Westminster Hall Sitting of 1 May 2001

Preamble
[MR. MICHAEL LORD in the Chair]

Rail Investment
Motion made, and Question proposed, That the sitting he now adjourned.—[Mr. Jamieson]
9.30 am
Mr. George Stevenson: I am extremely grateful to have the opportunity to debate rail investment. It is probably one of the most crucial issues that face the country and the Government. Given recent changes—what some may call developments—particularly in the Government's relations with the Strategic Rail Authority and Railtrack, it is a timely debate.
The Government are to be congratulated on having the courage and determination to publish their 10-year transport plan. Massive investment is planned for the railways; about £60 billion of public and private money will be invested during that period. The Government's main objective since the establishment of the SRA is to bring cohesion to the industry following the disastrous privatisation embarked on by the previous Government. It is in the public interest for the Government to oversee and direct that investment, if for no other reason than that enormous amounts of public money are involved. The public have an interest in the future of the railway network, and the investment that the Government are committed to making needs to be high on the agenda of the SRA.
Privatisation was a disaster, as it led to the fragmentation of the industry. It is beyond peradventure that that is the core of the problem that the industry now faces. It is not only I who say that; Railtrack and the SRA say so. Indeed, in its recently published document on strategy, the SRA unequivocally says that fragmentation was a disaster and that Railtrack has failed.
The other element that the Government need in order to develop the rail network over the next 10 years—and longer; we need always to think in the long term with the railways—is partnership. Partnership with the private sector, with the industry itself and with all the players is crucial. I shall return to that element of the Government's approach in a few moments. Partnership will deliver the necessary investment; it will enhance our railways, promote them and make them more efficient and effective. Crucially, it will increase passenger numbers and develop freight transport on the railways.
The Government's vision is shared widely in the House and throughout the country. Their courage and determination to put in place the necessary resources have been well received by the country. If we compare that with the previous Government's record, we can see how vital this Government's initiatives are. Some hon. Members in the Chamber know more about the industry than I ever will, and I have never quite understood how one can argue that we can have economic growth without the transport system to back it. The Government's approach is, therefore, critical.
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The available resources and the Government's determination must be matched by confidence in the partners that the Government seek to bring into the 10-year plan and in their ability to deliver. It is crucial that the industry's structure is clear and cohesive; it must be simplified. In particular, the blight of the fragmentation that followed privatisation must be tackled. As a result of their policy initiatives, the Government have a golden opportunity to set a positive framework for the industry.
The SRA is a critical factor in that process, and progress has been made. More stability is being brought into the franchises, which now last longer. That means that the partners—the train operating companies—can see their way more clearly to embarking on vital investment. They can see that greater stability is emerging. The SRA is also involved in a determined and strong effort to develop the critical partnership to which I referred. That is the plus side, and the Government are rightly to be congratulated on their courage. Despite the carping criticism that one hears from time to time from different quarters both in the House and outside, I believe that the Government's initiative is welcome.
However, I fear that there is a downside. The crucial objectives that are set out in the 10-year plan can be fatally damaged by one of the partners in particular—Railtrack. I have read as much as I can put my hands on and have informed myself as best I can. It is difficult not to come to the conclusion that there is no confidence in Railtrack. That is true throughout the industry and the country, among many hon. Members and, I am sure, in the Government. It is equally true within the SRA, the train operating companies and even Railtrack itself. That is the bottom line. I fear that prospects are unlikely to get any better. The critical partnership that the Government must develop could therefore be fatally flawed.
The problems that we face as a result of the lack of confidence in Railtrack are starkly illustrated by the west coast main line. Railtrack's network licence sets the tone. It states that Railtrack is charged with

"(a) the maintenance of the network;

(b) the renewal and replacement of the network; and

(c) the improvement, enhancement and development of the network".

Railtrack looked at the west coast main line and said, "We'll do it, but it will cost £2.3 billion." That did not last long. Quite unilaterally—without consulting anyone, in particular the Government—Railtrack changed the specification of the signalling on the west coast main line, and the cost went up to £5.8 billion. Recent announcements suggest that it has gone up to £6.3 billion.
What has been Railtrack's attitude in the light of that situation? Pretty clear, going by evidence that it has given to the Transport Committee, of which I have the privilege of being a member. In questioning on 22 November 2000, Mr. Marshall, formerly finance director and now chief executive of Railtrack, said that the modernisation of the west coast main line would not go ahead if the Government, through the regulator, did not provide a grant of £4 billion. Railtrack will simply turn its back on a vital rail artery of the country, for which it is responsible under its licence, unless the Government and the public purse fund it all. It is not just

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a matter of £4 billion. In further questioning, Railtrack admitted that if it did not receive that grant, not only would the scheme not go ahead, but it would have to raise the money on the capital market, and embark on a £1 billion rights issue. In effect, it was saying to the Government, "We want £5 billion from you, or you will not get the scheme."
Some people may think that that is a good illustration of partnership, but it is not one that I recognise. It gets worse. It is interesting, when we consider the Government's decision to hand over enormous amounts of public money to Railtrack, to look at the stock market valuation of Railtrack. The latest figure that I have—I think that the share price has gone down since, then staggered up a little—is about £5 billion. For one scheme, the public purse has to give a private monopoly company approximately the total value of that company. The net proceeds of privatisation, according to the House of Commons Library, were £4.6 billion. So we are giving this private monopoly company more money than the public purse received for the entire privatisation of the industry.
What do we ask in return? We ask—some might say demand—a number of things. The first is that Railtrack be better managed. We all subscribe to that. Railtrack has said that it is in danger of losing its A credit rating, which would compromise its ability to raise money. The Government have therefore decided to bring forward the first instalment of the £4 billion and to cough up £1.5 billion to prop Railtrack up. As a quid pro quo, they want to appoint someone to Railtrack's board to look after the public interest.
Mr. Marshall's response, as reported in The Times of 3 April 2001, was that such a
"non-executive director, to be appointed in a few months' time, was largely a symbolic gesture."
He went on to say that the company would not accept other people telling it whom to have on its board. What does Sir Alastair Morton, who chairs the SRA, think about that grant to Railtrack? In evidence to the Select Committee, Sir Alastair said that it was a gift and that Christmas had come early. It was not a Member of this House saying that; it was the chair of the Strategic Rail Authority.
So, the conditions are better management and a public interest non-executive director, which Railtrack sees as symbolic and wants to appoint anyway. Interestingly, and quite critically, the Government and the Strategic Rail Authority have said that one of the problems with Railtrack is that the company has too much to do. They think that, in future, Railtrack should manage and maintain the existing rail network, and the Strategic Rail Authority, in partnership with the private sector, should take on the development of new rail links—after the development of the west coast main line, if that ever happens.
To that end, the Government have unceremoniously dumped Railtrack from the second phase of the channel tunnel high-speed link. That is not a ringing endorsement by the Government or the SRA of Railtrack's ability to deliver.
Now the Government and the SRA are looking for another development plan for the east coast main line. However, the Government have not left matters there,
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and I understand the difficulties facing them. The issues are so critical to the 10-year plan that they must be tackled, and I hope that, in the short time left to me, I can convince my hon. Friend the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Streatham (Mr. Hill), at least to commit the Government to tackling them.
Lord Macdonald was worried because the share price of Railtrack was going down further. The shares had been sold at £3.90 and had gone up to £17, but they were back crawling along the bottom again. That was not good enough. Something had to be done to boost the price, so the £1.5 billion prop-up, bail-out grant was made, and Lord Macdonald made a speech at the Birmingham chamber of commerce, in which he said that the Government supported Railtrack and saw it as an important partner for the future. What happened? The shares blipped up in price.
It is an unedifying prospect. Every time a member of the senior management of Railtrack makes a speech, the share price goes down, and every time a Government Minister makes a speech, the share price goes up. That is a new experience for many of us in the Chamber. How can such a relationship be a basis for the crucial delivery and the partnership that are required for the Government's 10-year plan? It is not a partnership and it cannot form a basis for future action.
The evidence on fragmentation is overwhelming. With the greatest respect to the Minister, this is not an old Labour versus new Labour argument; it is about what is right and what is wrong. The argument is about public interest, delivery, confidence, public and private money and partnership. It is a matter of our ability to deliver and our confidence in doing so. The debate is essential to the Government's having any chance of success.
However, the SRA's new role is not very encouraging. The new development of rail is being transferred from Railtrack to the SRA and other partners—I presume with Government approval. That means another fragmentation of the industry. Railtrack will maintain the current rail network and the SRA's private partners will develop the new network. The industry needs further fragmentation like it needs a hole in the head. I am very concerned about the prospect of further fragmentation.
Nevertheless, if the SRA, with its partners, is to be responsible for development of new rail infrastructure, that responsibility should be significantly extended. As a start, the SRA should take shares in Railtrack on behalf of the public. Am I saying that, or is it someone else? In the evidence to the Select Committee to which I referred, the then chief executive of Railtrack and its current director, who was then the finance director, said:
"We have proposed that the SRA invest in preference shares in Railtrack"
as, effectively, a quid pro quo measure for the public money coming in. Railtrack said that, not me. Its representatives said that the mechanism would be
"the most efficient way o lever public money into the railway."
Railtrack's opinion has changed of late. I think that that is because its shareholders are upset about it. In any case, the Government are bailing Railtrack out. What

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sort of message does that give? How much confidence can we have in a company that has to rely on ministerial speeches and the odd massive bail-out from the Government?
I was enormously encouraged on reading an article in The Guardian. It was not always correct, but was nevertheless interesting. According to it, my right hon. Friend the Secretary of State for the Environment, Transport and the Regions is considering a British National Oil Corporation solution. That would be to take a 51 per cent. majority share in Railtrack, which would protect the public interest and mean a new direction for Railtrack. I think that the solution has much to commend it, with reference not only to my arguments today but to answers that my hon. Friend the Minister gave about the sum of public money put into Railtrack. He said:
"Some 85 per cent."—
I understand that the figure is nearer 90 per cent.—
"of Railtrack's income is paid to the company by TOCs in access charges, a substantial proportion of which are supported by Government subsidies."— [Official Report, 18 December 2000: Vol. 360, c. 7W.]
For the one scheme in which Railtrack is now involved, the west coast main line, 100 per cent. of the capital comes from the Government. A large proportion of the 90 per cent. of its operating revenue also comes from the public purse. As things stand, we intend to allow that situation to continue. That is a private monopoly that is publicly funded.
The majority of shares should be acquired by the Government, quid pro quo for public money. That is the only way to get out of this mess. The shares should be invested in the SRA, as a step in the direction of restructuring the industry so that the SRA is responsible for the infrastructure while the private sector operates the trains. That should be done as soon as possible. We are witnessing the dismemberment of Railtrack, so my suggestion is the logical next step.
Railtrack represents the dead hand of privatisation. It is a luxury that we can no longer afford. Some in the industry legitimately and sincerely claim that they do not want any more upheaval. I understand that, but can we afford to stagger from crisis to crisis as we are doing now, and as many believe that we shall do in future? The majority of the public know that something dramatic must be done. They are fed up. When they begin to understand how much public money is at stake, they will become even more concerned. It is not always the case but, in this instance, public instinct is right. I hope that the Government will recognise that and act accordingly, as they have a historic opportunity to do.
9.54 am
Mrs. Gwyneth Dunwoody: I wholeheartedly congratulate my hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) on his customary trenchant and careful demonstration of his knowledge of this thorny problem. For many months, he has consistently obtained from members of the railway industry the information that is essential to understanding the tortuous and complex problems of that badly bedevilled form of transport. His success in doing that is a tribute to his sagacity and his complete understanding of how essential the railway industry is to the development of the United Kingdom.
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The Government now face real difficulty. It is a long time since anyone seriously set about considering the connections between transport and the economy. The Government took a major step in preparing a 10-year plan for transport. Not only that, but because they were happy to pass primary legislation and commit large sums of public money, they were beginning to tackle a 20-year pattern of neglect. However, consideration of the implications of those plans reveals an immediate dilemma. Because of the fragmented nature of the industry following privatisation, there is little to suggest where the industry thinks that it is going.
As we have been told this morning, the responsibility of the Strategic Rail Authority and of Railtrack is set down in transport legislation and involves not only promoting but developing the industry. Those are essential and fundamental tasks, but confusion and lack of clarity are now creating a dangerous situation. The impact of the rail accidents on industry confidence has been great—some would say almost disproportionate—but that has not been taken on board fully by all the major players. Railtrack's responses were set out in considerable detail before the Transport Sub-Committee. The previous chief executive seemed to understand that the company had not done sufficient in the past and that it would be required to do much more. The incoming chief executive, who was previously finance director, appeared better to grasp some of the immediate problems.
Nevertheless, time is passing and Railtrack has still not begun to come to terms with some of the difficulties that it needs to confront. First and most important is the public perception of Railtrack. Railtrack is the core of the rail industry. If it gets things wrong, whether in the maintenance of facilities or the development of the railway system, everyone else will suffer. Its representatives appeared to understand that one difficulty was that the steady state system had not been maintained as it had been previously.
We hear a great deal about 20 years of under-investment, but one thing that British Rail did was to maintain the system. Sometimes it did so with love and bits of string, but railway men and women maintained that system so as to enable it to continue in existence. When Railtrack officials came before the Committee we pointed out to them that their failure in that regard had endangered the system. We said that it was clear that the problems were not only affecting old-style rails; often they concerned parts of the system that appeared to have been renewed. It should have been possible to be confident that those parts of the system could take the new pressures.
I am concerned about the lack of evidence that Railtrack officials, who appeared at the time to understand that it was their failure to confront matters that had led to complications, have taken major decisions essential to its future security. A new director with engineering experience was appointed to the board, but it is extraordinary that for so many years engineers were not on the board, and that there were 13 directors without such practical experience. After appointing the new director, Railtrack appeared to feel that it had dealt sufficiently with the practical problems of development. It is essential, however, that Railtrack admits some straightforward, important things. It must understand that it failed to deal with basic questions about its

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contractors, about its acceptance of the fact that responsibility was passed down the line without sufficient monitoring, and about its inability to know whether the standard of maintenance that was required was being delivered by those who were paid to do that job. if it continues to get such questions wrong, it will simply go out of business, because there will be no way of maintaining its share price or the confidence of anyone in the City and in the general public in its ability to do the job.
So what has Railtrack done? Has it created an in-house engineering system, sought a new training system, asked the contractors to come up with a different way of working, or changed its way of awarding contracts? No. What it appears to have done is to decide that having one engineering director on the board will begin to confront its problems. As we demonstrated in our report, because it did not know how to handle contractors or have sufficient people to monitor what was happening, and because, from its commercial point of view, it was prepared to drive down the overhead cost of contracting by continually moving work from one firm to another—even moving it from one region to another—Railtrack contributed to the factors that led to the problems immediately after the bad accident at Hatfield.
I am very disappointed, because I believe that Railtrack was under an obligation to say, "Fine, we are under considerable pressure, but we are now prepared to take a number of basic, important steps." It must agree to look at training and at why it was not able to provide inspection without relying on someone else, and accept greater supervision from Her Majesty's railway inspectorate—an essential recommendation. It must also talk seriously to the train operating companies about how it can become more accountable to its customers. It is extraordinary that so many people can be required to work together in an industry with no obvious means by which they are accountable to one another for the quality of services delivered. That situation is reprehensible and dangerous.
Mr. David Drew: Will my hon. Friend comment on the Wessex franchise? The ridiculous situation arose a year ago when Wales and West announced that it was not interested in continuing the franchise. Confusion has now followed about who will take over the franchise and invest in that network.
Mrs. Dunwoody: I sympathise with the people affected in that franchise area. They must have considerable worries about the future of the service. This afternoon my Committee will question Sir Alastair Morton on the long-term plans of the Strategic Rail Authority in relation to franchises. Some time after the franchise process was supposed to have begun, considerable confusion still exists about who will get which franchise, under what conditions, and what will be delivered in return. If the SRA is not able to demonstrate a clear plan, it is difficult to see how it will award franchises. If it does not know what it wants of the railway industry, how can it say what it wants individual franchises to deliver?
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When Stagecoach was re-awarded the franchise in the south-west, some of us felt that if that was the answer, it must have been a strange question. In many instances there is considerable confusion about the development of franchises. Railway companies and passengers are unclear about where we are going and what is required before a franchise can be awarded. I sympathise with my hon. Friend the Member for Stroud (Mr. Drew).
Many passengers will be worried that those companies that have not acquired new rolling stock, improved their services or delivered good facilities will nevertheless be considered for franchises on the basis of arrangements that will be unclear to those of us who use the service. Such arrangements may leave the travelling public dissatisfied.
If I may digress for a moment, it is extraordinary that those of us who suffer on the west coast main line, where one is unable to catch a train that arrives anywhere near to timetable, will be asked to pay a 10 per cent. fare increase. There are few industries in the United Kingdom in which one could get away with cheerfully saying to one's customers, "I don't bring you the goods you want at the time you want in the way you want or in the place you want, but I shall now charge you 10 per cent. more for the privilege of using them." Virgin ought to bear that in mind. Some train companies have confronted that issue, but the west coast main line is still suffering.
So what are we suggesting? When the Committee examined the question of rail investment, it became clear that we have an extraordinary dichotomy at the centre of the system. Under the privatisation legislation, Railtrack was clearly never meant to be put into private ownership. It was meant to be the core of the system. All the private companies around it were supposed to operate on a different basis that allowed them to raise capital on the open market, which should have allowed them to deliver much higher standards than British Rail. However, the last-moment decision to throw the whole system open to private ownership caused enormous difficulty.
The only way in which Railtrack can obtain money is from the taxpayer. Although that money comes through the train operating companies, it is still our money. That is not a barrier to efficient working, but it does mean that train operating companies have special responsibilities, which they are not fulfilling. Following recent traumatic incidents, they have not shown sufficient vigour, clarity of vision or commitment to change to restore confidence in their ability to provide high-quality services. There has been no clear plan for training and no obvious confrontation of the fact that many of the plans that they put into operation did not provide the quality of service that was needed. There does not seem to have been clear monitoring of the management systems of their contractors or the people employed by their contractors. All those are essential if Railtrack is to operate effectively.
When the Committee pointed out that the Government must ensure that there is a genuine transfer of risk to the private sector in contracts reached with private sector partners, it was underlining something about which many people feel strongly. There is no logic in transferring assets to private companies on the assumption that they will shoulder the risk in the market and raise large sums of capital to provide better-quality

