in surrounding constituencies who are still working on animals and are prepared to be open about the need to do that work.
It is a big subject and I know that many other hon. Members wish to speak. I thank the Government for their efforts in recent days to assure us that carefully considered legislation is on the way. Although my Liberal Democrat colleagues and I want to see the legislation's detail before writing a blank cheque in support of it, I hope that the Government will be taking a cross-departmental view on it. Some issues—such as the protection of shareholder information and the rights of shareholders and directors—are not subjects for debate with a Home Office Minister.
The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): I reassure the hon. Gentleman that I speak for the Government, and not only for the Home Office, so I should be able to address some of the issues on shareholding that he has raised.
Dr. Harris: My time is up. Will the Minister therefore also address the issue of how we can ensure that company directors do not have to disclose their names and addresses in a manner enabling extremists to target them, particularly as little protection is provided to them? Shareholders in the constituencies of many hon. Members are similarly concerned about that issue, as they are about secondary targeting.
The article that I quoted above was from just one campaign in one part of the country, but it demonstrates the depth of organisation among the extremists. Methods must be established—a national police bureau, perhaps—to provide not only intelligence on the extremism, but operational advice to forces on how best to tackle a national but increasingly international problem.
11.49 am
Dr. Stephen Ladyman: First, I congratulate the hon. Member for Oxford, West and Abingdon (Dr. Harris) on securing this much-needed debate. When he selected the subject, he was not to know that we would be debating the Criminal Justice and Police Bill yesterday, when we were able to discuss some of the relevant issues. Even so, today's debate allows us to expand on some of them.
I agree that the Government's recent performance on this matter has been good. They moved decisively to protect Huntingdon Life Sciences, and have made some encouraging announcements about their intentions in respect of the overall law to protect scientists. However, I do have some criticism of the Government: their action has come late in the day. More than 12 months ago, I received a letter from my right hon. Friend the Home Secretary. He said that he was looking at the law in this area and that he was aware of the problems, but the proposed changes to the Criminal Justice and Police Bill still do not appear in the Bill. They will have to be introduced as amendments, and it is fair to criticise the Government for that.
A further criticism applies to the Labour party, and, as a member of that party, I accept a share of responsibility. I agree with the hon. Member for Oxford, West and Abingdon that the sale by the Labour party pension fund of its shareholding in Huntingdon Life Sciences was inappropriate, unhelpful and ill judged. However, I shall not accept too many lectures from Liberal Democrat Members, as we have no idea where their party's pension fund has shareholdings. If the fund ever held any such holdings, we do not know whether it sold them off before anyone found out about them.
Dr. Ian Gibson: The Liberal Democrats have no money.
Dr. Ladyman: That may be true.
Labour party members must hold up their hands and accept that the sell-off was a mistake. The action being taken by the Government now may have saved Huntingdon Life Sciences but it is too late for many other small organisations, such as Shamrock Farms. It also comes too late for the many scientists who have left the business because of pressure from evil people—I maintain that they are evil, even though they may think that their motives are good.
I believe that animal experiments are vital and necessary. Unlike other speakers on this subject, I do not hide behind the legal requirement that many animal experiments must be carried out to develop medicines and to get permission to market them. Even if the law did not require such experiments to be carried out, many medical advances could not be made without the animal experiments needed to underpin the knowledge base on which they are made. The necessity of such experiments is completely independent of any legal requirement that they be carried out.
It is claimed that animals are a poor model for what happens in human beings. However, they are one model for that, and represent an important contribution to determining how a new treatment, therapy or drug affects human beings. Animal experiments offer part of the picture that scientists need to build up. They are not

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the whole picture—for that, experiments also have to be carried out on human beings—but they are a vital component. Without them, there would be no new medicines or therapies.
Over recent weeks, some people have tried to defend animal rights activists from a position of ignorance. One annoyed me so much when I heard him on the radio the other day that I feel entitled to name him and annoy him back. Michael Mansfield QC said, "We don't need animal experiments. Hammersmith hospital has just announced a new cure for leukaemia. It is entirely cell-based and does not require animals to be used in the development of a drug."
The cure is not a drug-based therapy and so might not require animals in the development of a drug, but every bit of research on which it is based was conducted on animals, mostly mice. Mr. Mansfield speaks as a respected member of society. He is considered to be learned and intelligent. When people hear him on a popular radio programme, they think that he must have some information that is worth knowing. Yet he speaks from a position of absolute and total ignorance.
When idiots such as Mr. Mansfield say such stupid things, they promote in society a body of opinion to the effect that animal experiments can be done without. The truth is that they cannot. The bioscience and pharmaceutical industries would do without animal experiments tomorrow if they could, as they are very expensive. Those industries spend a fortune trying to find alternatives, but so far with no success. Until alternatives are available, animal experiments will be needed.
We need to protect people who carry out animal experiments, as they do important work on behalf of the economy and our health. In my constituency alone, £1 billion has been invested in the pharmaceutical industry. That investment comes not from the UK but from the United States of America, and 5,000 people are employed in the industry in my area as a result. That investment will come to an end tomorrow if we cannot convince people that we mean business and intend to protect scientists.
We need to protect scientists in all sorts of ways. The criminal justice legislation needs to be improved, as the House discussed last night. In addition, I suggest to my hon. Friend the Minister, who I know is very concerned about these matters, that the Home Office needs to look at some of the measures that could be taken.
For example, bogus allegations were recently made against an animal breeding organisation. The Home Office spent £36,000—and 1,000 hours of officers' time—investigating the allegations, only to find that they were completely false. Moreover, the inspectors found only one person who might have committed a crime during the events included in the allegations, and that turned out to be the undercover operative who made the allegations in the first place.
However, the Home Office was unable to try and recover the costs involved from those who made the allegations, or to prosecute anyone for making false allegations. As far as I know, the undercover operative was not charged with the crime that may have been committed at the time. Only when legal action is taken against them will those involved in obstructing science realise that they must abide by the rules.
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I shall not repeat too much of the detail of what I said in the debate last night about the need for other and more extensive protection. We need to look at how campaigns are organised so that we can ensure that their leaders are responsible for the actions of the people who take part. We need to look at the legislation on harassment, and to define the limits of peaceful protest.
The hon. Member for Oxford, West and Abingdon spoke of the security measures that he is having to introduce for his staff. I can tell him that I have a personal security alarm that was issued by my local police force. I might be prepared to risk going without it, as I am responsible for my words and actions, but members of my staff also have to have personal security alarms. Whether they are the result of over enthusiasm or deliberate intent, threats against MPs and their officers, and against scientists and others working in the industry, cannot be right. We need to define clearly what is meant by the term "peaceful protest".
In addition, we must make sure that people are protected from secondary targeting. Consideration must be given to what should be done with regard to the addresses of shareholders and company directors, and with regard to malicious communications and protests outside people's homes. We should review the available legislation across the board, and we should do so very soon.
Finally, I agree with the hon. Member for Oxford, West and Abingdon in that I still believe that there is merit in the possibility of a royal commission to look into animal experiments. However, the terms of reference would have to include the possibility that any such commission could find that the status quo was appropriate. In other words, a royal commission would have to be able to agree with me that the present legislation in this country is the best and tightest in the world, and that it does not need to be changed.
A royal commission's terms of reference should also allow it to conclude that the current regulations are too tight, and that their administration is too onerous for scientists trying to carry out experiments. It would be bogus and inappropriate for the terms of reference to state that the only possible conclusion for a royal commission was that the regulations had to be tightened.
Science has nothing to fear from explaining what it is doing. So long as it is given a fair opportunity to do so, I believe that it will be able to make its case. It is up to the Government to protect the scientists who do this vital work.
Dr. Michael Clark (in the Chair): Order. There are only two other speakers before the Minister. I hope that whoever I call next will bear that in mind and keep their contribution appropriate so that the other speaker may be able to get in.
12 noon
Mr. Phil Willis: I thank you for allowing the debate to go on, Dr. Clark. That was very courteous of you.
I represent Harrogate and Knaresborough, where there is a major laboratory, Covance. I wish to thank the Government for taking the issue seriously. I agree with the hon. Member for South Thanet (Dr. Ladyman) that

