Westminster Hall Sitting of 8 May 2002

Preamble
[SIR ALAN HASELHURST in the Chair]

Royal Navy Sea Harriers
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Stringer.]
9.30 am
Mr. Robert Syms: The focus of today's debate is the Ministry of Defence's decision, announced on 28 February, to axe the Royal Navy Sea Harrier units from the beginning of 2004; service will end by 2006. The decision is of great concern to the Opposition as it affects the Royal Navy and the future of this country's defence. Even the Minister of State for Defence, who was involved in the decision, pointed out:
"There is an associated risk attached to all of this, but it is without question a decision based on the balance of investment. We believe it to be an entirely logical step".—[Official Report, 29 April 2002; Vol. 384, c. 660.]
We will point out the flaws in the decision during the debate. I hope that the Minister will not only respond, but reconsider this short-sighted policy.
In 1998, the Government conducted their strategic defence review and decided to restructure the Harrier forces in the Fleet Air Arm of the Royal Air Force.
Mr. Mark Francois: Will my hon. Friend comment on two related points? First, although we are discussing a matter of great importance to the defence of the fleet and therefore to the defence of the realm, no Labour Back Bencher is present. Secondly, without intending any disrespect to the Under-Secretary of State, for whom I have a considerable amount of time, I have to say that it is disrespectful of the Secretary of State for Defence not to be present in Westminster Hall this morning to discuss such an important matter.
Mr. Syms: I make no comment about the Government: people can make up their own mind about the Government's priorities. However, I draw attention to my hon. Friend the shadow Secretary of State for Defence, who is answering the debate for the Opposition. I welcome his contribution, as it proves what importance the Conservative party attaches to the issue.
The 1998 strategic defence review proposed a joint force of the Fleet Air Arm and the Royal Air Force. The Opposition were not against that because there is logic in it, but we are concerned that already, only two years later, the Government are changing the shape of the defence forces proposed in the review, and the decision will reduce the flexibility of the Royal Navy. Between 2006 and the introduction into service of the new aircraft carriers between 2012 and 2015, there will be a major gap in air defence of our fleet. The Opposition regard that with great concern. A key lesson of modern defence is that air superiority is vital to our armed services, so it is a serious matter to give up air superiority of our fleet.
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The United Kingdom's Sea Harrier is a capable fighter aircraft. We all remember its vital role in defending the fleet from air attack during the Falklands war. In 1982, the Sea Harrier destroyed 28 of the 100 enemy aircraft destroyed; more importantly, United States Air Force analysts said that it deterred 453 further attacks on the fleet. Without it, that enterprise would not have been successful. In 1996, Commander Richard Dawkins—Commander Air for the Fleet Air Arm—said:
the F/A2 is the best air-defence aircraft in Europe"
It is therefore important to keep the aircraft as part of our armoury to protect our fleet.
Many members of the press have expressed concern about the decision. In March 2002, the much respected Jane's Defence Weekly commented:
"Withdrawal of Sea Harrier FA2, equipped with the Advanced Medium Range Air-to-Air Missile will … represent a significant diminution of the RN's fleet defence capability. Whereas the FA2 is equipped with the Blue Vixen multi-mode radar, the GR7/GR9 lacks a radar and is only equipped with short range air-to-air weapons for self-defence."
That is a critical point. There has just been a major refit of the FA2s. In 1985, work began on a mid-life update of the Sea Harrier fleet. Finished only in 1996, the programme cost £466 million. We can stretch the life of the aircraft to give our fleet substantial protection.
Why have the Government changed their policy and what are their motives? Is it money? The overall cost of keeping the Sea Harriers would represent good, not bad value for the taxpayer. The Government claim that the move will save £109 million between 2002–03 and 2005–06, but if it impedes the flexibility of naval forces and does not provide protection for carriers, it is a shortsighted economy. The replacement of the Harrier GR7 with the upgraded GR9 means no stand-off weapons capability, as the aircraft will not be equipped with an appropriate gun. The arms it possesses will give it an over-the-target capability, but, as we all know, it is difficult to deliver that payload when the enemy state has an air defence system.
It is important that the fleet has a layered defence. Sea Harriers provide the outer layer, patrolling perhaps 100 nautical miles around the fleet's exterior. Because radar can see down and jet fighters can cover hundreds of square miles, they provide the outer protection. The key to protecting the fleet is to see off any potential threat before it becomes a real threat to our ships, and that involves deterring as well as shooting down. The problem with relying on the type 45 for missile defence is that the moment an aircraft comes within the range of our missiles, we are within the range of its missiles. That puts our fleet in great danger.
We all know that Britain has been involved in several areas of tension, albeit not clear-cut war. Our fleet may be stationed off the coast of a nation over which the west is in dispute. I can readily imagine a rogue state sending jet fighters to threaten our fleet, and presenting our fleet commander with a difficult choice—to take an aircraft out, or allow it to come close enough to launch its missiles, which could result in the loss of a ship. That choice would not arise with Sea Harriers protecting the fleet, because of their great reach.

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I remain deeply concerned about the change. The Government place great emphasis on the type 45, but the fact remains that by 2010 to 2012, we shall have only three type 45s. The missile for which we all have great hopes—the principal anti-air-missile system—will certainly be superior to the Sea Dart, but to provide high-level protection it will have to act at the height of its capability from day one, straight out of the box, and we know that high technology does not always work like that. I am worried that we are giving away an air superiority fighter that would have provided protection for the fleet, and instead relying on missile defence when we may not have sufficient ships or sufficient missiles to make it work for our fleet in areas of significant risk.
The Government have spoken about significant technical difficulties, such as problems with the Harrier and Sea Harrier in hot climates, which can affect the power of the engines, but the Harrier's record shows that it has served all over the world, including the middle east and off Sierra Leone, so I see no reason not to continue its service. Even with a slight diminution of capability, it remains a capable air defence fighter for protecting our fleet. Off the coast of Sierra Leone, the Sea Harrier was used for patrolling and bombing missions on the mainland in preference to the Army version. Its radar enables it to find the ship, which the Army version cannot do.
Incidentally, a hardy aircraft is required to serve in a maritime environment. The Sea Harrier has anticorrosive treatment to enable it to serve in that environment, whereas adapting the proposed GR9 to ensure that it can serve on land and off aircraft carriers might involve quite expensive treatment.
My principal concern is that getting rid of the Sea Harrier will make us heavily reliant on other forces if we were to deploy in the air defence of a British battle group. We would have to rely on US carrier protection, which immediately inhibits what we can do. The French are also a possibility, because they have an aircraft carrier and air superiority forces; perhaps India is, too. Perhaps if we had to sell the aircraft to India, we could do a deal whereby the Indians protect the Royal Navy. The Government's policy decision leads us to all those conclusions.
I am genuinely concerned because the Sea Harrier is a proven aircraft. Admittedly, it is slowly becoming obsolescent, but all military kit becomes obsolescent. There is a substantial difference between keeping an aircraft that is ageing but can perform a role, and getting rid of it entirely and having no aircraft to perform that role. Our fleet needs protection: the added security of an air defence fighter in the form of the Sea Harrier is vital to ensure the maximum flexibility of the armed services.
I hope that the Government will reconsider carefully the arguments being advanced from all quarters, including the Opposition. The policy decision will substantially inhibit the Government's strategic outlook. It will be a sad day in the future when the Royal Navy can deploy a battle group only by agreement with other countries. The Royal Navy has always been the third navy in the world and a blue-water navy that can deploy around the world. I believe that, at least in the
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interim before the future aircraft carriers are introduced, the Navy will not be able to perform the tasks that the Government continually give it.
Several hon. Members rose—
Mr. Deputy Speaker: Order. With such demand, brevity will be our friend.
9.42 am
Richard Ottaway: First, let me pick up on the final remarks made by my hon. Friend the Member for Poole (Mr. Syms). Once, as the British fleet closed on the American fleet, the Americans signalled to the British fleet, "How's the world's second largest navy?" The Royal Navy replied, "Fine. How's the second best?"
I had the privilege to serve in the Fleet Air Arm in the 1960s. I was a fighter controller, carried on board HMS Eagle and operating out of Royal Naval air station Yeovilton. It was a time of great tension: Russian aircraft would constantly overfly the fleet. We operated primarily in the north Atlantic, off the coast of Norway, and in the Mediterranean. I had the privilege of being on board HMS Eagle when the first vertical take-off aircraft landed. The Kestrel was the forerunner of the Harrier, and it became obvious to those of us involved in defence of the fleet that it was an integral part of Britain's defence system. I was also involved in the trials of the Phantom, which was the backbone of the Fleet Air Arm throughout the 1970s and 1980s. HMS Eagle carried a fleet of Sea Vixens of 899 Squadron, which were the backbone of the air defence capability of the Fleet Air Arm. Those aircraft were flown in combat air patrols over the fleet, in a manner that was described admirably by my hon. Friend the Member for Poole, in an air defence capacity.
It is unthinkable that British amphibious forces could be deployed in a modern theatre without air cover—it is an essential ingredient of modern warfare. I can understand how the problem has arisen. The new carriers are predicted to come into service in 2012, but I guess that it will be 2015 or even later. There will potentially be an eight, nine or 10-year gap in the fleet.
The FA2 is a fantastic aircraft: it carries a tremendous weapons system and good radar. One difficulty is that it is getting old; another is that it is designed to operate in the north Atlantic, not in hot weather conditions such as the Indian ocean and the Gulf. It is unable to land if it is still carrying a heavy load of unused missiles, and the only alternative is to dump the missiles, which is a bit like dumping a Rolls-Royce every time the aircraft comes in to land. It differs from the GR7, which is bigger, lighter and made of more modern fibres than the heavy FA2. More recently, the FA2 has effectively ridden as shotgun for GR7 bombers, for example in Bosnia and Kosovo.
The solution is to upgrade the FA2 and fit a modern engine, but the Government have chosen not to do so. I assume that the reasons for that are budgetary, but there are only 17 FA2s: is it really worth sacrificing the essential air defence cover of our amphibious forces because there is a lack of cash to upgrade the engines of 17 aircraft? It is a big risk. and the Government are seriously exposing themselves with the decision.

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The second world war was won as a result of air superiority, and HMS Sheffield was lost due to a lack of air superiority. In the Gulf war, the position was never tested, but I am sure that the Americans would not have gone to the Gulf had they not had air defence cover.
Mr. Francois: There is an old naval saying about spoiling a ship for a ha'p'orth of tar. Is this decision not a modern variant?
Richard Ottaway: My hon. Friend is right. It is such a bad decision for a modest budgetary sum, which is why it baffles me.
The Government say that the answer is to upgrade the missile defence system and have spoken about the introduction of the type 45s and new PAAMS air defence system. However, the world is an uncertain place. Who would have thought 12 months ago that the Marines would be deployed in Afghanistan today? We have no idea where future threats will come from. We are highly vulnerable in many theatres, and the Government's decision will put at risk the lives of many men and women who serve the interests of this country.
Equally seriously, the Minister will be putting at risk major warships at the centre of our amphibious fleet. The potential to lose a ship is dramatically increased in the event of a missile attack on the fleet, and the result would be catastrophic. The Exocet that sunk HMS Sheffield is now out of date, but just as British and European technology has advanced, so too has other technology. Missiles now have all the capability in the world.
I have three questions. First, how good does the Minister think PAAMS, which is, unfortunately, a French system, will be on the type 45, and how much cover will it give to our amphibious forces? Secondly, what are his proposals for airborne early warning radar cover of the fleet? Thirdly, how do the Government intend to fill the gap I have mentioned?
If there are no clear answers, the consequences will be profound. If the fleet is lost as a result, I would not like to be in the Minister's shoes when he faces the House to explain the decision. Defence is the most basic function of Government, and a strong defence is the surest way to peace. By this decision, the Minister has put that status at risk, and he will he held to account if he gets it wrong.
9.49 am
Mr. David Health: I, too, congratulate the hon. Member for poole (Mr. Syms) on securing the debate. It is a great pleasure for me to take part, because I represent the constituency that contains Yeovilton, Where much of the Fleet Air Arm is based— although if the boundary commission has its way, it will be moved to the constituency of my hon. Friend the Member for Yeovil (Mr. Laws). I Would consider that a great loss.
We are pound of the Fleet. Air Arm, which is the oldest air service in this country. We are proud of both its history and its future capabilities. I am pleased that the Government have recognised that capability in some of their recent decisions, but the decision on the Harriers has rightly caused some consternation, not least because of the personal issues associated with the crew and
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families at Yeovilton, who have faced considerable disruption in the past year or so. First, they were told that they were to leave Somerset for what I was criticised in the papers for calling "the wilderness of Lincolnshire". I withdraw that comment unreservedly. I am sure that Lincolnshire is a delightful place, but it is not where the crew and their families want to live, having built their lives in Somerset. They have faced considerable uncertainty. They have made career and family decisions based on a decision that was subsequently rescinded. It is regrettable that the information on which so recent a decision was based has in a short time changed so much that the decision has been reversed.
Mr. Bernard Jenkin: The hon. Gentleman misunderstands the point. The fact that the Government were planning to transfer the Sea Harriers to Lincolnshire underlines the short-term nature of their decision. It was not the intended decision; they made it under budgetary pressures in the short term. It was originally intended to extend the life of the Sea Harriers and deploy them from Lincolnshire.
Mr. Heath: The hon. Gentleman pre-empts my point. This is an example of the Ministry's short-term thinking, which is difficult to defend to the people involved, however grateful I am to see a continuation of their presence in Somerset in years to come.
The hon. Member for Poole raised the wider issue that the decision strikes at the heart of the expeditionary strategy, which was the basis of the strategic defence review. I welcomed the development of the strategy, which puts amphibious operations at the heart of the future capabilities of the British armed forces, treats the Navy as a crucial element of that capacity, and envisages the amphibious taskforce as a basic unit of deployment in the Navy. However, if that strategy is to be successful, the decision on the Sea Harriers leaves many questions, because it leaves an amphibious force no air-to-air capacity and no forward detection capability beyond the horizon offered by rotary aircraft above the taskforce. The decision suggests that the Ministry has taken the view that within the relevant period an amphibious taskforce can and will be deployed only in the context of littoral warfare, and only with support from America or other navies that still enjoy air-to-air capacity.
Although I understand that rationale, it begs the question what happens in the case of the unexpected and the unknowable. To what extent is an expeditionary strategy constrained by that lack of capacity? As we have heard, eventually we will have type 45s, which will provide missile defence in the form of PAAMS, but that is an untried system, and as a replacement it will need to work from day one.
The second strand of replacement is the joint strike fighter, but there are questions about the JSF's design and how far advanced its marinisation is. There is a conundrum: the Government have announced that they want to have two carriers, but they cannot be designed until we know the form of the aircraft that will fly from those carriers. The whole process is held up while we wait for the Americans to work on the marinisation of the JSF.

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Have the Government accepted a curtailment of the capacity of the expeditionary strategy during the interim period? How soon will we have firm proposals for the marinisation of the joint strike fighter, and at what stage will firm design proposals for the new carriers be possible? What will happen to our existing carriers in the interim—at what stage will one or both of the operational carriers be taken out of service? Do those carriers have the capacity to convert to rotary wing use, which would enhance our amphibious capacity and might supplement HMS Ocean, which is one of the most important elements of the strategy?
Is it clear that the contribution made by naval air capacity is crucial to the future defence of this country and to the deployment further afield that the Government clearly want to use and have used frequently in the past few years? If so, are they willing to put in the investment that will make the means equal to the ends?
9.56 am
Mr. Mark Prisk: I, too, congratulate my hon. Friend the Member for Poole (Mr. Syms) on securing such a timely debate. I declare an interest in that two members of my family are serving officers in the Royal Navy.
The Government's on-the-hoof decision to withdraw the Sea Harrier is bad for both the Navy and its personnel. I contend that it reduces the capability of the joint force Harrier. Most significantly and as highlighted by the hon. Member for Somerton and Frome (Mr. Heath), it will undermine the pivotal role of the Royal Navy in the future defence of this country and its role in an expeditionary force.
The Sea Harrier has served this country well. The original version was at the heart of the naval campaign in the Falklands, where, even shorn of its current capabilities, it showed its defensive strength on several occasions. Since then, the Sea Harrier has been radically upgraded. Only three or four years ago, at the time of the strategic defence review, it was clearly intended by the Government to be the provider of air defence for the Royal Navy all the way through to 2012. All the documentation and information that the Royal Navy has published clearly supports that intention, so the last-minute decision to withdraw the Sea Harrier 10 years earlier than was previously anticipated seems peculiar.
What is the reason? Ministers say, "Well, the aircraft is ageing," but we are discussing the FA2, which only began service in approximately 1993—indeed, one of those aeroplanes was delivered only three years ago, in 1999. It is not an ageing aircraft. If it were, Ministers might be less able to sell it to other countries. We are told that the engine will not be able to cope with the heat, yet it has served in Sierra Leone and the Gulf. It is said, "Well, don't worry because the Harrier GR7 and GR9 will replace it," but those aircraft are designed specifically as a ground attack plane—a specific and different purpose. To replace a defensive aircraft with a ground attack aircraft is like trying to replace a shield with a spear. They are inherently different in their function and, operationally, such a replacement makes no sense.
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The unstated reason is, as usual, money. As my hon. Friend the Member for Poole pointed out, in practical terms, the Royal Navy will be left without a defensive fixed-wing aircraft for at least six years—and probably 10 years. We all accept that air defence should be provided in layers, the first and most important of which is the Sea Harrier; therefore to remove that layer will inevitably increase the risk to our ships and service personnel. I understand that the Minister of State for Defence has already accepted that possibility, but I ask the Minister present today whether he believes that our service personnel should have to accept such a risk. After all, it is their safety on the line, not his.
Another argument put forward by the Government is that the type 45 destroyer will fill the gap. That is to overlook the tiny detail that one is a ship and the other is a subsonic aircraft. There are other problems. The type 45 does not have the Sea Harrier's over-the-horizon radar and, as we heard earlier, there will not be sufficient numbers to provide complete cover in any realistic sense until at least 2010. Also, as the hon. Member for Somerton and Frome rightly pointed out, the much vaunted PAAMS missile system is still in a box and has yet to be tested. We do not know whether it will work: it may be superb, but it may fail. That is the risk that Ministers are taking.
Perhaps the most ironic result of the decision to scrap Sea Harriers is that the capability of joint force Harrier will be set back, because, as we have heard, Sea Harrier has the Blue Vixen radar and GR7/9 does not. Therefore, joint force Harrier will now have to rely on the one aircraft that does not have that radar. That is a retrograde step and although I appreciate that the Minister is not directly responsible for the decision, I hope that he will confirm that in his reply.
The Government's on-the-hoof decision will undermine the Navy's expeditionary role—a critical role that lies at the heart of the whole characteristic of the strategic defence review. All expeditionary sea forces need air defence — ask any Falklands veteran. Even 20 years ago, the Sea Harrier was able to take out 28 Argentine aircraft for the loss of only two of our own in combat. Sea Harrier is essential to any taskforce or similar naval operation.
Without our own naval air defence aircraft, the MOD is asking the Royal Navy to face an invidious choice. This country must either rely on the forces of another country if we sail beyond our own shores, or take the huge risk of travelling without proper cover; or we must play safe and the Royal Navy become a coastal defence force. The Minister does not have to take my word for that. Lieutenant-Commander Peter Burgess wrote to The Daily Telegraph at the end of March, saying:
"Without the Harriers, the Royal Navy is reduced to a coastal force. Any attempt to operate elsewhere would place an unacceptable risk on any task group and the elements it supports."
Twenty years ago, this country sailed across the world in defence of its interests. Today, under the Labour Government, there is every danger that our services would be unable to repeat a mission on that scale and would instead be restricted to our coasts. I appreciate that this is not the Minister's area of responsibility and I am sorry that the Secretary of State has not seen fit to participate in this debate. Clearly, he has other priorities. However, I say to the Minister that the