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services if, when it comes to the point at which they need to do such a thing, it is found that they must return to the Government and say, "We are terribly sorry. We are unable to do what we promised to do in the first instance and we want you to underwrite all our losses."
Many of us believe that Railtrack would not be where it is today in the City if it did not receive such Government support. It is because City firms believe that it is the taxpayer who coughs up for basic services when real difficulties arise that Railtrack enjoys its current share price. Frankly, that leads to the worst of all worlds. Railtrack is not being supported by the private sector, but nor is it receiving input from the state sector. With such input, there would be no need for a large return on assets before money is put into the system. Railtrack is being reduced to an enormous, muddled compact between Government and private industry that is not working and seems incapable of providing the future that we demand of a truly modern rail system.
Wherever one goes in the European Community, and whether one considers high-speed trains or freight, one finds that large amounts are spent on transport. It is clear that most highly industrialised countries accept that an efficient railway system is fundamental to their economies. Without it, people and goods are not moved efficiently, profits are not made and countries do not develop as nations, yet many years after the creation of a railway system that is essential to our future, it remains unclear what the situation in this country will be in, say, 10 years' time. Although the Government have provided the opportunity and support necessary to produce a modern railway system, confusion reigns among companies, the Government and passengers. Frankly, that is not acceptable in the new century.
The general public are not prepared to continue to accept such chaos. They were told that, after a period of discomfort, there would be new rolling stock, new facilities and new and better railways. They will demand that those facilities be delivered, bat the point is that Railtrack is not delivering. It has not carried out even the elementary maintenance work for which it was created. It cannot expect to continue to enjoy the support of passengers and the Government unless fundamental changes are made. Perhaps the appointment of a particular director will have an effect, but in my view we have reached a rather more basic stage. The taxpayer is spending a fortune on a company that is manifestly not doing its job.
If Railtrack were forced to answer for its actions on the open market, in the manner of most private companies, it would be bankrupt. We must seriously consider alternative plans. If taxpayers are to pay, there should be delivery of goods and services at the level that they expect. If they continue to pay and pay and yet receive inferior service, their anger will increasingly be a matter for their elected representatives, rather than for the individual companies concerned.
This Government are the first to have sufficient guts and ability to try to confront the problems of the railway industry. It is no use stopping halfway along the line and saying, "We'd like to get to Crewe but unfortunately we've finished up in Birmingham."
10.14 am
Mr. Peter Snape: Hon. Members will be grateful to my hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) for the opportunity to debate this important subject, although the debate has not proved particularly enlightening, in that we seemed to have gone round and round in circles. Bashing Railtrack is dead easy. It is true that it is not undeserving of a good bashing, but a discussion that is long on problems and short on solutions will not take us much further forward. The only solution of which I have heard apparently involves the renationalisation of Railtrack.
I must declare an interest in that I worked in the railway industry for some years before being elected to Parliament, and I am still a member of the National Union of Rail, Maritime and Transport Workers. Until 31 December last year, I was chairman of a major National Express subsidiary. I therefore have some experience of the nationalised railways. Although I did not work on the railway side of National Express, my colleagues left me in no doubt about what life had been like trying to operate in a privatised—perhaps, having listened to my hon. Friend the Member for Stoke-on-Trent, South, it would be more accurate to say semi-Privatised—environment since the Railways Act 1993 was passed under the previous Government.
The flaw that I find in the debates that we have on the Floor of the House and in Westminster Hall is that we are bereft of any solutions other than demanding that the Government, having put money in, should assume control of Railtrack. I have bored the House on many occasions with stories of what life was like when the Treasury ran the railway industry. Whether under Conservative or Labour Governments, Treasury control did not lead to happy bunnies in the industry, and certainly did not create an industry of which the nation at large was massively proud. We are in danger of creating a myth that the publicly owned railway industry was part of a golden age in which all the staff walked round with smart uniforms giving cheery responses to members of the public, and all the trains ran on time. That was not my experience when I worked on the railways. Year after year, and decade after decade, the amount of investment that the Treasury decided to make available to the railway industry was always inadequate for the job that needed to be done, certainly in so far as modernisation was concerned.
There was one exception to that rule. In 1955, the Government—a Conservative Government, funnily enough—accepted a modernisation plan that was subsequently implemented by both Conservative and Labour Governments. We were rather distracted during the period of its implementation by the plans of Dr. Beeching, some of which came to fruition and some of which fortunately did not. Many of us who worked on the railways at that time were frankly incredulous at some of the decisions that were made when the investment tap was, for the first and only time, turned fully on. I remind hon. Members that with cash that is provided by the Government via the Treasury comes a certain degree of control as to how it must be spent. During the implementation of the 1955 modernisation plan—which was not completed until the late 1960s and early 1970s—a great deal of public money went into the industry, and the Treasury saw to it that everyone got to

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dip in the gravy. Consequently—I speak from memory but, I think, fairly accurately—there were no less than 33 different types of diesel locomotives, none of which were compatible with each other and many of which ended up in the knacker's yard within a decade because they were no good. Conservative and Labour Governments were equally guilty. As a result of their desire to see the money spread properly around the country, many of the decisions that were made, apparently with good reason at the time, turned out to be disastrous—certainly from the taxpayer's point of view.
I cannot honestly think that renationalising Railtrack—as my hon. Friends the Members for Crewe and Nantwich (Mrs. Dunwoody) and for Stoke-on-Trent, South apparently want to do—would lead to the kind of rail industry that they and I want to see. The one advantage of Railtrack being a private company is that it has access to money that is not from the Treasury. I realise that much of the money that it obtains, and plans to obtain in the near future, comes from the Treasury. Perhaps my hon. Friends believe that £1.5 billion will be sufficient to modernise the rail industry, but I very much doubt that. It remains to be seen whether Railtrack, given its new remit and new chief executive, will be able to accomplish the tasks before it. Continual attack on the present structure of the industry is not helpful. As my hon. Friend the Member for Stoke-on-Trent, South said, the last thing that many of the industry's workers want now is yet another reorganisation.
A prominent railway manager, who was fired for writing a book on the difficulties of railway operation in the 1960s, Gerry Fiennes, made the immortal comment that every time we reorganise, we bleed. The railway industry has been reorganising and bleeding for far too long. Concentration on reorganisation at the expense of passenger and freight services is one cause of low morale, although the barmy privatisation rushed through by the previous Government did not help.
Mr. Stevenson: My suggestion that the Government, through the SRA, should be the majority shareholder in Railtrack, was first proposed by Railtrack itself.
Mr. Snape: I do not want to be rude to my hon. Friend, but he cannot have it both ways. He spent most of his speech, understandably, attacking Railtrack and its managers. Now, he has isolated one statement that those managers made and said that they were right on that occasion. I think that they were wrong, because they made that statement for all the wrong reasons. They handled the company extremely badly, and made that suggestion as an escape route from their mishandling.
I am not sure whether any Minister as talented as my hon. Friend the Member for Streatham—albeit, if I may say so, a little unfortunate in the past few days—wants to accept responsibility for everything that goes wrong within Railtrack. Inevitably, things sometimes go wrong in a large organisation. If we are to get enough money into the industry to enable it to be successful, which we all want, a mixture of private and public cash is, in my opinion, the only way forward.
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The debate is about railway investment, but I will spend a couple of minutes touching on other aspects of the industry that also give cause for concern. Many TOCs have arranged to lease new trains. We should not fall for the propaganda of some of them about how much they are spending on those trains because the vast majority of the trains are leased. Although that is relatively expensive, the cost of the trains is borne by companies such as Angel and other leasing organisations.
There is a problem in getting many of the trains into service. It is disgraceful that so many new trains are lying in sidings up and down the country waiting for safety cases while passengers struggle on old, in some cases, slam-door rolling stock. Others that have had safety cases have been so poorly put together that they do not work. We have heard understandable screams of anguish from TOCs throughout the country that have had to take such trains out of service a very short time after introducing them, because the trains were not up to the job for which they were designed.
I am tempted to say that that never happened when British Rail Engineering built the trains. It certainly did not happen as often. The total collapse of investment in the railway industry in the run-up to privatisation is now reflected in the infrastructure and in the quality of new trains being introduced. In the last five or six years of British Rail, nothing but emergency routine maintenance was done to the tracks and no new rolling stock was ordered. That resulted in the virtual collapse of our indigenous railway manufacturing industry and a dependence on rolling stock manufacturers based abroad. The fact that manufacturers are based abroad does not necessarily mean that they are not up to the job, but that hiatus in the supply of rolling stock led to many of our current problems.
Those of us who take part in these debates are a fairly restricted group, and those who listen to them either on the Floor of the House or here must be thoroughly depressed and sick of the sight of us. However, we have one thing in common: we all want to see a better railway industry in the future. How best to make that happen is a matter that only the Government, Railtrack and the train operating companies can decide.
The last anecdote that I shall probably relate during my undistinguished parliamentary career will be one that my hon. Friend the Minister has heard many times before. I tell it only because on Friday I shall be going back to the signal box where I started my railway career in 1957 with a TV crew who want to show how I have fallen badly from grace from being a railway signalman to being a Member of Parliament. When I went to work as a 15-year-old train recorder in 1957, I was told that the signal box was about to be swept away in the west coast main line modernisation programme. The fact that it will still be there on Friday will, I hope, do something to undermine the case of my hon. Friend the Member for Stoke-on-Trent, South, notwithstanding the respect that I have for him. If the Treasury could never find the money in 50 years to shift Edgely junction No. 2 signal box, which was built by the London and North Western railway in 1888, I cannot see it happening at any time in the future. The job of all of us who care about the railways is to get the best deal possible for the industry. Flawed and fragmented though the present structure may be, we should try to make it work properly.
10.26 am
Mr. Tom Brake: I congratulate the hon. Member for Stoke-on-Trent, South (Mr. Stevenson) on securing the debate. He set out the challenges facing the industry and suggested possible solutions to the problem. The past decade or so has been relatively good for the railways, in spite of one former Prime Minister's fixation with the motor car. Passenger journeys have risen from 738 million in 1986–87 to 892 million in 1998–99, which is the last period for which figures are available. Investment has involved big sums of money—a total of £34.3 billion in the period 1991 to 2001 and, it is promised, £54.5 billion in 2001–11. That all sounds very impressive, but it is worth looking at some historical background.
I shall not go back as far as 1955 because I have no recollection of what happened then, but let us consider what the Labour party said in opposition. In 1993, the current Deputy Prime Minister said that the Tory rail privatisation Bill was driven by ideological dogma and that it commanded no support from experts or the public. I imagine that that comment is still quite fresh in the minds of hon. Members. The Guardian reported the right hon. Gentleman saying that the proposed privatisation would
"make the railway system less safe…reduce services and investment, drive up fares and force freight traffic on the roads."
Mrs. Dunwoody: He was not wrong.
Mr. Brake: Indeed. The Labour party maintained that stance throughout the passage of the Railways Bill and during the first few years after privatisation, and the now Deputy Prime Minister pledged to take Railtrack back into public hands. The 1997 Labour manifesto admitted that rail privatisation
"made fortunes for a few, but has been a poor deal for the taxpayer".
Despite that recognition, there was a policy U-turn, and the commitment to renationalisation was removed in favour of setting up the Strategic Rail Authority. The manifesto had nothing to say on the subject of safety, which was Labour's prime concern back in 1993.
I shall comment briefly on the Tories' position. I thought that the absence of any Tory Members at the beginning of the debate had to do with the shame that Conservatives felt about the state in which they had left the railways. Tom Winsor commented:
"Railtrack was privatised with a fantastically weak licence, weak contracts and a poor financial regime that did not give it an adequate regime for investment."
Hon. Members will know that Gerald Corbett, the former chief executive of Railtrack, said:
"The railway was ripped apart at privatisation and the structure that was put in place was a structure designed, if we are honest, to maximise the proceeds to the Treasury."
It is not exactly a good way of improving the railways to focus only on the proceeds to the Treasury. To give the Conservatives some little credit, it is true that they have now accepted that perhaps their railway privatisation has not been terribly successful. They have conceded that the
"system was made into too many different companies."
What Labour Members said in opposition is not nearly as interesting as what has happened since they came to power. We know that between 1997–98 and 1999–2000,
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there was a 25.6 per cent. reduction in the rail subsidy paid by the Government to the train operating companies. That is projected to continue to fall in the next couple of years. The subsidies were set up under the franchise agreements of the previous Tory Administration. The 10-year transport plan, which I say now that I welcome, to avoid criticism that I am carping, outlines the £60 billion that the Government will be spending on the railways.
The franchise replacement programme will be underpinned by extra Government funding, which is necessary as everyone accepts that the franchises were designed to deliver a basic service, to enable bidders to come forward. If the targets were too stringent, no bidders would have applied. Money has also been set aside for a rail modernisation fund.
The plan for the Strategic Rail Authority was originally to be published in May 2000, and it is now likely to appear later in the autumn, having been delayed in the aftermath of Hatfield. There are delays in the review of franchises and track access charges, with only two of the 18 new franchises having been decided so far. That is causing major delays in the investment plans of rail companies. The award of the franchise to GoVia, which is due to take over from Connex South Central is a subject that is close to my heart as well as to the Minister's, as we are commuters using the same service. The franchise process is complete and GoVia is supposed to be running that service, but it has not taken over yet. Perhaps the Minister can say when that will happen. I understand that negotiations are still taking place. The staff of Connex South Central believe that the company will run the service right to the end of its franchise, which will last another two or three years, but I hope not.
It is claimed that more will be spent on the railways in the next 10 years, but it is clear that no more public investment will be made. The amount of investment will be lower than in the final years of the Conservative Administration. The crucial issue is how much private money the Government can lever in. It is only through private money that the promised investment of £54.5 billion will flow to the railways. Is there any evidence so far of a railways renaissance? Very little, according to the latest edition of Rail, which I suspect some Labour Members read regularly. An article entitled "A new railway? Sometime … we hope … perhaps … maybe …" contains interesting quotes that reflect the views of key players in the railways industry. The EWS, for example, says that
"40 per cent. of current railfreight is at risk of returning to road haulage"
because of
"44-tonne lorries, reduced excise duty and a standstill on fuel duty."
The chairman of the Rail Freight Group says that
"the SRA's Agenda for Growth"
is
"an 'upside-down approach' because the final document will not be produced until after the main passenger franchises have been agreed."
Everything referred to in the article is running late, and I am not talking about the trains. Railtrack's network management statement has been delayed; the

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SRA is apparently not committed to delivering a single project before 2005; and the strategic plan, which is due in October or November, is running a year late. If we analyse Railtrack's network management statements, we find that the deadlines for the completion of urgent projects have been missed wholesale.
What is the solution to the crisis that the industry faces? First, the regulatory system must be simplified. The SRA is pushing the case for rail, and we would like the other aspects of transport to be integrated under a sustainable transport authority. We would ensure that that authority took the lead in using public investment to secure partnerships with the private sector. That would not necessarily involve Railtrack, and that model is beginning to emerge.
We favour a demerger of Railtrack. In practical terms, that would mean that a not-for-profit company ran the infrastructure—the track, signalling and power supplies. We and some Labour Members have suggested such a model for other modes of transport. We could achieve that by negotiating with Railtrack. Given the position that it is in, it must recognise that it is unable to do the jobs that are being asked of it, whether on-going maintenance or more innovative projects. If necessary, we could ask the Competition Commission to review Railtrack's activities. We certainly approve of simplifying the structure of the railway system and reducing the number of franchises. There are good grounds for encouraging Railtrack to pass on responsibilities for infrastructure renewal to the train operating companies, some of which have expressed an interest.
There must be scope within the newly negotiated franchise for further control over fares if we are to prevent dramatic increases such as those made by Virgin, which have, unfortunately, not been matched by any improvement in service. We support the recommendations of Lord Cullen's inquiry and would favour setting up an independent accident investigation body of the kind that exists for air travel. There is also scope for significantly increasing the amount of freight that goes by rail.
We have heard solutions from different quarters. We clearly agree on one issue. The system is not working, and the Minister will have to respond to that concern. The Government are under siege over transport—
whether it is rail, air or tube. The lessons that arose out of the privatisation of the railways do not seem to have been learned. The tube is due to be partially privatised, possibly within the next 24 hours, against the opposition of all Londoners—and, for all I know, even of the Minister. We all know what has happened to air traffic control. The Government have one more opportunity to make their mark on transport. Their success at levering in private money and improving reliability will determine whether the likes of the Minister will retain his ministerial limousine or have to swap it for a bicycle.
10.40 am
Mr. Geoffrey Clifton-Brown: I congratulate the hon. Member for Stoke-on-Trent, South (Mr. Stevenson) on securing this interesting debate. It has already revealed division among
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Government Back Benchers on the future management of our railways. The problems that we face today are partly the result of muddle and confusion having been translated into the Government's strategic thinking on how to run the railways.
Mr. Snape: Will the hon. Gentleman give way?
Mr. Clifton-Brown: I will happily give way to the hon. Gentleman, because his speech was one of the most sensible.
Mr. Snape: I am condemned now. Would the hon. Gentleman prefer us all to be obedient Blair babes, or should we speak our minds?
Mr. Clifton-Brown: I am delighted that the hon. Gentleman is here. He has huge experience of the railways and brings a great deal to the debate. I am not sure whether he is standing for re-election.
Mr. Snape: I am not.
Mr. Clifton-Brown: He will be sadly missed by the House; we need People like him with a depth of knowledge. His anecdote about the signal box demonstrates the failure of Governments of all colours to bring our railways up to a satisfactory, modern standard. I am sure that he will have seen privatised railways throughout the world working satisfactorily—for example, in Hong Kong. Such companies can lever in private finance and go from strength to strength.
The Government's lack of strategic thinking has led to confusion and muddle for Railtrack, which has not been able to retain the confidence of its investors and has lost share value. We should get away, once and for all, from the continual, bickering call to bring it back into public ownership. The Government have had four years in which to do so. The Minister may tells us differently this morning, but the Government obviously do not want to bring Railtrack back into public ownership. They should state that clearly, and concentrate on their 10-year strategic plan, so that Railtrack and the other parts of the railway industry can bring in more private investment.
The Government inherited a railway system in which passenger numbers, freight traffic and investment were all increasing. Public investment has decreased from £1.8 billion in 1997–98 to £1.6 billion in 2001–02, yet private investment has gone up during that period from £1.2 billion to £3.7 billion. We have heard a lot of criticism of the railways this morning, but some excellent things are going on. For example, Angel Trains, in conjunction with Stagecoach and Siemens, announced in March a £640 million deal for new rolling stock for South West Trains, which could eventually be worth well over £1 billion. That is a significant sum of money, and it should be welcomed by everyone.
We have had one or two unfortunate incidents on our railways, which have highlighted the confusion and muddle. The Prime Minister visited the scene at Hatfield, and said that everything would be all right in the new year, and yet even after Easter, we are still suffering chaos and are not back to normal. The hon. Member for Stoke-on-Trent, South said that Railtrack's

