Westminster Hall Sitting of 28 March 2001

Preamble
[SIR ALAN HASELHURST in the Chair]

Steel Industry
Motion made, and Question proposed, That the sitting be now adjourned. —[Mrs. McGuire]
9.30 am
Mr. Paul Flynn: Thank you, and good morning. It is fortuitous that we are meeting this morning to discuss the steel industry I shall not give the speech that I had in mind last week, given the serious change of attitude by Corus and the dialogue between Corus and the unions, the Government and politicians in the past 24 hours. To put it mildly, the atmosphere during that dialogue was poisonous. Yesterday, a package was put to Corus and discussion took place about which we can express at least a bat squeak of hope.
The last thing we should do is to raise false hopes among those who work in the steel industry, who are anxious about the future. That would be unreasonable. We should be making a case for manufacturing industry and for steel, not talking about a crisis in the steel industry. Steel is a vital part of Welsh industry, as it represents 6 per cent. of Welsh gross domestic product. Manufacturing industry in Wales is the biggest component of Welsh GDP at 27 per cent. Steel is an industry of the future. It is constantly seen as part of the past—it is often described as a smoke-stack industry, and many other pejorative terms are used—but it is nothing of the sort. The modern steel industry is high-tech, and has received huge investment. It is a sustainable industry, with 40 per cent. of steel being recycled, which is good for the environment as it reduces the energy take enormously.
If my hon. Friends will forgive me, I shall concentrate on the Welsh steel industry and what I know of it in my constituency. I am delighted to be joined by my right hon. Friend the Member for Newport, East (Mr. Howarth) in whose constituency the Llanwern steelworks is situated. Unfortunately, because of his duties as a Minister and the conventions of the House, he is not able to make a speech, which we would have liked to hear, but he makes an effective contribution elsewhere in his tireless fight to save jobs at Llanwern.
Many of my constituents work at Llanwern. The Whitehead steel company in my constituency, in association with another company has threatened the loss of 35 jobs. We all want to ensure that the case is made for the steel manufacturing industry in Wales, and that it is heard loud and clear.
Yesterday, this Room was full of people rightly seeking solutions to the nightmare crisis in agriculture. Many suggested that public funds should be made available not only to the agricultural industry but to tourism, which has never happened before. Even fly fishing was mentioned—I shall try to catch the eye of the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd)—as an activity that is in financial trouble and
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worthy of public support. We are breaking new ground in suggesting that public money should be used to support the tourism industry. I am not making a case for or against it, but it has not happened before. We had crises in the 1980s when there were bombs in London and policemen with guns at Heathrow airport. Those pictures went around the world, and the tourism industry suffered a great slump, especially in London, but no call was made then for public subsidy, public support or compensation.
The attitude towards Government intervention in such circumstances is changing. Governments have traditionally intervened to help the farming industry—public subsidies have been paid for the past 50 years. However, if we are—as we seem to be—entering a new world of compensation, and if the worst happens in the steel industry, there is a strong case for paying compensation to steelworkers. If they ultimately suffer the loss of their jobs, and if their skills are thrown away and they become useless, they should be at the head of the queue for any compensation that is on offer.
Mr. Barry Jones: My hon. Friend fights hard for his steelworkers, as does my right hon. Friend the Member for Newport, East (Mr. Howarth). If any steelworkers, such as those at Shotton, were to lose their jobs, they would lose a salary of around £20,000 a year, and their incomes would suddenly plummet from a fair wage to virtually nothing. The steelworkers who would lose their jobs are young, with young families and big mortgages. Does my hon. Friend agree that, in any proposed scheme, the Government should help to bridge the gap? Something must be done in that sphere.
Mr. Flynn: My right hon. Friend makes a strong point. We know that the British steelworker is in an unfair position compared with many of his counterparts on the continent. Dutch steel companies send e-mails explaining workers' likely benefits, which are up to five times greater than those that a British steelworker could expect if the worst should happen.
I take my right hon. Friend's point. I have had many conversations, phone calls and meetings with friends old and new. I started working in the Llanwern steelworks in 1963, before any steel or iron was made there. The people I was working with then were fresh-faced apprentices, but they are now candidates for early retirement. It is extraordinarily moving knowing what those people, who were friends and neighbours of mine for so long, now faced and what they have been through.
There has been an almost permanent crisis in the steel industry, because it is cyclical. About every five years there has been a threat of closure. Things go from feast to famine very rapidly. That is the nature of the industry—it has always been like that. The sacrifices made by steelworkers throughout the land have been extraordinary. Plants have been slimmed down—they have been anorexic—as staffing has been reduced. Steelworkers have increased their skills, and have been very innovative in their approach to changing methods of production.
It was a great pleasure to go back to the steelworks, which I had not visited for some years, and to see how extraordinarily efficient it is. The galvanising plant now

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has wonderful kit, and it would be impossible to find a more energy efficient or productive set-up. The industry is a marvellous success story in every possible way.
What is the position in the rest of Europe? We know that the steel industry is doing very well throughout Europe, even in the smaller European Union countries such as Austria, Luxembourg, Sweden and outside the EU in countries such as Ukraine, Argentina and Brazil. There is overcapacity throughout the world, but that does not prevent other countries in the EU from improving their productivity and their sales. The Iron and Steel Trades Confederation suggested that in 2000, for the first time ever, Spain would produce more steel than the UK. It is quite shocking, considering the embryonic state of its industry over many years, that it has now overtaken our own.
However, productivity in Britain is very high—the highest in the world at Llanwern. That is freely admitted by Corus. It is acknowledged that the British steel industry is the most efficient in the world, so why on earth is this threat being made?
This debate has been informed by two splendid Select Committee reports. The first came from the Science and Technology Committee, which reported on Corus plc research and development, and the second was the report on steel by the Select Committee on Trade and Industry, which was published earlier this month. We should pay tribute to the Select Committees for their work in compiling those reports. They are splendid examples of the work of Select Committees in probing the often self-serving claims made by the industry. They expose its weaknesses and suggest practical ways in which to strengthen the steel industry in Britain, and identify the means to restore and strengthen our manufacturing base.
It is an extraordinary statistic that the amount contributed by the steel industry to the Welsh economy is 60 times that contributed by farming. We know that farming is in crisis, with all kinds of troubles, and that other elements are involved in that statistic, but that is the raw figure. The manufacturing industry contributes 270 times the amount contributed by the agricultural industry. So wherever we are—Wales, Newport or the United Kingdom—if we want a firm economic base for our children and grandchildren, we cannot discount the enormous contribution that manufacturing industry is making and will make in the future, if we protect it.
Mr. Richard Livsey: The hon. Gentleman's analysis is correct. However, does he agree that farming and the steel industry are in the same situation because of the currency fluctuations with which we have to contend? Neither can now sell a product at a profit. Does he agree that had the Government been more fleet of foot in their attitude to the euro, we would not be having this debate, and nor would there have been a debate on farming yesterday?
Mr. Flynn: I am grateful for that intervention. All those who wear pound badges should visit steelworkers and explain to them that the choice in many industries in this country, including farming, is often "euro or your job". The main crisis that has hit the steel industry is not
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a crisis of productivity or efficiency, but of the value of the product. The effect of the weakness of the euro and the strength of the pound is that the steelworkers' product is artificially expensive when exported to Europe, while that produced in euroland is artificially cheap when sucked in here. That is the reason for the crisis.
Corus has, understandably, taken a line on this. It is an international company with roots in several countries, mainly the UK and Holland, but all its decisions are informed by the need to survive, to be prosperous and to pay handsome dividends to shareholders, and are not influenced by the national interest. We have all experienced that in the bruising meetings that we have had with the head of the steel company, who is difficult to contact and to relate to. We found those meetings—unlike the one yesterday, which I shall come to—anything but productive.
The Trade and Industry Committee urged Corus and all companies to consider the long-term damage that would result from the loss of experienced staff and their ability to carry out effective research and development. The cuts in Corus involved restructuring research and development, which meant that the research and development staff and resources that would go to the Netherlands would be disproportionate, to the great loss of this country. The Committee also made a point about the difficulties that the euro has caused.
I happened to be present when the Select Committee on Trade and Industry interviewed Sir Brian Moffat and his comrades. In its report, the Committee described in graphic detail how it saw Corus and its role, and it asked the company to reconsider its decision. Great damage is likely to occur if Corus goes ahead with its proposals. We know about the heartbreaking loss of jobs, the families involved and the damage to people who face the insult of redundancy, knowing that their skills are no longer required. Many of them will never work again due to their age. However, the damage to our economy will result in a loss of capacity. If things go ahead as planned, a blast furnace may be lying on its back come the summer. That loss of capacity is irreplaceable and cannot be rebuilt. It will do enormous damage to the future prosperity of Wales and the rest of the country. The Trade and Industry Committee laid heavy emphasis on that in its report.
Dr. Ashok Kumar: I shall quote from the report. On Sir Brian Moffat and Corus, the Committee concluded:
"Nothing we heard from Sir Brian Moffat has led us to believe that the cuts announced on 1 February are part of a long-term strategy for the company's survival".
The company has no long-term strategy, so how can anyone have faith in the future of the industry? As my hon. Friend mentioned, we are living with feast and famine. That is the crux of the matter.
Mr. Flynn: My hon. Friend is quoting from the recommendations of the report. Some of us have been familiar with the ups and downs of the steel industry for a long time. My work in the industry began before Llanwern was open, and I can remember at least four or five crises in my 31 years in the industry. Armageddon was regularly on the horizon due to problems with

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Brazil, Asia or some other country. Nightmare scenarios always came up, but shortly afterwards we found that handsome profits had been made, like the £1 billion a year made by Corus.
The Committee also said:
"We regret that Corus felt unable to take Ministers more fully into their confidence.while they were preparing the proposals announced".
That has been another great difficulty, as Corus has behaved differently from other industries. The Minister has told us, and may tell us again this morning, that when there is openness—when the books are open and companies take the Government into their confidence—good will can be generated and solut ions can be sought, if not always found. Instead of co-operating, Corus created a great wall of secrecy and was not open with politicians.
Some of my hon. Friends want to speak at length, and I am aware that I am taking up time, so I shall make a final point. I am optimistic about what happened yesterday in the meetings between all the principal trade unions and Corus. A bold plan was presented, which I believe is groundbreaking, as I have never heard of one like it before. It is a £90 million plan that would involve payments to Corus. The package would pay half the wages of the steelworkers for a year. During that period, there would be an intensive training programme to allow the workers to prepare for the worst—although they would hope that it would not happen. They could at least benefit from active preparation in re-skilling and re-training for high-tech industries. That is a practical way to fill lives instead of waiting for the blow to fall.
The other part of the package is of great benefit, as it would protect the capacity. There would be no change in the configuration of Llanwern and t he other sites. They would not be destroyed, so could be rebuilt. The package would involve money from the trade unions, Europe and the Government. It has been informed by a distinguished and well-connected barrister, and seems an entirely new way to build a bridge between the hell of closure and redundancy and a practical way of getting out of the present position.
Without wanting to raise false hopes, we can say that the atmosphere on both sides seems different. A working party will meet in the next few weeks and report in a month's time in an attempt to rescue jobs. Both sides are clear about the reality. There is overcapacity in the industry and losses are sadly inevitable. However, there is hope of them working together not with antagonism but in a spirit of co-operation. We can to at least hope that there has been a change since the period of trench war.
The unions and the work force are grateful, even to us, the politicians-or perhaps I should say, especially to us and why not? I pay tribute to my right hon. and hon. Friends, from the Prime Minister upwards to the Back Benchers. We have all been di stressed about what has been in prospect. There is now the energy that is needed to take matters forward. Gratitude is due to the Dutch trade unions that have refused to take work from Llanwern. They said that if asset stripping from Llanwern and other steel plants was under way, they would not do the work.
New international solutions must be found to meet the challenges from multinational companies. It does no good for lone trade unions to argue with companies that
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can play them off against the trade unions of other countries. Trade unions must work together internationally. It does no good for one Government to try to deal alone with such a company. Governments will have to combine in pursuit of shared interests. To do that, we need new structures.
A bold, innovative plan has been produced. It deserves to work and breaks new ground. Perhaps what has happened will not after all result in the dreaded amputation of part of a steelworks. Perhaps that approach will be replaced by delicate surgery—the rescue of the hopes and jobs of many people who have given their all to the steel industry for years, and who deserve better than redundancy and the raw deal that Corus had prepared for them.
9.52 am
Mr. Elfyn Llwyd: I warmly congratulate the hon. Member for Newport, West (Mr. Flynn) on securing this important debate. All of us across the political spectrum agree that there is a crisis in the steel industry in Wales, and we support any measure that will alleviate the problem.
When Corus announced the prospective job losses in February it was a shock. After it made losses of £1 billion last year, for whatever reason, the alarm bells should have rung. Manufacturing is probably in a worse state in Wales than in other parts of the United Kingdom, as 20,000 jobs have been lost. The hon. Gentleman spoke about worldwide overcapacity, but as he pointed out the industry is cyclical. The package that was reported in the Western Mail today seems encouraging. I hope to be optimistic, but I do not want to be complacent.
Sir Brian Moffat said in evidence to the Welsh Affairs Committee that the Ebbw Vale and Llanwern workers were too productive. That is not a criticism that one hears too often from bosses. His comment fills me with dismay.
The strength of the pound has had an effect: it has had an undue impact on agriculture and manufacturing, and probably on tourism. Wales is highly dependent on exporting to the so-called euro zone. According to a report in the Financial Times a couple of weeks ago, 72 per cent. of Wales's exports go there. The figure is approximately 58 per cent. for England and about 50 per cent. for London. Wales, and particularly manufacturing in Wales, is more sensitive to the strength of the pound. The Financial Times article concluded:
"Labour's heartland areas are the biggest exporters to the EU and consequently the most exposed to substantial currency swings, which would be eradicated by membership of the Euro."
Mr. Llew Smith: Corus cannot agree on its position and on what the effect of the euro has been, and possibly will be, on its ability to export. A couple of months ago, it was blaming the euro for all the problems of the steel industry. A little later, one of its Dutch chief executives said that the problems had nothing to do with the euro. The day before the most recent announcement, Corus again said that the problems related to the euro, but 24 hours after that announcement, the Financial Times reported that the

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problems had nothing to do with the euro. I suspect that they have little to do with the euro and much to do with asset stripping.
Mr. Llwyd: I hear what the hon. Gentleman says, and he obviously knows the story as well as anyone. I also refer to what the hon. Member for Newport, West said earlier about the chairman of Corus being a rather difficult gentleman to deal with. However, I do not want to scupper any negotiations, so I only make that point in passing. I know that the euro has been mentioned many times, and then put lower down the list of perceived problems.
There is a need for a regional economic policy—in other words, for a different view of the manufacturing industry in Wales and our over-dependence on the euro zone. I hope, as we all do, that Corus will play its part in keeping jobs, whether or not that is through the package reported today in the Western Mail. We do not know what the future holds. As has already been mentioned, the Select Committee concluded that there has not been much forward planning. That fills me with dread.
Dr. Kumar: When the redundancies were first announced, the chairman of Corus told us that he had not come to a conclusion about the figure until the night before. That shows what a shambolic approach has been taken towards the industry.
Mr. Llwyd: When he gave evidence to the Welsh Affairs Committee, the chairman did not know whether one plant to which we referred was making a profit or a loss, which did not give us the impression that he was in control.
I want to ask the Minister one specific question. I am not being defeatist, but in case it turns out that today's reports are over-optimistic and Corus goes ahead with the cuts, I refer the Minister to Council directive 98/59 EC of 28 July on collective redundancies and the way forward. Will the Government consider putting judicial and administrative procedures in place for the enforcement of that regulation, if it is necessary? I am reluctant to spring that on the Minister today, but it may be important as a back stop, and it may encourage Corus to be even more co-operative than today's newspaper article suggests.
Various steps can be taken to secure jobs. I hope that a regional policy will be developed. Some parts of the UK are doing extremely well while others are not doing at all well. It behoves the Government to be creative with their regional policies, by cutting corporation tax in some areas or by cutting employers' national insurance contributions. In a recent speech, the Secretary of State for Trade and Industry suggested that we need to take a different approach to various parts of manufacturing industry in the UK. Therefore, operating aids could legitimately be used, and I hope that they will be.
The impression that I received from Sir Brian Moffat was not helpful. Various reasons have been given—some of them conflicting—about what is going on. Some relate to the cost of labour, others, somewhat illogically, relate to over-production. However, let us not scupper any possible negotiations. When
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representatives of the unions gave evidence, they were forthright and on the ball. They had taken proper advice and the package that they presented was not fanciful. Corus now realises that they mean business; the package is surely worthy of proper and mature consideration.
We know that the Chancellor is sitting on a healthy surplus. He could, if necessary, introduce a rescue package for the area I hope that the report will bear fruit and that something will happen. Having looked at the figures, I do not think that more than about £200 million would be necessary to ensure the future of those communities, which have been devastated by the announcements. If Ebbw Vale and Bryngwyn were closed, the land would have to be prepared and decontaminated at a cost of about £100,000 per hectare at 2001 prices. That would total about £10 million. I also urge the Government urgently to consider new technologies such as broadband communication, at a cost of about £5 mil lion, the restoration of a passenger rail service from Blaenau Gwent to Newport and Cardiff, at a cost of about £35 million and, of course, direct compensation—I fully agree with the hon. Member for Newport, West about that. Why should not those people be properly compensated?
Even at the 11th hour, we hope that common sense will prevail? I suspect that, 12 months hence, steel will be needed, and if the plants have been decommissioned, the decision will be seen to have been shambolic and made with no view to the future or acknowledgement of what everyone knows, which is that steel is a cyclical industry.
I urge Ministers to engage with Corus in any way that they can, to assist the unions in their discussions and to prepare aid packages as necessary—including assisting the package reported today. The amount of money required is not large, and could make all the difference. I hope that, even at the 11th hour, Corus will think again about how it has acted. If not, I hope that the Government will act urgently and will properly fund any rescue package and/or retraining package as necessary. I thank the hon. Member for Newport, West for the opportunity to make those points.
10.2 am
Mr. Denis MacShane: I congratulate my hon. Friend the Member for Newport, West (Mi. Flynn) on obtaining this debate, and on the extraordinary persistence with which he has dealt with the problems of the steel industry on behalf not just of his constituency but of the wider steel community and the public. As always in a debate such as this, I refer to my declaration in the Register of Members' Interests.
This is also a British and a wider European and international problem. There was a whiff of Welshness, if I may say so, about the contribution of the hon. Member for Meirio nydd Nant Conwy (Mr. Llwyd). If the Welsh steel industry is to export around the world and to the rest of Britain, we must consider the matter from a United Kingdom perspective, not from the more parochial south Wales position of the Welsh nationalists, who have so little to contribute to the debate.
That also applies to the Conservative party, because the fundamental problem for steel remains the triple whammy of, first, the decline in steel consumption in the