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decision represents a cut too far. It is operationally unsound and strategically inept, and I call upon him to reconsider, go back to the drawing board and plan again.
10.4 am
Patrick Mercer: I am grateful for this opportunity to speak and especially grateful to my hon. Friend the Member for Poole (Mr. Syms) for securing this debate, which goes to the heart of our future defence policy. I have never been in the Royal Air Force, the Royal Navy or the Fleet Air Arm, but I have been carried by and served under the protection of the Fleet Air Arm, and I was hugely grateful in both instances for the professionalism and dedication of that service.
I should like to start with a quote:
"The removal of the air arm from the control of the Navy left the fleet vulnerable to air attack and meant that the endeavour that had cost so much British blood could not be completed effectively."
On St. George's day 1918, there was a combined attack on the German naval base at Zeebrugge. Admiral Sir Roger Keyes felt that, despite the death of nearly 1,000 bluejackets and Royal Marines, the nation's safety was still endangered because he did not have aircraft in his control, as the Royal Naval Air Service had recently been transferred into the nascent Royal Air Force. I suggest that we may be putting ourselves in a similar position today.
The lessons of history were heeded at first. Our understanding of the projection of power from or by ships into the air both for coastal and blue-water defence developed into the Fleet Air Arm. That led to our outstanding naval successes in the second world war, the Korean war and, most recently, in the Falklands. What worries me horribly about the gap of at least six years that will be left is that the lessons of history have been ignored.
A great deal has been said and, for the sake of brevity, I shall not repeat much of the technicalities. I shall talk about the essential difference between the FA2 and the GR7/GR9. We have heard the splendid analogy made by my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) of the shield and the spear. We should take that further and use it to try to understand the layered element that the use of Sea Harriers gives the Royal Navy.
We know about the medium-range Sea Dart, which has the limitations of its age and radar, and about the closer-range Sea Wolf. There is also the last-ditch defence, the Phalanx gun, which we trust and hope will—as it did in many cases in the Falklands—interdict enemy aircraft attacking the fleet. However, the Sea Harrier is the shield, or more properly the eyes and ears of the Navy. It is capable of seeing beyond not only the physical horizon but the radar horizon provided by the Royal Navy's current radar suite. Without that aircraft not only to interdict but to see and report for maritime reconnaissance, the Navy is effectively blinded.
The GL7 is and the improved GL9 will be an impressive aircraft that will fill much of the capability gap for ground attack. However, the aircraft has no defensive capability, and it has precious little reconnaissance capability without the radar system that the FA2 already has. These systems are still highly
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vulnerable to a sea-skimming attack by, for example, the Exocet and the much-improved modern versions of that missile, which are too numerous to mention. We are told that PAAMS will fill that gap much better than the Sea Dart can in the interim, before the joint strike fighter comes on stream.
I have personal understanding of two systems of radar and radar-controlled missiles. The first is Sea Owl, which was a naval system that was meant to be extremely well adapted, capable and competent for use at sea. We tried to adapt that system for use in the Victor towers in south Armagh, to oversee the landscape in that difficult countryside. Eventually, we got the system working, but it was not as adaptable as we had hoped, and there were all sorts of glitches. That meant that our operational effectiveness as soldiers on the south Armagh border was severely hampered until the equipment worked.
Secondly, and much more pertinently, I have experience of the Rapier system. As many of my hon. Friends will know, the Rapier was developed for point defence of military instillations against ground-attack aircraft. It worked extremely well, and was designed for the cold war. It was extensively troop-trialled, and was embarked with a naval force to go to the Falklands. It was thought to be highly effective until it was established as point defence in winds of up to 70 or 80 mph, at which point the system failed. Eventually, those involved got the thing working, but in the interim operational effectiveness had been severely curtailed and British Marines and paratroopers had died as a result of ground attack. The system simply did not work and had not been tried in such conditions.
I urge the Minister not to place too much faith in an untried system. Any soldier, sailor or airman will make the point that equipment must be tried. Until such time as it is tried, PAAMS cannot be relied on to plug the gap that will be at least six years in duration. I do not want to iterate points that have already been made, but an aircraft that may be ageing, obsolescent and under severe trial in hot and dusty conditions is none the less battle proven and, most importantly, still commands the faith and trust of its pilots. I speak from personal experience—a Harrier coming in at low level over the top of one is a hugely reassuring sight. Until such time as we have a proper, reliable and sensible replacement, I urge the Minister to reconsider his decision.
We have heard that the Navy has been reduced to coastal protection. I take that a stage further: it is almost a fisheries protection fleet. That is all that we have. Without the aircraft, the Navy is effectively blinded. Someone once said that, if nothing else, war is the province of confusion and uncertainty. Until such time as we can guarantee that we can operate without crucial help from allies, to propose that we should operate only under an American or French air umbrella is simply ridiculous.
One point that I do not believe has been mentioned is that there will be a vital training gap until such time as our two new carriers are on stream. That will be sometime between 2012 and 2015, by which time the Fleet Air Arm, or what remains of it, is likely to have lost any capability that it has for the style of operation involved. It is not an operational style that is quickly

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acquired or understood, and we do a grave disservice to both our surface fleet and our Fleet Air Arm by not allowing them to maintain that capability.
In conclusion, I simply say this: all the time, the armed forces have a finger pointed at them and are told that they are preparing for the last war—they are blamed for not looking over the horizon and preparing for the next war. However, in this instance we have neglected the lessons of the last war and previous wars. One thing is certain: we can never be certain. To protect against uncertainty, we must keep the Sea Harrier in service.
10.13 am
Mr. Crispin Blunt: Occasionally, the MOD throws up a decision that is so bizarre or so illiterate, as the shadow Secretary of State described the decision this morning on the radio, that some analysis has to be carried out to ascertain how it could possibly have reached such a conclusion. Inevitably, we find that the dead hand of the Treasury sits behind the reason why the MOD has reached an extremely strange conclusion.
I take issue with one point made by my hon. Friend the Member for Croydon, South (Richard Ottaway). He said that he would not want to be in the Minister's shoes if and when Royal Navy sailors incur the decision's potentially awful consequences. By the time the decision comes into effect, the Minister will be long gone—being, in Sir Robin Day's famous words, "A here today, gone tomorrow Minister", as all Ministers are. It is likely that the Minister who will carry the can at that stage is sitting on the Benches alongside my hon. Friend. I therefore hope that the MOD will review the decision, but not merely in the interests of one of my hon. Friends, who may have responsibility for the matter in future.
The decision is important because the consequences at some point down the line are potentially catastrophic. The MOD is making a decision now that will have an effect in 12 or 14 years' time. The analysis that it has advanced in support of the decision not to upgrade the FA2s and to keep them in service until the joint strike fighter comes on line does not bear scrutiny. The risks that the Ministry is taking, such as those associated with PAAMS and the difficulty of bringing such technology into service on time, are far too great. The MOD's claim that the type 45s will be delivered on time and in sufficient numbers to cover the gap left by the FA2s does not bear analysis either.
In its 1998 strategic defence review, the MOD confirmed the decision taken by the previous Conservative Government and announced in the 1997 general election manifesto to replace existing carriers with new ones. It was an expensive decision, and the necessary investment must be behind it if it is to be delivered. I speak as a veteran of three long-term costings rounds, in 1993, 1994 and 1995. Mr. Deputy Speaker, you will remember from your service on the Select Committee on Defence that at that time the defence budget was under significant pressure. Money is the reason why the MOD has come up with a decision that flies in the face of the overall strategy of the SDR and violates the principles of the entire direction of British defence policy as set out in 1998. The Ministry is plainly scratching round within each area of its budget for savings to meet the budget line.
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The whole LTC process is always an effort to get a quart into pint pot, and it occasionally throws up painful decisions. Perhaps this is a case of royal yachting gone wrong. To those hon. Members who are not familiar with royal yachting, I should explain that when the Navy was asked for cuts, the first thing it offered was the royal yacht. It knew that as long as there was a Conservative Secretary of State for Defence, there was no question of the royal yacht being taken as a defence cut. Eventually that strategy became discredited, but it did not stop the Navy continuing with it from time to time. I suspect that someone may have made the suggestion about the FA2s in the firm knowledge that as we now have a carrier strategy and as the whole of the MOD's policy is predicated on expeditionary capacity and a proper ability to defend the fleet, there could be no question of taking the FA2s.
Optimistic calculations give us a six-year gap, but the aircraft will start to come out of service in 2004 and will be completely out of service by 2006. The gap will last between six to eight years—and that is an optimistic estimate. There may be problems bringing a new carrier into service. We may have to wait until we know the exact capability and requirements of the new joint strike fighter. The timetable may slip—they always do—and we could be carrying a risk for a wholly unacceptable period.
Those who put this measure in LTC 2002 may have believed that it would never be accepted, yet it has been. The decision may have been taken because of the consequences that the carrier strategy, which I endorse, has for expenditure in other areas. Some painful decisions are having to be taken in the land and air budgets. Perhaps this was an opportunity for a little bit of revenge to be taken inside the MOD. Who knows what happened in the internal MOD debate and exactly what the motivations are of the staff who accepted the measure and allowed it to be put to Ministers? None the less, Ministers must understand that their job is to take decisions, and they are the ones who have to engage with the Treasury to ensure that the defence strategy to which the Government have set their hand will be properly funded.
In the light of the decision on the FA2s, one has to conclude that the Government are not prepared to invest properly in the defence policy that they have announced and to which they have committed the country. It cannot be right for the Government to accept the appalling risk created by the length of time that the Royal Navy will be without a proper air-to-air capability that would enable it to act, if necessary on its own, in circumstances that it is impossible to predict, in the next decade and beyond. The decision vividly illustrates the fact that the Ministry of Defence appears to have lost its debate with the Treasury about securing proper funding for the 1998 strategic defence review and the new chapter.
The Government must collectively reconsider. The Secretary of State for Defence must make it clear that the position is unacceptable and that he must have a properly funded defence strategy. If the Government will not provide the means, they must re-evaluate their strategy—an uncomfortable conclusion—because there is no point in having a carrier-based, expeditionary strategy to enable the United Kingdom to operate around the world if that strategy is not properly funded

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and equipped. We are conning ourselves about our ability to sustain that strategy if we are not willing to give the means to support it. Our servicemen will pay the price, and that is unacceptable.
10.21 am
Mr. David Laws: I am grateful for the opportunity to take part in this important debate, and I add my thanks to the hon. Member for Poole (Mr. Syms) for having raised the subject. All our defence debates are important, but some are more important than others, and this debate addresses one of the biggest issues that has arisen in defence policy since the election—and perhaps for considerably longer than that. We are talking about losing for years not merely a small portion of our capability in a particular defence area, but our entire capability in that area.
The case for the prosecution has been made effectively in the speeches by the hon. Members for Poole, for Croydon, South (Richard Ottaway), for Newark (Patrick Mercer), for Reigate (Mr. Blunt), and for Hertford and Stortford (Mr. Prisk) and by my hon. Friend the Member for Somerton and Frome (Mr. Heath). However, from the perspective of actually having a debate, it is a pity that we have not heard the other side of the argument, because that would have made it possible for us to engage more fully with the points that we will hear shortly from the Minister.
I take particular pleasure in being able to take part in the debate because of the proximity of the Yeovilton air base to my constituency. As my hon. Friend the Member for Somerton and Frome said, when we are both swept back into power after the next election, we may find that boundary changes make the Yeovilton air base part of my constituency.
The main arguments have already been thoroughly covered, but I wish to raise several points. The one common factor in all our debates on defence is the need for our forces to retain flexibility, so that we can respond to all the different challenges we face in this post-cold war era, wherein we do not know where the next threats will come from. In the 1970s, many people considered it unlikely that we would fight a campaign such as the one we fought in the Falklands in the early 1980s. The Sea Harrier was vital to our success in that campaign—indeed, it is difficult to imagine how we could have won that war without the contribution of the Sea Harrier. None of us are in a position to know whether we will have to fight similar campaigns in future, and the Government are making a serious mistake if they base their policy on the experiences of recent times.
On 28 February, the Minister of State for Defence sent a letter to my hon. Friend the Member for Hereford (Mr. Keetch)—and, no doubt, to the Conservative defence spokesman—that explained the reasons for taking the decision. The Minister wrote:
"The SDR emphasised the requirement for increased carrier-based offensive air-power. This has been borne out by operations in recent years in which it has been the ground attack capabilities of the Harrier GR7 that we have needed most on our carriers."
That may be so, but the Minister was wrong to imply that because that has been the experience of recent years, it will remain the experience in the future.
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The Under-Secretary of State for Defence will know that there is not only the question whether we need Sea Harriers to defend our fleet in the future, but the fact that in some conflicts we will need aircraft that can defend our ground-attack aircraft against attack from other aircraft. An officer who served with the Fleet Air Arm in the Falklands conflict put that point to me this morning. One consideration that we have perhaps underplayed so far is the great concern felt by experienced, serving and former members of the armed forces about the Government's decision. That includes the taskforce commander in the Falklands, who said that it would be impossible to mount a similar campaign now without the protection that Sea Harriers currently provide and that we will shortly lose.
I do not want to open up a gap between my Conservative colleagues and myself, but we should also address the Government's intentions in respect of European Union military capability. Were the Government not intending combat aircraft, including Sea Harriers, to form an important part of that military capability? What decisions have the Government taken about the gap that will be opened up with their future inability to deliver on their commitment to our EU partners regarding the availability of Sea Harriers to act as air defence for our fleet and, potentially, the ships of other EU navies?
Mr. Menzies Campbell: My hon. Friend raises a very important point that relates to not only the European security and defence policy, but our NATO allies. The capability represented by the Sea Harriers is a NATO capability in the sense that it is available to NATO. Does my hon. Friend have any information about the extent to which the Government's decision was the subject of consultation with our NATO allies, particularly the United States, to whom we might have to look for the protection that the Sea Harriers currently provide?
Mr. Laws: I thank my right hon. and learned Friend, but sadly such matters are beyond me. No doubt the Minister will be able to enlighten us about any discussions that took place with EU and NATO allies before the Government took such a fundamental decision.
Other hon. Members have commented on the gaps that will exist in the lines of defence for the fleet and our other various lines of air defence. That is not only because the Sea Harriers—the furthest out line of defence—are proposed to be removed for some years with nothing in their place, but because there will be holes in the missile defence based on the destroyers. Again, the Minister of State for Defence did not reassure us in his letter of 28 February. In explaining the departure of the Sea Harriers, he said:
"The entry into service of the Type 45 destroyer, equipped with the Principal Anti-Air Missile System from 2007 will provide the Royal Navy with a world class maritime area air defence capability."
Not only are we talking about another gap before we can be sure that that capability is in place, but, as other hon. Members have said, no serious individual with even the remotest experience of military matters would

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consider that a missile system based on a destroyer could offer any protection comparable to the types of defence that the Sea Harriers can and have offered.
Mr. Heath: Is not the obvious conclusion that the Government's decision represents, at least in the medium term, a substantial change to the strategy of the Royal Navy and United Kingdom forces? As such, is it not extraordinary that the Government announced that not as a change in strategy, but as either a procurement decision or a decision based on the location of units in the United Kingdom, neither of which does credit to the fundamental decision that has been taken?
Mr. Laws: My hon. Friend is right. It is difficult to deduce the significance of the decision in the press release in which the Ministry of Defence announced it. It merited a more significant statement, so that the matter could be properly debated in the House first.
The hon. Member for Newark mentioned skills, which are important. Over the past few years, aircrew have built up significant experience in air-to-air defence activities. If they no longer engage in those activities and if those skills are not in place for the next few years, we may lose a vital part of our capability. Even if we have new aircraft to fulfil the Sea Harriers' role, it will take some time to acquire the skills that were deployed to such effect in the Falklands conflict.
As my hon. Friend the Member for Somerton and Frome mentioned, the decision raises a fundamental question about the Government's approach to defence policy. We understood that the Government wanted to have large carriers in the years ahead-hopefully, shortly after 2012; presumably, they would have not only ground-attack aircraft, but aircraft that could fulfil the Sea Harriers' role. How can the Government take a decision that involves so much expenditure on new aircraft and aircraft carriers that are so fundamental to our future defence needs and argue that we can limp along for the next few years with a couple of much smaller carriers with no serious air defence capability for themselves, the fleet or the ground attack aircraft? This is an important part of air defence policy, and I am grateful to the hon. Member for Poole for having raised the issue.
On 29 April, the Minister of State was kind enough to acknowledge in the House:
"There is an associated risk attached to all of this".-[Official Report, 29 April 2002; Vol. 384, c. 660.]
Many hon. Members have concluded that the Government are taking not only a risk, but a serious gamble with their defence policy, and with the lives and security of the service men whom we ask to do important jobs on our behalf.
10.32 am
Mr. Bernard Jenkin: I congratulate my hon. Friend the Member for Poole (Mr. Syms) on obtaining this debate on such an important subject. We have expressed the serious concern felt in this Chamber and by many well informed members of the defence community with little, if any, party political point scoring.
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I agree with the hon. Member for Yeovil (Mr. Laws) that we have not had much of a debate so far. I will be brief, so that the lonely Minister can express his and the Government's thinking. It is disappointing that the Government have been so unwilling to engage in the debate. This morning's Daily Telegraph reported that it sought to publish the Government's point of view, but that Ministers declined to be interviewed. What sort of open government is that? The Government have an obligation to be braver and to explain more. It is an insult not to me, but to the Royal Navy and the services that the Secretary of State for Defence is meant to represent that he will not engage in the debate.
Mr. James Gray: My hon. Friend might not have heard the comment made twice by the Under-Secretary of State from a sedentary position. The answer to the question, "Where is the Secretary of State?" was, -He's working." That indicates his view that coming to the Chamber to answer this important debate is not work. Is that not a disgraceful attitude?
Mr. Jenkin: I have no animus towards the Under-Secretary of State, but I sent a message through him that I would be taking part in the debate and that I hoped that the Secretary of State would attend. That is why this Chamber exists. [Interruption.] The fact that the Under-Secretary of State is muttering betrays his embarrassment.
The Parliamentary Under-Secretary of State for Defence (Dr. Lewis Moonie): Please do not be so pompous.
Mr. Jenkin: I shall not rise to that insult.
There is emotion attached to the question because the Sea Harrier became such a symbol of British military prowess and expertise during the Falklands conflict. It is worth recalling that 4 May 20 years ago last Saturday was the day that HMS Sheffield was hit by a sea-skimming missile. A year ago tomorrow, it finally sank. That is the price we may find ourselves paying for inadequate fleet air defence. We did not have enough of the previous variant of the Sea Harrier in theatre to provide round-the-clock air defence at that stage of the conflict. We were reliant on ship-based radar, which provided barely more than a minute's warning to manoeuvre craft to a more advantageous position and deploy counter-measures. As Admiral Sir Sandy Woodward subsequently explained, ultimately, HMS Sheffield was out on the edge of the defence perimeter to act as a sacrificial decoy, to save the more important ships of the taskforce. We might find ourselves in that position again because of the decision to withdraw the Sea Harrier FA2s from 2004 onwards.
The debate is not about the past or about emotion; we must engage constructively to ensure that we understand why the Government have made their decision. As we have heard from all hon. Members participating in the debate, that decision not only potentially puts the lives of our service men at risk and imperils the operational capability of the British Navy, but it is a militarily illiterate decision in the context of the expeditionary concept of warfare set out in the SDR and in "Options for Change" under the Conservative Government. The purpose of the Government's

