Westminster Hall Sitting of 9 December 2003

Preamble
[MR. EDWARD O'HARA in the Chair]

Post Office Closures (Wales)
Motion made, and Question proposed, That the sitting be now adjourned. [Margaret Moran.]
9.30 am
Llew Smith: My constituency has some of the worst deprivation problems in any part of Wales and many parts of the United Kingdom. We have the highest incidence of disability and some of the worst health problems, including heart disease, respiratory disease, cancer, emphysema, pneumoconiosis and so on—you name it, we have it in abundance. We have among the lowest incomes and the highest unemployment, as well as one of the lowest levels of car ownership in any of the valleys throughout south Wales, combined with poor public transport. Where there is public transport, it almost invariably does not cater for disabled people, whom we have in abundance in our community. We have an ageing population, but also a considerable number of lone parents. In recent years, we have seen the collapse of the manufacturing industry; prior to that, the policies pursued under Tory Administrations during the Thatcher years wiped out the coal industry. Disadvantaged groups of people are particularly dependent on a vibrant post office service. It is reasonable to assume that the Post Office, working in conjunction with the Government, could find ways to strengthen the service to meet the demands of such people, but instead of a process of reinvigorating the service in our communities, it has embarked on a mass closure programme.
It is almost impossible to discuss the matter with the Post Office, even during periods of consultation. Mr. Barrett, who is responsible for the closure programme, says that we do not understand because we are simple folk, but that the Post Office is not in the business of closing post offices. He says that the Post Office has drawn up a network reinvention plan. I do not know what berk thought up that description, but if it is a network reinvention programme it is an insult to the people in my community. I anticipate that when senior citizens go to what was their local post office and see that the doors and shutters are closed, they will protest at the closure, but the Post Office will accuse them of being stupid and of little intelligence, and Mr. Barrett will proclaim that the post office has not closed, but has become part of the network reinvention plan.
The Post Office is telling people in my community that they have nothing to worry or complain about. I suspect that it wants to be thanked for its initiative and for devastating the postal service in my community, but, thankfully, the people in my community are more intelligent than that. They know better and they have the courage and good sense to raise their voices in protest, as they did yesterday at a demonstration when Mr. Barrett visited the Welsh Assembly, and as they will
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this afternoon when Mr. Barrett is dragged into my valley to meet the local authority. He will receive a traditional valley welcome—a welcome in the hillsides—when he visits Ebbw Vale and its local authority this afternoon. People are coming out in their hundreds and thousands to express their discontent and opposition at public meetings, demonstrations and in letters. You name it, local people have done it.
Mr. Wayne David: Has Mr. Barrett or another senior representative of the Post Office taken the trouble to go to all the post offices that the Post Office wants to close in Ebbw Vale?
Llew Smith: When we were demonstrating at the Welsh Assembly yesterday, one constituent had a placard stating: "We seek him here, we seek him there, we seek Mr. Barrett everywhere." This is a serious point: even during a period of consultation the only way in which we can have discussions with Mr. Barrett is to seek him out. If the consultation were real, he would show respect to the community by visiting it and becoming involved in dialogue with it. The answer to my hon. Friend's question is no, Mr. Barrett has not visited my community or spoken to the people in it.
Mr. Barrett wants us to believe that there has been consultation, but that is another insult to our intelligence, because when he did visit the constituency, he came to speak to postmasters and postmistresses. After those discussions and negotiations, a closure programme and redundancy package for those postmasters and postmistresses was agreed. If Mr. Barrett was serious about consultation, he would not have met the postmasters and postmistresses first and agreed a redundancy package. He would have gone into the community, consulted people and got involved in public meetings and dialogue and, after listening to people's concerns and ideas about the future of post offices, he would have gone back, drawn up plans and then discussed those plans, the future of the post offices, redundancies and so on. However, that has not happened. The reverse has happened.
Mr. Barrett is the person responsible, but he refuses to take part in public meetings, which is a vital part of the consultation process. We have had public meetings that hundreds of people have attended. There was one at the school in Willowtown a couple of nights ago: the school hall was full and people were queueing along the corridors to get into the meeting. That is just one of many examples highlighting local people's concern about the closures.