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1990s and before, which was unmatched in any other country and was the direct responsibility of the anti-manufacturing politics of the Conservative party. That is why no steel community, no steelworker and, I suspect, not even Sir Brian Moffat, will ever contemplate voting Conservative again. [Interruption.] I do not want to go into the details of his political affiliation. Those of us who have met him hope that even a sinner at the last moment of his job may repent.
The second problem handed to the steel industry by that wretched Government concerned Europe—"euro or your job." In 1996, the pound was trading at DM2.15 and steel was making money. In May 1997, the pound had risen to DM2.70 and steel was losing money, and has been losing money on exports ever since.
The third problem was the decadent privatisation of the electricity industry, which resulted in excessively higher prices for our steel companies than those in the rest of Europe. We are the only European nation that has seen a decline in electric arc furnace steel manufacturing: all other European countries have seen an increase. That was another wicked inheritance from that wretched Tory party. I should be surprised if a Tory spokesman even dared to speak in the debate.
Dr. Kumar: Has my hon. Friend observed that the steel industry is obviously not an important issue for Conservative Back Benchers, given that so few of them are present for this debate?
Mr. MacShane:: The "City Slicker" column in The Daily Telegraph today depressed me, because it said that Llanwern should be closed and asked who cares about a fading industry such as steel. Newspapers such as The Daily Telegraph, and the Conservative party, should pay the same attention to the thousands of families who are facing misery and ruin as is being paid to the farmers, who also face a terrible plight
There is a difficult world problem. Recently, I was in America where 11 companies are either in chapter 11 or facing bankruptcy. In the past six months, 16,000 American steelworkers have lost their jobs. The response to the United Steelworkers Union—a good friend of mine—was to favour a complete import moratorium. As I said to the union in Pittsburg, that was not the right approach. We need a managed approach to the world economy in steel. Mergers in Europe will also lead to job losses. It is not wholly accurate to claim that the European picture is rosy.
What can we do? I could do a lot of name calling, but I am not in that mode today. I want to be reasonably polite about the managers of our steel industry, because we shall have to deal with them in the future. I also want to be reasonably polite about my hon. Friend the Minister who is to reply to the debate, because I hope that we shall deal with him in the future. However, Corus has taken a deplorable approach to the problem. It showed great discourtesy—I shall put it no more strongly than that. The chairman of Corus was not willing to tell the democratically elected Prime Minister of our nation which plants were to be closed and how many men would lose their jobs, even though everyone in the industry had known since the beginning of
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December, after the dismissal of the joint chief executives, that the death sentence had already been pronounced.
Mr. Llew Smith: I accept my hon. Friend's point about the lack of consultation and the fact that not even the Prime Minister was informed of plant closures. However, even worse than that was the fact that the workers were not told what was to happen, when they had devoted their lives to the industry and had built it up to be the most efficient in the world. They and their families are most important, and they should have been consulted first.
Mr. MacShane: The lack of effective partnership in the steel industry, despite the best efforts of the Iron and Steel Trades Confederation and the other steel unions, undoubtedly contributed to the problems that we are facing. I have on file letters to Sir Brian Moffat dating back six years, when I was elected to the House, pleading with him to join the steel community MPs, trade unions and others to debate the future of the industry. Steel is not like Primark or Matalan: it is not a tee-shirt factory or a virtual industry. Steel requires constant interface with the Government, whether on currency, trade, investment, public infrastructure, energy costs, antidumping or its relationship with Europe. Government decisions in all nations profoundly affect steel. That is why the US Treasury Secretary, Mr. Paul O'Neill, is one of the great steelmaker leaders of America
In Sir Brian Moffat, we have an accountant who worked in the nationalised British steel industry when it was run like a municipal outfit for many years. He was lucky to keep his job when the industry was privatised. He has an accountant's mentality—when in doubt, shut it down; when there are problems, axe workers; when unions say consult, tell them to get lost; and when the City says jump, say, "How high?" Over the past four or five years, we have seen the City's blind worship of financial markets, not steel engineering. Let us have no more of those ad hominem remarks. The deplorable Corus press briefings constantly chip away at and attack the Government. That is not worthy of a great international company. Let us move forward.
As a constituency Member, I directly represent steelworkers in Rotherham who are deeply concerned. This is a British issue that affects many different parts of the United Kingdom. I welcome yesterday's agreement to establish a joint working party—we have been asking for that for months. Regrettably, the announcement comes late in the day. As Members of Parliament, we must be honest and admit that a joint working party will not alter the disastrous world problem of overcapacity that steel faces—a tonne of basic steel costs as much on the world markets as a tonne of raspberry jam. However, we should look forward and consider what can be done to save the threatened jobs. As hon. Members have said, it is important to maintain capacity, because if public investment in infrastructure comes through and companies such as Nissan and others invest in the car manufacturing sector in the United Kingdom, we will be able to supply British steel.
The Government must also lend their direct support. I have taken delegation after delegation to the Department of Trade and Industry to discuss antidumping and regional aid policies, and have come away

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empty-handed. I hope that the Prime Minister's new commitment will be conveyed down the Whitehall feeding chain and will persuade officials in the DTI—not my hon. Friend the Minister, who is a great spokesman for the working class and industrial manufacturing—to approach matters with new vigour and vision. Germany, France and Spain have no problem backing their steel industries in compliance with European Union rules.
We have new investment in Rotherham. Boeing is coming in next week, and I have the pleasure of accompanying the Secretary of State for Trade and Industry to open a new factory, Toyada Gosei, which is a major Japanese manufacturing investment in Rotherham. Corus is investing, along with Boeing, in a new technology centre in Rotherham.
The Government must take the issue forward. We need a new approach after the election to back a thing-making economy. Britain cannot be a nation of call centres, Starbucks cafes and financial analysts. We consume more goods than ever, and many of them contain steel. That steel can and must be made in our nation. I invite the Minister to be positive in his reply, to build on the partnership programme approach agreed yesterday, to support the steel industry and to give it a positive future.
10.13 am
Dr. Ashok Kumar: I congratulate my hon. Friend the Member for Newport, West (Mr. Flynn) on securing a timely debate on an important subject. I agree with other hon. Members that his contribution in fighting on behalf of steelworkers is exemplary. My hon. Friend the Member for Rotherham (Mr. MacShane) said that the debate was parochial and about only Wales, but I have heard my hon. Friend the Member for Newport, West championing steel on behalf of the whole country, not just Wales, although I would understand it if he were parochial.
As a Teesside man, our Deputy Speaker—my hon. Friend the Member for Stockton, North (Mr. Cook)—will surely concur with what I am about to say. Although you are not able to take part in the debate because of your duties, Mr. Deputy Speaker, we have shared many meetings with steel managers and directors of companies regarding the future of the steel industry.
Before I came to the House, I was a steelworker. Like my hon. Friend, I worked in research and development on Teesside, at the Teesside technology centre, which, unfortunately, will soon be closed down, thanks to the vision of Sir Brian Moffat and the board of Corus. My views are supported by friends and colleagues who work in the steel industry, for the time being, many of whom have given a lifetime of service. They have done everything that was asked of them—total quality performance, quality management and other changes to the steel industry.
Managers and middle managers, who were asked to introduce changes in the 1980s, now find that they will be made redundant. I see them on Teesside, I meet them in shopping centres, and they come to see me at my surgery. My comments are echoed in the communities that I represent, which cannot understand why Sir Brian Moffat is taking such action.
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One of the mills to be closed down on Teesside is the Coil Plate mill, which is one of the best and most advanced in the world. It is profitable and successful, but it is going to be closed. The argument advanced is that it is because of over-capacity. Beyond that, however, we do not know the reasons. I have been told that preparations are being made to close the mill in mid May. Yesterday, Corus created the impression that it is in negotiation with the DETR, its joint working task force and the Iron and Steel Trades Confederation. If so—and I believe that Sir Brian Moffat and the board are honourable—why are they preparing for closures? The secret is leaked out in today's edition of The Guardian. A spokesperson for Corus is quoted as saying:
"We have agreed to keep the door open to any schemes but that has always been there. We have heard nothing that changes our mind about the size of the cutbacks nor the timescale"
That is the real truth. They are window dressing. If I am wrong, and I hope that I am, I shall be happy to apologise, but that is the secret. If those involved were genuinely discussing the matter, they would not have made such statements.
Mr. Flynn: Corus always said that there was no alternative and no way to help the steel industry that would abide by European Union competition rules. The unions, the Government and others have put together a package, which, we ere advised, is practical and would abide by the competition rules. That is the great change. Corns always said that that was not possible. It did not test whether it was possible, and it had to agree yesterday that the proposals could be achieved.
Dr. Kumar: I thank my hon. Friend for those observations. I am happy that we are at least making some progress. I could see none before. I also agree with my hon. Friend the Member for Rotherham. I remain pessimistic, but I hope that I am wrong. I can only become more optimistic as time goes on. I know the approach of Sir Brian Moffat and Corus. I know from the time when he was British Steel chairman that once he makes up his mind, there is no return. He does not make up his mind lightly. I say that in all honesty. If he were to change his mind, it would do him great credit, but I cannot see that happening. I hope that I am wrong.
I welcome the union initiative. A great deal of work has been done on the proposals. I also want to give great credit to the Secretary of State for Trade and Industry and his Department. Every time that there are difficulties in relation to steel, I and other hon. Members representing Teesside go to see him. Last year, he set up a task force, which is a great credit to him. I know that the Minister recognises the contribution of the Teesside steel industry.
We should examine the steel industry in general, but we should give particular attention to its research and development aspects . A recent report by the Select Committee on Science and Technology, of which I am a member, expressed concern about the imbalance of redundancies between the United Kingdom and the Netherlands, and about the apparent downgrading of Corus's commitment to research and development in our country.
The Government believe in research and development, and in innovation, but closure of the laboratory will leave a huge vacuum in research and

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development on Teesside. The Minister supports the chemical industry's efforts to create clusters of employment, but the area that I represent faces huge job losses. Young people are being encouraged to study science and to pursue careers as physicists and chemists, so that they can contribute to research and development, yet one of the biggest employers in my area is closing one of its research institutions. That sends the wrong signal to the youngsters who will become graduates and go on to make a great contribution to research and development.
I am passionate about this matter, and I want the Minister's full support. There will be 1,000 redundancies, but that will cause 6,000 to 7,000 job losses in my community and others. Unemployment is falling in our constituencies, but it is rising in some parts of them. That trend must be reversed Representations should be made to Sir Brian Moffat to impress on him the concerns that I have expressed, and to remind him of his responsibilities and obligations to the communities that have given his company such great service.
10.21 am
Mr. Llew Smith: My hon. Friend the Member for Rotherham (Mr. MacShane) has shown that he is an authority not only on the steel industry, but on matters as diverse as raspberry jam and toffee. It is difficult to follow such speakers. However, although my contribution will be modest and brief, the points raised will be important, because the Ebbw Vale plant is in my constituency, and it faces closure unless it receives a last-minute reprieve.
I have occasionally disagreed with the Government, and voted against them. However, it would be wrong to criticise them now, and it would do a disservice to the work force. I have consistently criticised Corus's actions and decisions. In the past few months, the company has not acknowledged that the Government might have a role—except, perhaps, in clearing up the mess, in terms of the environment and job losses, after it leaves town. I am critical of the previous Government who privatised the steel industry. Subsequent events have informed us about the negative effects of privatisation.
I agree with my hon. Friend the Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) that there was a lack of consultation. It is bad management not to involve the work force. The people in my constituency who are employed in the steel industry have devoted their lives to their work. They know the industry inside out. They might not have long lists of letters after their names, but they are the true experts, and they should have been involved in the consultation process. If those experts are ignored and treated with disdain, the wrong decisions are often made. I hope that the plan to set up a joint working party is not window dressing, but a serious attempt to involve the experts who have devoted their lives to the steel industry. If that is done, the industry will be far better off. If those experts had been involved in years gone by, they would not have been involved in the asset stripping that has taken place.
As I have said before, on the day that Corus was formed, it handed over approximately £700 million to the shareholders. It appropriated £900 million from the
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workers' pension fund. It wasted £135 million buying up companies abroad. It spent millions compensating former chief executives whom it obviously regarded as incompetent, and it handed out massive pay increases to the former Dutch management. All that money amounts almost exactly to the debt that Corus seems to be facing—in the region of £1.75 billion. If the asset stripping had not taken place and the money had instead been invested in the industry, Corus would not face the sort of debts that it now faces.
On the Ebbw Vale plant, no matter what happens with the joint working party, we shall still have to deal with 300 redundancies resulting from a previous decision. The work force have formulated their plans, and within the restrictions within which they have been operating, they have calculated that, following those 300 redundancies, the Ebbw Vale plant will be in profit. Under the plans that they have proposed, which I hope will be considered, the plant will be very much in profit. It is daft to consider closing a plant that is not only one of the most efficient in the world but will make substantial profits
We welcome yesterday's decision to set up a joint working party. Much is at stake, especially for communities in Blaenau Gwent, as no other jobs are available. I am not trying to be emotional or to whip up emotion. I am describing the reality of the circumstances, as the Government's statistics show. The jobs available are for security officer on a few pounds an hour. The Government's statistics on wage rates show that Blaenau Gwent has some of the lowest wage levels not only in Wales—I accept what my hon. Friend the Member for Rotherham said about it being a UK problem—but in the UK.
I remember the day that Corus was formed. As I have said before in Parliament, at approximately 8 to 8.30 in the morning, the managing director, Mr. Tony Vickers, rang me at home and said, "Mr. Smith, there is no threat to jobs; there is no threat to the steel industry; and there is no threat to the plant in Ebbw Vale as a result of the amalgamation or the takeover." That was not true, because since Mr. Vickers made that statement and since Corus was formed, we have lost in the region of 300 jobs in Ebbw Vale. If the plans proceed, we shall lose the plant. That cannot be right. We are losing not the 700, 800 or 900 jobs that the press has suggested but in the region of 1,250 jobs, because in the past year or so jobs have been outsourced.
No one doubts the problems that farming and tourism face, and no one doubts that those industries should receive all the support possible. However, what is aggravating is that my community is in danger of being wiped out, but we are not the No. 1 item on the news night in, night out. We are not the subject of special reports. We do not receive the attention that others receive. If the plans proceed, 7,000 steelworkers will lose their jobs, and 7,000 families will lose their wage earner. They deserve as much attention and support as those who are receiving those things from the media because of their involvement in tourism and farming.
10.30 am
Mr. Richard Livsey: It is a privilege to follow the hon. Member for Blaenau Gwent (Mr. Smith). As an agriculturist, I agree entirely with his

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comments. His community will be absolutely devastated unless the closure programme can be stopped in its tracks. Ebbw Vale is on the boundary of my constituency, and my family has in the past included ironworkers in south Wales, so I know a bit about the matter. However, he is in the thick of it, and his community encounters people on the street in despair every day. We must work together to try to crack the problems. There is no doubt that there must be a crash programme in places such as Ebbw Vale, which must receive compensation and be given special status for aid. Vision is required to rescue the steel communities. If necessary, the activities of multi national companies must be forensically examined on a worldwide scale, and international agreements should be made to control the exploitation of the labour force across the world.
The hon. Member for Blaenau Gwent was right that Corus's losses of £1.75 billion and the payout of funds—from plundering the steelworkers' pension funds to pay off people such as executives—amount to almost the same. The crisis is large. I congratulate the hon. Member for Newport, West (Mr. Flynn) on securing the debate, and I hope that he was correct in his analysis that the rescue package is meaningful. As we know, the steel industry is cyclical, and 12 months is a long time in steelmaking and the steel industry. The package gives breathing space, and I am glad to see that it has been won.
I am familiar with many places in Yorkshire and Teesside, which are in just as bad a state because of the closure of parts of plants and people who have been made redundant. It is a complete and utter carve-up. It is interesting to note that although the plant at Ijmuiden in Holland is not as productive as UK plants, particularly the Welsh plants, it will remain open. Corus exports more than half its production to Europe, and owns substantial German and Dutch steel operations. Commodity steel prices are at a 20-year low.
Mr. Ken Purchase: Does the hon. Gentleman share my feeling that part of the reason why the Dutch plant remains open is that it would be difficult to close it in comparison with the ease with which British plants can be closed?
Mr. Livsey: I agree, and, if I have time, I shall address that point.
Corus, like every British quoted company is, even now, exposed to a takeover because of the organisation of our stock market and the way in which ownership responsibilities are discharged. That makes the company vulnerable, and it is trying to put a gloss on its results—or non—results as they may be at the moment — to try to make it appear more attractive. The skilled steelworkers, who have achieved record production outputs, are the victims of that. We live in a crazy world, in which less productive plants in Holland recruit more steelworkers, while more productive UK workers are being sacked. That is the law of the jungle.
British workers need help from the law. UK employment law protects British workers inadequately in comparison with continental laws. The Government
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must introduce legislation to give British workers the same protection as their European counterparts. They would not be as vulnerable if that were the case. An error of judgment was made when the Department of Trade and Industry allowed the amalgamation with British Steel, which was not done with a great deal of thought. We must reverse the anti-manufacturing policy embedded in our policy-making structure, which was left by the previous Government. We have not sufficiently put that policy aside.
Until the Government make clear the time frame for entry into the euro, the long-term stability of manufacturing that investors require will not be certain. Many aspects of the Corus cutback and the redundancies in the steel industry mean that little, if any, investment is being made and job numbers are declining. We should be asking how much money Corus will invest in the United Kingdom, in line with the rescue package. In Sir Brian Moffat s previous statements, the answer to that question was "nothing". We must extract promises from Corus.
Given the scale of redundancies, the Government should reverse their blocking of the European directive that aims to introduce information and consultation rights to most of the United Kingdom work force. Several things can be done to improve the situation in the steel industry. I agree with the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd). We should give special status to certain areas and special regional economic assistance, as was done in the 1930s and 1940s by Governments who invested in specific parts of the United Kingdom. We might vary corporation tax and give assistance through a reduction in national insurance, or perhaps even abolish it in areas where the state of affairs is as bad as it is in Ebbw Vale. Operating aids could also be introduced, and special assisted area status for some of the crisis areas where the work force can be retrained.
Industry can be made more profitable through Government intervention. Those policies should be combined with a clear programme for when we join the euro. The hon. Member for Rotherham (Mr. MacShane) was right to say that it is a case of "the euro or your job." In many parts of the United Kingdom, that is the situation. Imaginative investment should be made into steel-using manufacturing. Why not put a state of the art car production plant alongside the steelworks? That would be easy in some parts of the United Kingdom, especially on the south Wales coast—
Mr. MacShane: And Rotherham!
Mr. Livsey: And in Rotherham—we must not forget that. It is all about competition. The steel industry is not competitive because of the euro and neither are car plants, if they are not efficient enough. Great investment must be made into manufacturing and steel-using manufacturing to stimulate demand in the industry, but that steel must be competitive on world markets or there will be imports and we will be undercut in the marketplace.
I am irritated by some of Sir Brian Moffat's statements. He is anti-competition; when asked whether he would sell his plant to the work force or to a management-work force buy-out, he said that he would