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supposedly foreign policy-led defence policy is to be able to deploy a battle group with the full spread of high-intensity warfare capability to fight medium-sized wars in any corner of the world. Without comprehensive air cover, that capability will no longer exist.
Many of the technicalities have been covered. The FA2 is not comparable with the GR7 or the upgraded variant, the GR9, which do not have radar that can track 20 targets simultaneously 70 miles away from the aircraft, 100 miles away from the battle group. The first key capability of the FA2 is its deep penetration 100 to 200 miles away from the battle group, seeing over the horizon. The second is the AMRAAM—the advanced medium-range air-to-air missile. Even the upgraded variant, the GR9, will carry only the Sidewinder missile, which is a short-range missile requiring visual contact that can be used only in daylight and is ultimately a weapon of self-defence rather than a weapon for taskgrouped defence. GR7/GR9 is a slower aircraft: if it encounters fighter aircraft—Russian Migs or French Mirages—it will be outrun. It will not be able to catch up with the target if it is attempting to attack. It will not be able to escape an attacking aircraft because it is too slow. That leaves the GR7s and GR9s—which are supposed to replace the FA2—deeply vulnerable to attack.
Reference has been made to the militarily dyslexic assertion that the type 42 and new type 45 destroyers
"will herald a quantum leap in our maritime air defence capability".
That is the sort of rubbish that should end up at the bottom of deep-trenched latrines in Kabul. It is no serious contribution to a debate on defence. Radar capability on these destroyers will be a mere 20 nautical miles. Even with the new helicopter-based airborne early warning system, it might extend no more than 70 nautical miles—not the vital hundreds of miles that provide the crucial first and second layers of air defence that the fleet requires in order to remain capable.
The only possible conclusion is that the Government have decided that compromise requires us to forgo a considerable element of our expeditionary capability. That means that they do not foresee the need for that capability—what an extraordinary risk to take. As my hon. Friend the Member for Newark (Patrick Mercer) pointed out, the only certainty is that things are uncertain. Who could have foreseen an amphibious assault on Sierra Leone led by British forces? Who could have foreseen that we would send a huge taskforce to fight in the Gulf war in the early 1990s? Who could have foreseen that we would send 1,000 Royal Marines to do battle with terrorists in the mountains of Afghanistan at the same time as an infantry battalion and headquarters were managing peacekeeping in Kabul? The precise purpose of our defence policy is to provide for the unforeseen. If the unforeseen happens, how long do we have to prepare for it? How many times in history can we look back and say that we wish we had what we have not? The Falklands was a case in point; we need go back no further than that.
Mr. Henry Bellingham: Does my hon. Friend agree that we have been here before? When a previous Labour Government decided to get rid of strike carriers, the Gannet airborne early warning system was scrapped as well. That proved to be the main
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weakness of the taskforce that went to the Falklands. We have been there before, but we did not learn the lesson. What on earth are the Government up to?
Mr. Jenkin: One can conclude only that Ministers have cajoled themselves into this decision on the basis of advice from the services about what is available. Our armed services are brilliant at making do. If they have been told that they must make do with less than they really need, they will not appear on the television screens to say that it cannot be done. That is not in their character and we should not expect them to do so. It is for Ministers to ask themselves whether the advice that they are receiving is the best that could have been provided if the strategic defence review had been properly funded from the start. We know from the comments of Lord Guthrie in another place in December that the SDR was underfunded from the start.
No doubt the Minister will speak about obsolescence: he will say that the aircraft is obsolete, the engine inadequate, and so on. Every piece of defence equipment becomes obsolete, but many obsolete pieces can prove extremely effective in certain types of conflict. We can all agree that it is desirable to upgrade the Sea Harriers' engine and we know that it will be expensive. Even if the Government cannot afford the engine upgrade, I submit that Sea Harriers with the existing engine remaining in service as long as possible is much better than no Sea Harriers at all. We should not be scrapping them all on the basis that they cannot deploy in extreme tropical conditions when they will be capable of deployment everywhere else. Even in extreme tropical conditions, we could deploy them, perhaps with fewer munitions and a lighter load of fuel, to perform their essential airborne early warning function.
That option would be better than scrapping the Sea Harriers altogether simply because the Government think that they cannot afford the upgrade. Money is, of course, at the heart of this issue. The real question is whether the Government are capable of funding the strategic defence review by which they set so much store when it was launched in 1998.
The purpose of drawing attention to the Sea Harriers in an emotional way is that the decision about them betrays what is going on in the armed forces in a way that we can communicate to the public. The scrapping of long-distance weapons programmes and the downgrading of other technical capabilities do not seize the public imagination. That may be why Ministers have chosen Sea Harriers: it is the bleeding-stumps syndrome, where something visible is cut to up the ante in negotiations with the Treasury. Those negotiations are the real crunch point in the Government's defence policy. It is meant to be foreign policy led, but is proving to be anything but.
I shall conclude my remarks now to give the Minister plenty of time to respond. I hope that he can also take one or two interventions. His purpose must be to explain a major change in the Government's defence policy and a major departure from their original intentions, but how he will square that circle, I do not know.
10.46 am
The Parliamentary Under-Secretary of State for Defence (Dr. Lewis Moonie): I begin by congratulating the hon. Member for Poole (Mr. Syms) on securing the

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debate, which has given us a chance to explore an important issue. I shall preface my remarks with a couple of points that have gone astray in the Opposition's fantasy football league equivalent of defence. All our decisions are taken within the framework of a finite budget, so they all involve some form of opportunity cost or benefit forgone elsewhere. It is worth remembering that when considering what we are trying to do.
Mr. Blunt: The Minister should say what programmes have been kept in the budget. The Government's decision to strike out the Sea Harriers for the period that has been mentioned indicates the enormous pressure that the Ministry is under because of a wholly inadequate budget. He should shed some light on the alternatives that produced such an extraordinary conclusion.
Dr. Moonie: The hon. Gentleman did not listen: I said that we had a finite budget. In the real world, when one is in government, that is what one has to deal with. It is only in opposition that people have the luxury of a fantasy budget that can be expanded infinitely to take in every choice that they want to make.
Mr. Gray: Will the Minister give way?
Dr. Moonie: No. In 12 minutes, I cannot go through all our programmes and the balance of choices that we had to strike when deciding what and what not to keep.
There have been many references to danger and past conflicts. I remind Opposition Members that all operational decisions that we make involve a balance of risk for our forces. We are well aware that we may call on our men and women to make the ultimate sacrifice on our behalf. We need no reminders about that from Opposition Members.
Last week, Air Marshal Sir Jock Stirrup, the deputy Chief of the Defence Staff, in charge of commitments, gave evidence to the Select Committee on Defence. I shall paraphrase his remarks, because the evidence has not yet been published as a minute and has merely been placed on the internet for information. His comments provide an appropriate framework for our discussion. He said that to sustain the Sea Harrier—the FA2—beyond 2006 as a viable weapon system would require a great deal of investment and entailed substantial technical risk. He went on to say that a number of other areas of the programme required investment and, as ever, it was a question of balance of priorities. Given the need to balance the priorities and the risk, the decision was taken that it would not be sensible for that period of time to make the degree of investment in the Sea Harrier that would have been necessary to keep it viable in service.
Mr. Deputy Speaker (Mr. John McWilliam): Order. May I assist the Minister? The fact that the Committee's sitting was public and the transcript has gone out on the internet means that he can quote every word of it.
Dr. Moonie: I am grateful for that, Mr. Deputy Speaker. I would hate to have overstepped the bounds of propriety in quoting from a Select Committee.
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Sir Jock went on to ask:
"what is that we seek in terms of capability from our carriers? We seek the projection of offensive power. That was the purpose behind the decision to procure two new larger carriers in the defence review. The carriers are about the projection of offensive power in which the Sea Harrier plays a very small part and a reducing part as the technology. in terms of offensive power, moves on."
When questioned further, he said:
"I need to make clear, before moving on some more detail about air defence, why we have carriers in the first place and it is not to provide air defence for the fleet, it is to provide projection of offensive power. Clearly, if you have a fleet at sea. you need to make sure that it is properly protected from the range of threats that it might face: sub-surface, surface and from the air as well. We are introducing, as you know, the Type-45 Destroyer".
He went on to describe the future systems.
Patrick Mercer: Sir Jock Stirrup also said that he could not see that destroyers would ever wholly fill the capability that aircraft currently provided.
Dr. Moonie: Absolutely. No one has tried to pretend otherwise for a moment. If the hon. Gentleman reads carefully the remarks that were made last week, when Sir Jock was speaking on behalf of the Ministry of Defence, he will see that we are well aware that any decision like the one that we are debating involves a balance of risk. Nobody has attempted to hide that—neither Ministers nor any of our senior military advisers who have led us to our decision
The Sea Harrier has had a long and distinguished career and the decision to withdraw the aircraft earlier than planned was complex. I welcome the opportunity to explain the decision that was announced on 28 February and how we plan to improve the utility of the joint force Harrier to meet today's and tomorrow's defence needs. The aircraft was procured in the mid 1970s to meet the threat posed principally by shadowing reconnaissance aircraft and long-range bombers threatening our anti-submarine forces operating in the north Atlantic in concert with United States Navy nuclear aircraft carrier battle groups.
The Sea Harrier entered service in 1979 and, as hon. Members have recalled, it achieved early operational success in the campaign to recover the Falkland Islands in 1982, accounting for 26 Argentine aircraft. Today, of course, the circumstances in Argentina and the nature of the Falklands garrison are entirely different. Beginning in 1994 the Sea Harrier fleet was upgraded to the FA2 standard to provide an enhanced capability for the following decade. When the Sea Harrier is withdrawn from service in 2006 it will have been in service for a significant length of time—more than 25 years, which is far longer than most of its predecessors in the Fleet Air Arm.
A strong theme throughout the strategic defence review was the importance of joint operations. The SDR concluded that the emphasis for the Invincible-class carriers had already moved away from cold war deep-water anti-submarine operations supported by the Sea Harrier providing a limited air defence capability. In future, as Sir Jock Stirrup said, the priority will be the delivery of flexible expeditionary air power, with an increased emphasis on ground-attack strike missions

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from the embarked air group. That has been confirmed in the emerging conclusions of our post-11 September work.
Mr. Prisk: Is the Minister arguing that we do not need any air defence aircraft? Certainly all hon. Members present would accept that there is a case for having an increased ground-attack capability. The concern here is that the removal of all air defence capabilities removes the defence and security of the personnel. This long read-out passage, which seems to be replacing a speech, does not answer that question.
Dr. Moonie: I have already made the point, but I shall make it again. We are not saying that there is no change in the balance of risk, but our advice and the advice that we have received from the service chiefs on which we base our decisions is that the balance of risk is acceptable. We are not saying that in an ideal world we would not have every capability, but we do not live in an ideal world. We live in the real world and within that we must make decisions. The balance of risk has changed, but it remains acceptable.
Mr. Jenkin: The hon. Gentleman is arguing that the aircraft is old. The FA2, which was introduced in 1993, is a much newer aircraft than the Tornado GR1A or GR4A, which was introduced in 1989, or the Tornado F3, which was introduced in 1986, or the Jaguar, which the Government are keeping in service and which was introduced in 1973. The age of the aircraft is not relevant to the debate.
Dr. Moonie: Unfortunately, the age of the aircraft is relevant to the debate. The upgrade in the FA2 is concerned predominantly with avionics and other systems that are placed on the aircraft. The aircraft frame remains old. The aircraft structure remains old, and there is nothing that we can do about that. The hon. Gentleman has not properly examined what the upgrades involve. I now want to make some progress. As usual, I have given way far too often. I apologise to the hon. Member for North Wiltshire (Mr. Gray) for not giving way to him before, but I want to finish my remarks.
The strategic defence review included a commitment to establish a joint force Harrier—a joint, flexible and deployable force that is ideally suited to the demands of the new strategic environment. It was formed on 1 April 2000 under the command of 3 Group, Strike Command, and it operates two aircraft types. During 2001, it became evident that both Sea Harrier FA2 and the GR7 would require substantial investment over the next few years to ensure that they remained effective until replaced by the future joint combat aircraft. Upgrades to both aircraft types were considered, but the improvement and maintenance of one type was deemed achievable and preferable to maximise our ability to deliver carrier-based offensive air power in a joint force.
To ensure that the Harrier GR7 fleet maintains a credible expeditionary capability by day and night from land and sea until the introduction to service of the FJCA, several important aircraft system enhancements will be necessary, and they have been drawn together to form the GR9 upgrade programme. The GR9 aircraft will be able to communicate securely with each other
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and with likely coalition parties, and they will be capable of employing the latest smart and precision weapons. They will enable the Harriers to deliver the Brimstone anti-armour missile, the precision guided bomb, the Maverick missile and so on. There will be considerable upgrades.
Mr. Francois: Those are tank busters.
Dr. Moonie: That is the ground attack role.
Mr. Francois: So the fleet is under threat from tanks?
Mr. Deputy Speaker: Order.
Dr. Moonie: Thank you, Mr. Deputy Speaker.
Because of what the Sea Harrier was designed to do and where it was designed to operate, there are limitations on the worldwide operational deployment of the FA2. That renders it incapable of operating to its full capability for certain periods of the year in the Gulf and the middle east due to the thrust limitations of its engine. While the FA2 possesses a capable weapon system, it would also require significant investment to remain effective beyond 2005 to deal with obsolescence and shortcomings in its radar and self-protection systems. Unlike the GR7, the FA2 was not designed to be able to take the more powerful Rolls-Royce Pegasus, so any engine upgrade would carry considerable technical risk.
In the light of those considerations, my right hon. Friend the Minister of State for Defence announced to the House on 28 February the Government's intention that the joint force Harrier should migrate to an all-Harrier GR force, maximising investment in one aircraft type.
Mr. Richard Bacon: Will the Minister give way?
Dr. Moonie: No, I shall not. The Sea Harrier FA2 will therefore be withdrawn earlier than planned, by 2006. As a consequence of its earlier withdrawal from service, the planned relocation of Sea Harrier FA2 aircraft from RNAS Yeovilton to RAF Cottesmore and RAF Wittering in 2003 will not now proceed. The relocation of Royal Navy personnel will go ahead, but slightly later than planned, over the period 2004 to 2006. By 1 April 2007, joint force Harrier will have migrated to an all-Harrier GR9 force manned by roughly equal numbers of RN and RAF personnel.
Mr. Bacon: This is absolutely pathetic.
Mr. Deputy Speaker: Order. The Minister is not giving way.
Mr. Bacon: This is absolutely disgraceful.
Dr. Moonie: Oh dear, I am sorry, Mr. Deputy Speaker, to have so disappointed Opposition Members, but I have to give the reply that will show exactly why the decision was made—and that is what I am

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attempting to do. The decision was made in the real world, not the fantasy world that the hon. Gentleman and his colleagues seem to occupy.
The immediate urgency of the announcements made was to minimise nugatory expenditure on enabling work—
Mr. Deputy Speaker: Order. Time is up. I invite all hon. Members who are not staying to leave the Chamber quickly and quietly.

Biomedical Research Industries
11 am
Mr. Ernie Ross: I welcome the opportunity to talk about the impact of the biomedical industry on the economy of Scotland. Like you, Mr. Deputy Speaker, I grew up in an era when the belief that there was a job for life was instilled in most of us. We went to school, we left school and we hoped to start an apprenticeship. We imagined that we would join the thousands of men and women who marched through the factory gate every day with a piece in our pocket. We thought that we would do that for 40 years and would retire with our gold watches and dig our allotments or look after our grandchildren.
That world has disappeared in the past 20-odd years. I am not saying that I regret it, but the Dundee that I grew up in is nothing like the Dundee of today. For decades, our national reputation as the workshop of the world rested on the assumption that we had a unique manufacturing capacity. When I first became a Member of Parliament, I had already served my time in a shipyard and had then become an engineer. I imagined that I would be an engineer for the rest of my life. Not long after I became an MP, the shipyard closed and other manufacturing sectors started to disappear. I remember arguing with the Scottish Development Agency, as it was then, that we should do something to revive manufacturing industry in Dundee, if not in Scotland.
We received a good response from the Conservative Government at the time, who were a good bunch of Tories. They understood the need to support the economy in Scotland and did one or two things right. They got it wrong for the next 17 years, but initially they did things right. We in Dundee realised that we also had to change and we established the Dundee Project, which was the first of its kind in Scotland. A Labour-controlled town council worked with a Tory-controlled regional council and a Tory Government through the SDA. Each put their responsibilities into one pot.
The Dundee Project was established in 1980 and has since become the Dundee Partnership. Instead of a person having to go to the Government, local authorities and universities to find out if there were development opportunities, land and skilled people in the area, they were able to go through one door and obtain the information that they needed. It paid off.
As an engineer, I maintained that we should be searching the world for manufacturing companies to come to Dundee. A guy called Geoff Lonsdale—who has since moved on but is still working in the enterprise industry—said to me, "Look, Ernie, Dundee's future lies in the medical area." I looked at him, thinking that he was having me on. I thought he was trying to deter me from pursuing manufacturing companies and I could not understand how hospitals and doctors could create jobs. The biotechnology industry may have existed in America, but it did not exist even in anyone's head in Dundee, far less in terms of wealth creation there. That is why I am glad that we are having this debate.
Scotland is now a global player in the biotechnology sector. At the recent BioSquare conference in Switzerland, Scotland was ranked equal eighth in the