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price was going up and down like a yo-yo. That points to what has been going on in our rail system. He said that we should take part of the shares in Railtrack back into public ownership, but did not really explain how that would be done. I do not think that it is a sensible way forward.
The hon. Member for Crew, and Nantwich (Mrs. Dunwoody) said that we could not carry on as at present. She criticised several aspects of Railtrack's running of our railways but, with gnat respect to her—she has huge knowledge of the railways—I must point out that she did not suggest a strategic way forward. The hon. Member for West Bromwich, East (Mr. Snape) clearly said that we should not bring the railways back into public ownership. That must be right. Let us try to give Railtrack some hope and a strategic way forward. The Government, working with Railtrack, should come up with some proper targets, and should encourage Railtrack to meet them, rather than penalise it to ensure that it does so. Our infrastructure should be improved and run more safely. Signals should not be passed at danger and rails should not crack, because they should be improved and maintained to some of the best standards in the world, rather than some of the worst.
Since privatisation, the New York underground is considerably better than our public underground in London. That is the way forward. I wholly accept the plea made by the hon. Member for Carshalton and Wallington (Mr. Brake) that we should simplify the running of our railways. Since the Government came to power, all sorts of different regulatory, safety and other bodies have tried to tell Railtrack what to do. We have ended up with greater confusion than we had when we started.
We ask for clear, strategic thinking from the Government and their regulatory and safety bodies. We want to go forward into the 21st century with a modern railway system that befits the world's fourth biggest economy, not one that befits a third world economy and would be more suited to the century in which railways were invented. It is high time that our sophisticated country was able, with proper investment and infrastructure, to produce a railway system that can cope with a modern economy, that it transports many people swiftly around the country on time in reliable trains, and that carries an increasing amount of freight. We all want that, as it would befit a modern economy, and be good for the environment and our people. We look forward to the Government producing a plan to deliver those results, or giving way to a Government who can do so.
10.47 am
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Keith Hill): Let me begin by congratulating my hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) on securing the debate and on the informed and reasonable way in which he made his case. I am also grateful for the contributions of my hon. Friends the Members for Crewe and Nantwich (Mrs. Dunwoody) and for West Bromwich, East (Mr. Snape), and those of the hon. Members for Cotswold ( Mr. Clifton-Brown) and for Carshalton and Wallington (Mr. Brake). They all provided insights on this important subject.
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The debate has brought together great expertise, including that of both my mentors and gurus on transport as well as parliamentary matters. I pay an especially warm tribute to my hon. Friend the Member for West Bromwich, East, as this debate is likely to be his swansong in the House.
I want to talk about the positive developments in the railway industry, the new beginning that we have made with Railtrack, and the exciting employment prospects opening up in the industry. First, I shall deal with specific issues of ownership that several colleagues raised. Directly or by implication, my hon. Friends the Members for Stoke-on-Trent, South and for Crewe and Nantwich referred to the Select Committee's recommendation that the Government consider taking a majority equity stake in Railtrack, or taking Railtrack back wholly into public ownership. As they are well aware, my right hon. and noble Friend the Minister for Transport explained the Government's reservations about such proposals to the Committee.
Renationalisation would probably take a couple of years and involve complex and controversial primary legislation. During that time, the industry would effectively be paralysed. The initial costs to the taxpayer would comprise not only Railtrack's market capitalisation of around £2.5 billion at the current stock market valuation but £4 billion of debt liabilities. None of that money would buy additional rail investment. It would all go towards compensating shareholders and funding the company's debt. Renationalisation would also involve the public sector in directly funding Railtrack's investment. The additional debt through which the company currently plans to finance its activities would become public sector borrowing.
I share the conviction of Labour and Opposition Members that serious mistakes were made in the privatisation process. However, after years of fragmentation and instability, the answer is not yet more upheaval. What we now need is evolution rather than revolution, especially when the revolution would be at enormous cost to the public purse and deliver nothing directly in improved rail services.
It has been argued that the public money going to Railtrack should generate an equity stake. However, the money that the Government will be paying Railtrack, in renewal grants for the west coast main line, for example, is to meet the cost of improvements to the network. An equity stake would have to be paid for on top of that money, and it is not clear what the taxpayer would get in return for the extra cost beyond a right to dividends.
Mrs. Dunwoody: Will the Minister tell us exactly what Railtrack has already received in moneys brought forward and under recent arrangements?
Mr. Hill: I think that my hon. Friend is alluding to the £1.5 billion in funding for Railtrack that was brought forward on 2 April. I hope to dwell further on that and the benefits that it will confer in terms of infrastructure renewal.
Let me continue by responding to the proposal made by the hon. Member for Carshalton and Wallington that Railtrack should be converted into a public not-for-profit stakeholder trust. There are serious drawbacks to that idea. The first is that the taxpayer would have to

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foot the bill for buying Railtrack. The second is that a public trust's spending would be public expenditure. The trust would have to fund all its investment from public resources—potentially trebling the public expenditure cost of enhancements. We believe that the money would be better invested in education and health, where there are no alternative sources of funding.
The Government believe that renationalisation or the purchase of a large and costly public equity stake in Railtrack is not necessary to ensure that the company meets its public service obligations. We need an appropriate framework of incentives and regulation, within a coherent strategy of public-private partnership for the railways and our transport system as a whole. The 10-year plan provides the broad framework. The Strategic Rail Authority assumed its full powers in February under the Transport Act 2000. Within the framework of the plan the authority has published its strategic agenda and will publish its strategic plan later this year.
We have appointed a tough rail regulator to ensure that Railtrack delivers on its licence requirements and does not abuse its monopoly position. His periodic review, published last year, greatly increased not just the rewards to Railtrack for good performance but the penalties for poor performance. The regulator is rigorously enforcing Railtrack's network licence obligations. He has proposed seven new licence conditions. They include the key requirement on Railtrack—strongly endorsed in the Committee's report—to establish and maintain an asset register and make it available to other key industry players. A further proposal covers the establishment of a code of practice for Railtrack's dependent customers—also a recommendation made by the Select Committee. Railtrack has also made a commitment to appoint a new public interest director to its board. This strengthening of the Railtrack board demonstrates the company's recognition of its special public role.
This has been a most useful debate on rail investment, the subject of the recent very thorough and well-researched report of the Environment, Transport and Regional Affairs Committee. The Government will give the report the careful consideration that it deserves and will respond in the usual way to its many important conclusions and recommendations.
Rail investment is an area of public policy of considerable complexity, but on the whole the picture is very encouraging. Passenger and freight use of the railway system has grown strongly. Passenger journeys are up 20 per cent. since 1997, and freight volumes have grown by 22 per cent. The 10-year plan for transport looks forward to further growth of 50 per cent. in passenger use and 80 per cent. in freight volumes. Huge investment is needed to accommodate that growth, to secure the improvements that we require in the safety and quality of rail services, and to make up for past under-investment.
Since 1997, rail investment has doubled. Nearly 2,000 stations have been improved and 17 new stations built. There are 50 new freight terminals, and more than 3,000 new vehicles have been introduced. The 10-year plan for transport set out the Government's view of the rail investment that will be needed to support our objectives
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for a rail renaissance. We also set out our view of the public funding that would be needed to support that investment and our intention to make that funding available. We estimated that £49 billion of investment would be required in total; £15 billion of public investment expenditure would lever in £34 billion of private investment. That is part of an overall plan for transport involving £180 billion of public spending and private investment.
Mr. Brake: The Minister will be aware that GoVia intends to increase services in south-west London by 30 per cent. It will achieve that by stopping direct services to Victoria or London Bridge. I am sure that it has similar proposals across the south of England. How will he ensure that the increased investment that he talks about will deliver the services that commuters want, as opposed to delivering what the rail companies want?
Mr. Hill: The hon. Gentleman is right. He and I share a common constituency concern about the efficacy of services to be delivered in due course by GoVia as a result of its acquisition of the Connex South Central franchise. It is precisely the role of the Strategic Rail Authority to supervise specific proposals that are being put in place. I have confidence that it will discharge that task. It is an open and accountable body, to which he and I, in our various capacities, can make representations.
In the brief time remaining, I want to speak about the human resources implications of the 10-year transport plan. I especially want to draw the Chamber's attention to the enormous employment implications of the Government's transport programme. The £180 billion plan is expected to create at least 60,000 new transport-related jobs, many of them in manufacturing and construction. The Government are determined to ensure that British companies can win that work by competing on expertise and price.
Recently, rail companies have had to import specialist welders and engineers from northern Europe, and signalling engineers from eastern Europe, to meet the demand for skilled labour. Shortages of train drivers are disrupting schedules in some areas. Action is now under way to recruit and train people to run the expanding rail system. The Department for Education and Employment, working with my Department, the SRA and other key stakeholders, has created a framework action plan to help push skills further up the agenda of the rail industry. The plan was unveiled by the DFEE last week. It is a balanced package that aims, among other things, to raise employer commitment to skills, to overcome obstacles to recruitment and labour supply, to improve training, and to improve skills and quality through externally validated qualifications. The plan focuses on several key occupations that the industry has identified as critical, including drivers, signalling and track maintenance engineers, middle management, graduates and professional staff.
For transport as a whole, the Department of the Environment, Transport and the Regions, the Department for Education and Employment, the Department of Trade and Industry and the devolved administrations, with Trades Union Congress involvement as appropriate, aim to meet in the near future to ensure that the 60,000 jobs created can be

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filled. We shall involve the new job transition service, to link available opportunities in transport to those affected by redundancies. I know that that will be welcome news to the Select Committee, which drew special attention to its concerns about skills shortages in the railway industry.
I am grateful for the support that has been warmly expressed today for the 10-year plan. April was the first month of its operation. With the progress that is now being made on refranchising, on the channel tunnel rail link and on the relationship with Railtrack, it was a good new beginning for the railways.

HIV-AIDS
11 am
Mr. Andrew Robathan: I am delighted to have the opportunity for this debate. It was prompted particularly by the third report of the Select Committee on International Development, entitled "HIV/AIDS: The Impact on Social and Economic Development". I commend that report to the House and to those outside the House. I had a part in it, and I congratulate the support staff involved and, in particular, the Clerk of the Committee, on writing it. It is an excellent report and deserves wider publicity than it has had so far.
What we are to discuss today is arguably the biggest disaster facing the human race. It is a crisis and a catastrophe and, to a large extent, it is not understood in the developed or the developing world. Last year the International Development Committee returned from South Africa and Mozambique having seen floods, among other things, and having witnessed the enormous AIDS problem confronting southern Africa. I asked my then research assistant, an extremely intelligent and well-informed person, what he knew about AIDS in Africa. He thought for a moment and said: "I think it is quite a problem, isn't it?"
I am afraid that that is typical of the reactions of people in this country, although that is changing to an extent, perhaps since the Durban conference last year. Yesterday I received an invitation from Christian Aid to a reception at the opening of Cold Heaven, an exhibition by Don McCullin on AIDS in Africa. Don McCullin, who is one of the world's leading photojournalists, said:
"I wanted to photograph the AIDS situation because the western world in which I live seems to have no interest in it".
In this country HIV-AIDS is still largely thought of as a disease of drug addicts, homosexuals and haemophiliacs. That was true in Britain to begin with, but has been changing dramatically. Indeed, in 1999 for the first time heterosexually acquired cases of HIV exceeded gay HIV infection. That was quite a milestone in HIV-AIDS in this country. I see that the hon. Member for Walthamstow (Mr. Gerrard), who chairs the all-party group on AIDS, is present; it was at a meeting of that group that I heard information from a document entitled "Informing Policy", by the African HIV steering group. The document stated that in the first quarter of 1999 Public Health Laboratory Service figures showed that heterosexually acquired HIV infections, of which Africans made up the majority of cases, outstripped transmissions among gay and bisexual men. Referring to African communities resident in Britain, the document stated that there was an infection rate of one in 28 for men and one in 18 for women born in Africa.
That is the crux of the matter. In the United Kingdom as a whole, HIV prevalence is about 0.11 per cent. and 450 people died from AIDS-related disease in 1999. In some countries in Africa the prevalence rate is more than 25 per cent., and in sub-Saharan Africa in 1999 more than 2.2 million people died from AIDS-related diseases. That is some 200 times the UK rate.
The disease is wreaking havoc in the developing world, especially in sub-Saharan Africa. In Zimbabwe and South Africa it is a catastrophe unlike anything

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since the second world war. In 1998 the International Development Committee was in Uganda. At dinner I sat next to a Minister who had just attended the funeral of the fifth of his wife's siblings to die of AIDS. Although it is an extraordinary thing to imagine, such circumstances are replicated in many, many families throughout Africa.
That man was obviously educated, and the problem can be disproportionately serious among educated people because it is related to travel. If one stays in the same place the whole time, without meeting many people from elsewhere, the virus is not spread. The infection is often contracted when one travels for education or work, as do many miners in South Africa. It can, therefore, have a disproportionate impact on the number of teachers or doctors in a county, although it could be said that such people should be better educated and aware, and therefore, perhaps, less prone to the infection.
There are already 13 million AIDS orphans in Africa, 95 per cent. of them in sub-Saharan Africa. That approximates to one quarter of the population of the United Kingdom; to put it another way, it is like finding that every person in Norway and Sweden had been orphaned by AIDS. Life expectancy in some countries of the developing world is dropping remarkably. In 1996, life expectancy in Zambia was 48.6 years. God knows, that is low enough. It fell, however, to 40.1 years by 1999. In the UK, life expectancy is more than 80 years.
Development, which was progressing in the second half of the 20th century, is starting to go backwards. There are more poor children. Many orphans are unable to go to school, perhaps because, as their parents are dead, they have to stay at home to look after siblings. Money is directed at the care of AIDS patients and away from other health areas. Diseases such as tuberculosis are very much on the increase because of AIDS. All that affects development. Poverty is greater. As we all know, the aim of DFID's policy is to reduce poverty in the developing world.
Such countries' economies are suffering. Our report examined that to a certain extent, but we are seeing only the beginning of it. Some work forces are literally dying and markets are getting poorer because there is less money in the market to buy goods. Investment that would have been channelled to some sub-Saharan African countries might now be channelled elsewhere, although that has yet to be determined. Agricultural production has also been reduced because of the number of deaths.
Some in the western, or developed, world might say, "That's all very sad, but it doesn't affect us directly", but political instability and possible social collapse and conflict are likely to arise. At a basic level, we could ask why people who are dying should obey the law. Also, in an earlier report that looked into the causes of conflict, we found that conflict and poverty are inextricably linked. It is self-evident that prosperous societies tend not to go to war in the same way that poor societies do.
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Greater instability in the world would be detrimental to us as well as to other countries. The United States has declared the epidemic a national security threat.
Mr. Andrew Rowe: My hon. Friend paints an accurate picture of the appalling situation. As some infections, such as TB, get out of control in sub-Saharan Africa, they are mutating into forms that convey considerable risks to people in more prosperous parts of the world. Does he agree that that is a further repercussion for the developed world?
Mr. Robathan: I agree with my hon. Friend. That is why it is so important that the western, developed world appreciates the huge scale and pandemic nature of the crisis.
We found that HIV and AIDS are exacerbated by poverty—owing to health care problems—and, at the same time, exacerbate poverty. That can become a vicious circle leading to greater conflict. It is an awful problem.
Dr. Jenny Tonge: Before the hon. Gentleman leaves the causes of conflict, was he as puzzled as I was that the cross-departmental report on the causes of conflict in Africa, which has just been published, makes no mention of the AIDS crisis?
Mr. Robathan: I confess that the hon. Lady has the advantage over me, as I have not read the report, but it is self-evident that the AIDS crisis plays a part. In Ethiopia and Sierra Leone, for example, there is evidence that AIDS is being spread rapidly by the conditions of conflict.
Botswana has the worst adult prevalence rate in Africa: 35.8 per cent., or more than one in three. Last month, I went to a meeting attended by the President of Botswana. His big plea to the UK and the developed world as a whole was for us to try to understand the impact of AIDS in his country and the effect that it is having in every nook and cranny of its national life.
The first purpose of this debate is to increase awareness and understanding. The need for that has recently been illustrated by coverage of the dispute in South Africa about anti-retroviral drugs and the patent case brought by pharmaceutical companies. However, although the issue of the production of generic drugs is important, it merely scratches the surface, because in most of sub-Saharan Africa there is no health service to distribute such drugs and there are insufficient doctors and nurses to educate people about how to take them. Moreover, even if the cost of the drugs is reduced by a factor of 10, they are still too expensive to distribute to the millions of people who have the disease. I am glad that the pharmaceutical companies have dropped the case, but that will not have an impact on the big picture that I shall describe.
Not only is the problem huge, but it may be getting worse. In some countries, good policies appear to have stopped the rise in prevalence rates, but in other countries there is no evidence of that. Although infection rates are uncertain, there is a real worry about countries such as India and China. Recent newspaper reports suggest that the prevalence rate in China—which was until last year the world's most populous