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not, because the buyers would compete against him, which would put an end to his nice co y monopoly. That situation must be bust open—we must get it by the scruff of the neck. If Sir Brian Moffat is not committed to providing work for British steelworkers, whether on Teesside, in Yorkshire or in south Wales, he should leave it to the management and work force to show him the way to producing profitable steel that is competitive on world markets and provides work for the areas that he is trying to do down.
10.39 am
Mr. Richard Page: I, too, would like to thank the hon. Member for Newport, West (Mr. Flynn) for bringing this matter before us; it should be kept constantly in the public eye. I say that because other areas of manufacturing, such as the textile industry, are steadily disappearing from the scene, but they do not appear to be areas of worry and concern for the Government. The textile industry is a prime example. Although I, too, am concerned about the loss of jobs in the steel industry, more jobs have been lost every year for the past four years in the textile industry and, sadly, 1 believe that the situation is getting worse. John Edmonds of the General, Municipal, Boilermakers and Allied Trades Union said that some 96,000 manufacturing jobs were lost year, and he shares my concerns. In 2001, some 10,000 manufacturing jobs will be lost every month. That is not my view, but that of John Monks, the general secretary of the Trades Union Congress.
This is the third debate on steel that I have attended, and the first at which there has been a glimmer of hope that something might come out of this serious situation. I understand that hon. Members who are faced with disastrous job losses in their constituencies want to try to reverse the situation. I can also understand their lashing out against those whom they believe have caused the problem. However, in many cases, the target of their wrath has been misplaced and their energies misdirected. Constantly blaming Corus might be politically smart but I do not believe that the facts endorse the positions taken by many hon. Members.
In 1997, British Steel made a profit of about £1 million a day. The line on the graph then goes straight down, and Corus is now losing a fortune every day. That position is not sustainable, and it cannot be allowed to continue. Something must be done . I have enormous sympathy with steel industry workers who are caught up in a nightmare that is not of their making. I endorse what the hon. Member for Newport, West said about efficiency. It is unusual for me to quote the Secretary of State for Trade and Industry, but in his recent announcement on this sad affair, he said that the productivity of UK steel workers now 571 tonnes a year per man—a staggering figure that makes ours one of the most efficient and productive steel operations in Europe.
I come from a manufacturing background and, for several years, I was the Member of Parliament for Workington. At that time, the blast furnace at Workington required 14 man hours for every tonne
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produced, but over the past 20 years, productivity has risen by 5 per cent. a year, which is 3 per cent. more than the figure for general manufacturing industry.
Dr. Kumar: On the criticisms of the chairman of Corus, we recognise the bitter reality that he faces, but we are greatly concerned about how he has achieved his objectives and the approach that he has adopted towards the Government, Members of Parliament and the communities affected.
Mr. Page: I accept what the hon. Gentleman says, but I understand that because the Department of Trade and Industry is one of the most leaky Departments—the Vauxhall debacle resulted from information being leaked to the press in advance of the announcement—management at Corus has held things back. However, I shall not defend or attack the Corus management because I am not fully au fait with the facts.
We have touched on only some of the problems, many of which, I believe, have been caused by the change in the balance of trade resulting from the strength of sterling. The volume of steel used in imported goods now balances that produced in and for the UK. As a result of sterling's appreciation against the euro, the average price of a tonne of steel exported to the European Union has fallen by a quarter since 1996.
I shall not follow up the rather myopic contribution of the hon. Member for Rotherham (Mr. MacShane). I suggest that he tries to cast the mote from his eye—or, perhaps, from the Government's eye—and looks to see who ticked the box to allow the formation of Corus, which has been blamed for so much of what we now face.
Mr. MacShane: Will the hon. Gentleman give way?
Mr. Page: No. I am sorry, but if I do the Minister will not have time for his thruppence-worth, and I want to hear what he has to say about the joint statement.
The hon. Member for Newport, West spoke about Europe, and said that we must look to the future. The United Kingdom and Europe must face the fact that a number of industries have such a high volume of activity that if they get into difficulties, one Government alone will not be able to prop them up and keep them going. The hon. Gentleman's little package of measures would be a drop in the ocean against the losses and costs that would face companies such as Corus. I pay tribute to the hon. Gentleman, which is unusual, but that is a debate for another day. It should take place soon.
Time is not on our side. The hon. Gentleman mentioned the developments of the past 24 hours. I, too, have received a copy of the joint statement from Corus and the trade unions. It offers a first glimmer of hope. The hon. Gentleman was right to say that we must not raise false hopes, but it is good to have something positive to look forward to. The working party's application to the EU should be submitted as soon as possible. What will the Department of Trade and Industry do to promote and support that application? The DTI does not usually push EU applications speedily. On behalf of all involved, the Minister should urge the Department to get its skates on and act quickly.
10.46 am
The Minister for Competitiveness (Mr. Alan Johnson): I congratulate my hon. Friend the Member for Newport, West (Mr. Flynn) on securing this debate. He said that he would make a different speech to that which he had originally envisaged, and I shall give a different reply, because of recent and important developments.
I know that you, Mr. Deputy Speaker, have a deep personal interest in the matter, and the concern felt by hon. Members across the House is shown by the attendance here, although it is felt not only by those who contributed to the debate. My right hon. Friend the Member for Newport, East (Mr. Howarth), was here earlier; he has taken pains to argue behind the scenes on behalf of his constituents at every opportunity, despite the fact that, as my hon. Friend the Member for Newport, West pointed out, his ministerial responsibilities place him in a difficult position. Also here are my right hon. Friend the Member for Alyn and Deeside (Mr. Jones) and my hon. Friends the Members for Merthyr Tydfil and Rhymney (Mr. Rowlands), for Corby (Mr. Hope) and for Wolverhampton, North-East (Mr. Purchase). They have all expressed their concern about the future of the steel industry.
This is a crucial time. As my hon. Friend the Member for Newport, West said, we must not raise false expectations; neither must we suggest that these are simple problems with simple solutions. They are complex matters, caused by difficult international trading conditions. We speak of globalisation affecting industry, but globalisation has a bigger impact on steel than on any other industry. As my hon. Friend the Member for Rotherham (Mr. MacShane) pointed out, the problems do not affect jobs only in the UK; he told us of similar problems in the United States. Overcapacity, weak prices and low profit margins have long been a problem.
The important thing about yesterday's developments is what I might call social partnership. All unions, especially the Iron and Steel Trades Confederation, which has a particular connection with the steel industry, have been extremely constructive over many years. From yesterday's developments, it seems that it has been recognised at last that talks with those who represent the work force and have expertise in the industry can produce solutions to complex problems.
Mr. Phil Hope: Does my hon. Friend recall the experience in Corby in the 1980s, when thousands of men were thrown out of work? The town had 30 per cent. unemployment, and it has taken us 20 years to recover. Yesterday's announcement shows a different way in which to operate. It gives hope to other communities under threat of experiences similar to that of Corby when the Tories dumped it in the 1980s.
Mr. Johnson: My hon. Friend makes an important point. We have been round that course a few times in debates on steel.
I have little time and want to respond to the constructive contributions made. That might mean that I miss out the contribution from the hon. Member for South-West Hertfordshire (Mr. Page). Frankly, I had heard it all before. This country had 20 wasted years in which not only were the work force attacked, but the
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only people who could stand up to defend them were excluded at every turn through spiteful pieces of anti-union legislation. If we had only created a climate of social partnership in that period, we might be much further forward with employment relations and the tackling of such issues.
Evidence of the work force's constructive approach is highlighted by the fact that productivity per employee in the industry has risen by 10 per cent. a year for the past quarter of a century. That cannot be said often enough. In 1999, the year in which the Corus merger took place, productivity was 571 tonnes per employee, higher than Germany at 543 tonnes per employee and France at 534 tonnes per employes . That is an amazing success record, and one can understand the feeling of steelworkers and their communities about last year's announcement.
I want to speak specifically about yesterday's developments, but I shall first pick up on some of the points made. The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd ) mentioned operating aids, which are tightly restricted under the European Coal and Steel Community treaty. From the start of the exercise—not only from 1 February when the announcement was made, but from December when the two chief executives left Corus, which gave us an idea of what was to come—the Government and the Welsh Assembly have worked hard to find packages of assistance for the industry. That does not mean only operating aid, but whatever aid we can produce to meet the strict and rigorous terms of the treaty. No stone has been left unturned. The developments yesterday demonstrated some of our thinking on the issue.
We all hope that the initiative leads to a lack of job losses such as those announced recently. Nevertheless, we will ensure that Corus understands its obligation to clean up the sites that it might leave behind. That important environmental issue was raised by my hon. Friend the Member for Newport, West in various debates last year, and we have worked hard on it in the interim.
If my hon. Friend the Member for Rotherham did not indulge in name calling today, I would hate to hear him when he did. He rightly pointed to some of the complex international issues, and talked about the lack of effective partnership. That will be a big issue. If we can glean the support of the electorate for a second term of Labour government, I hope that we can develop the idea of social partnership. My hon. Friend has a great track record on such issues.
In another passionate speech, my hon. Friend the Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) epitomised the views of people in the affected communities. He referred to research and development and the report of the Trade and Industry Committee, which we have studied closely. Our understanding of the rationale behind Corus's approach to research and development is that it wants to avoid inefficient duplication of research resources following the merger, by establishing one research and development centre in the Netherlands and one in the United Kingdom. Each operation will focus its attention on the areas where the equipment and expertise of its personnel are best placed to be effective in their research effort We have made it clear that, wherever in this country Corus decides to site its research and development centre, the DTI is ready to

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assist: it will provide advice and will pursue policies to help the company to increase its competitiveness by maintaining a significant level of research and development effort in the United Kingdom. We shall pay close attention to the matter in the coming months.
My hon. Friend the Member for Blaenau Gwent (Mr. Smith) mentioned lack of consultation and made some fair criticisms of Corus's past approach. I want to concentrate my remarks on what a constructive approach could produce.
The hon. Member for Brecon and Radnorshire (Mr. Livsey) said that British workers want the same protection as other European workers. We have initiated a review of the entire information and consultation process in this country under various pieces of legislation, from the acquired rights directive, through the Transfer of Undertakings (Protection of Employment) Regulations 1981, to the redundancy legislation. We are conscious of the criticism that it is easier to sack British workers than any others in Europe and we do not think that that is a good thing. Perhaps the Opposition do.
We are pleased at our record levels of inward investment last year. None of our analysis suggests that that had anything to do with more lax labour laws. It was related to other issues—productivity and skills, and the fact that our economy is so marvellous at the moment. The review that my right hon. Friend the Secretary of State announced last month will be of use in this context. We want to analyse the facts and discover whether it is true that it is easier to dismiss British workers. It is not necessarily true; the issue is more complex than it appears. If we find that it is easier, we shall decide what to do about it.
We had a debate about the single currency in December. Many manufacturers told me that things would be much better if the exchange rate for the deutschmark was around 3.10. It is about that now, and Corus has made it clear that the single currency was not the sole reason for its announcements. The point about the single currency is in many ways a red herring.
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We were all pleased about developments following the meeting involving Corus and the trade unions yesterday. My right hon. Friend the Secretary of State has made it clear to the unions and to Corus that he is willing to approach the European Commission and other member states to ask for their approval for a scheme, under article 95 of the European Coal and Steel Community treaty, to assist Corus. We understand that to comply with the treaty any scheme would need to contain a significant retraining component. We believe that to be a central feature of the Union's proposals, although we have not yet seen the full details of the submission. It is an imaginative approach to providing in-work training while the work force pick up their normal wages. It would make it possible to buy some time and to improve workers' skills for their local labour market.
Officials of the Department of Trade and Industry are happy to participate and to play a key role, alongside the company and union officers, in a small working party to help to develop such a scheme. I hope that we can soon work up the outline of a scheme to enable us quickly to make an initial approach to the Commission. That approach would not, as I understand it, be affected by any purdah that might descend on us from any quarter in future. After seeking permission we would need to ask for the approval of other member states. Unanimous approval is needed. A process must be undergone, and the timetable will be tight. Corus has told us that it is willing to work with the Government and trade unions to develop a scheme, as it sees the obvious benefits to all concerned, but has asked us to seek the European Commission's consent by the end of April. That is what we shall do.
The initiative is important and we should be optimistic that a chink of light has appeared. The steel industry remains a major part of United Kingdom manufacturing industry and a significant contributor to the economy and employment. The Government will continue to work closely with all parts of the steel sector to try to ensure its long-term competitiveness.

Tourism (South-West)
11 am
Mr. Matthew Taylor: In the context of the present foot and mouth crisis, this an extremely important debate. I know that a large number of hon. Members will be hoping to catch your eye or to intervene, Mr. Deputy Speaker. I hope that that will show the cross-party concern that exists about the impact of foot and mouth on the wider economy in the south-west and other parts of the country.
There have been many statements and debates on the matter in the House. Yesterday, much of the debate focused on the impact on the farming community. That is why today I am raising the subject of the tourism industry, but that does not reflect any lack of concern for the farming industry, which is being devastated. The disease is no less devastating for the surrounding rural communities, especially in its effect on related businesses and tourism. I am not taking the opportunity to make any party points. We all understand that we need to find solutions to the crisis. Any Government would be struggling to cope with the scale of it. That is not to say that I have not had criticisms and suggestions to make.
As regards tourism in the south-west, there have been cancelled accommodation bookings; restricted access to accommodation and attractions; forced closure of environmental and animal-based attractions in urban as well as rural areas; a dramatic fall in inquiries about holidays and breaks; perhaps a tarnished image that will last for some time, at least overseas, if not in the United Kingdom; and a perception that the region is currently closed for business.
Mr. Lembit Öpik: I have listened to my hon. Friend's list. Does he accept that every single one of those problems also exists in rural Wales and, I imagine, across the United Kingdom? Does he agree that one of the reasons for that is that internationally, people do not understand that foot and mouth poses no danger whatever to human health?
Mr. Taylor: My hon. Friend is right. A huge communications exercise needs to be conducted. I shall return to the matter later.
Mr. Richard Livsey: Further to the point made by my hon. Friend the Member for Montgomeryshire (Mr. Öpik), the Welsh Assembly has produced a charter for responsible tourism, which sets out clearly what people can and cannot do during the foot and mouth outbreak. I commend it to my hon. Friend the Member for Truro and St. Austell (Mr. Taylor) as a way forward for the south-west.
Mr. Taylor: I thank my hon. Friend. I will take the opportunity to discuss some of the positive measures that have been undertaken in the south-west.
For many years, I have fought against the perception that because the south-west is an area of sunshine, sand and sea, it is a comfortable place to be. In many parts of the south-west, there is severe poverty, and no more so than in my area in Cornwall, with high levels of
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unemployment, seasonal jobs, very low wages and problems of access to local transport. Much of the south-west is classified as a rural priority area. Cornwall has objective 1 status, because we have some of the highest levels of need anywhere in the European Union.
The foot and mouth crisis is impacting on an already poor area that is highly dependent on the tourism industry. The outbreak could not have come at a worse time, following the BSE crisis; swine fever last year; the strength of the pound, which has hit tourism hard, as well as hitting farming and exporting industries; and appalling disruption to rail services in most of the southwest. I have not been able to use the train regularly for months—it simply is not running down to my part of the world. [Interruption] It is a disgrace, as the hon. Member for Exeter (Mr. Bradshaw) says. On top of all that, we have had the wettest weather for more than 130 years and possibly In recorded history.
The crisis comes at a time of the year when cash is at a minimum in tourism-related businesses. Most of them survive on their income from the Easter period through to the end of the summer. During the winter and early spring, they invest in improvements to accommodation and in advertising so at this time of the year their resources are at a minimum. In the rural communities most significantly Affected, tourism makes up 30 per cent.—a third—of local income, compared to 10 per cent. from farming
The combined impact of all those factors represents an economic catastrophe facing the area. The regional development agency estimates that the total net loss to the south-west could easily be £1 billion or more, with tourism bearing the brunt. The industry in the southwest is larger than in Scotland and Wales together. In 1999, more than 12 million people took holidays in and trips to the region, which were worth almost £2.5 billion and accounted for 100,000 jobs. Other estimates put losses as a result of foot and mouth as high as £2 billion. In the most seriously affected areas, 30 per cent. of gross domestic product could be affected.
There is also an incidental impact on the farming community—as if I had not suffered enough as a direct result of the disease. In Cornwall particularly, and in much of the south-west, farms are reliant on diversification and their role in the tourism industry. Many farmers generate more than half their income from that.
Mr. Ian Bruce: I am grateful to the hon. Gentleman for initiating the debate and allowing me to intervene. In Dorset, we have tended to close all the farmland and all the paths, yet the Government are telling us to make sure that everyone can go to the beaches. Unfortunately, they often need to cross farmland to get to the beach. Is that a problem in the hon. Gentleman's, constituency, and how has it been dealt with?
Mr. Taylor: The hon. Gentleman is right. The problem is serious throughout the south-west. Access was closed on a blanket basis on MAFF advice at the start of the outbreak. In Cornwall, there is no access to more than 90 per cent. of the coast. Although some of the routes cross lard used by livestock, some could be opened. The matter is under review, but the process is

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extraordinarily slow. That impacts on the costs borne by local authorities and others. I shall ask the Minister what scope there is for help to be given to local authorities. We have spoken at length in the House, rightly, about the impact on business, but local authorities must devote huge resources to get the footpaths opened as quickly as possible and make sure that the right advice is given.
Mr. Ben Bradshaw: The hon. Gentleman has identified the factor that may be doing more damage than anything else: the blanket closure of all our footpaths, whether or not they go anywhere near livestock. I hope that when my hon. friend the Minister replies, she will say what exactly the dangers are. There are those who say that the danger posed by people walking on footpaths has been greatly exaggerated. If that is the case, should we not be moving much more quickly to open some of our beautiful and very important footpaths?
Mr. Taylor: The hon. Gentleman is right. The impact is huge, and we need to find ways to make rapid progress to open up access where it is safe to do so. However, the first priority must be to contain the spread of the disease. If anything is done that puts that at risk, it will ultimately be worse not just for the farmers but for the tourism industry as well. That is why tourism organisations and all those who are dealing with the outbreak have said that their first priority is to support the containment of foot and mouth disease and to back the farming community on which it directly impacts.
The second priority must be to safeguard the long-term interests of the tourism industry and the related small businesses that are being hit. Such businesses are characteristic of the rural community, but they do not have large amounts of money to help them to survive the crisis. Most of them—I hope that they will not take this wrongly—have a pretty hand-to-mouth business existence and do not make huge profits. They work very hard and they employ local people, but all that is falling down around them.
That is why the third priority must be to limit long—term damage. These problems are not merely short-term; if such businesses close, many of them will never reopen.
Mr. Anthony Steen: The problem in Devon is that nobody knows what is closed and what is open. Last week, we heard the Minister for the Environment say that it was business as usual in Devon and the west country and that everything was open. However, I have just been phoned from Dartmoor by my hon. Friend the Member for Teignbridge (Mr. Nicholls), who said that everything was closed. People who want to walk across fields in Devon do not know whether it is legal to do so. The situation has been muddled because the county council has not made clear statements and MAFF has not given clear directions.
Mr. Taylor: The provision of proper information at the right time is a huge issue, which I want to emphasise in this debate.
I should like to give some examples of how foot and mouth is hitting the region, as they will help to show what must be done. An enormous number of
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accommodation bookings have been cancelled, not only in farm accommodation, but in seaside towns. Although coastal towns are not directly affected by foot and mouth, their bookings are disappearing because of the belief both here and abroad that they are closed down. The Best Western hotel in Newquay, which specialises in student holidays from other parts of Europe, has had £50,000-worth of bookings cancelled. So far, the cancellations extend into June and are due mostly to the closure of coastal footpaths and the Pentire headland, as well as the negative pictures of burning animals in the region.
I know that my hon. Friend the Member for Torbay (Mr. Sanders) has seen exactly the same thing in Torquay. Indeed, the situation there is arguably worse, as Devon appears as just one big red splodge on the maps that are shown on the evening news. One would think that the whole place was covered in yellow "do not pass" lines.
It is crucial that locations are reopened as soon as possible, but the right campaigning is also needed to promote the opportunities that are available in the affected communities. As hon. Members can imagine, many people have asked me to raise their concerns in this debate. The problem is hitting not only areas that have foot and mouth, on whatever scale. One person from Exmoor stated:
"There are no outbreaks of Foot and Mouth on Exmoor at the moment, (and I hope it stays that way) but the tourism industry is suffering just as badly as the other areas are suffering.
My wife and I run a small Bed and Breakfast business … We take up to eighteen guests. and normally in March/April and onwards we are very busy. For the last four weeks we have had no guests at all, and it does not look as if we will have any in the foreseeable future. We have had to date £15,000-worth of business cancelled. Enquiries for the summer and autumn have also stopped coming in.",
Mr. John Butterfill: I am grateful to the hon. Gentleman for securing this debate. I should like to endorse his remarks, as the problems that he describes are seriously affecting towns such as Bournemouth. There is no foot and mouth in and around Bournemouth, but all the local attractions have been severely affected. The New Forest is closed, as well as Studland in the Isle of Purbeck, which is closed partly because deer graze on the dunes. Hengistbury head is closed because there are some sheep there. My area is just as affected as those to which the hon. Gentleman refers, and the letters that I am receiving from my hoteliers bear out everything that he says.
Mr. Taylor: The hon. Gentleman is right, although he will agree that we should concentrate also on the huge number of attractions and hotels that are still open.
I should like to give another example from my constituency. As I said, we do not currently have foot and mouth, and I hope that it stays that way. However, the Rosevine hotel says that the footpath along the coast into Portscatho, the local village, is closed. The path is 400 yards long, but the alternative route is a car journey of three and a half miles. The path has never been grazed by livestock in living memory and it provides no access into livestock areas, but it remains closed. The hotel has lost 84 per cent. of its bookings, and has already lost a total of £19,000.
Mr. Andrew George (St. Ives): Does my hon. Friend share my concern about a parallel outbreak involving a

