Westminster Hall Sitting of 23 January 2002

Preamble
[SIR MICHAEL LORD in the Chair]

Zimbabwe
Motion made, and Question proposed, That the sitting be now adjourned.—[Jim Fitzpatrick.]
9.30 am
Dr. Julian Lewis: It is chastening to observe that Robert Mugabe, who started his time in power in Zimbabwe as an avowed Marxist, seems to be ending it as a fascist.
I am put in mind of the fact that at about the time that Mugabe took control of Zimbabwe back in 1980, the BBC televised a version of Bertolt Brecht's remarkable play "The Resistible Rise of Arturo Ui". It painted, in terms of Chicago gangland, a parable of the rise to power of Hitler and the way in which he maintained himself in power, though nothing more than a lethal murderous clown, by means of corruption of the courts, intimidation of witnesses and the substitution of gangsterism for civilised behaviour.
I am reminded of that play in the context of present-day Zimbabwe because of the series of reports that comes out of that wretched country day by day. On 15 January, it was reported that David Mpala, an opposition lawmaker, was critically wounded after 20 ruling party militants attacked him, slitting his abdomen. The police spokesmen said that the incident was being investigated, but claimed that the assailants were unknown and suggested that it could have been a case of carjacking.
Similarly, on 19 January, it was reported that Thomas Tawanda Spicer, the 17-year-old son of a Zimbabwean film maker, was tied to a tree, and beaten and kicked throughout the night. Later, he was taken to a police station where he was reportedly arrested on charges of kidnapping. After first denying any knowledge of him, the police then confirmed that he was in their custody, but have denied him access to his family or to a lawyer.
This is the third debate on Zimbabwe in as many months that has taken place in Westminster Hall. There remain 45 days before the presidential election. Morgan Tsvangirai of the Movement for Democratic Change states that the country is already engaged in what he describes as "low-intensity civil war". There are road blocks where people are required to produce ZANU-PF cards if they want to proceed. Prisoners are being interrogated in ways that would have Labour Back Benchers and Liberal Democrat Front Benchers frothing at the mouth if they were applied to al-Qaeda suspects in Cuba.
The foreign press is being excluded from the country, and the local press is threatened with being licensed year by year. The chief justice of Zimbabwe has been forced from office; opposition politicians have been murdered; their rallies have been tear gassed and their offices torched. An electoral register excluding up to 2 million
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Zimbabweans on the basis that one parent was born abroad has been drawn up, while the same electoral register allows large numbers of long-dead voters the privilege of receiving a ballot paper.
There are threats to seize UK companies in Zimbabwe, of which there are about 300. Repeated demands are being made for British passport holders to renounce their UK citizenship and, presumably, the protection that that is still reckoned to confer. Since 2000, 156 opposition supporters have been murdered and many more have been kidnapped and tortured. The military have stated that they will not serve under a different Government from that of Mr. Mugabe. Of course, they do not put it precisely in those words. The chief of staff, General Zvinavashe, said that the armed forces could not accept a president who had not fought in the liberation struggle. That was clearly designed to rule out Morgan Tsvangirai.
It is believed that, since the beginning of this month, some 10,000 soldiers have been sent on leave to campaign throughout the country for a Mugabe election win. Legislation is being put into practice to ban foreign journalists from working in Zimbabwe at the earliest opportunity. Two-year jail terms are anticipated for reporters who cause by their journalism "alarm and despondency" in the country.
In short, Zimbabwe is suffering from starvation, inflation and colossal unemployment, while Mugabe and his cronies embezzle funds and channel them abroad in readiness for a possible enforced retirement to Libya or some other bolthole, in the event that they are eventually forced from power.
The head of the Zimbabwe Union of Journalists, Basildon Peta, has produced a remarkable series of reports for The Independent. He notes:
"Critics say the new laws exceed the worst excesses of Rhodesia's white minority government or apartheid South Africa".
The question that I must ask is, why are people who, rightly, strongly criticised white repression in those countries in the past responding so feebly to black repression now? This is a viciously racist and fascistic regime. Where are the mass demonstrations against it? Could it be that people on the left of politics feel a little intimidated by such Mugabe rhetoric—unjustified rhetoric I hasten to add—as, "Britain has a war with us. Prime Minister Tony Blair wants his own version of colonialism in Zimbabwe."? Is it a liberal-left guilt feeling about anti-imperialism, or simply double standards? I do not believe that it is double standards, but I do believe that a bit of liberal angst is creeping into the muted reaction that we are getting to this terrible situation.
Baroness Amos, a Government spokesman in the Upper House, reportedly told the BBC:
"There have been calls for targeted sanctions against the government of Zimbabwe.
The process that we are engaged in with the European Union could result in what are called 'appropriate measures' if the things that we are looking for are not met. What it means is that Britain has been working with partners on this. The EU has the possibility to take 'appropriate measures' … that could be targeted sanctions."

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The report, via the Press Association, goes on to say that Lady Amos added that the Government want to maintain dialogue with Zimbabwe and said:
"We are not ruling anything in or anything out.
We are at a point now where the Government of Zimbabwe have to come back with some written commitments …
And the EU have made it absolutely clear that they will be looking very closely at the action that is being taken by the Zimbabwe government on the ground".
Mr. Julian Brazier: My hon. Friend is making a powerful case. Is not part of the problem that Ministers have remarked more than once that Robert Mugabe came to power by democratic means? Surely the lesson of history is that some of the very worst tyrants, including arguably Adolf Hitler, originally came to power by largely democratic means. That cannot be a justification for what is happening now.
Dr. Lewis: It is certainly true that the system in Zimbabwe seems to be a parody of democracy. Its leaders try to govern by means of institutions that look, on the face of it, as if they conform to democracy while actually being the merest send-up or perversion of democracy in the way that they operate.
I fear that the Foreign Office has consistently applied too much of a softly-softly approach. We saw the same sort of language back in April 2000, when The Independent quoted British officials as claiming that the Cairo meeting between the then Foreign Secretary, the right hon. Member for Livingston (Mr. Cook), and Mr. Mugabe had restored relations to
"a frozen kind of friendliness",
and that Mugabe would lessen his criticism of UK Ministers if the Government would
"lower the temperature of its commentary"
about him. That is not the approach that is required, or that we were led to expect when the Prime Minister said in May:
"I will make Africa a major personal priority and a priority for the Labour Government."
In June, the Foreign Office said in a press release:
"Relations with Africa will be an important priority for this Government's second term of office."
In a leaked memorandum entitled "Touchstone Issues" and published in The Times on 18 July last year, the Prime Minister admitted that the Government is seen as "insufficiently assertive on Zimbabwe".
It is not assertions that Zimbabwe needs, but effective action. It is hard to believe that right up until recently the deportations of people back to Zimbabwe were continuing at a heavy pace. The Refugee Council expressed serious concern that the Home Office's assessment of the situation in Zimbabwe was so out of date that it was only under severe pressure from the council—and, I might add, from the Conservative party and the Liberal Democrats—the Home Secretary suspended deportations of people back into the hands of the Mugabe regime.
There has been much talk about what measures could be applied. We hear that smart sanctions are under consideration by the European Union and America, and
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that the Commonwealth is expected to consider calls for Zimbabwe's suspension. Where is the voice of Mary Robinson, the United Nations High Commissioner for Human Rights in all this? For that matter, where is the practical action by our Prime Minister, who memorably told the Labour party conference last year that
"on the African side, true democracy, no more excuses for dictatorship, abuses of human rights; no tolerance of bad governance, from the endemic corruption of some states to the activities of Mr. Mugabe's henchmen in Zimbabwe … This is a moment to seize. The kaleidoscope has been shaken. The pieces are in flux. Soon they will settle again. Before they do, let us re-order this world around us."
On 14 January, Mugabe promised the Southern African Development Community that the presidential elections would be free and fair, and that recent cases of political violence would be "fully and impartially investigated". Apparently, that was good enough for the President of Malawi, the chairman of the SADC, who said:
"Let's give Zimbabwe a chance. President Mugabe has made a commitment to us as SADC—let's wait and see."
After that regional summit in Malawi, Mugabe boasted:
"The whole meeting supported our position"
and he claimed that he would like "free and fair" presidential elections to go ahead. That was also enough for South Africa's deputy Foreign Minister, who said that there was no alternative to using "quiet diplomacy" to persuade Mugabe to restore the rule of law. He said:
"Let's try at this very difficult time to assist, to take measures that will help us stabilise the situation."
That is in stark contrast to Morgan Tsvangirai's call for South Africa to impose direct sanctions on Zimbabwe by cutting transport links and stopping fuel and electricity supplies. That call will evidently fall on deaf ears.
The sad fact is that the gay rights campaigner Peter Tatchell has achieved more effective action against Robert Mugabe than the Commonwealth, the United Nations, the EU and the Governments of Britain and South Africa put together. Basildon Peta, the head of the free journalists in Zimbabwe, has stated that the EU, the UN, Britain and the Commonwealth have done precisely nothing. He said:
"All we can do is brace ourselves for years of dictatorship, and pray that someone, one day, comes to our aid."
He also said:
"An unfortunate truth for many Zimbabweans is that we cannot rely on institutions such as the Commonwealth, the British Government or the European Union, which purport to be the custodians of democracy, for relief against wayward leaders like President Robert Mugabe."
Tony Worthington: Will the hon. Gentleman give way?
Dr. Lewis: I am bringing my remarks to a conclusion, but I will give way to the hon. Gentleman.
Tony Worthington: The hon. Gentleman's speech has contained some fine rhetoric, but he has not yet said what he would do. Before he brings his remarks to a conclusion, will he say what he would do?
Dr. Lewis: I thank the hon. Gentleman for that intervention. I have said that tough sanctions should be

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brought into play. I may be somewhat ahead of my party's position, because I would not rule out direct intervention in the event that this dictatorship is not seen to bring matters back into a constitutional position.
Tony Worthington rose—
Dr. Lewis: The hon. Gentleman will have his chance to contribute shortly. I want to develop the point that I was about to make when he intervened.
I am glad that the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Exeter (Mr. Bradshaw), will respond to the debate, because as he knows I consistently supported the Government when they took action against tough regimes. He has remarked on that fact to me, and I am grateful that he acknowledges my support. I supported the Government over Kosovo, Sierra Leone and Afghanistan, and I hope, in the not too distant future, to be able to support the Government over Zimbabwe as well.
I began by drawing a parallel between Mugabe's regime and Nazism, and I want to go back to that to conclude my speech. Desmond Tutu has rightly described the Zimbabwean political leadership as having gone
"bonkers in a big way."
That reminded me of the famous despatch that our ambassador in Germany sent back as early as June 1933, only a few months after Hitler had come to power. The ambassador, Sir Horace Rumbold, was retiring and was sadly about to be replaced by an appeaser. In his valedictory address, he said:
"I have the impression that the persons directing the policy of the Hitler Government are not normal. Many of us, indeed, have a feeling that we are living in a country where fantastic hooligans and eccentrics have got the upper hand."
His recommendation then was that Hitler should not be appeased. Our recommendation now is that Mugabe should not be appeased either.
9.47 am
Tony Worthington: I agree with a surprising amount of what the hon. Member for New Forest, East (Dr. Lewis) said, but it is the duty of Opposition Members to be specific about what they would do. He claimed that Morgan Tsvangirai was in favour of sanctions, but as I understand his statements, his appeal is that they should be targeted against Mugabe and his narrow band of people who are looting the country.
When the hon. Gentleman says that he does not rule out direct intervention, he should explain what that means. Does he want British intervention? Should any intervention be under the United Nations or should it be regional intervention? That should be spelt out. For all his rhetoric, the hon. Gentleman has not made it clear how his position differs from that of the Government.
I shall be honest about this and admit that this problem is an embarrassment. Something is going on in the heart of Africa. The British reaction—not the Labour party's—to the situation in this previously and still potentially prosperous country has been muted. That is because, for a long time, we believed
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that any intervention by this country would be counterproductive. If we protested, we would be seen as intervening on behalf of white farmers in that country, and that would feed into Mugabe's rhetoric. I think that we were wrong, because the main sufferers have been poor blacks, and they are suffering more and more.
Our reticence has had some strange side effects. If we had realised the depths of Mugabe's iniquities, we would have protested more effectively, and would not have been returning opposition people to Zimbabwe. There is a great deal of difference between protesting and taking effective action.
There is no doubt that Zimbabwe is a potentially prosperous country which Mugabe is progressively destroying, institution by institution. That is what is suggested when a chief officer in the army threatens a coup if the opposition win, when the judiciary is packed with Mugabe supporters, when the police stand by while atrocities occur, and when there are attacks on the opposition. Wherever there are abuses of human rights, we must protest. I was delighted to hear a Tory Member call for an ethical dimension to foreign policy, and I hope that he will spread his influence among his colleagues.
Dr. Lewis: I will do my best
Tony Worthington: It must be pointed out that the main losers in Zimbabwe are poor blacks, and that the need for humanitarian aid is mounting as the economy collapses. Nearly 100 members and supporters of the MDC have been killed, and thousands have been tortured, maimed and raped by ZANU-PF supporters. That can be authenticated.
We should praise the sheer courage of opposition politicians who are risking all for democratic government. Last Saturday, 10,000 MDC supporters turned up for a peaceful rally at the White City stadium. The rally was cancelled, and 25 MDC supporters were tortured and hospitalised by ZANU-PF supporters while police stood by. That is outrageous. We can already see that these are not free and fair elections, because of the intimidation that has already occurred.
The hon. Member for New Forest, East referred to the violence and corruption, and to people being forced to buy ZANU-PF cards in order to go about their daily business. That, too, is outrageous, as are the laws that are being passed. I was interested to read this morning that it is intended to proceed with the restriction on press freedom that was postponed for a short time. Recently an Act was passed, the General Laws (Amendment) Act 2002, which it is estimated will disfranchise more than 1.5 million people. Postal voting from overseas is being restricted to those who are effectively in the Government's employ. Those in rural areas can vote only if the local headman will vouch for them: in other words, they must be approved by Mugabe. The impact of the licensing of Zimbabwean journalists could not be clearer.
It is plain, then, that Mugabe has no intention of holding free and fair elections. As the hon. Gentleman pointed out, he has broken the promises that he made at the Abuja meeting in September. He has already failed to take the action required of him by SADC members on

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15 January. We can see that he will break the promise made just last weekend to President Osabanjo of Nigeria that he would stop all election violence immediately.
Mugabe claims that what is happening is British interference, but that is not true. It cannot be British interference that has caused 2,500 people to leave Zimbabwe for South Africa each day. That is the official figure; I suspect that the actual figure is far higher. The Independent estimates that there are now some 400,000 Zimbabweans in this country. Many are here illegally, but the fact that they are avoiding the tyranny in Zimbabwe cannot be due to British action.
I am sure that African leaders are increasingly realising what an enemy of Africa Mugabe is. It is not Britain but poverty-stricken Zimbabwe that is damaged by his action. Assistance from the World bank, the African development bank and the European investment bank has already been withdrawn from Zimbabwe, and, as the hon. Gentleman said, the inflation levels are frightening: the latest recorded figure is 112 per cent.
In June last year, the European Union invoked article 8 of the Cotonou agreement. After all, why should our assistance go to a Government who stimulate political violence, do not allow election monitoring, have ended freedom of the media and judicial independence, and have allowed and even encouraged the illegal occupation of property? At the meeting of the General Affairs Council of the European Union on 28 January, the EU must agree to use every possible means to target the corrupt resources of Mugabe and his narrow group, and to make their lives as difficult as possible by forbidding them to travel.
We have a bad record on the issue of corrupt leaders and their resources—leaders such as Abacha, Mobutu, Milosevic and Saddam Hussein. We must now see whether all the laws passed in the world since 11 September to prevent money laundering work. They must be imposed rigorously against Mugabe. I am sure that the ordinary people of Zimbabwe will rejoice if he can be prevented from gaining access to the looted resources that he has gained from not only his own country, but the Congo.
Sanctions, however, must be targeted; they must not be general. We have learned over and over again that when we impose general sanctions, the victims of such people as Mugabe become double victims. Sanctions, among other things, set up black markets and give power to supporters of Mugabe and the like, so that they look after themselves and those outside the network lose further.
Mr. Bill Wiggin: Sanctions were imposed on Libya to force it to give up the Lockerbie bombers. Libya is now a close ally of Mugabe. Perhaps the success of those sanctions will cause the Libyans to advise him to pay a great deal more attention to what we are suggesting.
Tony Worthington: Believing that requires a considerable leap of faith. It is touching that the hon.
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Gentleman believes it, but I think that it would be difficult for him to find anyone else who considers that Gaddafi's influence will be crucial in this instance.
Mr. Hugo Swire: The hon. Gentleman should not dismiss Gaddafi's influence so lightly. There is evidence that he has contributed about half a million pounds to Mugabe's election expenses so far. Moreover, there are reports of Libyans being granted fertile land, particularly in areas near Harare. The hon. Gentleman underestimates the potential influence of Gaddafi and the Libyans at his peril.
Tony Worthington: This is becoming a little esoteric. The fact is that general sanctions imposed on Zimbabwe would mostly damage those who have already been damaged by Mugabe's activities. I find it difficult to identify any imposition of general sanctions in the world that has been really effective. Where they have been effective, for instance in South Africa, it has taken decades. We want our action to be effective a little more quickly than that.
There is no doubt that there should be targeted sanctions. The International Development Committee has considered what are often described as smart sanctions, although there is not too much smartness around. I hope that the legislation that has been introduced around the world by an enormous number of organisations can be proved to work in the case of Mugabe.
We must continue the pressure for an end to political violence, and for unrestricted access to election monitors. I believe that the exertion of pressure by the European Union can be a huge advantage. One of our problems is that Mugabe uses our colonial past against us. He cannot do the same to the 15 countries of the European Union. This is a good example of the way in which the EU's foreign policy activity can be very helpful to us. I am surprised—although perhaps not—that the hon. Member for New Forest, East rather down-played the contribution that can be made by the EU.
The African countries must now fully punch their weight, especially South Africa. It is losing because of Mugabe. From Mugabe, we must have only action. The illegal seizure of lands must cease. The recent judgment by his court that illegal seizures of white-owned land were justified must be reversed. There must be invitations immediately to international observers from bodies such as the Commonwealth and the EU. He must let international journalists, including from the BBC, back into the country.
We must intensify that pressure in any way we can without harming the ordinary people of the country. The whole international community, regardless of colour or race, must tell Mugabe that his behaviour is leading his country into total wilderness.
Several hon. Members rose—
Mr. Deputy Speaker (Mr. Frank Cook): Order. It may be for the benefit of the Chamber if I ask right hon. and hon. Members to call to mind that the general convention at sittings is to ask the three Front-Bench spokesmen to commence winding up 30 minutes before