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it is rather late in the day in many respects. We had been promised that there would be action much earlier, but we welcome it even at this late stage.
Many people with genuine concerns about animal welfare have a right to be involved in the debate. It is a debate for the whole country, not simply for scientists. We should take seriously issues of animal welfare brought up by organisations with a genuine commitment to see as little suffering to animals and as little experimentation on them as possible.
There could be greater control over some experiments, particularly repetitive ones, often on the same drug for different companies. I believe that we could cut down considerably on experiments for 20 different types of aspirin, for example, or other products.
Much of the debate so far, and much of yesterday's debate, seemed to centre around Huntingdon Life Sciences laboratories and the tremendous level of activity there. I know the chief executive—Brian Cass—well because he was the chief executive of Covance laboratories in Harrogate before going to Huntingdon Life Sciences. Although there is a lot of interest in Cambridgeshire, many laboratories throughout the country also need the sort of support given to Huntingdon Life Sciences.
Covance in Harrogate is a major laboratory—in fact, it is the major private sector employer in my constituency. We were particularly disappointed that the Minister could not find time to visit Covance and meet the staff who were suffering enormous harassment earlier in the year and are continuing to do so. It is unacceptable that my constituents, particularly relatives of people working at the laboratories, should be subjected to continuous harassment. They receive threatening letters and threatening telephone calls in the middle of the night; their children are followed to school and excrement is put through their letter boxes. Such behaviour occurs not just in Huntingdon but throughout the country, and particularly in my constituency.
I am enormously worried that not only are the scientists at Covance harassed but so are the cleaners, the secretaries and the people who deliver the sandwiches. We have to look beyond the scientific community and consider the community as a whole.
The assurances from the Home Secretary yesterday, when introducing the Criminal Justice and Police Bill, went some way towards allaying our fears. No doubt tightening up the Public Order Act 1986 and the Malicious Communications Act 1988 will have an impact. However, the existing legislation could have been applied more vigorously. There are sufficient powers under both Acts to have dealt with many of the worst effects of the present protests. I suggest that one reason why that has not happened is because police forces such as ours in North Yorkshire do not have the resources to deal with the level of protest that occurs from time to time. The £1 million given to Cambridgeshire police is very welcome, but will the Minister accept that forces such as that in North Yorkshire also need resources to police the Covance laboratories in Harrogate and offer the necessary protection to individuals and their families?
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On some occasions, when police have been called to support a family, virtually the whole force for Harrogate has been involved in the incident, leaving the rest of the patch unpoliced. That is unacceptable. The Minister knows that the deputy chief constable of North Yorkshire is heading the taskforce and bringing the information together, yet North Yorkshire has to pay for that work. That matter needs to be addressed.
There is a basic right in this country that people's homes and families should be protected by the law. I do not know what arrangements are being made under the Criminal Justice and Police Bill, but could we have an early look at the amendments that are being proposed so that if, as my hon. Friend the Member for Oxford, West and Abingdon (Dr. Harris) said, they cannot be debated on Report, at least we can have fair wind of them so that we can make representations to the Home Secretary?
It is my understanding that, as well as going international, as my hon. Friend says, the organisations are going on the internet in a big way. Given that there will be a massive rolling out of the internet in the next couple of years, that could be a major problem. Perhaps the Minister will respond to that point.
Finally, one concern on the other side of the argument is that we should provide people with greater certainty about animal welfare in terms of inspections and, in particular, the RSPCA's access to animal laboratories. It is a respected organisation, and giving it greater access would be a help.
Ultimately, this is a legitimate business, and, as such, I will support my constituents. I hope that the Home Secretary and his Department will do so too.
12.7 pm
Dr. Ian Gibson: I congratulate the hon. Member for Oxford, West and Abingdon (Dr. Harris) on securing the debate and raising the subject.
On Sunday lunchtime, I debated for two hours with Stop Huntingdon Animal Centre on local BBC television. Surprisingly, I found it quite mild and entertaining; I had been expecting the talk to be violent. SHAC members condemned the violence—a fact which I welcomed. I also welcomed the contribution of Brian Cass from the Huntingdon Life Sciences laboratories. He said that the Government had reacted positively and well.
It was also very interesting to hear Roger Spiller, the local regional officer of the Manufacturing Science and Finance Union, which represents most of the workers in Huntingdon and also those in Occold near Eye in Suffolk, who are suffering the same kind of intimidation and threats. The movement has gone from Huntingdon to intimidate the workers at Occold, and I am very pleased that the unions have taken up an issue that traditionally one might not have associated them with. The issue has the full official support of the union, and such support will gradually, I hope, move across the whole trade union movement.
I should like to say a few things about the need to use animals in biomedical research. I am grateful to friends such as Professor Nancy Rothwell of Manchester university, who is an outstanding scientist, and other members of the scientific community with whom I have

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debated these issues over the years. They have made it clear that advances in the prevention and treatment of disease over the past 50 years have led to dramatic improvements in the quality and quantity of all our lives, yet major diseases still remain to be conquered—heart disease, strokes, Alzheimer's and cancer. There is no cure and no useful treatment; much remains to be done on infectious diseases and drug-resistant micro-organisms.
A great deal of research is needed. We need to understand the normal biological processes of cells. Despite the magificence of our molecular, cellular and human studies, the use of experimental animals will have to continue for the foreseeable future. That is agreed by organisations such as FRAME, or the Fund for the Replacement of Animals in Medical Experiments—there is no substitute for some degree of animal experimentation.
I realise that the issue is sensitive and complex and that public opinion is divided, but 80 per cent. of the population support the use of animals for the possible treatment of human diseases. Recently, during debates in both Houses on stem cell research, many members did not understand the issues and were confused but were able to make up their minds based on an open, proper, educated and intelligent discussion.
It is often forgotten that well over 96 per cent. of experimental animals are non-human primates. We use such animals to investigate medicines, biological functions and so on. I offer an example of an animal experiment that led us on to a new path of treatment. I am sure that it will interest you, Mr. Winterton, as it led to a cure for prostate cancer.
A major company developed a drug that acts like a natural hormone and was expected to stimulate the ovaries, testes and sex organs. However, during long-term animal studies it was unexpectedly found that the drug caused the sex organs to shrink. That paradoxical discovery would not have been made in the planned clinical use in infertility treatment and it might simply have been concluded that the drug had failed. In fact, the scientific understanding that it brought led directly to its use as a highly successful, reversible treatment for prostate and, indeed, breast cancer. As calculated by Professor Rothwell, it has already offered more than 3 million patient years of valuable treatment.
Professor Rothwell has also carried out research on interleukins. Animal experiments gave an extremely interesting result that has allowed us to develop new cures for strokes and brain injuries. There are other examples that do not tell such an exciting tale, but we have to use those approaches as well as considering alternative methods.
Scientists constantly try to replace, refine and reduce the number of animals used. The Government made a majestic strike on animal experiments when they took on the cosmetics industry. Many of us thought that useless experiments were being carried out merely to make us all look prettier. The Government took a huge step forward; almost from day 1, they took on that silly use of animal experimentation.
Despite strong regulation and much discussion, it is true that, now and again, some apparently inappropriate experiments are approved. However, that is being cut down as more debate takes place. Laws are
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in place; projects are considered; and there are Home Office visits. Indeed, if one starts to conduct an experiment in a university laboratory as much as one minute before the time specified on the Home Office certificate, the lab can be closed down by the Home Office. I was the boss of such a department and had to monitor these matters. Although I was angry when I had to stop people conducting experiments, I made it clear that the rules were firm and that they had to be obeyed.
The public need information, and explanation of these issues. Many scientists spend much of their time talking to various groups. For example, the Women's Institute has strong views about animal experiments and is often visited by scientists. Major funding bodies, such as the Medical Research Council, devote copious sums of money to the investigation and justification of alternatives to replace the use of animals in experiments.
Animal experiments will have to continue for the foreseeable future for one major reason: the human genome project will necessitate an understanding through the use of transgenic mice of the genes that cause cystic fibrosis and many of the problems that afflict humanity. There may be a small increase in the use of mice for the best medical reasons—to develop new cures. There is interaction between Government, industry and the scientists who are absolutely committed to that work. The loyalty of those scientists under pressure demands full Government support.
12.15 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): I join hon. Members in congratulating the hon. Member for Oxford, West and Abingdon (Dr. Harris) on securing the debate; the way in which he made his case does him great credit.
The use of animals for medical research will always give rise to strong feelings. I am grateful to hon. Members who spoke in the debate for their reasoned contributions on what can sometimes be a difficult and emotive subject.
I condemn without reservation the violent and intimidatory behaviour of so-called animal rights campaigners. They do no good to the cause of animal welfare, whereas more reputable organisations such as the RSPCA have achieved change through argument and debate. On the other hand, by the use of violence, the extremists have prevented change that might have taken place—for example, on freedom of information. When there is a clear threat of violence, it is difficult to agree to greater freedom of information if it might result in intimidation of and violence towards individuals who work in animal research.
The extremists have damaged their own cause, whereas those who try, by argument through the proper democratic process, to set out how change can be achieved have brought about some progress—as I shall explain. The Government are determined that extremist organisations will be opposed. We are equally determined that organisations undertaking legitimate and valuable work and the individuals who work for them should be protected. That is why we have allocated additional funds of £1 million to the Cambridgeshire police, as extra resources to police the protests against Huntingdon Life Sciences.