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contagious human disease? I refer to the spread of benefit-of-hindsight disease, whose symptoms are brass neck and severe memory loss. The human race is also being affected by the disease of panic, which is out of place. As my hon. Friend points out, there are no outbreaks in Cornwall, so we should establish ourselves as a livestock island and a disinfected route through which humans can make their visits and enjoy their holidays. Cornwall is open for business, and we must shout that out loud from this place. I am grateful to my hon. Friend for securing us the opportunity to do so.
Mr. Taylor: I agree with all that my hon. Friend says.
I should like to give a further example of how badly businesses are affected. I have received a fax from somebody in Dartmoor,who says:
"Our last customer was on the 27th of February. The bunkhouse has been shut since then thus its income is zero. We are no longer operating courses and holidays on the moor, we have managed to run a couple of groups in Sussex and in South Devon but we have no more bookings. We would normally bring about 1500 people to Dartmoor each year—this year it is likely to be less than 200 and they will be at the end of the year.
If this crisis is not brought under control very soon we are going to lose the summer bookings. It is doubtful whether we can survive until September without an income but if we did and we lost all summer income we are unlikely to survive the winter!"
This problem is destroying tourist businesses and we need urgently to shout from the rooftops the opportunities that are available.
Several hon. Members rose
Mr. Taylor: I shall continue to give way to hon. Members. I hope that they will bear in mind the fact that their interventions will extend the length of my speech, but I am aware that it is helpful to allow everyone to make their points.
Mr. John Burnett: I, too, congratulate my hon. Friend on securing this debate at such a crucial time. Does he agree that decisions about which locations stay open and which stay closed rely on detailed scientific advice? Local authorities and councils do not have the necessary expert scientists, so will he confirm that central Government must concentrate on the matter and give authorities the most detailed possible advice and guidance about what should and should not stay open? Furthermore, does he accept that emergency powers should be given to councils, to enable them to move stock from small areas of common land, whether or not it is infected, so that such areas can be opened and stay open?
Mr. Taylor: My hon. Friend represents an area which has been hit hard by the outbreak, so he has direct experience of the positive efforts that have been made and also of the difficulties that are dragging us back. I agree absolutely that the Government have a key role to play in providing resources, back-up and information to the local authorities and to other emergency planning groups. That is largely why I sought to initiate this debate. In my county, an extremely good group is working out of county hall to bring together all the
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relevant services. I think that that is happening in most other areas. The group is struggling, however, as it does not have the necessary expertise. It is under-resourced, as the problem is costing a lot of money—a point on which I shall comment further in a moment.
There is some good news. For example, the National Trust is now reopening properties in Cornwall. It is concentrating on car parks that provide access to beaches, provided that they are located within non-risk areas.
The hugely successful Eden project is in Cornwall. Many people are visiting it, but they are mostly local because those outside the county wrongly believe that Cornwall is closed. Newquay zoo has reopened, but the enforced three-week closure has cost it £40,000. Only seven years ago, the current owner won the national small business award for turning a failing business around. Like other attractions, the zoo has been closed for the winter and relies on the income stream that begins to flow at this time of year. It is terrified of the impact of the adverse publicity.
Foot and mouth disease is affecting not only holiday businesses but businesses linked to them. For example, Millmans coaches, which is based in Dartmoor and has 16 coaches, has asked me to raise its case. Millmans usually take schoolchildren from the midlands and the south-east to residential centres on the moors. That cannot currently happen because the moors are closed. Devon county council has cancelled all extra-curricular activities and agriculture colleges are cancelling field trips. The company's bookings have inevitably been cancelled. It has lost some £20,000 and it is in serious danger because of cash-flow problems.
Mr. Nick Harvey: My hon. Friend made the point that some small tourist businesses have just come through the winter months when they have almost no income. They are reflecting on the prospect of earning little if any income in the next few months. Does my hon. Friend agree that the benefits system is too inflexible to respond to those dire circumstances? Other hon. Members and I have fought cases in the past on behalf of constituents who have no money in the winter but are told that the income must be averaged over the year for benefit purposes. If they have no cash at the end of the winter period and will not now receive any, it is essential to fine-tune the benefits system to help them through these terrible times.
Mr. Taylor: It has long been a problem in the tourist industry that work comes in relatively short blocks, whereas the benefits system assumes that people are either in full-time, permanent, long-term work or not in work. That needs to be changed. I pressed the previous Government to change the system, and I hope that the current crisis will spark some rapid action at least on some temporary measures. It is not only businesses that are affected but those who are employed by them. Many people in my constituency depend on summer business in the local hotel or restaurant. Most of them find that they are not being taken on or that they are being laid off.
As I said earlier, Cornwall is largely unaffected by the infection, but Carbeil caravan and camping park stated in a letter to me:

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"Enquiries for information and literature for our Park and Cornwall in general have become non existent".
That refers to future bookings. The letter continues:
"No bookings are being received. These should start to come through now, not just for now but for the whole of the Summer months.
Coastal Paths are closed; this is our main source of income at this early start of the season".
That is a key point. At this time of year, walking holidays maintain the business. The 1etter goes on to say that the proprietors
"Desperately need Easter trade but need money to finance advertising".
They cannot advertise to try to deal with the problem because, as they say in their letter:
"If we are spending what little money we have on advertising will the enquiries/bookings arrive? A difficult question in normal pre-season incentives".
They simply do not know what to do.
My office has received distressing phone calls from people in genuine personal need. They do not knock the Government; some try to cast blame, but all are desperately anxious about their future. My hon. Friend the Member for Montgomeryshire (Mr. Õpik) referred to our negative image abroad. The impression is given that the country is closed and that people cannot visit it. The British Tourist Authority hr s highlighted the problem, but I do not believe that it has the resources to overcome it.
Let me cite a couple of examples from colleagues. My hon. Friend the Member for Bath (Mr. Foster) has been contacted by the City of Bath further education college, which received a fax cancelling a visit of a group of German students. The fax states:
"Much to our regret we have to cancel our stay at your college from 28th March to 12th April 2001 because of foot and mouth disease. The Ministry of Agriculture"
that is the German Ministry of Agriculture—
"has given advice to the Ministry of Cultural Affairs to stop all trips to England within the near future."
It is no wonder that we have a serious problem if such advice passes between German Departments and filters down to affect bookings.
My hon. Friend the Member for Somerton and Frome (Mr. Heath) had his attention drawn to the position of a coach company in Wincanton in his constituency. It has been forced to cancel a trip for students from Sexey's school in Bruton and King Arthur's school in Wincanton to Lahnau, their twin town in Germany. The coach company has therefore lost business. The mayor of Lahnau told the students that, on the basis of advice from his regional government, they must not come to Germany. Some extreme and incorrect information is being spread abroad. National American television is telling people that it is their duty as citizens not to travel to the United Kingdom.
The problem is currently being tackled by newspaper advertisements, which resemble the sort of information that was published in 1950s and told people to wrap themselves in brown paper and hide under the stairs in the event of a nuclear alert. Not many people will be attracted to sunny Devon and Cornwall by such adverts. Of course, accurate information must be provided. All
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parties have connections with major advertising companies, which are doing all sorts of work, in some cases free of charge. Surely the Government can do better than the full-page. black-and-white adverts.
I appreciate that the tourist associations, with Government support, are planning advertising campaigns in due course to overcome the negative impressions that may remain when the crisis ends, but we need positive advertising now to persuade people to go ahead with bookings and to explain the time scale. We should promote success stories—for example, Torquay and Newquay, which are as open as they have ever been, and new, vibrant attractions such as the Eden project. There is no reason why people should not visit them.
We desperately need to provide the back-up, resources and information to help the opening of the coastal footpaths and to promote other attractions that can be visited safely. The bridleways, cycleways and footpaths in Cornwall total 25,000 miles. They comprise 6,000 paths including 300 miles of coastal path. There are nearly 1 million annual visitors, and walkers bring in £10 million to Cornish tourism. However, almost all the paths are closed and the county is struggling to find the resources to reopen them.
South West Tourism provides regular updates and distributes supplements in the region's daily newspaper, the Western Morning News, which covers Cornwall and Devon. The supplements explain what is open and what people can do. However, they do not reach people from other areas. Only the Government can properly tackle that problem. It is fantastic that so many local organisations, businesses and others are pulling together to get through the crisis, but they cannot do it alone.
Let us consider compensation. The Government have made some announcements, but they are too limited and they affect only the smallest communities. They do not cover all the businesses that are being hit; frankly, they are insufficient. I appreciate that the Government are considering further action, but let me make one suggestion. There is an urgent need to make money available to affected businesses. The Government could cover the cost of the interest. They should be flexible about evidence, but if businesses can show that their problems are related to the crisis, money should be made available. The Government could pay the loan costs and the banks could administer the scheme. Although the banks claim that they are being helpful, they have to operate under commercial constraints. Only the Government can intervene to take the matter further.
The Minister should take a hand in sorting out the diabolical problems with rail services to the south-west. We have suffered a double blow. Not only are direct routes to much of Devon and Cornwall closed, but much of the rolling stock has been transferred to Wales to provide a more frequent service there. That has meant the loss of modern inter-city high-speed trains in and out of Cornwall. That causes further delay and does nothing for the image of access to the county. People believe not only that the countryside is closed but that when it is open they will have to travel on a 40-year-old train. That is unacceptable. Great Western Railways, with Government encouragement, could do something about that now. A bit of good news would be extremely welcome at the moment.

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I wanted to raise the issue of the local authorities and their problems, and I hope that the Minister has taken those points on board. Many local authorities are now spending large sums of money. Cornwall has just authorised £61,000 for the schemes in which it is involved so far; it has authorised £25,000 a week for further work during the crisis; and £250,000 has been set aside since the middle of March. The local authority does not even know whether the Bellwin scheme or some other scheme will help to provide compensation for those costs. It needs to know what funds it can make available, as that will make a difference to what can be done. It has other responsibilities such as education and social services, and it needs to know how to balance its spending.
I have given a large number of hon. Members the opportunity to intervene, and I know that others would like to speak. I understand that it is not easy to come up with quick answers, but I must say to the Minister that quick answers are what those businesses urgently need. Better adverts would at least make a start in showing that the Government understand that those businesses are open and that they want customers. Customers can safely come to the south-west, but the businesses need a bit of help to win those customers back.
Mr. Deputy Speaker (Mr. Frank Cook): Order. It might be helpful if I advise the House that the convention is to start the Front-Bench contributions 30 minutes before the termination of the debate, in this case at 12 o'clock. That gives us 29 minutes in which to hear from six hon. Members. Many hon. Members have already made interventions, and I ask everyone, please, to bear in mind the constraints under which we operate here, so that all hon. Members who wish to can make a contribution.
11.32 am
Ms Julia Drown: I congratulate the hon. Member for Truro and St. Austell (Mr. Taylor) on securing this debate, and I echo his concerns for the farmers. Although I do not want to detract from that, I want to concentrate on tourism and the impact that the foot and mouth crisis has had on Swindon. It is important to focus on the positive side of this issue, because there is still a great deal for tourists to enjoy. The hon. Gentleman mentioned the region being closed for business, but we should not use that term, because there is so much in it that is definitely open. That is certainly true for tourists in Swindon.
I see Swindon as the gateway to the south-west: it is sometimes described as the place where the Cotswolds meet the west country. We undoubtedly have some problems because of foot and mouth. Our wonderful country parks are closed. Lydiard park—in which one could normally learn about the chequered history of the Bolingbroke family in one of the finest small historic houses in the country—is closed at the moment. Coate water, where people who are mobility impaired and others can take beautiful walks, is also closed because of foot and mouth. So, too, are the farmers' centre, and Broome Manor golf course, where international golf champions have trained.
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Although we have those problems, Swindon is definitely not closed for tourism. I want to emphasise that today, because Swindon's tourism trade has grown magnificently over the years and we are keen for that to continue. Indeed, we have an ambition to be the fastest-growing tourist destination in Britain. That may raise some eyebrows here, because Swindon has been well known as a boom town and the fastest-growing town in Britain—it is sometimes cited as the fastest-growing town in Europe—but we now want to share that success with tourists from Britain and abroad. We are being very successful in doing so. Last year, we raised about £216 million from the tourist trade, an increase of 73 per cent. since 1997. Tourism is now the second-largest employer in the borough, supporting about 6 per cent. of jobs; it is very important to us.
Many people do not know about the attractions of Swindon. We are not as good at advertising as some places. We have one of the best collections of 20th-century art and ceramics outside London, thanks to the work of the borough council. After the war, Swindon was the first local authority to build a purpose-built art gallery, and it is one of only a handful of local authorities to have collected a nationally significant contemporary art collection, to which it is still adding and which is one of the most important collections outside London.
That foresight is reflected in many areas of the borough council's work. It was the first local authority to adopt a percentage for art policy, and the first to establish and finance an arts centre. It is the only local authority to run a national dance agency, and many of the dance organisations in this country have their roots in the work started in Swindon. We have our own Billy Elliots now: people who came in off the streets of Swindon, never having danced before, now dance in the west end and on Broadway, with companies such as Rambert and others. That facility is in Swindon for people to enjoy.
Swindon has a world-class railway museum, well funded by the national lottery, that has been cited Wiltshire's family attraction of the year by the "Good Britain Guide". The McArthur Glen designer outlet at Great Western village was given two regional tourist board attraction of the year awards. These are all very much open to the public. For younger people, the Brunel rooms, where Billie Piper first performed, is just one of the many venues providing a good evening's entertainment in and around Swindon.
We are aware of the bigger issues involved with travelling to Swindon, and there are some problems with the railways, although the situation has improved recently. We do not have the on-going problems that areas further into the west country are experiencing. We are keen to continue to support the tourism trade, for the reasons that I have outlined. It represents an increasing success in the town.
I want to ask the Minister to comment on a couple of issues that could help tourism in Swindon and across the south-west. First, there is the big issue of getting information out about the foot and mouth problem. Even when that problem did not exist, there was a problem with information. The national helpline was set up for people to call. but sometimes that is tricky because it does not have the information that people on the ground have. If queries could be put through to the

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local tourist information centres, that would be the best thing. Our centre in Swindon helps about 180,000 people a year, and it has detailed, on-the-ground knowledge.
Secondly, different people are running websites, and Swindon, too, is launching its own tourism website—it might even be up and running today.The English tourist board and the British Tourist Authority both run websites. If all that information could be co-ordinated across the country, it would be helpful.
Swindon is often the butt of criticism, but I have just given the House a flavour of the rich cultural activities that it has to offer. I invite all hon. Members to come and visit us as soon as possible and if anyone is free on 3 May, our literature festival will be running then. Hon. Members might want to come and hear a very good poet, Jenny Joseph, who is the author of the award-winning poem, "When I am an old woman, I shall wear purple". There will be culture throughout, and Swindon is open. Please come and visit us.
11.39 am
Mr. Anthony Steen: The hon. Member for Truro and St. Austell (Mr. Taylor) has done a great service to the House. I agree with everything that he said, and I should like to thank him for putting it so succinctly. I have cut my speech by at least 50 per cent., as I do whenever I speak. My speeches are always improved as a result.
The Minister for the Environment recognised the gravity of the situation in his statement on 20 March. I liked that statement because it represented a step in the right direction. However, it was a very small step. The seriousness of the situation in South Hams and the part of Torbay that is in my constituency, which the hon. Member for Torbay (Mr. Sanders) will tell me is about one third—
Mr. Adrian Sanders: A quarter.
Mr. Steen: The hon. Gentleman says it is a quarter. The seriousness of the situation can only be guessed at. I am worried stiff about the business prospects in my area. Easter will be a watershed. I fear that media sensationalism has given people the misconception that vast areas of Devon are no-go areas full of mass burial sites and closed footpaths. People need the facts, not the latest culling figures. If they do not come to Devon for its countryside and seascape, they certainly do not come for its night clubs.
Let me give an example of how crazy the situation is. In Torbay, a footpath on Churston common, which is on one side of a road, is closed. Immediately on the other side is a massive golf course, which is open for business. That is sheer madness—people do not know what they can do. One of my councillors who was walking on a footpath with his dog was told that that was illegal. Dartmoor is allegedly open to the public, but my hon. Friend the Member for Teignbridge (Mr. Nicholls) has just rung me from there to say that it is closed. He cannot stop his car. He cannot go into the car parks. He cannot go walking.
In spite of the whole of south Devon, including South Hams, Teignbridge, Torbay, Plymouth and Exeter, being free of foot and mouth, I believe that Devon
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county council has closed all the footpaths, although nobody knows. People are not coming to Devon, and understandably so. The Minister for the Environment said in his statement last week that the countryside is open for business and that tourists should go there, but that is no good if those who go to the countryside are told that they cannot stop, cannot go into car parks and cannot go walking. Tourists do not know where they can go walking, but they can play golf. Golfers are very welcome, but if people walk across a footpath with a dog, they are not welcome. That is sheer madness—it has to be put right, and the Minister could do it.
Let us consider two hotels in my constituency. The Thurlestone has four stars and 67 rooms—it is one of the best in the area. It has been in the same family since the 1890s, is highly regarded and has every possible facility, including a golf course where people can play. It has a swimming pool and people can swim there. It has grass and greenery and people can walk there, but if they go outside the hotel they cannot walk on the footpaths. The Royal Castle hotel in Dartmouth has three stars and 25 en suite rooms—it is one of the oldest in my constituency. I gather that its figures are down by between 12 and 15 per cent. on this time last year. Much more worryingly, it has noticed a 50 per cent. decline in bookings compared with the same period last year. My view is that seasonal staff will suffer as they will bear the brunt. Also, where will students go when they want jobs this summer?
Health and safety regulations cost a fortune to enforce. Why can they not be relaxed? If I may say so, since they were introduced, the instance of food poisoning has increased. If we got rid of or relaxed health and safety regulations, we could be sure that food poisoning would decrease.
Hotels are braced for a meagre season and they have enormous overheads to sustain. The hotels in a tourist area are intrinsically immersed in the whole rural community and even though south Devon is clear of foot and mouth, the disease pervades the very fabric of the community. Everyone feels affected: the roads are empty in South Hams, the caravan sites are deserted and Devon is like Britain on a Sunday in the 1960s—very little is moving.
Woodlands leisure park is usually visited by 400,000 people each year. The owners are already very worried men—they are all former farmers—and they have closed the park for a month. Pennywell farm, which is another tourist attraction, cannot understand why MAFF has sent out a directive saying that schools in Devon should not arrange visits to farms or farm attractions. Pennywell is deserted and its owners bereft because MAFF has told schools that they must not visit their farm.
Can the Minister please put that right? Can she please make sure that MAFF corrects that message and does not send out any more? If Devon county council has closed footpaths, people should know which ones and there should be clear information as to why. Most people believe that closing footpaths makes not the slightest difference to foot and mouth, which is mostly a wind-borne virus. People who have not gone near an affected area are perfectly safe to walk on those footpaths, are they not?

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The problem is that we are relying on the public to have common sense. I suggest to the Minister that a lot could be done to relax those draconian measures, which should not apply to footpaths away from livestock. People should be able to walk on a public footpath on one side of a road and play golf on the other without having to draw a distinction between the two.
Besides advice from MAFF, the Government could do a number of things to help. If prudent and responsible action has been taken to prevent the spread of disease and attractions have closed voluntarily, the Government could underwrite a business interruption insurance. They could help with committed costs such as feed and business expenses and veterinary and medical bills incurred by farms and tourist attractions. They could suspend all business rates until the emergency is over.
The Government could also contribute the equivalent of jobseeker's allowance to affected companies while they are closed. That would prevent the loss of trained and experienced staff. On marketing funds, they could help to relaunch Devon in 2001. There is also the VAT problem, which could be alleviated by immediate suspension of VAT on entry tickets to tourist attractions until the end of October.
Have those measures been thought about? The Government have to take action, because my area is bleeding to death—not because it has to, but because of totally false and conflicting information that people do not understand and cannot grasp. The Government may not be responsible for this appalling disease, but they are responsible for not clearly stating what the situation is.
I ask the Minister to make perfectly plain in her winding-up speech exactly what the Government are doing to make people understand that south Devon is not closed for business, that the tourist attractions and hotels are open and that people can walk in the countryside without fear of prosecution or of encountering the problems associated with spreading foot and mouth. The Government have a responsibility to make a clear statement, but they have not done so.
11.47 am
Mrs. Linda Gilroy: I congratulate the hon. Member for Truro and St. Austell (Mr. Taylor) on initiating a debate on a matter that is crucial to all our constituencies in the south-west. Reference has been made to Cornwall, the South Hams and Torbay being disease free. That is true for the bulk of the end of the far south-west peninsula, including my constituency.
I want to make some brief points about the role of cities in the south-west in re-establishing confidence in tourism in a way that helps the countryside. Often, town is set against country, but nothing could better illustrate the way in which each relies on the other for a thriving economy than the current circumstances. The hon. Gentleman emphasised the scale of the tourism industry in the south-west, which is second to none in the United Kingdom in its importance to the economy.
The health of the economies of cities such as Plymouth depends on a thriving economy in the surrounding area. An example that came to my
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attention over the weekend was featured in our regional BBC television programme "Spotlight on Westminster". A fishing tackle business in Exeter street has just been decimated by the impact of the crisis on fishing in the surrounding area. There will be many more such examples unless we can get some confidence back in our tourism industry, but there is every reason to expect that we can achieve that, and the historic cities of the south-west have a key role to play.
Disease-free areas such as those to which hon. Members have referred can become bases from which tourists can undertake visits with confidence and we must provide imaginative, up-to-date signposts to the other facilities that are open for business in affected areas. I recommend that my hon. Friend the Minister work with all the people who, I know, are beavering away on the local taskforce to emphasise that ours is not a can't-do peninsula, but a can-do peninsula. I often refer to Plymouth as a can-do city and I shall give brief examples to illustrate that.
I believe that the Minister visited our area recently, and is aware of the importance of the national marine aquarium. The aquarium, which attracts some 400,000 visitors a year, demonstrates more than any other attraction in our city the magnificent experience that can be had. On 7 April there will be a presentation entitled "The Jewels of Plymouth Sound", showing some of the creatures that can be seen on the shores of the west country—octopus, cuttlefish and, I understand, a fish called "Tom Pot blenny". The aquarium was featured in last Monday's edition of, The Daily Telegraph.
Opposite the aquarium is Dartington Glass, which provides an important industry in the constituency of the hon. Member for Torridge and West Devon (Mr. Burnett).
I want the Minister to realise that such tourist attractions can be promoted in an upbeat way. They can serve as can-do signposts, encouraging people to visit Plymouth and Cornwall with confidence. Perhaps there could even be a twinning arrangement between industries and tourist attractions that are open for business, and others that are not so evidently in that position. Perhaps the aquarium and Dartington Glass, for instance, could signpost that Buckland Monochorum is very definitely open. It is a beautiful garden centre with one of the United Kingdom's finest gardens, which will be featured throughout the country on gardening programmes this summer.
Plymouth also offers much in the way of water sports, and, in the evenings, one of the country's pre-eminent regional theatres, the Theatre Royal. We should make much more use of such amenities. People often try to set town against country, but in the present circumstances we can help each other by being imaginative in promoting our area. The same is probably true of all our cities. The hon. Member for South Swindon (Ms Drown) said that hers had much to offer, but so have Bath, Bristol—with its splendid millennium projects—and Wells.
Let me make a final suggestion, which arises from an experience that I had. Earlier, someone referred to the advice that is given abroad. When I visited Turkey at about this time last year, I met members of the Turkish tourist industry. They were extremely concerned about information that we had posted on our Foreign Office