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the termination of the debate. I ask those participating to bear that in mind and to make their contributions concise, clear and pertinent.
10.1 am
Mr. Francis Maude: The Chamber owes a debt of gratitude to my hon. Friend the Member for New Forest, East (Dr. Lewis) for raising this issue and for the way in which he has introduced the subject. I am glad to follow the hon. Member for Clydebank and Milngavie (Tony Worthington) and welcome the tone of his contribution. It is encouraging that there is growing consensus. I hope that we can approach the issue with as little partisan spirit as possible.
Why does the great issue of Zimbabwe matter to us? It matters because of our history, our connections and our historic obligations to it, and because of its strategic importance. It is at the centre of southern Africa. What is happening there is contaminating and destabilising the whole region. Therefore, for every reason that one can think of, it is in Britain's interest and a matter of honour and obligation to do whatever we can to assist the beleaguered people of Zimbabwe.
My hon. Friend the Member for New Forest, East and the hon. Member for Clydebank and Milngavie have talked about what is happening in Zimbabwe. It is now a matter of public record and without contest that matters are descending ever further into what amounts to—it sounds like a paradox but it is not—state-sponsored anarchy. It brings to mind what Mao Tse-Tung did in China in the 1960s—an ageing despot increasingly out of touch with his people, with the world moving on beyond him. Like Mao, Mugabe is unleashing the forces of anarchy, effectively declaring war on his own people and deliberately subverting the rule of law. He has only one objective. It is nothing to do with land; we all know that. There is an issue with land but it can be dealt with sensibly. This is about one thing only: power. It is about that ageing despot clinging to power. He will do anything to accomplish that.
We have heard the saga of murder, beating, invasions, systematic brutality and the way in which the economy is being deliberately subverted and disrupted, so that there is widespread shortage of food and starvation in many parts of the country. I have visited Zimbabwe twice in the past 18 months, the last time in February. I had the privilege of meeting so many amazingly brave, fine people who are striving to make their country better. Whether they are white or black, they all think of themselves, rightly, as Zimbabweans. It is their heritage, their country, and they feel that it is being taken away from them.
During a tour of the high-density suburbs of Harare, I was guided around by a wonderful man called Wilfred, who had been a senior commander in the Zimbabwe African National Liberation Army under Mugabe. He was a genuine war veteran. A lot of people who are described as war veterans are not. They are plainly too young to have been anything other than toddlers in arms at the time of the so-called war of liberation.
Wilfred said, "This is not what we fought for. What is going on at the moment is as bad or worse than anything we suffered under the old Smith regime." These people have a sense of betrayal and a desire to move on from the past and to make their own lives. Wilfred had become an
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entrepreneur: he was running his own business and trying to make a success of it in appalling circumstances. We must all move on from the post-colonial guilt which sometimes overhangs our approach to black African countries. Certainly most Zimbabweans have moved well past post-colonial resentment, which undoubtedly had an effect.
What can Britain do? We must speak out. We must make our voice heard unequivocally. Britain has not always done that since matters began to deteriorate in February 2000. The Minister's colleague, the current Minister for Europe, did speak out when he had responsibility for these matters. I praised him on many occasions for doing so. Sometimes one felt that he was not entirely in accord with the Foreign Secretary at the time, but he was right to do so. With his background of anti-apartheid campaigning he perhaps had almost unique authority and credibility to speak out in that way, but I would like to hear the same clarity of articulation from the current Minister.
Too often, the argument that we must pursue quiet diplomacy and not disrupt our influence by being counter-productive has degenerated into what an Australian Prime Minister called the pre-emptive cringe. We must beware of that. We owe it to Zimbabwe to speak out.
The pre-emptive cringe reached its culmination in the Abuja agreement in early September. We must be clear about it: that was a sham. Mugabe agreed to that agreement for one reason only: to get himself into what was going to be the Commonwealth Heads of Government meeting in Brisbane. As we know, that has been postponed but it was transparently obvious that that was what it was about: buying time to allow him to strut his stuff in front of the world's media at the Brisbane meeting.
It was clear, even in the few days between that agreement and the events of 11 September, which caused the postponement of the meeting, that nothing was being done to implement it. In fact, all the reports I had from Zimbabwe said that, even in the few days immediately after the agreement, matters were getting worse: the intimidation was being intensified.
That shows that Mugabe cares about the Commonwealth, about being able to be part of that important organisation, and about the veneer of respectability that continued membership confers upon him. I urge the Minister to use all Britain's considerable influence to ensure that at the reinstated CHOGM in a few weeks or couple of months, Mugabe is not allowed to make a grand entrance.
We saw the damage last year when Mugabe was given the full red carpet treatment by President Chirac in France and by the Belgian Prime Minister. The propaganda coup that that gave him in Zimbabwe was considerable. We must beware of that. He must be denied the propaganda oxygen that continued membership of the Commonwealth confers on him and his regime.
What can be done now? Aid has been reduced. We do not like that but it is obviously necessary. The military advisory team has been removed. That was the one thing that people in Zimbabwe said to me they did not want. They saw the presence of even a small contingent of British troops there as a stabilising influence on the

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army. I revert to the points that were made by my hon. Friends the Members for Leominster (Mr. Wiggin) and for East Devon (Mr. Swire) about the effect of Libya. The small vacuum created when the British military advisory and training team left last year has been filled by Libyans. My impression is that Zimbabwe is stiff with Libyans these days, and that some of the slack has been taken up by advisers from China's People's Liberation Army. Taking the BMAT team away as a modest gesture of protest has therefore had an unfortunate effect.
What can be done? The hon. Member for Clydebank and Milngavie mentioned targeted sanctions, as did my hon. Friend the Member for New Forest, East. That option must be the answer, as my party has urged for many months. It is not necessarily a matter of targeting sanctions against Mugabe himself. Morgan Tsvangirai has always told me that it is a mistake to focus all the action against Mugabe, and that attention should be turned to the gangsters who surround him and sustain him in power.
The number of such people—about 20—is not huge. They could be subject to financial sanctions, and their assets could be examined. They should not be allowed to travel, and their histories of wrongdoing, which largely go back to the Matabeleland massacres of the early 1980s, could be investigated. It has taken a long time to make any progress on such matters, even to talk about suspending the Mugabe regime from the Commonwealth. I am glad that that is at least being discussed now, but we must move in the direction of targeted sanctions against individuals.
What of Mugabe himself? If he departs voluntarily, what should our attitude be? I suspect that it would stick in everyone's gullet if Mugabe were allowed to slip off to a cosy and quiet retirement home in Libya or some other chosen location. However, it is in the overwhelming interests of Zimbabweans that he should leave. The price that has to be paid for seeing him leave voluntarily might be that a line has to be drawn under his regime of tyrannous misdeeds. However, all my contacts and knowledge lead me to believe that most Zimbabweans would joyfully pay that price. Of course, there will be a human desire for vengeance and retribution, but people in Zimbabwe just want to see the back of Mugabe and to get their country back. They will accept drawing a line under his personal misdeeds if that means that he leaves voluntarily and quickly. We should therefore be sufficiently realistic and grown up to accept that that would be a price well worth paying.
We must be aware of the danger that the threat of endless pursuit of Mugabe, into his old age and wherever he is, is likely to make him more desirous of clinging to power. We should be aware of the danger that, like a wounded and cornered animal, he would be willing to do anything for that.
The hon. Member for Clydebank and Milngavie spoke of the presidential election. We must abandon the pretence that there is any prospect that it will be free and fair. It cannot be, even though the Zimbabwean Parliament is discussing the media law today. The other laws that have been passed, the gerrymandering and the systematic intimidation of those who oppose Mugabe make it unrealistic that the election could be free and
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fair. Even the presence of monitors would not change that. Their investigations could only provide more incontrovertible evidence of what has been going on, if that were needed.
However, that is not to say that the elections will be won by Mugabe. The parliamentary elections 18 months ago were subject to gerrymandering, intimidation and vote-rigging—every tool of the dictator was deployed to secure victory, but he only just managed it. Many Zimbabweans will have taken heart from that, and seen that they have the power to make a difference, despite all that is being done by Mugabe. We therefore should not simply assume that Mugabe will succeed in his aims. He may very well not succeed, and if he loses the election and tries to cling to power, Britain and the international community will have some difficult questions to answer.
My hon. Friend the Member for New Forest, East raised the possibility of intervention. We should not be mealy-mouthed about the fact that that would result in hair-raising problems for Britain. However, it would be impossible for Britain and the international community to stand aside and allow to remain in power someone who has lost an election even though everything was in his favour.
My plea to the Government is that they should lead international opinion and use Britain's influence in the world to good effect. They should spend some of the international political capital that the Prime Minister has undoubtedly accrued in recent months to help the people of Zimbabwe. The country could be incredibly prosperous and stable. It has some of the best educated and most literate people in Africa, and it could be a fantastic success story.
Britain should use its influence to make a difference in what is a very good cause. We have obligations of honour and history to Zimbabwe, and we must discharge them.
10.16 am
Tony Baldry: I shall try to make my comments as brief as possible.
It seems to me that Zimbabwe challenges the ways in which the Commonwealth and the Government put principles into practice. I should like hon. Members to consider a simple and straightforward statement from the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Exeter (Mr. Bradshaw), who is responding to the debate. Answering an oral question a couple of weeks ago, he said that the Government welcomed the public reiteration by Pakistan's President Musharraf of his commitment to stick to his road map to democracy and to hold national and provincial elections by October 2002. Yet Pakistan is still suspended from the councils of the Commonwealth, while Zimbabwe is not.
Pakistan was suspended immediately under the Millbrook terms. Since then, at the Commonwealth ministerial action group on the Harare declaration in Durban, it was recommended that Pakistan remain suspended until democracy was restored there. The Millbrook terms are unambiguous: they state that once a suspended country returns to the Commonwealth it
"must reinforce the need for change … even after two years."

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Although Pakistan is making progress towards democracy, it remains suspended from the Commonwealth. In contrast, Zimbabwe—which is introducing the strikingly undemocratic Public Order and Security Bill and other legislation—has had no action taken against it by the Commonwealth. Such double standards do not reflect well on the Commonwealth.
Zimbabwe is also challenging the way in which the UK Government respond. The Department for International Development has reduced overall development aid to Zimbabwe in the past year, but the total amount is still larger than it was in 1997, when the Government came into office. The Department's most recent report states that development aid should be
"focused on systematic poverty reduction in ways that support local ownership."
It added that the Government
"has … increased its commitment of assistance for well thought-out programmes in key sectors in reforming countries … which in turn will improve the quality of public expenditure management as a whole, and help reduce corruption".
It is clear that the DFID principles regard improving democracy as a totem for supporting development aid, but that is not happening in Zimbabwe.
The Government's support for the land reform programme in Zimbabwe is very confused. Indeed, that programme, more than any of DFID's other programmes, puts into sharp relief the confusion of the Government's approach to Zimbabwe, democracy and development principles.
The communiqué from the Abuja agreement last September rightly observed that
"land is the core of the crises in Zimbabwe and cannot be separated from other issues of concern to the Commonwealth, such as rule of law, respect for human rights"
and democracy. The same communiqué also refers to the UK Government's financial involvement in land reform and welcomes the
"re-affirmation of the United Kingdom's commitment to a significant financial contribution to such a land reform programme and its undertaking to encourage other international donors to do the same".
That would be welcome if the land reform programme remotely assisted poverty reduction. It does not. The Zimbabwean Government's "fast-track" land reform programme is not fair land reform. It does not meet the Abuja agreement terms and it does not deserve bilateral aid from the Government.
A paper presented last year to the Southern African Regional Poverty Network asserts that the situation for huge numbers of farm workers in Zimbabwe
"is still unsatisfactory. They are still poor in absolute terms, and access to services such as health and education in particular is far from satisfactory".
As the hon. Member for Clydebank and Milngavie (Tony Worthington) said, the solutions in respect of Zimbabwe are not easy, but I believe that if we are to have statements of principle, whether from the Commonwealth or from the Prime Minister speaking, as he did recently, in India about the need to support democracy, we must be consistent. Neither the Commonwealth nor the United Kingdom Government are being consistent in their approach to Zimbabwe in putting principles into practice. That is bad for the
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people in Zimbabwe where, tragically, 500,000 people now face starvation, bad for general support for the Commonwealth and bad for the integrity of international development.
10.21 am
Mr. Hugo Swire: This is the second time that I have taken part in a debate on Zimbabwe, and I am most grateful for the opportunity to speak. While I, like my right hon. Friend the Member for Horsham (Mr. Maude) and the hon. Member for Clydebank and Milngavie (Tony Worthington), deplore the actions of President Mugabe and his supporters, I wish to speak, in the time remaining to me, mainly about the plight of those ordinary citizens who are suffering from Mugabe's mismanagement of the economy.
Zimbabwe has traditionally been seen as the most industrialised country in the southern African region, and one which has traditionally produced a grain surplus. However, it is now clear that under President Mugabe's mismanagement the economy is in crisis. There is a grain shortage and hundreds of thousands of people face starvation. As my hon. Friend the Member for Banbury (Tony Baldry) commented, according to the World Food Programme, more than 550,000 people in the far north-west and south of the country now face severe food shortages.
The Foreign and Commonwealth Office website states:
"for many years Zimbabwe's per capita income was significantly higher than that of most sub-Saharan African countries. Mining (gold, ferrous alloys, asbestos and nickel) accounts for about 33% of exports, and manufacturing 23% of GDP. Commercial farming (tobacco, meat, cotton, maize, sugar, and plants) is export oriented, accounting for around 19% of GDP, and earning 40% of the country's foreign exchange."
More than 80 per cent. of financial transactions that pass through institutions in Zimbabwe pass through institutions that are owned or managed by whites, practically all of whom oppose ZANU.
The project document that accompanies the latest emergency operation in Zimbabwe from the World Food Programme states:
"all economic indicators currently show negative trends. The gross national product is expected to decline five per cent in 2001, amounting to a cumulative decrease of 18 per cent during 1999–2001. The country is facing an acute foreign exchange crisis limiting its ability to import fuel, energy and basic food grains to meet the looming food deficit. The prices of basic commodities and services continue to increase following the fuel price increase of 70 per cent in June 2001. Rapid inflation combined with high levels of unemployment and the increasing cost of living have deepened the poverty and eroded the purchasing power of poor urban and rural households."
The project document provides the following worrying evidence:
"The United Nations Food and Agriculture Organisation/WFP Crop and Food Supply Assessment Mission, carried out in May 2001, determined that there would be a shortfall of 447,000 tonnes of maize during the April 2001-March 2002 marketing year."
The document states that the reason is that
"due primarily to disruptions caused by land acquisition activities, the large-scale commercial sector experienced a decline of 30 per cent in area planted under all crops and a 54 per cent drop in maize area planted during the main season. Mainly because of the poor production in commercial areas, cereal production in 2001 was 24 per cent lower than last year and 8 per cent lower than the ten-year average."

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I am arguing that according to local experts, the only country in southern Africa with a grain surplus—and a narrow one at that—is now South Africa. One Harare-based economist told BBC News Online that the Zimbabwean Government had
"pretty much mismanaged the tendering process. There's very little on the way. For months they denied that there was a need to import, and by the time the government changed its tune most of it was allocated. There's not much more than a week or two's supply left."
The scandal does not end at Government mismanagement. According to the state-owned Herald newspaper:
"the government has seized 36,000 tonnes of maize from commercial farms who were refusing to hand it over to the Grain Marketing Board (Zimbabwe's monopoly supplier). More than 6,000 tonnes was seized from a German-owned farm, the paper said, despite efforts from German embassy staff to stop the process."
While the people starve, the Government are seizing food to feed Mugabe's henchmen. That scandal cannot be allowed to continue. I ask the Minister, what are the British Government doing to ensure that pressure is put on President Mugabe to allow that vital aid to reach those people who need it the most?
President Mugabe turns 78 next month and he is reputed to be in failing health. According to a report in Africa Confidential on Vice-President Simon Muzenda's birthday last October, Mugabe said:
"The biggest prayer of my life is that God gives me more life to see me through the land issue. I have the backbone to pull through, the courage, and I am fearless but I need God's blessings."
As that report depressingly concludes:
"Such blessings may bring an election victory but they are ruining the country."
10.27 am
Mr. Menzies Campbell: The debate has been short but notable, not simply because of the degree of unanimity across the Chamber but because it is the first time that I have heard Peter Tatchell and Bertolt Brecht quoted with approval by Conservative Members.
I congratulate the hon. Member for New Forest, East (Dr. Lewis) on obtaining the debate, but we should not need to have it. The only reason that we are having it, as the right hon. Member for Horsham (Mr. Maude) said, is because of Mr. Mugabe's determination to retain the presidency of his country at all costs—indeed, at any cost, as long as that cost is borne by his countrymen and women.
In this country, to some extent, our focus has been on the plight of white farmers, some of whom have bloodcurdling stories to tell of intimidation and violence. I suspect that I am not the only Member in the Chamber today who has received representations from constituents with relations in Zimbabwe. I do not propose to mention any names, for fear of further persecution, but some of the personal stories that have been relayed to me in letters and e-mails and by other means are extremely distressing.
Black citizens also suffer in Zimbabwe. The farm workers, some of whom have spent generations on one farm, are not the beneficiaries of some benevolent form
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of land redistribution. They have become the consequential, and sometimes frightened, victims of illegal land appropriation. The legitimate political rights of black citizens have been removed.
It is clear that Mr. Mugabe does not believe in apartheid: when it comes to damaging the interests of citizens of Zimbabwe, he does not discriminate against them because of the colour of their skins. A feature of his behaviour has been the agreements entered into and the undertakings given that have been abandoned before their ink has dried. Reference has already been made to the empty sham of the Abuja agreement, which, as the right hon. Member for Horsham rightly said, was designed to try to ensure that Mr. Mugabe could take his place at Brisbane.
The Mugabe Government are still characterised by intimidation of the judiciary, the expulsion of independent journalists, the persecution of their political opponents and the introduction of repressive legislation, with one purpose only: to secure Mr. Mugabe's re-election. There is nothing more repressive than the Access to Information and Protection of Privacy Bill—Orwellian in conception and, no doubt, totalitarian in application. There are reports in a national newspaper today of anxiety in the ranks of members of ZANU-PF, which suggest that the consideration of that Bill has been adjourned because of those very anxieties.
In truth, Mr. Mugabe ought to be grateful for that delay, because the Bill would create an offence of causing fear, alarm and despondency. If anyone has caused fear, alarm and despondency in Zimbabwe, it is Mr. Mugabe himself. He has engendered the same consequences throughout southern Africa, which caused Mr. Mbeki—until now, by no means a trenchant critic of the Mugabe regime—to say on 21 January:
"The instability in Zimbabwe has gone too far … Poverty, economic instability and unemployment have continued to affect that country."
For months, there has been an overwhelming case for sanctions, targeted against the elite surrounding Mr. Mugabe. I do not for a moment pretend that the simple imposition of those sanctions would, overnight, restore Zimbabwe to the kind of democracy that we would all hope it to be, but restrictions on bank accounts and travel should be in place now. If we need any example, we have only to look across the Atlantic to the United States Congress, which has passed legislation in both Houses to allow the President to implement such sanctions were he to consider them appropriate.
The hon. Member for New Forest, East mentioned the possibility of direct intervention. He is right to say that he has supported direct intervention in other places, but direct intervention in Zimbabwe would be extremely difficult both from a political and a military point of view. Which of the surrounding countries would be the obvious candidate to give us host-nation military support? We could hardly conduct operations in Zimbabwe all the way from Brize Norton or RAF Lyneham. Which of those countries would be willing to give us the political support on which it would be necessary to base the moral authority for intervention?
Again, as the right hon. Member for Horsham rightly says, if Mr. Tsvangirai and his brave colleagues are successful in the presidential election but Mr. Mugabe