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international league table for biotechnology sector development. Scotland now has 86 research and development companies employing a total of 3,897 people, 192 supply and support organisations employing 5,571, 99 medical device companies employing 6,714 and 51 research institutions employing 8,224. That makes a grand total of 428 organisations in Scotland employing more than 24,000 people.
Biotechnology is important for the health of the individual and the economy. The medical and scientific communities are presented with new challenges as the world's population grows and ages, and the demand for new and better medicines is expected to grow. There are many conditions for which there are not yet effective cures, such as cancer, heart disease, allergies and tropical diseases. Scotland has a vital role to play in world health terms to try to resolve that problem.
During the past three years, the biotechnology sector alone has grown by 30 per cent. The European bioscience market is expected to be worth £100 billion by 2005, so the Scottish bioscience community has a vital role to play in our economic future as well as a contribution to make to our health.
Growth in the sector is bound to create new opportunities on our doorstep, so that we can offer better jobs than working in the Dundee jute mills. More importantly, as an engineer I witnessed a loss of skill and talent in the 1970s and 1980s. During those decades, some of our brightest and best scientists moved abroad to apply their talents and there were many inquiries into how to reverse that trend. We are now witnessing such a reversal, with Scotland attracting research scientists from around the globe. We should all he proud of that.
I have often heard—usually from Opposition Members—that Scotland gets more than its share. On this occasion, I am prepared to accept that argument—but we are entitled to receive more. Scotland consistently secures a greater percentage share of funding from United Kingdom research councils. That is one piece of evidence that shows the ground-breaking, important and high-quality work going on in Scotland. Earlier, I mentioned the world-class nature of the research currently undertaken in Scotland. That is backed by the most recent research assessment exercise, which concluded that an 18 per cent. improvement in quality had been recorded—a faster rate of improvement than in any other part of the UK. We are entitled to more than our share, because of the quality of work being carried out in Scotland.
Although we can be justly proud of what has been achieved thus far, the biotechnology sector as we understand it, is still in its infancy. In the years ahead, it must continue to develop, and it can do so only by working in partnership. That partnership will involve collaboration between the Government, universities, the enterprise network, research funding institutes, local government, the pharmaceutical industry and private investors—all have been critical to what has been achieved. That same determination to work in partnership will be critical to our future success.
I have spent years attacking the pharmaceutical companies for the prices that they charge for their drugs. Now, I must admit that Dundee has benefited. The Wellcome Trust, the largest research trust in the world, gave Dundee scientists a substantial sum to open the
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Wellcome Trust Biocentre in the university of Dundee. Although we want pharmaceutical companies to lower their prices, we welcome the contribution that the pharmaceutical industry is making.
The Minister, who knows Dundee well—as do you, Mr. Deputy Speaker—will not be surprised to hear that Dundee is famed for many reasons. We used to be famous for jute, jam and journalism; comics such as The Dandy and the Beano, with Desperate Dan; and shipbuilding, the industry in which I served my apprenticeship. I remember walking through the door of the Caledon shipyard in 1958. We were trying to compete with the Japanese—the Koreans had not yet started to build ships. I went into the shed where the platers worked and saw a machine punching out holes for the rivets to go into the plates. The machine that we were using was built in 1921 and the Japanese were then building ships in sheds.
The Caledon shipyard launched many ships, some of which are still sailing the seas. Dundee built the Discovery, the ship that Captain Scott used to go to the Antarctic. Although it was locked in the ice for at least a year, the craftsmanship that went into building the ship ensured that it came back. That ship is now back in Dundee and is in the Discovery's visitor centre as the centrepiece of our maritime history.
One of the largest whaling fleets in Britain was based in Dundee. James Chalmers invented the adhesive postage stamp and James Bowman Lindsay the electric light. When Mary Shelley was staying on the Broughty Ferry road she came up with the concept of Frankenstein. That was nothing to do with Dundee, may I add; it just inspired her. Those hon. Members who had marmalade on their toast this morning should know that it was first made by Janet Keiller in Dundee. One of our local councillor's predecessors, the Belgian de Gernier family, brought fish and chips to Dundee. There is also the famous Dundee "peh"—or pie for the Hansard reporter—Timex and NCR.
All those industries will, to a greater or lesser degree, ensure Dundee's place in history. However, many are predicting that the city's relatively new biotechnology industry has the potential to eclipse the importance of all those examples of what Dundee has given to the world. Dundee is home to one of the most exciting research and biotechnology clusters and some of the most eminent research scientists to be found anywhere in the United Kingdom, if not the world. Dundee is home to Sir Philip Cohen; the Wellcome Trust building that I have mentioned; Sir David Lane, famous for p53, the cancer gene; Cyclacel; Professor Roland Wolfe; and Professor Sir Alfred Cuscheiri, a pioneer of non-invasive or keyhole surgery.
Dundee is tremendously fortunate to have some of the world's most highly regarded scientists. Their presence in the city has attracted many other research scientists from around the globe to work in the city. Such a concentration of expertise in life sciences has in turn led to a growth of leading companies and cutting edge spin-outs such as Axis-Shield plc, the largest biotech company in Scotland, and Cyclacel, the cancer therapeutics company which last year alone attracted £34 million in investment. I was delighted that the Prime Minister recently accepted an invitation to open the new Cyclacel premises and witness for himself the nature and

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importance of the work being done there. That £34 million ranks it among the top three venture capital investments in Europe last year.
The city's two academic institutions have played a leading role in biotech development. Dundee university and the university of Abertay produce world-class research, develop extensive links with business, and demonstrate a willingness to exploit commercial opportunities. In Dundee university, Sir Philip Cohen, Sir David Lane and Peter Downes were named by the Institute for Scientific Information as three of the 15 most highly cited UK scientists between 1980 and 2000. That is the quality of person that we have managed to attract to Dundee. In the latest research assessment exercise, Dundee university achieved the highest—a five-star—rating for its entire school of life sciences, and the university of Abertay's environmental grouping, including the school of life sciences, achieved a four-star rating, its best ever.
The Wellcome Trust research centre in Dundee is home to a team of international scientists who are striving to understand the nature of diseases including cancer, heart disease, diabetes, allergies and tropical diseases. I mentioned a moment ago the role of the biotech industry in Scotland in halting and reversing the brain drain about which we are all so worried. In Dundee, the Wellcome Trust research centre houses more than 250 scientists and has attracted world-class research scientists from 48 nations, including the United States, Germany, Holland, Switzerland, Ireland, Italy and Japan, all working on what I grew up knowing as the Hackie. The only prominent thing on the Hackie when I was growing up was the Princess cinema and a street that, when the Queen was crowned 50 years ago, had a marvellous street party. Other than that, the Hackie was full of old industries such as jute mills. There is now a Wellcome Trust building, with 250 scientists from 48 countries on the Hackie. When I visit schools, I tell kids that their future lies on the Hackie—the Hawkhill. When I was growing up, if someone had said that our future lay on the Hackie, people would have thought that that person was mad. They would have brought along the van and wheeled him away. Yet on the Hawkhill we have 250 scientists from all over the world, living in Dundee.
The city has had to work hard to provide the right conditions for growth, expansion and the attraction of biotechnology ventures. Dundee is now home to 20 biotechnology companies and an emerging professional support sector. The most important of those conditions is partnership. As I said, the conscious decision made in 1980 to give up some political control and work in partnership is now reaping the reward. If Geoff Lonsdale were here today, I would be singing his praises even more. He understood where the future lay.
The city's two universities, Scottish Enterprise Tayside, Dundee city council and the Dundee business community have all played their part in the success that is Dundee's biotechnology industry, and we in Government must play our part. Support for the new emerging industry is vital for not only the Scottish economy but, probably more importantly, the world's health.
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I am enormously proud that so many of the world's leading scientists call Dundee and Scotland home. The industry has shown remarkable growth, and with our support—I look forward to hearing the Minister's comments—the potential is mind blowing.
11.17 am
David Hamilton: I congratulate my hon. Friend the Member for Dundee, West (Mr. Ross) on having initiated the debate and on his tour of Dundee. I am akin to some of his words, even on the other side of the Forth. The history that he developed through Dundee and the historic significance of former industries play a significant part in my constituency, too.
In the past 10 years, biotechnology in Midlothian has expanded beyond belief. I am slightly younger than my hon. Friend, and I remember the coal industry in Midlothian. When I started in the industry at 15 years of age, people went down the pit at 16 years of age. There were some 20 pits in Midlothian alone. There is now not one. The bad news is that in Fife, the last of the coal industry has now gone in Scotland as a whole. On every street near where I lived there was a miner or someone who worked for Ferranti, a big company at the time. People were guaranteed a job either as an apprentice or going through life as a painter and decorator, electrician or plumber—all the jobs that people cannot find nowadays because everyone goes to university. Has anyone tried to find a plumber? It costs a fortune. There is a lesson in that.
From that proud tradition of 20 collieries in Midlothian, we have moved on at quite a pace. Midlothian has undergone a transformation from minor specialising in biotechnology research—a transformation that many other areas in the country would emulate. Dundee has been going longer than Midlothian in relation to biotechnology, but I am glad to say that we are beginning to move fast in that area.
In 1998, I and a group of people from research organisations went to north America to visit key centres of technology in Massachusetts, San Diego and Vancouver. During that week of hectic travel, we saw a mature biotechnology industry where both public and private sector groups are visibly working together to create a dynamic business environment.
People were positively encouraged to spin out of academic organisations to set up their own companies. We have still not mastered that. In the United Kingdom, academia takes a different view from the private sector, and they do not gel well, except in certain areas. That is getting better but, at present, we do not do what happens in north America, where the two sectors come together. That is a major area, in which we must make progress.
Support mechanisms were in place to ensure that the business planning processes were tailored to suit the individual needs of the company; that is another important area where we must begin to develop a strategy, if we want to move forward.
There were sensitive negotiations with regard to intellectual property, which were handled with fairness, against a background of partnership between the public and private sectors.

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There was evidence of a mature financial sector, which understood the needs of the biotech sector; in particular, it was an environment where venture capital and angel finance seemed to be readily available. They are not always available in our country.
We saw an environment with a first-class range of incubation centres and science park developments that provide the technology sector with a range of physical facilities. That encouraged co-operation between academic groups and the business sector.
For me, the visit was a confirmation that what had already begun in Midlothian would have far-reaching positive effects for the entire region. For many years, the Bush estate—one of the development areas in Midlothian—has been recognised as a centre for agricultural research and development. That is where everything started. The concept of developing the Bush area as Edinburgh Technopole—a science city or precinct on the edge of the city—was first developed as long ago as 1990 by Edinburgh university, Scottish Enterprise Edinburgh and Lothian, and Midlothian council.
The additional development of the Pentlands science park proved to be a key milestone, which has been further enhanced by several other developments at the Bush, such as the Roslin institute; everyone has heard of the cloning of Dolly the sheep, and other developments have spun off from that.
However, there is a danger that we might begin to lose some of the expertise that we now have, if we do not begin to work hard together. Given the lack of finance, some of the scientists at Roslin are beginning to consider moving out. That is a big danger for Scotland; it is not a Midlothian issue, but a Scottish issue, and it must be addressed.
Other developments include Edinburgh university's Dick Vet small animal hospital, and a new campus at Gowkley Moss where Midlothian council and Scottish Enterprise Edinburgh and Lothian have purchased land to allow a range of organisations to expand and develop their research and development and their manufacturing on the same site, which is another major step forward.
It is estimated that —50 million of capital development has taken place in Midlothian over the past 10 years. As a result, Midlothian now faces a problem; we are running out of land that can be used for the continued expansion of the area.
One of the key stakeholders in the rapid development of the biotechnology sector has been the East of Scotland European Partnership, which has supported a range of projects with both capital and revenue grants. With a physical environment in place which can match that of anywhere in the world, the biotech sector in Midlothian is beginning to develop a range of support services similar to that which we saw in north America.
The financial sector in Scotland is also beginning to respond more positively to the needs of the biotech sector. However, there are still investment gaps—such as the lack of venture capitalists, as has been mentioned.
It is not easy for an individual to set up a new company or form a spin-out company from an academic organisation. Where that company is also involved with complex technology, the technical risk often brings added worry for the entrepreneur. Another sign of the maturity of the technology sector in Midlothian is that the public and private sectors are working together.
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I learned from my trip to North America that Scotland is very small on the international map. I recall that our guide in Boston said, "We are just going next door to see the next place." Next door was 40 miles away. We drove there. That is how our guide thought of the concept of "next door". Therefore, when we discuss Scotland and Midlothian, we must talk about Glasgow, Dundee and Midlothian as one place. It should not be a matter of Glasgow as opposed to Edinburgh or Midlothian as opposed to Dundee. We must consider the market as Scotland as a whole and work on that basis. The European market is one which we can dominate, and we are dominating it currently. With the legislative changes that are taking place, we can capture a major part of the American market with new developments.
There are fewer than 100 companies in Midlothian that, including everyone's support network, employ 2,000 people. With a population of 90,000, they are substantial employers in anyone's figures. We aim to increase that employment to 3,000 to 4,000 in the next two to three years, and with that in mind, I suggest that Members who have an interest meet Scottish Enterprise, with which we can develop a strategy on how to develop Scotland as a whole.
11.25 am
Mr. Iain Luke: I congratulate my hon. Friend the Member for Dundee, West (Mr. Ross) on securing this debate on an industry that promises so much benefit in alleviating suffering and promoting health. We have both been keen on having the debate, not only because of the industry's medical significance but because of its growing importance to the economy of Scotland and the United Kingdom. It promotes jobs and economic well-being. My hon. Friend the Minister has taken a great interest in the subject and has also been keen to have a debate to examine the strengths and weaknesses of the biomedical and technical industry in Scotland to see what we can do to promote and foster it.
I am also glad to see the shadow Secretary of State for Scotland, the hon. Member for Beckenham (Mrs. Lait). This is an important debate for her party, and we look forward to hearing her contribution.
As my hon. Friend the Member for Dundee, West commented, we are fortunate that our home town of Dundee is well placed to exploit the opportunities that have come its way as a result of successful research programmes in biomedical technology and the life sciences. I must point out that he has been around Dundee and Hawkhill much longer than I have, so he knows more about the differences in opportunities in Dundee's economic package, given the drastic changes in Dundee during the past 50 or so years.
The economic history of Dundee, and indeed Scotland, is characterised by innovation, excellence and the need to adapt to change, new demands, products and forms of production. That dynamic process has not always been easy, and sometimes it has been extremely difficult. Our city, and Scotland, has been blessed with an ability to adapt and flourish despite the difficulties that have beset us.
The universities have been mentioned, and it is almost unique for a city of Dundee's size to have two universities of such stature. Their long-term

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development has proven them to be vital assets in the constant drive to meet change. Although they are often referred to as new universities, both Dundee university and Abertay university, in the guise of the Dundee Institute of Technology, have been around for well over 100 years. As a graduate of Dundee university, I know its history fairly well, but I must pay tribute to the development of the first biotechnology course, which was started 15 years ago at Abertay university in its previous life. Although they are described as new universities, they have done a great deal during the past 100 years and more to promote economic enterprise and encourage innovation in Dundee. That has often produced industrial developments and economic progress.
Both universities have developed biomedical research facilities and degree courses in biotechnology. That has been married with the creation of a first-class teaching hospital at Ninewells and, through the work of the universities and the Government, the promotion of high-quality medical research opportunities. As my hon. Friend said, those opportunities have attracted scientists and medical men with global reputations.
Mr. Ross: And women.
Mr. Luke: Yes, and women.
Dundee has become a world-class centre. It has put itself at the forefront of research and academic renown. Points have been made about the strength of the industry. Outwith Cambridge, Dundee has the highest percentage of life scientists and researchers per head of the country than any other part of the country. Reference was made to the top 15 renowned scientists in the UK, and three of them are working at Dundee university. The city and the university should be proud of that track record.
The city has been blessed by developments at both universities. As my hon. Friend said, the siting of the Wellcome Trust building—a major research facility for the UK and the world—also helped. It has played a significant role in bringing research work to the city, which has led to the discovery of new drugs and treatments that cure many life-threatening illnesses and diseases. The pioneering biomedical work at the university is closely linked to practice at Ninewells—Dundee's university teaching hospital. Sir Alfred Cuschieri's surgery has had a significant impact on the medical engineering and biomedical research worlds. These are all added dimensions to the industry that means so much to Scotland.
Abertay university has not been as heavily promoted in this area, but it has moved on and is working harder to become a leading player in computer technology and computer games, which is another industry that has a great impact on Scotland's economic base. It is showing much promise, and is working with countries such as Japan. The point has been made that the UK, Europe and the United States are great at inventing things, but Japan is probably the largest producer. This country invented CDs and cassettes, but they are produced overseas, especially in Japan.
We must enhance the work of our universities to transform Dundee's and Scotland's economic bases. The impressive growth in both Dundee's universities has
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underlined Dundee's claim to be a city of academic excellence. That excellence has helped to create in Scotland the third largest biotechnology cluster after Cambridge and Thames valley. Dundee's success has been replicated in other areas of Scotland. My hon. Friend the Member for Midlothian (David Hamilton) also made clear the importance of that industry to his area. We must give credit to all who have played their part in creating such a vibrant and viable sector in the Scottish economy, which plays on traditional Scottish strengths of education, excellence and inventiveness.
The biomedical technology industry has given substance to the Scottish economy in which IT and the microchip industry have supplanted the old manufacturing base. The IT and microchip sector is global, but has had its problems with recent downturn. As the Scottish manufacturing base changes, those areas of excellence must be promoted to ensure that the economy continues to grow and prosper. The healing influences of the biomedical research industry will, I hope, provide a soothing ointment to ensure that in any future downturn and rush of attendant economic consequences, distresses are mended or even avoided.
It is important also to note the progress that has been made, as my hon. Friend the Member for Dundee, West made clear. Certain initiatives have helped, such as the research and development grants that the Budget proposed, and the review of the incubator grant—a fund specifically targeted to kick-start such facilities. My hon. Friend mentioned the progress that has been made in the Lothian area. The Dundee project provides a unique partnership, in which the local enterprise company, the local council, the university, chambers of commerce and the Wellcome Trust development play an important role in developing a strategy for the future economic growth of the city. That has to be looked at as a microcosm. Within that strategy, Dundee has seen, as in Lothian, the creation of a technopole, sometimes called a crucible, whereby the products of research development in the universities can be transferred to production, providing jobs and prosperity. Production can be diversified.
In February my right hon. Friends the Prime Minister and the Secretary of State for Scotland had an opportunity to see the fruits of this activity first hand when they visited and opened Cyclacel Ltd. in our crucible and technical park. The company is engaged in the production and development of novel cancer therapies in its new Dundee premises just off Hawkhill; it is also based in Cambridge. I hope that my hon. Friend the Minister as well as the spokesman for the Conservative party will have the chance to visit the endeavour and see at first hand what goes on there. They would see the products of men and women employed in the research operation in Dundee. Sir David Lane and his wife Bridget have been at the heart of this enterprise, which is now of global significance.
The potential was made clear by Shield Diagnostic, or Axis-Shield as it is now known. The company started as a collaboration between Dundee university and Tayside region, as it was then, a council responsible for industrial promotion. An enterprise share fund was created and it financed the first steps of the development on the road to Axis-Shield. which is now another global impact company. It employs more than 100 people in Dundee. Others are employed in Norway, where the

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company joined forces with the Norwegian-based Axis-Biochemicals. The company is now highly innovative and is moving into vital diagnostic products with significant global market potential in meeting future current and future health care needs, as set out in its mission statement. It is another success story. It started some time ago, but we should not overlook it because it points to the way ahead for the Scottish economy.
That follows in the steps of another pioneering Scot, Alexander Fleming, who discovered the wonder drug penicillin, which has saved so many lives. Medical research and the production of new medicines and drugs is a critical part of the sector, worth millions of pounds—£100 million was mentioned earlier—in the UK and globally. It is essential to recognise the importance of this activity, and we must understand how best to promote it. The Government recognised that in the Budget, which will help to foster the promotion of such enterprise.
It is an economic truism that economic activity never stays still and the market continues to move on. Over its long history, the Scottish economy has seen momentous changes, constantly having to reposition itself. My hon. Friend the Member for Dundee, West referred to Dundee as a jute city, but no jute is left, only a museum to the former industry. We have obviously moved on and left that history behind. We have some fond memories, but also harsh memories of the conditions in which people worked.
Mr. Ross: Did my hon. Friend ever work in the jute industry?
Mr. Luke: No, I never worked in the industry. I am younger than my hon. Friend, so I missed that opportunity, though my family—certainly my father and grandmother—were employed in it at one time or another.
As I said, Dundee has had a history of change in which it has had to reposition itself to new and demanding types of production and products. My town provides a microcosm of the Scottish dimension. Globalism, the international development of the capitalist economic system, in which costs mean that labour-intensive forms of enterprise are always on the move, must be replaced by an alternative form of development. Only when enterprise, high-quality academic initiatives and proper investment are married together in conducive circumstances do mature economies such as the UK prosper and grow.
The 1998 DTI White Paper entitled "Our Competitive Future: Building the Knowledge Driven Economy", made the point that the UK no longer relies on its natural resources such as coal and steel. Our competitiveness depends on our making the most of our distinct and valuable assets that competitors find it difficult to imitate. In Britain's modern economy, these distinctive assets are increasingly knowledge, skills and creativity, rather than traditional factors such as land and other natural resources.
The validity of that comment is evident in the approach adopted in Dundee and throughout Scotland, and in the success in promoting the biomedical technology industry and its contribution to the Scottish economy. That industry must he fostered, and I am sure
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that my hon. Friend the Minister will make it clear that that it is at the top of his priorities and is the Government's programme for industrial and economic regeneration in Scotland.
11.44 am
Mr. David Heath: I, too, congratulate the hon. Member for Dundee, West (Mr. Ross) on introducing this topic for debate, and the hon. Members for Midlothian (David Hamilton) and for Dundee, East (Mr. Luke) on their contributions.
I do not speak for my party on Scottish matters, nor do I represent a Scottish constituency. I do, however, speak for the Liberal Democrats on science, and to a large extent we are here to celebrate a great British success story in that regard: the development of biotechnology and the science base in Scotland, and the things that flow from that. It is a great shame that the debate has coincided with the sitting of the Scottish Grand Committee, because some hon. Members who would have wished to take part in this debate cannot do so.
The story of Dundee and the development of its industries is inspirational to the rest of the country. We should be clear about that. I cannot claim a huge acquaintance with Dundee. I can remember going there some years ago, when the conference of what was the Liberal party was held there. It would be fair to say that, at that time, Dundee's industries faced an uncertain future. The old idea of "jute, jam and journalism"—which owed much to its alliterative quality—as something to remember Dundee by did not clearly suggest a future. At that time, the city faced the possibility that the highest aspiration that a young person in Dundee could have was to be editor of the Beano, and that was about it.
All credit should therefore go to the people of Dundee, the local authorities involved and the universities that the city has the good fortune to have in its proximity for realising that they could invest in and develop new markets and activities. They have done extremely well, and I certainly look forward to my next opportunity to return to Dundee to see the splendid east European town hall, which we all love so well, and the progress that has been made.
As the hon. Member for Midlothian has said, this is not only about Dundee, but about what is happening in Midlothian and Glasgow, and the developments associated with the universities there. However, it is pleasing that, for once, it was not Glasgow or Edinburgh that took the lead, but another city in Scotland.
We have seen the rapid growth of the biotechnology industry to the point where it is quickly becoming the most prominent part of a growing Scottish economy. We should take note of that. Business a.m. of 26 April refers to seven gazelle companies, those companies that are leaping ahead of the pack. It says that Inverness Medical would have been the runaway, had it been classified as a Scottish company rather than an American offshoot of Johnson & Johnson. That is another example of biomedical development in Scotland. Mr. Gordon Maclennan from Scottish Enterprise Glasgow is quoted as saying that he expects biotechnology firms to make their presence felt over the next few years by filling up the gaps in the area.