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site describing the state of tourism in Istanbul, and mentioning the dangers of mugging and theft on the streets. They were at pains to demonstrate that that simply was not true.
I hope that the Minister can reassure us that not only our own sites and advice, but all web and internet information that is available across the world, are being monitored to identify both inaccurate information and opportunities to promote the can-do approach that we must make every effort to implement in the south-west peninsula in the next few days and weeks.
11.54 am
Mr. David Atkinson: I too congratulate the hon. Member for Truro and St. Austell (Mr. Taylor). The debate could not be more timely.
My constituency—along with that of my hon. Friend the Member for Bournemouth, West (Mr. Butterfill), and those of my hon. Friends the Members for South Dorset (Mr. Bruce) and for Mid-Dorset and North Poole (Mr. Fraser), who are also present—is well known to Members. We welcome the conferences of all three political parties nearly every year: we appreciate their business, and look forward to their return.
We in Bournemouth and Dorset have the greatest sympathy for our colleagues in tourism and farming in the south-west, who face devastation. No amount of compensation can make up for the trauma and loss that the rural economy is experiencing. Dorset has been fortunate so far, but, as my hon. Friend the Member for Bournemouth, West has said, we know from those who run smaller hotels and guest houses in Bournemouth that they are being hard hit by the closure of the New Forest, Hengistbury Head and the nature reserves along the River Stour.
I fear that the entire tourist industry will soon be hit as this national crisis develops. Given last year's fuel crisis, foot and mouth could not have come at a worse time for British tourism. Visitors to Britain are already in decline: there were 2 per cent. fewer last year than the year before, while the number continued to rise in Europe and throughout the world, by 6 and 7 per cent. respectively. Much of that is due to the strong pound, which I accept we can do little about. "You cannot buck the market," as someone once said. But the problem is also due to our high VAT, compared with the competition. We can do something about that, by doing what the French do and offering lower VAT rates for smaller hotels.
Having the most expensive petrol in the European Union does not help much either. The Government are, of course, entirely responsible for that.
Mr. Christopher Fraser: Does my hon. Friend agree that the application of the minimum wage and the working-hours directive have had a very detrimental effect on small and medium-sized businesses in the south-west, compounding the problems that he has mentioned?
Mr. Atkinson: My hon. Friend is right. When faced with the national minimum wage, small businesses—especially those that the hon. Member for Truro and St. Austell described as leading .a hand-to-mouth existence—may choose to employ fewer staff, or even to go out of business.
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It is clear that if British tourism is to maintain its vital contribution to the British economy, this Government and the next must restore our competitiveness with the rest of the world. During the present crisis, every little helps—for example, the "business as usual" and "the countryside is open" campaigns. However, as with farming, no quick fix can restore British tourism once the crisis is over. We shall need massive new investment, private as well as public.
The British Tourist Authority and the English Tourism Council, fully backed by the Government, need to plan now to re-promote tourism to Britain—especially in America and Europe, but also among our own people—as soon as the crisis is over. Those plans must not apply just to the areas that are hardest hit, or to those that have been in decline for many years, deserving as they are. Instead of assisting particular areas on the basis of European Union criteria, we should be helping particular industries in their entirety. Tourism, like farming, is one such industry.
A common tourism policy that does not discriminate between areas should not only invest in the regeneration of areas that have run down; it must invest in success, by which I mean resorts such as Bournemouth. To date, Bournemouth has done well to maintain investment from its own resources without major public funding or European Union assistance, but it remains a struggle. It is frustrating, given Bournemouth's courageous investment nearly 20 years ago in an international centre to encourage year-round conference and exhibition trade, to see Birmingham—along with Blackpool and other resorts —making similar investment with the help of considerable public and European funding. We in Bournemouth suffer as a result of unfair competition from subsidised competitors.
This year's standard spending assessment of nearly 6 per cent. for Brighton, compared with Bournemouth's 3.8 per cent.–which, as my hon. Friend the Member for Bournemouth, West pointed out at Prime Minister's Question Time on 7 March, is responsible for an increase of nearly 10 per cent. in our council tax—encourages us to conclude that we are suffering from not just unfair competition, but political discrimination.
Mr. Butterfill: Does my hon. Friend agree that the fact that we have the second-lowest police grant in the United Kingdom has forced our council tax payers to subsidise the police? That, too, has pushed up our council tax.
Mr. Atkinson: My hon. Friend is right, and I hope that his comments will be noted by council tax payers as another way in which this Government are discriminating against us.
Bournemouth is making the case to the Government for its development as Britain's world-class resort, based on its diverse range of markets and quality products that continue to receive so many national and international awards. I believe that the Minister was present, last month, when that campaign was launched. She will know that not only does Bournemouth have world-class potential, but that its surrounding sub-region includes the New Forest national park and the Dorset Jurassic coast—which is located in the constituency of my hon. Friend the Member for South Dorset and is short-listed

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as a world heritage site. As we all know, beyond Dorset lie the undoubted attractions of Somerset, Devon and Cornwall.
My appeal to the Minister is to use the opportunity of the crisis facing tourism as well as agriculture to begin to lay the foundations for a tourism strategy for England and Wales that is fair, does not discriminate, backs winners as well as losers and invests in success as well as failure, and to recognise the potential of Bournemouth not only by words and praise, but by deeds and funds.
12.1 pm
Mr. Adrian Sanders: Tourism in the United Kingdom is worth about £61 billion. It is a growing industry, although it is not growing as fast here as it is in other countries. We always refer to it as a great growth industry, but the fact is that parts of the industry are in decline and have been for some time.
It is important to make it clear that there is a real difference between seaside resorts and rural tourism. Seaside resorts have been in decline for some time. On 4 December 1998, I was lucky enough to initiate an Adjournment debate on the problems facing seaside towns. The situation that I described in that debate has not changed. Seaside towns still have to contend with competition from package tours. They are end-of-the line towns to which people go because there is something to visit and not simply because they want to go somewhere. They also have 180-degree economies, unlike market towns, which have 360-degree economies, and tend to be in peripheral parts of the United Kingdom. They have poor transport links and tend to have local government that has been underfunded for years.
Since that debate, various reports, studies and action plans have been published. However, we have seen little action. We have certainly not seen any money.
The tourist resorts themselves have done a great deal to try to diversify away from dependence on tourism. They have moved into the care homes sector, where they have experienced problems with social services funding. They have also moved into the language school sector. The schools have been a great success in many tourist resorts, but they have been hit hard by the foot and mouth crisis.
Seaside resorts have even become involved in high-tech industries. However, in the past five weeks, in my constituency and in that of the hon. Member for Totnes (Mr. Steen), 1,400 manufacturing jobs have been lost. On top of that has come foot and mouth, creating a sense of crisis. Indeed, with our football team at the bottom of the league, we are at rock-bottom.
The serious point is that we have had an urban White Paper and a rural White Paper and that we should now like to have a seaside resort White Paper. At last we have a Government who have recognised that seaside resorts have a problem and tweaked the lottery criteria to try to help. However, that is all they have done. We need more action—a need fuelled by the foot and mouth crisis.
There has been much investment in new tourism markets, but that investment irks many people from seaside towns. They do not object to the development of
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new farm-tourism markets or investment in attractions such as the national aquarium, which the hon. Member for Plymouth, Sutton (Mrs. Gilroy) mentioned, or in other inner-city developments, but they do object to the fact that investment is being made in new markets in new tourism areas while the areas with experience in tourism are not receiving the same investment. For many of our seaside resorts, the difference in investment levels is making a bad situation worse. I believe that investment should match the level of tourism expertise.
The foot and mouth crisis has created some new problems. Other hon. Members have already mentioned the misrepresentation of the crisis in the south-west. As people cannot get to poor old Cornwall without going through Devon, Cornwall will have no chance at all if people are put off going to Devon. However, large parts of Devon are open for business. It is important that we concentrate on what is open, not on what is closed. Torbay is very much open for business, as are all the seaside resorts around the country.
There are various problems in respect of how rural tourism and seaside tourism are treated. For example, it has been acknowledged that rural tourism has problems, and the Government have said that they will provide assistance to deal with them. Additionally, the banks have said that they will help rural businesses, although we shall have to wait and see whether that happens. Moreover, this morning, South Western Electricity said that it will help farmers and farming businesses. Our regional newspaper is even running a "green welly day" campaign to help rural areas.
It is right for organisations to take such action. However, when a hotel loses a booking, there is no compensation. When a guest house goes out of business, there is no Government support. There is no "yellow flip-flop day" for landladies and other people working in tourism in my constituency, but perhaps there should be. There has to be some recognition that we are all in this together and that the assistance that is available should extend well beyond the rural areas and into the seaside areas.
We have to advertise and inform people about the real situation. Today,I spoke to a publisher and was told that, for about £ 1.5 million, he could produce and distribute to every one of the United Kingdom's 23 million households a four-page newspaper to get the message to everyone that they should come to the seaside resorts—particularly, I should hope, to Devon and Torbay. I believe that £1.5 million is nothing compared with the sums that are being lost. It is estimated that foot and mouth is costing my constituency about £3 million to £4 million per week in lost tourism revenue. As the Minister said, across the south-west, £17 million is being lost each week.
We need immediate cash flow assistance, as is being provided in rural areas. In the medium term, we need a major marketing relaunch of the British tourism industry and particularly of the seaside tourism industry. In the long term, we must examine the infrastructure—rail, road and air links—of our tourism resorts, particularly the coastal resorts. We should also build on the expertise and tradition of the industry in areas that have welcomed visitors down the ages. If we are to expand into new markets, let us have the same

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investment levels in the established areas and not leave them out on a limb. Tourism is all that some areas have, and tourism is in serious trouble.
12.7 pm
Mr. John Greenway: I congratulate the hon. Member for Truro and St. Austell (Mr. Taylor) on securing this timely debate. He and other hon. Members have given examples of the problems is that they have experienced in their south-west constituencies. They have also used the widest definition of the south-west that we could have hoped for. The south-west is a massive tourist area. Recently, South West Tourism produced figures stating that, in the south-west, the industry is estimated to be worth about £6 billion annually. Additionally—I had not appreciated this—about 25 per cent. of United Kingdom domestic tourism spending is spent in the south-west.
It is therefore not surprising that hon. Members on both sides of the Chamber have said that. in the past four or five weeks, as the foot and mouth crisis has taken hold, tourism businesses in their constituencies have been devastated by the cancellation of bookings and the loss of visitors who may have planned on staying for a day, an evening or a short break. The crisis has put off visitors both from within Britain and from overseas. Many of the businesses affected are small and medium-sized, and they cannot withstand they difficulties with cash flow that they are experiencing.
The Minister could not attend the British travel trade fair seminar last week, as she was promoting Britain in the United States, although her Parliamentary Private Secretary, the hon. Member for Loughborough (Mr. Reed), was there. The interesting point was made that many charities are also affected, especially the Youth Hostels Association.
I remember many happy days spent youth hostelling in the south-west, in the constituencies of some of the hon. Members present for this debate. I travelled by bicycle—I am sure that there is a story in that that the media might like to take up—but the point is that charities, too, are in financial difficulties. The problem is widespread.
Mr. Paul Tyler: I should declare a non-pecuniary interest, in that I am a vice-president of the Youth Hostels Association. The hon. Gentleman's analysis is spot-on. Does he accept that the rates relief being given to businesses is of no use to charities? That is a particular problem in the south-west.
Mr. Greenway: I agree: the charities already get that relief. The hon. Gentleman will know that the YHA already has a capital structure plan in place, and I hope that it will be possible to find other ways to help it and similar charities. The effects of the crisis will be devastating. We want young people to get out into the open air, which is what I enjoyed when I was young. I hope that the Minister will take that on board.
South West Tourism has made it clear that the losses are cataclysmic. It estimates losses for March alone at between £70 million and £80 million, and this month's losses are likely to be as much as £125 million. As my hon. Friend the Member for Totnes (Mr. Steen) said, Easter will be a watershed for many businesses.
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However, all the hon. Members who have contributed to the debate have emphasised that there remains a lot for people to see and do in the west country. Much of the coast is not affected, and the numbers of visitors going to attractions make the point graphically. For example, the Roman baths and pump room in Bath normally get 905,000 visitors a year. Although not quite in the million club, the attraction draws a staggering number of people.
Other attractions, such as Crealy Country in Exeter, Flambards theme park, and the Woodlands leisure park in the constituency of my hon. Friend the Member for Totnes, also draw huge numbers of people. The national marine aquarium in Plymouth gets more than a third of a million visitors every year, and almost a quarter of a million people visit Bristol's museum and art gallery. Those examples demonstrate that there are places for people to visit that are unaffected by foot and mouth, and we should promote them.
I was also favourably surprised to learn that the Tate gallery in St. Ives—which I do not think is in the constituency of the hon. Member for North Cornwall (Mr. Tyler)—gets 180,000 visitors a year. There are no problems at all with foot and mouth in that part of the world.
Mr. Steen: Does my hon. Friend agree that the Minister has a serious obligation to the House and the country to make a clear and unequivocal statement about what land can be walked on and where people can go? Is not the present muddle inexcusable?
Mr. Greenway: I agree, and I shall speak about that in a moment, but first I wish to touch on zoos, a matter in which I have a constituency interest. The west country has several zoos of national importance—at Bristol, Paignton and Newquay—and it also contains the Combe Martin wildlife park, and Longleat, with its famous lions. There is a similar zoo and theme park in my constituency: Flamingo Land draws more than a million visitors a year.
Some zoos have closed voluntarily, while others have been closed for the winter period. Flamingo Land is due to reopen on Sunday 1 April, but it has received no advice from MAFF about what to do. Farmers with property surrounding zoos are petrified that people will bring foot and mouth and that their animals will be affected. Therefore, I hope that the Minister will help zoos and wildlife parks throughout the south-west. Will she ensure that the Minister of Agriculture, Fisheries and Food is aware of the problems that those attractions face? They need urgent advice and action on their behalf.
My hon. Friend the Member for Bournemouth, East (Mr. Atkinson) made a significant contribution to the debate. I enjoyed meeting the tourism people in Bournemouth last autumn, and I hope that he will let me know how the area's world-class destination campaign is progressing. I was greatly attracted by what the local tourism industry was trying to do.
We welcome the Government's announcement of a business rates scheme, although it is limited and will not greatly help the major attractions, which have rateable values way in excess of £12,000. This morning, I was surprised to discover that the rateable value of Flamingo

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Land is £363,000—up by 51 per cent. this year. I dare say that attractions in the south-west area are similarly affected.
We welcome the rates announcement, but the Government need to go further. They should support businesses with cash flow problems with interest-free loans, as proposed by my right hon. Friend the Leader of the Opposition. The hon. Member for Truro and St. Austell in effect supported that suggestion in his opening remarks. We would expect a reasonable ceiling to be fixed, perhaps of £10,000. Our calculations suggest that a loan scheme would require an outlay of around £500 million, although only the interest-free element would cost the Exchequer in the long run. Such a scheme would make a huge difference to many small concerns.
The Minister for the Environment has suggested that help would be given with regard to postponing value-added tax, national insurance and pay-as-you-earn payments, but the anecdotal evidence is that that help is not being given. One person apparently told his local Customs and Excise office that he had been informed that he did not have to pay his VAT bill, only to receive the response that the office had not heard anything about the scheme. Clear instructions must be issued in that regard.
We welcome what the Prime Minister has said today, but the message must be clear that visitors must keep away from livestock. An element of confusion is still apparent in the message being given out by the Government. The problem is not confined to areas that have foot and mouth, as areas without the disease are also affected. Cornwall, Dorset and south Devon do not have cases of foot and mouth, and they do not want it.
The key is to keep people away from livestock while promoting those attractions that people can attend. For example, local education authorities must stop cancelling school visits and Government Departments must stop cancelling conferences.
I shall conclude with the four requirements that I believe that the Government must meet above all else. First, they must eradicate foot and mouth disease, as the tourism industry knows better than anyone. Secondly, the Government need to open up rural assets such as the coastal paths as soon as it is safe to do so. Thirdly, they must give more funding to the English Tourism Council, and to the regional and sub-regional tourism organisations. Finally, the British Tourist Authority must have a budget and a plan—as my hon. Friend the Member for Bournemouth, East said—to re-promote and re-brand Britain when the crisis is over.
12.18 pm
The Minister for Tourism, Film and Broadcasting (Janet Anderson): I too congratulate the hon. Member for Truro and St. Austell (Mr. Taylor) on securing this debate, which could not be more apt. The presence of so many hon. Members shows that the House is very concerned about the situation in the tourism industry.
I shall not refer by name to every hon. Member who contributed, as there is not much time left and there are many important matters to deal with. However, I reassure all hon. Members that I came to this debate from a meeting with my right hon. Friend the Prime
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Minister at No. 10 Downing street; he understands clearly—as do we all—the impact on the tourism industry. We want to do what we can to help.
The first priority, of course, has to be to get foot and mouth under control—whatever it takes. That is not only in the interest of the farming industry; we are now aware that it is in the interest of many people. As Tourism Minister, I am sad that the importance of the tourism industry to the local, regional and national economies should have been brought to the fore in this way. However, I am glad that it has been brought to the fore, because now people understand. Rural tourism is worth £12 billion a year; nationally, tourism is worth £64 billion and employs almost 2 million people. It is the fastest growing industry in the world and, perhaps most important, we estimate that one in four of all new jobs created during the past 10 years were in tourism, hospitality and related activities. I reassure everyone that we understand the importance of the industry. I shall deal with what must be the main priorities—what people want most of all.
When I went to Devon, I visited the constituency of the hon. Member for Totnes (Mr. Steen) and went to the tourist information centre. I visited a hotel on the edge of the national park. There was no reason why people should not go to it, but, because they were confused, it had been empty for two weeks and the proprietor estimated that she had lost about £50,000. It is clear that better and more accurate information has to go out to people.
Today, my Department is issuing clearer guidance as to what can and cannot be done. We have set up a website to co-ordinate all the websites; my hon. Friend the Member for South Swindon (Ms Drown) mentioned the need for that, and "www.co-ordination.gov.uk" does so. If it does not, please let me know so that we can look at it again. There is a helpline—0845 607 1071—to give people information about what they can and cannot do. The regional tourist boards and information centres will help as well.
Mr. Ian Bruce: In effect, everyone is being told, "Keep off the grass" because there might be animals nearby, yet almost all my tourism businesses rely on holiday camps and campsites that have often been grazed by sheep, but where there is no foot and mouth. Is the Minister saying that once livestock have been moved from such land, it is safe to go there and that we should encourage people to do so?
Janet Anderson:The short answer is "Yes, it is", although I shall have to check. One of the problems with tourism is that so, many issues and policies that impact on it are matters for other Departments—although I do not make that point as a cop-out—so my understanding is that the advice being issued by MAFF is
"Don't go on farmland or open country or walk dogs, even on a lead, unless you are sure that the land isn't used by cows, pigs, sheep, goats or deer."
I think that once the livestock have been moved off the land, there is less of a problem.
Many hon. Members referred to footpaths. I am pleased that, as they may know, the current restrictions on rural rights of way expire on 31 March. Today, Suffolk and North Lincolnshire announced the