We are a few days from the end of the so-called consultation period, but I saw Mr. Barrett for the first time on Sunday, when he addressed the nation and said that the people of Blaenau Gwent and elsewhere had nothing to fear. That is an insult. People have been trying to get their ideas over but have been unable to meet Mr. Barrett. The first lime they saw him was via the television screen on Sunday. Yesterday, he came to the Welsh Assembly, and busloads of people came from my community to express their concern. When he turned up, he and his representatives asked me in which committee room the meeting was being held, because he wanted to read out a statement to representatives of the

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local community. I told him that he would not be in any committee room or making any statement to the representatives because busloads of people were heading south and he was expected to become involved in a dialogue. After much argument, he said that he would read out his statement and listen to questions and then think about them when drawing up his final plan. I said that that was not good enough because people had come to the Assembly and they, unlike him, had shown an interest in the post offices, so he must not only listen to people's concerns but address them and do so now. Eventually he did that, because he realised that the occasion was a public relations disaster. We were using his tactics—broadcasting to the nation and expressing our concern about the closures and the tactics of those responsible for the consultation document.
The local community had the good sense to realise that the occasion had nothing to do with consultation but was mere spin. It was a public relations stunt, a sop to appease local people and to give them the impression that their views were important and will be listened to and responded to positively. I, as the Member of Parliament for Blaenau Gwent, am not the only one to express concern about the consultation. The Under-Secretary of State for Wales, whose Islwyn constituency neighbours mine, put out a press statement some weeks ago, and I had a conversation with him this morning in which he declared that the consultation process in his constituency was a sham and a fraud. When local people tried to meet Mr. Barrett to propose alternatives to the closure programme in Islwyn, he refused to meet them, which is surely unsatisfactory.
People recognise that the closure programme in Blaenau Gwent is the first stage and that more closures will follow. If anyone is in any doubt, they should read the Post Office statement:
"If our proposed changes go ahead, we cannot guarantee that there would not be further changes."
Yesterday, I spoke to my hon. Friend the Member for Wrexham (Ian Lucas), who told me about his community's experience. In that case, the Post Office tabled a consultation document proposing closures while saying, "Not to worry—although this particular post office is closing, there is another one down the road that local people can use." The Post Office then closed not only the first post office, but the alternative post office as well. What happened in Wrexham will almost certainly happen in Blaenau Gwent.
The Post Office plans to close seven post offices—one in Tredegar and six in Ebbw Vale. On top of the problems that I have mentioned, Ebbw Vale has been devastated by the closure of the steel giant Corus. With the knock-on effect of those job losses, some 1,500 jobs have gone in that small town—and not any old jobs: by the standards of working people in Blaenau Gwent, they were good, well paid jobs in a plant where the trade unions had a positive involvement. Tredegar was also devastated by the closure of the steel plant. Both Ebbw Vale and Tredegar have been hit by further closures, including the other two main manufacturing companies in the community, Bosal and Faurechia. By
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the standards of Blaenau Gwent, those companies paid good money and provided the kind of jobs that we need in our community. To make matters worse, six of the seven post office closures are in Communities First areas, where there is the greatest deprivation. We have not replaced the jobs lost with similar jobs. Those communities have not recovered from the closure of the coal industry. Too many low-paid, part-time, nonunion, unskilled, soul-destroying jobs have been created in my constituency in recent years. While the Government are trying to reinvigorate and save the communities of Blaenau Gwent, the Post Office is delivering us a body blow—indeed, it is delivering us seven body blows.
The Post Office has not shown us the respect of bothering to carry out research into the closures. It has invented public transport: for example, Mr. Barrett says that Willowtown post office is served by excellent public transport and that he knows, because he has been there, that there is a bus stop outside the post office. I have been there, and there is no public transport—there has been no public transport for the past 16 years. In order to con people and the Government into supporting its plans, the Post Office has invented public transport. In addition, the Post Office's plans, which are based on a map, give the impression that Blaenau Gwent is flat. I have not got a PhD in geography—we are humble folk—but I know that the community is not flat. The community is based on valleys because the area is mountainous. When I read the report, I was reminded of how the ambulance service drew up plans to change its service in Blaenau Gwent when in reality it wanted to close one ambulance station. Its plans, too, were based on a map. We had to remind the service that although A was three miles away from B, there was a mountain in between them. It could not comprehend that and neither can the Post Office.