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refuses to accept the result, very difficult questions will shortly present themselves not just to our Government, but to those of the European Union and perhaps to the United Nations.
Zimbabwe stands on the edge of the abyss. The breakdown in law and order is palpable. As we have already heard, grain shortages are acute—3 million people have registered for food relief and almost 600,000 people in the countryside are now considered to be at risk of starvation. Inflation runs at more than 100 per cent. Unemployment stands at 60 per cent. Three quarters of the people of Zimbabwe live in poverty. It is estimated that 25 per cent. of the population may have HIV. It is further estimated that 2 million Zimbabweans have fled illegally to South Africa.
If we talk about direct intervention and applying sanctions other than in a targeted way, we must remember that a possible consequence will be a further flight to the south from Zimbabwe. That would place enormous strains on the South African economy, which has suffered from a reduction in inward investment and a decline in the value of its currency as a result of the very instability and lack of confidence that Mugabe's behaviour has created.
We are talking about someone who ignores the condemnation of Kofi Annan, Mary Robinson, Desmond Tutu and Nelson Mandela—hardly 21st century defenders of British colonial rule in the past two centuries. Their independence is not in doubt, yet Mr. Mugabe seeks to bolster his position with oppressive legislation that undermines the human rights of every citizen of his country.
I believe that Zimbabwe under Mr. Mugabe has forfeited its right to membership of the Commonwealth. When the Commonwealth leaders meet in Brisbane on 2 March, unless material improvement has been demonstrated, their duty is clear: suspension, with the credible threat of expulsion, is the minimum necessary.
10.36 am
Mr. Michael Ancram: I congratulate my hon. Friend the Member for New Forest, East (Dr. Lewis) on securing this debate and on the robust and effective way in which he opened it. This is a most timely and important debate on what all hon. Members agree is a matter of enormous importance, not only for the people of Zimbabwe but for southern Africa generally and the wider international community. He made a powerful case, and we are all grateful to him for doing so.
It is shameful, however, that for the third time in as many months this subject is being debated at the instigation of an Opposition Member. It would certainly not be taking place if it were left to the Government to initiate such a debate. For the Government, this is an international crisis that they wish they could pass by on the other side. This impending catastrophe challenges the last vestiges of their ethical foreign policy, and I suspect that it will prove the graveyard of that ethical foreign policy. The Government's reluctance to face up to this spiralling disaster, to take any initiative or, indeed, to do anything, other than wring their hands and talk about talks, is nothing short of an abdication of responsibility. I do not blame the Minister. I blame his boss, the Foreign Secretary, and the Prime Minister, too, because they have simply dodged this issue.
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Let us be clear: we are not debating a far-off problem of which we know little. We know Zimbabwe well; we know it much better than we knew Bosnia or Kosovo. We know that Zimbabwe faces a growing nightmare of fascism, the destruction of democracy, the suspension and abrogation of human rights and the undermining of justice and the rule of law. We know that it faces a growing humanitarian crisis, as we have heard from my hon. Friends the Members for Banbury (Tony Baldry) and for East Devon (Mr. Swire).
We know, too, that the birth of this new rogue state is already responsible for an economic downturn among Zimbabwe's immediate neighbours, not least South Africa. The usual suspects of the rogue-state brigade—not least Libya, as we have been reminded this morning—are already eyeing Zimbabwe with anticipation. The Government's response has been, if I recall the phrase rightly, one of "quiet diplomacy"—to do nothing, and nothing is what they have done. However, doing nothing in the face of evil is not an option.
We should not be squeamish about what is happening in Zimbabwe. In the past year, there have been 48 political murders, 329 abductions, 2,245 cases of torture and 992 cases of unlawful detention. Foreign journalists have been labelled as terrorists. Draconian laws have been introduced to block basic democratic freedoms of expression and assembly. Every day, 2,500 Zimbabwean refugees are now entering South Africa. The rand has suffered and much-needed investment in the region has been lost. In short, Zimbabwe is collapsing internally, and externally it is exercising an increasingly malign influence. The international community cannot stand idly by.
For some time, Conservative Members have been pointing the way. Our calls are not new. In March last year, my predecessor, my right hon. Friend the Member for Horsham (Mr. Maude), who made such a strong speech, attacked the Government's "supine inaction" and urged
"the imposition of travel bans and criminal investigations of those of Mugabe's henchmen who sustain him in his murderous and repressive regime".—[Official Report, 27 March 2001; Vol. 365, c. 800.]
I remind hon. Members that my right hon. Friend was mocked by the Government for making those suggestions. Yet despite the previous Foreign Secretary deriding him then and the current Foreign Secretary deriding me now for proposing targeted sanctions against Mugabe, his henchmen and their ill-gotten foreign stashes, there are at last faint signs that the Government are beginning timidly to give support to those—including the United States, which has been robust on this matter for a long time, and now Europe—who are now moving in this direction.
Bringing Mugabe to book even at this eleventh hour must be the immediate objective. He must be brought to see the downside of ignoring the democratic norm and the weight of international opinion behind it. With our associations with Zimbabwe, we can no longer shelter behind the lily-livered shield of post-colonial sensitivity. It did not stop the Prime Minister jumping in with both feet in India to offer advice on Kashmir, so why are we so sensitive about Zimbabwe? If we have a constructive contribution to make—I believe that we have—we should make it and not just talk about it.

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Action cannot wait. It is clear that President Mugabe has no intention of keeping his promises to ensure free and fair elections. Already this week, we have seen the first Movement for Democratic Change rally of the presidential campaign tear-gassed by the police. That will not be the last time that we see that.
We know that international action must, above all, involve Zimbabwe's long-suffering neighbours, especially South Africa. In the end, they can exert the greatest pressure on Mugabe and his henchmen. What assistance are the Government offering those countries that we must seek to bring into the international coalition to deal with this problem? In the other great international coalition, both Pakistan and India have received substantial packages of support, so what proposals does the Minister have for south African countries whose assistance we also need?
The hon. Member for Clydebank and Milngavie (Tony Worthington) asked what action could be taken. He must have heard from many speakers that the actions that we can take are now clear. They include international sanctions targeted personally against Zimbabwe's elite and, as the right hon. and learned Member for North-East Fife (Mr. Campbell) said, suspension from the Commonwealth. They also include suspension from the Southern African Development Community and from other organisations that convey respectability. What action are the Government taking to initiate such procedures? In the event of other developments, such as the rumoured possibility of an army takeover and the postponement of the presidential elections, can the Government tell us what contingent response has been prepared to meet such a situation?
A lot can be done, so why are the Government still dragging their feet? It is not for the want of fine words. My hon. Friend the Member for New Forest, East reminded us what the Prime Minister said in his great "I will mend the world" speech that he delivered to the Labour party conference in October. It worth recalling the words that he used. He talked about
"no tolerance of … the activities of Mr. Mugabe's henchmen in Zimbabwe".
"No tolerance". Strong words, but what did they mean? From the inaction that we have seen, they were not worth the breath with which they were uttered. They created false hope that has now been dashed by "supine inaction". That inaction continues.
The Foreign Secretary goes to central Africa, where he is today, but he does not go anywhere near Zimbabwe. The Prime Minister—the man who spoke of "no tolerance"—goes to Africa later this month or early next month and we are told that he too will give Zimbabwe a wide berth. Once again, there will be more talks—of that we can be sure—but Zimbabwe does not need more talks. It needs action.
I should like to quote a member of the Movement for Democratic Change, who said this week:
"We are fighting on all fronts using the only tools we have—the truth, the written and spoken word, and the courage of our leadership and membership throughout the country."
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A spokesman of the MDC said recently:
"In this deteriorating situation where the abuse of civil and human rights has become commonplace, where fear rules and freedoms exist in word only, we urge the European Union to take appropriate measures … We urge the governments of Europe to remember the pledge made at Nuremberg—'Never again'."
Never again—that should be the wake-up call to this Government, whose inaction on Zimbabwe to date has been a disgrace and a betrayal of the values for which this country should stand.
We owe Zimbabwe our support. There is still time—just. If the Foreign Secretary has not the stomach for this task, he should make way for someone who does.
10.45 am
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Ben Bradshaw): I congratulate the hon. Member for New Forest, East (Dr. Lewis) on proposing this debate. I am aware of his close personal interest in Zimbabwe. His usual eloquently expressed concern is shared by many in the House and in the country at large.
I was also extremely grateful for the contribution of the former shadow Foreign Secretary, the right hon. Member for Horsham (Mr. Maude), and the particular stress that he placed on the importance and the greater effectiveness of the House approaching the problems in Zimbabwe in a bipartisan spirit. I am only sorry that the shadow Foreign Secretary, the right hon. Member for Devizes (Mr. Ancram), did not enter into the same spirit. To claim that the Government have done nothing does him no credit.
All hon. Members have stressed the need for tough action. We agree with that. However, our approach to Zimbabwe must put Zimbabweans first. That means that, when it comes to combating the abuses of the Mugabe regime, we should act rationally and effectively. Whatever the right hon. Member for Devizes says, in his heart of hearts he must recognise that the Government's long-held view—that we act best when we act with our international friends—is the most effective strategy. As my hon. Friend the Member for Clydebank and Milngavie (Tony Worthington) said, the importance of international action is paramount. It is vital that we do not play into President Mugabe's hands and allow him to portray this as a neo-colonial struggle with Britain.
The Government believe that their efforts to build a strong international consensus on Zimbabwe has borne fruit. The European Union has tried constructive engagement with Zimbabwe for 10 months, and there has been no response. On 11 January, the EU gave the Zimbabwean Government seven days to take immediate action on election observers and free access for the international media, but their response has been neither specific nor satisfactory. EU Foreign Ministers now have no choice but to discuss appropriate measures against Zimbabwe at their meeting on 28 January. In their deliberations, they will also consider the views of members of Zimbabwe's civil society and opposition parties, all of whom are keen to ensure maximum international scrutiny of the presidential elections.
On 20 December, the Commonwealth ministerial action group—CMAG—condemned Zimbabwe's serious and persistent violations of the fundamental values of the Commonwealth. The group put Zimbabwe

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on its formal agenda, ensuring that Zimbabwe's status in the Commonwealth will be debated at the Heads of Government meeting in Australia in March. CMAG Ministers will discuss a recommendation to suspend Zimbabwe from the organisation at their meeting in London on 30 January. My right hon. Friend the Foreign Secretary made it clear on 8 January that Britain would argue for Zimbabwe's suspension if conditions continued to deteriorate. Well, they have. Britain shares the view of Australia and others that countries that violate the values of the Commonwealth should not have a seat at that table.
The United States and other countries are also considering measures. They have not taken concrete steps yet, because—like us—they have been listening closely to the views of representative groups in Zimbabwe and have wanted to act in international concert. However, the US Government's line on Zimbabwe is strong, principled and unambiguous, and we welcome it.
During last November's passage of the Zimbabwe Democracy and Economic Recovery Act, the United States Congress set out a clear bipartisan view that Zimbabwe's fundamental problems are not about land or black majority versus white minority interests; nor are they about unfinished colonial business. Congress made it clear that the problems arise from the Government of Zimbabwe's authoritarianism and political violence. The support of the Bush Administration for that Act sends a clear message to the Government of Zimbabwe about the political consequences of their actions, and American views on that are close to those of the European Union.
Several right hon. and hon. Members, including the hon. Member for East Devon (Mr. Swire) and the right hon. and learned Member for North-East Fife (Mr. Campbell), described the Abuja agreement as a sham. The Government accept that it has failed, but we still believe that it was worth getting an agreement to lock the fellow African countries into the process and make the international consensus on Zimbabwe more effective. As the shadow Foreign Secretary admitted, that approach is vital.
I was going to describe the picture in Zimbabwe as it has developed since 27 November, but to be perfectly honest I would rather concentrate on other matters in the short time available. In any case, the deteriorating situation in Zimbabwe was eloquently described by other hon. Members, including the hon. Member for East Devon, who made an excellent speech about the state of the Zimbabwean economy, and my hon. Friend the Member for Clydebank and Milngavie, who painted a bleak but nevertheless accurate picture of it.
Some people ask why the countries of the region do not do more. It is easy for outsiders and for us to ask that question, but it is much more difficult for those in the region who make the decisions. The countries of southern Africa face the brunt of the breakdown in Zimbabwe and of Mugabe's misrule. They know what Zimbabwe's economic implosion would mean. They feel the effects of the collapse in investor confidence and know the bizarre reality that, by frightening away investors, the Government of Zimbabwe have effectively imposed sanctions on their country and the whole region.
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Indeed, President Mugabe's economic policy has crippled Zimbabwe's economy far more effectively than external sanctions ever could. The region knows that. Just as the world is warming to the idea of an African renaissance, Zimbabwe is trying to row the continent back to the bad old days of a one-party state. It is no wonder that the Southern African Development Community has taken action to express its concerns and to set out clear benchmarks for the Government of Zimbabwe's future conduct. To answer the question posed by the right hon. and learned Member for North-East Fife, the prospect of concerted regional action is growing.
In contrast to what the hon. Member for New Forest, East suggested, the United Nations Secretary-General and the UN High Commissioner for Human Rights have recently added their moral weight to the international consensus, which is a sign that events in Zimbabwe threaten peace and security in the region. Let me make it clear, however, that Britain's policy of international action has not stopped us acting or taking unilateral decisions if we think that that is right.
Mr. Swire: On unilateral action, what thought have the Government given to the aftermath of the election if Mugabe wins it, but it is deemed unfair, or to the alternative scenario in which Mugabe loses the election, but refuses to go?
Mr. Bradshaw: I hope that the hon. Gentleman will forgive me, but I will not speculate about what might happen in one, two or three months' time. At the moment, it is vital that we concentrate on the immediate steps, which we are trying to make as international and multilateral as possible. I explained that some precipitative unilateral action will not work because it plays into President Mugabe's hands.
In recent weeks, we have seen reports of ZANU-PF thugs carrying out appalling atrocities against opposition supporters. We have seen efforts to deny the opposition the right to campaign and the media to report freely. We have seen reports of plans to rig the voting process and a statement by the chief of the Zimbabwean defence forces that the army would not support the opposition candidate even if he were the people's choice. The British Government unreservedly condemn those flagrant attacks on democratic principles and practice. The violations show that Zimbabwe's ruling party knows that it cannot win a free and fair election. Instead, it is choosing to rig the process and bludgeon its way through.
Mr. Menzies Campbell: I understand why the Minister declines to speculate, but if we are inviting countries surrounding Zimbabwe to be part of a political coalition that might have consequences for their economies, are we able to say that we will give them economic assistance if their economies are damaged because they have signed up to something that all hon. Members think is appropriate?
Mr. Bradshaw: We are holding detailed discussions with those countries and already provide economic assistance to many of them. We shall certainly give requests for help sympathetic consideration. International observers are a key to free and fair

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elections. The EU has insisted on the invitation and accreditation of international observers at least six weeks before the elections. The tragic truth about Zimbabwe's leaders is that they no longer offer constructive answers or desire genuine co-operation; they simply create more extreme problems and resort to ever more implausible allegations against outsiders.
There are those—we have heard their voices today—who say that the efforts of the international community to date have been too little, too late. I do not share that interpretation because it assumes that there could have been a magical solution if only we had tried harder to find it. The hon. Member for New Forest, East suggested that in this country that approach had something to do with a liberal-left guilt about colonialism. I have been on the same side as him in all the arguments about intervention since we have both been in the House, and I sincerely suggest that that is not the case. The issue is how we approach the problem most effectively, without playing into President Mugabe's hands. Some of the quotes that he gave, not least by Baroness Amos, who is the Minister with responsibility for sub-Saharan Africa, were out of date and did not reflect the progress that the Government have made.
It is our view that the only people who could have prevented the crisis, and still could prevent a meltdown, are those in positions of authority in Harare. Zimbabwe is a sovereign country. It runs its own affairs, but one thing is certain: the course being taken by the Government of Zimbabwe is unsustainable and, ultimately, self-defeating. Zimbabwe's leaders need to know that one day they will be held personally accountable for their stewardship.
Although we have focused on the present, we should not overlook the future. Let me reiterate the Government's strong desire to resume a close relationship with a democratic, open and forward-looking Zimbabwe. In the right conditions and with the right international support, Zimbabwe can again become a beacon of hope for Africa—stable, prosperous and a good neighbour. That will take time and effort, and we will continue to work to that end. We look to hon. Members on both sides of the House, and more widely, for support in that.

Coal Industry
10.59 am
Mr. John Grogan: I am proud to represent the largest remaining coal mine in the United Kingdom, the Selby complex—[Interruption.]
Mr. Deputy Speaker (Mr. Frank Cook): Will right hon. and hon. Members leave the Chamber quietly, please, so that we can continue with our business in the proper fashion?
Mr. Grogan: Thank you, Mr. Deputy Speaker.
I am proud to represent the Selby complex, which is the largest remaining coal mine in Britain. The Government have a creditable record on dealing with coalfield issues and the coalfield communities since 1997, when they came to office. Sometimes it has taken passionate debate in Parliament and elsewhere to bring that about, but that is how it should be. The Government have been responsive to arguments made by coalfield communities and MPs about justice. They have dealt with the legacy of decades of coal mining and its effect on our communities; the legacy of the strike of the 1980s; and issues such as implementing the largest ever compensation scheme for industrial disease. Only last week, they recognised for the first time the special needs of the poorest mining pensioners and their families and are making special provision for them. They have dealt with those who were unfairly victimised in the aftermath of the strike and, just before Christmas, they ensured that those people have proper pension arrangements. They have also dealt with the major issue of the regeneration of coalfield areas through the Coalfields Regeneration Trust and other mechanisms. That is a proud record indeed.
As well as offering justice, the Government have ensured that the coal industry has a part to play in Modern energy policy, not out of sentiment or respect for the past, but out of sheer economic need and necessity. In 1997, when the Government came to office, there was a widespread feeling that coal was discriminated against and that gas was favoured by market arrangements. Measures were taken, including new electricity trading agreements, a moratorium on gas-fired power stations and, latterly, the introduction of subsidies. That big move from the Government ensured the survival of much of the British coalfield. I understand that the latest figure for subsidies paid is more than £130 million; the Selby coalfield in my constituency has got more than £140 million in subsidy arrangements. There can be little doubt that without those subsidies Britain's coalfield would probably be about half its remaining size. That is a record to be proud of.
Essentially, I want to make four points. I know that a number of hon. Members representing coalfield areas want to speak on particular issues; the future of the Prince of Wales colliery, for example, will be mentioned by some of my hon. Friends. I wish to underline the continuing importance of coal nationally and internationally. When I was preparing for this debate in the Tea Room yesterday evening, one of my hon. Friends from the south of England looked at me and said, quite seriously, "You mean there is still a coal