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nation—is a great deal higher than the authorities would have us believe. We have little knowledge of what is happening in China, but awareness is as important there as it is anywhere else.
The prevalence rate is still rising in much of Africa, but in Uganda it has been reduced. Having been top of the incidence rate for AIDS in 1993, it is now 14th. That is the result of good public policy. Uganda stands out as a beacon of hope in that respect. Its achievement was based largely on increasing awareness and understanding, causing behavioural change, and political leadership and education. The average age of first sexual intercourse has been increased by two years. That may sound like a paltry figure, but it is extremely important: it means that teenage boys are not having intercourse at the early age that had been customary. At the same time, male condom use has increased from 15.4 per cent. in 1989 to 55.2 per cent. in 1995—the most recent date for which I have figures. AIDS is not beaten in Uganda, but people there have started to turn the awful tide.
What can we do? There is a tendency to view such an enormous problem as insuperable, throw one's hands up in horror and have nothing to say. That would be wrong. We can help through education, and DFID does so, as it should. We have seen various schemes that DFID has assisted around the world. Development aid can be used to educate people and alleviate effects.
I remember visiting Kisumu high school in March 1998 with the hon. Member for Richmond Park (Dr. Tonge) and other Committee members and watching a rather good drama—a role play—about the dangers of AIDS, performed by teenagers. It was a shock to discover that, by the age of 19—I think that I am correct—over one third of girls and 8 per cent. of boys at that school are infected with HIV. At least education has begun, even though it may be too late and perhaps insufficient. Girls are more vulnerable because in some developing countries they are coerced into having sex at an early age, often by older men, and they are often raped. They are coerced by money and pressures from their family, and for understandable biological reasons they may be more susceptible to picking up the virus.
Education must lead to behavioural change, which is much easier to say than to achieve. We have heard the argument that the habits of some developing countries are cultural habits, that it is important that people have always behaved in a certain way and that it is not for people in the west to tell others that being profligate in their sexual favours is dangerous. The truth is that such cultural behaviour is leading to the death of cultures and the death of a large number of people. Greater abstinence and fidelity would assist, but that, too, is easier to say than to achieve. We have also heard about the practice of dry sex—I shall not elaborate. We are told that that is something imbued in the culture of various African countries, but it is assisting in the transmission of the disease. That issue relates to health. Bad hygiene and poor health care, together with a large number of sexually transmitted diseases, contribute to the spread of this ghastly disease.
Women's rights, human rights, the impact of conflict, which we have dealt with briefly, and the response from DFID, which I look forward to hearing, will be discussed later. The first step towards changing the
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situation, in which we can assist today, is understanding. In future, history books will be written about this plague, just as they have been about the black death. It is too easy to say that the problem is too big for us and that we cannot do anything. Africa's schools have been emptied of teachers, its hospitals emptied of doctors, millions of children are without parents and societies are in a state of collapse. AIDS is the new black death stalking Africa and the human race. I hope that today's debate will push the issue up the public agenda.
11.18 am
Mr. Neil Gerrard: I warmly welcome both this debate which has been initiated by the hon. Member for Blaby (Mr. Robathan) and the report by the Select Committee on International Development, which gave a balanced and thoughtful overview of the situation. The speech that we have just heard reflected the contents of that report. HIV is not just a medical problem; it reverses development gains in southern Africa, among other places. The spread of HIV in Asia and eastern Europe raises the prospect of development also being reversed in those regions. Without international action, the effects of the reverses will increase. I should like to focus my remarks on that issue.
I welcome the attention that the Department for International Development is giving to the issue and its promise of an HIV-AIDS strategy, which I look forward to seeing soon. However, there will be opportunities over the next few months for progress to be made and initiatives to be taken. There will be a special session of the United Nations General Assembly, in June, and a G8 summit, one month later, both of which will provide opportunities for the international community to start seriously to face up to the scale of the problem and to start to commit the necessary resources. An agreement in principle to set up an international fund was reached at the recent International Monetary Fund meeting. Whether that international fund will be of the required scale is debateable, but at least there are signs of progress.
I am concerned by how that fund might work and about whether there will be an appropriate international response to it. The hon. Member for Blaby referred to the court case in South Africa involving pharmaceutical companies. Concerns have been expressed in southern Africa about the approach taken by countries such as the UK and the US to that court case. Perhaps we were not seen clearly to support the South African Government's position.
In last week's International Development questions, my right hon. Friend the Secretary of State for International Development said she thought that the court case was ill advised. However, not much was said about the issue while the court case was in progress. Although the European Parliament passed a strongly worded resolution calling on the pharmaceutical companies to withdraw from the action, that position was not reflected in events in individual countries. Some activists in South Africa were disturbed by the impression—true or not—that the Government, and perhaps some other western Governments, were in the pockets of the pharmaceutical companies.
I agree with the hon. Member for Blaby that we must learn the lessons about the type of response that is necessary. Our response should not only be medical,

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because poverty reduction and education are other integral aspects of addressing the issue. In that context, I should like briefly to mention the consultation paper that the Cabinet Office performance and innovation unit produced, on 30 March, and which discusses in detail how such an international fund might be used.
The paper lists the following package of measures: a new global fund for health, including funds to purchase commodities and commitments to buy effective new products as they become available; tax credits to strengthen incentives for drugs donation and research; protection of intellectual property rights and support for tiered pricing; better co-ordinated publicly-funded research and development, including clinical trials support; streamlining drug approval and regulation; and action to strengthen and expand coverage of health care delivery systems. Looking at that list of six items, it strikes me that five of them concern drugs, medicines and medication, and that only one of them concerns the expansion of health care delivery systems. I am concerned that people in developing countries may think that the package contains a distorted set of priorities that focuses on the needs of the pharmaceutical companies and drugs provision, rather than on the wider response that we need and which the hon. Member for Blaby described.
I see little mention in the document of matters such as the supply of condoms, education, and the necessary social and cultural changes. In some countries, the empowerment of women is key to making a difference and dealing with the stigma attached to HIV. The hon. Member for Blaby mentioned the need to change the sexual culture, but, as he said, we cannot impose such changes on other countries. However, the example of Uganda shows that such measures, combined with political leadership, can work. Our response should involve using all the funds that are established not just to provide medicine and drugs, but to encourage other necessary developments. Of course we want medical solutions when they are available, and we should continue to invest in research to develop vaccines and microbiocides that might prove cheaper and more effective, but in doing so, we should remain focused on the other forms of response that are necessary.
We should set up global funds and use them to encourage social, cultural and educational changes. We must consider how to deal with poverty and embed the HIV issue in the development agenda. There must be a balanced response. There should be medical intervention when possible, and better and more effective research into drugs, but we must not put all our eggs in that basket. We must consider the entire range of responses. The Select Committee report clearly highlighted the responses that are necessary and which have made a difference. We should encourage those responses.
Finally, even if he cannot give the exact figures this morning, I ask the Minister to provide a clearer explanation of Department spending on HIV and AIDS. When responding to questions in the House last week, my right hon. Friend the Secretary of State for International Development mentioned a figure of £100 million for last year. However, in June 2000, an HIV-specific spend of£17 million was mentioned. In
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July, spending for 1998–99 was said to be £43 million, but was later said to be£53 million. I must say that I am a little suspicious of what those figures actually represent. How much is spent directly on HIV, and how much spending on other reproductive health programmes is being included in that figure? We need greater clarity on what is really being spent and where.
During International Development questions last week, my right hon. Friend the Secretary of State made it very clear that, in her and the Government's view, a wide range of responses was necessary to tackle those issues. She has also spoken frequently about the need to deal with poverty as an integral part of that programme—a point that has been made clearly this morning. I am pleased that we have had this debate, and I believe that the Select Committee has done an excellent job in producing its report. In the next year or two, I hope that we can move beyond this debate and use the report's recommendations to influence the United Nations and event internationally, and to ensure effective use of the money that would be generated by the international fund that the G8 is considering establishing.
11.29 am
Sir Norman Fowler: You caught me rather by surprise, Mr. Amess. I was going to intervene later.
I congratulate my hon. Friend the Member for Blaby (Mr. Robathan) on securing the debate. He spelled out the seriousness of the international crisis extremely well. In the past couple of months there have been two debates on the subject in Westminster Hall, in which a few of us have taken part, but although millions of people have been infected with HIV-AIDS and are dying of it, we have not yet had a serious debate on the Floor of the House. That is a pity, and I can think of no other crisis on such a scale that has not found its way on to the Floor of the House. I say that with no disrespect to Westminster Hall —thank God there is somewhere to raise the matter—but it is astonishing that we cannot find time to have a serious debate on the issue on the Floor of the House.
Much of the writing, debate and discussion in the past few months has concentrated on drugs and the case involving drug companies in South Africa. It should be emphasised that that issue is not remotely a panacea. The delivery systems of drugs are lamentably inadequate in many of the countries where the problem is most serious. It needs to be repeated that we still have no vaccine for HIV -AIDS and there is no cure for it. Drugs can extend life, but they will not cure the disease. We are a long way from acquiring a vaccine.
We should turn our minds towards the prevention of HIV-AIDS, which was a point made by my hon. Friend the Member for Blaby. We should be concentrating on public health education. We had our own public education campaign in this country back in the 1980s. We used television advertising, sent letters to every household, put up posters, and so on. It is absurd to believe that such a public education campaign could be replicated in Africa or India, but some elements of it could be. My hon. Friend was correct to say that when Governments start taking the issue seriously, there can be some improvement in the figures. That was

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established in this country and it is precisely what has happened in Uganda. The Ugandan Government have broadcast their concerns to the public, resulting in successful public education.
Mr. Rowe: Does my right hon. Friend agree that one of the paradoxical consequences of our highly successful public education campaign is that the new generation have almost forgotten the risks? There is clear evidence that the incidence of sexually transmitted disease in this country is rising sharply, and that will inevitably bring with it an increase in HIV-AIDS. Does my right hon. Friend agree that it is time for the Government to take seriously the risk of HIV-AIDS in this country?
Sir Norman Fowler: I am grateful for that intervention, which brings me to my next point. There is an example in this country, which is relevant to international discussion. We took the risk very seriously at the end of the 1980s and into the 1990s. I do not feel that we are taking it so seriously today. The Minister is not from the Department of Health, but he obviously keeps in close contact with it, and that Department promised a strategy paper on HIV, not of one or two years ago, but four years ago. My point is not really party political. Everyone on both sides has been disappointed by the Department's slowness in producing that paper—we are still waiting for it.
I cannot believe that we would have waited four years for a consultation paper to deliver a strategy on a different kind of issue. Will the Minister give us some guidance on when the strategy will be published, given that we are probably in the last days of this Parliament? We have all been long-suffering and good humoured about the matter until now.
The Parliamentary Under-Secretary of State for International Development (Mr. Chris Mullin): I can put the right hon. Gentleman out of his misery and tell him that the HIV-AIDS strategy will be published next week.
Sir Norman fowler: That is very good news and I am extremely glad to hear it, but I take back not one word of what I said about the delay. Four years has been too long. I take it as a solemn promise from the Minister that the paper will be published next week, and I and the chairman of the all-party group on AIDS, the hon. Member for Walthamstow (Mr. Gerrard), will be very pleased.
Mr. Gerrard: I will be happy to see the strategy published. Is what is being published next week the DFID strategy or the Department of Health strategy? I suspect that my hon. Friend the Minister was referring to the DFID strategy.
Mr. Mullin: I am grateful to my hon. Friend. I meant the DFID strategy, for which I am responsible.
Sir Norman Fowler: I realise that I should not have believed that the Government would suddenly emerge from their slowness on the matter. They are not publishing the Department of Health strategy, which is, of course, what I was referring to. I said that several times and I underline it again. The Department of
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Health said four years ago that it would produce a strategy for HIV and AIDS. There is no debate on either side about that. The Department has been saying for a very long time that the strategy will be published shortly, and perhaps it will be. From what the Minister has said, however, there is no sign that it will be published next week. The international strategy might be, but the domestic HIV strategy paper is not due for publication, as far as the Minister knows.
My hon. Friend the Member for Blaby is entirely right: unquestionably, what is happening in Africa and Asia is more serious than the situation in the United Kingdom and in Europe. However, that is not a case for ignoring the state of affairs here and in Europe.
Although our figures are better than those of many other countries, including many of our European neighbours—thank God for that—we should take only limited comfort. The Public Health Laboratory Service estimates that today some 30,000 people are living with HIV in the United Kingdom. That equates to a prevalence among those aged 15 to 49 of about one in 1,000. It also estimates that the number of people living with diagnosed HIV is increasing by at least 10 per cent. a year. That is one reason why the disease was given the highest priority in the recent overview of communicable disease undertaken by the PHLS. Although HIV is an
entirely preventable infection—that needs to be repeated constantly—the past two years have seen real cause for concern in this country. In January this year the PHLS reported almost 3,000 new HIV diagnoses for the year 2000, a number that is set to rise as more reports come in. It is expected that the number of new HIV diagnoses recorded for 2000 in the UK will be the highest ever, once all the reports have been collected.
That is the problem that the Government should be tackling. It is not remotely a party political issue, but it is one that many of us feel strongly about. We should hate it if the progress that has been made was not followed up.
There is no cause for complacency anywhere. Self-evidently, there is no cause for complacency in Africa or in many countries in Asia. The international situation is the most serious. However, I hope that we shall not ignore the fact that AIDS is an international problem and that it affects this country and others in Europe. I accept entirely what my hon. Friend the Member for Blaby has said; numerically, the major problem is in other countries. I also agree with the hon. Member for Walthamstow that there is a need for an international fund. However, I return to the point that we should not concentrate exclusively on drugs and treatment. We also need to try to prevent people from getting HIV in the first place. That must make sense. We need to make that an aim of our policy, and consider how we can most effectively put over the public health education message in other countries, not just in Europe.
11.43 am
Mr. Andrew Rowe: In this age of e-mails, I understand that the Post Office service is now known as snail mail. With a small adjustment to the spelling, we might transfer the epithet to the Secretary of State for Health on the question of the AIDS strategy paper, which has not yet come out. The Select Committee report is full of suggestions about

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how the Department for International Development might assist the international community to take practical steps to alleviate this dreadful scourge.
Although I shall not spend long on the issue, I want to stress the fact that our big companies and banks could play a leading role in bringing together companies in sub-Saharan Africa to talk about how they can help to prevent the spread of the infection among their employees. They are not investing enough time, energy or money in that proposition.
We should all be challenged morally by the issue. It is easy to take what I would describe as the popular press view—if no British person is involved in a bus crash in Spain, it is not worth reporting—of the problem. If people in sub-Saharan Africa are the only ones who will die, does it really matter that much? However, we must remember that all people are equal in the sight of God and that we have a moral obligation to assist all our fellow citizens.
None of us on the Select Committee could remain unmoved when it was reported by the group that visited Cambodia, of which I was not a part, that in a conversation with a woman in a slum there, it became clear that, if she needed an operation to sort out her health, and she had other children to care for, the only way that she could pay for that operation would be to sell one of her children. None of us was unmoved. When, in this comfortable country of ours, we pontificate about moral attitudes and issues, we do so from a viewpoint that is often very far from the reality that gives rise to those attitudes. How does one argue with a woman who has other small children to care for, and who may die without the medical care that she needs, that she should not sell the only asset that she has—one of her other children? I would not wish to face such a dilemma in my household, and I do not think that anyone else would, either.
The problems will become increasingly acute as the epidemic sweeps across not only sub-Saharan Africa, but other parts of the world. We should always remember that Thabo Mbeki, whose reported views on the origin of HIV-AIDS are entirely wrong, is quite right to say, as my hon. Friend the Member for Blaby (Mr. Robathan) said, that it is inextricably linked with poverty.
The alleviation of the scourge is manifestly a matter of political leadership. The Select Committee's report described how, when a Minister of a Government fell ill with HIV-AIDS, he did not want any of his colleagues to come and visit him, because he could not stand the stigma that would be attached to his condition. I would have thought that the Commonwealth Parliamentary Association and the Inter-Parliamentary Union could both play a part in showing our parliamentary colleagues worldwide how important it is that they take the lead in removing the stigma from this dreadful condition.
I had a meeting in my constituency on Friday to discuss the question of drugs in one of the towns in my constituency —Faversham. The meeting was very interesting, not least because we had with us a number of families with members who were drug addicts and who had committed suicide or were in prison. Those
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families all told the same story. The children get bullied because their brother is a drug addict. The parents are shunned in the shops because one of their children is a drug addict, regardless of the fact that the others are not. If we, in this so-called civilised society, ostracise people for a misfortune that could happen to any of us, how much worse is it that whole societies overseas are ostracising people with a disease—even though perhaps as many as 30 per cent. of a given age group are falling victim to it?
Social attitudes to people with the disease are partly determined by the fact that it is the incidental infections, not the disease, that kill the victims. People can use that as a mask and pretend that TB or some other illness carried the victim off. If we cannot change those attitudes, we will not make the progress that we need. We as parliamentarians—perhaps I should say my successors as parliamentarians, because I am retiring—should take on board the thought that we can use the CPA and the IPU to increase awareness.
I am concerned about HIV in India. We are deluding ourselves if we believe that health service provision there will be robust enough to cope when the epidemic really takes hold. The health service in some states in India may well be able to cope, and I met a Minister in the national Government—he may have moved on by now—who had an intelligent strategy for dealing with HIV-AIDS. However, I believe that the disease will spread like wildfire in India, and the idea that there is a cultural barrier to promiscuity is a myth. It is interesting how all the nasties come from abroad—it's the foreigners wot brings them in. It does not matter which country one is in—it is never the native people, but always the foreigner who is responsible for importing the nasties.
Some of my colleagues went with me to what looked like a small housing estate on the outskirts of a town called Bogra in Bangladesh. That is a Muslim country where, as we all know, promiscuity is banned by the Prophet and, therefore, does not exist. It struck me as marginally improbable that that small housing estate, which was actually a brothel of about 800 prostitutes, could have been established solely to service the relatively small number of foreigners who happened to pass by. Until countries accept the fact that the behaviour in sexual matters of some of the population is perhaps not as anchorite as they pretend, we shall make little progress. If the population is more than a billion, the incidence of HIV-AIDS does not have to be high for a large number of people to be infected. If that happens, the disease is bound to get dangerously out of control. To return to the issue of our own self-interest, the links between this country and India are very good, and the interchange of personnel between us is legion. If the disease gets out of control in India, we shall be at much greater risk than we are even now.
Mr. Robathan: That relates closely to a recent outbreak of TB in Leicester, which is just next to my constituency. The TB came largely from people who had been visiting India or the sub-continent, at least. TB and AIDS are linked, although I am not suggesting that any of the current TB cases have anything to do with AIDS. However, HIV infection can easily be brought to this