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reopening of some of their footpaths. My right hon. Friend the Minister for the Environment, who heads the rural taskforce established by the Prime Minister, has ordered a ring round of all county councils to ask them which footpaths are open and which paths they can open and to make a health risk assessment because we want more paths open. We very much want the message that Britain is open for business to go out. I understand—not least from my visit to Devon—how important the coastal footpaths are.
We are pleased that the National Trust has announced that it has already opened 160 of its properties. English Heritage will open 200 on 1 April. British Waterways is considering what it can do. We are putting the emphasis on the fact that Britain is open for business.
The hon. Member for Ryedale (Mr. Greenway) mentioned that I could not be at Birmingham last week. I am sorry about that, but I had taken it upon myself to make a two-day visit to the United States. We went to New York; we held media interviews back-to-back; we talked to the travel trade press and tie tour operators. I am very glad that we did so, because they were obviously under a misapprehension. The United States is so important to us—it is our most important market. Last year, 4 million visitors came from it to the UK; they spent £2.5 billion.
One problem is that people in the United States confuse foot and mouth—or hoof and mouth, as they call it—with BSE or mad cow disease . They thought that they could not eat our food or drink our water. At a lunch with the travel trade press, I listed all the places that are still open and told them, "There are all sorts of things you can still do in Devon and Cornwall." There are numerous examples, such as the Eden project or the national marine aquarium, which I have visited, in the constituency of my hon. Friend the Member for Plymouth, Sutton (Mrs. Gilroy).
I referred to several cities that American tourists like to visit and pointed out that they were all open for business. A journalist said, "Yes, but how do you get from one to the other?" I replied that our roads are not closed and that our public transport system is still working—[Interruption.] It may come as a surprise to hon. Members to learn that people in the United States like our public transport system; they think that it is better than theirs.
I had to reassure people that there is not a funeral pyre of animals in every field and that we are talking about only a small percentage of our livestock. I hope that that message has got across.
Hon. Members referred to school visits. We have made an approach to colleagues in he Department for Education and Employment pointing out that clearer information is needed. I am told that the DFEE has issued advice to local education authorities and schools that they must take decisions in the light of local situations, taking into account advice from the MAFF chief vet on visiting the countryside. Perhaps clearer advice is needed, so I shall see whether that can be provided.
In the short time remaining, I want to deal specifically with the south-west, which is one of the country's most important tourist regions. It follows that tourism is one
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of the most important sectors in that area. The hon. Member for Ryedale cited the relevant figures, so I shall not repeat them.
There is no doubt that the foot and mouth outbreak has hit the rural tourism industry in England hard. South West Tourism estimates that losses are running at about £20 million a week. When the debate finishes, I shall visit Cornwall where I shall stay until tomorrow afternoon to see the situation for myself.
Mr. Steen: Do not go by train.
Janet Anderson: I am flying to Newquay. Mr. Steen: That is much better.
Janet Anderson: I am pleased to hear that.
Mr. Matthew Taylor: There are two key issues that would make an immediate difference. The first is to sort out the advertising campaign; as I said, words—the black and white method—do not do the job. Secondly, as the Minister is flying to Cornwall, she will avoid the problems on First Great Western, but perhaps she could ask her team to do something to tackle the appalling situation on the railways. Not only do trains not run into Cornwall, but even when they do, they are old ones.
Janet Anderson: I know what the hon. Gentleman means, because I have travelled on those trains. His example is good. I cannot go anywhere to talk about tourism without someone raising the transport issue. That is why one of the most important initiatives taken by the Department, since I have held my current position, is to set up an annual tourism summit with Ministers from every Department. Two summits have been held—the most recent was on 6 March. They are tightly-knit meetings that enable my right hon. Friend the Secretary of State for Culture, Media and Sport and me to tell our ministerial colleagues that when they take decisions about transport, planning or employment law—to which the hon. Member for Mid—Dorset and North Poole (Mr. Fraser) referred—they should remember the impact on tourism.
Hon. Members will be aware that the Prime Minister has set up the rural taskforce, chaired by my right hon. Friend the Minister for the Environment, which is meeting as we speak. My right hon. Friend has announced to Parliament a preliminary package of measures for which businesses that have been badly hit by the foot and mouth outbreak will be able to apply. Of course, that does not mean that we are not continuing to monitor the situation to see whether more needs to be done. We are in no doubt about the cash flow problems faced by such businesses because there is no income. We want to do all that we can to get the visitors back. I shall visit the Lake district to help with that.
Mr. Steen: What a nice job.
Janet Anderson: It is a nice job. Usually, we do not have crises in my job, although when they arise we get to grips with them. I reassure the hon. Gentleman on that point.

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The package announced by my right hon. Friend the Minister for the Environment includes help through the rates system, including enhanced discretionary and mandatory rate relief, although I take on board the comments of the hon. Member for Ryedale on visitor attractions. There will be help through the tax system, including the offer to defer payment of taxes and national insurance contributions and the measures on VAT. If that message has not got through to Customs and Excise, we need to ensure that it does. I thank him for raising that issue. With the Small Business Service. we are working on a national helpline to give advice to small businesses.
We are trying to make procedures in the Department of Social Security as fast and flexible as possible. We are increasing Government support for the rural stress network and matching donations made by the voluntary sector.
I will take up the point that the Youth Hostels Association is a charity to see whether we can do anything more about that.
In government, we shall do all that we can to continue to monitor the situation and to help the businesses that are affected and, ultimately, to get visitors back to the areas where it is safe for them to go—to give out the message that Britain is still open for business.

Fire Stations (Wirral)
12.30 pm
Mr. Ben Chapman: I should first express my appreciation of the opportunity to debate this issue, as. among the many public services, that provided by the fire service must rank as one of the most important, with its major roles of dealing with fires and other emergencies, such as road traffic accidents; advising on fire prevention measures and encouraging their implementation; and carrying out inspections for fire safety certification. Those services are provided by trained personnel and paid for through the public purse.
As a service funded by the public, it is only right and proper that the responsible statutory body, the fire service authority, includes representatives of the public as well as representatives of the professionals who provide the service. In principle, that should ensure that the service provided meets with public approval and professional agreement.
My reason for asking the Minister to look at the role played by the fire service authorities, and particularly by the Merseyside fire authority, is that I believe that the checks and balances built into the system of representation may be insufficiently robust, with the result that an authority may take decisions that satisfy neither the public nor a substantial number of the professionals in the service—the firefighters. That is the situation that has arisen on Merseyside as a result of the representatives of the public on the fire authority possibly being out of touch with public opinion, and the opinions of the senior professionals perhaps being unduly weighted by factors removed from the primary purpose of saving lives and property.
Because the Merseyside fire authority has reached a decision that is greatly at variance with public opinion in my local community, I hope to persuade the Minister that it must be carefully considered and, I hope. reversed. The decision that has prompted my raising this matter is the fire authority's decision to reduce the manning of fire stations in the Wirral from 24-hour cover to daytime cover, with night-time cover being based on fire crews on call. One of those stations is in Heswall, in my constituency, where I live.
First, I shall set out the main arguments, as I see them, of the fire authority in favour of its proposal, together with some comments of my own. Before I start, we should all be clear in our minds that, whatever rationalisation is presented for the changes, the underlying motive should not be merely to save money.
To put the main argument baldly, cutting out 24-hour manning reduces staffing costs substantially. The authority argues that the resulting savings in the running costs of the two stations will allow it to shift the emphasis from firefighting to fire prevention. It proposes to fit, without charge, smoke alarms in all the houses throughout the area for which it is responsible. It believes that that provides better value for money. If that argument were reduced to absurdity, we would have masses of smoke alarms, wonderful value for money and no fire stations.
I, of course, have no objection to the devoting of more effort to fire prevention; indeed, I welcome it. But fitting fire alarms does not of itself prevent fires. It merely

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reduces the risk of catastrophic consequences should a fire break out. In any case, although fire alarms reduce the risk of loss of life in the event of fire, they require regular maintenance.
For example, and obviously, batteries must be fitted at regular intervals—a task which is unlikely to be undertaken by the fire service. That may sound like a trivial point, but if the authority seriously believes that fitting fire alarms is a significant contribution to safety and will reduce the need for call-out of firefighters, it must recognise that installation of fire alarms is not a one-off process. It, or someone, must ensure that the alarms remain fully operational. I have not yet heard from the authority its long-term plans on this matter, or the costs that will be involved; but, above all, whatever the arguments on detail, the point remains that fire prevention is complementary to firefighting, not an alternative to it.
What causes public concern is, of course, the closure of the fire stations at night, particularly as Merseyside, according to a statistic supplied by the fire authority, has the highest rate of fire deaths in the United Kingdom: 20 a year. Whatever the relative differences in fire statistics as between night and daytime. what are not the same are the consequences of an emergency particularly in the case of a property fire. People are not around to see a fire in its early stages, and people are often asleep, so the fire gets a strong hold before the emergency services can be alerted.
The authority argues that emergency cover will still be available at night as the firefighters will be required to live within four minutes of the station and be ready to turn out should the need arise. That seems a rather theoretical notion. First, will firefighters be able to find affordable housing within four minutes' access time, by moving house if necessary? Heswall is a relatively expensive place to live. There is a real danger of arriving at the ludicrous situation of losing experienced staff and gaining inexperienced ones, merely as a result of that condition of employment.
Secondly, will firefighters really be able to get up in the middle of the night, get dressed and be at the station within four minutes of the alert, whatever they might have been able to do under ideal practice conditions? I am assured that firefighters are will used to that, but what happens if they get up to find their car windows covered in ice or if they have to drive to the station in thick fog or have some other unforeseen problem? At best, the procedure will add four minutes to the interval between receiving the alert and arrival at the emergency—four minutes that could mean the difference between life and death, or between minor and permanent injury. The latter reservation is shared by those at the coal face: the firefighters.
However, it would not be fair if I did not refer to what some people would regard as a powerful argument in favour of the proposal—the fact that many stations throughout the country operate the proposed manning system. In many cases, however, purpose-built housing is available for firefighters in the immediate vicinity of the station, so that the time taken to respond to an emergency is less of an issue.
My counter-argument is to ask, why degrade an excellent service to save money when the public support the expenditure? Moreover, I understand that the
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normal daytime crewing hours in other stations on daytime manning elsewhere are 9 am to 6 pm. Those hours do not fit the peak hours for call-outs at Heswall, which are 9 am to 11 pm.
Many would argue that the proposed changes to manning would result in fire cover arrangements below the national standard. Moreover, the performance of Merseyside fire service was, in my view, already deteriorating. From April 1999 to March 2000 inclusive, there were in Merseyside increases of 37.7 per cent. over the previous year in the number of fires, of more than 12 per cent. in other emergency incidents, of 11.3 per cent. in dwelling fires, and of 14.6 per cent. in the average time taken to carry out inspections for the issue of fire safety certificates.
In addition, the inspectorate, in the principal inspection report of 9 June 2000, sent a clear message in respect of its
"reservations over the intention to review individual station areas rather than discrete functions/services".
Section 2.8 of the executive summary drew attention to the
"difficulty in validating the Brigade personnel data, which added to the problem of determining the current establishment as approved by the Secretary of State following a number of Section 19 applications over recent years".
Crystal clear guidance is contained in the statement:
"There are opportunities to reduce the 'ridership factor', which could result in considerable savings without changing crewing policies or the current number of appliances".
In other words, there is ample scope to improve efficiency without shifting to day manning, by looking at other areas. The inspectorate's views on that could not be more explicit.
I have also been told, albeit indirectly, that some members of the fire authority have said that, had they been informed of the substantial decrease in the yearly target in respect of fire cover from the national average of 96 per cent. to 90 per cent. by October 2000, they would have voted against the decision taken in November 2000 to close Heswall fire station at night. Comparing like with like on a variety of counts, Merseyside can be seen as the worst performing fire authority in a metropolitan conurbation, so why seek to make it worse, as would happen under the proposals?
I shall now deal with the consultation process. Under section 19 of the Fire Services Act 1947, there must be adequate consultation before final decisions are taken. In fact, I understand that the Home Secretary considers it desirable that the fire authority should not only consult as appropriate, but consider any representation that it receives. A local meeting, convened by the Heswall and District Business Association in conjunction with the Heswall Society, was held at Heswall in October of last year; the fire authority was represented, together with the Merseyside branch of the Fire Brigades Union and, of course, many members of the general public.
It is fair to say that, at that meeting, the fire authority representatives merely reiterated their case, claiming that the proposed changes would not lead to an inferior service. The record of that meeting shows that none of the many members of the public present were convinced by the arguments produced and agreed unanimously to

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oppose the plans to downgrade the status of Heswall fire station. The fire authority also organised meetings at which the tenor of the argument was the same.
Lest it be thought that those meetings were in some way unrepresentative of the local view, let me remind the Minister that I have already presented to the House a petition, signed by more than 2,000 residents—there could have been many more—who object to the proposal. I have yet to meet anyone in Heswall who favours it. I have heard of someone with such a view, but I have not met that person. I have received numerous letters expressing objections to the proposal. Wirral metropolitan borough council has reservations and has expressed its concern that the fire authority is unable to guarantee that all the smoke alarms would be installed before the changeover in shift pattern took place, if it took place.
I feel bound to mention another issue, given that it has been raised by several Heswall residents. Many of them think it unfair that the Heswall station should be downgraded to release money to fund fire prevention throughout Merseyside. As substantial contributors, as council tax payers, to the local council's finances and, through precepts, to the other statutory bodies on Merseyside, they often already feel that they do not get their fair share of the benefits. They question the validity of losing a valuable amenity—the 24-hour manning of their local fire service—so as to provide alarms elsewhere. Others may not wholly agree with that view, but many people hold it strongly.
The Minister will recall that the fire authority should not only consult as appropriate, but consider any representation that it receives. I hope that I have made it clear that there is no sign that the fire authority has taken any account of local residents' views. The consultation process is regarded locally as a sham and as having been predetermined; the conclusion was fixed in some of the circulars that were issued in advance. None of the points made at the meetings or elsewhere have been met, or apparently even genuinely considered. The fire authority's decision-making process is thus flawed. When the representatives of the public do not represent the public view, and when the points made in consultations are ignored, the whole process is fundamentally unsound.
I shall summarise my views. The proposal to downgrade Heswall fire station is based on far too many dubious propositions. The consultation process has revealed that the fire authority has already decided to proceed with the proposal, so the consultation was not at all genuine. The decisions reached by the fire authority have taken no account of local residents' fears. We, in Heswall, have a particularly high preponderance of people aged over 60. So I ask the Home Office and the Minister to reiterate, as I have been told previously, that they are still open to receive representations. The Minister has agreed to meet me and my hon. Friend the Member for Wirral, West (Mr. Hesford), together with the Heswall Society and Heswall and District Business Association; I look forward to that meeting and to advancing further arguments.
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I ask the Minister also to reflect on the points that I have made today and, I hope, having done so, to support my plea for that local issue to be referred back to the fire authority for further consideration; especially, I hope that he will insist that the authority do more to meet the wishes of local residents. I also ask him to look at the wider issue to consider how we might ensure that more weight is given to local opinion when such decisions, which directly affect their communities, are taken in future.
12.46 pm
The Minister of State, Home Office (Mr. Charles Clarke): I congratulate my hon. Friend the Member for Wirral, South (Mr. Chapman) on securing this debate on the staffing hours at fire stations in the Wirral.
I apologise for the fact that the Under-Secretary of State for the Home Department, my hon. Friend the Member for North Warwickshire (Mr. O'Brien), cannot be here today because of a long-standing prior commitment. I am happy to stand in for him. I shall pass the full text of the debate to him for his attention, and I shall discuss it with him. He has asked me to confirm that my hon. Friend is right; he has agreed to discuss the situation further and in more detail with a delegation of the type that my hon. Friend mentions. So I hope that further clarification of the issues discussed in this debate will be given at that meeting.
I fully understand the concern that my hon. Friend has expressed today about the proposal by the Merseyside fire and civil defence authority to change the crewing arrangements at Heswall and West Kirby fire stations from whole-time to day crewing, but, before I respond in detail, I should like to set the issue in context.
We have good reason to be proud of the fire service in this country, because it achieves consistently high standards of performance, often in difficult and hazardous circumstances. The fire service's high level of performance in responding to fire calls has been confirmed year after year by the Audit Commission. The latest figures published by the commission show that, in 1999–2000, the fire service nationally met attendance standards in responding to fire calls on 96 per cent. of occasions. In Merseyside, the standards were met on 96.4 per cent. of occasions—slightly above the average.
The inspectorate of fire services is considering, with the Merseyside fire authority, how it proposes to address the issues raised in the inspection report about attendance standards, such as those mentioned by my hon. Friend. I confirm that the ability to meet attendance standards in Heswall and West Kirby is one of the key issues on which the inspectorate will provide advice to my right hon. Friend the Home Secretary in relation to the authority's application under section 19 of the Fire Services Act 1947.
In general, the fire service is to be commended for the range of community-based initiatives it undertakes across the country to promote fire safety in the home. With the full support of fire service interests, we are seeking to make a commitment to prevention as the first line of defence against fire, to develop a clearer vision for the service and to set out a clear strategy with targets for improvement.
We want progress to be measured against that commitment. We have therefore publicly set a target of reducing the average number of accidental house fire

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deaths by 20 per cent. over five years. We believe that the current strategy is paying dividends and we are seeing a pleasing reduction in the number of people being killed and injured in fires in the home.
I confirm that my hon. Friend's remarks about fire prevention being complementary, not an alternative to fire safety, are absolutely correct, and represent the Government's position. He refers to the absurdity of having smoke alarms and no fire star ions, but that is not our aspiration; the two must go side by side. We should not undervalue the important role that community fire safety can play in our approach. In particular, the Merseyside fire and civil defence authority has an excellent programme of activity that is designed to reduce the number of preventable dwelling fires and the deaths and injuries that they can cause.
I now turn to the case of the Heswall and West Kirby fire stations that my hon. Friend raised. In November last year, the authority submitted an application under section 19 of the Fire Services Act 1917 seeking approval to change the crewing arrangements at Heswall and West Kirby fire stations from whole-time to day crewing. The application was made following a special meeting of the Merseyside fire and civil defence authority on 6 November at which responses to a consultation begun on 7 August were considered in detail.
I can confirm that Merseyside fire and civil defence authority is defined as a best value authority under the Local Government Act 1999. It therefore has a duty to secure continuous improvement to the way in which it exercises its functions, having regal d to a combination of economy, efficiency and effectiveness.
As I said, the application was made following a meeting of the authority on 6 November and, under section 19(4) of the Fire Service; Act 1947, a fire authority cannot reduce the number of fire stations, fire appliances or firefighting posts without the express consent of my right hon. Friend the Home Secretary. The authority's proposed change of crewing arrangements at Heswall and West Kirby fire stations would result in a net loss of 14 posts at each station and the proposal therefore requires such consent.
My right hon. Friend has a specific role in considering section 19 applications. He can grant approval only if he is satisfied that the proposals have been sufficiently widely publicised, and in appropriate detail and with adequate time to enable any interested party to make representations; that the representations have been considered by the authority; and that Her Majesty's inspectorate of fire services advise s that the national standards of fire cover will be maint, Lined. My right hon. Friend has to take those three rigid requirements into account, and two of them relate to the nature of the consultation process.
The point about national standards of fire cover was specifically addressed in my hon. Friend's speech, and it is for the chief fire officer to put in place such crewing arrangements as, in his professional judgment, will best meet the authority's statutory responsibility to provide effective fire cover in Merseyside, in line with the national standards.
Day crewing means that professional firefighters are based at the fire station during the, day and the same firefighters then provide cover from their homes at other
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times. To do so, they are linked by pager and they must be able to reach the fire station within four minutes. The four minutes period represents the actual travelling time between home and station, and it is fully tested by timed runs. This arrangement is used by many brigades without difficulty, and has been used for many years in many parts of the country where my hon. Friend's points about the weather and other issues are taken into consideration. However, I am happy to assure him that I shall pass on his remarks about the potential difficulties of the four-minute period to my hon. Friend the Under-Secretary and, through him, to the inspectorate. They will then be able to address the concerns that have been raised in the debate.
Whether day crewing is appropriate for Heswall and West Kirby is one of the issues to which Her Majesty's inspectorate of fire services will give careful consideration when advising on the section 19 application. The other fire stations in the Wirral—Birkenhead, Wallasey, Upton and Bromborough—are crewed on a whole-time basis and will continue to be so.
On the consultation process, there is no statutory requirement on the authority to consult, but my right hon. Friend considers it important—he has said so on several occasions—that proper consultations be undertaken, so that he can be sure that his first duty, which is to ensure that the proposals have been sufficiently widely publicised, can properly be met.
I appreciate that the section 19 application submitted by Merseyside fire and civil defence authority regarding Heswall and West Kirby fire stations has raised considerable concern locally among residents and the business community. Concern has also been raised, in particular by my hon. Friend the Member for Wirral, West (Mr. Hesford), that the consultation process undertaken in Heswall and West Kirby by the authority has differed from the one in Formby for a separate but similar section 19 application. That application was approved earlier this month after lengthy consideration.
An inspector from Her Majesty's inspectorate of fire services visited the brigade in February to examine the consultation process in detail. His conclusion, at that stage, was that appropriate consultation had been undertaken and that sufficient opportunity had been given for representations to be made. However, once a section 19 application is made, my right hon. Friend the Home Secretary will also take into account representations that are made directly. As I said at the beginning of my speech, my hon. Friend the Under-Secretary has indicated his willingness to meet my hon. Friends the Members for Wirral, South and for Wirral, West to take account of their representations as well as the points that have been made in the debate.
My right hon. Friend the Home Secretary's primary concern is the maintenance of the national fire cover standards—that is the principal issue. Successive Secretaries of State have interpreted the duty to provide an efficient fire service against those standards. I can give an absolute assurance to my hon. Friend that my right hon. Friend and the Home Office will not approve any proposal unless we are entirely satisfied that national fire cover standards will be maintained.
All fire authorities are obliged to review regularly the fire risks in their area against the national standards to ensure that the brigade's deployment of resources is

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updated in the light of changing circumstances. It is important to emphasise that the standards are not just nationally recommended, but are nationally agreed in the Central Fire Brigades Advisory Council for England and Wales and in the Scottish Fire Brigades Advisory Council—both constituted under the Fire Services Act 1947 to represent fire service interests in advising the Secretary of State.
The standards dictate the initial attendance to a fire in terms of number of appliances and speed of response. They rest on four main standards of service, according to the risk category of the area, and they assume for each category that a predetermined number of firefighting appliances should attend within a certain time.
The areas currently served by Heswall and West Kirby fire stations are a mixture of C risk, which includes suburbs of large towns and built-up areas of small towns, and D risk, which is mostly rural. The national standards provide that, in normal circumstances, a fire authority should respond to a fire call in a C risk area by sending one pumping appliance to reach the incident within 10 minutes, and, in a D risk area, by sending one pumping appliance to reach it within 20 minutes.
I understand that it is, in fact, the Merseyside brigade's policy to send a minimum of two appliances to all property fires regardless of risk category, so it is ahead of the national standards. That policy will be unaffected by the proposed change of crewing arrangements at Heswall and West Kirby. Obviously, my right hon. Friend the Home Secretary will want to be assured that that point is clarified by Her Majesty's inspectorate of fire services, and its report will assess whether the area covered by the two fire stations has been correctly categorised for risk and whether the brigade will continue to be able to meet the standards of fire cover.
As I have said, I fully understand the concerns that my hon. Friend the Member for Wirral, South and his constituents have about the quality of their local fire service and about whether it will be affected by the authority's application to change the crewing arrangements at the two fire stations. We shall seek advice from Her Majesty's inspectorate and we shall take full account of representations, together with the points that have been made in this debate.
My hon. Friend's driving commitment is to ensure that national standards of fire cover are appropriately maintained, and I assure him that they will be. It is our intention, policy goal and ambition to achieve that side by side with improving significantly the ability to prevent fire in the first place, and to take the steps that he described that would enable us to achieve that aim. The two arms of our policy will work in parallel, without one being carried out at the expense of the other. The most effective way to reduce the number of fire accidents and fatalities is to have both arms of the policy working together, and that is the overall context in which we approach the problem.
I have tried to cover the points that my hon. Friend has made in the debate. As I have said, he will have the opportunity to discuss them directly with my hon. Friend the Under-Secretary at an appropriate time.