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industry?" Internationally, 40 per cent. of all electricity is still generated by coal; there is no indication that that is likely to change. In Britain, just over one third of our electricity is generated by coal and £1 billion of our national income depends in some way on the coal industry. There are nearly 300 million tonnes of proven reserves of UK coal; BP estimates that perhaps 1 billion tonnes of coal are available for the country's energy needs.
Coal therefore still makes an important contribution to our overall energy pattern and portfolio. Today's debate is taking place against the context of the energy review which, together with the accompanying clean coal technology review, will be published by the end of the month, so Ministers tell us. That is a specific commitment; I am used to being given the commitment that reports will be published in spring, summer or winter, which is a bit more flexible. However, a publication date of the end of January is pretty specific. The energy review is ambitious; the Government are looking at a period of 50 years. Imagine looking in 1952 at this country's energy needs in 2002; the venture is extremely ambitious.
The background papers to the review are worthy of brief examination as they suggest that there has been a stark decline in coal-generated power. Energy Paper 68, which was published at the end of 2000, deals with the projections by the Department of Trade and Industry on different energy prices in the years ahead. Importantly, those assumptions depend on the role that the Government envisage for different energy sectors. A critique emerges from the paper; the Government make fairly realistic assumptions about the price of coal, but they underprice oil and gas, which leads to projections of a steeper decline in coal than is likely. I asked my hon. Friend the Minister for Industry and Energy a written question in December, to which he replied that the oil price projections in Energy Paper 68 were above the range for 22 of the past 24 months. I therefore urge Ministers to look carefully at assumptions in the energy papers.
In addition, some of the papers come to frightening conclusions about the country's likely dependence on imported energy in future. According to those assumptions, by 2020, we will be 70 per cent. dependent on gas, 90 per cent. of which will be imported; similar projections were made by the European Commission. How robust that gas supply would be is open to question; only a few weeks ago, the Confederation of UK Coal Producers issued a report, commissioned by the respected risk analysts, the Control Risks Group, which pointed up possible terrorist threats to gas pipelines. However, terrorists do not pose the only possibility of blackmail; there is also a possibility of economic blackmail. If we go down the gas route, we will be in a similar position to the one that we were in the 1970s, but instead of the oil industry holding us to ransom, it will be gas. The head of the Russian gas monopoly, Gazprom, which will be one of our largest gas suppliers in that scenario, recently said:
"It is necessary to create a body which will group countries exporting natural gas, a body that would exercise real concrete regulation of prices."
He continued,
"Everybody should get together to pool their ideas and come up with … an agreement about the way we should behave on the market instead of each exporter doing his own thing."
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That is the threat that we would face. It is worth recalling that at the moment, contrary to projections in Energy Paper 68, coal burn is increasing in coal-fired power stations and went up last year. PowerGen recently announced plans to reopen coal-fired power stations, so there is a role for coal.
Some people question whether that coal needs to be British, and ask whether some of it could be imported from the international market. There are early signs that that market is tightening; China, for example, is importing coal for the first time. Much Colombian coal, which flooded on to the market some years ago, is now tied up in contracts with the United States. We should never forget one advantage of coal, which has become all too apparent in the past few years in our energy markets; coal-generated power can follow the load in the electricity market. It is much easier to increase and decrease the volume of power according to market fluctuations with coal than with renewables or nuclear power. That advantage has become particularly apparent in the workings of the market in recent months.
I wish to examine in a little detail the subsidy arrangements to which I referred earlier. The treaty establishing the European coal and steel community, a feature of European policy since the 1950s, expires towards the end of July 2002. The treaty was designed to expand coal mines. In the aftermath of the war, mines were sunk in the 1950s in many parts of Europe. However, since the 1950s, the European coal and steel treaty has largely been a vehicle for subsidising an industry that has been in decline.
I have explored the issue to some extent with my hon. Friend the Minister for Industry and Energy in various exchanges in the House. In European Standing Committee C in November, he said:
"As I have said in the past, if a successor coal regime is introduced in the EU, we will not allow our industry to be put at a relative disadvantage, on principle. However, our stated position is our starting point in the discussions and if another state aid regime is agreed to, we will reluctantly subscribe to it and it will then be part of the scheme to which we have subscribed."—[Official Report, European Standing Committee C, 28 November 2001; c. 8.]
My plea to the Minister on that occasion and subsequently is based on many years of supporting Bradford City, mainly in the lower divisions. It is simply to get stuck in. To be fair, I believe that he has done that.
Although a coal subsidy scheme is subject to veto, all the signs from Europe point to discussing such a scheme in the Industry Council and the European Parliament by the spring. Parliamentary written answers since November suggest Government awareness of that. It is in our interests to shape the scheme because we shall probably have to live with it until 2010.
In the original proposal from the European Commission, there were three grounds for subsidies by member countries under the new regime: to safeguard resources; to cover reduction of activity, and to cover exceptional costs. It is not clear that, for example, subsidies for investment will be allowed under those criteria. My hon. Friends will go into detail about the Prince of Wales colliery, but investment has clearly been important in that crisis.
There has been much speculation about nuclear power and the need for a great deal of public investment if we were to go down that road. Surely there is a case

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for subsidy arrangements for opening new coal faces or even new mines. We should try to include that in the European instruments that will be introduced later this year.
There is a more immediate problem. Any new treaty will not take effect until later in the year. National Governments will have to design their schemes; France, Germany and Spain have already said that they will do that. There will be a transitional period because the schemes will have to be approved by the European Commission and are unlikely to be in operation until next year. The transitional period will probably last for six months from July.
The other European coal producing nations have announced that they will apply to the European Commission to roll forward existing schemes for another six months. Given the Minister's remarks in the European Standing Committee about not wanting Britain to be at a disadvantage, I hope that the Government will seriously consider doing the same. If we do that, it would be logical to lift the cap of £75 million, which applies to payments to any coal producer because the figure relates to a specific subsidy scheme that ends in July.
It is worth comparing the scale of subsidy in other European countries with that in Britain. In 2000, the last year for which clear figures are available, approximately 6 billion ecu of aid was given in Germany. In France and Spain, the figure was roughly 1 billion ecu each. By contrast, the figure for the United Kingdom was approximately 142 million ecu. The scale of subsidy was much smaller in the United Kingdom.
There is a message in all that for UK Coal, the major coal producer. If we are to have further subsidy arrangements, it must specify what precisely it offers the coal industry. There is more than a suspicion that UK Coal plans to concentrate production in fewer pits with more intensive working—possibly 24-hour working—and to move miners from pits that it closes to those that it decides to work intensively. UK Coal is paying reasonable dividends at the moment, no doubt to ward off takeover. If it seeks a subsidy to maintain the coal industry and invest in it, it must specify what is on offer.
The 1997 Department of Trade and Industry review said that the pit at Selby could last until 2009. It is not clear that that will happen on UK Coal's current investment plans. However, without going into detail, there are possibilities of further investment in work in Selby and elsewhere. UK Coal should be more forthcoming about that.
Mr. Harry Barnes: I compliment my hon. Friend on obtaining such an important debate. Unfortunately, I do not have the constituency interest that I used to have in subsidies for coal mining. There is only a small mine in my constituency, in Moorside, that employs 29 people. However, small mines sometimes have difficulty getting into the subsidy regime. They have problems in organising their submissions and the rules of the schemes sometimes make it difficult to get on to them.
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I hope that that is taken into account when new systems are developed in Europe. It is important for the people who depend on coal for their livelihoods.
Mr. Grogan: My hon. Friend makes a valuable point that reinforces the need for the British Government to be at the negotiating table at all stages to take care of the interests of small mines.
I want to consider clean coal technology. The latest figures that I have seen show that CO2 emissions have been stable since 1997. They are no longer in decline, and the Government and the coal industry must tackle that. I shall make one or two suggestions about that. Sulphur dioxide and nitrogen dioxide emissions are close to being sorted out. One of the successes of the past few years is the expansion in the number of companies that are introducing new flue gas desulphurisation plants. Eggborough in my constituency is an example of that. Such technology was considered unlikely given the dynamics of the market three or four years ago, but it has happened.
We must deal with CO2 emissions. The clean coal technology review is most welcome. Ministers have generally supported clean coal technology. In July 1998, the then Minister with responsibility for energy stated:
"Clean-coal technologies have an important part to play … We are keen to support cleaner coal technologies."—[Official Report, 22 July 1998; Vol. 316, c. 1081–2.]
In November 2000, the successor Minister said:
"Several hon. Members have raised the issue of cleaner-coal technology … We are conducting an analysis and will do so in even more detail as we proceed with examining the technology."—[Official Report, 22 November 2000; Vol. 357, c. 405.]
Lord Sainsbury spoke in a debate on clean coal technology in the other place before Christmas. His words suggest the likely content of the clean coal technology review. I make a plea to Ministers not to neglect existing coal-fired power stations. Without going into detail about the technology, the super-critical boilers can be retrofitted to existing coal-fired power stations. That could save up to 20 per cent. of CO2 emissions. Such a step could be taken quickly, given that those power stations will be with us for many years, whatever the policy.
I shall paraphrase Lord Sainsbury's argument, which appeared to be that some clean coal technologies such as gasification and super-critical boilers are used overseas and that there is therefore little need for a demonstration plant. However, he said that other clean coal technologies such as carbon capture and pumping CO2 into oil fields to capture the CO2 and to improve the extraction of oil are in such an early stage that a demonstration plant would not be feasible. I cannot imagine anyone presenting such an argument about renewable plants, which clearly exist in many overseas countries. Much of the technology is speculative, but the Government have made a clear commitment in financial incentives to developing renewables. I hope that they will make a similar commitment in the review of clean coal technology.
Let us consider the scale of what happens in other countries. In America, the Department of Energy contributes $2 billion a year to clean coal. In Japan, the new Sunshine programme means $100 million for clean coal technology. That has to be the future of our

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industry. I hope that the review that is coming out before the end of the month will demonstrate that now is the time for some action, after many years of supportive words and comments.
Whatever happens in terms of the energy review, it is inevitable that there will be coal mine closures in the next decade. Some pits will become exhausted. It is a challenge to the Government as to how they deal with that. The closures will obviously be on a much smaller scale than in the '50s or '60s, and, indeed, in the '80s, but this will nevertheless be a real challenge for the communities involved. I hope that it will be a mark of the Government that, where there are closures, they will be planned for and that the necessary investment will be made in skills retraining, and so on.
The official estimate in the Department of Trade and Industry review in 1997 for the closure date of the coalfield at Selby, in my constituency, was 2009. Who knows precisely when it will close? But it will close—I do not know whether it will be in my lifetime as the Selby MP, with a majority of 2,000—although I hope that it will go on for many years. On 22 February we are holding a conference on the future of the Selby economy—I shall provide the Minister with details—and I hope that the Government office will be represented there at a high level. One of our aims will be to work out ways of prolonging the life of the coalfield, but we shall also discuss planning for the inevitable day when it closes.
If the Government are to ease the closures, when they occur over the coming decades, they should look again at pensions. Managers and pit deputies who are made redundant get a pension at the age of 50 under the arrangements made following privatisation. Ordinary miners, however, do not. Those hon. Members, many of whom are present in the Chamber, who have worked in the coal industry, and those such as myself who have been down a mine, will know that miners have a very physical, back-breaking job. In Germany, the pension arrangements on early retirement are much more generous.
If miners in this country were given the same rights as their managers and pit deputies—the right to a pension at 50 if made redundant—it would cost about £99 million, according to the actuaries. The mining pension schemes have been in surplus, but this idea will never be promoted by the trustees of the scheme who are elected by the miners, because those miners are all retired. There are no working miners in the scheme. However, half the trustees are now representatives from the DTI, and it would be open to the DTI to explore the possibility of this change, through those trustees. Putting miners on the same footing as their managers would cushion the blow in communities in which there will be closures in the coming decades.
Coal mining is now a Modern, flexible industry. It is eager to make its contribution to Britain's energy requirements for many years to come, and all that it asks from the Government is fair play. The Government have given it that over the last four years, and it would be a pity—now that the industry faces heavy losses owing to the decline in prices following
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11 September—if they did not build on the achievements of their first term of office to maintain a viable domestic British coal industry.
Mr. Deputy Speaker: Order. Hon. Members should call to mind that it is the convention at these sittings to commence the three Front Bench contributions 30 minutes before termination—in this case, at midday. I have five names on the paper, and an additional hon. Member trying to catch my eye, making six in total. I therefore ask hon. Members to bear in mind my admonishment and make their contributions concise, clear and pertinent, and to keep interventions to a minimum—I would prefer to see none at all.
11.24 am
Adam Price: I am grateful to the hon. Member for Selby (Mr. Grogan) for securing this vital debate, and for his knowledgeable and forceful exposition of the case for continued public support for the coal industry. This is a critical time for the coal industry and, unfortunately, we are all aware of rumours about pits that might be about to announce redundancies, and about other mines that might be moving over to a closure plan, thus foreshortening the life of the mine. This is a dreadful shame, particularly considering the social and economic conditions in many of the communities involved.
The Minister has taken a much more expansive, open-minded approach to this issue than has possibly hitherto been the case. This is certainly a Government success story, and I say that as, technically, an Opposition MP. The UK coal aid operating scheme is something of which the Government should rightly be proud. In my constituency, Betws New mine, where my father worked, has received significant support. It should have closed in 1988, and it is a tribute to the work force, the management and the support from the Government that it is still providing good quality jobs-150 faceworkers, earning about £25,000 a year—in one of the poorest communities in the UK. That illustrates the success of the subsidy regime, and shows why hon. Members are keen to see that success built on.
As the hon. Gentleman said, the coal industry is still a significant industry. It employs about 2,000 people in Wales, directly and indirectly. If we compare the level of subsidy in the UK to the 4.6 billion euros that the coal industry in Germany receives, our level of support is very small. Considering that, it is amazing that British coal production is very competitive compared to imports. It would take only a small change in the exchange rate or the global level of coal prices to close the gap.
The arguments for continued support have been well rehearsed. They relate to security of supply. Coal has to play a part in ensuring a diversity of supply in terms of energy needs. We are not just talking about energy needs, however. There are other markets for coal. In my constituency, there is an anthracite coalfield. The only suppliers of good quality anthracite to the UK from outside Europe are China and Vietnam, so there is clearly an issue of security of supply involved.

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The point about the social cost to the community of mine closures has been very well made, and we certainly do not want to repeat the travesty of what happened to so many of our communities in the 1980s. If we consider the question in terms of the global net impact on Government revenue, it would be idiocy to close these mines, because the tax take from employment in many of them more than makes up for the cost of the level of support across the industry that we are talking about.
In the coal industry, more than in any other, we have to take a long-term view. I notice that Lord Sainsbury of Turville, speaking in another place yesterday, referred to the short-term factors that were the rationale for the introduction of the support scheme. There are always short-term factors involved in access to reserves in any mine. Hon. Members who have worked in the industry will know that. That is the problem with the coal industry: it has long-term reserves and needs a long-term perspective, but there are short-term costs involved in accessing those reserves. When problems of market failure occur, there is a legitimate role for the Government in helping the industry to overcome issues of short-term costs, to ensure that the coal industry can continue to access the available reserves, probably for the next 50 years.
I was also glad to hear the Minister's remarks about ensuring that we are not at a comparative disadvantage. The point has already been made, however, that we shall be at a comparative disadvantage unless we get at least a short-term extension of the scheme, so that we can have a full debate about designing a regime that is most appropriate for the UK industry's needs. The issue of the company cap has been raised, as has the question of aid, not just operating aid, but investment aid for access to new reserves, and why not? In a very long-term view of the industry's future, a report by international mining consultants, commissioned by the Government in 1998, referred to new mine construction.
The six-month extension to the scheme, which has already been announced in other EU member states, is vital to some of the mines that I know will be switching over to a closure plan. Those who have worked in the industry will be able to explain this better than me, but basically some mines will be looking in the next few weeks for an announcement about an extension from July to December, otherwise they will halt their development plans and start working to a short-term closure plan. I know of mines that have the potential to last another 10 years, but without an announcement their lives will be foreshortened to perhaps two or three years. The issue is critical, as I know the Minister is aware.
It is imperative that the Government show their faith in the coal industry and coal communities. They have a good record on this issue, and we do not want to repeat all the mistakes of the 1980s, do we? The industry has been badly served by successive Governments, and this is an opportunity to build for the future. The last thing that the Government want as their epitaph is that they closed down the coal industry. We must bear it in mind that there are by-elections on the horizon. Let us, together, develop a positive future for the industry in
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Wales, where there is a lot for the Government to build on. I repeat: it is vital that we have an announcement on the extension in the next few weeks.
11.32 am
Mr. Kevin Hughes: May I start by congratulating my hon. Friend the Member for Selby (Mr. Grogan) on securing this important debate? He made an excellent speech and gave us a grand and detailed tour of the issues. I shall bear in mind your advice, Mr. Deputy Speaker, and concentrate on one aspect of the issues.
My hon. Friend's constituency is just to the north of mine, but a boundary is not the only thing that we share. We both have a deep interest in, and commitment to, the coal mining industry, the people who work in it, directly or indirectly, and of course the communities in which they live. The way in which the last Tory Government ransacked the industry in the 1980s and 1990s was absolutely appalling. They abandoned the people and their communities, leaving a trail of destruction, with little hope of a decent future. However, I do not want to dwell on the past; I want to look to the future. I believe that coal and the people who work in the industry can and should have a prosperous future if we—and by that I mean this Labour Government—grasp hold of the new generation of clean coal technology that is now coming to the fore.
There are serious decisions to be made about our energy supply in the not-too-distant future. We are awaiting the outcome of the performance and innovation unit's energy review, and I understand that it has been submitted to Ministers for their consideration. Whatever that review says, the Government will need to decide what they will do to secure and maintain the supplies to meet our future energy needs. It will be good sense to maintain a broad mix of generation options.
The Government will have to deal with our rapidly depleting indigenous gas supply, the enormous cost of decommissioning the present nuclear capacity and the environmental threat from any new build. They will have to face up to the fact that renewable sources are not and will not for years to come be sufficiently advanced to generate enough power at a reasonable cost. May I warn the Minister that I believe there will be a huge outcry when the public see great swathes of our countryside and seascape blighted by obnoxious-looking, noisy wind farms?
The Government have to grasp the nettle of reducing our CO2 emissions. There are other forms of renewables which are not as environmentally unfriendly as wind farms, and the Government can embrace the new generation of clean coal technology, in which they may well find the answer to many of these questions. Moreover, they will tackle the issue of security of supply. Within the new CCT methods being developed, integrated gasification combined-cycle technology offers us a realistic way forward. Put very simply, and I mean very simply, IGCC plants convert coal to gas and steam, and then burn the gas and utilise the steam to generate electricity. They reduce CO2 emissions, are small enough to be built on colliery sites and produce an inert waste material that can be used in road foundations, among other things.
Let us look for a moment at what we can achieve by using the new CCT. First, the bulk of the coal produced at a mine need not even leave the site, cutting down on

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road transport and, in turn, emissions from heavy goods vehicles. Secondly, it reduces CO2 emissions, which will help us to meet our Kyoto targets. Thirdly, unlike other CCTs such as flue gas desulphurisation, there is no need to dig great holes in our countryside to extract limestone. That cuts down on quarrying, which scars the landscape, and again reduces HGV emissions because there is no need to transport more limestone.
Fourthly, the by-product is useful in civil engineering, again cutting down the need to quarry in our beautiful countryside. Fifthly, by using our own coal supplies to greater advantage, we do not have to worry about the security of supply issue. Sixthly, as it develops, CCT may help us to deal with the issue of our depleting indigenous gas supply. If we burn more gas in IGCCs to generate electricity, there will be less need to burn our natural gas supply for that purpose, thereby resolving the vexed problem of our having, in the not-too-distant future, to import natural gas from eastern Europe. Finally, a new life for coal will be created if it is used in this way. It would create new employment opportunities in areas that have still not recovered from the devastation of the Tory pit closures programme of the 1980s and 1990s.
In the round, we start to get the picture that once again coal can play a significant role in our future energy needs. All we need is a bit of willpower and foresight, and together with the coal industry the Government can help to give coal a new life, help to save the environment on several fronts and regenerate communities that were ripped apart by the Tories. In conclusion, I urge the Minister to look closely at all these matters and to take a step into the future with a fuel that we know we can rely on.
11.38 am
Mr. Denis Murphy: I congratulate my hon. Friend the Member for Selby (Mr. Grogan) on securing this important debate.
The coal industry still plays an important role in my constituency. Ellington colliery, which borders Wansbeck, employs some 450 people, and with an unemployment rate that is still twice the national average, those jobs are vital to the local economy. Ellington, however, was not included in the UK coal operating aid package. It is producing today only because the other collieries in the group are receiving financial aid, thereby freeing much needed capital investment for new equipment, enabling the colliery to continue production.
Coal's contribution and value is recognised widely throughout the European Union. The Commission has allowed member states to subsidise coal for many years. The current scheme, as hon. Members have pointed out, ends this year. I understand that the Commission will soon be recommending a new scheme, which is intended to operate until 2010, to replace the current operating aid. I urge the Government, through my hon. Friend the Minister, to play a leading role in setting the rules of any new financial structures, because any new scheme should certainly encourage investment. If it can be proven that new equipment or even accessing new reserves will improve a colliery's efficiency, financial support should be given. That is exactly the investment required by Ellington to keep it viable for at least the next 10 years, to cover the short and medium terms.
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The coal industry's long-term future can be guaranteed only by building a new generation of clean coal power stations, and the Government could assist either by direct grants or by introducing an obligation. Either way, it is important that the current balance of fuels for electricity generation be maintained. Coal, nuclear, gas and renewables all have a role to play, but it is imperative that the UK should not become dependent on gas.
I have nothing against the gas industry—gas is a wonderful fuel. Indeed, it is far too valuable to flare off in huge quantities in gas-fired power stations. In 1990, total UK gas reserves stood at 36 years. By 2000, that had fallen to 14 years, and we shall import 55 to 90 per cent. of our gas by 2020. It is reasonable to ask where that gas will come from: 70 per cent. of the world's natural gas reserves are concentrated in the middle east and the former Soviet Union—areas not noted for political stability—yet oil companies are pressing ahead with projects such as the $35 billion Yamal pipeline from Siberia. If we source our gas there, the UK will be at the end of a long pipeline and subject to high transport costs and possible supply interruptions. We still have a choice and that choice, if we are serious about security of energy supply, is simple: coal from the UK or gas from Siberia.
The thermal efficiency of gas power stations, which is nearly 50 per cent., may look attractive compared with that for coal-fired power stations, which is only about 38 per cent. That comparison pales, however, when the alternative uses for gas are examined closely. Modern domestic central heating boilers can achieve nearly 88 per cent. efficiency and compressed natural gas provides significant environmental benefits in transport. The European Union White Paper on transport policy for 2010 argues that natural gas is the most promising fuel in the medium to long term; so considered against more efficient uses, burning vast quantities of gas at power stations is incredibly wasteful. Coal, however, is abundant and ideally suited to power generation.
In an Adjournment debate that I secured in July 1998, I argued for building a clean energy centre in my constituency. It would be a world first in best practice and would incorporate research and development linked to the region's universities. Newcastle university is a world leader in photovoltaics—the science of converting light to power—and the only offshore wind farm in the UK sits half a mile off the constituency, adjacent to the seven wind turbines, which are also in the constituency, at Blyth harbour.
There is huge potential for offshore wind farms, yet the generating technology is sourced outside the UK. The centrepiece of the new clean energy centre should be a brand new, state of the art, clean coal power station incorporating combined heat and power, which should be set in green parkland. We can show that coal meets the challenges both of efficiency and of the environment.
I see that you have looked at your watch, Mr. Deputy Speaker, and several times at me, so I shall conclude. There is still a huge opportunity for coal. The industry's short term can be protected by lifting the cap on operating aid. The medium term can be secured by the UK's agreeing to implement a new EU scheme. The long-term future can be guaranteed by encouraging the building of a new generation of clean-burn power stations.