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country in the same way as TB. From time to time, we should stress the need for self-interest more because altruism is not as prevalent as it might be.
Mr. Rowe: Indeed.
Finally, I stress an observation that the Select Committee made in its report. The international community set the international development targets before the extent of HIV-AIDS was understood. As the report says, it is terribly important to understand that it is no good simply revising a target every time one finds it difficult to reach. However, when the basis of international development targets has been knocked to pieces by a scourge on such a scale, it is unrealistic for us to continue with a rod for our own back. We cannot conceivably reach the targets that were set before the scourge was understood. We need an international agreement about working together.
I shall make one more quick point. For goodness' sake, let us pour some resources into south-to-south education. A wonderful non-governmental organisation in Uganda keeps together a group of young people who have agreed to be tested for HIV-AIDS. Whether they are diagnosed as positive or negative, they support one another, work together and get involved in public education to help change the nature of the debate there. We should make sure that they have the resources to spread their expertise to neighbouring countries, because many of those countries are quite rightly becoming weary of being told what to do by white people from a long way away.
11.55 am
Dr. Jenny Tonge: I congratulate the hon. Member for Blaby (Mr. Robathan) on securing this debate. My only regret is that it is not longer, because I could easily speak for an hour on the subject; it was one of my specialties before I entered Parliament. I regret that I was not a member of the Select Committee when the report was being prepared, as I would have found it interesting.
We have heard many statistics about AIDS. My introduction to AIDS in the third world was, as hon. Members may remember, driving from Kampala airport into the capital of Uganda. I was mystified to see piles of rectangular boxes outside little shops in every village that we passed through. Some were tiny, some were big. I did not realise their purpose until I asked one of our Ugandan escorts, who told me that the best business in every village in Uganda was making coffins for AIDS victims.
One can see AIDS walking the streets not only in Uganda, but all over Africa. If one is a medic, one knows, because the victims are extremely ill, have sunken faces, and are thin, listless and weak. Many have open or closed TB. It is patently obvious that that continent is suffering terribly from the disease. I would not say that it was as obvious in Asia—not yet—but it is certainly obvious in Africa, where 34 million people have AIDS. There are families of orphans. One in five South Africans will die before the age of 15. That is the equivalent of one child in every family.
Before AIDS hit the world, the diseases that most affected developing countries, such as gastroenteritis and malaria, always killed the very young, the very old
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and the sick. The trouble with AIDS is that it hits the young, fit, economically active members of the community. That is what makes it so destructive, and so different from previous pandemics. Kofi Annan described it as a global security threat, for all the reasons that we have heard, which is why I was surprised that it was not mentioned as a cause of conflict.
What can we do? I want to concentrate on three aspects. First, I shall deal with the so-called triumph of the South African Government over the drug companies. I emphasise that it is a triumph, because cheaper drugs are needed in all developing countries. The agreement on trade-related aspects of intellectual property rights must be renegotiated—or at least, some detailed work needs to be done on it. Drugs are needed for TB, malaria and gastroenteritis. They are needed also to prevent the vertical transmission of AIDS from mothers to babies. That simple treatment can be given to pregnant women to stop their babies being born with AIDS. It is needed, and it is affordable.
The idea that developing countries can use the sort of retroviral regime that we use in this country—it involves a complicated cocktail of many drugs and is often combined with special dietary requirements and special medical checks—is utter nonsense. If people in those countries hear that there is a drug to cure AIDS, we are done for. All the messages about prevention will go out of the window, and everyone will let rip.
One has only to look at the history of antibiotics in our country to see how true that is. If an antibiotic is useful on specific bacteria that cause a specific disease, the pharmacological companies will promote it and people will all want it from their doctors. A good and useful antibiotic, septrin, one of the ingredients of which is trimethoprim, was overused and badly used some years ago. People do not take correct regimes of drugs, but stop taking them as soon as they feel better, instead of finishing their courses. That leads to resistant bacteria, which is the other danger of thinking that AIDS drugs will be the answer in developing countries. If they are not taken properly, there will be further variations in the virus and further problems in the spread of the epidemic that we will have no way to treat.
I emphasise caution in thinking that drugs will be any use. We should put in a little plug for the pharmaceutical companies, as I want them to develop microbiocides. Those will be an interesting development in the treatment of AIDS. I also want the companies to put money into the development of vaccines. In the long term, a vaccine for AIDS would be tremendous: a greater contribution than the smallpox or TB vaccines. Many vaccine projects are already taking place. The all-party group on AIDS went to Oxford to see the work of Professor MacMichael. In Africa, 10 different trials are going on for different strains of the AIDS virus that affect Africans.
I am told by the international AIDS vaccine initiative, however, that there is a shortage of money. We must tackle that problem, about which little has been said so far. The Department for International Development started two or three years ago by contributing£ 250,000. It has now upped that contribution to£14 million. That is a tremendous advance, and it shows that the Secretary of State for International Development is on-message on the AIDS pandemic. Another development in the spending review, announced by the Secretary of State

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and the Chancellor of the Exchequer, was the measures to encourage pharmaceutical companies to engage in vaccine research. I would like to hear more about that, as little on the matter has been said.
Prevention is the only tool that we can use at present against the disease. The only message that we can safely promote is that education, health education and the use of the poor old condom form practically our only defence against AIDS. I apologise in advance if I offend anyone in the Chamber, but I want to make a plea. The Roman Catholic Church has tremendous influence in the developing world. We all know—we have seen it on trips abroad —that Catholic charity workers all over the developing world promote the use of condoms. However, that is not the same as a clear message from the Vatican to say that condom use is acceptable. Would that not be a pro-life message from the Church, rather than an anti-life message, considering that millions of people die from AIDS because they do not use condoms?
I urge everyone in the Chamber to put pressure on the Catholic communities in their constituencies to try to get that message through. The Tablet, a Catholic magazine, is working hard to promote it. A Vatican announcement in favour of the use of condoms is vital and would have a huge effect on people in the developing world. At present, that is our only defence. We have seen wonderful projects, and hearing the hon. Member for Blaby talk about the play that we saw in the grammar school in Uganda took me back three years. A lot of us said at the time that our schoolchildren should be doing plays like that before the problem overtook us. A wonderful preventive message was going out and being taken on board by the children. We should push that message at every opportunity through health education and ordinary education.
That is why it is so important, as the right hon. Member for Sutton Coldfield (Sir N. Fowler) said, that we have a strategy for HIV-AIDS. We have waited four years, which is a long time. I do not know why we have had to wait so long. It is vital for the world that we have a strategy for the west, as well as a good strategy for the developing world from the Department for International Development.
Will the Minister tell us why spending on AIDS prevention has gone down in recent years, as noted in the Select Committee report? Last year,£700 million was spent on AIDS projects worldwide. The United Nations estimates that between£5 billion and £7 billion needs to be spent. If so, what initiatives will the Government promote at the UN Special Assembly in June? What will the money be spent on? Will it be for all projects remotely connected with AIDS or only for particular health projects, including vaccine research and drugs? I do not know, and we need more detail. What I do know, however, is that AIDS is one of the greatest catastrophes facing the world. It is a problem not only for the developing world, because what happens there will spread to us as surely as night follows day—and night is what it will be if the AIDS pandemic spreads through western countries as it has done through developing countries.
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I end with a quote from the Select Committee's report, which is excellent, although it does not mention the Catholic Church, as it would have done, had I been present. In its conclusions, the report states that the real crisis of the AIDS pandemic is the
"crisis of poverty. It is the denial of resources, services and rights which has done so much to exacerbate the spread of HIV/AIDS and control of the epidemic will only be secured when such poverty issues are addressed".
How true that is.
12.8 pm
Mr. Bowen Wells: I begin by congratulating my hon. Friend the Member for Blaby (Mr. Robathan) on securing a debate on such an important subject. As the hon. Member for Richmond Park (Dr. Tonge) said, it is probably the most important issue facing mankind.
The Select Committee's report was the product of all the time that its members spent on the Committee. In each country that we visited over the four years available to us, HIV-AIDS was a major topic, and my hon. Friend the Member for Blaby illustrated how important that is. The report notes that there are 13 African countries with adult prevalence of 10 per cent. and that potential gains in life expectancy will regress 17 years. That means that instead of reaching 64 years by 2010 to 2015 as previously expected, life expectancy will regress to an average of just 47 years. That represents a reversal of most of the development gains of the past 30 years.
What do those figures mean in a country such as Malawi? They mean that more teachers are dying of AIDS-related diseases than can possibly be trained to replace them. The impact on Malawi's capacity to educate its people is huge.
The conclusions of our inquiry make grim reading. As my hon. Friend said, in 1999, 2.7 million people worldwide died suffering from AIDS, which is more than three times the combined deaths from war, murder and violence. HIV-AIDS is also having a disproportionate effect on the poor, as many hon. Members have said in powerful speeches. The facts are starkly shown in the statistics. Of the estimated global total of 34.3 million people who at the end of 1999 were living with HIV-AIDS, 24.5 million were in sub-Saharan Africa and 5.6 million were in south and south-east Asia. HIV-AIDS prevalence in sub-Saharan Africa was 8.5 per cent. in 1999, compared with less than a quarter of 1 per cent. in western Europe. Some parts of Africa, including South Africa, have a rate of infection as high as 40 per cent. It is hard to imagine what that means for the complete undermining of the social community and of society. It will certainly lead to serious conflict and violence.
The report argues that poverty and HIV-AIDS are inextricably linked. First, there is the crisis of the global HIV-AIDS epidemic and the tragedy that it brings in its train. Secondly, sub-Saharan Africa has appalling levels of prevalence; levels of infection are so high that in many countries the collapse of the entire system is a real danger.
As the hon. Member for Richmond Park said, the only medical intervention, or semi-medical intervention, that will prevent HIV-AIDS from spreading is the

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condom. What else can be done? The most effective action to reduce the effects of HIV-AIDS on a country is to reduce the number of transmissions by promoting effective prevention. The means of preventing or reducing transmissions of the virus are already known, but we lack the will to make them work on the necessary scale. Uganda was given as an example of a country where, from the President downwards, interventions have been made and have had the effect that the hon. Lady illustrated.
Another example is Thailand, where the army's general field marshal recognised that unless the AIDS problem, which had been rampant, was dealt with, he would not have an effective army to fight in a potential war and defend the country. With the total support of the Government of Thailand, he went to every brothel and place where HIV was likely to be transmitted and, gave direct orders to every male in his army to use condoms. The result was a dramatic fall in the incidence of HIV-AIDS in Thailand. It is therefore possible to produce the result that we are looking for by human, if not medical, intervention.
The report also addresses the question of care. We noted that all too often the debate about access to treatment for HIV-AIDS is reduced to one about anti-retroviral drugs—an issue to which the hon. Lady also referred. No evidence to the inquiry called for the purchase and donation of anti-retroviral drugs to be a priority for donor funds. The Secretary of State told the Committee that even at cost price, such drugs cost in the region of $3 a day per person and, as the hon. Lady said, the care for those undergoing retroviral treatment is very complicated and unlikely to take place in remote villages and towns in South Africa or elsewhere in the developing world.
In many developing countries, annual health budgets amount to little more than $10 per person per annum. The use of anti-retrovirals in tackling the disease is completely irrelevant to the main causes that we are talking about, and we should remember that—although greater access is needed to cheaper drugs for opportunistic diseases such as TB, malaria and gastroenteritis, which are the biggest killers in southern Africa. The provision of anti-retrovira1 treatments to people with HIV in the poorest areas of the developing world is clearly not a practical or sustainable development intervention. Donor funds and activities should concentrate on the prevention of further infections, the development of basic health care systems, the provision of palliative drugs and basic treatments of opportunistic infections. However, the report does conclude that there is room for price reduction for drugs to treat opportunistic infections, and we welcome efforts to secure access to cheaper drugs.
An analysis of the expenditure by 10 major donors on HIV-AIDS showed an increase from $59 million in 1987 to $293 million in 1998. As spectacular as that fivefold increase appears, during the same period the number of infections rose from 4 million to 34 million—an eightfold increase. In per capita terms, expenditure on HIV-AIDS has fallen from $22 per person living with HIV-AIDS in 1988 to less than $9 in 1997. That is a massive fall. Expenditure on HIV-AIDS remains at less than 1 per cent. of donor countries' total annual overseas development aid budgets.
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In the report, we examined DFID's expenditure on HIV-AIDS. Here I must make a confession. I got my noughts in the wrong place when I asked a question at last week's International Development questions. We think that the figure is£100 million or thereabouts—although, as the hon. Member for Walthamstow (Mr. Gerrard) said, DFID gave us several different figures in the course of the inquiry. It is interesting to note that since the end of the financial year 1999–2000, DFID has made several attempts to assess its expenditure on HIV-AIDS, on each occasion increasing its estimate of the amount spent. In our first oral evidence session with DFID officials, we were told that expenditure was running at between £20 million and£30 million per year and that it was anticipated to rise to £40 million in 1999–2000. By the end of the inquiry, we were told that the figure for 1999–2000 had increased to £54.8 million—not yet £100 million—and in an answer to a parliamentary question in January this year, DFID claimed to have spent more than £84 million on bilateral HIV-AIDS related work in 1999–2000.
What is the Department including in those figures? How has it made them advance so much in such a short time? Last week, at International Development questions, the Secretary of State put the figure for the same financial year at£100 million. How do we get there? I was glad to hear from the Minister that the HIV-AIDS policy is to be published next week. The report called for its publication, and we believe that it is essential. One of the effects of the report has been to make DFID look carefully at the whole matter, which had been spread around a range of subject areas.
Although we naturally welcome the increased funding, there is clearly some confusion as to what constitutes HIV-AIDS spending. In an effort to examine DFID expenditure in this area, we examined a list of DFID-funded HIV-AIDS and sexual health initiatives from 1992 onwards. We examined bilateral expenditure between 1992 and 2003. Because most projects lasted for a number of years, for example we averaged such expenditure out—for example, we valued a three-year project costing £3 million at a cost of £1 million a year.
I refer hon. Members to the results of our findings, which are reproduced in a graph in paragraph 256 of our report. Although the graph is not an accurate representation of year-on-year expenditure, it provides us with a crude sense of the regional spread of DFID's HIV-AIDS work. The graph makes striking viewing, showing that bilateral HIV-AIDS expenditure in sub-Saharan Africa rose rapidly in the early 1990s to a peak in 1997, but that has been followed by a considerable decline in that region. Over the same period, DFID's expenditure in Asia has risen more gradually, but has now levelled off at fairly high amounts.
Obviously, the graph does not take account of any new spending commitments announced since the start of our inquiry and, if any such commitments have been made since that time, we would welcome them, but the basic point remains: bilateral expenditure should be increasing. Although we welcome DFID's prevention work in Asia, any decline on bilateral expenditure in sub-Saharan Africa is unacceptable.
DFID has considerable leverage in many of the countries worst affected by HIV-AIDS. In 1999, DFID was one of the top three donors in eight of the 10 countries with the worst HIV-AIDS prevalence in the

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world. Furthermore, there has recently been a change in the political climate in Africa, with countries such as Uganda, Senegal and Zambia making serious inroads into tackling the disease. The report also calls for DFID to develop an explicit HIV-AIDS strategy, which we look forward to reading about next week.
HIV-AIDS is not only a result of poverty; it also entrenches poverty still further. The Committee has, as a result of its inquiry, concluded that donors, including DFID, have much work to do in assessing the impact of HIV-AIDS on the spectrum of their development activity. There is an urgent need to redesign development programmes, policies and approaches, particularly in sub-Saharan Africa, to take account of the new realities caused by HIV-AIDS.
12.21 pm
The Parliamentary Under-Secretary of State for International Development (Mr. Chris Mullin): The hon. Member for Blaby (Mr. Robathan) has raised an important issue and I thank him for triggering a good debate. The HIV-AIDS epidemic is perhaps the most important challenge facing the world in the foreseeable future. He and others have graphically set out the scale of the problem and I propose to concentrate on what my Department is doing about it.
I shall start by knocking on the head any suggestion that DFID is complacent about the issues. Contrary to what is sometimes suggested, there has been no decline in DFID spending on HIV-AIDS. On the contrary, spending on HIV-AIDS related work, which includes sub-Saharan Africa, continues on an upward trend from around £62 million in 1998–99 to more than£100 million currently. Furthermore, we expect that upward trend to continue.
Rather than getting in a tangle with the hon. Member for Hertford and Stortford (Mr. Wells) over figures in the limited time remaining, I shall write to him and attempt to clarify the funding issues, which are complicated for reasons that I shall touch on briefly. DFID is increasingly helping to tackle HIV-AIDS in the context of large sexual and reproductive health programmes and sustainable health systems. In those circumstances, it is often difficult to attribute spending to particular aspects of sexual and reproductive health. For example, the provision of condoms serves the dual purpose of HIV-AIDS prevention as well as family planning and protection against sexually transmitted infections. We strongly believe that a cross-sectoral approach to tackling HIV-AIDS is essential if we are to be successful, and I know that the Select Committee shares that view. The hon. Gentleman will understand the difficulties in attributing particular amounts of spending to particular problems.
DFID currently supports HIV-AIDS related activities in 39 countries throughout the developing world, including Ghana, Kenya, Malawi, Mozambique, Nigeria, South Africa, Tanzania, Uganda, Zambia, Zimbabwe, China, Cambodia, India and Russia. Sub-Saharan Africa will nevertheless continue to be a priority region. Areas of growing concern include Burma, Vietnam and neglected vulnerable populations in central and south America and the Caribbean, where the epidemic is growing faster than anywhere else in the world.
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As national strategic plans to tackle the epidemic improve, we have begun to place our support within the framework of those plans. Our HIV-AIDS strategy, which will be published next week, aims to balance immediate local prevention and mitigation measures with support for long-term initiatives. I realise that the hon. Gentleman is interested in the Department of Health's strategy, but I cannot help him today in that regard. However, I shall make inquiries and write to him.
In global terms, DFID's strategy aims to build political leadership and national capacity, to tackle underlying causes, to maximise the contribution of all sectors, to encourage a comprehensive approach that addresses both prevention and care, and to support research and development. DFID is a significant contributor to the global fight against HIV-AIDS, but it is clear that we cannot succeed alone. If we are to tackle the epidemic successfully, there must be a comprehensive response from donors, Governments, non-governmental organisations, the private sector, faiths and communities. I wholly endorse the comments of the hon. Member for Richmond Park (Dr. Tonge)—who has had to leave early—about the need for a strong lead from the Catholic Church. In terms of HIV-AIDS, we are a major contributor to the efforts of the UN AIDS programme, the World Health Organisation, UNICEF and the UN population fund.
At this point I should say something about the recent court case involving the pharmaceutical companies and the Government of South Africa. The case was regrettable and it is sad that the dispute came to court at all, but we welcome the settlement that has been reached. One hopes that we have all learnt from the experience. In our view, the way to increase investment in, and access to, new and existing medicines to tackle the diseases associated with poverty lies in co-operation between the pharmaceutical companies, developing countries and the international community. We will continue to do all that we can to facilitate that cooperation.
In the past year, we have seen welcome reductions in the cost of anti-retroviral drugs for developing countries. However, as hon. Members have said, even at reduced prices those drugs remain unaffordable for the poorest countries. In addition, they are very toxic and complex to administer, and constant monitoring of the treatment regime is required. Tragically, health services in many poor countries do not have the capacity to deliver those drugs and other treatments safely and effectively. It is therefore vital that basic health systems are put in place to ensure that the poor can benefit from the availability of TB and malaria care, reproductive health care and HIV-AIDS care and treatment.
The Government are considering a range of policy options for improving the affordability of essential drugs in poor countries. As part of the global child poverty initiative, my right hon. Friends the Chancellor and the Secretary of State for International Development announced several tax measures and purchase fund options to increase access to medicines in developing countries. The UK is working with other donors to mobilise additional resources. This morning, my right hon. Friends are chairing a breakfast meeting in New York with Kofi Annan and representatives of developing and developed countries to build support for

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the establishment of a global health and HIV-AIDS fund to help developing countries tackle the diseases associated with poverty.
We are also encouraging developing countries to do more to facilitate lowering the price of drugs. Import duties, trade barriers, customs restrictions and delays all contribute to increased prices. It is crucial that we do not let dramatic headlines distract us from doing the things that work well, and that have already saved countless lives. I have no time to discuss the details, but our policy consists of four broad themes: raising the profile of the epidemic; prevention in, and beyond, the health sector; care for people infected with, and affected by, HIV-AIDS; and improving knowledge and technology.
In conclusion, I should point out that the situation is not hopeless. As hon. Members have said, Governments such as those of Uganda, Thailand and Senegal have already demonstrated that the tide can be turned. Progress has also been made in countries such as Zambia and the Dominican Republic. Above all, what is required is strong political leadership from Governments who are committed to the welfare of their people. For our part, the UK stands ready to increase its support for Governments and institutions that are seriously committed to tackling this dreadful disease.