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We are conscious of public concern about the use of animals in experiments and in other scientific procedures. We are aware that many people want to stop all such work. Unfortunately, that cannot yet be done without halting important medical and scientific research and without compromising public safety. We need to get that message across to the public loud and clear.
We often see newspaper advertisements with a picture of a monkey with electrodes on its head. That is an extremely emotive image and causes people to wonder whether such experiments are necessary. However, if a photograph of a child suffering from a serious and painful cancer was placed alongside that image, thus confronting us with the question of whether animal experiments are necessary to cure that child, the public would have to consider the serious—yes, emotional—but deep philosophical issues involved.
People feel uncomfortable about the issue. I especially noted the comments made in yesterday's debate on the Criminal Justice and Police Bill by my hon. Friend the Member for South Thanet (Dr. Ladyman) who has also spoken today. He said that when he began to conduct experiments on animals, he felt uncomfortable about doing so. As a Minister dealing with such matters, I, too, feel uncomfortable. I feel uncomfortable that animals may be hurt during some experiments, but I should feel much more uncomfortable if I stopped necessary research and people died or suffered as a result. There is thus a clear moral issue for everyone in the country. As the hon. Member for Harrogate and Knaresborough (Mr. Willis) suggested, a wider debate is needed so that people confront the serious issues involved.
We intend to ensure that animals are used only where fully justified, where no alternative exists and where the benefits outweigh the costs to the animals involved. A total of 2.57 million animals were used in scientific procedures in 1999. With the exception of 1997, that is the lowest figure since 1955. As my hon. Friend the Member for Norwich, North (Dr. Gibson) said, the Government have taken steps since 1997 to ensure that we respond to people's discomfort about animal experiments.
We have announced our intention never to allow the use of great apes. We have secured an end to the testing of cosmetics on animals. We have announced our intention never to allow the testing of alcohol and tobacco products on animals for the use or promotion of those products. We have ended the licensing of the lethal-dose 50 test and tests for skin corrosivity and phototoxic potential. We have started phasing out the use of animals in monoclonal antibody production. We have promoted the principle of data sharing to reduce the duplication of testing on animals. All that shows that we have done everything that we reasonably can to ensure that animals are used only where absolutely necessary, and that where animal testing takes place, it is carefully monitored and controlled.
The Government have brought about those changes as a result of discussions with the scientific community and several animal welfare groups. We have considered the issues very carefully. Those discussions have produced changes, but no change in our legislation or
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procedures has resulted from intimidation or violence. I give a commitment that we will not allow those who promote violence and intimidation to change our laws or procedures.
The research needs to be carefully monitored. The system has operated for several years and imposes strict regulations on animal welfare during research. However, it is essential that that research is carried out. Medical research saves lives. It improves incomparably the quality of life and life expectancy of people who have debilitating diseases, but it is also important because it enables veterinary science to improve. However, some animal welfare organisations ignore the fact that some of the research benefits animals in the long term.
Medicine has made enormous strides during the past century, but that progress can be maintained only if we have strong, active pharmaceutical and biotechnology industries. We all want breakthroughs to be made in the treatment of diseases, such as Alzheimer's, leukaemia, arthritis and multiple sclerosis—the list goes on—but the animal rights extremists threaten those breakthroughs. They want to destroy an industry that saves lives.
As we have heard this morning, animal rights protesters are not warm, sentimental people who love animals; they are not prepared to use democratic processes and peaceful protests to present their opinions. They are aggressive terrorists who are happy to use violence against anyone with whom they disagree. They pursue ugly campaigns of intimidation and harassment. They are indiscriminate about harming the innocent friends and families of those whom they target.
I understand that people are concerned about animal research, and the Government are actively engaged with the groups that are prepared to use peaceful means to present their views, such as the British Union for the Abolition of Vivisection, the National Antivivisection Society and the RSPCA. It is harder for them to press the points that they want to make when they have to dissociate themselves from the illegal and extreme behaviour of other groups. Those actions have only hardened the resolve of the Government, the pharmaceutical industry and the medical research organisations to resist the pressure from extremists.
The Government welcome the fact that Huntingdon Life Sciences has successfully found new long-term financial backing. If, as the result of animal rights extremists' actions, such industries were driven out of this country, we would all be the losers—patients, the national health service, employees and the United Kingdom economy—but the irony is that the animals would be worse off. In this country, the use of animals in experiments and other scientific procedures is strictly regulated under the Animals (Scientific Procedures) Act 1986—the most rigorous legislation of its kind anywhere in the world. Nowhere else is animal welfare so carefully controlled.
The 1986 Act operates on the principle of the three Rs—replacement, reduction and refinement. The principle involves the replacement of animals by non-animal methods wherever possible; the reduction of numbers to the minimum necessary to obtain valid results where replacement is not possible; and the refinement of all procedures to minimise suffering and

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harmful effects. A series of special licences must be obtained before a researcher can use an animal. Researchers must have the necessary skills, training and experience. The establishments must have facilities to care for the animals properly and are subject to regular inspection, often without notice, by a team of Home Office inspectors. I cannot guarantee that a mistake will never be made in any research establishment, but their regulation is as rigorous as possible to minimise the problems that may arise.
We are considering how to give more protection to those who have been targeted by extremists. Tough laws already exist to protect individuals and businesses from violence and threatening or intimidatory behaviour, but we are keen to find out whether more can be done. We are urgently considering the scope for strengthening the law to prevent extremists from intimidating people by protesting outside their homes or sending them threatening letters. As the hon. Member for Harrogate and Knaresborough has said, the extremists sometimes target their victims by looking up the names and addresses of company directors and shareholders. We shall examine what can be done in company law to protect directors and shareholders.
At present, directors' names and home addresses must be filed at Companies House, and shareholders must also provide a contact address, although it may be a nominee account. That requirement is being reviewed as part of the independent review of company law, which will report to the Secretary of State for Trade and Industry in May this year. I hope that it will provide a means by which we can safeguard not only the proper requirements of company law, but the personal protection of those who work in such companies. The Government therefore share the hon. Gentleman's aims, and we shall consider how to deliver them.
It is particularly unsettling for people to be intimidated by protesters outside their homes, and we are understandably concerned about the safety of their families. We are considering the possibility of creating an offence of demonstrating outside a residence in a way that is likely to cause intimidation or distress. Another favourite ploy of the extremists is to bombard their victims with hate mail. We are considering whether such can be addressed under the Malicious Communications Act 1988.
I have not been able to deal with all the issues raised during the debate. However, we have had several meetings with the police, the Crown Prosecution Service and the various other organisations that seek to control the extremists. They are developing not only guidance on how those who may be victims can register their shares and protect themselves, but a much more proactive approach to targeting extremists and ensuring that they are discredited, and we shall prosecute them where possible.
I hope that the concerns expressed today are recognised by the police, but I assure hon. Members that the Government are absolutely determined not to let the extremists succeed. We will not hesitate to do whatever needs to be done to protect the public and support the freedom of a legitimate and important industry to pursue its business. It is right and proper that people express their opinions, but they should do so peacefully under this country's democratic parliamentary system.

Chapel Hill School, Braintree
12.29 pm
Mr. Alan Hurst: I am very pleased to have the opportunity to bring to Members' attention matters concerning Chapel Hill school in Braintree. Two weeks ago, the parents of the children at the school received a letter from Essex county council's education department and they were stunned to read that it was proposed to close the school. That would mean that the children, who, in the main, live nearby, would be scattered to other schools throughout the town and possibly throughout the wider district. The proposal followed from what would be regarded as a less than satisfactory Ofsted report in the spring of last year.
Chapel Hill school was in a different position when it opened in 1929. It was built by a Chelmsford firm of builders and was part of the progressive expansion of Braintree. It was built to serve a developing council house estate that was based on Bartrams avenue and was being built by the then Braintree urban district council. At that time, Braintree was a market and small industrial town. It had a number of large mills and works. Indeed, well-known names such as Courtaulds, Crittall Windows and perhaps the lesser-known Lake and Elliot's had their factories and works there. It was a thriving town that you, Mr. Winterton, might associate more with the north of England, but markets towns are found in the south and East Anglia, too. At that time, people went to school, worked and lived in the same town. It was a closely bonded community.
The school's degree of permanence is shown by the fact that its first headmistress, Miss Austin, was there for 34 years. She started at the school in 1929 and left it in the mid-1960s. She saw enormous changes not only to the school, but to the town in that period. Indeed, the school welcomed wartime evacuees from London. They moved out from the capital because they believed that it would be much safer to live in small towns surrounded by countryside. Generally speaking, that was true. Braintree did not suffer extensive war damage, but some damage occurred close to where the school is situated.
One frequently meets older citizens who not only went to the school themselves, but have children and grandchildren who have been to it. In the main, most of us have fond memories of our school days; we try to blank out those that are not quite so fond. However, the people to whom I have spoken all have memories of a warm, hard-working, community-based school.
I presided at the annual general meeting of the Silver End friendship club last Friday. Silver End is a village near Braintree and, at the meeting, I met a lady who told me that her first day at school was the day that Chapel Hill school opened. She said, "Now I've said that, Mr. Hurst, you'll know how old I am." Even an arithmetic ignoramus such as I could just about calculate that adding five to the number of years from 1929 to now would enable me to work out her age. She spoke very well of the school and was sorry to hear of its proposed closure.
The school has had its ups and downs. At one time, the school had 500 pupils accommodated in demountables or temporary classrooms in its grounds. The school was bursting at the seams. That is not the position now. It has room for 240 pupils—it is like the