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By implementing the measures that they have, the Government have shown the value that they put on the industry and the people who work in it. I urge my hon. Friend the Minister to continue his excellent work and his support for Britain's coal industry.
11.45 am
Mr. Michael Clapham: I congratulate my hon. Friend the Member for Selby (Mr. Grogan). This is an important debate and the number of MPs from coal mining and former coal mining communities who are here shows that. The coal industry is a strategic industry, because on current extraction rates, it could last 200 years, so we must ensure continuity for coal mining through investment and encouragement.
My hon. Friend the Member for Doncaster, North (Mr. Hughes) referred to the size of the coal mix in the UK's energy economy. Members are aware that, in 1993, the President of the Board of Trade referred his cuts to the Trade and Industry Committee, which reported in February and suggested that there was a market for 62 million tonnes of coal. Last year, we burned 59 million tonnes, which clearly shows that the Select Committee got it right, and 62 million tonnes would briefly have retained a mining industry of about 40 collieries.
There is a continuing need for a coal industry, particularly in respect of the dominance of gas, and I refer the Minister to the gas price increase. I suggest that it has been caused largely by UK gas suppliers pushing their gas through the interconnector to Europe and chasing the higher prices there. That pulled UK gas prices in its train, causing the increase. A price fall is unlikely because, in the next two to three years, we shall import gas from the Danish field to feed into our power stations.
Just three power stations are fitted with flue gas desulphurisation technology—another is under construction—but six need to be fitted with it. I hope that the Minister will encourage the owners of that set to fit FGD technology, because it is required. In moving towards new clean coal technology, we must deal with the existing plant and FGD offers one way of doing that.
My hon. Friend the Member for Doncaster, North referred to the new IGCC technology. I think, Minister, that we ought to aim high, and in aiming high we should invest in a demonstration plant. That could put in train a new generating set based on new technology, which would be good for British manufacturing and good for our ability to exchange the technology, particularly with economies such as India's and China's. That, too, would be good for British manufacturing. I hope that the Minister will consider such an investment.
The current coal aid system is restrictive. It operates under the European Coal and Steel Community treaty, which ends this April, but the new European Commission draft is just as restrictive. We need a flexible coal aid scheme and I hope that the Minister will take that up with the Commission. We have to bear in mind how we can aid further development at new and existing collieries and in health and safety technology. We must also ensure that that technology keeps pace with mining technology.
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Finally, I urge the Minister to hold a major debate in the Chamber when the PIU report has passed through his office and entered the public domain.
11.49 am
Colin Burgon: I too congratulate my hon. Friend the Member for Selby (Mr. Grogan) on securing this debate on the future of the coal industry. He is a staunch supporter of both the industry and those who work in it. Even though he is a Bradford City supporter, his contribution was truly outstanding.
I shall make a short contribution to the debate—I see you nodding your head, Mr. Deputy Speaker. I shall not cover general points but will raise one specific concern.
The Selby constituency now contains more working pits than any other constituency in Britain. Prior to the great miners' strike of 1984–85, my constituency had three pits and one workshop, and was headquarters of the National Coal Board's northern area, which meant that some 3,500 jobs were provided by the industry. All those jobs have now gone. It is estimated that, within the whole of the Leeds district, only some 200 men are left in mining. While I, like many others, am well aware of why that happened, I will never forgive the Conservative party for destroying the industry. It was a wanton piece of vandalism. We must now concentrate our minds on securing some kind of future for coal in Britain.
Rather than go into the general policies that will ensure a place for coal in helping to meet our current and future energy requirements, I shall concentrate on the need to keep open the last remaining pit in the whole of west Yorkshire, the Prince of Wales colliery at Pontefract.
On 3 December, UK Coal announced that work was to be halted on developing a new coal face in the colliery. That move jeopardises the 480 jobs at the colliery. If the pit closes, those, plus another 150 contract workers' jobs, will be at risk, with all the usual knock-on effects. Indeed, Wakefield council estimates a possible loss of some £50 million a year in wages and income, from supplying service industries in the area.
The Under-Secretary of State for Health, my hon. Friend the Member for Pontefract and Castleford (Yvette Cooper), has been energetic in the campaign to prevent closure and has called on UK Coal to keep the pit open. I fully agree with her stance on that. I also agree with the view of the Coalfield Communities Campaign when it called for a new mining plan to be drawn up ensuring the colliery another 20 years of life.
The Prince of Wales colliery has made more than £80 million profit since privatisation in 1995. Unfortunately, it has hit geological problems precisely when UK Coal can no longer call on the current subsidy scheme for assistance. I fully support the view that the current Government aid package should be extended to access new coal reserves. As the Yorkshire coal taskforce has argued, it should be seen as part of a European coal reserve, accessible at a far lower cost base than coal mined elsewhere in the European Union. That would help make the colliery an important asset in accessing reserves, as discussed in the European energy Green Paper.
I hope that the Government will listen to all who argue that they should amend the UK subsidy regime to allow the Prince of Wales colliery to remain open so that

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it can contribute to the country's energy needs and the local economy. I know that the Government have done a great deal, as has already been said today. To be blunt, if we did not have a Labour Government, we would not be having this debate.
I am lucky to have friends who work at the Prince of Wales colliery, and I have discussed with them the threat that they face. There is a long history of miners being badly treated, and UK Coal seems determined to continue that tradition. Miners complain of an almost total lack of information. They do not know whether to leave the industry and are convinced that UK Coal is not vitally committed to keeping the pit open. They also suspect that UK Coal wanted to transfer a section of the work force to Kellingly colliery so that it could impose an unpopular four-shift system, so as to fulfil its main aim, the boosting of company profits. I look forward to UK Coal proving me wrong.
On Saturday, I read in the Yorkshire Post that six options are now being considered for the pit. Gary Foreman, the NACODS—National Association of Colliery Overmen, Deputies and Shotfirers—branch secretary, said that there was a prospect of going into a new seam. I hope that that is the case and that the Government will support such a move. I also share the view of Tony Withington, the National Union of Mineworkers branch secretary, that UK Coal should not cut and run, but should show a full commitment to keeping the pit open.
Future generations will look back and judge the privatisation of the coal industry to have been a monumental piece of economic and political vandalism. They will judge the approach taken to a plentiful and reliable energy source to have been profligate and short sighted, and the treatment of those who work in the industry to have been cavalier and thoughtless. Let us hope, in relation to the Prince of Wales colliery, that those judgments will not be sustained.
11.54 am
David Hamilton: Thank you, Mr. Deputy Speaker, for allowing me to speak. I may follow Gary Cooper at high noon in order to meet the 12 o'clock deadline, and I shall therefore make my remarks very quickly.
I congratulate my hon. Friend the Member for Selby (Mr. Grogan) on raising the issue. I also congratulate all my longer established comrades, who have for a number of years been fighting the campaign to try to keep the coal industry in existence. I shall limit my remarks to one or two small points which I consider very important, because the detail has already been argued.
When I started work in the pits at the age of 15, and then went down the pits at 16, the one thing I knew was that at some point the pits would close. I therefore do not look at the coal industry with a great big heart and think that it must be kept at all costs. I was involved in the 1972 and 1974 disputes, which it should be remembered came about because of the price of oil. We were at the beck and call of the middle east.
What hon. Members have said today about expanding the coal industry is right, but I believe that the security of our future energy needs is key to this whole debate. We must go forward in that area. In the short time I have been a Member of this House, we have
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had several meetings with the Minister on a host of matters, and his door is always open in order that progress can be made on those matters.
Renewables are a key area for the future. The Minister is well aware of Moncktonhall colliery, which is was one of the deepest pits in Europe and has now been closed. Midlothian council is looking into the possibility of some 4,000 houses being provided with the hot water that has been generated there. Thus an ongoing benefit to the coal industry is stored at the colliery. I invite the Minister to pay the council a visit to see that project for himself.
I wish to discuss two major issues. The first is the fact that the oil and gas industries are finite, although the coal industry has a much longer period before it. There will be major obstacles for nuclear power. Personally, I would oppose nuclear power all the way down the line, not because I am an ex-coal miner but because I think that it is the wrong way forward. Nevertheless, the two industries must compete with each other and also complement each other. If Europe is to survive in the near future, the German, Spanish, French and British coal industries should combine to secure their future. The former Soviet Union and the middle east have major problems—we have only to look at what is happening now. We cannot possibly leave our future in those hands.
With those few comments and with only two minutes to go until noon, I do not think that I have done too badly. Let me make one final comment on pensions. The Minister is to be congratulated on the work that has been done on pensions. Miners' pensions had been victimised, and I hope to see progress on that work very soon.
11.58 am
Rachel Squire: I have just one minute in which to speak. I apologise to you, Mr. Deputy Speaker, and to my hon. Friend the Member for Selby (Mr. Grogan) for being late. I was due to be in a Select Committee, so I had not put this date in my diary. It was only when the title of the debate came up on the screen that I realised it was on.
I very much support what my hon. Friend the Member for Selby and my other hon. Friends have said. I thank all hon. Members present for their support in helping to keep Scotland's only deep coal mine, Longannet, open. Without the support that it has received from my hon. Friends, the Labour Government and particularly the present and previous Ministers for Industry and Energy, that pit would not be open. I very much hope that the Prince of Wales colliery can look forward to a secure future in the months ahead.
I urge the Minister to listen to comments about clean coal technology and how this country could lead the way and boost both the future of coal-fired energy production and manufacturing by exporting our expertise and knowledge to other countries. I hope that we shall be able to celebrate an announcement on, and some funding for, the development of super-critical boilers, for example, and that we will support a diverse energy market.
12 noon
Dr. Vincent Cable: I congratulate you, Mr. Deputy Speaker, on shepherding through all the speakers in the debate in good order. I also congratulate the hon. Member for Selby (Mr. Grogan) on introducing the debate. He spoke effectively on the subject. I grew up on the outskirts of the west of York, a few miles from his pit, so I understand the strength of feeling about this issue and its relevance to the economy of the Vale of York.
Unfortunately, I shall begin by making a slightly discordant comment. Most hon. Members have pitched their remarks on the assumption that the key energy review is on Ministers' desks and is being considered at leisure. Unfortunately, it is already in the public domain. It was referred to in The Independent this morning, and I do not know in how many other newspapers. That is yet another example of the discourtesy shown to Parliament. I do not know whether an official or a Minister leaked the report.
The Minister for Industry and Energy (Mr. Brian Wilson): If I knew how to prevent leaks of the PIU energy report, I would employ a hundred plumbers to do so. It certainly did not come from the Government, and it is deeply against our interests. It has been leaked by people who want to put a spin on it, and not to reflect the overall report.
Dr. Cable: I accept the Minister's comment. The report does not help the case of the hon. Member for Selby, because one of its key conclusions, according to that article, is that we need
"a radical agenda to enable the UK to put itself on the path to a low-carbon economy"
that is less reliant on oil and coal-fired power stations. That is a bold and brutal conclusion. The implication is that we must quickly debate this report in Parliament. Whoever was responsible for the leak, the issues are out, and the Minister should make a statement this week, so that the matter can be properly debated.
My first point is about the basic economics of coal. For those of us who do not represent coalfields, the issue is how much we are willing to pay as a society to keep open the option of a coal industry, and to keep the skills and technology to stop the coal faces from being destroyed. There is an argument for keeping that option open and for paying something for it as a community. I agree with the hon. Member for East Carmarthen and Dinefwr (Adam Price) that the Government have got the balance right. The current modest subsidies, which are degressive over time, are probably the right approach.
A key uncertainty, which has not been mentioned but which is important to the debate, is the current United Kingdom exchange rate. One reason why the UK coal industry finds it extremely difficult to compete against imported coal, quite apart from other fuels, is the fact that the pound appreciated in real terms by 30 per cent. in 1995, and it has remained at about that level ever since. The British coal industry competes against not just western Europe, but Australia and South Africa. The Australian dollar and the rand have been heavily devalued. To have a proper discussion about how much the industry needs to be subsidised to maintain that
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option, we need a clear picture of the exchange rate at which the industry can compete at its present level without a subsidy.
The Secretary of State clearly understands that problem, because she was on the radio this morning talking about the exchange rate in relation to the euro. I do not want to open that debate, but it is essential to the argument. It would be helpful to have an understanding of how much the exchange rate needs to come down to keep the coal industry in business. That is the issue.
My second point is about security of supply, on which I have a little less sympathy with hon. Members from the coal mining belt. When they talk about security of supply, I sense that they are clutching at straws. The brutal fact of the matter is that the British gas supply is much healthier than in the 14 years that the hon. Member for Barnsley, West and Penistone (Mr. Clapham) mentioned. There is constant exploration, new technology, west of Shetland development, and the industry is developing horizontal drilling, which enables it to get not just the oil but the associated gas and to develop new gas fields. The amount of the reserves continues to expand.
Overseas supplies are not as unreliable as has been suggested. According to the article in The Independent, the leaked reports says that there is
"'little risk' of an international shortage of gas supply".
Most of it comes from western Europe—Denmark and Norway—and the former Soviet Union. We tend to forget that the pipeline from the former Soviet Union was built in the days of the cold war, and was one of Mrs. Thatcher's initiatives. She rebelled against Reagan, and insisted that the pipeline be built, which was sensible. It has never been disrupted, and there are now new pipelines and new private sector suppliers. There are at least two pipelines from north Africa, liquified natural gas from the Gulf, Nigeria and Venezuela, and large numbers of diverse supplies.
To argue that those supplies will be disrupted politically is not plausible. The coal industry has a case, but it should not rest it on security of supply. Worse than that, it gives ammunition to the Germans, who are pushing through an unhelpful policy on coal subsidies, which are massively greater than ours, and it damages the case of the UK coal industry. The security of supply arguments are completely invalid and to our disadvantage.
Thirdly, the environmental argument about clean coal is important. I support the idea of investing in research and development for new coal technology. That is a much better use of money than endless operating subsidies. The basic point that must be addressed is about carbon. The hon. Member for Selby rightly said that many of the problems associated with sulphur and nox have been dealt with, so the problem is with carbon. In the past few years, Britain has met its carbon dioxide targets because of the replacement of coal by gas, so how should we address that issue?
I have heard people in the coal industry arguing that it can be dealt with through coal sequestration. Carbon can be pumped into deep reservoirs under the oceans. I do not know how far that technology has evolved, but there is a case for examining it seriously and investing some resources at least in research. I do not know

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whether it has reached the prototype stage, but that seems to be the area on which clean coal research should be focused. I would be interested to hear the Minister's view of how that is progressing.
My fourth point relates to Europe. I have always been a strong supporter of British participation in the European Union, but the EU is a disaster in two areas: agriculture and energy. The Government must try hard—it is easy to say that, but there are 15 other member states—to get the energy policy right. At the moment, it works heavily to the disadvantage of UK energy producers, especially the coal mining industry. There is massive over-subsidisation in Germany, and we cannot get an agreement on the liberalisation of gas, which is the real security of supply problem. Ruhrgas can divert gas within Europe. This is an internal, European problem. Until there is an agreement on single market rules, the continental European producers will continue to distort the market against us.
The French continually block agreement on electricity. Electricité de France operates at a cost of capital of a normal nationalised industry, competing against British producers which operate in the market, so companies such as Scottish Power that use coal and are committed to coal have to compete on an unlevel playing field with European producers such as EDF. Until we get a proper, liberalised, fair European market in energy, many of these problems will remain. The Government must give that top priority.
My final comment, Mr. Winterton, is to say—
Mr. Deputy Speaker (Mr. Nicholas Winterton): Order. I am pleased to tell the hon. Member that fortunately a motion went through at the end of last week, and I can now be addressed appropriately as Mr. Deputy Speaker.
Dr. Cable: I am sorry, Mr. Deputy Speaker. I had not caught up with the news.
The clock is ticking on energy policy. The report of the energy review has got into the public domain, and I hope that the Minister will say when he intends to bring its conclusions to Parliament so that we can debate them properly.
12.8 pm
Mr. Robert Key: Mr. Deputy Speaker, I shall start by congratulating the hon. Member for Selby (Mr. Grogan) on initiating this important debate. Not only does he represent a quarter of the nation's coal industry in the Selby complex, but he plays a significant role as the honorary secretary of the all-party parliamentary coalfield communities group. I congratulate that group on the submission it made to the PIU review of UK energy policy, which was a good deal more concise than many reviews, and contained much more good sense.
Coal has a future: it is a Modern, rejuvenated industry, as hon. Members have said. The energy industry and the City are investing in coal: they want it to succeed and so do I. Any debate about the future of coal must assume a knowledge and understanding of the history of coal, coal mines and coal miners and the role that they have played in the industrial and social life of the United Kingdom. As a southern MP, I was brought up with stories of the coal mines. My father was brought
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up in the Potteries, and his father was the rector of Hanley. There was a mine at the bottom of the garden, and he was regularly down the coal mines. He told me all about it.
This does matter. It is wrong to imagine that just because people live in southern England, they know nothing about coal mines. I do know about them. I first went down a mine in 1976, when I was fighting my first seat, Holborn and St. Pancras. The headquarters of the National Union of Mineworkers was in that constituency.
I also observed the importance of the miners to the whole trade union movement during the 1977 Grunwick dispute, with which I was intimately familiar when I was secretary of a large branch of what was then the Association of Scientific, Technical and Managerial Staffs. I will never forget the impact of the NUM's march to Grunwick through the summer mist with Arthur Scargill at its head, and the sight of him being snatched by police about three feet from where I was standing—much to his annoyance, as he had been pushed through the police picket line by members of the Socialist Workers party. But I must not digress.
From the agony of the 1980s has emerged a small, efficient industry—an industry with a future, if it can survive in the face of heavily subsidised foreign competition, which has already been mentioned. It was a pleasure to hear more from the hon. Member for Doncaster, North (Mr. Hughes) about his campaign against wind farms, and also to hear from the hon. Member for Midlothian (David Hamilton), who spoke of the importance of price stability and pointed out that the industry had already been held to ransom in the past. I feel particularly strongly about that, as my first job was in Musselburgh, and I was very familiar with the mines of which he spoke.
One of our current problems is that the Government, like ducks, are paddling like mad under water and trying to look serene on the surface, while numerous leaks occur and, apparently, reports are delayed. Yesterday, in the other place, Lord Sainsbury of Turville pointed out that the Government had subsidised the industry to a significant extent—£140 million so far—under the coal operating aid scheme. He said
"We currently have no plans to extend it, or to introduce a new scheme beyond July 2002."
He mentioned the performance and innovation unit and the clean coal technology review, which we hoped would have been published by now. He said that there would be no more subsidies under the existing scheme, but added
"We are also working to ensure that the new EU regime gives us the flexibility to pay suitable types of aid if appropriate."—[Official Report. House of Lords, 22 January 2002; Vol. 630, c. 1382.]
We really do need to start coming clean. It is not fair to the coal industry for there to be so much uncertainty about not just the general approach to the energy review, but specific schemes.
Do leaks matter? They do, but perhaps not as much as some people think. I suspect that the leak mentioned by the hon. Member for Twickenham (Dr. Cable) and reported in today's Independent has a great deal more to