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The Scotsman of 25 April provides an upbeat assessment of the biotechnology industries in Scotland. It says that they have not found their growth prospects seriously damaged by the events of last year and any economic uncertainty in the global climate, and are still progressing. That is valuable. I know that the Minister will wax lyrical on the subject when he replies. He waxed lyrical the other day in response to a question from his hon. Friend the Member for Norwich, North (Dr. Gibson). He was not ashamed to proclaim the success story of biotechnology in Scotland. I do not wish to detract from that or to criticise it, but I want to put it into a United Kingdom context.
The Scottish economy is not divorced from the rest of the UK economy. We are seeing similar developments elsewhere. That is good. Cambridge, which has always been the brand leader, is developing links between its science base and industry. Similar things are happening in my area. Bath and Bristol universities are coming together to form a partnership with industry to develop biotechnologies. The hon. Member for Dundee, West used many vernacular terms to baffle the Official Report. I will not do the same with west country terms, as that would not be appreciated. The developments in the west country are to be encouraged.
The university of Ulster is doing something very similar in the different economic conditions in Northern Ireland. There is much to be said for that. Indeed, the Secretary of State for Trade and Industry, when she was the Minister for Small Business and E-Commerce, said:
"The fact of the matter is that we have the second-largest and most mature biotechnology sector in the world. We remain the biotechnology leader within the European Union. Three quarters of the new drugs developed in the European Union are developed here in the UK".—[Official Report, 30 November 2002;Vol.357.c.1123.]
It is important to latch on to that fact. It should drive much of government thinking and industrial thinking about where we move forward. If we do not exploit the sectors where we have clear advantages, we will find it difficult to compete on a wider UK basis. It is by no means certain that we will retain our advantages in this sector. It will need constant support from the Government and the private sector. New companies will require constant incubation as they come along and we will need a research environment that aids our predominance.
I want to focus on what we need to do to maintain the progress that has been made. The first element is the research environment. Unless we are doing leading-edge research in our universities and in the private sector research facilities, we will not maintain our leading position. That undoubtedly means that guidance needs to be given to the Higher Education Funding Councils, for both England and Scotland, to understand that investment in research in science and technology in our universities is not only innately good because it expands our knowledge base but also economically good because of its potential for spin-offs.
That is why exercises such as the research assessment exercise—on which the Science and Technology Committee recently reported—are important. When exercises are carried out to assess the value and quality of research at universities, good performance is
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recognised by enhanced funding. The last research assessment exercise was disappointing because university departments achieved excellent research results but received no reward in terms of research grants for their improvements or maintenance of high standards. That is not good enough. Funds must match the performance of our centres of excellence.
Greater integration between the various research councils is needed. Medical biotechnology often cuts across various research council topics—medical, physical or whatever—and it is important to achieve cross-connections. Therefore I welcome the development over the past week of an umbrella body, Research Councils UK, which will enable that integration. I hope that we will concentrate our funding not only on scientific applications but also on blue-sky research.
It is often people pushing the envelope of scientific research that results in great advances leading to greater economic performance. We should not assume that every development must be on the basis of existing science. We must give scope for our scientists and technologists to think outside the envelope. We must ensure that the research environment is not constrained by avoidable legal problems. I do not mean that we should throw away the rule book or that there should not be an ethical dimension to legislation on biotechnology—that is important.
It is also important that this place keeps pace with the great pace of change in science, and that it is prepared to legislate when required to maintain that progress. We had excellent debates on stemcell research. Whether or not we came to the right conclusions, the arguments were sound. We must be flexible enough to recognise where problems develop as research moves forward and to react accordingly. We should take a precautionary, but not superstitious, approach to the development of science.
The Scottish experience in the business environment has lessons for the rest of the United Kingdom. The development of the Scottish Enterprise biotechnology group and support systems such as the biotech business mentors programme, the Enterprise fellowship programme and the Proof of Concept fund, are positive ways of supporting people in the industry and helping them believe that there is an active environment in which they can develop.
I particularly like the frame of mind displayed by Scottish Development International's pronouncements on its website that
"the Medicines Control Agency …and the European Medicines Evaluation Agency, is based in London, which is one hour's flying time from central Scotland."
That is exactly the right focus. I add that it is three hours' driving time or a bad train journey from my part of the world.
Mr. Luke: Will the hon. Gentleman also recognise the good air links between Dundee and the rest of the UK that I believe have made so much difference in bringing renowned scientists to Dundee and promoting biomedical technology?
Mr. Heath: The hon. Gentleman is right. Infrastructure is crucial, as is the rest of the business environment, and I welcome the research and development tax credits that the Chancellor announced in the Budget. As my hon. Friend the Member for Twickenham (Dr. Cable) said, according to the firms that are engaged in the business, the Chancellor has got it 95 per cent. right. If we could say that about everything that the Chancellor says and does, I would be a much happier man. Well done on that, and well done if the Government are prepared to support changes in patent law to ensure that it is consistent with scientific research. The one problem—as with all manufacturing industries—is the exchange rate and the effect that it has on the competitiveness of British biotechnology firms, but I hope that that will eventually be addressed.
There are two more components that I want to talk about. One is direct investment. I do not want to say much about that, but I welcome increases in the science budget. They are insufficient and I do not believe that they will be widely disseminated, but let us welcome them.
It is desperately important that we give higher education every opportunity to engage with local industry, to develop the sort of links that we see in Scotland throughout the United Kingdom. We give higher education the opportunity to train the top scientists of the future. I note that Scotland makes up 9 per cent. of the United Kingdom population, but produces 17 per cent. of all UK biotechnology-related PhDs, and 17 per cent. of the UK's graduates in first degrees in medicine and industry. That is a marvellous record. I should like to see it extended to the rest of the country, and it is something to which those who are responsible for education within England and Wales should aspire.
Finally, we must not neglect the teaching of science within the schools that provide the people who will work in the industries. At present, we are deficient in that area. British children—under the Scottish, English and Welsh education systems—are not sufficiently attracted into the sciences. We need to address that problem urgently.
David Hamilton: With your experience in the sciences, do you accept my earlier point about academia and business? There is a division within Britain that I did not see in the USA. We are educating people, bringing them through the universities and colleges—we are doing that in Midlothian and it is now part of the curriculum—but people in academia are holding back and not wanting to expand on the information that they have. On the other side, the business community is trying desperately to fund packages, but the information technology that we want to achieve is not there.
Mr. Heath rose—
Mr. Deputy Speaker (Mr. John McWilliam): Order. The hon. Member for Midlothian (David Hamilton) used the expression "you". That refers to me. As it happens, I have experience of the sciences, but I am not taking part in the debate.
Mr. Heath: I must not take part in the debate for much longer, other than to say that I think that the
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hon. Member for Midlothian is on to a good point, on which I hope the Minister will be able to expand. We should not be complacent about what we have achieved. We have competitors who are well placed to take markets from us, particularly the USA, which has a critical mass that we simply cannot match. That means that we have to be even more active, even more productive, and even more enterprising in our approach to science and biomedical industries. I believe that we have the capacity to do that and I hope that the Government will support it every inch of the way.
11.58 pm
Mrs. Jacqui Lait: Thank you, Mr. Deputy Speaker. It has been a pleasure to listen to all the contributions. I congratulate the hon. Member for Dundee, West (Mr. Ross) on securing the debate. I lived in his constituency and worked in the jute industry in the late 1960s, a period which saw the demise of the industry. I worked for Jute Industries Ltd., which moved into North sea oil—the cutting edge of technology at the time. As everybody has said, Dundee and Scotland have always been at the cutting edge of invention. Life moves on and, with sadness, we have seen the end of the jute industry. Also, with sadness in a sense, we regard the oil industry as mature, not a state-of-the-art industry. Dundee is now sharing in the new industries that come from the research base, which has always been one of Scotland's strengths. For many hundreds of years, there were more universities in Scotland than in England, and we have seen the fruits of that endeavour.
I congratulate all who are involved in the Dundee Project for grasping what faced them in the 1980s and for making such a success of it. We must recognise that when big decisions are made, it takes a long time for the payback to come. We are now seeing the benefits of what people did 20 years earlier. Such a message is spreading more widely throughout the United Kingdom and the hon. Member for Somerton and Frome (Mr. Heath) was right to point that out.
The Government recently announced that there is to be a new high-tech university—based on the regenerative ability of a new university—in my former constituency of Hastings and Rye. I hope that Mr. Lonsdale can be tracked down and congratulated on behalf of us all. The effect of his decision that Ninewells should work with Dundee university and Abertay has come not to a satisfactory conclusion because I expect those industries to move on, but has progressed satisfactorily.
It is interesting to see how the change from emphasis on manufacturing is now being accepted throughout Scotland and is moving to the knowledge-based economy and the effect that that has on developing a sophisticated economy. I congratulate everyone who takes part. I should be happy to take up the invitation of the hon. Member for Dundee, East (Mr. Luke) to visit some industries in Dundee. After the debate has finished, perhaps he would give me some contact names. It is one of my objectives to visit as many industries as possible. I have already visited several throughout the rest of Scotland.
Hon. Members have talked about the need for the universities not only to compete with one another in Scotland, but to co-operate. The hon. Member for

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Midlothian (David Hamilton) drew on his experience of the United States. If we are thinking competitively, we need to think of competing with MIT. It is with encouragement that I note that my old university, Strathclyde university, competes and co-operates with Glasgow university. I am sure that Dundee university does the same with Abertay university. I am also conscious that Aberdeen university has the same partnership with Robert Gordon university, and I cannot believe that Edinburgh university does not co-operate with Heriot-Watt university. It is the best way in which to create the critical mass that we need to move forward and to be more widely recognised as one of the world's leaders in the new knowledge-based industries.
As has been mentioned, we must make sure that we receive back-up. The hon. Member for Midlothian made cogent points about how business and academia in the United States have learned to co-operate in a way that we are having difficulty in developing in the United Kingdom. Having spoken to people who are active in the venture capital market in Scotland, I understand that while there is a willingness to invest in the new industries, some packages that are offered to inventors to encourage them to move into companies are not as sophisticated as in other places. Someone who is developing a company can be called on to put their house and their pension on the line, whereas other venture capitalists south of the border are developing much more sophisticated help packages so that there is not the same threat if something goes wrong. We need to take away some of the risks from our inventors who, let us face it, are not rounded business people. They need reassurance to encourage them to continue to invent new products and ideas. There continues to be a need for sophisticated packages of venture capital aid to encourage yet more people into the business world.
We are also conscious that although many universities are developing incubator companies and science parks, growing businesses and working closely with established businesses, there is wariness about whether that is the right way forward. Had I not been speaking in the debate, I would have attended the open day at the Hunter centre for entrepreneurship at Strathclyde university. The centre is encouraging people from the academic body who have ideas to make presentations to an audience of people who can help to develop those ideas. It is difficult for inventors to realise that to get a product to market, one needs the advice of experts in marketing, as well as accountants and lawyers, who can ensure that intellectual property as well as company formation is properly established.
The idea behind the open day is to get people to move forward towards the market. As it is my old university, I beg leave to bang its drum a little. I believe that the school of entrepreneurship is unique—in the world, not only the United Kingdom—in managing to marry up undergraduate degrees with entrepreneurial classes. As people leave university—with degrees rather than PhDs—they have an understanding of business and how to move products forward into the marketplace.
From small acorns grow the great oaks of academic powerhouses such as the MIT. That is what we should be aiming for. Dare I utter this heresy, but we should consider bypassing Cambridge and moving into a
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worldwide competitive arena. We must ensure that business, the universities and government in all their various forms work towards that end.
We must also ensure critical mass. Indeed, as the hon. Members for Dundee, West, and for Dundee, East both said, Dundee has probably already achieved that. Employees come to Dundee to be in the company of people with the same intellectual interests and ability. People can be hired from that mass to ensure that companies, in which people can move around easily, can grow and develop. These people are in many instances home grown, and we must ensure that others can come in easily from abroad. I hope that the Government will make it as easy as possible for people to get the necessary permissions to come in to contribute to the Scottish economy. That is crucial to its future development and success.
There are also broader areas of concern. The hon. Member for Somerton and Frome referred to the regulatory environment. Having worked in the chemical industry, I am conscious of how quickly regulation that is developed to meet a particular situation throws into question previous regulation. We are not sufficiently adept at European Union level from where most regulation stems. We are in a global market, and it could be argued that a world body such as the World Trade Organisation should create the regulatory environment rather than Europe, but that is the subject of another debate. We must ensure that that environment can create modern regulation and that old and conflicting regulation is dropped and done away with. It is always a problem to make sure that that happens, because people are comfortable with old, established regulations. It is difficult to move on, and we Members of Parliament need to be well aware of that problem.
The use of animals in development is a controversial issue. We do not dare back away from it; we must address it. I was glad that the Government stood up for Huntingdon Life Sciences in the end. We must ensure that businesses that need to use animals do so in the most effective way, and that there are tight controls over the way that animals are used. However, we should recognise that there is need for such use from time to time. Science moves on, and many of the old tests have been replaced by more modern and less invasive techniques. In some cases, the use of animals has been done away with altogether. However, we must allow animals to be used when that is required.
We must broadly consider other potential impediments to development. What is likely to impede future development? I have talked about the critical mass of scientists and inventors. We also need to consider whether there are any external drawbacks, and whether factors such as the higher cost of regulation and business taxes will have a detrimental effect on those starting up businesses or investing in incubating businesses.
There is a new research and development tax credit, but we must ask whether it is outweighed by the other costs put on business. In Scotland, the business rate is 9 per cent. higher than in England. These issues matter at the margin—and beyond, when things get too far out of hand. If the Government stop people from investing, matters should be reviewed.

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I am delighted to have taken part in the debate, and I congratulate the hon. Member for Dundee, West on securing it. I am sorry that the Scottish Grand Committee is sitting now; I am sure that he would have liked to have heard more contributions from other hon. Members from Scotland. It is worth mentioning in passing that I do not see any members of the Scottish National party here. One would have hoped they would be prepared to contribute to a debate on the future prosperity of Scotland.
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The Minister of State, Scotland Office (Mr. George Foulkes): I also join in giving hearty congratulations and thanks to my hon. Friend the Member for Dundee, West (Mr. Ross) on initiating the debate. It is appropriate that we have had a lively and extremely well informed debate on a subject that is important to Scotland and the United Kingdom.
I welcome the generous remarks of the hon. Member for Somerton and Frome (Mr. Heath), who says that we are celebrating a success story for Scotland and the United Kingdom. Perhaps that answers the question put by the hon. Member for Beckenham (Mrs. Lait), who asked why Members of the Scottish National party are not present. Notwithstanding the meeting of the Scottish Grand Committee, I would have thought that the SNP could have managed for one of its five Members of Parliament to come along.
Biomedical research industries in Scotland are a success story, but the SNP does not like that; it does not fit into its political agenda of talking down Scotland and pretending that everything in Scotland is bad. The hon. Member for Somerton and Frome mentioned the Business a.m. gazelle awards, which I had the privilege of presenting. It is remarkable that in Scotland there are 280 "gazelles", or companies with phenomenal 100 per cent. growth.
I congratulate and commend my hon. Friends the Members for Dundee, West and for Dundee, East. I visited Dundee twice recently and on each occasion had a fantastic welcome. I was greatly impressed by how the city is responding to the challenges of the 21st century, in not only this respect but others, too.
I was also impressed by how my hon. Friends are representing their constituents so well and so assiduously, and are quietly and effectively supporting innovation and new job opportunities, not only in this sector but in many others. It is not always the person who shouts the loudest and gets the biggest headline and their picture in the newspaper who is the most effective Member in Parliament.
The topic is close to the heart of my hon. Friend the Member for Dundee, West. Tayside benefits particularly from the industry's presence, as I shall discuss in more detail in a moment. I shall not cite the impressive statistics that both my hon. Friends mentioned on jobs and investment in the area.
Dundee, in particular, and the technology park, share the success in Scotland in biomedical research in the commercial sector. My hon. Friend the Member for Dundee, West mentioned Cyclacel and Axis-Shield, but there are others, and both Dundee and Abertay universities have excellent records in the biomedical and biotechnology fields. I speak as a graduate of Edinburgh
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university, and if a Strathclyde graduate and an Edinburgh graduate praise both universities in Dundee, it must be true.
The biomedical research centre is part of the medical faculty at Dundee, and was set up in 1992 at Ninewells hospital medical school laboratory block. It aims to provide a focus of excellence in biomedical research. The level of excellence attained was underlined by The Guardian's assessment of the top 100 UK universities in 2000, which placed Dundee second in the entire UK in the table for biosciences. That is a tremendous record.
Abertay, the newer but equally effective university, which I had the pleasure of visiting on Monday, was praised last month by the network director of Scottish Enterprise's biotechnology group. Almost 15 years ago, Abertay offered Scotland's first degree in biotechnology, from drug design to food and drink manufacture. It now boasts innovative and progressive courses.
The two universities are extremely effective, and I can confirm that they are working together. The expertise in biotechnical research at Dundee is world renowned and is fuelling the engine room of the industries in the Tayside region as a whole. Indeed, Dundee is now home to 25 per cent. of Scotland's biotechnology companies.
I am confident that, given continued support and encouragement of the right sort, growth will continue. Biotechnology offers huge opportunities. Following the publication of the map of the human genome—as some will know, John Sulston received the Robert Burns humanitarian award at Culzean Castle, at an event that my hon. Friend the Member for Ayr (Sandra Osborne) and I attended last Friday—there are huge opportunities for wealth creation, high-quality jobs and improving the quality of life. The UK has the leading biotechnology industry in Europe. I shall discuss later the point made by my hon. Friend the Member for Midlothian (David Hamilton).
Scotland is making inroads and grasping the vast opportunity that biotechnology offers. Industry, academia, the enterprise networks and the Scottish Executive must all play their part, individually and collectively, if we want to ensure that we do not lose our position as a potential market leader and allow others to exploit that opportunity.
The commercial and social benefits of biosciences are enormous. Genomics can be harnessed to develop radical new treatments for previously intractable diseases such as Parkinson's, Alzheimer's and cancer, for which we have sought treatment for so many years. That is why it is vital. It also supports novel developments to improve the environment. Therefore, Scotland is well-established in this regard, as the hon. Member for Somerton and Frome generously said.
With just under 9 per cent. of the UK population, Scotland wins 12 per cent. of total UK funding for research, 13 per cent. of research councils' resources for research, 13 per cent. of the Government research departments' resources for research, and 12 per cent. of the EU research resources that are spent in the UK. Therefore, we are getting more than our fair share, and rightly so. The per capita income from research grants and contracts in Scotland is also higher than in other parts of the UK.