Hospital Transport (Gloucestershire)
12.59 pm
Mr. Geoffrey Clifton-Brown: I am grateful to have an Opportunity to debate the problems of hospital transport in Gloucestershire. I am also grateful to the Minister for being here to reply.
The provision of hospital transport for patients in my constituency is inadequate. I have received a flood of complaints from constituents who rely heavily on the provision of tram port to and from hospital for appointments for in-patient and out-patient treatment. I shall focus on key aspects of the system that are letting patients down. I want to question the national and local criteria for assessing the patients who receive national health service-provided transport and I am concerned about the funding settlement for Gloucestershire health authority, which has had to divert money from the provision of transport to meet other Government health targets. I shall cite several constituency cases to illustrate the problem and explain that current criteria are incorrect because decisions are taken on a patient's medical condition, not on his or her capacity to travel.
I have corresponded many times with the Department of Health about the problem. It says that if a patient has a medical need for transport, it should be provided free of charge as part of NHS treatment. No one would disagree with that. It also states that medical need depends on the medical condition of a patient, the availability of pub is and private transport and the distance travelled. However, the principle that should apply is that each patient should be able to reach hospital in a reasonable time and in reasonable comfort without detriment to their medical condition. My examples make it clear that that is not the case. I will name only one person because others who have corresponded with me are elderly and worried about their names being divulged.
Mrs. Jackson is 83 years old. I have been in touch with her regularly in recent months. She had to go into hospital for an eye operation and also suffers from angina, but, because she is not in a wheelchair, she does not come within the C2 category for provision of free transport. A 67-year-old patient was sent to Cheltenham general hospital when she cut her leg badly. The hospital refused to provide transport home despite the fact that she suffers from a varicose ulcer on her other leg and is in great pain when she walks. The size of my constituency means that taxi fares are expensive. I met an 89-year-old lady who was forced to pay a £45 taxi fare to and from hospital. One constituent is crippled with arthritis and could not afford to pay the fares. Her daughter had to take her to and from hospital and, on her last visit, had to wait from 8 am to 5 pm to bring her home.
Those cases graphically illustrate the way in which our elderly patients are being treated by the NHS. According to the Department of Health:
"if a patient has a medical need for transport, then transport should be provided free of charge as part of NHS treatment".
How does that square with my constituency cases? The Minister needs to take urgent action to address that shameful problem. The health authority cites funding as the main problem and it is the Minister's responsibility to address that.

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Gloucestershire health authority has introduced a new set of criteria for assessing w nether people need transport. It provides transport for walking patients under the C1 category in four circumstances: first, if a patient is registered blind or partially sighted; secondly, if he or she has a combination of poor sight and total hearing loss; thirdly, if the individual is undertaking oncology treatment; or, fourthly, if he or she is receiving peritoneal dialysis treatment.
Under the separate C2 category, transport will be provided only for patients who are unable to walk and require the assistance of two people from their home to get them to the vehicle and back. Transport will also be provided for patients who are confined to their wheelchair and must be transported in it. The final category includes patients on stretchers who must be transported completely or mainly lying down.
In other words, Gloucestershire health authority is able to provide transport only for hose who are deaf, blind or a combination of both, on a stretcher or receiving oncology treatment or treatment for coronary heart disease. We know that many sick people have serious conditions but do not fulfil hose criteria. They, too, should be eligible for transport.
As a result of those restrictive criteria and the need to redirect funding, patients are not being treated with respect. The criteria unacceptably exclude many patients who desperately need hospital transport. Gloucestershire cannot provide that service because it is obliged to meet national targets that unfortunately do not recognise rural sparsity and the transport infrastructure of the area. Them is little value in diverting money to meet national targets if that undermines other essential services that the NHS was set up to deliver. Hospital transport is an essential service for patients in my sparsely populated rural constituency. The Minister must recognise that they rely on it. There is often no suitable public transport for rural villages.
The Government have increasingly prescribed the way in which health funds can be spent by local health authorities. The problem is that the more that policies are prescribed, the less discretion the health authority has to meet the needs of patients in its area. Thus, spending on initiatives, however worthy, such as the waiting list initiative, ignores the clinical needs of health authorities and prevents them from having the freedom to spend money on local priorities, including hospital transport in Gloucestershire.
The Gloucestershire health authority has revealed that it cut funding for the provision of transport to meet other national targets. In September, the chairman of the health authority wrote to min stating that NHS resources have been made available to meet national priorities, such as improving services for people who suffer from coronary heart disease and mental illness and reducing waiting list times. I accept that those are laudable targets, but the health authority has had to adjust the criteria that determine whether patients in Gloucestershire receive hospital transport free of charge. The changes have saved £170,000 and NHS patient journeys have dropped from 200,000 in 1998–99 to approximately 135,000 in 1999–2000. I am all for saving money and for people providing their own transport when they can, but the criteria are too restrictive.
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Health authorities with a market forces factor of 117 or higher are eligible to receive additional funding, especially for the recruitment and retention of nurses and doctors. The problem of funding Gloucestershire health authority has been a matter of extreme concern to me over several years and its solution is essential for the provision of hospital transport. Gloucestershire receives a lower weighting than it should because it is not considered to be an urban authority. That is because Gloucester and Cheltenham are six miles apart, but they have a high proportion of the council's population, so the authority is not considered to be rural. From a funding point of view, we are neither urban nor rural, so we get a poor deal from discretionary funding because of the market forces factor.
I represent 10 market towns covering almost 1,000 square miles of Gloucestershire, which at the extreme could be 30 miles from the district general hospital in Cheltenham. I say to the Minister in what I hope is nonpartisan way that it is essential that, whoever is elected at the general election, the inequality of Gloucestershire's funding is addressed.
We should broaden the assessment criteria so that when a patient needs transport they will get it. The criteria must be based on the principle of the patient's capacity to travel and not just on their textbook medical condition. Funding should recognise the great distances that patients have to travel in rural areas and the poorer transport infrastructure in those areas. I make no political point about that; it is a fact of life that people in villages have little or no public transport to and from the local hospital.
Often, if there is transport, it does not operate at a convenient time to get people to their appointment, and if the appointment is delayed, it may not be available to take them back home. That is why the emphasis must be on capacity to travel and not just on medical condition. Common sense needs to be applied so that patients are not let down and harrowing cases such as those that I have cited do not happen in future, as I am sure everyone listening to the debate agrees.
I re-emphasise the point that we must treat elderly patients with dignity. According to Age Concern, almost one in three people in my constituency are pensioners, which is among the highest proportions in the country. The elderly can be very confused when they go to and from hospital. It is a stressful time, and it should be a fundamental principle of a decent society that we offer them the basic courtesy and respect of providing comprehensive hospital transport services. I hope that the Minister will recognise that human problem, and I look forward to her positive response.
1.12 pm
The Parliamentary Under-Secretary of State for Health (Ms Gisela Stuart): I congratulate the hon. Member for Cotswold (Mr. Clifton-Brown) on securing the time to debate a topic that is clearly of considerable, long-standing concern to him. I note that, last year alone, he wrote to me on the subject and asked questions of my right hon. Friend the Secretary of State for Health.
Before I deal with the patient transport service in Gloucestershire, I should like to explain a little about the Government's national policy. Although I do not

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wish to be partisan or to score party political points, I point out that the guidelines were introduced in 1991 and have not been changed since, but there is the question of how they are implemented locally.
The NHS has a responsibility, which it has recognised, to provide transport to get patients to and from hospital if it is considered that their medical condition makes it necessary. That decision is made by a doctor or other health professional who decides whether there is a medical need for transport to be provided free of charge, as part of the patient's NHS treatment. In arriving at the decision, doctors or other health professionals must take into account the availability of private or public transport and the distance to be travelled by the patient. The transport infrastructure therefore informs that decision.
The principle that should apply is that patients should be able to reach hospital in reasonable time, in reasonable comfort and without detriment to their medical condition. The availability and suitability of alternative forms of transport vary from area to area and it is important that local arrangements cater for local circumstances. As a Member of Parliament for an urban area, I am aware that distances that appear small on a map may be terribly difficult to travel. Over the past decade, a wide variety of social, health and similar specialist transport schemes have been set up for different purposes.
There is no intention to undermine such services, but I believe that now may be the time to examine that provision. I strongly encourage all those providing transport for patients in the NHS, social services, local authorities and the voluntary and private sectors to take this opportunity to review their services together to ensure that people can access the range of services they require, that we can make the best use of health and other facilities and that all transport resources can be used most efficiently and effectively.
Having set the national scene within which the Gloucestershire patient transport service operates, I turn now to the service itself. It is important to point out that the service in Gloucestershire fully meets the standards that apply to the NHS throughout England. This debate is not about the quality of the service provided by the trust, but rather about who should receive that service. I see the hon. Gentleman nodding, so we agree on that point.
The patient transport service is too often seen as merely providing a bus service to hospitals, but it is an extremely important service which complements the emergency services of the ambulance trusts, and that additional role is often overlooked. The staff who provide the service are all trained in first aid. They provide care and possible intervention to patients whose medical condition is such that they need transport by the NHS. They also provide help and support to patients at a time when they are understandably anxious about their treatment and are feeling vulnerable.
The Gloucestershire Ambulance Service NHS trust considers the patient transport services vital to the operational needs of the service, particularly when dealing with major incidents such as train or coach crashes. The patient transport service can be called on in
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those circumstances to transport large numbers of walking wounded to hospital, allowing paramedics to concentrate on the treatment and care of the more seriously injured.
In addition, in of their normal duties, staff in the patient transport service are often the first on the scene of an accident where they can provide basic first aid, help and assistance until the paramedic crews arrive. A number of patient transport ambulances within Gloucestershire are equipped with defibrillation gear, which enables staff t treat suspected victims of cardiac arrest within the critical time. Patient transport staff may provide a first response to other life-threatening calls and help to stabilise patients before they are transported to the nearest accident and emergency department.
I stress that the patient transport service is not an add-on to the ambulance service; it plays an integral part in that service and we take it very seriously, as I know Gloucestershire does. Working in the service provides good experience and grounding to staff who wish to train to undertake accident and emergency ambulance duties in the future. I t gives them a good opportunity to improve their driving skills, to gain experience in the handling and lifting of patients, to develop communication skills with patients, relatives and carers and to widen their knowledge of the care and treatment of a wide range of medical conditions.
As the hon. Gentleman stated, a review of patient transport services was undertaken in Gloucestershire in 1999. Its main finding was that there was considerable over-use of the service by patients who did not meet the criteria that apply to the NHS for access to patient transport services. The hon. Gentleman quoted reductions in some o1 the figures. In developing the NHS plan last year, we found huge variations in the delivery of services. We have to establish a common base, so Gloucestershire, rightly, reviewed its transport services.
Mr. Clifton-Brown: I do not disagree with the hon. Lady's point that hospital transport was being provided to people who did not need it. However, does she accept that cases such as those that I have cited today are unacceptable? Does she accept also that if there is discretion in the system, as there should be, it should be applied favourably to elderly people, first, because they are likely to be confused and anxious when they go to hospital, and secondly because there is a lack of rural transport in my big constituency?
Ms Stuart: I shall respond to those points.
The national guidelines call for the NHS to provide transport for those patients who have a medical need for such transport. In Gloucestershire, a considerable number of patients who had no medical need for transport to and from hospital received that transport none the less. Changes to the criteria have released £169,000 in the first full year of their operation; that money is now being used to provide health care for Gloucestershire.
I accept the hon. Gentleman's point about conflicting priorities: money is also being spent on reducing waiting lists and improving services. However, it is a matter of ensuring that all those things happen. To put it at its most extreme, it would be no good improving transport

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services if hospital services were not improved at the same time. A balance has to be struck, part of which is to ensure that the right people get tote right service.
I am advised that the local health economy has kept the criteria under continuous review and has already updated the policy to ensure that vulnerable groups, including the mentally ill and frequent attendees at hospital, such as patients having renal dialysis and cancer treatment, continue to receive NHS transport. Other exemptions are made on a case-by-case basis. If the hon. Gentleman believes that any of his constituents who should receive patient transport have not done so, I recommend that he contacts the trust involved and asks for a review of the individual cases. From my knowledge of some of the cases that he has raised with Ministers, I know that he has done that in the past. The system allows discretion to be exercised. but if that does not happen in certain cases, it must be investigated.
Mr. Clifton-Brown: I am grateful to the Minister for her suggestion. I have indeed drawn cases to the attention of trusts. The problem is that, by the time a case has arisen, it is too late. Is she prepared to write to the trusts today, stating that I have brought the issue to her attention and expressing the Department's hope that in cases involving that discretion, the elderly in particular will in future be treated sympathetically?
Ms Stuart: I have found that., even when debates on such issues are sparsely attended here, all the health professionals concerned keenly read Hansard afterwards. In addition, I shall ensure that they are sent a copy of today's debate, so I am sure that the words uttered in the Chamber today will not go unnoticed in Gloucestershire.
To help to tackle specific cases, each trust in the county has appointed an officer who can permit exemptions to the usual criteria.An example of that exception would be a frail elderly person who encounters difficulty in using public transport or has no family support. The cases highlighted by the hon. Gentleman—those of Mrs. Jacksot and the 67-year-old patient with a leg injury—appear on the face of it to be the sort that should be taken up.
I appreciate that, after the implementation of the new guidelines in 1999. there was some concern about the impact of the measures on voluntary transport providers, who play an important role. Local trusts are currently discussing future opportunities with the South Cotswold volunteer service and Gloucestershire county council.
The hon. Gentleman expressed concern about the perceived poor allocation to his local health authority. I should explain that the Department of Health uses a national weighted capitation formula as the basis for allocating hospital and community health services revenue to individual health authorities. The underlying principle of the formula is to distribute resources as equitably as possible based on the health care needs of the local population. Under the current weighted capitation formula, Gloucestershire health authority should receive £377 million next year. However, the Government are allocating nearly £394 million for next year—a real-terms increase of 5.7 per cent. and more than £161 million more than the health authority received in 1997 under the previous Administration.
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In addition to those allocations. Gloucestershire health authority has benefited from a number of initiatives under the Government's investment in modernisation. Those include £100,000 to identify and implement service changes that will improve cataract services for local patients; £103,000 to help to reduce waiting lists; £407,000 for booked admissions projects—which will in themselves make it easier for patients to plan their journey; and more than £2 million to modernise the accident and emergency departments in the area. I am sure that the hon. Gentleman welcomes those investments and the many others that benefit his constituents.
The hon. Gentleman made clear his belief that the formula needs to be changed because it fails adequately to cover the costs of providing health care in rural areas. In November 1998, we announced a wide-ranging review of the formula used to make cash allocations to health authorities and primary care groups and trusts under the auspices of the Advisory Committee on Resource Allocation. The aim is to produce a new and fairer formula that reflects the way in which the new NHS is managed and uses its resource.
The review includes assessment of the health care needs of rural populations and identification of any unavoidable extra costs associated with providing health services in rural areas. Although there can be no guarantees about the outcome of the review, I am aware that this is not the first Adjournment debate in which Members of Parliament representing rural areas have expressed their view that the way in which resources are allocated should be changed.
We know that the announcement of large and complicated reviews can cause a period of uncertainty; therefore, at the time that we announced the review, the Government announced a freeze on further changes to the existing formula. That will help to maximise stability and certainty for health authorities and primary care groups, while allowing the wide-ranging review to take place.
The hon. Gentleman also touched on the subject of the poor public transport infrastructure serving his constituents. All of us know that that problem did not start in 1997; it is rooted in the more distant past. I trust that he welcomes the announcement by my right hon. Friend the Deputy Prime Minister of considerable increases in funding for rural bus services, from £90 million over the past three years to £136 million over the next three. This year, Gloucestershire received nearly £800,000 to help to provide 36 new and enhanced services in Gloucestershire. Next year, there will be an increase of more than 20 per cent. in the rural bus subsidy grant for Gloucestershire, taking it to more than £1 million; that will be followed by a further 15 per cent. increase the following year.
Not all rural areas are alike, and traditional transport solutions are not always appropriate in some of the most remote areas. The rural White Paper also announced our intention that smaller communities should benefit from a new £15 million special parish fund. Parishes will be able to apply direct for up to £10,000 for small-scale projects such as buying a minibus, setting up a social car scheme or a car or moped pool, or paying a bus company to divert a route. through an outlying village,

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which I know has been most helpful in some areas. That will give them more freedom to decide on the sort of help that they need.
I understand the hon. Gentleman's concerns about patient transport, which is a matter that we take seriously. However, the hon. Gentleman raised the question of medical needs and their assessment. We have to draw a distinction between vulnerable groups and patients who really need hospital transport so that their condition does not deteriorate, and cases in which the problem is inability to pay. Therefore, I draw the hon. Gentleman's attention to the hospital travel costs scheme, which supports low-income patients and allows some reimbursement of such costs.
Mr. Clifton-Brown: It might not be strictly relevant to today's debate, but, in connection with funding, will the Minister take into account the fact that her Department has recently altered the coverage criteria for the southeast living allowance to include Bristol and Swindon? That is causing great problems with recruitment of nurses and doctors in Gloucestershire because in many areas, including the Cotswolds, the cost of living is higher than in Swindon and the rest of Gloucestershire. When a formula is changed, problems always arise at the margin, and that is what has happened as a result of the changes to that allowance. Will the Minister consider whether anything can be done to solve that problem?
Ms Stuart: That problem has been raised in this Chamber before. We continuously examine those matters, because we know that wherever a line is drawn, some people are left on the other side.
In addition to expressing specific concerns about patient transport in his constituency, the hon. Gentleman has stated his belief that we must give the elderly the respect that they deserve and must treat them properly. In that context, I hope that he welcomes yesterday's launch of the national service framework for care for older people. It is designed to provide a blueprint for care and to tackle problems of age discrimination throughout the NHS.
Everyone has a right to first-class treatment in the NHS. In every part of the service, whether in urban or rural areas, we need to identify and meet the needs of those who may be vulnerable. I hope that today's debate will enable the hon. Gentleman to take up individual cases involving decisions that he believes were wrong, although I believe that the overall framework is the right one.