GM Crop Trial (Low Burnham)
12.30 pm
Mr. Ian Cawsey: I am delighted to have the opportunity to debate the genetically modified crop trial in Low Burnham, in my constituency. I want to address two aspects: first, the specific problems at Low Burnham and secondly, the general handling of GM crop trials in future.
I am very pleased that my right hon. Friend the Minister for the Environment is here to listen to the debate and to answer for the Government. I am grateful for the welcome help that his private office gave me when I needed to raise residents' concerns about the matter with his Department.
So far as approvals are concerned, the matter relates back to directives that were agreed in 1990 and came into effect in 1993. Ministers can be held to account for many things, but not for what happened before they were in power. Nevertheless, government involves dealing with the here and now, and the Minister needs to address the real issues affecting Low Burnham.
Low Burnham is situated in an area of north Lincolnshire called the Isle of Axholme, which is reclaimed land—now some of the country's best agricultural land. It lies in the parish of Haxey, between Haxey and Epworth, and is a very small village with an agricultural tradition. The trial came to my attention when I received correspondence from the Department for the Environment, Transport and the Regions and from Aventis. I quickly sent that out to the local parish councils and to the local National Farmers Union to make them aware of the situation and to ask for their comments.
An interesting feature of this part of the Isle of Axholme is that it is an area of strip farming, which is no longer widely practised in the UK, and is often described as a mediaeval method of farming. The fields in Low Burnham and nearby areas are open, and many people own small strips that border on to each other. There are, therefore, concerns that the field location chosen is an inappropriate place for a GM crop trial.
In addition, the field where the trial will be is adjacent to the village and next to the greenway, a disused railway line that is now a popular rural walk with much blossom and wildlife. People are obviously concerned about that. An organic farm is in close proximity and there is bee-keeping in the area. The location hits all the buttons of intense concern that have been pressed by GM crop trials in the past few years.
It is to the Government's credit that, some time ago, they tried to introduce a voluntary code of practice for the companies concerned to ensure that trials were more open and that people had greater access to information about them. However, that has not been the case in respect of Low Burnham. First, information was not sent out to the relevant parish council. I understand from the comments made by representatives of the DETR who came to a recent open meeting that information was sent out, but to the wrong place. That part of the code of practice failed to work.
Secondly, the published grid reference was wrong. Although it was in the locality, it was the wrong field. That led to some concern, not least for the farmer who owns the field at the published grid reference.

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Thirdly, the farmer did not consult local landowners. That led to frustration and annoyance among villagers and landowners. So the three safeguards that the Government had built in to help such situations all failed in respect of that trial.
There is little information or awareness of what happened at the start of the trial, and that has led to great suspicion. People take the view that they cannot have confidence in the regime and protocol of the trial if basic safeguards fail at the outset.
I have been asking questions of the DETR and Aventis on the issues that local residents have raised with me. I have sent the answers out to villagers, parish councillors and anybody else who asked for information. It has been a useful exercise that has given people a great deal of information, but I am concerned that it was down to myself and my constituency staff to send out information that should have been offered more willingly by those involved in the trial.
Local residents have formed a group to campaign on the issue and they have been diligent in that respect. It would be wrong to try to name everyone involved, but it would be equally wrong not to mention people such as Dr. Goodwin, who lives in the village and has done a great deal of work, Jilly Moore, Linda Patel and Councillor Jean Turner from Epworth town council. They have worked tirelessly in trying to access information about the trial and in talking to other groups across the country that have similar concerns.
Their actions resulted in a public meeting on 23 April, when Graham Davis from the DETR addressed residents and we went through the issues. Although little could be said about what went wrong, there was nevertheless a great feeling of dissatisfaction by the end of the meeting. For instance, the fact that information was sent out to the wrong parish council was acknowledged as a mistake that could not be put right. Similarly, the grid reference will be corrected, but apart from that, nothing will be done.
The Department thought that there had been consultation, which did not surprise me because both the DETR and Aventis had previously given me the same information. I spoke to the farmer on two separate occasions, and he told me up front that he had not managed to speak to the landowners concerned. That is not surprising in light of my earlier point about it being an area of strip farming. There are 10, 11 or maybe more landowners adjoining the field because of the method of farming used in this part of the world. The farmer involved in the trial told me that he was unable to contact the landowners because he did not know who they were. In short, the consultation failed completely.
There was great concern among the villagers present at last week's meeting that the voluntary code of practice, which failed in Low Burnham, did not matter because the trial went ahead regardless of it. I hope that the Minister will be able to address that point.
Mrs. Jackie Lawrence: May I tell my hon. Friend that there was no consultation in respect of a similar trial in my constituency? The first that anybody knew of it was the posting of the sites on the DETR website. Does he agree that it is necessary to
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press the Minister to replace the failed voluntary consultation process with a statutory form of consultation?
Mr. Cawsey: I thank my hon. Friend for her comments. It is regrettable that these matters came to light only when grid references were published. I hope that the grid references were correct in her case, which would put it one step ahead of the trial in my constituency. However, she is right about the need for a statutory approach.
Other issues, which were not addressed, came up during the public meeting. One was contamination. The Government and Aventis said that there would be no more than 1 per cent. contamination, but people were still concerned by what they meant. In particular, a villager from Low Burnham said that he suffered from bad allergic reactions. How do we know that 1 per cent. contamination would not lead to allergy sufferers having problems? There was no answer to that point and, without wanting to be critical, it is a question that needs to be answered. The person available at the meeting could not answer it, so perhaps the Minister will ensure that we get an answer.
On liability, there are real concerns that the only means of redress is through the civil court, which, in theory, is open to anybody—providing that they can afford it. As we all know, the civil court is therefore open to few people. There ought to be some sort of statutory liability order on such matters. I know that the Minister answered a parliamentary question on that point earlier in the year, when he said that he wanted to consider the issue. Hopefully he will be able to say more today.
A further concern is the scientific validity of the trial because no baseline data was collected. The trial was designed to examine the effect on wildlife when a herbicide interacts with a GM crop. Local people are concerned that if one does not examine the wildlife before the trial, it will be difficult to identify any difference. One answer that has been given is that the trial will be in two halves of the same field: a genetically modified crop will be grown in one half and a standard crop in the other, and the two halves will then be compared. In an area such as the Isle of Axholme, that creates a problem in relation to good old strip farming. There is no guarantee that what are now two halves of the same field will have been farmed in the same way over the years—they may have been farmed in different strips with different crops and pesticide regimes. Even now, before a single genetically modified organism has been put into the soil, it is likely that an analysis of the two halves of the field would produce completely different results. If no baseline data capture is taken at the start of the trial, how on earth can any meaningful result be obtained?
The trial will not seek to consider key species such as earthworms, soil fungi and bacteria, and I have been told that funding to look at the impact of GMOs on bird life in the area has been withdrawn, so that work will not go ahead.
Separation distances are another worry, especially to people who keep bees. The DETR has told me that the separation distance for the trial is 50 m. That may be extremely optimistic from the point of view of ensuring confidence in the trial.

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What can the Minister say or do for us? I could make several suggestions, but I shall try to be brief. First, I should like him to give me a personal assurance that he will investigate the Low Burnham trial and the mistakes that were made, especially in relation to the lack of information that was sent out, the incorrect grid reference and the fact that his Department and Aventis were content to accept that consultation had taken place merely because the farmer had told them so, although in fact that was not the case. My constituents would welcome such an assurance.
Secondly, given the nature of the area and the fact that 10 or 11 landowners farm on the border of the field, cannot the Minister, even at this stage, try to persuade the company that this is a highly inappropriate location for a GM trial and that it should pull the plug on it? I say in all candour to the Minister that if he is unable to do something, the code of practice will effectively be dead in the water. If, after all the concerns that have been raised about issues such as strip farming, the trial goes ahead anyway, how can there be any public confidence in the code of practice in future?
Thirdly, will the Minister tell us more about the statutory compensation scheme, in which I know that he is interested?
I agree with my hon. Friend the Member for Preseli Pembrokeshire (Mrs. Lawrence) that we need a statutory approval system to give local authorities, parish and town councils, local residents and farmers a legal input into a site application and the right for their views to be taken into consideration. I say that not only because it would be an extension of democracy—something in which I am always interested—but because often local people can provide the best local knowledge about the appropriateness of a site. I do not mean to underplay the ability or role of civil servants in the Department of the Environment, Transport and the Regions, but I and others from Low Burnham who spoke to some of them received the impression that they did not even understand what strip farming was, or even that it still existed. And why should t hey? After all, they do not work at the Ministry of Agriculture, Fisheries and Food. We need a system that would involve local people and allow them a say.
I do not blame the Minister for 1990 directives, but I look to him to introduce a more rigorous procedure generally and specifically to investigate the concerns of the village of Low Burnham and, for that matter, the whole of the isle of Axholme. If he can establish proper procedures and put matters on a more statutory footing for the future, he will have done rea1 service not just to my constituents, but to everyone in the United Kingdom.
12.45 pm
The Minister for the Environment(Mr. Michael Meacher): I very much welcome the comments of my hon. Friend the Member for Brigg and Goole (Mr. Cawsey). They were made in sober tones, conveyed a forthright message and require a response. There is no question but that mistakes were made at Low Burnham and we need to learn from the experience. He referred to nearby organic farms and bee-keeping, and to the unusual agronomic condition of strip farming—which, as he made clear, was not properly taken into account. Those are all valid points.
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I agree about the importance of informing the public and farmers—especially organic farmers—of the whereabouts of the farm-scale evaluation sites in time to allow genuine discussion and negotiation. I am committed to openness and transparency in that regard and to informing the public fully about the evaluations and what they entail. My hon. Friend has clearly shown that that did not happen in the case about which he is concerned. I apologise on behalf of the Department. It should have happened but did not.
The Government have asked the farming and biotechnology industry group, SCIMAC, to impress on farmers participating in the evaluations that they should inform local organic farmers and neighbours as soon as possible of their intention to grow a genetically modified crop. I noted what my hon. Friend the Member for Preseli Pembrokeshire (Mrs. Lawrence) said about trials and the failure to apply the principle that I have outlined. I am very concerned about that and should like to consider how we can improve matters.
To assist the process, we have announced that, this year, the locations of evaluation sites should be announced much earlier. I have asked that that be done six weeks before sowing, thereby allowing my Department and others to do more work in informing local people about sites near to them. In this and other cases, officials in my Department have written to provide information to all parish, community, district and county councils in whose area an evaluation is sited. My officials have offered to attend meetings with parish councils to explain the evaluations.
Mrs. Lawrence: My right hon. Friend said that he has asked for local people to be informed six weeks prior to evaluations. However, is there any potential for objections to be made in that time and for people to find ways of preventing the trials?
Mr. Meacher: My hon. Friend puts her finger on a sensitive point. Although the 92/20 directive includes notification and consultation requirements, EU legislation makes no provision for public consent. Information, discussion and consultation are certainly expected and required, but current legislation makes no statutory provision for agreement. I continue to believe that that is a serious problem.
The statutory requirements for notification are that, at least 15 days before planting, the company—in this case, Aventis—is required to inform the Department about its intention to plant a particular crop at a particular site; and that, no more than five days after that, and at least 10 days before planting, it should advertise the fact in the relevant local newspaper so that others in the area will know about it. That is not sufficient time, which is why I want the requirements to be changed.
In the Aventis case, officials wrote on 28 February to parishes and other councils where oilseed rape and beet were to be grown, and on 3 April to those where maize sites were planned. My hon. Friend the Member for Brigg and Goole has described what happened, and I do not dispute what he said. Indeed, I agree that mistakes were made. It was not a good or representative example of the public being informed about how evaluations were intended to work. Elsewhere, however, the procedure has generally worked as expected.

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On 28 February, following telephone advice from the local authority about the relevant parish, officials wrote to Epworth parish council about the oilseed rape site near Low Burnham. We were later informed that the site, despite being close to Low Burnham, was actually in the nearby parish of Haxey. We therefore wrote to Haxey parish council, with copies of all the information that had been sent to Epworth, and offered the participation of officials in any public meeting that the council might call.
Subsequently, we were informed by SCIMAC that the final figure of the six-figure grid reference that it had supplied for the site was incorrect. I emphasise that it was extremely unfortunate—I could use another word—that the two errors occurred at the same site, and I apologise for the confusion that the matter has caused local residents. However, I am told that local farmers and the public were fully aware of the identity of the farmer who was hosting the evaluation and of its true location.
In this year's spring sowing round, we have detected a similar error in only one of the other 84 sites. We suspect that the grid reference supplied for that site may be incorrect, and we are investigating the information supplied as quickly as we can. My Department told SCIMAC that it must re-advertise the site in the local paper to correct the confusion. I agree that it is after the event, but it is the right thing to do in the circumstances. My Department and English Nature have checked that the risk assessment for the correct field remains valid, and we are satisfied that it is. We have also updated our website to include the correct location details.
In the majority of cases this spring, the arrangements for notifying local people have worked rather better. Although I do not intend to diminish my acceptance that things went badly wrong and the situation was unacceptable, I believe that neighbouring farmers and local parishes have been informed about the evaluations in reasonably good time, and certainly in better time than in previous years. Indeed, I understand from SCIMAC that, some weeks ago—although I know that a different view is being put forward by the other side; one never knows exactly where the truth lies—the farmers hosting the site at Haxey spoke to their neighbours about their intention to grow GM crops and contacted the only organic grower in the area.
I am told that the farmers elected to host a GM oilseed rape crop evaluation because none of their neighbours usually grow that crop, whereas they do grow beet.
Mr. Cawsey: Just to clarify the point on what consultation took place, the farmer—I have spoken to him directly and am fairly confident of this—spoke to some of the landowners, but he did not speak to all of them because he did not know the identity of all of them. He could not contact those whom he did not know. When he did speak to landowners, he did so on a reactive basis, in response to questions about whether he was conducting a GM trial. It was only when people
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started to raise concerns with him that "consultation" took place. It is not in dispute that several landowners were not consulted.
Mr. Meacher: My hon. Friend gives an account that probably reconciles those two slightly divergent views. I accept that there was some communication, but that it may have been reactive rather then proactive, and probably was not comprehensive.
As part of the public information campaign for the evaluations, my officials, as my hon. Friend said, attended meetings with local farmers and the public in a number of areas. That included a meeting at Haxey, on 23 April, with local farmers and my hon. Friend. I understand the concerns and the irritation expressed at that meeting, and the wish to see information about the evaluations corrected and made available as soon as possible. I am also aware that some adjoining farmers have stated that they were not consulted. My officials are pursuing that point with SCIMAC.
The conclusion is that we have a voluntary system that generally works properly, but has not worked in a significant number of cases. We should certainly consider the request made by both my hon. Friends, that the system should have some statutory back-up. As the Low Burnham site shows, it can sometimes be difficult to ensure that everyone who needs to know about a site is told, and in good time. The voluntary agreement generally works well, but it undoubtedly works less well in some cases.
We need a fresh approach, and I should like to see improved notification and consultation processes for future rounds of the evaluations. Like my hon. Friend the Member for Preseli Pembrokeshire, my preference is for a statutory system of notification to ensure that all those who need to know about the sites are informed, including organic growers, bee-keepers and non-GM farmers. I have also insisted that, before the next round of evaluations begins in the autumn, each site should have a specific risk assessment carried out on it.
My hon. Friend the Member for Brigg and Goole made a number of general points on the trials. He also spoke about the issue of statutory consultation and my point on the need for greater assurance of public consent. We are considering the statutory liability provision. There is also an EU provision on liability across the whole environmental spectrum. I agree with my hon. Friend that we need to consider that provision specifically with respect to GM in this country, and we are doing so.
Like my hon. Friend, I remain concerned about whether people understand what 1 per cent. GM contamination really means. It should be made clear that it means that adjoining crops may be contaminated by GM at a rate of up to 1 per cent. There is also the question of whether there are health impacts for those who have particular allergies. I cannot speak about that, but it is an issue.
The issue of fields split into halves, one of which has been strip farmed, is a significant one, and we probably did not take it sufficiently into account. However, I shall raise with the scientific steering committee the issue of whether it invalidates the results in this case. I may write to my hon. Friend when I have done that.

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The number of fields—although it is 84 or 85 this year—is not sufficient for us to be able to draw statistically valid conclusions about the effect of GM on the number of birds. However, we are considering using bird food as a proxy to try to measure that effect.
The separation distance in this case is 50 m, which is intended to deliver no more than 1 per cent. contamination. However, I am well aware that that is a very contentious issue. It is also important to encourage dialogue between farming groups at national level. My Department and the Ministry of Agriculture, Fisheries and Food have already discussed with industry bodies how we can do more to inform organic farmers and bee-keepers in farm-scale evaluation areas about the location of sites that might affect them. I shall ask my officials to arrange further meetings with the respective industry groups, both SCIMAC and organic and conventional farmers, to establish whether we can do more together in future to ensure that all their members who could be affected are informed of farm-scale evaluations near them in good time, and I repeat, at least six weeks before sowing.