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do with the feelgood factor among newspaper circulation managers than with the future of the coal industry.
The PIU report is not important merely as a subject that we will debate. It is crucial for the Government to make their policy clear thereafter. I suspect that when the report goes into the public domain, the Government will say "It is frightfully interesting: let us now talk about it for quite a long time". That is entirely right, but what will matter are the conclusions that they subsequently reach.
If there is anything to be said about the leaks in today's newspaper, it is this. The hon. Member for Twickenham said that reducing the cost of carbon emissions made things look bleak for coal, but, according to The Independent, the PIU proposes to put the United Kingdom
"on the path to a low carbon economy"
that would be
"less reliant on oil and coal fired power stations. But it"—
the PIU's leaked report, that is—
"says that the plan to switch to 'renewable' energy could push up domestic electricity bills by between 5 and 6 per cent."
There is another issue, however. Will this lead to the end of any hopes for clean coal technology? That would be a tragedy, and I hope that it will not happen.
There are some questions to which the industry needs answers. As we are seriously constrained by time, I will ask them now. I hope that the Government will address these questions, which have been raised by the industry.
Do the Government recognise the role of coal-fired generation in providing fuel diversity? I believe that they do—the Minister and I have discussed the issue before—but it is crucial for the Government to reassure the industry. A good deal of investment is needed. The industry is also keen to know whether the Government will facilitate the co-firing of biomass in coal-fired plants under the renewables obligation, as has happened in Denmark. Let me add that it is important for the policy review to be completed and then followed by a period of stability in energy, so that we can get down to working out investment strategies in the various sectors of the industry.
Perhaps the main point that should be answered—the Minister will say "Not me, guv"—is that the Government should not gold-plate the environmental controls agreed in Brussels under the revised large combustion plants directive. I know that that is technically a question for the Department for Transport, Local Government and the Regions and the health and safety regime, but there will be a hugely important impact on the coal industry if the directive is unhelpful to it.
The PIU review of the strategic issues surrounding energy policy is set in the broader context of meeting the challenge of global warming, and ensuring secure, diverse and reliable energy supplies at a competitive price. It is terribly important for people to realise that we do not have a true market in energy anywhere in the world. If we did, the rush to gas would continue and the price would fall to a point at which—as has happened in California—no one would invest in new plant, and the
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lights would not come on when the switches were pushed. The Government must be careful to avoid that, and I am sure that they will.
The issues of security and diversity are extremely important. We should consider what is in the national interest, and what is in the strategic interests of all the industries involved. Then there are the environmental issues. I was astonished to learn that Greenpeace had made no submission to the PIU review, and that Friends of the Earth did not mention the word "coal" in its submission. It has not mentioned that word in any of its output since 1998, when it was pretty rude about it.
I think it tremendously important for us to allow the Government to support the industry sensibly, not least because it faces massive competition from other European interests. I urge the Minister to go in there and sort out subsidies in the European market and liberalisation of the energy market, particularly in France and Germany. If he can sort that out he will have our wholehearted support, because it is one of the great brakes on a liberalised energy market in this country.
We must encourage clean coal technology whenever we can. We do not yet know the costs involved, because the important paper that has been spoken of has not yet been produced. We look forward to its publication.
Whether we are talking about the treatment of emissions from pulverised fuel combustion or about other examples, such as the hybrid combined cycles which, I believe, have a bright future, we need to ensure that the coal industry is properly treated as part of the country's energy mix. Coal has a future in the energy mix, because it is abundant, capable of storage, can be turned on and off in minutes, is not dependent on unpredictable weather conditions, and can be easily transported by ship, rail or road. Quite minor investment will ensure that coal can continue to meet the UK's baseload energy requirements while new technologies are allowed to develop.
The flexibility of coal makes it an ideal complement to intermittent forms of generation such as wind and wave power. It has an important future, and it has our support.
Mr. Deputy Speaker: I thank the hon. Member for Salisbury (Mr. Key) for his contribution. The Minister of State will reply.
12.19 pm
The Minister for Industry and Energy (Mr. Brian Wilson): I join my colleagues in congratulating my hon. Friend the Member for Selby (Mr. Grogan) on securing the debate and on his wider work in promoting the interests of the UK coal industry. It has been a useful debate, which has reflected the industry's importance in many parts of the country, and its importance to the nation's energy needs. I will certainly follow up on some of the comments that have been made.
I appreciate the comments about our performance on the coal industry. It is a very interesting and challenging part of my job as Minister for Industry and Energy. We do have a good record. We have managed, for example, to turn around the coal health compensation scheme, which is now working pretty well. There is always room for improvement but the money is getting through, which is what matters. I am pleased that I have been able

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to do something about victimised miners and the low pensions issue, and to keep the subsidy scheme operating effectively, as hon. Members on both sides of the Chamber have recognised.
I was particularly pleased to be able to do something about Hatfield when the opportunity arose. I look forward to going there next week for what I am sure will be a happy occasion, when we can also discuss Mr. Budge's ideas for an IGCC power plant, to which my hon. Friend the Member for Doncaster, North (Mr. Hughes) referred. I welcome the comments of all hon. Members about the effectiveness of what the Government have done for the industry, including the comments by the hon. Member for East Carmarthen and Dinefwr (Adam Price).
Coal has a major role. If any Labour Member deep in the south of England does not realise that, they should be sent a copy of the Hansard for this debate. After all, the industry provides over a third of the UK's electricity needs. If current trends continue, coal burn is expected to account for between 10 and 22 per cent. of electricity generation in 2010. Clearly, coal will continue to play a key role in the UK's energy mix for a long time to come.
We have a coal industry to be proud of. It is by far the most efficient in Europe, thanks to the great strides in recent years to improve efficiency and raise productivity. To give hon. Members some idea of that success, in the 1990s, output per head increased by an average of 33 per cent. each year—greater than in any other energy industry, and far greater than the 5 per cent. average for the industry as a whole.
At many of the remaining pits, the prospects are good. The hon. Member for East Carmarthen and Dinefwr mentioned Betws, which is a good example. Lots of reserves are being worked on a relatively small scale, producing highly valuable anthracite for niche markets. We could go through the card. The prospects for a good number of pits are sound.
On the other hand—everyone recognises it—the future is not entirely rosy. For geological reasons, some mines will close in the next few years. Realistically, that cannot be avoided. I return, however, to the positive. Latest statistics suggest that last year coal production in this country rose by over 4.5 per cent. Over 3.5 million tonnes more coal was burned at power stations in 2001 compared with 2000. Over a third of electricity is generated by coal.
Several hon. Members mentioned clean coal technology, particularly my hon. Friend the Member for Wansbeck (Mr. Murphy). I emphasise the crucial significance of that. If we are to secure a truly long-term future for coal, it must be consistent with environmental obligations. CO2 emissions in particular will need to be addressed, given the concerns we all know about on global warming. That is one of the reasons why the Government announced in June that the case for supporting development of cleaner coal technology was being reviewed. A demonstration plant could play an important part in any future role for coal in the fuel mix. It would ensure security of supply while meeting environmental requirements.
In the course of the clean-coal technology review, the scope for capture and storage of CO2, and the need for Government support for that, have been given particular attention. There are potentially exciting
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prospects, both for using CO2 to enhance oil recovery from North sea oil wells and to store CO2 permanently underground, a point to which the hon. Member for Twickenham (Dr. Cable) referred. I assure him and other hon. Members that the clean coal technology review will have a lot more to say about that.
The conclusions of the review into Government support for cleaner coal technology will be published later this month. The PIU energy review is expected to be published around the same time. Both reviews will inform a fresh look at how we can achieve our economic and environmental objectives.
A lot depends on those two reviews but I stress, as I always do in these discussions, that the PIU report will be a report to Government, rather than of Government. As the hon. Member for Salisbury (Mr. Key), the Opposition spokesman, rightly said, the debate will begin rather than end with the publication of the PIU report.
Everyone knows why the PIU review was set up and has seen speculation about it but I reiterate the point that the leaking has been in order to secure particular interpretations of the review. Most of it comes from the obsessive anti-nukes. They started off trying to prove that the review was a great whitewash for the nuclear industry, that the devil incarnate was involved and that it was proof positive of that. Then they gave up on that and changed their line. Now they say that it is the death knell of the nuclear industry. Pay your money, take your choice, but my advice is to wait for the PIU review. I think that people will find a balanced report on that issue, as on others. Future policy on coal and energy more generally will be informed by the conclusions of the review.
Everyone has recognised that the UK subsidy scheme has been very successful in achieving what it set out to do. It was designed in 2000 to assist the coal industry through short-term market problems and to prevent a sudden and sharp decline in the coal industry. That has been achieved. Eligible pits have been helped significantly to survive the very difficult price and structural threats that they faced between 1999 and 2001. As a result of that approach, hundreds of jobs have been saved. I welcome the comments of hon. Members on both sides of the Chamber about the success of that approach.
Any pit with a long-term viable future should now be able to survive without Government support. Indeed, the terms of the scheme, as approved by the European Commission, required recipients of aid to be able to demonstrate medium-term viability without aid from July 2002.
As my hon. Friend the Member for Selby and others recognise, we are negotiating to put in place a framework for possible national subsidy schemes after July 2002. Our aim—I repeat what the hon. Member for Salisbury and significantly my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) said—is to secure an outcome that will give us the flexibility to put in place suitable schemes, should we wish to do so. The key word is "flexibility". Future policy will be informed by the PIU energy review, the Department of Trade and Industry business support review, the clean coal technology review—like London buses, they come in threes after a long wait—and the House of Lords

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reports into security of supply. If the conclusions of those reviews suggest that a further coal subsidy scheme may be appropriate, we will of course consider the issue further. I look forward to discussions beyond this debate with colleagues.
A number of hon. Members have raised the issue of security of supply as an argument in favour of a new scheme. Clearly, that is an extremely important issue, and the overall aim of Government energy policy remains to ensure secure, diverse and sustainable supplies of energy at competitive prices.
Whether there may be security of supply benefits from maintaining a particular level of coal-fired generation is something that we will need to consider in the light of the PIU review and the House of Lords and Select Committee on Trade and Industry reports, but our current position is that, whatever the security of supply issues surrounding coal generation, there are not significant security of supply benefits from maintaining a particular level of UK coal production. As the EU security of supply Green Paper itself notes, the geopolitical diversity of coal sources is such that the risks of disruption to supply are minimal.
Mr. Deputy Speaker: Order. Sadly, time is up. I am grateful to the Minister of State for his reply.

Tanzania
12.30 pm
Dr. Vincent Cable: I welcome the opportunity to hold this debate, not least because it allows me to address you correctly for the first time, Mr. Deputy Speaker.
Normally, I use Adjournment debates to deal with policy questions, and I regret in some ways having to raise a personal case today. However, the case is so extreme and frustrating, and has been going on for so long, that I feel that it can be addressed only in an Adjournment debate. It involves a dispute between one of my constituents, Mr. Patel, and the Tanzanian Government that has been going on for almost 20 years. It has involved Ministers in this Government, and their Conservative predecessors, for five years.
I shall recount the story in a few moments, but the essential point is that Mr. Patel supplied thread to a Tanzanian factory as part of a Government project in 1982. He was owed about £100,000 on the transaction. The Tanzanian authorities never disputed that the claim was entirely legitimate, but the money was never paid. To this day, my constituent has not received a penny for that deal.
Even before today, at least three Ministers have been involved. There have been innumerable diplomatic notes and meetings with Ministers, but we have found no way forward. I want to bring the matter to the slightly higher level offered by this Adjournment debate for three reasons.
First, we seemed 18 months ago to have reached the point where all the details had been agreed. The Tanzanian Government had at last accepted the principle that they should pay Mr. Patel some interest payments on his outstanding claim. Mr. Patel had accepted the terms, the cut-off period and the rate of interest. I have the correspondence, which went through the high commission in Dar es Salaam, setting out the details. All the preliminaries had been conducted and, 15 months ago, agreement was reached in principle to resolve the problem finally. However, nothing happened and the drift continues.
Secondly, the conditions of Mr. Patel's life have deteriorated over the years. No one has ever said as much in print, but I suspect that there is a feeling in Tanzania that a rich Asian business man is pursuing interest on loans that a poor developing country cannot pay. However, Mr. Patel is not a rich man. Twenty years ago, he used his house as collateral for a loan to finance the deal, and he has struggled for the past two decades. His wife has gone out to work and he has changed his job in order to meet the interest payments on the loans. Eighteen months ago, he finally had to give up. His wife was made redundant and his house was repossessed. He is now homeless and living with his daughter.
Thirdly, although Mr. Patel's fortunes have waned, those of Tanzania to a degree have waxed. The country has received debt relief, with the support of the International Monetary Fund and the other international institutions. Although still a very low-income country, it is now considered to have rather sounder economic conditions, and is committed to a liberalisation programme.

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The British Government evidently felt that Tanzania was sufficiently solvent to enable them to promote the sale of air traffic control equipment to it. I do not want to reopen what was a major controversy but, if the press is to be believed, even the Prime Minister got involved in promoting the deal. My simple reaction is that if Tanzania can afford to meet its obligations to British Aerospace it can certainly afford to meet its obligations to Mr. Patel, who is no less British. Moreover, if Tanzania is moving into a new era in which it attracts foreign investment and deals on a proper commercial basis with investors and creditors, it must resolve its outstanding claims.
I realise that, for the Foreign Office, such matters can take a long time. I have no criticism of the Foreign Office, which I think has handled the matter very well. I am not out to bash the Foreign Office, as I realise that resolution of such matters can be protracted. In the 1970s, I was a first secretary in the Foreign Office, and I remember repeated visits from the Peruvian bond holders who had been expropriated in a nationalisation in Peru some 40 years earlier. They kept coming back to the Foreign Office, and we remained unable to get them any money. However, I hope that there will be a happier outcome in the case of Mr. Patel.
I have set the scene, so I shall now take the Minister through the sequence of events, as the file is rather fat and some of the details are important.
The problem originated in early 1980, when a shoe project was supported by the World bank. It was not some dodgy little project: it was high profile, with World bank sponsorship. Mr. Patel's company, Pillarcliffe, was commissioned—by the World bank and after proper tendering procedures—to supply thread to the Morogoro shoe factory.
The project went ahead, Mr. Patel supplied the necessary equipment, but the money was not paid. The initial reasons for that were complicated, and had a lot to do with inefficiency in the World bank. Mr. Patel was never properly reimbursed, and for three years was involved in an argument about whether the money should, or could, be paid. However, the matter was clarified finally in 1988, when the principal secretary in the Tanzanian Ministry of Finance and Economic Development accepted in writing that the business transaction was entirely legitimate and that Tanzania had an obligation to pay the money. I have the relevant letters here.
Nothing happened. Three or four years later, the Morogoro shoe factory folded, as did a lot of other publicly sponsored industries in Tanzania. That was the Ujamaa era of protected import substitution in the country. The industry became unviable and collapsed. The Tanzanian Government accepted that they had to take responsibility for what remained, and decided to settle relations with creditors, who included Mr. Patel. The Foreign Office is in possession of letters to that effect. The Tanzanian Government, effectively, nationalised their liabilities and undertook to pay them.
The letter confirming that undertaking dates back to 1994, but still nothing was paid. In the mid-1990s, Mr. Patel had not been paid the £100,000, and the accumulating interest on that sum, which he was owed. He estimated the interest owing to him at £375,000.
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Lest anyone think that Mr. Patel was some sort of usurer, I must stress that he was paying interest on the UK loan with which he had financed the transaction. Those interest payments were a lot higher than the interest that he would extract, as a creditor, from Tanzania.
Mr. Patel became extremely frustrated. He went to his local MP, my predecessor, Toby Jessel. Jessel wrote a strong and effective letter to the Foreign Office, which then took up the matter with Baroness Chalker. She met Tanzanian Ministers, who wrote letters to the Tanzanian Government, and for a while it seemed that something was going to happen.
In 1996, however, a very strange but important episode took place. Although it represents a slight detour, it helps to explain how we have got to where we are. Thirteen years after the original deal, the Tanzanian Government finally agreed that they must pay Mr. Patel his £100,000. They duly paid the cheque—unfortunately, to the wrong Mr. Patel. My constituent is Mr. M. R. Patel, but the cheque was made out to Mr. Chantilal Patel, the chairman of a Tanzanian company called Globe Mercantile.
I generally subscribe to what might be called the cock-up theory of history, and people may say that the fact that there are so many people called Mr. Patel means that such a mistake is easily understood. However, this was no mistake: this was a case for which the conspiracy theory of history is valid.
When documents were produced, it emerged that an elaborate fraud had been perpetrated. A letter was unearthed from an address in Twickenham—a false address that was nothing to do with Mr. M. R. Patel—that purported to authorise the payment of money from the Tanzanian Government to the fraudulent company, Globe Mercantile, which was owned by Mr. Chantilal Patel. The cheque was paid fraudulently.
Fortunately, Mr. M. R. Patel realised what had happened. He alerted the British high commission, who informed the Tanzanian Ministry of Finance and Economic Development and suggested that the simple way of dealing with the matter was to freeze the account of Globe Mercantile, which was in a Tanzanian state bank. For very odd reasons, the Tanzanian Government never took action, which has led to the suspicion that rather more was involved than the fraudulent Mr. Patel. None the less, the money was never paid to my Mr. Patel. It remained in Tanzania and probably at some point disappeared into a bank account overseas.
The importance of that episode was that Mr. Patel effectively lost his claim on the principal because the Tanzanians, to this day, have never accepted that that money was diverted. Mr. Patel has more or less written off that money. He has been told that if he wants the money he must pursue a legal action in Tanzania against the phoney company. He lacks the resources to do so, so he has accepted that, effectively, he has lost the principal.
That was where I came in, as the new Member of Parliament in 1997. Mr. Patel had lost £100,000 as a result of a fraud, but he still had the possibility of obtaining some payment from the Tanzanian Government in respect of the accumulated interest. We continued to pursue that claim through the Minister's