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turn of time—and they are accommodated in good, old-fashioned self-contained classrooms with a door, walls and windows. Such classrooms were terribly out of fashion in the 1970s; it was almost an abomination to have such things.
I recollect that my wife taught at a progressive school in that period, and she was told that one could not possibly have a blackboard and easel. If one used a blackboard, one had to prop it up, because using an easel would make it too formal. The world moves on and, just as one can now use the modern version of blackboards—they are probably called overheads—one can have proper classrooms. It is significant that the newest school in Braintree, at Notley Green, has been built with defined classrooms. The design of Chapel Hill school has come back into fashion and modern usage.
In the company of the vice-chairman of the governors, the Rev. Steven Lloyd, I visited the school last Friday afternoon. I had been to the school in the summer, but this visit had not been pre-planned; I went almost without notice. No one had painted the walls bright green, because of my visit, so I hope that I saw the school as it really was.
The first class that Rev. Lloyd took me into was a reading class. A wide selection of books of all kinds—from modern books to classical novels—was available. I spoke to every child in the class and they were able to tell me what the books were about and what their favourite reading was. They had an enthusiasm for reading and for the feel of books. However great advanced technology may be, there is nothing like the feel and smell of a book to encourage the sense of learning, the wish to learn and the excitement about what lies in its pages.
I was particularly impressed by a young girl in that class. She had a book of poetry, which had not been given to her just because a dignitary was coming. She showed me her favourite poems and they were appropriate to a girl of her age. There is place for poetry in the world in which we live and I was pleased that Chapel Hill encourages that as well as other subjects.
The next classroom provided a contrast; it was the computer class. Virtually every child in the school has access to a computer. I am not able to judge whether the children were doing well, but they were at the computer and showing enthusiasm. Each child has had the opportunity to use a computer from a very young age.
Some things in schools do not change very much. As I went along the corridors, I saw the wall displays. Sometimes one thinks that history does not always find its proper place in teaching in schools these days and one can argue that history is an essential subject. If we do not know where we come from, we shall not have the faintest idea of where we may be going. However, I was pleased that the wall displays showed Braintree in history. To link one's town with the course of history is more pertinent than the obscure descriptions of events in classical times. Those events are fascinating for what they teach us, but they are not as relevant to young children as what they see around them.
The displays also showed events from the 20th century. It makes you feel older than you think when you realise that the everyday events of your boyhood are
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now part of historical exhibits. Again, it is important that the children know their parents' and grandparents' background and how they lived in former times.
My close friend Elwyn Bishop is a county councillor and he is taking an active part in the campaign to save the school. It is being well supported by the local newspaper, the Braintree & Witham Times, and a whole range of parents, teachers and governors. The town is becoming unified in its opposition to the closure, and a great well of affection and emotion is coming from people who want to preserve the school that they went to or have known of and have loved.
Elwyn Bishop faces a particular difficulty in the campaign to save the school. It is shortly to play a football match against the school at which he was headmaster. He faces a great dilemma as to which side to support during the match. I advised him to support one school in the first half and the other in the second half, but that might have been too political an answer.
Chapel Hill school has a playing field. When one considers that the school was built in the 1920s in the middle of a then industrial area, the fact that it has a field at its rear and a further one beyond that makes it a fairly unusual school in an urban environment. The playing field at the rear of the school is surplus to its requirements. It might be possible to exchange it for value, as it were. That might lead to further improvements to the school. A nursery school is also on the playing field.
I do not want to suggest that the area is deprived; that would be the wrong word. However, it has been through difficult times and the great factories and works that I described earlier disappeared 10, 15 or 20 years ago. Crittall Windows remains, but it is very much a scaled-down version of what it once was. The life went out of that part of the town, but, as a result of regeneration schemes, between 250 and 500 new properties are planned to be built within the school's catchment area. Although the number of people in the catchment area has decreased, the arc of projection is rising, and more children will be around to attend the school.
The nursery school was not established by chance. The county council's policy was that those areas that were not as advantaged as others should take priority when such schools were established. It is a natural feeder for the main school. More than half the youngsters who attend live locally; the remainder live further afield, within the town itself. The school also provides an opportunity for other people within Braintree. For example, students at Braintree college are gaining valuable experience by acting as nursery assistants.
There is consistent support for the school. When I was there on Friday, I met Mrs. Joy Mills, a teaching assistant. She is an ex-pupil, as are her two children, one of whom is a chartered physiotherapist; the other is studying medicine at Imperial college. I also spoke to Mrs. Abbott, who lives close to the school. She and her children attended it. Generation after generation have gone there, loved it and are united in trying to save it. The community spirit carries on after school with football, netball and choir practice. The area needs that facility as it comes out of the bad times.
The Ofsted visit in April 2000 was a great blow. The school was labouring under a number of disadvantages. The deputy head had been suspended following an

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allegation that was subsequently proven to be groundless, so she was not present during the visit. A senior member of staff was ill and away from the school for some time. The gaps were being filled by temporary and supply teachers, one of whom had been there for only three days when the inspection took place.
During one day of the Ofsted visit, the school was supposed to be going on a trip to the millennium dome—I hope that my hon. Friend will look favourably on that. Therefore, the inspection was squeezed into three days instead of four. The school applied for a deferment, but that was refused and the visit took place. Problems were found within the school, and those have been accepted. As a consequence of the report, the headmaster became ill and resigned. The effect of Ofsted inspections on school staff, teachers, pupils and governors could be the subject of another debate. The stress, illness, resignations and public humiliation that arise from them are pertinent matters.
The headmaster was therefore absent after the report's declarations in May, and the school has been rudderless since then. I do not criticise the people who stepped in on a short-term basis. The deputy was in charge for a little while; a acting head took over for six weeks; and there is another acting head now. However, they could not achieve what the county council could have achieved had it gone all out to find a new head for the school at an early date.
I recently met the school governors. Mr. Dave Rogers, the chairman, the Rev. Lloyd and Mr. Alan Howard said that they wanted to advertise the post of headmaster last September, but were told that it would be better to hold off until this term. During that time, the school drifted.
The inspectors returned in November and found that the school had not improved, but that cannot have been a surprise. It could not have succeeded without a dynamic commitment to make it work. It is almost as if the closure process is being willed, because that is what will happen without dynamic intervention. No one has been in permanent charge of it since May and it does not have the prospect of salvation that would have existed had another course of action been taken. The school has not been given a second chance.
The public reaction to the decision has been overwhelming. The matter has not been before the county council as part of the democratic process, so there has been no democratic input, but it is not a party political issue. Essex county council is finely balanced between the parties and it is hoped that men and women of good will will ensure that the school is turned around. I do not want to use specific phrases, but we want the school to have a new beginning that is based on united hope and confidence. We are imploring the county council to reconsider the matter and are asking for kind words and inspiration from my right hon. Friend.
12.46 pm
The Minister for School Standards (Ms Estelle Morris): I congratulate my hon. Friend the Member for Braintree (Mr. Hurst) on raising this issue. Although the Government will have little to do with the final outcome, I accept that for his community—and certainly in terms of the Government's priorities for raising standards in every school—it is central to the work of the
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Department for Education and Employment. We have a good opportunity to reflect on national policy and how it works at a local level.
Many people have spent a working lifetime in the school. My hon. Friend painted the picture of a school that started in the 1920s and reached this century with a proud history. It is almost a truism, but, if a school is good, the memory of it stays with former pupils for life. When they consider their life chances, they put down their successes to the fact that they had a good education. It is only as we reach adulthood that we realise the importance of a good education. The school has, without doubt, had that effect on his constituents and others for many decades.
I also want to acknowledge that schools are part of communities. They provide more than teaching; they are focal points and often provide facilities that cannot be found anywhere else. They are crucial to the areas in which they are located. However, in the gentlest of terms—I know that my hon. Friend will appreciate my tone—I must emphasise that no one can live in the past. Although the school may have a proud record and have served many generations well, we need to consider how it is performing for current students and what its prospects are for improving its performance in the next few years.
My hon. Friend rooted the issue and the decisions that will soon face the community in the Ofsted inspection of April last year and the six-monthly inspection by Her Majesty's inspectorate of schools in November. He said that he was not surprised that, six months, after the first inspection, progress had not been made because the right mechanisms for improvement had not been provided, but six months is a heck of time in the life chances of a small child. If children have spent half a year in a school that is not providing good quality education, those who have a responsibility for making sure that education services are well run must act as quickly as they can.
I accept my hon. Friend's point that the school is not performing as well as he hoped that it would. Although I have not visited the school, obviously in preparing for the debate I have sought information on it, and it seems that my hon. Friend was right to use the term "drift". There has been a lack of continuity of leadership, and we know that leadership is the key. I fervently believe that if a school gets a poor Ofsted report, it must act immediately; otherwise, drift will get worse.
This is a strange case in that it is unlikely that the Government will have any direct involvement in the school's future, and I shall explain why. We want schools that go into special measures to come out again within two years, or we will take measures to shut them. That is right because two years is a long time for a child to spend in a school where the quality of education is not satisfactory. Often what happens in those two years—although I am not saying that it is happening at Chapel Hill school—is that parents vote with their feet and move their children out of a school that Ofsted deems to be weak. Nobody wants schools in special measures to wither on the vine because they are not seen to improve straight away.
Our first involvement, therefore, would be to say to the local authority, "Get your act together and get the school out of special measures within two years. We