Unemployment (Jarrow)
1.30 pm
Mr. Stephen Hepburn: My hon. Friend the Under-Secretary will be pleased to hear that the content of my address will not he as negative as the title of the debate implies. If we practised joined-up government—rather than just talking about it in government—and got down to grass roots to deliver it, the Department of Trade and Industry would have a far easier job in creating wealth in the northern region.
Since we were elected in 1997, a lot has been done and there is much to be proud of in the northern region, especially in my Jarrow constituency. We certainly picked up a poisoned chalice from the Tories. When I see the farmers' present plight, I can do nothing but sympathise with them and hope that they get over their problems quickly. What they are going through is certainly nothing that we have not experienced in my constituency. When the previous Government were in power in the 1980s,lost the mining industry, the steel industry and the shipyards—and that was only in my Jarrow constituency. Decent men were thrown on the scrap heap and forgotten.
I do not remember Prince Charles packing in his holiday and saying, "I'll not go on holiday and I'll not go skiing; I'll stay in the country and look after this tragedy." I do not remember anyone saying that we should have emergency daily Cabinet meetings to sort out the unemployment problems in Jarrow, when all those great industries collapsed through Government inaction. As I said, I hope that the farmers get over their problems; certainly, they have our sympathy because we have been through similar problems.
When I got into Parliament, I was nagged by the question of how we were getting on creating manufacturing job in my Jarrow constituency. Obviously, I am talking about manufacturing jobs, but that is not to demean other areas of the economy. None the less, manufacturing jobs are important in Jarrow, as they are in Tyneside Tyneside communities and towns in my constituency were built on the back of manufacturing, and that will always be the case. When I asked the Chancellor how many manufacturing jobs had been created since the election—given concerns about the running-down of the industry in the past—I was careful to take into account manufacturing jobs that had been lost in the same period. I was pleased that there was a net gain of more than 800 manufacturing jobs in Jarrow; that shows that the manufacturing sector in my constituency, which reflects the rest of Tyneside, is picking up.
In the same period, thanks mainly to the new deal, youth unemployment has dropped in Jarrow by a massive 75 per cent., and long-term unemployment has fallen by an impressive 63 per cent. I am wary of using percentages in talking about unemployment because, even if there is only l per cent. unemployment, people within that percentage are 100 per cent. unemployed. However, I use those figures showing a massive decrease in unemployment to give an indication of where the Government are going and how they are tackling unemployment.
We are delighted at the way in which all sectors in the north have taken up the Government's challenge to work in partnership. Of course, that is not a new

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initiative. It was started by the Tories;, but the difference is that we want it to work. If it is to do so, every part of the partnership, whether the private sector, the Government sector, Government agencies or trade unions, have got to have an input, and feel that they are valued and being listened to. Above all, they must feel that they have made a contribution. Under the previous Government, the only sector that got to make a contribution was the private sector, so partnerships did not work. I am pleased to say that partnerships are now working on the Tyne, and there have been some landmark agreements between employers and trade unions in ship-related industries.
Employers, trades unions and politicians formed a unique group called the Tyne Mantime Group under the chairmanship of Kevin Cup ran, the regional secretary of the GMB, and a north-east member. A charter has been agreed with each Tyne company that is involved, which addresses basic but important issues such as health and safety, labour agreements and training. It also deals with contracts between companies—if one company is quiet another will help it out—and exchange of labour during boom times in the industry.
The Tyne Maritime Group will play an even greater role in promoting Tyneside as a cluster of shipbuilding expertise. It is the first time that employers, trade unions and Government agencies have worked together to promote that great Tyne industry, which made our communities what they are. Employers are not doing that from benevolence, but because I hey know that if the Tyne is working and there is shipbuilding and ship repair on the Tyne, the rest of Tyneside is working. Tyneside was built on the shipyards; it will survive and, indeed, prosper through them in future. We are therefore making marvellous progress.
I do not want to create the impression that everything in the garden is rosy, however—it i not. We have done a lot, but we have much more to do The average age of a skilled worker on the Tyne is new 50, owing to the running-down of the shipyards in the 1980s, which I have already mentioned. A whole generation between the ages of 25 and 40 has been lost. We must address that urgently if we are to benefit from the skills of the 50 year-olds, which need to be passed to young apprentices to make the Tyne prosper. If we do not do that immediately, the Tyne's maritime industry will go, with the loss of lots of jobs, signalling the end of Tyneside as we know it.
That is the main issue addressed by the Tyne Maritime Group, whose members are working together and promoting the area. However, they can only succeed with Government help. I shall come to that point later. The Tyne is doing well it present and is the envy of the country. For example, Swan Hunter has orders totalling £130 million for Ministry of Defence supply vessels, and Cammell Laird has placed a bid to build £340 million-worth of cruise vessels. We are still waiting for clarification of the Cammell Laird contract from the DTI, and I hope that the Minister will deal with that today. There is an order to build a floating production and storage vessel at Aker McNulty's and, of course, last week the Prime Minister made a great announcement of 2,000 jobs that would be created by AMEC in a massive contract for Shell, again for production and storage vessels.
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Basically, a lot of work is going on, but we have skills crisis which, I hope, is being addressed. There is a contract with the MOD on the horizon for a £1 billion aircraft carrier, but to build that we need a skills base. What was a sunset industry under the Conservatives has become a sunrise industry under Labour, and the orders that I have mentioned have given us a much-needed boost.
However, I cannot let this opportunity pass without mentioning the disappointment that I share with all of Tyneside at the MOD's decision to give a contract for the construction of roll on/roll off ferries to Germany. I see from the newspapers that the MOD has been experiencing difficulties with the Weir consortiums on commercial issues. It has taken control of part of that order and has placed the construction of two ferries directly in Belfast. I only hope that it sees the light, has the guts to take over the rest of the order and gives it to Merseyside and Tyneside. That would create an extra 1,500 jobs, and another 1,000 jobs would be created in local businesses and suppliers; it would inject £650,000 of workers' money into the local economy. We cannot ignore that. That is what joined-up government is about. The DTI is doing much to create wealth and jobs in the area, but what on earth can it do when the MOD turns round and stabs it in the back?
I shall finish my contribution by saying something about the public sector and its role in job creation and joined-up government. Again, I believe that the DTI has been let down by other parts of the Government in its efforts to create jobs and wealth in the northern region. In the past, Governments have had the nationalised industries in the north through which to regulate employment levels. If they wanted to create jobs, they would put in more investment, the number of apprentices would go up and output would increase. Now, of course, we do not have the nationalised industries. They have gone, but we have the public sector, which is in an ideal position to take over the role of boosting the economy in the northern region. It is already one of the largest employers in the region.
Over the border in Scotland, there is a vastly better grant allocation system, owing to the Barnett formula. In the north-east, we are told about the million-pound divide—
Mr. Ronnie Campbell: I thank my hon. Friend for giving way. He just touched on an important point. My daughter lives in Sussex, and me and the wife were down there with her at the weekend. It is a lovely little village and we went to the local pub and had a drink on Sunday night. Some people were playing cards in the corner, and someone came in and asked, "Have you sold all your shares? Did you panic and sell your shares?" Someone else said, "No, no, I have kept my shares." The conversation among everyone was about shares. The barman said, "I was buying when you were selling, because I was buying cheap." Imagine that conversation back home, in a pub in my constituency or that of my hon. Friend the Member for Jarrow (Mr. Hepburn). It would more likely be, "Hello, Joe. When do you get your giro? Did it come on Saturday?" and the reply would be, "No, no, I had my incapacity benefit."

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That would be the conversation. That is the difference between the north and the south—and to some extent, with Barnett, even Scotland.
Mr. Hepburn: My hon. Friend is right, and Ministers must grasp the difference. We need extra investment in the north. We need extra public investment, and that can be done through a Barnett formula 2. The conversation in the south is about which shares people have. In the north, the situation is vastly different. We have struggled in the past, and the only way that we will drag it round is by means of a Barnett formula 2. If it were the same formula as in Scotland, that would put an extra £1 billion into Tyne and Wear, £100 million on to the budgets of South Tyneside councils and 50 per cent. on to Gateshead council's budget.
The DTI has been let down. It is promoting regional development and the concept of One NorthEast, but how can One NorthEast compete with the Scottish Development Agency, which is working under an entirely different funding regime and a vastly better one than in the north-east? I am not suggesting that Scotland should come down to our level—rather that we should go up to Scotland's level, to allow us to compete for jobs and promote our area.
I heard—or read in the newspaper—with pleasure that the Prime Minister and the Chancellor had said that, after the election, millions of pounds would flow from the south towards the north. I assume that that is an indication that they plan to tackle the Barnett formula, to the benefit of the north-east.
We have come a long way since those dark days when the only announcements in Jarrow were about another closure or further lay-offs, but with 2,492 people still unemployed, I am sure that my hon. Friend the Minister will agree that we have a long way to go. If we are to achieve the Chancellor's goal of full employment—a dream that we never had in the past, in the dark days of the 1980s when lay-off followed lay-off—we need to achieve the goal of joined-up government. Until we achieve that, with the MOD and the Treasury working with and helping the DTI, we ain't going to get there. I have great hope for the next Parliament and for a new Labour Government who will address the problems that I have outlined.
1.45 pm
Dr. David Clark: I congratulate my hon. Friend the Member for Jarrow (Mr. Hepburn) on obtaining the debate. I intervene briefly, as his constituency and mine are inextricably linked. Ours are the two authorities in the South Tyneside local authority. My hon. Friend spoke about partnership, which is a matter that I want to raise with the Minister.
We have done extremely well over the past few years under the Labour Government. We had the unenviable reputation of having the worst unemployment record in England. Currently, the level for South Tyneside is 11 per cent. out of work. The two constituencies are neck and neck, although in South Shields the official figure for male unemployment is still 18.1 per cent. One in five men is currently out of work.
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As I said, we have made great progress. We are well on the way, but I urge the Minister to start drawing up plans to take our progress further under the next Labour Government. The new deal has been a success. In South Shields, 2,000 people entered the scheme, and 900 of those young people have entered full-time employment. That is a great tribute to the Government, but we take the responsibility on ourselves, as well. It is our responsibility to pull ourselves up by our own bootlaces.
I hope that we will have every assistance from the Minister, working across government. If we speak of worthwhile jobs in the future, we are speaking of highly skilled jobs—jobs requiring high educational attainment. I am delighted that in the key stages examinations in English, there has been an 11 per cent. improvement over the past four years, and we are almost up to the national average. In mathematics, there has been a 21 per cent. improvement in attainment, and we are better than the national average.
I make that point because I want to get across to the Government the fact that we recognise that that is the result of a partnership not only between Government Departments, but between the people of South Tyneside—the people of Jarrow and South Shields—and the Government. If the Government continue to give us the tools to help ourselves, we will deliver in South Tyneside. That is my message. We have made tremendous improvements and tremendous progress, and I am very optimistic that, after the next general election, when we have a new Labour Government, we can move forward tnd reduce those horrific levels of overall unemployment from 11 per cent. to the national average.
1.46 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Al in Johnson): I congratulate my hon. Friend the Member for Jarrow (Mr. Hepburn) on securing the debate on issues that are obviously close to his heart, and close to the hearts of my right hon. Friend the Member for South Shields (Dr. Clark), whose point about the Labour Government continuing to promote social progress and attack social exclusion is well made, and of my hon. Friend the Member for Blyth Valley (Mr. Campbell), who was helping to bring civilisation to Sussex at the weekend. I can well imagine a similar conversation taking place in a pub in West Hull. I hope that he sympathises, though, because, although there are many good things about living in Sussex, you also have to drink the beer. That is a very big difference between our constituencies and the constituencies in Sussex.
I am well aware of the excellence that exists at Tyne shipyards and of the important role that they play in the local economy. I am also aware that those shipyards, like shipyards throughout the UK, face difficult challenges. However as my hon. Friend the Member for Jarrow said, the situation has been transformed under this Government. There have been considerable improvements in the prospects for Tyneside yards in recent months. It is worth elaborating on some of my hon. Friend's points about the success of Tyneside companies involved in both shipbuilding and the related offshore fabrication sector.
Swan Hunter at Wallsend has secured a major contract to build two troop landing ships for the Royal Navy, which will create up to 2,000 new jobs at the yard.

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In addition, it has secured a contract from Kerr McGee to build an FPSO—a floating production, storage and offloading facility—which will create a further 800 jobs. Between them, those contracts are worth almost £300 million.
On Cammell Laird, before I deal with my hon. Friend's question, I can tell him that the UK's largest ship repair and conversion company recently completed a passenger ferry for a Norwegian owner at its Hebburn facility. That was the first ship to be built on Tyneside for seven years. The UK's other major ship repair and conversion company,
A & P, remains a major presence on the Tyne.
With regard to Cammell Laird, there is the prospect of building the first cruise liner in this country for many years. At this delicate stage of negotiations, when we are continuing to talk to Cammell Laird and to Luxus, I can say nothing more helpful than that he DTI has gone to extraordinary lengths. We have made an exceptional and unprecedented offer aimed a helping Luxus to attract a commercial lender to share the risk, so that the project can proceed. We are continuing to talk to the companies about the proposal. We share my hon. Friend's concern that we should leave no stone unturned in our efforts to assist in any way du t we can. That work is still in progress. It would be wrong to go into further detail, however, as sensitive negotiations are under way. Along the river from my hon. Friend's constituency, Aker McNulty has had success in the FPSO field. The most recent good news is the award to Amec by Shell of the Bonga contract, which will create 1,000 jobs in Wallsend and another 3,000 in the UK, many of which will be in the north-east.
Such contracts are not won easily. Neither my hon. Friends nor I are complacent about the difficulty of sustaining that level of activity on the river. The developments show, however, that the industry is alive and well on Tyneside and that we have companies and a work force with the skills, technology, ability and determination that are necessary to succeed in a competitive global market.
The key challenge facing tin UK shipbuilding industry is to improve its competitive performance. We recently published a White Paper entitled "Enterprise, Skills and Innovation: Opportunity for all in a world of change", which developed some of the themes raised in this debate. It deals particularly with education, skills and training, which are especially important for the future. It is for a second Labour Government to take those forward, providing that we receive the electorate's support. The White Paper also explained how we are helping British businesses to respond to challenges in five key areas: developing a more highly skilled work force; building prosperous regions and communities; investing for innovation; fostering enterprise; and ensuring that markets operate effectively and fairly.
We are working closely with the shipbuilding industry to help it to improve its competitiveness. As my hon. Friend said, we have established the shipbuilding forum to facilitate that process: for the first time in the history of this maritime nation the shipbuilding industry, its work force and the Government are sitting down around the same table to discuss the industry's problems. The forum was established thanks to my predecessor, my hon. Friend the Member for Leeds, West (Mr. Battle), who introduced the initiative.
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The shipbuilding forum has taken forward a great deal of work, and my Department is committing substantial funds to competitiveness projects. For example, we are contributing £2.8 million to the link research project, which is led by the Shipbuilders and Shiprepairers Association, to help the industry to identify where improvements are necessary. We are providing grants of £176,000-50 per cent. of total costs—towards a three-year marketing project that is aimed at generating new orders to match the increased production that the link project is expected to generate. We are also introducing an idea that was developed by the trade union movement to improve skills and training. Indeed, an initiative is currently under way in my constituency to advance that aspect of the forum's work. We are also considering creating a pilot training scheme within a selected area. That proposal is based on the excellent training initiatives that are already under way on the Tyne.
There are concerns in shipbuilding about Korean competition. I know that my hon. Friend is aware of those anxieties, as we had a meeting about them recently. The Government are still aware of the matter and we are considering carefully whether to support World Trade Organisation action. Our preferred option was a bilateral agreement between the Commission and Korea, but Korea has recently been extremely unwilling to restart the talks that began last year, so we may not have any alternative but to pursue WTO action. That would be time-consuming and bureaucratic, but it might be the only course open to us.
Before I deal with some of my hon. Friend's other points, I should like to comment briefly on the marine export partnership, which my Department launched earlier this month. The initiative seeks to strengthen the promotion of British marine industries, including the shipbuilding, conversion and repair industries, to overseas markets. It is supported by Trade Partners UK and brings together the trade promotion work of the DTI and the Foreign and Commonwealth Office, which are trying very hard to achieve the sort of joined-up government to which my hon. Friend referred. People often use platitudes when they speak about joined-up government, but I know from experience that it is difficult and complicated to achieve. The marine export partnership is another attempt to achieve joined-up government, and we are providing it with support of more than £100,000 during the next 18 months.
The shipbuilding market remains difficult. I am encouraged by recent developments on the Tyne. Few shipbuilding regions in the UK can match the range of new building, conversion and repair capabilities that the Tyne yards now possess, building on their proud history. I assure my hon. Friends that the Government will continue to work closely with those yards further to enhance their competitiveness and to help them to win new and vital orders. In particular, we want to help them to deal with the problem of a work force who are dedicated and skilled, but who are ageing, like many of us in this Chamber. We must tackle that problem, which is probably the most serious challenge that the industry faces. My hon. Friend's point about that was well made.
My hon. Friend spoke about the wider problems in his constituency. Unemployment is a huge concern to us all and was one of the major challenges that faced us when we took office. This month, we took great comfort

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from the announcement that the number of people who are unemployed has dropped below I million for the first time since 1975. At the same time. we have the lowest long-term interest rate since England won the world cup and the lowest inflation for 25 years. Prices are rising at the lowest rate since 1973 and the economy has grown by 2.7 per cent. per year since the election, in contrast with the abysmal performance of the previous Government, who presided over the worst growth record since the second world war of any country in the Organisation for Economic Co-operation and Development—and we were told that the Conservative party was the party which could run the economy.
Reducing unemployment in the context of that stable economic platform is a tremendous achievement, but I agree with my hon. Friend that somebody who is unemployed is 100 per cent. unemployed. We have to work towards the target of full employment—a goal which was announced recently by my right hon. Friend the Chancellor.
Mr. Ronnie Campbell: I was wondering about the Barnett formula, which my hon. Friend has not mentioned, even though my hon. Friend the Member for Jarrow (Mr. Hepburn) did so. Scotland was given the Barnett formula all those years ago in the 1960s because it had high unemployment, and because shipyards were closing on the Clyde and in other such places. As we have made clear, our area is now in the same position, so why can we not devise a Barnett formula for the north-east? We get blanket replies to that question. I can see that my hon. Friend is trying to avoid it, but I am trying to get him on the right track and to get some words out of him.
Mr. Johnson: I was rather hoping to avoid the Barnett formula, but I accept my hon. Friend's point. I am not equipped to speak about any plans for the Barnett formula, but I can say that the initiative announced by my right hon. Friend the Secretary of State, who knows a thing or two about Tyneside, is geared towards the need to ensure that the prosperity that is created from our fine economic record does not leave people out in particular areas, such as my constituency and those represented by my hon. Friends.
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Perhaps this assurance will not solve the Barnett formula problem, but I can say that the funds that are being generated and distributed through the regional development agencies are directed at tackling those very problems. Such assistance seeks also to deal with earnings problems and the traditional earnings gap between the north and south. Thanks to the minimum wage and many other initiatives, that gap narrowed considerably this year. From memory, I think that earnings have increased by 4.7 per cent. in the past year, whereas in London and the south-east, they increased by about 1.2 per cent That is the first indication for many years that some of these problems are being tackled. Unfortunately, however, we may have to wait for another debate before questions about the Barnett formula can be given a more lucid and comprehensive reply.
Mr. Ronnie Campbell: I feel an Adjournment debate coming on.
Mr. Johnson: I hope that I will not be the Minister who responds.
Economic stability is helping UK areas to prosper, but my hon. Friend the Member for Jarrow makes a valid point. Unemployment has fallen in his constituency and in the north-east. Spectacular gains have been made, although they are lower than the national average. In his constituency, the reductions are lower than the average in the north-east in general. It is, however, worth repeating that unemployment in the north-east has fallen by 27 per cent. and by 39 per cent. in the UK since 1997. As my hon. Friend rightly said, long-term unemployment has fallen by 63 per cent. throughout the country.
I should like to return briefly to the recent successes on the Tyne. The projects were not won because of hidden subsidies or state intervention, but because the best of our businesses and work force are truly world class and can compete with all corners. Having created a stable economy, our next challenge is to ensure that all our businesses, regions and work force benefit from that stability. It will not be easy, but that objective can be achieved if Government, business, education, trade unions and Members of Parliament work together.
Question put and agreed to.
Adjourned accordingly at one minute to Two o'clock.