Listed Buildings
1 pm
Mr. David Heath: It is a privilege to have the opportunity to raise an important issue in the Chamber. I ask the Minister for the Arts to put away his file on stately homes. I do not want to talk about stately homes or large monuments, but the large number of listed buildings that people live in.
I refer to people's normal residences, which they try to maintain at substantial cost with very little support through existing Government structures. I recognise that the Minister's Department understands some of the issues and values the historic, listed buildings in this country. It commissioned the important report, "Power of Place", which says precisely that. However, I ask him to listen to what I have to say and to make even stronger representations to his colleagues in the Treasury and in the Department of the Environment, Transport and the Regions, because it is there that we need to see action to support the fine words that have been said on many occasions.
Part of the idyllic rural scene, almost the epitome of rural England, is the thatched cottage—one in a west country village—with roses around the door. What we must recognise is that the chocolate-box cottage costs a pretty penny to maintain. My interest has been stimulated by the fact that there are a great number of listed and thatched buildings in my constituency. Many of my constituents who live in those buildings have written to me over the years expressing their concern about the difficulty of maintaining their buildings in the way that they would like. I am indebted to Mr. Tregoing, a constituent from Long Sutton, who came to my surgery and clearly set out his concerns. He had had to look again at thatching half of his property and realised how expensive that would be. It has to be done every few years, using top-grade materials—that is required by the authorities—in order to maintain it. He cannot go for a cheap alternative. He cannot even use a cheaper material for thatching. In our area, reed thatching is not acceptable, so he has to use traditional thatch materials and that makes it an expensive job.
What Mr. Tregoing finds extraordinary is that first, he does not have access to any support—there are no local authority or other grants—and secondly, he has to pay what I think is the iniquitous imposition of 17.5 per cent. VAT. The majority of people to whom I have spoken who live in that sort of property consider it a great privilege to live in their houses. They love living in historic buildings. They recognise that in many cases not only are those buildings very beautiful in themselves, but they add beauty and value to the village or town in which they are located. The building might not even have been listed when they first lived there, and they find it difficult to understand that the value added tax system penalises them for maintaining it to an acceptable standard for the public good, although they obviously have an interest in doing so.
The Minister will be familiar with the facts, but I will set them out for the record. Since 1973, the standard VAT rate of 17.5 per cent. has applied to repairs and refurbishments of buildings, including listed and historic buildings. The difference is that newly constructed buildings carry a zero rate of VAT. At first

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sight, that seems totally anomalous; it flies in the face of everything that the Government have argued otherwise—and which Liberal Democrats have always argued—as regards sustainability and the proper balance between using existing buildings and allowing new buildings. However, there we are.
The regulations were amended slightly in 1994 to extend the zero rating to approved alteration work on protected buildings. If one applies for listed-building consent for an alteration to a listed building, the zero rate applies. Of course, that makes the situation even more anomalous. The extraordinary thing is that someone who builds an extension or undertakes a major alteration to his thatched cottage is not liable for VAT; however, someone who simply tries to maintain it in the historic form in which it has always existed is. Many people find that difficult to understand.
There has been a long-running campaign on the issue, and different concerns have been expressed. As regards churches, the Government have listened. It was announced in this year's Budget that the Treasury has devised a mechanism whereby listed buildings that are places of worship will benefit from a reduction in VAT. That has not yet been agreed with the European Commission, and discussion is still going on. There will be a general review in 2003, when it is hoped that the matter will be resolved.
The Government cannot hide behind the smokescreen of European rules, which I understand are restrictive in this regard. There is no scope under the current agreement for new—I emphasise new—zero rates of VAT for goods or services unless that is decided by general agreement. However, there is scope for introducing a 5 per cent. rate of VAT. Annexe H of the sixth VAT directive lists the goods and services to which Governments can apply a 5 per cent. rate. Item 9 refers to the
"supply, construction, renovation and alteration of housing provided as part of a social policy."
It is a matter of interpretation as to whether an historic building can be construed as part of a social policy, and I understand that difficulty.
In October 1999, a further qualification extended to member states an option to apply an experimental reduction to a 5 per cent. rate for three years on services including the renovation
"and repairing of private dwellings, excluding materials which form a significant part of the value of the supply."
That seems to many of us to offer the Government a much more realistic opportunity to do something significant. However, there is no indication that they intend to take any action whatever. I am disappointed by that, because the Government are failing to act in a way that would be of enormous benefit to a great many people in this country, as well as to our built heritage, and in a way that would meet the objectives—the core beliefs—of the Department for Culture, Media and Sport. We will have the wrong end of the stick if we are not prepared to entertain a saner taxation system that encourages what we want, such as conservation and sustainability, but instead have a system that does the reverse—that provides a fiscal stimulus to build new buildings and allows old buildings to fall into disrepair.
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Another aspect of the problem is the absence of grants for maintenance of listed buildings, which compounds the difficulties that individual householders face with respect to VAT costs. Local authority grants for maintenance are now almost non-existent. There was a time when local authorities had a little more spare cash and were relatively generous and when, perhaps, fewer people knew about the grants and asked for them, but times have changed. I checked with the two district councils in my constituency. Mendip district council does not have a great number of thatched cottages—that is not a vernacular style for that area—but it does have many historic buildings. It has offered no grants for the past two years. It still receives applications, which are kept on file, but there is no indication that grant aid will be available. At one time, it had funds of £25,000 for maintenance grants and £40,000 for buildings at risk. At present, it cannot deal effectively with grant applications for maintenance or for buildings at risk. That worries me enormously.
South Somerset district council, in the other half of my constituency, has 6,000 listed buildings in an enormous range of styles. The area contains the second highest number of listed buildings in the country. Even uneducated laymen would recognise many of them as historic, beautiful and worthy of conservation. The district council's fund, which is now down to £24,000, is targeted at buildings at risk. It is used almost exclusively for unoccupied buildings that otherwise would be in danger of dereliction, and not for occupied buildings. I understand that priority, but I also recognise that it leaves many people without the support that they would like.
The only other alternative is the heritage lottery grant. It currently allocates £86 million for historic buildings and townscapes, but I understand that that is set to fall to £53 million in the coming year. Those funds are oversubscribed by a factor of five to one and are clearly inadequate to the task. They are targeted largely at major buildings rather than the individual dwelling places that are, cumulatively, of as much historic importance.
We are in a very serious position. Mr. Colin Johns, a gentleman with whom I have had dealings, is a founder trustee and the honorary treasurer of the UK Association of Preservation Trusts. As an architect, planner and former head of conservation at Wiltshire county council, he knows a great deal about the matter.
He has said:
"Access to the Heritage Lottery Fund is now the lifeline for many conservation projects, which without grant aid will simply fail. Until recently it was often possible to obtain funding from Cadw, English Heritage or Historic Scotland but these opportunities have been severely curtailed for most projects and the political pledges made in the past that lottery funding would be additional to existing funding, not a replacement for it look decidedly tarnished."
I agree with that comment.
Returning to the subject of VAT, many organisations take the view that it is an anomaly that must be corrected. A number of them have come together as the Joint Committee of the National Amenity Societies, which has produced a report entitled "VAT and the Built Heritage". Its foreword states:
"Charging VAT at standard rate on repairs to listed buildings whilst charging nothing on alterations to them flies in the face of government advice on conservation. The present system is also at

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odds with the ideas of sustainability which lie at the heart of recent thinking by the Department of Environment, Transport and the Regions and which underpin the report of the Urban Task Force."
I agree entirely with those comments, and something must be done now.
The crux of the argument is that doing something about VAT and making grants more widely available would be good for the country. Compared with the alternatives, such measures make economic sense and are good in terms of sustainability. In keeping with the argument that I have already advanced, there is no sense in adopting a fiscal policy that encourages new building and is detrimental to older buildings that we want desperately to preserve. Such measures would also be good for employment. They would help to maintain a craft base and the artisans and craftsmen who carry out such work, and to ensure that the materials that they use are kept in use in this country. Such measures would also undoubtedly be good for tourism. Part of the image that we in the west country sell is that of the traditional townscape or village, of which older buildings form an integral and essential part. Without them, it will be even more difficult to bring back to the glories of the west country the visitors whom we have lost through current events.
Finally, such measures would be good for the residents themselves. They would be freed from the serious concern of maintaining a roof over their heads— literally so, for those who live in thatched cottages—and would be able to preserve their properties in the manner that they prefer. It is true that that would be to their benefit, but it would benefit everyone to whom the listed building process is relevant. Without such measures, the entire system for protecting historic buildings will remain a nonsense. Instead of paying lip service and offering pious hopes, this Government should reform the system so that it can make a real difference to those who live in historic buildings.
1.17 pm
The Minister for the Arts (Mr. Alan Howarth): I thank the hon. Member for Somerton and Frome (Mr. Heath) and congratulate him on securing today's debate. He makes a gentle and seductive case, and I should like to respond to it as fully as time will allow. He and I are certainly in agreement, inasmuch as historic buildings and other survivals of the past give profound pleasure. They stand as a record of artistic and technical achievement in many different fields, and we have a proud tradition of protecting and preserving important buildings. The listing of buildings of special architectural or historic interest began after the war, when planners in blitzed towns and cities desperately needed guidance on which surviving buildings were worthy of retention. Protection is now given to some 500,000 listed buildings, and a wide variety of structures are included—from castles and cathedrals, to thatched cottages, milestones and village pumps.
The Government are advised on which buildings to list by English Heritage, which conducts thematic studies such as those recently carried out on cinemas and military and railway structures. It also advises us on specific proposals for listing buildings that are, for example, under a perceived threat. Legislation is backed up by planning policy guidance note No. 15, which provides solid guidance on identifying and protecting
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the historic environment, and includes advice on the upkeep and repair of historic buildings. The guidance is directed not just at local authorities, but at other public authorities, historic building owners, developers, amenity societies and other members of the public.
As the hon. Gentleman noted, many owners are pleased that their properties have been listed, and therefore officially recognised, as part of our heritage. However, we realise that some owners may be uncertain or apprehensive about what listing will mean for them. My Department's publication, "What Listing Means: a Guide for Owners and Occupiers", deals with general queries. Local authorities and English Heritage are available to answer more detailed questions, and often best placed to do so. Many listed buildings are in public ownership. The Government are aware of their responsibilities and we are considering how best to give guidance to local authorities on best practice in the care of their buildings.
That a building is listed does not necessarily mean that it must be preserved intact for all time. The main purpose of listing is to ensure that care will be taken with decisions affecting the building's future, that any alterations respect its particular character and interest, and that the case for its preservation is taken fully into account in considering any redevelopment proposals.
Owners of listed buildings who wish to carry out works affecting the character of the building must first obtain listed-building planning consent from the local planning authority. When considering applications for consent, planning authorities must ensure that the terms on which consent is granted relate fairly and reasonably to the circumstances of the building and its conservation needs. Planning authorities must therefore ensure that conditions are necessary, relevant, enforceable and reasonable, and they should have access to the appropriate expertise. If an applicant is aggrieved by the terms on which consent is granted, he or she has a right of appeal to my right hon. Friend the Secretary of State for the Environment, Transport and the Regions.
Although owning a listed building can result in additional costs for owners, it can also bring benefits. In many areas, the cachet of listing can add to the value of residential property. As the hon. Gentleman said, many people regard owning a listed building as a privilege and accept it as a responsibility. We are aware of and appreciate the efforts made by the vast majority of listed building owners to maintain their properties in sound condition. PPG15 states that regular maintenance and repair are key to the preservation of historic buildings, that routine expenditure on repairs keeps a building weather-tight and that regular maintenance—especially roof repairs and clearance of gutters and downpipes—can prevent more expensive work becoming necessary later.
The lifespan of an historic building may be all but indefinite, provided that it is regularly maintained and that any major repairs are undertaken promptly. Major problems are often the result of neglect. If tackled earlier, they can be prevented or at least reduced in scale. PPG15 also encourages owners of listed buildings to seek expert advice on maintenance and the best way of carrying out works. The Government hope that local planning authorities will give owners informal advice when they can or guide them to other sources.

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English Heritage is a national source of information and expertise on matters relating to the historic environment. It provides much specialist advice on the care of historic buildings and can sometimes advise on individual cases, especially when there are unusual problems. Its learned and fascinating publication, "Thatch and Thatching", for example, provides valuable guidance on thatched cottages. It says that local authorities' policies should be based on a thorough knowledge of local traditions of thatching and take account of regional diversity, the preservation of materials and technologies and the maintenance of the area's character.
The hon. Gentleman made important points about the wider benefits to the economy, our craft tradition, tourism and heritage of ensuring that our heritage buildings are kept in good repair. He also said much about funding. I do not think that we dispute that local authorities have powers to give grants to owners of buildings of special architectural or historic interest, regardless of whether they are listed. The allocation of funds is, however, for local authorities to decide. I appreciate that there is not, in practice, great scope for authorities to grant funds, but it must be a matter for their priorities and a decision for them.
Grants for the repair of buildings of outstanding architectural or historic interest, which usually means grade 1 and grade 2* buildings—approximately the top 6 per cent. of listed buildings—may also be available though English Heritage provided that the application is made prior to the work being carried out. All applications for grant assistance are judged on their merits. English Heritage takes into account the importance of the building, the urgency of the proposed repairs and the need for financial support. In addition, the Ministry of Agriculture, Fisheries and Food has grant schemes for the repair and reinstatement of traditional farm buildings, which includes listed buildings. The directory of grant-making trusts also lists a number of charitable trusts that make grants towards the preservation and upkeep of historic buildings.
The Government have long been aware of the concern that repairs to listed buildings attract the full rate of VAT. The Chancellor's approach to the European Commission last year to seek to lower the VAT burden to 5 per cent. on repairs to listed places of worship is wholly representative of the Government's willingness to play their part in sustaining that inheritance. The Commission has said that it will look carefully at the VAT treatment of heritage buildings when the VAT directive is reviewed in 2003. We shall continue to work with the Commission towards a positive conclusion.
Mr. David Heath: Will the Minister give way?
Mr. Howarth: Will the hon. Gentleman excuse me, as I have very little time?
That is not to say that we are content to let the matter rest there. My Department, following the undertaking given by the Chancellor in his Budget statement, is working urgently on developing a system to administer grant payments to listed places of worship, which will
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effectively reduce the rate of VAT to 5 per cent. That new policy will mean a very substantial increase in public support for the repair of listed places of worship. The measure has already received widespread and enthusiastic response by all faiths nationally and locally, and we shall make an announcement as soon as possible on introduction of the scheme. Indisputably the nation's places of worship play a huge part in creating our sense of common heritage, but they also play a critical role at the centre of individual communities. It is partly for that reason that my right hon. Friend the Chancellor, with whom the responsibility for VAT rests, chose to concentrate the benefits on those particular buildings.
A responsible Government must be circumspect and selective in targeting reliefs. All of us understand that a relief introduced in one area costs revenue that has to be made up from elsewhere. Of course we fully recognise the importance of the conservation of secular buildings and the important role that individual owners play in achieving that. We greatly appreciate what they do, and we do not underestimate the burden and difficulty for many of them. We play our own part in their preservation through the provision of the grant assistance to which I have already referred. I cannot hold out the prospect of asking taxpayers to provide grant to support the general cost of repairs to grade 2 listed buildings. As the hon. Member for Somerton and Frome said, there are 6,000 listed buildings in south Somerset alone. The allocation of heritage lottery funding must be a matter for the trustees.
We have set in train a wide-ranging review of policies on the historic environment, leading to a major statement of policy on the historic environment later this summer. That is a Government initiative. As a first stage, I asked English Heritage to address a number of specific issues and to submit a report to the Government. Its report, "Power of Place", to which the hon. Gentleman referred, was published in December last year, and we are currently considering it very carefully. I am grateful to the hon. Gentleman for what he had to say about it.
The report contained a number of recommendations aimed not just at Government, but at the heritage sector and owners generally. The Joint Committee of the National Amenity Societies, to which the hon. Gentleman referred, was among those who participated in that process. The document also addressed the issue of the VAT burden, which was so central to the hon. Gentleman's argument. One of its recommendations was for an equalising of work that is new build or alterations, with work that is repair and maintenance. The Government understand the force of that plea and will consider the proposition carefully. Determination of the matter lies with the European Union, but these matters are not set in concrete. The Government have shown that they are willing to use the flexibility available. The overall system will be reviewed in 2003 at European level.
Another message was the need for the heritage sector to promote a shift from cure to prevention, by encouraging regular condition surveys and planned maintenance and by piloting self-help initiatives and low-cost insurance schemes, and for owners to carry out routine maintenance and regular condition surveys. That backs up the message in PPGl5, and we are looking forward to seeing how the heritage bodies

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respond to it as well as the other recommendations. I know that many of them have already seized the initiative and are actively considering future patterns of collaboration.
The Government are very much aware of the problems faced by those who own and live in listed buildings and the special responsibility that they carry for the maintenance and repair of those buildings. We pay the warmest tribute to owners for the work that they do in caring for their properties and ensuring that they retain their place within our national heritage. The proper upkeep of listed buildings is an integral part of our policy for protecting the historic environment, which matters greatly to the vast majority of people and is something about which we can be rightly proud. Our forthcoming policy statement will set out in full our vision for sustaining that policy.