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Scotland produces 1 per cent. of all the research publications in the world; in that regard, it ranks third in the world per head of population. Scotland has the highest concentration of biotechnology provision in Europe; 18 per cent. of all UK biotechnology-related PhDs are awarded in Scotland.
We are not complacent. We can and we should do more; we should build on this foundation. However, we should also recognise and acknowledge what has been achieved so far, as the hon. Member for Somerton and Frome said.
The infrastructure is in place to develop the potential. We have several science parks—the West of Scotland science park, the Pentlands science park, the Stirling university innovation park, the Dundee medipark, and the Aberdeen science and technology park, which I had the privilege of visiting.
In his eloquent contribution, my hon. Friend the Member for Midlothian mentioned the growing potential in Midlothian. He referred to plans to develop the manufacturing facility at the newly created national biomanufacturing centre at Gowkley Moss in Midlothian—these centres always have strange names. That is where PPL Therapeutics—which harnessed the Dolly technology to create the life-enhancing drug AAT for the treatment of cystic fibrosis—will construct its £42 million manufacturing facility, so it is a very important development.
In these parks, we can find some of the sector's globally-recognised companies: Cyclacel, which has been mentioned, is developing important cancer therapies; PPL Therapeutics is developing proteins to fight diseases such as pancreatitis and cystic fibrosis; Pantherix is developing anti-infective therapies and antibiotics; Axa-Shield is producing a kit that predicts heart attacks, which is very important for those of us who are moving on in years; other companies are also producing various diagnostic kits, and others are developing medical devices and heart valves. All of those are important areas.
My hon. Friend the Member for Midlothian rightly averred that it is easier to raise finance for biotechnology in the USA than it is in the UK. Finance for biotechnology in the UK is a major issue, as we know. There is concern that the European drive in biotechnology will help other countries, such as Germany, to overtake the UK as the leading biotechnology industry centres in Europe. We are determined that that will not happen—in particular, by building on Scotland's lead.
Currently, the UK leads Europe in biotechnology, and Scotland's science base is second to none. Entrepreneurship is booming. The venture capital industry has stimulated more start-ups—in particular specialised biotechnology start-ups—than anywhere else. That is a good sign.
As the hon. Member for Somerton and Frome rightly mentioned, Scottish Enterprise has identified biotechnology as a key economic development driver, and it has implemented a £40 million biotechnology cluster action plan, which it launched in November 1999.
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It is significant that the framework for action that Scottish Enterprise announced in 1999 has already been substantially achieved well ahead of schedule. In September 2001, employment in the sector was 24,406—above the 24,000 target that was set in 1999. There were 86 biotechnology companies, and 291 support and supply companies—we had anticipated 290. Allowing for possible mergers, we are almost on target already, and are well ahead of the target date.
On international co-operation, there are interesting collaborations such as the Scotland-Maryland biotechnology alliance, which was launched at Bio 2000 and signed in Edinburgh in August 2001. Scottish Enterprise and the Maryland science alliance are working together to stimulate further growth in our biotechnology industries through a series of activities over the next two years. A 27-strong trade mission from Maryland, which included 10 biotechnology companies and three universities, visited in August. As a result of the initiative, four Scottish companies have already secured deals with their Maryland counterparts that are worth more than £1.5 million. I want to see more such collaboration between Scotland and the United States. As my hon. Friend the Member for Midlothian said, we can learn much from it.
We accept that there is a continuing need to boost industry's investment in research in Scotland. Scottish industry invests only 0.5 per cent. of its gross domestic product on research and development. That is half that of the UK, a third of the Organisation for Economic Co-operation and Development average and less than a fifth of Sweden's. The Government are determined to help. In the 2002 Budget, UK tax credits for small business research and development were extended to include large businesses, as the hon. Member for Somerton and Frome mentioned. That will encourage investment in the biotechnological and biomedical industries.
The Scottish Executive's science strategy for Scotland identified bioscience, genomics and medical research as priority areas. The aims are to build critical mass, improve performance, and strengthen local and international networks. The Government and the Scottish Executive will work in partnership: the Government will provide the funding and the Executive will provide their science strategy. The Government have also delivered the programme Bio-wise, which is led by the Department for Trade and Industry, to encourage industry uptake of biotechnology. They also introduced the £750 million joint infrastructure fund to update the science and research-base infrastructure, from which Scotland benefited by about £65 million.
My hon. Friend the Member for Midlothian also talked about bridging the gap between academia and industry, which is what Scottish Biomedical exists to do. It delivers milestone-driven research projects on behalf of pharmaceutical and biotechnology companies by matching the needs of business with the skills, expertise and technologies of research departments of the universities of Scotland. A prime example of that success was the —5.2 million deal with Kyorin Pharmaceutical Co. Ltd. of Japan, the result of which was the state-of-the-art Kyorin-Scotland research laboratory in the West of Scotland science park. The formula "research plus business plus infrastructure" equals success.

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I accept the point made by my hon. Friend that more needs to be done if the UK is to continue to lead in Europe and to catch up with the United States. I will meet the BioIndustry Association in the next few weeks to discuss that. More needs to be done to keep Scotland ahead of the field. Commercialisation is just the start. We must nurture and go for growth. Growth needs different measures, such as the Executive's refocusing of regional selective assistance. We must focus on growing indigenous Scottish firms such as those in our biomedical and biotechnology sector. Access to finance is also key. Ernst & Young noted that Scottish Enterprise's framework for action identified that two of Europe's three largest venture capital investments were in Scottish biotechnology companies.
Biomedical research and industry in the wider biotechnology sector already have a key role in the Scottish economy. My hon. Friend says that the Government should play a key part. I assure him and the Chamber that the Government have played their part and will continue to do so. Through partnership and sensible devolution, the Scottish Executive and British Government are working together on a commitment to fuel a knowledge-based economy based on excellence in research and innovation, delivering high growth and high quality jobs for a highly skilled work force. That is the way forward for Scotland and the United Kingdom.

Lottery Grants (Gloucestershire)
12.30 pm
Mr. Laurence Robertson: I am pleased to secure this debate and thank the Minister for attending. I am listed to discuss lottery grants in Gloucestershire and, indeed, I want to do so, but I hope that you will forgive me, Mr. Deputy Speaker, for making particular reference to my constituency of Tewkesbury, as we have lost out considerably in the distribution of such grants.
I held a debate on 20 December 2000 to discuss this issue. I met the then Minister, the hon. Member for Vauxhall (Kate Hoey), who was helpful. Since then, in spite of her gallant efforts, nothing seems to have improved for my constituency. I discovered at the time that organisations from Tewkesbury were applying for just as many grants as those from other constituencies and for as much money, but they were being turned down.
There are six parliamentary seats in Gloucestershire, and Tewkesbury applied for about one sixth of the money, which was right. We played the lottery as much as the other constituencies. One sixth is about 17 per cent, yet we received less than three per cent of the money coming to the county. That did not seem right.
The Minister and I discussed a number of the failed bids in detail. I was assured that the Government were considering improving the processing of applications and the way in which help might be given to applicants at early stages. Despite that, there has been no change in the amount of lottery grant coming to my area. Since the lottery's inception in 1994, organisations in Gloucestershire as a whole have received £83.7 million, yet only £2.9 million—3.4 per cent—has found its way to Tewkesbury. If we divide Gloucestershire roughly into six, we should have 17 per cent of the money, equating to about £14.2 million. Coincidentally, that is the national average for lottery grants to constituencies. We are nowhere near that figure.
To put the problem in perspective, neighbouring Gloucester has received £28.7 million and Cotswold has received £20.2 million. I do not begrudge those areas their money—if they have made applications and been given grants, good luck to them. It seems odd, however, that compared with £28.7 million and £20.2 million Tewkesbury receives less than £3 million. I wonder why.
When I looked into the matter, met the Minister, held a debate and discussed the problem with one or two heads of the departments distributing lottery money, one of the criteria given for distribution was deprivation. That is not a good measure. What does deprived mean? Does it mean that it is a poor area, or that there are few facilities or amenities? I mentioned that Cotswold has received £20 million in lottery grants. One could hardly describe it as deprived, yet it received seven times as much money as Tewkesbury. I stress that I do not begrudge Cotswold its money, but I would rather see a fairer share come to Tewkesbury.
If the word "deprived" means poor, many better-off areas have pockets of deprivation, but because of the way the calculations are made they are not recognised, particularly if those pockets straddle two electoral wards. Deprived may mean few facilities, but many

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wealthy areas have no amenities. Some well-off villages do not have a single shop—are they deprived? What exactly do we mean by deprived?
The calculation based on deprivation tends to centre on inner cities and towns. As I have asked before, what about rural poverty? I highlighted that in my last speech, but since then the situation in the countryside has got worse. Farming incomes have fallen further and foot and mouth has devastated the rural scene. I am pleased that the Minister is replying to this debate because he is also the Minister for Sport, and he may know that the Cheltenham race course is in my constituency. We lost the Cheltenham racing festival last year. That hit my area hard and should be taken into account in debating deprivation and the allocation and distribution of lottery grants.
I do not want to go too far into this subject, but my area, given its dependence on the racing industry and the national hunt race course, will be hit hard if the Government decide to ban hunting. I say that as someone who does not hunt, but the Government should be aware of that problem. I am sure that I will be called to order if I go any further down that road. In those circumstances, from where would the compensation come for my constituency? Would it come from lottery grants, or because of the way that it is calculated, would we continue to slip through the net?
The perception is that Tewkesbury is well off, but that is not true. It is not poor, but it is certainly not wealthy. Like many other areas, it has problems with drug pushers, drug users and people who commit crimes because they are taking drugs. It has a town—Tewkesbury itself—that needs regeneration because there are many empty shops. It is a wonderful place to visit, but it needs some help. Other areas have few facilities and the constituency also suffers from having excessive housebuilding requirements forced on it. It is all right to build houses, but that does not create a community. We must keep those people in the area to create a community, but if the lottery grants do not help the projects, that creates a further problem.
The south-west is generally not that well off. It is poorly served by the railway network, although many constituencies could claim that, and it loses out on funding for services such as education, health, policing and local government. In recognition of the unequal lottery distribution, the Government introduced a system for fairer distribution and identified 51 areas for targeting. Again, the criteria were that the areas had to be deprived and have received less lottery funding than other parts of the country. So far so good, but of those 51 areas, 50 had received more money than Tewkesbury. As I said, we have received less than £3 million, while Brent, which was targeted for more money, has received £138 million. Portsmouth received £63 million. My home town of Bolton, about which I can claim to know a little, received £34 million, while Blackpool received £8.3 million—is it deprived? There are other figures: Doncaster received £61 million, Oldham £16 million, and Kirklees £35 million. Some of those areas may have bigger populations, but even if we multiple Tewkesbury's population proportionally, we do not get anywhere near comparable figures. However, those
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areas are targeted under what is called the English fair share initiative. Where is the fairness and how will things improve for my constituency?
Organisations in Tewkesbury have made many good applications and I have seen some in detail recently. There was an application to make improvements to the famous Tewkesbury abbey, one to upgrade the Bishop's Cleeve tithe barn and many other examples that I could mention. However, all were turned down and, despite promises, the area remains poorly funded in terms of lottery money. Indeed, Gloucestershire comes sixth out of six in terms of total funding. If we break that down into the six categories, it is bottom of the list in four, and fifth out of six in the remaining two, so we lose out in every which way.
Perhaps the Minister will be kind enough to answer my questions; I certainly intend to leave him enough time to do so. What about the merits of individual applications? How are decisions about the applications weighted and made? What is meant by "deprivation"? How is it calculated and how big an area in each constituency is measured? I ask the right hon. Gentleman to review that criterion as a means of deciding which areas should benefit from lottery funding. Why is the distribution of lottery money across the country still so unequal? I have given examples. Why does my constituency keep losing out so badly?
The national lottery was started in 1994 with the objective of helping projects that would benefit the community. It was a way of helping those projects without calling on taxation, which might be inappropriate. The lottery was set up not to supplement taxation, but as an alternative way of raising funds so that community projects could benefit.
The lottery has had much success in a number of areas. The one or two projects that have benefited in Tewkesbury have been tremendously successful, but there have not been that many of them. This is the second time that I have raised the issue in the House of Commons and I do not intend to let it slip because a number of organisations in Tewkesbury are pressing me to ask why we do not get our fair share.
12.41 pm
The Minister of State, Department for Culture, Media and Sport (Mr. Richard Caborn): I congratulate the hon. Member for Tewkesbury (Mr. Robertson) on securing the debate. I know his constituency reasonably well. Indeed, we met at the Cheltenham gold cup, when I backed the winner. I am sure that he appreciates that Cheltenham, like all horseracing towns, has backed a winner in that my right hon. Friend the Chancellor of the Exchequer has provided help for the racing industry.
Since 1994, the national lottery has become one of the most successful lotteries in the world. We must acknowledge that, because sometimes in these debates we miss the bigger picture. It has raised about £12 billion and 100,000 lottery awards have been made. By those standards, it is a great success, which we should recognise and celebrate. We should also recognise that every part of the country has benefited in some way from lottery funding. However, some parts appear to have benefited rather more than others and the hon. Gentleman has initiated the debate to ask questions about his constituency.

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We wanted to make changes so that people had confidence that lottery money was spread fairly throughout the country and different groups in our society. We wanted decisions on individual grants to be made closer to the area where the money would be spent and for it to be distributed according to need. We wanted to shift the emphasis from capital expenditure on buildings to spending on people and activities. In the first couple of years after the lottery was conceived, we probably went down the road of capital schemes a little more than was advisable, but we have gone through a learning curve and I think that there is consensus among parties in the House on that. We have reviewed the situation and taken those points on board.
The National Lottery Act 1998 and the new policy directions for distributors set out a broad network that reflected those changes. Lottery distributors take decisions on individual grants within the framework, while retaining the independence that is a fundamental principle of the lottery. Distributors now have more flexibility in the way that they distribute money to good causes. They can delegate decisions within their organisations to a more local level and to outside organisations, which is happening. They can pool funds and work together on joint schemes more easily than before. They must produce strategic plans that reflect the needs of their sector and provide proposals for addressing them.
The 1998 legislation also introduced a new lottery distributor, the new opportunities fund, to fund new initiatives in the areas that concern people most. According to a MORI poll that we commissioned, those areas are health, education and the environment. It also introduced a new scheme, Awards for All, which allows distributors to work together to provide a one-stop shop for grants of up to £5,000 to community groups. The latter has been particularly successful and overall the number of small grants under £5,000 to community groups has trebled. Earlier this year, we introduced the fair share initiative, which is designed to tackle inequity in lottery funding in deprived areas. Overall, 62 areas were chosen for fair share funding based on a methodology that evaluated areas according to levels of deprivation and the amount of lottery funding already received. That initiative is worth £169 million.
Fair share is just one of several targeted initiatives operated by the lottery distributors and the Government are committed to ensuring that all areas of the UK benefit from lottery funding. More generally, since 1998 the percentage of revenue funding awarded—the big argument in the early years of the lottery was about capital, not revenue—has increased from 9 per cent. to 31per cent., and 41 per cent. of all grants made so far have gone to the 50 most deprived local authorities. Many distributors now also delegate decisions on funding. For example, the heritage lottery fund established nine committees in the English regions to make decisions on applications between £50,000 and £1 million. Decisions about arts projects below £100,000 are made at regional level. It must be right that decisions about funding are made at the most local level.
The quality, efficiency and standards unit—QUEST—report, published in August 2000, made a number of recommendations for improving application and assessment procedures to ease the administrative burden for smaller groups applying for grants. It
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recommended that we put in a hot line so that there could be contact at a one-stop shop. That has been successful. There have been nearly 8,000 inquiries to date. It has been an extremely popular way of contacting the lottery and getting information without being bounced from one distributor to another. The service provides basic information about the types of grant available and contact details for the relevant distributor from a single phone number.
Lottery distributors have also established a lottery website, which also provides basic information and links to relevant sites. The site averages more than 6,000 hits each month. Distributors are simplifying application procedures for smaller grants. That has been welcomed. The heritage lottery fund has introduced a simple application form for capital grants under £50,000 and in April 2001 the community fund launched a new grants programme for awards between £500 and £60,000, based closely on the Awards for All programme, with a short, simple application form and a quick turnaround time.
The hon. Gentleman asked why some applications were being turned down. Distributors are working jointly to produce common minimum standards for feedback and appeals to ensure that unsuccessful applicants are given helpful and detailed information on why their applications failed and to increase consistency between distributors on how appeals are handled. That is important for the integrity of the lottery. In spite of those very real changes, it is clear that some areas still do rather better than others. I make no apology for our decision to target some lottery funding, via the fair share initiative, on those areas that are both the most deprived and have historically done badly from the lottery.
That initiative is not a panacea for all ills, however, and it does not address the issues of those areas, which, while they may not be classed as deprived, still rightly want to win lottery funding for worthwhile projects in their communities. It is frustrating when a constituency does not do as well as its neighbours—that has been graphically illustrated today—particularly when one knows from personal experience how worth while the applications are. However, it is important to look not only at the individual constituencies, but at the surrounding area. The hon. Gentleman referred to Gloucestershire, which is made up of six constituencies, some of which have done better from the lottery than others. Indeed, Gloucester is top of the league. It has received average lottery funding of £285 per capita. At the other end of the scale, which the hon. Gentleman illustrated graphically, the figure for Tewkesbury is £35 per capita.
We need to be careful when we interpret statistics. Large towns and cities often attract lottery funding for large capital projects because they have the infrastructure and necessary support needed to secure funding—big stadiums or concert halls. We see that up and down the country. The hon. Gentleman knows that Gloucester leisure centre is a good example. It is in Gloucester, but many people in the surrounding area have benefited from it.
Often, a scheme to be delivered across an area will be based for administration purposes in a single location. For example, Gloucestershire local education authority is based in Gloucester. It has received £2 million to fund