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have powers to intervene if you do not." Clearly, we do not want to intervene. Two years is a long time, and the problems are essentially those that must be solved locally.
Our second involvement, therefore, would be to work with the local education authority in monitoring the school's performance. One of the education advisers from our standards and effectiveness unit will have attended a routine meeting with Essex county council to discuss all the schools in the county which are in special measures and have serious weaknesses. "All" sounds bad—there are not many. As we have said many times, if any school in the country is in special measures and is not providing the quality of education that is needed, we want to know why, and we want that school to be carefully monitored. Our second involvement will come about when the school comes up in monitoring conversations with our officials, our advisers and the council.
I suspect that the HMI visit in November, when it was decided that no progress had been made, may have been a factor that persuaded the council to consult on closure. Closure is not usually the end result for schools that go into special measures. Usually, there is new leadership or measures are taken to raise standards, and schools come out of special measures well within two years. To place that in a national context, the good news is that there are now far fewer schools going into special measures than there were two years ago. There are now 373 such schools, compared with about 515 two years ago, and that is good because once a school goes into special measures that is a problem. The challenge is to get schools to a standard at which they do not have to go into special measures.
Schools are turning themselves round more quickly. Three years ago, it was taking 25 months to come out of special measures; now, it is taking 18 months. In the vast majority of cases, the policy of pressure and support, or rapid action, of setting a target and of working with schools and the local authority is successful. Closure is a preferred option for only very few schools. Sometimes closure is not possible because there are not enough places elsewhere in the locality. Sometimes it is an obvious course because there are many surplus places. It will be for Essex to decide, according to the criteria, whether closure is right for this school.
It will be useful if I set out what will happen now, because that is what parents want to know. One of the difficulties for the local authority is that the minute it begins to consult on closing a school, it is assumed that the school will be closed. I want to assure parents, through my hon. Friend, that there is a process in which they, more than anybody, have a right, indeed almost an obligation, to state their views. My hon. Friend is right to point out that the subject has not yet passed through the council's democratic process.
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Consultation is being conducted now. There will be a parents' meeting at the school on, I think, 5 February. That will be reported to the county council's education panel on 26 March, and the panel will make a recommendation to the executive board meeting on 10 April. If the proposals are agreed, it is only at that point that the council will publish a statutory notice. It will then invite comments from anybody in the community. That consultation period will be four weeks, which is shorter than normal, because the school is in special measures. If there are any objections, and I suspect from what my hon. Friend said that there will be, the proposals will have to be referred to the school organisation committee. If the committee cannot agree, the decision will go to the adjudicator.
I know from my hon. Friend's speech that the issue is important locally. It concerns the life chances of his constituents' children and the future of the learning community in the area. It is therefore right that the decisions should be made locally, and I am delighted that there is now a system that makes that possible.
There are counterbalances within that system. If, after the consultation process, there is no agreement, the adjudicator can consider the final decision before it is confirmed. My hon. Friend may know of the list of criteria that the adjudicator will have to take into account when making his decision. If he does not have that list, I will be delighted to send it to him.
The adjudicator will not make his decision on a whim or because he is instructed by the council. He will take into account exactly the factors to which my hon. Friend has referred. Where would the children go? Would the journey be too long? Could they be guaranteed a better standard of education? What would be the effect of the school's closure on neighbouring communities? Would the council have insufficient places? The factor that will drive the decision-making process above all is the standard of education, which is, I know, what motivates parents, the local authority, my hon. Friend, the Government and myself.
The decisions will be painful and will raise questions in people's minds and provoke high emotions. It is right, however, that they face up to the fact that a school with a long tradition of service to the community is not delivering the education that we want for our children. For their sake, the community must face up to those decisions and find a way forward. That should be done in a spirit of openness. However much people disagree, everybody has the same motivation.
I hope that, whatever decision is made, my hon. Friend can at least say that his constituents had every opportunity to express their view and that there was a full and frank exchange of information. I hope also that it will solve the problems facing education in Braintree at the moment. I wish him well, as I do his constituents, including parents and teachers at the school. I hope that all those adults make the right decision for the children of his constituency. We have had this debate because their education is so important and we want it to take place in the best possible circumstances in the best possible school.

Crime Rates (Staffordshire)
12.59 pm
Mr. William Cash: I was due to be in Sweden today with the European Scrutiny Committee. That meeting is important, bearing in mind the fact that Sweden now holds the European Union presidency. However, I was successful in securing this debate on crime rates in Staffordshire. That issue is even more important than the meeting in Sweden, and I am delighted to be here. I am delighted also that the Minister of State, the hon Member for Norwich, South (Mr. Clarke), is attending the debate, perhaps in some recognition of the seriousness of the situation in Staffordshire.
Staffordshire crime rates are appalling. The spin and the misleading statistics put out by the Government cannot cover up their failure to provide a truly excellent police force in Staffordshire with the proper resources to carry out its job. My constituents are being put at serious risk, and I insist that the Minister not only explains his position and that of the Government, but tells us that the situation will be remedied, and how. Why should my constituents be subjected to such bad crime rates?
Yesterday, on the Floor of the House, the Home Secretary claimed that last October's British crime survey showed that crime had fallen since the general election by 10 per cent. between 1997 and 1999, and that that included a 4 per cent. reduction in violent crime. These figures will astonish my constituents in Staffordshire. However, the Home Secretary conceded that crime rates under the previous Conservative Government had fallen from 1993 to 1997.
I shall present some facts that have been taken from the Library research department, from my researches and from the Staffordshire police. First, the rise in recorded offences in Staffordshire since the general election, under the new method of calculation, is 13 per cent. Even under the old rules, the rise is 4 per cent. Given what the Home Secretary had to say only yesterday—that there had been a recent reduction of 4 per cent. in violent crime and of 10 per cent. in other crime—the Minister has some serious explaining to do. It is the Home Secretary's assertion that crime has fallen by 4 per cent. everywhere else in the country. The figures for the country as a whole bear no relationship to what is happening in Staffordshire.
Secondly, the Home Office's figures show that the largest increase in violent crime, a massive 43.6 per cent.—this is outrageous—is in Staffordshire. Given the figures, it would be little comfort to my constituents to hear that house burglaries this year have fallen by 13 per cent. and that car crime has come down by 11 per cent., welcome as these reductions are.
The Prime Minister's pledge that the Government would deal not only with crime but with the causes of crime has disintegrated in Staffordshire. The causes of crime cannot be dealt with unless the money is on the table, and it is not in Staffordshire. The Government have failed my constituents on crime rates, on the cause of crime, and on the money to solve the problem. The police, including the chief constable, do a great job but the Government have them in financial handcuffs.
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I shall give some simple key figures that prove my point. They have been taken from the police authority and from other sources. Government support for the authority has fallen from 85.13 per cent. in 1995–96 to 75.52 per cent. for 1999–2000. That is a huge drop of 9.6 per cent. In 1997–98, the budgeted spend of £115.25 million was £4 million more than the Government grant plus standard spending assessment. By 2000–01, the budgeted spend had increased to £126.9 million, which was £10 million more than the Government grant plus SSA. The situation is becoming much worse under this Government and the gap has had to be filled by reserves.
That is important because other public services are involved. As for the police, reserves are now below the levels recommended by the Audit Commission. I understand that they may be nil. On the figures that I have been given, there will still be a shortfall even after the use of reserves. Therefore, the balance will have to be filled by council tax proceeds. The council tax payers of my constituency will need to know why their bills have increased. They have been described recently as the third highest demand on the police precept in the country. My constituents will also want to know why crime rates have increased by so much. They will be interested in the correlation between the vast increase in crime and crime rates, which is dramatic and contradicts what the Home Secretary said yesterday, and in the lack of resources made available by the Government.
The Government have betrayed my constituents. They have broken their promises and they have let down the police. They have exposed my constituents to grave risk from criminals and criminal behaviour. Even with the announcement yesterday of a Government grant plus SSA for Staffordshire of £121.7 million on last year's figure of a budgeted spend of £127 million—I trust that the Minister will take this in good part—pressures such as this debate and the prospect of a general election, which no doubt are concentrating the mind marvellously, a huge shortfall of about £5 million will still have to be met by council tax payers. Even assuming that the budgeted spend does not increase from last year—I regard that as highly improbable, and perhaps the Minister will comment on that—yesterday's announcement will still leave that shortfall.
Part of this bad situation stems from the Government's failure to give a fair deal to my constituents in relation to the standard spending assessment. I have campaigned vigorously about the matter over the years, but the Government have failed to meet the problem. As a result, my constituents suffer across the board. Education and other services are affected, and damage is done to the police service. Some of the problems come from pension costs, but the Government are not measuring up to the crisis. I have drawn attention to the issue in the local press and on local radio many times over recent years.
What does all this mean? Crime has increased above the national average in Staffordshire. The required money is not there, and police and police support numbers have been cut by as many as 245, including the mounted branch. The prediction—that is all it is at present—is that 85 new police officers will be recruited. I think that I am right in saying that the Home Secretary said yesterday—he has certainly said this on other occasions—that there will be an increase in police