NHS and the Drugs Industry
1.30 pm
Mr. Peter Bradley: I can only assume that the May Day disturbances have prevented the public and Members alike from flocking to Westminster Hall for this debate. I had expected a full Chamber, but I shall have to do my best to whistle in the wilderness, which is a practice that is not unknown to me.
A couple of weeks ago, I received a copy of the Association of British Pharmaceutical Industries annual review for the year 2000—and a very interesting and useful document it is. It states:
"Opinion surveys of Parliament show that overall favourability towards the pharmaceutical industry had improved again over the past 12 months. Six out of ten MPs express a positive attitude towards the industry and only one in ten is critical."
I am afraid that I am part of that one in 10.
I make no apology for raising the issue again, as I have done a number of times, both in this Chamber and on the Floor of the House. I recognise the importance of the drugs industry to the national health service and, indeed, to the economy, but I have a principled objection, as I am sure do most others, to profiteering. I have been disappointed in the past two years at what I can regard only as the Department of Health's complacency in the face of the excessive profits that some pharmaceutical companies are making at the expense of the NHS and taxpayers. I very much hope that the Under-Secretary of State for Health, my hon. Friend, the Member for Birmingham, Edgbaston (Ms Stuart), in whom I have the utmost confidence, will restore my faith.
I acknowledge the industry's contribution of 60,000 jobs, a further 250,000 indirect jobs and £2.9 billion a year invested in research and development, which equates to about £8 million a day, according to the ABPI's annual review. Five of the top 25 selling drugs on the market have been pioneered in the United Kingdom and there were £7.1 billion worth of exports, producing a trade surplus last year of £2.3 billion. Drugs that are manufactured in the UK are our third biggest export, which is an impressive record.
However, we have seen too frequently the way in which the pharmaceutical industry and the companies within it have exploited their dominant position. We saw recently how multinationals sought to put pressure on the South African Government. I am pleased that they have now withdrawn their action against that Government in respect of AIDS drugs. We saw, too, the reaction of the manufacturer, which I believe is Glaxo Wellcome, although I stand to be corrected, when the National Institute of Clinical Excellence announced that it could not recommend that the drug Relenza could be prescribed through the NHS. As I recall, the chairman's response was that he would have to review the company's investment in this country.
It is interesting to note that drug prices are uniformly cheaper in Spain, where there is no drug industry, so that the muscle that the industry applies to the Government in negotiating drug prices is considerably reduced. It is my contention that there is routine profiteering at the expense of the NHS. I accept that the costs of research and development are considerable and I recognise the need for drug companies to recover their investment and to reward their shareholders. I do not object to profit, but to excess profit.

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In 1999, Shropshire health authority and the primary care group in my constituency raised concerns about the deficit in their drugs budget. I carried out research and initiated an Adjournment debate in which I described the £69 million overspend that health authorities were contemplating, £66 million of which would not have existed had there not been the differential pricing between branded and generic drugs. I described how hospital-led prescribing was contributing significantly to the problems that they faced. When I say "they" I mean 78 out of the 100 English health authorities. Some 34 were facing a deficit of £1 million, and five were facing deficits in excess of £2 million. In summary, hospital-led prescribing is simple. Pharmaceutical companies offer hospitals drugs at knock-down prices—loss leaders—knowing full well that hospitals account for only 20 per cent. of the market, and that outside the hospital, in the community, which represents 80 per cent. of the market, the prices of those drugs can be significantly increased.
Typically, when a patient is released into the community, he or she goes to his or her doctor and demands the same branded drug that was offered by the consultant in the hospital. The patient will not know that in many cases the cost of the drug in the hospital is a fraction of its cost in the community. In the case of Frumil, the cost in the hospital was only 6 per cent. of the cost in community, and the in the case of Imdur, the figure was 2.5 per cent.
My health authority faced a deficit of more than £1.5 million in 1997–1998. The following year the deficit was roughly the same. In 1999–2000 it had risen to £3.5 million. Those deficits had to be met either from other budgets for health care in my community or from the taxpayer. In 1999, with the introduction of primary care groups, the NHS began to get to grips with the problem. Because PCGs control their own budgets, they have an incentive to switch from expensive branded drugs to the cheaper generics. The health authority in my constituency was encouraging closer working between primary and secondary care, to begin to tackle that problem. It introduced innovative IT packages to guide doctors as to the most cost-effective medicine that they could prescribe.
At the same time, the Department of Health negotiated with the branded medicine manufacturers a 4.5 per cent. reduction in the price of their drugs. That was very encouraging, until the drug industry hit back. Mysteriously, between the autumn of 1998 and the summer of 1999, the number of drugs on the category D list, issued monthly by the NHS to alert practitioners to the lack of availability of cheaper generic drugs, leapt from 30 to 170. Typically, drugs were featured on the list as being unavailable and were then removed from the list some time later. Fruzomide in particular leapt in price between September 1998 and September 1999, from 26p to £2.14, an increase of 723 per cent. Other drugs followed a similarly steep path. The price of 100 mg of thyroxine increased by 670 per cent. and that of 5 mg of bendroflurozide increased by 567 per cent.
So alarming were those increases and their impact on health authorities, that the Select Committee on Health held a snap investigation of the causes of this fluctuation in the market. In its report, the Committee referred to market manipulation, hoarding and collusion, and it
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concluded that the stratospheric price rises of the past 18 months must have enriched many individuals at the expense of the NHS. It was right.
Sadly, the Office of Fair Trading, which was asked by the Department of Health to investigate the causes of spiralling drug prices, is still investigating almost two years later. OXERA—Oxford Economic Research Associates—a consultancy commissioned by the Department, has submitted its report, but it is currently unavailable for public scrutiny and is still being considered by Ministers. Meanwhile, the plunder continues.
The category D list may not be an issue now, but at the time it cost the NHS £160 million. I did not fabricate that figure—it was provided to me in a parliamentary answer by the Minister of State, my right hon. Friend the Member for Southampton, Itchen (Mr. Denham). So steep was the increase and so serious were the consequences for health authorities throughout the country that the Department of Health was obliged to make additional grants to those authorities of £90 million in December 1999.
Whenever I have raised my criticisms on those issues, they have provoked fevered denials from the APBI and individual drug companies, and rather sullen hostility from civil servants, which I do not understand, because I would have thought that if one could identify a way of spending precious taxpayers' money on the NHS more effectively, the Department of Health would be first in line to make use of it.
I first raised my concerns in an Adjournment debate in 1999. Some of the press interest generated by that debate caused the managing director of a small drugs company to write to me, explaining that he had been excluded from the market for pain relief medication for cancer sufferers. He ran a small company that made a generic drug that was a great deal cheaper than the drug known as MST Continus, which was produced by Napp Pharmaceuticals. I referred that complaint to the Office of Fair Trading. It is regrettable that the investigation took two years. but it was thorough. On 30 March, the OFT issued its findings—the first under the Competition Act 1998.
The OFT found that Napp's MST drug had captured about 97 per cent. of the NHS market in 1998, despite the fact that its patent had elapsed as early as 1992. It had achieved that by discounting the cost of the drug to hospitals by more than 90 per cent. It was being sold at less than 50 per cent. of the cost price. Napp's defence was that it could achieve that price through bulk sales to hospitals. I contend that a company that sells a product at less than the cost price will survive only if it can recoup the losses and make a tidy profit from other activities. In my view, that is exactly what Napp did. That was also the view of the OFT, which referred to Napp's strategy of eliminating competition. It spoke of selective "excessive" discounting in hospitals to capture 90 per cent. of the market within hospitals and, once it had secured that market and excluded those companies that could not compete with its discounting, it could capture the far more lucrative market in the community.
The OFT concluded that Napp had "abused its dominant position' in the absence of competition and had charged excessive prices in the community. MST treatments of 10 mg, 30 mg and 60 mg were 1,000 per

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cent. more expensive in the community than in the hospitals. The OFT estimated that a profit of about 80 per cent. was being made on the drug and, more important, that it was costing the NHS about £2 million a year. Those unequivocal findings ware serious enough to prompt the OFT to impose a £3.21 million fine. It also demanded that Napp should end the infringements, reduce its prices to the community and close the price differential between what it charged hospitals and what it charged doctors' surgeries.
OFT director John Bridgeman said:
"Napp's discounting policy to hospitals has impeded competition in the market for sustained release morphine by anti-competitively targeting rival's products. Discounts of well over 90 per cent. were offered in tendering for hospital contracts where Napp faced a rival"—
interestingly, those discounts were not so generous if there was no rival—
"and at least one competitor was forced to withdraw from the market.
By keeping more than 90 per cent. of the hospital segment of the market, Napp was able to retain a similarly high share of the much larger business of supplying sustained release morphine to patients in the community. It was able to do this because GPs' prescriptions are strongly influenced by the brands used in hospitals. Community prices were excessive—typically more than ten times higher than Napp's hospital prices and up to six times the export price of MST.
I estimate that the price reduction I have proposed should immediately bring savings to the NHS of the order of £2 million annually. In the longer term developing competition should lead to further savings to the NHS and so to the taxpayer."
That was a landmark decision. Should Napp appeal, the case will be heard by the tribunal set up under the Competition Act 1998, and will be the first of its kind under the new legislation. That, too, will be a landmark. What the OFT found after its two-year investigation totally vindicated the criticisms that I and many others had made of the drug industry over the years. Napp's defence, according to its press release, was that
"discounting in hospitals is commonplace"
It went on to state that
"the OFT's attack on Napp's list price could equally well be applied to other companies governed by the PPRS (Pharmaceutical Price Regulation Scheme) and represents an across the board attack on pharmaceutical companies' prices".
Hear, hear. That is less a defence than an indictment of the rest of the drugs industry. The practice for which Napp is condemned is as commonplace as it is cynical.
It is difficult to estimate the annual cost to the national health service. I have sought the benefit of the Department of Health's estimates through parliamentary questions, but it has not been forthcoming so far. I think that its estimate will be between £50 million and £300 million. That is not unreasonable when one realises that the annual bill for medicines is about £7 billion.
I am concerned about the responses from the Minister. In an answer that I received last week, she said:
"The Department keeps the level of competition in the pharmaceutical sector under review, and has mechanisms in place to prevent profiteering. It secures value for money through the Pharmaceutical Price Regulation Scheme (PPRS) which controls the profits which companies make from the supply of branded medicines to the National Health Service. Under this scheme a high price for one product may be balanced against a low one for
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another, provided that the company's overall profits remain within the limits permitted by the scheme."—[Official Report, 23 April 2001; Vol. 367, c. 168W.]
I wish that I could have such faith in the PPRS, but I do not, and I do not think that it is entirely shared by the OFT either. In its report, it referred to Napp's argument that the PPRS prevented it from charging excessive prices, and concluded:
"It is not considered that these restrictions prevent Napp from charging excessive prices on MST. In particular, it is noted that the PPRS is a portfolio constraint and does not seek to ensure that the prices of individual products are not set at excessive levels."
The officials in the Department who advise the Minister must do better on this issue. I welcome the Government's unprecedented investment in the NHS, but I am determined, as I am sure are Ministers, that every precious penny from the taxpayer that should go into front-line health care does so. That cannot be said to be the case now, as millions of pounds go in through the front door of the NHS and exit through the back, straight into the credit columns of drug company accounts. That is unacceptable.
I want the Minister to assure us that there will be a comprehensive and urgent investigation of the relationship between the NHS and the drugs industry. That should be followed—if it is justified, as I believe that it is—by decisive action to end profiteering. An end should be brought to differential prices in hospitals and the community. Consideration should perhaps be given to the establishment of a single central NHS purchaser for drugs.
If patients are to be at the centre of the NHS—I believe that they should be, and it is one of the central planks of the Government's reform of the health service—drug companies should move aside as much as other sectional interests in the NHS. It is time for the Government to take action.
1.48 pm
Mr. Andrew Lansley: I am grateful to the hon. Member for The Wrekin (Mr. Bradley) and the Minister for allowing me to make a short contribution. The hon. Gentleman referred to the recent OFT case concerning Napp Pharmaceuticals. The company is based in Cambridge and it employs several of my constituents, so I want to mention some points that have been made to me.
The OFT decision appears to be based on the belief that, as a result of the abuse of a dominant position, NAPP secured excess profits from the sales of its sustained release morphine drug. The penalty that the hon. Member for The Wrekin said had been imposed on the company suggested that substantial excess profits were obtained. However, in the Minister's recent answer to his question, to which he also referred, she explained that the PPRS
"has mechanisms in place to prevent profiteering. —[Official Report, 23 April 2001; Vol. 367, c. 168W.]
If the Office of Fair Trading decision stands, will it not undermine the purposes of the PPRS in encouraging research and development and the supply of innovative treatments?
We need clarity. Either the pharmaceuticals market should be subject to normal competition rules, along with full patent protection enabling innovative

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producers of drugs to secure a return while the patent protection applies, and doubtless involving higher costs for branded drugs during that period; or it should be possible for the purchasing power of the NHS to be applied through the PPRS to secure drug supply within negotiated profit levels. It is hard to dispute the effectiveness of that approach given the cost of drugs in this country relative to Germany or the United States. I would not regard Spain as a comparator because it does not have the same incentive to encourage innovation in its drugs companies, as the hon. Member for The Wrekin said.
Under the present regime, and following progressive price decreases in the PPRS, the price of MST tablets is lower than it was 18 years ago. The alternatives must be faced. It is unreasonable for the Government to impose the PPRS while appearing to allow it to be ignored, and letting the Office of Fair Trading apply normal competition criteria. In the era of supposed joined-up Government, Ministers need to tell us whether the PPRS is to be sustained or undermined.
1.51 pm
The Parliamentary Under-Secretary of State for Health (Ms Gisela Stuart): I congratulate my hon. Friend the Member for The Wrekin (Mr. Bradley) on securing the debate and on what I might describe—in the friendliest of terms—as his dogged persistence in getting the issue a public airing. I also note the comments of the hon. Member for South Cambridgeshire (Mr. Lansley) about the relationship between industry and the NHS.
It is true that the NHS spends about £7 billion on medicines in the United Kingdom. I hope that we all agree at least on wanting a system that allows as much as possible of the overall spending to benefit patients. My hon. Friend the Member for The Wrekin referred to the Office of Fair Trading investigation, which he instigated. It was an important investigation and a significant development in the way in which we deal with competition issues. I am grateful to my hon. Friend for bringing it to the attention of hon. Members. As he mentioned, it was the first action of its kind under the Competition Act 1998.
The market for medicines is unusual in several respects and that has been recognised by all countries and by the European Union. First, it is unusual because it is not easy to apply the ordinary language of buyers and consumers to it. Doctors choose medicines on clinical grounds, being relatively autonomous and wanting what is best for their patients. That is the right approach. Secondly, there is often no way in which substitute products can be used, because of patents or sometimes, even when a patent has expired, because of features that make substitution difficult or impossible. That is the case with slow-release morphine, which is the subject of the Office of Fair Trading investigation. Thirdly, the medicines market is not uniform. One cannot automatically decide that manipulation of one sub-market means that the same will happen elsewhere.
My hon. Friend has been quoted as suggesting that the NHS could save vast sums from the drugs bill. We need to be careful about the use of figures. It would be
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dangerous to extrapolate from one example to the whole market. It is not safe to generalise from economic behaviour in one or even a few examples. There is no alternative to certain drugs. Some medicines are for life and others are taken only once.
My hon. Friend spoke as if discounts were automatically a bad thing. I do not believe that. Discounting can be abused, but initially discounts are an example of purchasers using their skills and bargaining powers to achieve savings. That is why it is so important to study each case on its merits. Simply ending discounts will cost money, not save it. Nor do I think that deciding on the right price for a medicine is straightforward. A large part of the price of new medicines relates to the cost of research and development. I am sure that my hon. Friend will agree that without that there would be no new medicines. Of course it is less easy—and a matter for further debate—to say what share of the research and development costs the UK drugs market should include in the price of its medicines. The market is not always stable; I remember the Health Committee debate that was prompted by the unusual turmoil in the market, on the many ways in which the Department of Health could deal with it.
I recognise that companies must be allowed to recoup some of their research and development costs. What counts as "excessive" will probably be the subject of on-going debate. However, we have a strategy; so despite his call for a thorough investigation, I hope that my hon. Friend is convinced that we are looking for the right balance. A number of elements are involved, including direct price control, help with prescribing decisions and profit controls at company level. We need to be careful that the interface between those elements does not damage the pharmaceutical industry, or in any way leech money out of patient care. The pharmaceutical industry is successful, and we would lose it at our peril.
My hon. Friend spoke at some length about the recent OFT report. I reassure him that we are studying that report carefully. It took two years to write, but we have had it for only one month, thanks to the confidentiality provisions of competition legislation. The Director General of Fair Trading has still not issued his direction, although I understand that that will happen very soon. I should like to make it clear at the outset that the OFT investigation does not claim to provide for the day-to-day control of medicine prices. However, the OFT recognises that the pharmaceutical price regulations scheme has considerable advantages as a system of profit and portfolio regulation.
My hon. Friend also asked me to investigate the prevalence of the practice of which Napp Pharmaceuticals is said to be guilty—in short, is the Napp case typical? For the reasons that I have set out—patents and non-substitutability of medicines—dominance of such a limited market is not unusual. Indeed, there might be good reasons for it to happen. However, in the light of the OFT investigation, we are examining further the areas where there is a dominant position and the potential for abuse. We cannot prejudge the case of Napp, which could be the subject of an appeal. However, we can put strategies in place to deal with imperfections in the market.
A great amount of work has been done to improve prescribing in the primary care sector. For instance, the area prescribing committees are working together with

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the NHS trusts and the primary care groups, and the "Pharmacy in the Future" strategy was launched last September. We are making sure that good working relationships exist between trusts, drug and therapeutic committees and the area prescribing committees, including collaboration on formulary choices and the managed entry of new drugs.
My hon. Friend referred to generic medicines. We recognised that category D of the drug tariff was open to exploitation—it was one of the main topics discussed by the Select Committee on Health—and that changes needed to be made. That is why we abolished it last year, and there are now no products in that category. The market has changed over the past three years, and it has shown success in improving the use of generic medicines. The prices of generics increased, which is why we introduced the statutory maximum price scheme last year. The NHS is expected to realise savings of around £240 million on generic medicines in 2000–01, compared with price rises in March 2000. Overall, prices now are much as they were in 1999, before those steep increases.
There are real signs of the success of our strategy of working with the market. My hon. Friend referred to the OXERA report and the work that had been carried
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out. We are developing further options and drawing on that report. We are committed to publishing a summary of the factual basis for OXERA's findings and will discuss the options with interested parties before we take final decisions on the way forward.
The title of this debate is "NHS and the Drugs Industry". I should like to put on record that we have good relations with that industry. It is important, and it produces a trade surplus of about £2.7 billion; equally importantly, it develops medicines of enormous benefit to patients the world over. We value that and we have to ensure that the UK remains an attractive place in which to develop and produce new medicines.
The OFT investigation has shown that it can sometimes appear that a supplier is exploiting a dominant market position. We have the tools in place to deal with that, to have a proper and fair investigation and to apply the appropriate remedies. In the Napp case, we shall have to wait to see whether the company will appeal. I hope that my hon. Friend is satisfied that we are dealing with the matter vigorously and with great determination.
Question put and agreed to.
Adjourned accordingly at Two o'clock.