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technology training for teachers and librarians throughout the county, so Tewkesbury will gain from that.
Mr. Robertson: I am grateful to the Minister for his sympathetic approach. I believe he would agree that it is all right to spend money in inner cities, but people then have to travel to those areas. The town of Tewkesbury needs regenerating or there will be serious problems and we will waste a jewel of a place, but it has had applications turned down.
In order for people in Tewkesbury to benefit from something in Gloucester they have to travel by car. I was privileged to take part in the debate on communities initiated by the Government a couple of weeks ago. It is essential to keep people in the areas where they live for part of their leisure time if we are to build up communities.
Mr. Caborn: I take that point on board. The community fund is revisiting these issues—as we do continually—and announcing a rural initiative to help deprived rural communities that have received lower lottery funding than others. That is also the coalfield communities approach. We may consider Tewkesbury in that context.
The hon. Gentleman pointed out differences between Gloucestershire and Tewkesbury and other areas. Tewkesbury has received 116 awards, around the same number as Cheltenham, but Cheltenham's average fund per capita is around £166, much higher than Tewkesbury's £35. The other five Gloucestershire constituencies have all received funding well above the median level of £84 per capita. Tewkesbury sees fewer awards than most of its neighbours and those awards are for lower amounts. Those discrepancies appear in the calculations given by the hon. Gentleman.
It is not always easy to see the disparity from the bald figures, although we can bandy statistics around. Perhaps Tewkesbury does not make as many applications as other constituencies. Applications to the community fund from Tewkesbury are certainly lower. However, when they are made, they have a higher strike rate—44 per cent of Tewkesbury's applications to the community fund have succeeded, which is a better success rate than any of its neighbours except Forest of Dean. Voluntary community organisations in Tewkesbury may not be as experienced in applying for lottery funding as those in neighbouring areas. They say that nothing breeds success like success. One might want to consider that with regard to Tewkesbury.
Mr. Robertson: I am grateful to the Minister for giving way and for his advice on community fund
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applications. At the time of the previous debate, it was easier to obtain figures from the Department for Culture, Media and Sport about the number of applications that were made, but I am told that it does not have that information now. At that time, applications from organisations in Tewkesbury were just as frequent and as many as those from other constituencies in Gloucestershire, and we asked for as much money as they did.
Mr. Caborn: I take on board the hon. Gentleman's point. I am aware that Tewkesbury borough council has now met the community fund to discuss those issues and how they can be addressed. He raised a genuine worry and it is one that we have to bottom, whatever the reasons for it may be. Clearly, the borough council has an important role to play in building up the capacity of Tewkesbury to increase successful applications, and that shows that it takes its role seriously. I will request a progress report on the meetings that have taken place to ascertain whether there are deficiencies, wherever they may lie, and whether we can address them. There are major discrepancies and I would like that bottomed. Once that analysis has been carried out, we can start to deal with the matter.
The Tewkesbury problem is not uncommon. Several constituencies are not as successful at winning lottery funds as they should be. Unfortunately, as the hon. Gentleman will appreciate, there are no quick fixes. Since the inception of the lottery, we have tried to move from big capital schemes and have focused on revenue. We have devolved that power into the regions in respect of some distributors. We are trying to bring decision making nearer to the point at which it applies and feeding in local knowledge. I am sure that that can be achieved. Decision making is thus more informed and effective and people will appreciate that.
The Tewkesbury problem may not fit into any of those categories. As I have said, we will consider the discussions with the community fund. I will ask for a report and write to the hon. Gentleman about it. Constituents may have other issues of a similar nature that we shall also need to address.
The lottery is an evolving financial instrument. It has all-party support throughout the House and we want it to be effective and successful. If there are specific problems, we will try to deal with them, but we have to do that in the totality of the funding regime and the way that the House has constructed the lottery. Nevertheless, I will take the matter on board and will write to the hon. Gentleman about the discussions that have been taking place.
Mr. Deputy Speaker (Mr. Nicholas Winterton): Order. We thank the Minister for his reply. Although it is a little early, we can move straight on to the next debate.

Sexually Transmitted Infections
12.58 pm
Jane Griffiths: I am pleased to have secured this debate on such an important subject, although I would rather not have had to do so. In February, the British Medical Association published a report entitled "Sexually Transmitted Infections". It brought together an up-to-date summary of the situation with the most common sexually transmitted infections—STIs—in the United Kingdom. The information in the report was not new, but it was shocking. The number of new episodes of acute STIs diagnosed in genito-urinary medicine clinics in England, Wales and Northern Ireland rose from 887,760 in 1995 to 1,185,285 in 2000.
To give a couple of examples from that report, uncomplicated gonorrhoea increased by 31 per cent. in males and 26 per cent. in females between 1999 and 2000. Diagnoses of chlamydia have risen dramatically since 1993. Between 1999 and 2000, cases rose by 20 per cent. in males and 17 per cent. in females. It is accepted that the increase in diagnoses is as likely to be the result of increased testing and awareness as it is of increased transmission. However, the report further stated the sustained rise in diagnosis of acute STIs in the past six years, which is probably attributable to the increasing practice of unsafe sexual behaviour, especially in young heterosexuals and gay and bisexual men. The increase in the numbers of STIs is worrying and it is important that something is done, because having a STI is damaging.
The dangers of unprotected sex, such as the possibility of pregnancy and other problems, are well known, although apparently not by young women and young gay or bisexual men. Informal surveys suggest that many of them think that such issues simply do not apply to them—they do not feel at risk. However, there are further dangers from unprotected sex. If left untreated, either because of ignorance or because the infection is asymptomatic, as is often the case with chlamydia, those infected risk damage to their fertility or even death through ectopic pregnancy or other complications.
What information do we have about the problem? A study of 3,860 sexually active women in the United States attending sexual health clinics, family planning clinics or school health centres—women who, because of their attendance at such establishments, are more likely to look after their own health—found that, over a 33-month period, 31.2 per cent. of those under 25 were infected with chlamydia, compared with 9.6 per cent. of those over the age of 25. Worse, the majority of those cases were asymptomatic and the women concerned simply did not know that they had the disease.
On the Ectopic Pregnancy Trust's good website at www.ectopic.org. it states that
"a pilot study that has been carried out,"
suggests that
"10% of sexually active people under 25 are infected. It is probable that at least one third to half the population now in their forties will have had it at some time."
Since chlamydia is so widespread, one might think that infection would be accepted as one of the risks of being sexually active and that people would get
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regularly checked. Sadly, a survey of women in Scotland with a current or recent diagnosis of chlamydia found that most women thought that STIs were not relevant to them. The diagnosis came as a shock. The women felt that there was a stigma attached to attending the GUM clinic and found it extremely difficult to disclose their infection to current and previous partners. Evidence suggests that, the younger the woman is, the less confidence she will have about making a disclosure of infection and discussing it with current and previous partners. Such stigma is likely to promote the spread of STIs such as chlamydia.
The problems highlighted by the survey are worse when considered in the context of a recent survey carried out by PatientView, the Terrence Higgins Trust and the British HIV Association, which asked 100 consultants about the treatment of patients in GUM clinics. It found that more than 40 per cent. of people needing sexual health appointments had to wait more than a week to be seen and that more than one in 10 have to wait longer than a fortnight. That is worrying in the light of evidence suggesting that the longer patients wait for an appointment, the less likely they are to turn up. Thus, infections are likely to spread.
In my constituency of Reading, for obvious reasons it is almost impossible to acquire figures on the number of people having unprotected sex. To get some idea one needs to examine evidence that might provide a clue as to the nature of the problem. The dangers of unprotected sex for young women in Reading are real and present. The area covered by Reading borough council has the sixth highest number of teenage pregnancies in the south-east. Between 1996 and 1998, there were 107 conceptions in young women under the age of 16, which is almost double the average of 57 conceptions for Berkshire. For under-18-year-olds, Reading borough council's area has a conception rate of 436 compared with a Berkshire average of 280. When the survey considered the conception rate per 1,000 of people aged 15 to 17 in the same period, it was 62.5—the highest in the south-east. That is a worrying statistic for my constituency.
There is a part of Reading, which I shall not name, that sends pupils to a popular and well-respected secondary school in my constituency. One in eight young women in that area will become pregnant. I remember that when I was at school a long time ago—in the late 1960s—a girl in my year became pregnant and left school as a result. There was quite a scandal and fuss. According to the statistics, of the pupils attending that school in my constituency, three a year will fall pregnant. That is evidence that much unprotected sex is taking place in Reading. That is worrying for our public health.
I am grateful for information from Dr. Alan Tang of the Florey unit, which is the genito-urinary clinic in the Royal Berkshire hospital in my constituency. It has a waiting time of two weeks for a routine referral and a week for urgent cases. People at the unit think that that is too long. Those waiting times measure the period from a referral to a diagnosis, or possible diagnosis. They completely leave out of the picture those who did not appear at the clinic or did not know how to represent their symptoms so that the urgency or otherwise of their case could be determined. It is thought at the Florey unit that chlamydia, HIV and other STIs are increasing at the same rate as in London.

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In Reading, the greatest increases in STIs have been in genital warts, chlamydia, which has increased by 50 per cent., and HIV. The Florey unit operates an appointments system. It is aware that clinics in Slough and London have tried a walk-in system, which on the face of it might appear attractive. People do not have to make that embarrassing telephone call and do not have to wait; they can just turn up. However, long queues tend to form at such clinics. That is a sign of the level of demand for such stigma-free service. There is corresponding evidence that some people who join the queue do not reach the front—they give up and go away. The consequences, both for those people and for general public health, will emerge much later.
Dr. Tang and those at the Florey unit are working to increase the unit's size to cope with the growth in the number of cases with which they deal. There is an appeal to raise funds for that, which I strongly support. A bid has been made for a greater allocation to the Royal Berkshire and Battle hospitals national health service trust, so that the unit can continue to provide the service that the people of Reading, East deserve. For some reason, fund-raising for a genito-urinary clinic is not as easy as it is for a scanner. I wonder why that might be.
The number of people with sexually transmitted infections is rising significantly. In Reading, there is a serious problem with teenage pregnancy. Those problems are due to an increase in unprotected sex and they affect young women and gay or bisexual young men in particular. That is the problem; what can we do about it? In the mid-1980s, the threat of HIV/AIDS was new. Who can forget the advertisements on television and the leaflets that came through our doors? The level of sexually transmitted infection was then lower than it is now. The campaign and other information around at the time are credited with having played a part in that.
I would like the Government to launch another public awareness campaign about the dangers of unprotected sex. The campaign should focus on those most vulnerable to STIs and teenage pregnancy. Following the publication of the British Medical Association report in February, I tabled early-day motion 919, entitled "Sex and Death". It called for several measures, mostly those suggested by the BMA. One measure called for was for storylines in soaps watched by young people to feature STIs. Mersey Television should be congratulated. "Brookside" has had a storyline about Jackie Farnham and her ectopic pregnancy and the Ectopic Pregnancy Trust worked with the television company on that story.
I am even more pleased with Mersey Television for its storyline in "Hollyoaks", which has a younger audience than "Brookside". It concerned gonorrhoea and the consequences of unprotected sex. I am enjoying what is happening. Last night, I was interested to see which character was thought to have been the source of the infection. It is not always the usual suspects. The period that it takes to develop the storyline for such programmes means that it is unlikely that they carried them as a result of my early-day motion or even the BMA report. I also declare an interest as an unpaid founder trustee of the Ectopic Pregnancy Trust.
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The Department of Health has been running pilot screening programmes for chlamydia in Portsmouth and the Wirral. For the past 15 years, a massive campaign has taken place in Sweden to educate and screen the population. Chlamydia is now rare; it is about 3 per cent., down from 15 per cent., and there has been a reduction in ectopic pregnancies for all ages, most markedly in women under 30. It is those younger women whose ectopic pregnancies are most likely to have been caused by Chlamydia—although that is not the only cause of ectopic pregnancy.
The official view is that 50 per cent. of ectopic pregnancies are directly caused by chlamydia. That information from Sweden means that, for women under 25, almost all ectopics are due to a current or very recent infection. One in 100 pregnancies is ectopic. Thankfully, an increasing number are detected early and can be removed. In some such pregnancies, the foetus dies on its own. In all cases, however, there is damage to the fallopian tubes and the woman's fertility. Ectopic pregnancies kill up to 10 women a year and many result in emergency hospitalisation and a period of physical and emotional recovery for the woman. As well as the trauma caused by such a major operation, the fertility of women who have been hospitalised will have been seriously damaged.
Even a cold cost-benefit analysis of the cost of an education and screening programme, such as that in Sweden, compared with the later cost to the health service of ectopic pregnancy and other consequences of chlamydia supports the widening out of a screening programme to the whole United Kingdom. I ask the Minister to support an extension of the screening programme nationwide. As well as being good in cost-benefit terms, extending such a screening service fits with the philosophy of trying to reduce the number of health interventions and to move to a preventative health strategy.
I am grateful to Councillor Catherine Wilton from Reading borough council for passing me details of the recent report of the Office for Standards in Education on sex education. It showed that education about STIs is receiving less attention than in the past. Even though infections such as HIV remain a significant health problem, young people perceive it as less of a concern and that is contributing to the lack of use of condoms by those who are sexually active.
I am pleased that, as a result of the Ofsted report, my hon. Friend the Minister, who is responsible for public health, said
"sex and relationships education is most effective when it is taught in the context of relationships and values and is linked to contraceptive services that young people trust."
There is worry that that is not the approach being taken by all schools in Reading. Concerns have been expressed to me that some schools are teaching sex education in a mechanical way and not putting sex in the context of relationships, respect and the importance of contraceptive services.
In July 2000, the Department for Education and Skills issued guidance to schools on sex and relationships education. That provided guidance on the content of SRE, lesson plans and case studies. Work has also been taking place in Bristol on a programme that is targeted specifically at boys. The Department for

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Education and Skills has also been seeking to reduce the amount of prescription in the national curriculum where it can. However, it is accepted that some elements are taught in the national curriculum.
The current position with STIs means that the teaching and the content of the teaching of SRE should not only be the subject of guidance. Such education should be part of the national curriculum. I ask the Minister to talk to her colleagues at the Department for Education and Skills about making the teaching of sex and relationships education part of the national curriculum.
Finally, I am pleased to have been part of a Government who have published a draft sexual health strategy. That there was not one in place before is nothing to be proud of, but the BMA report shows the importance of achieving a national strategy as soon as possible. However, a strategy will do nothing unless we implement measures to tackle these problems in a practical way. I look to the Government with the hope that measures such as the ones for which I have called in this debate will be introduced. I want a national screening programme for chlamydia, better and more focused sex and relationship education, and a national education and awareness campaign such as the one launched in the 1980s. It is not about promiscuity or behaviour; it is about ensuring that if people are sexually active, they are safe, and about reducing the number of sexually transmitted infections and the consequential risk of damage to fertility or death.
I look forward to the Minister's reply and to hearing her answers to the points that I have made.
1.15 pm
The Parliamentary Under-Secretary of State for Health (Yvette Cooper): I congratulate my hon. Friend the Member for Reading, East (Jane Griffiths) on securing this debate and choosing to discuss something that is becoming such a serious public health issue. She mentioned in particular her concerns about chlamydia and teenage pregnancy and covered some of the wider issues relating to sexual health, including an information campaign. I want to try to respond to each of those points in turn.
My hon. Friend is right that the trend of increasing sexually transmitted infections is serious and needs to be turned round. That is why last year we set out the first ever national sexual health and HIV strategy. It follows the teenage pregnancy strategy launched three years ago and looks at sexual health across the board, but primarily in adults. The teenage pregnancy strategy already provides lessons from which we can benefit when looking at the broader issues surrounding adult sexual health.
Since the strategy was launched, there has been a drop of more than 6 per cent. in teenage conceptions in the past two years. There is still a long way to go, but that shows that it is possible to change outcomes. It is not a simple matter, as a number of complex factors are involved, but progress can be made. Tackling poor sexual health is an important part of addressing broader health inequalities. There is a strong link between social deprivation and sexually transmitted infections, abortions and teenage conceptions.
The reasons for the rising trend in sexually transmitted infections are complicated. Young people are at particular risk of catching STIs. There is some
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evidence of greater complacency in attitudes, but equally some evidence that condom use among young men has increased in the past decade. That is why it is important to link the work on STIs with that on teenage pregnancy. In planning for services, we must also recognise that the more that we improve testing and screening services, the more sexually transmitted infections we will find.
Lembit Öpik: On that point, the Minister will probably know that this is national condom week, sponsored by Durex—a campaign that I helped to launch in Cardiff. Will she welcome the message of that campaign, which is simply to say, in a non-judgmental way, "If you're going to have sex, make sure it's safe sex to avoid unwanted pregnancy and reduce the risk of getting a sexually transmitted infection"?
Yvette Cooper: Yes, I am aware of that campaign and I welcome work throughout the community to make people aware of the risks of unsafe sex, with its health and other consequences, and of condom use as well. I shall say a little more in a minute about the work that we are doing on an information campaign. We must also recognise that there are issues relating to HIV prevention too. Although our record on that compares well with that of other European countries, the level of new HIV diagnoses is still a matter of serious concern, with more than 4,000 new cases last year. Sex between men is still the predominant route of infection in the UK, but more than half of the new diagnoses last year were acquired heterosexually and it is estimated that more than 80 per cent. of those were probably acquired abroad. That is why the work of the Department for International Development in supporting HIV programmes overseas, particularly in sub-Saharan Africa, is so important and has so many repercussions in this country.
My hon. Friend the Member for Reading, East asked about a national campaign on the dangers of sexually transmitted infections. I agree that we should have a new national information campaign on the risks of such infections and the problems that can arise from them. We want to start a new campaign for young adults in the autumn and we shall start to invest in that campaign this year. We have already carried out some research into what might make a difference and looked at the national teenage pregnancy media campaign, which has a good evaluation with 70 per cent. of young people being aware of the campaign and having a good understanding of the key information being communicated. The teenage pregnancy campaign already includes information about sexually transmitted infections, particularly chlamydia, but we now need a broader campaign for young adults.
It is clear that the new campaign should not be a repeat of the fear-based HIV campaigns of the 1980s. They took place in a different context and in different circumstances. Evidence suggests that such an approach with the tombstones that we all remember would not work effectively if it were repeated today and that campaigns should be focused on the experience of young people today and the risks that they face. Such an approach must not be prudish or patronising if it is to work. The Government's role is not to tell people how