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recruitment. That does not make any difference comparatively if we have disproportionate cuts in manpower as a result of the Government's failure to provide the necessary resources.
That applies to resources for what is happening on the ground and to those that are needed to deal with problems arising from the police pension. I understand that the amount of money that is currently required to deal with those problems will involve an increase of about 54 per cent. in current funding. We are talking about substantial sums of money and a matter that the Government are obliged to redress. It is not simply a matter of doing that for the sake and benefit of the statistics. We are not talking about statistics, but, as I said, about a 43.6 per cent. increase in violent crime, which is the highest increase in the country. There is a direct relationship between the increase in violent crime and crime generally and the lack of resources being made available by the Government.
The Minister of State, Home Office (Mr. Charles Clarke): Most statistical analyses would contest that assertion. Perhaps the hon. Gentleman could give me the academic sources from which he drew the correlation that he has just cited.
Mr. Cash: First, it is based on common sense. However, the figures that I gave are also based on those from the research department of the House of Commons Library and from the police authority itself. I will not impute to those sources the opinions that I am happy to express myself, but, for practical purposes, I believe that there is a relationship between money and crime rates; anybody who looked at the matter objectively would draw that conclusion. Indeed, in the past, members of the Labour party and those of their persuasion have often argued that there is a direct correlation between prosperity levels in inner cities and crime rates.
That was one of the things that the Prime Minister was clearly referring to when he said that the Government would deal not only with crime but with the causes of crime. If I may, I will call the Prime Minister in aid of my argument that there is a relationship between money, resources and crime rates. Perhaps the Minister would like to take that up with the Prime Minister. That direct relationship is also reflected in the manner in which the SSA is calculated. In my meetings with Ministers on matters relating to other public services, that has been acknowledged. Indeed, a Minister admitted at a fairly recent meeting that the Government had not done enough. However, she added that that was the fault not of her Department, but of the Treasury, which would not grapple with the SSA problem. The Minister will know perfectly well that the SSA is based on a relationship between need, resources and population. It is for that reason that I complain bitterly on behalf of my constituents about crime rates, which have damaged them severely.
Against that appalling background, the police, to whom I pay tribute throughout my constituency, are making serious efforts—no thanks to the Government—to open new village police stations. Five have been opened, including one which has been
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reopened in Eccleshall in my constituency. We need more of them, not remote-controlled, pass-you-on systems. We need more police visibility and accessibility. We need more permanent bobbies, and regular bobbies on the beat in every part of my constituency. I am glad that they have come back to Gnosall and Eccleshall, as they make a big difference. In Stone and Cheadle, which have significant populations, we need more permanent bobbies on the beat. There is vandalism in Walton and in Stone, and there are problems in Hixon, where there have been difficulties with juvenile groups. In sum, we need to address the question of resources and we need a greater police presence on the street and on the beat, not only in Stone and Cheadle, but in Madeley and elsewhere.
A police presence is a great deterrent to criminals; a juvenile offender does not dare tangle with a policeman. The Audit Commission has recently revealed that only 5 per cent. of police strength is displayed on the streets around the clock. That is not good enough; in fact, it is an unbelievably low proportion. Rural crime sometimes increases through the theft of garden equipment and so on when there are unsupervised car boot sales in the vicinity. At Staffordshire meetings convened by "Save the Rural Crime Unit", I have strongly urged the police to improve their performance in rural areas of my constituency, some parts of which are invaded by criminals who come down the motorways from Manchester, Liverpool and Birmingham.
A new system of rural crime detection has been introduced by the police authority and the chief constable. However, the meagre reference to rural crime in the rural White Paper will not be sufficient. Neighbourhood watch, house watch and farm watch need money, and the Government are simply failing the police service on that. For example, from time to time, serious issues have been raised by my constituents in and around Cheadle concerning attacks on horses. That problem is of great concern to the rural community.
All in all, the Government stand condemned for their failure to provide adequate resources to solve the problems of crime in Staffordshire. Whatever the Minister says about the question of the causes of crime, the statistics speak for themselves and come from unimpeachable authorities. My constituents and I look to the Minister to say now that the Government will change their policy and provide the money that is needed to protect my constituents from crime.
1.17 pm
The Minister of State, Home Office (Mr. Charles Clarke): I am grateful for the opportunity to address these issues in debate. As the hon. Member for Stone (Mr. Cash) knows, I regularly meet with Staffordshire Members of Parliament on an all-party basis to discuss this kind of issue. Indeed, the hon. Gentleman has attended some of those meetings. I am slightly disappointed that the hon. Member for Lichfield (Mr. Fabricant) is not here today. He raises these matters with me, and I am a little surprised that he has not taken the opportunity to ventilate them fully here.
I want to address a couple of points at the outset. First, the hon. Member for Stone was right to raise the crime level in Staffordshire. The statistics that the Government published a few weeks ago on total

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recorded crime made it clear that crime in Staffordshire, which had increased by 13.4 per cent., was the worst of any police authority area in the country. The only authority that had an increase in crime of more than 10 per cent. during the same period was Suffolk, which had a 10.8 per cent. increase. In fact, the majority of police forces saw reductions in crime.
The hon. Gentleman is right to highlight the issue in Staffordshire, not only because he is a Staffordshire Member of Parliament, but because performance there was significantly worse than that in comparable police authorities. That was especially true of violent crime, for which the figures are as the hon. Gentleman set them out.
A number of important qualifications must, however, be made. The first relates to the connection that the hon. Gentleman made with resourcing. I am the last person to say that resources have no impact on the situation, but let us take, as a simple measure, the number of forces with a lower number than Staffordshire of constables per 1,000 of population. Table 3 of Home Office Statistical Bulletin 2/01 dealing with police service strength shows that 22 forces have a lower number. Staffordshire has 157.7 police constables per 1,000 of population, Avon and Somerset 152, Bedfordshire 139.3, Cambridgeshire 136.5 and so on. About half the forces in the country have a lower number of constables per 1,000 of population than Staffordshire.
I have used the constables per 1,000 measure because, in the regular interchanges that we have in the Chamber on these matters, the hon. Member for North-East Hertfordshire (Mr. Heald) always prefers it, but similar figures apply for officers per 1,000 of the population: 19 forces have a lower number of officers per head than Staffordshire. I cite those figures to demonstrate that the hon. Gentleman's point about the direct link between resources and crime levels is too simple. Important issues involving resources, including reassurance, also need to be addressed. The hon. Gentleman did refer to them, but the simple relationship that he postulated between resources and crime levels is not sustainable.
I shall spend a moment considering resources. The provisional funding settlement for Staffordshire was £121.7 million, as the hon. Gentleman said. The final figures were published yesterday and show an increase of 4.2 per cent. in real terms over this year. In addition to that money, the police authority will receive £1.943 million from the crime fighting fund to recruit extra police officers—a fact mentioned by the hon. Gentleman—and £275,000 from the rural policing fund.
That allocation was made following the submission of a large number of rural police authorities, including Staffordshire, which argued that, for the reasons outlined by the hon. Gentleman, particular costs are involved in rural policing, which the Government should meet. That is why we allocated £15 million in the current year and £30 million a year for each of the next three years. Staffordshire's share of that was, as I said, £275,000 in the current year.
Mr. Cash: I shall not repeat what I have already said, but the Minister would accept, I am sure, that, even with the announcement made yesterday, there will still be a substantial shortfall. Reserves in Staffordshire, if not nil, are certainly well below Audit Commission levels,
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and the burden will therefore fall on my council tax payers. The Government are doing nothing, as far as anyone can see, to sort out the standard spending assessment, which is so unfair to my constituents.
Mr. Clarke: I am not trying to evade the point, but, as the hon. Gentleman should know from his long experience of European and civil matters, the standard spending assessment is a matter not for me, but for the Department of the Environment, Transport and the Regions. The issues will be debated generally.
In total, Staffordshire has been awarded almost £3 million—£2.914 million—from the crime reduction fund for 16 projects, so there has been a significant resource increase in Staffordshire. It would be wrong if the hon. Gentleman did not have the courtesy to recognise that.
I acknowledge one point that the hon. Gentleman made in relation to resourcing, which I have acknowledged privately to him and his fellow Staffordshire Members of Parliament. The pensions issue has hit Staffordshire particularly hard. All forces are affected by the way in which pensions spending is allocated, and the problems may not be easily resolved, given the various interests involved and the way that pensions have been dealt with over many years.
Staffordshire does have a pensions issue, as I have acknowledged frankly since the first of my meetings with Staffordshire Members. All I can do today is reassert the commitments that I have previously given to the hon. Gentleman. We are considering what can be done to address the matter.
The chief constable has pointed out an additional factor, which I am sure he has also raised with the hon. Gentleman. In the chief constable's remarks to me, he states:
"The main priority in crime has been to make sure that we are properly recording crime reported to us."
That may seem a trivial point, but there have been significant problems in police recording procedures over the years, and chief constables—I pay tribute to Mr. Giffard for his commitment—as well as the police service as a whole and the Home Office are committed to ensuring that the recorded statistics are correct, so that we can establish the true situation.
The chief constable goes on to state:
"Changes in the counting rules and the way in which we have treated violent crime, particularly domestic violence, have led to an increase in the year to September 2000 of 13 per cent. in all recorded crime. In the case of domestic violence as a good example, 90 per cent. of domestic violence incidents produce a crime report."
I do not seek to minimise the issue, but I pay tribute to the chief constable and the force for the way in which they have dealt with domestic violence.
I have spoken to the chief constable about the matter, and his force has committed itself to legal action following reports of incidents of domestic violence, in order to banish the idea that crime in the home is marginal and acceptable, and to assert the idea that crime in the home—domestic violence—is entirely unacceptable.
The police are making every effort to root out this form of crime. That is why the chief constable is able to write to me that