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two predecessors, who were very effective, but we ran into an impasse. Tanzania had serious debt problems and a lack of foreign exchange. It pleaded that it could not afford to pay, even though it realised that Mr. Patel was in distress.
The problem drifted on until 2000, when there was a flurry of correspondence, in which the Tanzanian authorities accepted for the first time that they would, in principle, pay interest. They said that they would settle part of the claim through the interest payments. Mr. Patel initially suggested a 10 per cent. interest rate. He was actually paying much more to his bank in the United Kingdom, but he would have accepted 10 per cent. The Tanzanians said that that was too much. He then said that he would accept 7.5 per cent. for most of the amount and 5 per cent. for the rest. The Tanzanians said that that was too much. Mr. Patel finally settled, agreeing that the whole claim should be settled on the basis of a specific cut-off date and a 5 per cent. interest charge. That was accepted in correspondence in the middle of 2000.
What has happened since then? Nothing. That is why I have called the debate. Here was a claim long since outstanding. It was very convoluted, but at least there was some transparency and some agreement on the principles of a settlement, which had never been made.
I am asking the Minister to help us point the way forward. There has been a vast amount of correspondence; the file that I have with me contains only a small part of it. I am sure that the Foreign Office has an even bigger file. I am not sure that much more can be achieved by endlessly sending letters backwards and forwards. I believe that, probably, senior officials in the Tanzanian Ministry of Finance and Economic Development are genuinely trying to come to a conclusion on the problem. They seem to be honourable people, and Mr. Patel certainly is an honourable person. I am looking to the Foreign Office to find a way through the mess.
It may be that the sensible answer is that, the next time that a senior Tanzanian official from the Ministry of Finance and Economic Development or the Ministry of Foreign Affairs visits London, which I imagine that they do quite often, we should try to get round a table with them and agree a final payment solution, to resolve the problem finally. It does not reflect well on the Tanzanian authorities that the last 20 years of my constituent's life have been destroyed by this case. There is now a possibility of resolving it. I appeal publicly to the Minister to help us through the final stage of this very long and difficult case.
Mr. Deputy Speaker (Mr. Nicholas Winterton): For the second time this morning, I welcome the Minister to Westminster Hall.
12.44 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Ben Bradshaw): I thank the hon. Member for Twickenham (Dr. Cable) for proposing the subject for debate. I congratulate him on his interest in the case and on the hard work that he has done to represent his constituent. I also acknowledge the work put in by his predecessor, the former Member for Twickenham, Toby Jessel.
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We sympathise greatly with Mr. Patel's situation. It is an extremely sad story, as you have just heard, Mr. Deputy Speaker. We are aware of the financial difficulties that the delay in settling payment has caused the hon. Gentleman's constituent and the resulting anxiety for Mr. Patel and his family.
I am grateful for the hon. Gentleman's kind words about the efforts that the Foreign Office has made to settle the case. Officials from the Foreign Office and the British high commission in Dar es Salaam have been involved in Mr. Patel's case since 1993. They have regularly written and spoken to the Tanzanian Ministry of Finance and Economic Development about Mr. Patel's claim. They have also forwarded correspondence from Mr. Patel to the Ministry. Since 1993, the Foreign and Commonwealth Office has been in regular contact with Mr. Patel by letter, telephone and meetings. We have also been in correspondence with the hon. Gentleman and his predecessor about the claim, and a succession of Ministers has raised Mr. Patel's case with the Tanzanian high commissioner in London, the Tanzanian Minister of Finance and the Minister of Foreign Affairs.
As the hon. Gentleman is aware, in 1996 and 1997 the Tanzanian Government made two payments to settle the principal amount owed for the goods. However, as he said—he will forgive me if I cover some of the same ground, but I think it important to place on record the Government's view of events—the payments were made to a company in Dar es Salaam that had previously acted as Mr. Patel's agent. Mr. Patel still has not received any of that money.
In making those payments to a third party, the Tanzanian Government acted on what they believed to be instructions from Mr. Patel. However, Mr. Patel says that the letter of instruction was a forgery, and the hon. Gentleman has reinforced that statement. The Tanzanian Government consider that they acted in good faith and that they have paid off the principal debt. Since 1996, we have advised Mr. Patel to take legal action against his former local representative to recover that money.
As the hon. Gentleman says, Mr. Patel is now pursuing a claim for the interest due on the unpaid principal sum from April 1982 to 1996, the agreed cut-off point for the debt. Mr. Patel calculated that at a rate of 10 per cent. per annum, giving a total claim of £387,110. In April 2000, the Ministry of Finance and Economic Development wrote to Mr. Patel, stating that a 10 per cent. rate of interest was too high and requesting that they agree a rate of 5 per cent. instead. Mr. Patel responded in May 2000, suggesting a rate of 7.5 per cent. from 1982 to 1996, plus an additional four years-1996 to 2000—at a rate of 5 per cent.
The Ministry replied on 11 August 2000, reminding Mr. Patel of the agreed cut-off date. It did not refer to his suggested 7.5 per cent. rate for the pre cut-off period. Mr. Patel replied to the Ministry on 5 September, confirming that he would drop his claim for interest from 1996 to 2000. That left his claim for 1982 to 1996 at 7.5 per cent. per annum—a total of £277,374. Since then, there has been no response from the Ministry. It has not accepted Mr. Patel's calculations or agreed that it owes him that amount.

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Regrettably, Mr. Patel's situation is not unique. The Foreign and Commonwealth Office receives many requests for help from people who have a claim against foreign Governments following a commercial transaction, property dispute or pension entitlement. As we have seen with Mr. Patel, such cases can drag on for many years. Often the delay is not the result of a deliberate attempt to obstruct the claim or deny the claimant's legal rights. It may simply be the result of a lack of capacity in the local administration to address the issues raised by a specific claim, or of an inadequate legal framework.
However much we sympathise with Mr. Patel's situation, I am afraid that there is now little more that the Foreign and Commonwealth Office can undertake to do. The matter is essentially a private dispute between Mr. Patel and the Tanzanian authorities over a commercial debt. Her Majesty's Government have no formal standing to intervene in cases of that nature.
In addition, Tanzania is one of several poor countries that have been unable to repay their debt. The enhanced heavily indebted poor countries initiative—for which Tanzania qualified in April 2000—stipulates that all creditors, bilateral, multilateral and commercial, should provide debt relief on comparable terms. The United Kingdom Government strongly support that principle, which is essential if Tanzania is to exit the shadow of debt and fulfil its commitment to tackling the extreme poverty that exists in the country. Unfortunately, there is no reason why Mr. Patel's claim could be considered to fall outside the remit of the HIPC initiative.
Britain and Tanzania have an excellent and warm bilateral relationship. We share historic Commonwealth ties and have similar interests in the Great Lakes region and east Africa, such as their stability, security and economic growth. Tanzania is a major recipient of United Kingdom development assistance—about £65 million in this financial year.
It is regrettable that Mr. Patel has had to experience such a delay and so much anxiety in his efforts to secure payment from the Government of Tanzania. However, I hope that the hon. Member for Twickenham understands the United Kingdom Government's position. Achieving substantial debt relief for the poorest, most highly indebted countries is a key objective for the Government. Now that Tanzania has been granted debt relief under the HIPC initiative, the Foreign and Commonwealth Office can no longer continue to push the Government of Tanzania to pay Mr. Patel. However, we always remain happy to pass on correspondence.
Mr. Deputy Speaker: We thank the Minister for his reply. That brings this debate to an end. As the hon. Member and Minister involved in the next debate are not present, I suspend the sitting until 1 o'clock.
12.51 pm
Sitting suspended.

MOD Site Disposals
1 pm
Mr. Deputy Speaker (Mr. Nicholas Winterton): Before I call the hon. Member for Stroud (Mr. Drew) to introduce his debate, I welcome the Secretary of State for Defence to the Chamber. He will respond to the debate and his presence is a recognition of the important role of Westminster Hall.
Mr. David Drew: We are part of an august Assembly, so we shall act responsibly. When I secured this Adjournment debate, I did not realise that I would be asking questions directly of my right hon. Friend the Secretary of State. However, I welcome him to the Chamber. I hope that some of my general comments will be useful for the future.
I intend to concentrate on two sites that are partly within my constituency and that draw many of their work force from it. Lessons can be learned from what happened in both cases. The two sites are RAF Quedgeley, which is on the outskirts of Gloucester, and MOD Aston Down, which is midway between Cirencester and Stroud.
The two cases illustrate the problems that have occurred when sites are closed and how the work forces are deleteriously affected by that. I hope that we can consider some recompense for them, but I particularly want to look to the future so that we can improve matters. I also hope to draw some general conclusions.
I realise that we are dealing with legal matters and that it is not entirely within the power of even the Secretary of State for Defence to deal with all the issues involved. However, these cases provide a useful example. I have been wrestling with the problems for a considerable time. In fact, after my election to the House, the action group from RAF Quedgeley was among the first groups to see me to complain about what had happened to its members.
I wish to consider four key elements. First, I shall provide some of the background, but I do not want to consider it in great detail, because the Ministry of Defence knows exactly what happened and will have its own views. Secondly, I shall consider the implications for the employees and, thirdly, what the MOD could and should do in the future. Finally, I shall pull the strands together by considering how we can move forward.
RAF Quedgeley was an equipment supply depot on the outskirts of Gloucester and, before 1984, the base was fully staffed by people employed directly by the MOD. As a result of changes to contracts, a contract was awarded in 1984 to SERCO, a private contractor, and it had responsibility for the site for some time.
The point of dispute is the basis on which the redeployment of the employees was engineered. I accept that the issue has been gone over with a fine-toothed comb by those who have considered the legal arguments. It has gone all the way to the House of Lords and a judgment was made not just on this case, but on the way in which the previous Government had, in a number of instances, misunderstood or deliberately got wrong the Transfer of Undertakings (Protection of Employment) Regulations 1981 and the subsequent acquired rights directive.

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In 1990, the site returned to the direct employment of the MOD, but contractual obligations meant that the work force were disadvantaged because they were not taken on as full-time employees of the MOD. They had a contractual arrangement and, when the closure of RAF Quedgeley was announced in the 1990s, they lost some of their rights. They have campaigned ever since to demand the restitution of those rights and to ask for an apology given that a legal statement makes it clear that what happened to them was wrong. There is no dispute about that.
I draw particularly on the evidence of Mr. Deryck Waterhouse who is one of the leading advocates in the RAF Quedgeley action group. The argument is that people were disadvantaged because it was not possible to right the wrongs that they had experienced. I am aware that the case went to the House of Lords and that the judgment was that nothing much could be done. My right hon. Friend is a lawyer, so he will know better than me that there have been precedents.
I became involved in the case and contacted the Treasury solicitor. She argued that, because the case fell outside the six-year rule, it was not possible to obtain recompense. She also argued that those involved had been compensated in any event so recompense would probably not have led to them being any better off. However, the difficulty is that we do not know what would have happened and, because people returned to work at the site as contractually employed employees, they were placed at a disadvantage when RAF Quedgeley closed. Although I cannot dispute the Treasury solicitor's legal opinion, I not sure whether in moral terms the employees are no worse off than they would have been.
The case at the MOD site at Aston Down is more recent and took place under this Government. I was placed in the unfortunate position of having been told that the strategic defence review meant that the site would be kept open. However, a year later I was told that it would close, and that left a rather bad taste in my mouth. I had met the unions—mainly representatives of the Transport and General Workers Union—on a number of occasions to assure them that the site was safe for the immediate future, but the decision to close it was then taken.
The site was largely used for the storage of munitions and spares, but the common feature that it has with RAF Quedgeley is that SERCO has been involved in its running. Supposedly, SERCO had made a bid for the work at the site only for that bid to be turned down. However, I, as an innocent bystander, believed that that site could continue to operate even if it were not owned by the MOD. That would have ensured the continuing employment of the work force. Once the site's closure was announced, despite the good work of the rapid response team in helping to re-employ those losing their jobs, many people did not find suitable employment. The 80 employees feel rather let down.
My right hon. Friend will know whether there have been similar cases elsewhere, but the closures of those two sites were not handled with the sensitivity that should have been shown. A moral issue relates to the way in which the employees were treated, and the
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employment tribunal and the courts became involved. Although the courts have arrived at a judgment, the Government must be seen to be transparent and cleaner than clean in the way in which they treat the work force. People from both sites are disenchanted. Those from RAF Quedgeley, such as Deryck Waterhouse, are continuing to campaign. They realise that it is a moral case. They do not blame the Government for the decision, because they were not in power at the time, but they think that they could right a wrong.
In the case of Aston Down, I have drawn on the work of Alan Beale, who was employed there. It is thought that much more could have been done. The authorities should have been more honest and open with the work force by explaining the basis on which a deal with SERCO was possible, if at all. I have put parliamentary questions to that effect and asked Ministers in the Ministry of Defence about that. Indeed, I met the former Minister of State for Defence, my right hon. Friend the Member for Warley (Mr. Spellar), to clarify the situation. I knew that it had been decided to close Aston Down, but I wanted to get the ground rules clear. If there was a way to get the site taken on by another organisation and to allow its employees to have continuous employment, I wanted to ensure that we sorted that out, but nothing much seemed to happen. The message was that that was not possible. Apparently, there was no reason to pursue that course of action because there was an argument over the value of the site and of the work. That left me in a difficult position.
Will my right hon. Friend the Secretary of State consider the implications of the decisions? Can he reassure me about the way in which we handle such problems? Such matters will arise again and there is no point pretending otherwise. We have to rationalise what we have available and ensure that the right services are in the right place and that the right people are doing that work. In so doing, however, we have to handle the issues with great sensitivity. We must consider the legal implications and we must learn from the fact that the previous Government got it wrong in the case of RAF Quedgeley. If people are to be dismissed, we must ensure that they have the appropriate packages. That is not just a financial consideration. We need to retrain and give people the opportunity to find similar employment, which might be on other sites. Again, it was argued that the work force at both sites was weak and they were not able to access work within other Ministry of Defence establishments. That comment is much felt by the work force.
On a more general matter, has the MOD such a thing as a protocol on how it goes about closing a site and dealing with the work force? It might be that the work force is subcontracted, because that is the way of the world, but the process needs to be more transparent and open. The debate is opportune, not only with regard to the two sites that concern me. I am sure that the problem has arisen elsewhere, and we have to do more. I have highlighted the relationship with SERCO. I do not intend to go off at a tangent, but as it is such an important provider of services for the MOD, I hope that it is brought into the loop. It was involved in both cases and will probably be involved if such circumstances arise at other sites.
The issue is one of fairness and morality. It is also about putting good, practical considerations into place. The decisions could have been handled better and the

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work force in both cases feel hurt. We can learn lessons from that and I hope that my right hon. Friend will address that, not just in the historical context, but in terms of today and the future.
1.14 pm
The Secretary of State for Defence (Mr. Geoffrey Hoon): I begin by congratulating you, Mr. Deputy Speaker, and your colleagues on your new positions.
I am pleased to be here to respond to the debate. I also congratulate my hon. Friend the Member for Stroud (Mr. Drew) on securing it. He raises concerns about the Ministry of Defence's policy on site closures and disposals, and how those can affect civilian employees. I hope that my remarks will set out clearly the processes that the MOD now follows, and address the points that my hon. Friend makes. I shall also deal with Mr. Deryck Waterhouse, who was formerly employed at RAF Quedgeley. He has exchanged letters with the Ministry over a number of years and I am well acquainted with his claims.
The relevant facts are that until September 1984, the management of the storage activities carried out at Quedgeley was undertaken by Ministry of Defence civil servants. It was then contracted out to a private company, SERCO. At the time, the Transfer of Undertakings (Protection of Employment) Regulations 1981—known as TUPE—were thought not to apply. More than 200 MOD staff were made redundant and then re-engaged or subsequently recruited by SERCO to do largely the same work.
In 1990, the work was again put out to competition and was brought back in-house. Again, the TUPE provisions were not thought to apply. Thus the staff involved were made redundant by SERCO and re-employed by the MOD on fixed-term appointments. Subsequently, as a result of the "Options for Change" review, it was decided to rationalise the RAF's equipment supply depots, with the effect that RAF Quedgeley ceased operations as a depot on 31 March 1996. It finally closed on 31 March 1997.
Before dealing with the details of Mr. Waterhouse's case, I shall say something about the process by which MOD sites are closed and disposed of. It is, of course, a major decision to close or change the role of a site. It may have long-standing connections with a local community and provide employment for members of it. If it is decided that a site should be retained for use by another service or by a different part of the MOD, the Department would try to ensure that as many former members of staff were re-employed as possible. If the site is to be closed and disposed of, it is the Department's usual practice to undertake an extensive staff preference exercise to establish whether individuals would wish to transfer to a new location or be redeployed locally. I can assure my hon. Friend that every effort is made to find people alternative postings within the Department and to minimise the need for redundancies. I shall ensure that such a difficult issue is handled sensitively and sensibly.
Any individual who is made redundant is, of course, fully compensated in accordance with the terms of the civil service compensation scheme. Highly experienced consultants are made available to help individuals review and assess their skills, achievements, priorities
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and ambitions for the future. Advice is also provided on self-employment options, planning for retirement and financial matters.
I should also like to make it clear that the MOD is fully committed to a policy of consultation with civilian personnel on all issues that are likely to affect them. It is routine to involve the recognised trades unions from the outset in any study, investigation or proposal that might lead to a change in a site's use, right through to the final implementation of the decision. There is a general principle to consult the recognised trade unions and staff associations in the following circumstances: first, when proposals are still at a formative stage; secondly, to provide adequate information at all times; thirdly, to give the trade unions sufficient time to respond; and, fourthly, to consider carefully and conscientiously all the points made before a final decision is reached. Once that final decision has been reached, consultation, especially on sensitive personnel questions, continues throughout the implementation process.
On the transfer of MOD staff to the private sector, the Department signed a groundbreaking agreement with the Confederation of British Industry, the Defence Manufacturers Association, the Business Services Association and the trades unions as long ago as 1998. That code aims to provide clarity on the application of the TUPE regulations; to maintain the integrity of the contractual process and equity of treatment between different bidders; to provide reassurance to MOD staff that issues concerning their transfer and future employment are fully addressed; and to enable the transfer of staff between the employer to be as smooth as possible.
It is important that we identify as early as possible whether TUPE is to be applied. Nowadays, it is generally assumed that TUPE will apply if there is a transfer of significant assets or of a major part of the work force. Non-TUPE bids are considered only if they are properly justified. Indeed, bidders are required to provide full information on their intentions for the work force. That might include, for instance, the way in which terms and conditions of employment, including pension arrangements, will be replicated and any proposals to amend civil service terms and conditions. Once again, the trade unions and individuals are fully consulted throughout the whole TUPE process. The code of practice has been a success and continues to enjoy the full support of industry and the trade unions. Had it been in place earlier, I am sure that the problems experienced by Mr. Waterhouse and his colleagues would not have occurred.
Turning to the problems faced by Mr. Waterhouse, it was initially—I emphasise initially—conceded at a preliminary hearing of an industrial tribunal that TUPE should have applied both in 1984 and in 1990. In January 1997, the tribunal found that the ex-employees, of whom Mr. Waterhouse is one, were entitled to compensation. However, on legal advice the MOD appealed to the employment appeals tribunal, which could not resolve the case immediately, as that, in turn, was dependent on a decision by the House of Lords. That decision was made in October 1998, when the House of Lords concluded that the fixed-term employments were valid.