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to lead their sex lives, but to provide them with information about the risks of sexually transmitted infections so that they can make their own informed choices and understand the risks to their health.
We are planning to start the campaign in the autumn, although considerable work is already being done. However, we must continue to fund separate health promotion work for those most at risk of HIV and separate targeted work in local areas to try to reduce the rate of sexually transmitted infections.
My hon. Friend referred to improving sex education and mentioned the reports of the Office for Standards in Education and the British Medical Association on the importance of improving education in schools on sexually transmitted infections and HIV. Ofsted highlighted good practice and its report will be circulated to schools and local education authorities throughout the country because it sets out some of the issues that can make a difference and contribute to effective sexual relationship education, including matters such as inviting a local doctor to discuss sexually transmitted infections with students, providing a confidential health advice service in schools, and teaching in a context of relationships and not just biology.
My Department is working with the Department for Education and Skills to provide greater focus on sexually transmitted infections as part of the improvements being planned for sex and relationships education. The Ofsted report was commissioned as part of the teenage pregnancy strategy to try to drive up standards in sex and relationships education, but we must go further, including the commissioning of detailed practical guidance for teachers with lesson plans and good practice in education about sexually transmitted infections.
Ofsted also emphasised the effectiveness of specialist sex and relationships teachers and a programme piloting a new scheme to train and accredit such teachers will be available from the autumn through the healthy schools programme.
The issue is extremely serious. Many young women—equally, many young men—are simply unaware of the prevalence of chlamydia, or in some cases of what it is. Screening, as well as information, is important, as my hon. Friend said. Chlamydia is now the most common bacterial sexually transmitted infection in the United Kingdom, with as many as one in 10 young women infected in some parts of the country. Although it is easily treated with antibiotics, my hon. Friend is right to say that many cases are never diagnosed, and that untreated chlamydia in women can lead to pelvic inflammatory disease, ectopic pregnancy and infertility. Some estimates suggest that that costs the national health service at least £50 million each year.
That is why we have stated a commitment to a national screening programme for chlamydia. I agree that such a programme needs to be introduced and it will roll out to 10 sites later this year, supported initially by new investment of £1.5 million. It will build on the successful pilot study carried out in Portsmouth and on the Wirral. The programme will primarily target young women, but will also promote greater uptake of testing among young men.
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In future, we will rely on the development of new technology to make testing easier. Some interesting work has been done in partnership with the Ministry of Defence to provide new technology that allows much more rapid diagnosis of chlamydia. Using it, a simple urine test could provide results on-site within 40 minutes. That could lead eventually to a much more effective and rapid screening service that avoided the need for notification of test results by post and return visits for treatment. The project will be funded by a grant of £4.6 million during the next two years from the capital modernisation fund. It is an important and innovative example of cross-Government working, with technology developed for defence being used to improve NHS services as well.
My hon. Friend mentioned genito-urinary medicine services, which I agree face pressure from the rising trend in STIs. We are conscious of that and are considering related issues as part of the implementation of the sexual health strategy. We want to set out an implementation plan and some issues related to GUM services will be a critical part of that. We should also recognise the vital part that primary care trusts can play in implementing the strategy, by commissioning services from GUM clinics and others, and through earlier diagnosis. Primary care trusts could consider prevention, as well as providing and increasing services in primary care. They have a unique perspective across the community, hospitals and primary care, linking the NHS and local authorities, so they give us great potential to develop sexual health strategy in future.
My hon. Friend mentioned issues connected with the teenage pregnancy strategy, which has made some important progress, with a drop in teenage conceptions of more than 6 per cent. However, we need to go further. That partly relates to the same issues, such as improving sex and relationship education, building on the best practice that Ofsted identified and ensuring that standards can be raised across the board.
We must also build on the media campaign, which has so far been effective in terms of recognition, and on broader support for young people across the community by raising their self-esteem, and by providing them with alternative opportunities and information and advice about contraception. The number of youth clinics and health advice clinics for young people has increased by more than 20 per cent., which gives more young people the specialist support that they need.
As my hon. Friend said, there is no single solution for the problem, but action on a range of fronts—on information, services, advice. early diagnosis and improving treatment—can make an important difference. There is evidence of it having an impact in other countries and in other circumstances; and we need to recognise some of the international aspects. It is not something that one partner can do alone. The sexual health strategy is an important way forward. I congratulate my hon. Friend on raising those important matters.
Mr. Deputy Speaker (Mr. Nicholas Winterton): Order. The House congratulates the Minister on the speed of her delivery and the amount of information that she delivered.
We now move to the final debate, initiated by the hon. Member for Orkney and Shetland (Mr. Carmichael).

Public Service Obligation Orders
1.30 pm
Mr. Alistair Carmichael: I am delighted to have secured this debate, which is the first that I have secured in Westminster Hall. I am especially pleased that the Under-Secretary of State for Transport, Local Government and the Regions, the hon. Member for Plymouth Devonport (Mr. Jamieson), will reply. I know that he has some Shetland antecedents and that his portfolio includes many of the reserved transport matters that remain of great interest to me and my constituents. I hope that he will find time to return to his roots and visit Shetland, where I assure him of a warm welcome. Shetland is famous—some might say notorious—for its hospitality. Indeed, if he brings with him a public service obligation order, I can offer him more than a warm welcome—I can assure him of a hero's welcome.
I have spoken in this Chamber before about my obsession with transport. It is an obsession for which I make no apology. If one lives in an island community, as I do, transport is crucial to everything: get that right and just about everything else will fall into place. Since 1997, the Government have placed great emphasis on the need for social inclusion. We in Orkney and Shetland regard air services and the provision of transport services as a matter of social inclusion. Social inclusion is as important for a peripheral island community as it is for a peripheral housing estate in Glasgow or Edinburgh.
Let me give a few examples of our transport arrangements. The ferry alternative to air services to Shetland is a 14-hour overnight journey from Shetland to Aberdeen. From Orkney, it is a two-hour ferry journey to Scrabster, and from there to Aberdeen is at least a four-hour car journey-I have done that, so I can tell hon. Members that four hours is pushing it slightly. In that context, air services are crucial.
The return ticket that I bought in Orkney for this week's journey to Westminster cost £528 plus taxes. I can say that without blanching and without needing to sit down because it is paid by the Fees Office. If I had to use my private or my business income to pay for it, I would be rather less sanguine about that sort of expenditure. The Minister can doubtless imagine how it is when, for example, a family suffers a sudden bereavement and has to fly south at short notice. The myriad conditions, such as having to fly on a Saturday, would result in the family not being entitled to cheap fares. Constituents have recently come to my surgery saying that it would cost in excess of £900 for two or three members of a family to attend a family funeral in Glasgow.
There is a massive knock-on extra cost for the provision of health services on the islands, because specialist services are increasingly provided from Aberdeen and Inverness. In education, the provision of orchestras or sports services or any extension of interest in drama involves travelling away from the islands. Doing that in a reasonable length of time is dependent on air services.
I hesitate to speak of rugby clubs in your presence, Mr. Deputy Speaker, but there is a fine one in my constituency. Orkney rugby football club is striving to
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get into Scottish national division four. For a community of our size, that is a considerable achievement. We have a budget of £40,000 a year to run that club. I hazard a guess that there is not another rugby club in the country that cannot pack the first 15 into four cars and drive them wherever they need to go. That is the extent of the burden that is placed on us, whereas many communities on the mainland take ease of travel for granted.
The constant threat to communities such as those that I represent is that of depopulation. To make those communities attractive so that people move to them and stay in them, they must be made accessible, but if one speaks of subsidising air routes, state aid rules come into play. The Minister will be aware that derogations, through the provision of public service obligation orders, are allowed under European Union law.
The European Commission's third package of air transport liberalisation measures was adopted under Council regulation 2408, which trips very nicely off the tongue, in 1992. That regulation contains provisions under article 4 that permit the imposition of a public service obligation on scheduled air services within the European Union. Under the regulation, member states have the legal authority to impose a PSO in respect of scheduled air services on routes serving peripheral and development regions within their jurisdiction. The rationale for imposing a PSO should be based on the consideration that the maintenance of regular air services is vital for the economic development of the region in which the airport is located.
Furthermore, a PSO should be imposed where adequate provision of air services in terms of continuity, capacity and pricing would not be possible if air carriers considered solely their own commercial interests. That is very much the case in the highlands and islands. In selecting routes for PSO designation, member states are required to incorporate public interest considerations in addition to an assessment of the adequacy of services provided by alternative modes of transportation. A service that charges £528 plus taxes for travel between Orkney and London could not, within any reasonable definition of the term, be described as adequate.
I will examine briefly the experience of other countries within the EU that impose PSOs on domestic routes. The first example is that of France, where 46 domestic routes are subject to PSOs. The remarkable thing is that they are largely within France itself they do not serve only island communities. A lot of them operate out of the big Paris airports. Some 18 of them have been imposed on links with Corsica, and the most expensive fare that I have been able to find linking Paris with Bastia or Calvi on Corsica is £84.
In Italy, there are PSOs on routes between Sardinia and Milan and Sardinia and Rome. The Cagliari-Rome route has eight round trips per day and the maximum one-way fare is £41. Sardinia has a much more robust economy than either of the two communities that I represent, but the Sardinians are supported by their central Government because they are valued by them. Sadly-this is not a comment on the present Government-Governments for time immemorial have failed to place a proper value on peripheral and island communities such as Orkney, Shetland or the Western Isles.

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In Portugal there are PSOs on 10 domestic routes, four of them linking Lisbon or Oporto with the Azores. In 1999, the total subsidy was £16.9 million and 1.4 million passengers were carried. Again, we see the sort of community that is subject to all the conditions that are attached to PSOs by the EU and that is able to have PSOs placed on it. One has to wonder why, if we are all supposed to be on a glorious level playing field in the EU, people living in island communities in Italy, France, Spain and Portugal are given that sort of treatment by their Governments but we are not.
It is not, however, all about cheap fares. Fares are the most easily identifiable issue about which constituents who approach me speak most animatedly. With PSOs, there are all sorts of possibilities. With them comes the opportunity to stipulate minimum service standards, the size and nature of the aircraft that is to be provided, the seating capacity and the timetabling people can leave the island for the mainland at a time of day that is useful and that will allow them to return when they have completed their business.
The penalties that can be imposed for noncompliance with a PSO are also of great importance. Many of the benefits that I see in the imposition of PSOs stem from the fact that at present we are greatly dependent on our air services, yet we have little control over them. I pay tribute in particular to Loganair, which operates the British Airways franchise to Orkney and Shetland. The company is meticulous about keeping me and my colleagues in the Scottish Parliament informed about what it is doing and how it feels the service can be better operated. That is because it chooses to do so. If it chose not to, I could do nothing about it.
For something that is so important to many aspects of island life, that measure of local control is absolutely essential. We already have some experience of PSOs, as all the internal flights within Orkney and Shetland operate under them. Until recently in Orkney, that was limited to a handful of flights. However, the difference that the operation of PSOs made to communities like Papa Westray and North Ronaldsay was immense. It gave them the confidence to attract and keep people in those vulnerable communities. What happens to North Ronaldsay today will happen to mainland Orkney in five or 10 years and, no doubt, to the rest of the highlands and islands in 20 years. If we allow that constant drip of depopulation, we shall eventually find that we are all living in London-and heaven help us when that happens.
It is probably awfully poor form to refer to one's maiden speech, but I cannot help recalling time and again something that I said when I first came to the House-that I come here to represent communities that are proudly self-reliant. We are not subsidy junkies; we have a great contribution to make to the rest of the United Kingdom, not least that which flows through Flotta and Sullom Voe in the form of revenue to the Treasury from the oil industry. We have a lot to offer. The strength of the United Kingdom comes from the diversity of its communities. There is an obligation on central Government to ensure the survival of the widest possible range of communities. If communities such as
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Orkney or Shetland, or even the smaller ones such as North Ronaldsay or Papa Stour, Papa Westray or Graemsay, are depopulated, we shall all be the poorer.
I am conscious that I have spoken for almost 15 minutes. I am keen that the Minister should be allowed as much opportunity as possible to give a full exposition of the Government's thinking. Perhaps, in the course of that, he might be kind enough, if I conclude my remarks now, to allow me the occasional intervention.
Mr. Deputy Speaker (Mr. Nicholas Winterton): I call the Minister, who is a very regular contributor to debates in Westminster Hall.
1.45 pm
The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Mr. David Jamieson): I congratulate the hon. Member for Orkney and Shetland (Mr. Carmichael) on having secured the debate and on the sensible and clear way in which he has presented his case. The proud and self-reliant people of Orkney and Shetland can be proud that they have a good advocate. He is a doughty fighter for them, and may be for many years to come. I also congratulate him on having mentioned my antecedents. More than a century ago Magnus James Jamieson left Shetland to find his fortune in England. I could not have moved further away-in Plymouth, I am about as far as one can be in the United Kingdom from the Shetland Isles.
Mr. Deputy Speaker: Bar Solihull.
Mr. Jamieson: Thank you, Mr. Deputy Speaker. Given the peripherality of the constituency of the hon. Member for Orkney and Shetland, it is hardly surprising that he should be such a forceful advocate for good transport links between island communities and the mainland and I am aware that he spoke in a debate on rural and island transport on 8 January. At that time, he said that the chance to discuss island issues in the House is rare, so I am sure that he is glad to have had an opportunity to put the spotlight on the concerns that he has raised for Orkney and Shetland today.
As the hon. Gentleman has pointed out, the ferry journey from Shetland to Aberdeen takes 14 hours and it is, I believe, quite a rough one at many times of the year. No one can doubt that air transport is the only means of transport capable of providing the adequate links to the mainland that are essential to ensure the economic and social well-being of island communities. I can well understand the concern that those services should be reasonably priced and within the means of ordinary people.
Perhaps I can begin by setting out the regulatory framework that governs the air transport market and the extent to which Governments may intervene in it. There is a fully liberalised air transport market within the European Community. That means that Governments are not at liberty to interfere in the operation of the market. However, the European law that establishes the single air transport market recognises that special provisions may be necessary to maintain adequate services to regions. It therefore creates the ability for Governments to intervene in the

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operation of the air transport market by imposing PSOs. A PSO is an obligation imposed on a carrier to provide a set level of service on a particular route to ensure that the service satisfies fixed standards of continuity, regularity, capacity and pricing. The aim of a PSO is to ensure the adequate provision of scheduled air services to such standards, responsibility for which air carriers would not assume on a commercial basis.
The regulation empowers member states to impose a PSO in respect of scheduled air services on a route serving a peripheral or development area or on a thin route to any regional airport, where such a route is considered vital for the economic development of the region in which the airport is located and where an adequate standard of service would not be provided by carriers having regard solely to their commercial interest.
The hon. Gentleman was kind enough not to mention it, but one of the other links in the country is between Plymouth, Cornwall and London, which has some of the features that he mentioned. It is a different circumstance but has a similar effect for the people in my area.
The adequacy of standard of service is defined against criteria contained in the regulation, including public interest, the availability of other forms of transport, air fares and conditions for users, and the combined effect of all carriers operating or intending to operate on the route. A member state may, therefore, impose a public service obligation on any route that meets the criteria stated in the regulation.
I should make it clear that imposing a PSO does not in itself subsidise the service, although a route must be subject to a PSO before any subsidy may be paid. When the PSO has been imposed on a route, provided that no carrier has commenced a scheduled air service on that route in accordance with the PSO, the regulation allows the route to be restricted to a single carrier, subject to an open competitive tendering and for remuneration of operating losses incurred by the carrier selected to operate the route.
The Government's overriding policy since the inception of the liberalised air transport market in 1993 is not to intervene in the market unless it is felt absolutely necessary. We consider that the level of air fares is a commercial matter for airlines. The airline takes several factors into account when setting fares, such as the effect that fares would have on the volume and need to maximise capacity.
Mr. Carmichael: That is a fair statement of Government policy, and that of the last Conservative Government, but does the Minister understand the frustration that is felt in the isles when we see other Governments in the EU taking a much more interventionist approach to PSOs? Why should we not be given the same opportunities as others?
Mr. Jamieson: I can assist the hon. Gentleman on that matter. For a PSO to be placed on those routes, the Scottish Executive would have to make an approach to my Department, perhaps jointly with the local authority for the area. The Scottish Executive would have to take
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into consideration any financial implications. As yet, however, we have not had an approach from the Scottish Executive or the local council.
Mr. Carmichael: I am reluctant to ask the Minister to speculate. but could he give us a general steer? If such an approach were made, is there any reason why we should not take the same route as that taken by other EU countries?
Mr. Jamieson: Obviously, the United Kingdom Government will interpret the regulations in our own way. However, I shall move on, as what I am about to say may help the hon. Gentleman.
The exceptions to the policy of non-intervention are economically vital lifeline services that would not be commercially viable without subsidy. In such cases, the Government provide subsidy in accordance with the PSO provisions. As the hon. Gentleman will be aware, there are several lifeline air routes in Scotland, which are considered essential to the economic and social welfare of remote communities. The subsidised services include a number of inter-island Orkney and Shetland services, as well as other routes serving the highlands and islands. That shows the commitment of this Government and previous Governments to providing PSOs when it is deemed appropriate.
Aviation safety and regulation are reserved matters. My Department has overall responsibility for UK aviation policy and, therefore, for administering policy on PSOs. However, the Scottish Executive have day-to-day responsibility for considering applications for PSOs within Scotland and for overseeing their imposition, consulting my Department when necessary, especially on new applications. In the case of inter-island routes, the Scottish Executive work closely with the islands councils on their PSOs.
The Scottish Executive have, in the past, provided their full support to the local islands councils in their imposition of PSOs on Orkney and Shetland's internal air services, and they will continue to support the councils when the contracts are renewed.
I want to discuss assessments of the air services from Orkney and Shetland to the mainland against the criteria used for imposing PSOs. All that the PSO can do is specify standards of service that air carriers would not assume if they were solely to consider their commercial interest. If one or more carriers were able to meet those standards and already operated without subsidy, there would be no case for a PSO under our interpretation of the criteria.
I understand the issue raised by the hon. Gentleman about high fares, but costs are inevitably higher per passenger on low-volume routes than on highly packed traffic routes. However, for the Government to impose a PSO on a commercially viable service would mean overriding the long-standing policy of non-intervention other than when the market fails. It would set a precedent that could lead to requests for PSOs on many routes on which fares were perceived to be too high. One from my part of the country might be discussed at that time. The Government do not believe that such an approach would generally be helpful.
Mr. Carmichael: I feel that the Minister makes a bald statement when he says that such an approach would

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not be helpful. I would not deny the people of the southwest of England the opportunity for cheap air travel although, given the availability of road and rail links, I suspect that other considerations would be applied there.
Does the Minister not understand that the distances involved and the reliance on air travel make the case for a PSO compelling? Is there any point in the Scottish Executive approaching his Department to ask for a PSO on, for example, Aberdeen-Kirkwall and Aberdeen-Sumburgh if the policy that his Government pursue is, as he says, one of non-intervention?
Mr. Jamieson: As I explained, it is not entirely a matter of non-intervention, because several routes already have PSOs. Routes have to meet the criteria as we interpret them within the European Union. I was not trying to draw direct comparisons between the southwest and Scotland. I appreciate that there are considerable differences, such as the distances and the hard stretch of water between the mainland and those islands.
The hon. Gentleman asked whether there would be any point in the Scottish Executive approaching my Department, but that is a matter for the Scottish
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Executive to decide. That is what devolution is all about. It is not for us to tell the Scottish Executive or the islands council what to do. The Scottish Executive and the people in his locality have to analyse and assess whether the case is worth their consideration, bearing in mind that it could have continuing financial obligations. They would not ignore such obligations, which would probably fall on them.
We feel that we have to interpret the regulation as we think appropriate, but pursuit of the case is up to people locally. The devolved Parliament could make the approaches if it thought that appropriate. Should such an approach be made, we would carefully consider it within our policy framework. If the hon. Gentleman wanted to pursue the case, that would be his first port of call. My officials are in regular contact with colleagues responsible for transport in the Scottish Executive. We would be ready to respond quickly to any changing circumstances on the routes.
I understand the hon. Gentleman's points, which he made clearly. If circumstances change, we will respond. Should the Scottish Executive make an approach to us, it will be considered with great care, especially in the light of his arguments.
Question put and agreed to.
Adjourned accordingly at one minute to Two o'clock.