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"90 per cent. of domestic violence incidents produce a crime report."
That is a high figure, for which he deserves credit. It has the knock-on effect—unfortunate, in presentational terms, some might say—of an apparent increase in violent crime, but it has the entirely desirable result of ensuring that people who commit domestic violence are brought to justice.
The chief constable also points out improvements in performance on house burglaries and car crime, which it is important to put in context, and he explains what he is doing in respect of rural police stations, to which the hon. Gentleman generously referred. The chief constable notes that the force has actively used the money from the Government's rural policing initiative, which I mentioned earlier, and has tried to increase visibility in villages. He tells me that there are encouraging signs of the effect that that has had. He reports that most of those officers are deployed on foot, but some on bicycles.
Violent crime is an issue, and the increase is not explained by what is happening with regard to domestic violence. There are real problems of street crime, to which the hon. Gentleman rightly referred. We are trying to address that, and some elements of the increase are down to a highly desirable increase in the reporting of violent crime. I congratulate the force on its efforts to increase reporting.
I conclude by referring to an important point in the relationship between crime levels in different police areas and parts of the country. We are publishing, for the first time, data on crime and disorder reduction partnerships, which compare partnerships that are
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broadly statistically similar. Table 5 of Home Office Statistical Bulletin 1/01 on crime levels breaks down two crime reduction partnerships, which are statistically comparable on the standard basis that has been established over a long period.
The table shows that East Staffordshire, which is part of a group of about 25 to 30 crime reduction partnership areas including Derbyshire, Kent and Nottinghamshire, has the highest number of crimes in the group, at 17.9 crimes per 1,000 of the population. That endorses the hon. Gentleman's general point that there is a serious issue in relation to violent crime.
Staffordshire Moorlands, another Staffordshire police district in the same police authority, is in the same family of broadly comparable areas. Violence against the person per 1,000 people in Staffordshire Moorlands is 9.8, compared to 17.9 per 1,000 in East Staffordshire. In other words, the figure is about half. I have no immediate explanation for that. We need to understand more about what is happening in particular communities and in particular forces if we are to understand why there are dramatic differences in performances.
I am sure that I can count on the hon. Gentleman's support, and that of his colleagues in Staffordshire, to ensure that when the Government seek to improve police performance and to put more resources into the police—as we are doing in order to drive crime down—no one will seek to make party political capital. I am sure that he will do what he can to help us drive crime levels down.
I congratulate the hon. Gentleman on securing the debate, which has provided us with a good opportunity to consider some of the issues.

Council Tax Support Grant (Gateshead)
1.30 pm
Mr. John McWilliam: I thank my hon. Friends the Members for Tyne Bridge (Mr. Clelland) and for Jarrow (Mr. Hepburn) for joining me and for their support. Both of them have a significant interest in Gateshead and represent wards in the borough. I am sorry that my hon. Friend the Member for Tyne Bridge, who is a Whip, is not free to speak this morning. As a former distinguished leader of Gateshead council, he could have informed the debate greatly.
The Government have helped local authorities marvellously during their time in office, which amounts to almost four years, in which time there have been three settlements. They are building up local authorities that were seriously underfunded for many years. Indeed, the history of local government finance in the past 20 years is a sorry one.
A Conservative Government introduced the Local Government Finance Act 1982, which changed significantly the way in which local authorities received grants from central Government. As a matter of party-political policy, they shifted resources from the needy urban areas in north-east England and sent them to less needy areas in the south. They introduced a series of controls and evaluations of expenditure that were designed to have that effect.
The system in place today is essentially the same. It has been modified, but not very much and not by the current Government. I welcome the publication of the Green Paper on local government finance, but I hope that my right hon. Friend the Minister for Local Government and the Regions does not think that it will solve the specific problems of Gateshead or similar authorities. It will not do so; it is merely another twist of the same old system.
The basic problem is that the evaluation of appropriate expenditure arises from historic expenditure back in 1982, when civil servants used a statistical technique called regression analysis to project future expenditure. Such a technique cannot, however, be used to predict the future; it can tell one only what happened in the past. I have recently questioned civil servants about the use of that technique in relation to the Green Paper and I have been assured that it will not be used in future.
Education expenditure is a particular problem with regard to the basis provided in 1982. You will recall, Mr. Winterton, from your long years in the House, that 1982 was not long after local government reorganisation. Prior to that reorganisation, my constituency was a part not of Gateshead, but of County Durham.
The Minister for Local Government and the Regions (Ms Hilary Armstrong): Hear, hear.
Mr. McWilliam: Before my right hon. Friend gets too carried away, let me point out that there was an historic low spend. Back in 1980, when I was a member of the departmental Select Committee on Education, Science and Arts, Her Majesty's chief inspector of schools reported that four local authorities, including Gateshead, were in danger of failing to provide.
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Gateshead has an historical spend that is based on serious underspending in the past, as well as on the difficulties of having to put two completely different educations systems together. For example, County Durham had grammar schools and Gateshead did not.
Over the years, the nonsense aspects of the Local Government Finance Act 1982 have accumulated. The Government have now increased provision above the initial level of £3 billion. There is now a 7.2 per cent. increase, which has been made through the welcome raise in neighbourhood renewal and, for some authorities, in the education grant. However, there is still a shortfall. Of course, I welcome the additional £750,000 for education, but the shortfall in education expenditure in Gateshead was £1.3 million, so more than £500,000 is still needed. In total, despite having to impose £3 million-worth of cuts to meet its targets, Gateshead will also have to raise its council house rents by 9.1 per cent.—a huge increase. Ring fencing and the need to support tenants will mean that an additional sum of only £800,000 is available for the general rate fund.
All those problems result from policies and acts for which my right hon. Friend the Minister is not responsible. Her predecessors in a different party and Government were responsible, so I do not blame her, but huge anomalies remain. Gateshead has a high proportion of elderly people and single parents. It also has a high proportion of council houses and areas of serious deprivation. In spite of those circumstances, the standard spending assessment change for Gateshead was only 2.8 per cent., give or take the additional funds for neighbourhood renewal and education, which mean that it will now be slightly more. That contrasts with increases elsewhere of more than 7 per cent.
The standard spending assessment settlement was poor for Gateshead and means that it has a huge cash problem. The SSA increase of 2.8 per cent.—as opposed to an average national increase of 4.3 per cent—takes resources from deprived urban areas. The updated area cost adjustment has shifted resources to London and the south-east. The settlement will have a significant effect on the council's budget for 2001–02. As I said, the council is seeking to make cuts of £3 million.
The inconsistencies of the system are highlighted by the updating of the area cost adjustment, as council tax valuations have not been updated to reflect the significant increase in house prices that has occurred since 1991, especially in London and the south-east. In effect, those areas are getting the benefit twice. Rate banding is another problem, as the A band in Gateshead is too high. We could do with its being split in two, as it hits a significant proportion of households. On the other hand, the H band stops far too low. Only about 42 houses in the whole borough, most of which are homes for the elderly, fall into the H band. Such problems have a significant impact on resources.
We need a new system that is clear, transparent and fair and which seeks to equalise council tax throughout the country. It must ensure that areas with low resources and high needs are properly looked after and that areas with low needs and high resources can contribute towards their own costs. We have problems and it will not be easy. I look forward to seeing what my right hon. Friend the Minister does about the Green Paper on local government finance when the consultation is complete,