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Although I am conscious of Mr. Waterhouse's disappointment at that turn of affairs, because the decision by the House of Lords is the final word on the case, the Ministry has no proposals to provide further compensation. Indeed, because of the legal position, it would not be appropriate for it to offer further compensation. I am sorry that I can add nothing further to the details of the case.
My hon. Friend compared the process followed at Quedgeley with that followed at Aston Down. The contract for the operation of the defence storage and distribution centre at Aston Down was placed with SERCO. More recently, in April 2000, the MOD decided to close the depot in parallel with the formation of the Defence Storage and Distribution Agency. That approach will result in considerable efficiencies and savings. However, the contract with SERCO was allowed to run its course until 31 March 2001, when the unit ceased operations. Stores held at Aston Down were relocated to other sites within the Defence Storage and Distribution Agency, which owned Aston Down. SERCO is currently on site at Aston Down providing a site protection and security guarding service under a MOD contract sponsored by Defence Estates while the property is being marketed for disposal.
In conclusion, I shall say something about the reasons why the MOD disposes of surplus sites and the way in which it does so. Obviously, military requirements change as a result of changes in the security environment, technology and the nation's needs. Consequently, the estate occupied by the armed forces cannot, and must not, remain static, whether as barracks, storage depots, airfields and so on. The MOD does not aim to hold on to land that it does not need; it always intends to release it back on to the market so that it can be used productively by other sectors of the economy. In addition to making land available for redevelopment, the receipts which can come from disposal are of considerable benefit to the taxpayer, contributing to defraying the not inconsiderable costs of the armed forces.
When the MOD has surplus sites to dispose of, we work closely with the local planning authorities to achieve solutions which balance the needs of local communities with the taxpayers' interest in maximising
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the return on the sale. We seek to take a joined-up approach to align the Department's need to extract best value with the interests of other Departments. I recognise that sometimes those processes and marketing can be slow, but about 70 per cent. of all surplus sites are sold within a year of being handed over to Defence Estates, although they may occasionally be empty for some time before that happens.
As part of the strategic defence review, the Department was set a target of £700 million in estate disposal receipts over the four years to March 2002. That target was particularly challenging, given that the value of the sites identified in the review fell short of that figure. To date, receipts generated through property disposals against the £700 million target amount to over £690 million. We are therefore confident that the Department will achieve its target of £700 million by April. The sites involved range from small plots of land to airfields and are dispersed across the whole country.
The public service agreement in 2000 set a further demanding target for the Department. Defence Estates expects, however, to achieve a further £485 million from the disposal of land and property in the three years between the financial years 2001–02 and 2003–04. I hope that my hon. Friend will accept that the disposals and the change that is required to meet the new challenges faced by the MOD are necessary; that process is extraordinarily beneficial for local communities, as it allows the land to be put to effective and productive use. It is obviously beneficial for the MOD as it releases financial assets that can then be used to support the rest of the Ministry's budget.
Mr. Deputy Speaker: The Chamber thanks the Secretary of State for Defence for replying to the debate. Although the hon. Member for Romford (Mr. Rosindell), who will initiate the next debate, is present, sadly the Under-Secretary of State for Transport, Local Government and the Regions, the hon. Member for Southampton, Test (Dr. Whitehead), who will reply, is not, so, for the second time this morning, I must suspend the sitting in Westminster Hall until 1.30 pm.
1.25 pm
Sitting suspended.

Standard Spending Assessment (Havering)
1.30 pm
Mr. Andrew Rosindell: Thank you, Mr. Deputy Speaker, for calling me to speak today.
I bring this subject before hon. Members because there is a great injustice at the end of the east London corridor. Havering, the London borough in which my constituency is located, is given a raw funding deal year upon year by central Government. The coming year is no exception. Havering has consistently attracted one of the lowest levels of standard spending assessment funding, and consequently of grant per head of population, in London. That has led to massive underfunding, leaving my constituents and those of my hon. Friend the Member for Upminster (Angela Watkinson) and the hon. Member for Hornchurch (John Cryer), who is not present, feeling badly let down and disadvantaged compared with their neighbours in other outer-London boroughs.
That simply cannot go on. The people of Romford and Havering deserve to be treated the same as people in every other outer-London borough. There is no excuse for their care homes, libraries, schools, parks and leisure services being so badly underfunded. We must remember that that underfunding results only from arbitrary calculations based on what bureaucrats think the borough is like, which often relates to 10-year-old census information and bears no relation to the true situation.
To demonstrate those points, I should like to consider a few examples of how the continued underfunding has had such a detrimental effect on council services and infrastructure. In the past five years, spending on libraries has been 28 per cent. less than the outer-London average, peaking at 32 per cent. in the financial year 1996–97 and slowly falling to a low of 22 per cent. for the year 1999–2000. It is now creeping back up, and the figure last year was 23 per cent. Equally, spending on highways maintenance has averaged 17 per cent. less than the outer-London average over the past three years.
I could go on, but I think that those two examples demonstrate very clearly that lower central Government funding means that Havering is unable to deliver the same service levels as comparable boroughs, which leaves the council in a difficult position: it either has to allow spending to drop even further or to tax more. So, what did the Labour council opt to do? It decided on the high-tax option, forcing local people to pay a higher proportion of the cost of local services, yet we are now told that there are also to be cuts in services.
For Havering, it is a lose-lose situation. Indeed, because of those forced increases, council tax in Havering is now the third highest in London, and a 22 per cent. increase is in the pipeline for the coming year. I shall call that difference the Havering tax, as it is levied on Havering people only because their borough is not given a fair allocation of resources from central Government. Perhaps the Minister will tell us what criteria he uses to decide the grant for Havering, which seems so utterly unfair to my constituents and the people of my borough.
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I do not blame all the increases on the lack of SSA funding. A proportion of the increases stems from the waste and inefficiency of the past 12 years, during which time the Labour party has dominated our town hall in Havering. Equally, there is little doubt that if Government funding had been fairer in all those years—and, indeed, during the years of Conservative government—the tax increases would not have been so rapid.
That is not where the story ends. Not only do my constituents have to pay significantly more council tax, but the budgeted net expenditure per head still manages to be the eighth lowest in London. Indeed, Havering's budget is £12 million more than the standard spending assessment for this year, but the spending level per head of population remains low, at 27 per cent. less than the average in neighbouring authorities. So, people in Havering are awarded less per head by central Government than people in comparable boroughs. They pay more council tax than their neighbours to compensate and yet the remaining shortfall is such that spending remains very poor.
This year's SSA has brought some small and welcome changes, but it does not even begin to remedy the situation. Even though the abolition of the council tax benefit limitation scheme will save Havering taxpayers £925,000 and revision of the formula for area cost adjustment will save the council £1.4 million, Havering's SSA per head of population is still 12 per cent. less than the average for outer London and 19 per cent. less than that in our neighbouring authorities of Barking and Dagenham, Newham and Redbridge. Worse still, our total external support for 2002–03 is a massive 38 per cent. less than that of our neighbours.
Furthermore, the new settlement has done nothing to relieve the pressure on, for example, Havering's social services budget, which has a projected overspend of £1.5 million. That reflects the increasing number of children who need looking after and, therefore, the need to increase staffing levels. Indeed, the joint review of Havering social services that was conducted last year reported to the council with an action plan that required immediate funding of £950 million. I urge the Minister to do all that he can to ensure that Havering has enough funds for this most urgent of needs.
To make matters worse, my constituents feel equally aggrieved about the fact that Havering has to pay its share to the Greater London Authority and other centralised services, but takes so little back in return. Perhaps the Minister can tell us how Havering has benefited from the creation of the Greater London Authority, bearing in mind the amount that we have to pay towards its costs. Hornchurch has lost a fire engine and a police station has been closed in Collier row in my constituency.
If that is not enough, let us consider the example of the London borough grant scheme. Havering pays roughly £1 million a year into the scheme, but receives only approximately £50,000 back in local grants. The truth is that people in Havering are subsidising the rest of London. That has gone on for years and is unacceptable to me, to my hon. Friend the Member for Upminster and to everyone in my borough. We want serious and urgent action to be taken to put matters right.

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What can be done? The local government finance review provides the ideal opportunity for the Government to put right the funding inequality that has disadvantaged Havering for so long. The most striking method of redressing the imbalance is changing the way in which the allocation is calculated.
The main problem is that the current calculation is based on indicators and arbitrary factors. It would be better and fairer to base it solely on population, as some calculations that the London borough of Havering has made demonstrate. From the 2001–02 SSA, the average spend per head for Havering was £855, compared with £1,161 for the neighbouring borough of Barking and Dagenham, £1,472 for Newham, and £1,027 for Redbridge. That clearly shows the appalling extent to which the people of Havering are unfairly treated.
If Havering had received the same grant per head, based on our population, as the other-London boroughs, it would have meant an extra £39.813 million, based on the Redbridge grant; £70.757 million based on Barking and Dagenham's grant; and a stunning £139.578 million based on Newham's figure. Those figures are not insignificant. They would have gone a long way towards keeping open the care homes in Romford that have had to close. They would mean that Romford town could again have a swimming pool and leisure centre, which the council closed. They would also allow the run-down parks to be returned to their former safe and pleasant state.
I look to the Minister for some assurances. Will he ensure that any review of the formula tackles the needs of the London borough of Havering? Will he personally ensure that the years of underfunding in Havering, under Labour and Conservative Governments, are redressed? Will he also examine the case for population-based funding? Lastly, will he guarantee that Havering will never be the underdog of London again?
Mr. Deputy Speaker (Mr. Nicholas Winterton): The hon. Member for Upminster (Angela Watkinson) has sought my permission and that of the hon. Member for Romford (Mr. Rosindell) and of the Minister to participate in the debate. I am happy to call her.
1.42 pm
Angela Watkinson: I congratulate my hon. Friend and neighbour the Member for Romford (Mr. Rosindell) on securing the debate, which gives us the opportunity to highlight the specific financial difficulties that the London borough of Havering experiences. Local residents are alarmed that, after an increase in council tax last year of 12.5 per cent., they now face another rise of up to 23 per cent., which is what the council would have to charge if it set a budget at current approvals plus inflation. It is going through the budget-setting procedure and considering a package of cuts to try to mitigate the increase.
The formula under which the SSA is currently calculated serves Havering badly. Unemployment and benefit take-up are low in Upminster, and we have few houses in multiple occupation. Such factors do not serve Havering well. I was under the impression that green belt affected the local government settlement. Havering
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council believes that too, because it has said so in a succession of local meetings. I was surprised to be told by the Minister in answer to a written question
"Under the current formula the amount of green belt has no direct effect on the level of grant an authority receives through the Local Government Finance Settlement."—[Official Report, 22 January 2002; Vol. 378, c. 714W.]
I should appreciate some clarification of that in the Minister's closing remarks.
The council has expressed its disappointment that there is no safety valve in the interim before the review of the formula in 2003. It stated:
"We would like to see the rate of Council Tax increase over a number of years as one of the criteria for eligibility of Safety Valve Grant. Havering's cumulative percentage increase in Council Tax has been 34 per cent. higher than the outer London average, despite an extensive savings programme and the use of reserves … Poverty and deprivation are the prime cost drivers for need to spend on additional educational needs."
I have a specific anxiety about special educational needs. Havering is well served by three special needs schools. Until last September, there was a special needs nursery unit at Mead primary school in Harold Hill. Since September, no children have been referred to the unit, despite the great need throughout the borough. I am gravely worried about its future.
The council also stated:
"Consideration should be given to splitting the Environmental, Protective and Cultural Services block so that those services, which are driven by activity rather than deprivation, such as refuse collection, waste disposal, and Concessionary Fares, are fully reflected in the formula, thereby ensuring a fairer distribution of resources."
As my hon. Friend has pointed out, Havering fares badly when compared with neighbouring boroughs. I shall not repeat the statistics and services that my hon. Friend detailed, but I want to concentrate on education. Last week, I met a group of primary school heads in Upminster. The education budget is already running at £1.4 million below SSA, and they are worried that a further cut of £1.4 million is proposed. That means that the education budget will run at £2.8 million below SSA.
The education budget constitutes the lion's share of any council's expenditure. The lion's share of any school's expenditure is its staffing budget. The teachers whom I met told me that they are worried about losing non-teaching assistants and about the maintenance of their buildings. Given the Government's total inclusion policy whereby children with special needs are placed in mainstream schools, the need for non-teaching assistants is acute. Schools need more of them, not fewer.
Another problem is the army of carers for elderly people which the council will have to find in the wake of its phased closure of elderly persons' homes. That is another budgetary device. There is a serious delayed discharge problem in the local hospitals. Some elderly patients who are no longer clinically ill need to be discharged but are too frail to return to their homes. The absence of care beds in the public and private sector means that elderly people must be cared for in their homes, which will require a large increase in the number of carers. Havering has the lowest number of carers per head of population in London.

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In a debate on the local government White Paper on 11 December 2001, I asked:
"What assistance can the Secretary of State offer … local authorities such as the London borough of Havering, which receive a perversely low settlement under the current system? What help can he offer the council tax payers who suffered the third highest increase in the country last year—12.5 per cent.—and who face a possible increase this year of more than 20 per cent.?
The reply was surprising. The Secretary of State said:
"As for Havering, on any judgment the settlement announced last week is obviously generous. The local council in Havering will have to explain why it is even considering a council tax increase at the suggested level. Given the funding that is being made available and, indeed, the additional funds that may be made available as a result of the abolition of the council tax benefit subsidy limitation scheme—which will benefit a number of local councils—the council needs to consider the level of council tax increase that it should be setting. There is no good reason for that proposed increase, as we have made clear."—[Official Report, 11 December 2001; Vol. 376, c. 725–6.]
I would be grateful for an explanation of the difference of opinion between the local council and the Government.
1.49 pm
The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Dr. Alan Whitehead): I congratulate the hon. Member for Romford (Mr. Rosindell) on securing this Adjournment debate, which gives us an opportunity to debate the local government finance settlement for 2002–03. I hope that he will understand that I have a limited amount of time in which to deal with the points that he has raised today, but I shall attempt to address them in the time available.
The hon. Member for Upminster (Angela Watkinson) mentioned, in reading out an answer that she had received from my right hon. Friend the Secretary of State for Transport, Local Government and the Regions, that the overall settlement this year is another good one for local authorities. It demonstrates our commitment to investing in Modern local government, and we want all councils to have the funds to improve their services while keeping to reasonable tax increases. We shall certainly work closely with local government as we consider the spending plans for 2003–04 onwards in the context of the spending review.
The debate could be conducted in terms of overall settlements, and of what the Government want to happen in local government. The hon. Gentleman asked me for a number of specific assurances about Havering, which would detach Havering from the rest of the country, in terms of a fairer and more transparent settlement for local government as a whole.
Mr. Rosindell: I was suggesting that the grant be calculated per head of population. Surely that would be consistent across the country, so how would it detach Havering from the rest of Britain?
Dr. Whitehead: I had intended to cover that point in a moment. I would caution the hon. Gentleman to beware of his wishes, because they might come true. If
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the formula of a simple settlement on a head of population basis were to be implemented, it would immediately strip away all the considerations that go into the SSA, which attempt to adjust the system according to a series of indicators over and above the population figure per local authority. Those considerations are currently used to adjust the amount of money that a local authority receives in grants, and affects the relation of that to its SSA.
The notion of the standard spending assessment—which was introduced by the Conservative Government at the end of the 1980s—was ferociously to equalise out the theory of what would come to local authorities in the form of grants for the provision of a standard basket of services, based on the collection of a large number of indicators for the SSA arrangement.
The hon. Gentleman is suggesting that all that should be removed, and that we should introduce a grant system calculated per head of population. If we were to do that—presumably across the whole country—he might find that Havering would lose out substantially. The formula would be adjusted nationally to take account of the shire counties and various other areas that do not have many indicators positively in their favour in terms of additional needs over and above head of population. Such areas would, therefore, get a substantially greater proportion of the overall cake in the settlement. Consequently, Havering—which has some positive indicators, but not as many as some other local authorities—could lose a substantial amount of money in that general redistribution. The hon. Gentleman would probably be rather upset about that, so I would caution him against going down that route for a local government settlement.
Mr. Rosindell: Perhaps we could see the figures.
Dr. Whitehead: It is not possible to provide exact figures; if we did, we would have to recast the entire country according to the hon. Gentleman's nostrums for the future of standard spending assessment, involving per capita distribution. Discussions that will be held over the coming year on what is a fair, just and transparent settlement will have to take account of a series of factors. If he could see the overall effect that a per head of population outcome would have nationally, I suspect that it would not be one that he would want.
The hon. Member for Upminster suggested, when referring to those formula inputs, that the existence of green belt in a borough made a difference. I can only re-emphasise what I said in my letter to her, which is that that is not a consideration when we calculate a local authority's overall SSA. There are a number of other factors, however, and the hon. Gentleman asked which ones were taken into account in Havering.
Havering does receive a lower grant increase than the London average of 1.2 per cent., because it has a steady population. It has a decrease in pupils aged five to 10 greater than the London average of 0.1 per cent. I am not saying that the settlement for Havering, or for a number of other local authorities, is absolutely perfect. I am suggesting that, as a result of a number of indicators, SSAs come out in particular ways.
The SSA system tends to have several other long-term outcomes. First, it institutionalises the effects of certain local authorities having had low budgets in the early

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1990s when the SSA system was introduced. That tends to roll over as the system runs forward. Secondly, if the population of an authority stays static or decreases, it tends to cause problems for its funding because the money either does not come in or is taken away by the SSA system at a speed with which the authority may not be able to cope. For example, if there is one fewer child in a classroom—a decrease in pupils results in a decrease in grant—it is not easy to reduce the number of teachers by one twenty-ninth at the same time. Those problems are built into the SSA system.
I can confirm that the Government have announced their intention to pursue a root-and-branch review of the way in which the SSA system works, in order to introduce a new system of calculation of grants for local authorities based on a simplified, more transparent system. The new system will take into account to a greater extent an assessment of need, accurately based on what a local authority is doing. That system would come in for the next financial year.
The hon. Gentleman has already made a specific proposal, but if he or his local authority have any thoughts on aspects of the scheme, their views would be very welcome. This review is being conducted to ensure that the future system distributes the available money on a fairer, more transparent and more equitable basis. I would, however, caution hon. Members that, under such schemes, there will always be winners and losers.
One of the problems that has come my way is that a different form of SSA calculation—not related to the philosophy of how the SSA originally came about—
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could well be appropriate for the future, but many hon. Members have particular views about how an extension of the SSA system, or a tweaking of the indicators, might solve the problem of a local authority. I suggest that we need a system for local government that is robust, that has the confidence of local government in terms of how it works and its transparency, and that produces a just and equitable distribution of the available money. The Government are committed to doing that over the next year.
I can assure the hon. Members for Romford and for Upminster that I will take into consideration the points that they have raised about the way in which the SSA system works, and about the particular pressures on social services budgets. It is recognised nationally that such pressures exist, particularly in relation to the importation into those budgets of very large packages that might result from a court order. That can distort a social services budget when a local authority is working within a fixed budget.
The Government believe that there is a good settlement overall for 2002–03, but there will be winners and losers. The consultation period on the settlement has now passed, but I can assure the hon. Gentleman that what has been submitted in writing will be carefully considered when the final settlement is announced. Indeed, Havering submitted a substantial document, "Justice for Havering", a while ago. The hon. Gentleman's remarks today have also been very valuable.
It being Two o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.