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although it is obvious that she cannot tell us that now. I thank her for all the help that her Department has given. I should also mention her excellent departmental website, although I point out that her photograph is currently displayed as a negative image, rather than a positive one, which is a pity.
1.39 pm
Mr. Stephen Hepburn: I thank my hon. Friend the Member for Blaydon (Mr. McWilliam) for allowing me to take part in his debate. I want to mention an anomaly to which my hon. Friend alluded: the disadvantages of Gateshead and other northern authorities compared with those north of the border in Scotland. I refer especially to the Barnett formula, which is known in the northern region as the billion pound divide. If we had such a formula for the north of England, an area such as Tyne and Wear would have approximately an extra billion pounds to spend on local services. Councils such as Gateshead, South Tyneside, Sunderland, Newcastle and North Tyneside could tackle many existing problems and achieve many objectives with that extra money.
We cannot defend the indefensible. We can dress it up and we can claim that there are different systems north of the border. However, we live on the border, and we cannot defend what happens through the Barnett formula. We appreciate that local government receives additional grants and direct grants. The Minister has done a great job in getting those grants. However, the divide is so great that the Barnett system needs a complete overhaul. I do not want Scotland to be brought down to the same level as the north-east, but an equation for need should be included in the formula for the north-east to bring us up to Scottish levels.
The position is exacerbated by tuition fees, teachers' salaries and long-term care north of the border. The differences must be tackled. The system is a mess for those of us on the border. It may not affect people who live 300 miles away in the south of England, but we live next to Scotland and experience the effects of the difference, for example, when kids go to university. We cannot live with that. We are a laughing stock, and we must tackle that.
We need to tackle apathy about voting. Unless we deal with the nitty-gritty of the problem in the north-east, voter apathy will continue.
Mr. McWilliam: Does my hon. Friend agree that, within an hour and a half's drive of Gateshead, there are Scottish secondary schools, both grammar and comprehensive, which are a magnet for fully qualified teachers in our borough?
Mr. Hepburn: I hope that grammar schools are not a magnet because I do not believe in the grammar school system. I am a comprehensive school person. However, teachers' salaries and the way in which the education system is funded in Scotland mean that there are indefensible differences.
1.41 pm
The Minister for Local Government and the Regions (Ms Hilary Armstrong): I thank my hon. Friend the Member for Blaydon (Mr. McWilliam) for giving us a chance to rehearse some of the arguments that we shall present in the Chamber tomorrow on the local government settlement. Clearly, as another north-east Member of Parliament, I want the region not only to get its fair share but to use the money effectively to solve some of the current problems. Many northern authorities' problems with this year's settlement arise because of declining population and school numbers. It is in our interests to ensure that local government and the regional agencies can play their part in turning the region round. We can thus provide more economic stability to families who live in the area and encourage them to stay and to envisage their future there.
The local government finance settlement is currently of great interest to all local authorities. Yesterday, we laid before the House the local government finance report for 2001–02 and special grant No. 72. They set out the total revenue support grant and the basis on which that money will be distributed. Hon. Members will, of course, have the opportunity to discuss those reports tomorrow, but today's debate provides an useful opportunity to consider the issues and the consequences for Gateshead.
The spending review for 2000 provided more increases for local authorities. The first year of the review established the baseline for the approaching financial year and has enabled us to provide an increase in Government grant of £3 billion. In the four settlements since we took office, we have been able to increase the Government grant to local authorities by £8 billion. That is an increase of 14 per cent. in real terms and compares with a 7 per cent. cut in the previous four years before 1997–98.
Of course, we have given priority to education and social services. Provision for spending on education will increase next year by £1.9 billion. An increase of 8.1 per cent. for social services means that they will receive an extra £576 million. We have therefore provided an extra £6.4 billion for education and £2 billion for social services since we took office.
My hon. Friend the Member for Blaydon is especially worried about Gateshead, which will receive approximately £151 million in general grant next year. That is an increase of 3.2 per cent. or £4.7 million. The standard spending assessment figures that my hon. Friend gave conflict with mine. We need to discuss that later.
Mr. McWilliam: There is a simple explanation for that. I did not include the additional figures for education that were announced yesterday. I deliberately did not include the additional renewal fund figures because I do not believe that they are pertinent to the debate. We are considering the base level.
Ms Armstrong: The figures that my hon. Friend mentioned are not covered by the SSAs, which I was considering. The SSA increase for Gateshead was 3.6 per cent. I acknowledge that all authorities would like more. The Government want to build up investment and to ensure, through local government reform, that

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the money is spent in the most effective way. I acknowledge that Gateshead's settlement increase was below the average for metropolitan districts of 3.5 per cent. There are three main reasons for that.
The latest population statistics that we use show that 800 fewer people live in the area compared with last year. There are also almost 290 fewer pupils. As my hon. Friend acknowledged, the impact of increasing wage pressures in London and the south-east is reflected in the area cost adjustment. That also contributes to the reason for the below-average grant increase in Gateshead.
I sometimes believe that my hon. Friends want all the country's financial problems to be sorted out through the local government settlement. We cannot do that. None the less, we are considering more radical, long-term reforms. Our recent Green Paper makes it clear that we understand that an authority's costs do not always fall immediately and proportionately after a decline in population. However, a declining population must, over time, lead to lower costs.
Mr. McWilliam: As the figures that my right hon. Friend cited show, an authority such as Gateshead has a declining population because economically active people and their families are moving out. Those who are not economically active are left. That proportionally increases costs.
Ms Armstrong: We could have a long debate about that. Those circumstances do not necessarily increase the cost of basic services. However, incredible pressure exists in deprived areas. The Government have introduced the neighbourhood renewal fund so that we can tackle basic services more effectively in the most deprived neighbourhoods and thus improve the economic potential of people who live there and perhaps create a virtuous circle.
The SSAs take account of need, but I do not know of a single authority that believes that the distribution formula properly reflects its absolute level of need. I have come to believe that a formula that everyone feels to be just to their area and about which all agree is a holy grail that cannot be attained. The Government are trying to ensure that we identify deprived areas and grant additional money specifically to tackle deprivation there.
It is also true, as I am sure my hon. Friend would accept, that rapidly expanding authorities also face significant cost pressures. The issue is, therefore, one of striking the right balance between the competing and largely contrasting demands between declining and increasing populations. We introduced the floor and ceiling proposal to take such factors into account. That was because we realised, as soon as we started to consider this year's settlement, that using a purely data-driven formula would have given rise to wild swings in grant increases from this year to next. The updating of the area cost adjustment data contributed to these swings.
We consulted on those issues, but—surprise, surprise—there was no clear consensus from local government about how to proceed. Therefore, bearing in mind our commitment in the 1998 White Paper to continue to update the data on which standard spending
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assessments were based, we concluded that it was right to update the area cost adjustment. However, to provide stability we decided to introduce a floor of 3.2 per cent. and a ceiling of 6.5 per cent. I am aware that Gateshead wanted extra money to be added to the settlement to pay for the floor provision.
My aim is to put as much money as possible into the settlement every year, rather than to leave a pot of money on one side. This year, we concluded that it was right for the measure to be met within the overall totals. However, we have listened to the concerns of authorities during consultation. We are aware of the pressures facing authorities, and I am sure that Gateshead will have been delighted to learn, in the past day or so, of the action that we have taken in three specific areas.
We were concerned at the funding position of authorities in areas with the most serious deprivation problems, partly because they are the areas that are tending to lose rather than gain population. We therefore doubled the provision for the neighbourhood renewal fund in 2001–02 from £100 million to £200 million. Those additional resources will help local authorities to improve mainstream services in the most deprived neighbourhoods, and, consequently, to improve the outcomes achieved in those areas.
One of the specific issues that we want to tackle in the most deprived areas is educational attainment, and I am sure that Gateshead will want to use some of its money to raise standards of educational attainment in such areas. That should also help its education budget. We were able to announce last week that Gateshead will receive an extra £1.161 million from the neighbourhood renewal fund, taking its total next year to £2.322 million.
We were also concerned about the impact of serious floods this year. We therefore announced on Friday that we would provide an extra £11.6 million to pay for the Environment Agency's emergency response and repair costs. That money will mean that the agency will not need to add those costs to its levies on local authorities next year. I know that Gateshead was concerned about the levy when it made its representations on the settlement to the Department. The amount provided to the agency in Northumbria is £450,000, which will allow it to reduce significantly the proposed increase in the levy.
We also announced yesterday a new £52 million grant to help meet education spending pressures in those education authorities with the lowest increases in education funding from other sources. Gateshead was concerned about its low education SSA increase. It was also concerned about the basis on which we transferred money from the settlement to reflect the change in responsibility for adult education from local authorities to the learning and skills councils.
It was right to use the same methodology for making that transfer as for all other changes in which we have transferred provision out of the settlement. However, we recognise the pressures on authorities such as Gateshead and others in the north-east. The extra money will be provided in recognition of those pressures, and Gateshead will receive £750,000 from the grant next year. That is in line with the representations that it made to us on its education spending.
Mr. McWilliam: On education, I welcome the extra £750,000, because we need it. However, my right hon.

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Friend might have gained the wrong impression from what I have said. Although Gateshead was one of the authorities that were in danger of failing to provide in 1982, it now has some very fine schools attaining high achievements in places with particularly difficult catchment areas. I am very proud of the education authority there.
Ms Armstrong: I endorse that entirely. Indeed, a number of my constituents attend schools in Gateshead, and I receive regular reports on that matter.
Gateshead has also benefited from increases in a number of ring-fenced grants, most of which have now been announced. Gateshead's overall increase in grant—including revenue support grant, the other general grants and ring-fenced grants—is more than £9 million. That is an increase of 5.8 per cent.
My hon. Friend also mentioned rents, and I understand his concern. Decisions on setting rent levels are a matter for local housing authorities. However, for subsidy purposes, we have increased allowances by 7.4 per cent. in cash terms since 1997–98. There have also been significant increases in the capital resources that have been made available to Gateshead in the same period. The allocation for 2001–02 will be £17.433 million—a threefold increase in resources in four years, and a 24 per cent. increase over the current financial year.
My hon. Friend raised several issues that are being discussed as part of the consideration of the local government finance Green Paper. That consultation has now finished, and we are drawing together its findings at
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the moment. I have held my first meeting with the Local Government Association to consider how to take the ideas in those findings forward. The Government hope to introduce proposals in the summer in a White Paper.
I assure my hon. Friend that I understand fully the points he has raised today. We have, as he said, provided an excellent settlement overall, but that does not mean that it does not contain real challenges for some authorities. Having said that, the settlement for Gateshead is still a good one. We have also recently introduced measures to assist Gateshead. Those measures, in addition to the settlement and the increases for local government spending announced in the spending review, will mean that local authorities can be confident that they have a good base for investment over the next three years. I hope that they will continue to work with us to obtain changes in the grant distribution system that will enable them to be confident about their future.
I cannot promise that every authority will like every change, because, inevitably, change means that some gain and some do not. However, we are determined to achieve as fair a local government system as possible, and I share my hon. Friend's ambition that such settlements should be open and transparent so that the public will be better able to understand what is going on. I congratulate Gateshead council on the work that it has done to increase turnout through piloting postal voting. Together, we shall ensure that Gateshead and the north-east are confident in moving forward, enabling the authority to build for the future for the citizens of Gateshead.
Question put and agreed to.
Adjourned accordingly at one minute to Two o'clock.