In Blaenau Gwent, as in other parts of Wales and the United Kingdom, if the post office closes, the local shop closes because the two are linked. In communities such as Cefn Golau, if the shop closes there is no other facility because the estate is on the side of a mountain. The tragedy is that the council, which works in conjunction with the Assembly and the Government, is trying to reinvigorate those communities to give them hope for a better tomorrow, but the only facility on the estate, a post office linked to a shop, is obviously going to close. The Post Office does not take that into account.
The Post Office also fails to take into account the lack of public transport to travel to alternative post offices. It does not consider how often services run. what facilities there are for the disabled, the cost of public transport, the low level of car ownership in Blaenau Gwent, the cost of using an alternative taxi service, deprivation in the area and the difficulties many people would have in travelling to an alternative post office. The topography of the area is difficult because it is mountainous, and Mr. Barrett should know that the area is not flat. People who are disabled or suffering from poor health will be worst affected. The age of the population is also important.
We must remember that the post office is not like any other shop. In every public meeting we hold, a senior citizen always gets up and reminds us that the post office is not just a shop. It is a community meeting place that

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offers the only opportunity that some senior citizens get each week to communicate with someone else. That is sad, but it is a fact of life. When people go to the post office, they are not just going to buy a stamp or to collect their benefit; they go to meet friends and to share news, gossip, ideas and many other things. When a post office closes, it is more like a school closing than a shop closing, because the heart of the community goes with it. While we are trying to defend our communities, the Post Office is helping to devastate them with its plans. The Post Office's policy contradicts the Government's policy to increase community cohesion and to decrease social inclusion. Closing a post office denies senior citizens and others their meeting place.
Linked to that is a point that a home carer made to me in a public meeting. Home carers have a particularly important role in our community because of the age of the population and the incidence of disability and health problems. I was told that when carers visit a client they are allocated perhaps 30 minutes to carry out, or to attempt to carry out, the tasks necessary to ensure that that person has a little dignity in their life. If the local post office closes, carers will be expected to go to an alternative one, perhaps a mile down the road, to pick up the benefits or stamps needed, and by the time they return, their allocated time will be gone. The real reason for a home carer going to a home to see a client will then not be fulfilled. Carers will be forced to spend the time carrying out tasks that are vital to the people concerned, but that do not come within the carers' remit.
We must recognize—this is the point that I am trying to convey—that the Post Office is not simply a commercial organisation. It is a service. Places such as Blaenau Gwent, which are particularly deprived, have traditionally been more dependent than most on public services. The Communication Workers Union has made several proposals that I support because they would help the situation and help to prevent the closure programme. The proposals include one that
"The operation of the Customer Conversion Centre should cease as soon as possible. Instead customers should be allowed to open Post Office card accounts directly across the counter of their local Post Office."
It seems crazy that people can open bank accounts over the counter, but cannot open Post Office card accounts over the counter. The linked complaint that we hear is that in order to have benefits paid in the post office, people have to ring a number, but almost invariably that number does not work, or it takes a lifetime for the call to be answered. Again, that acts as a disincentive to having a vibrant post office service. The CWU says:
"Details of the Exceptions Service should be published without delay. The necessary steps must be taken to ensure that all Government Departments deliver a positive, consistent and focussed message to customers in relation to the card account. Pressure on key high street banks should be increased to ensure that their current accounts may be accessed at Post Offices."
The union demands that
"A comprehensive independent research programme should be initiated to ensure that the concerns of the central stakeholders are thoroughly investigated. A Direct Payment Forum, comprising representatives of all the key interested parties, should meet regularly to discuss the implementation of the new system and to develop policy as appropriate. All possible actions to reinforce the
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viability of the Post Office network should be taken. If the Post Office is serious about consultation, it will respond positively to the voice of the people."
Everyone in our community has opposed the closure programme: the community and borough council, I as a Member of Parliament, Peter Law as the Assembly Member, 100 per cent. of the local population and 100 per cent. of the organisations that make up the communities of Blaenau Gwent. Yesterday we met the Secretary of State for Wales and the Under-Secretary of State for Wales. Both have stated, privately and publicly, on the television, in the newspapers and on the radio, that the case for withdrawing the closure programme in Blaenau Gwent is "unanswerable". They have demanded that the consultation period, which is due to finish in a few days, be extended. As I have said, it has been a sham.
Mr. David: My hon. Friend has referred to the excellent co-operation between him and Peter Law, the Assembly Member for Blaenau. Gwent. Can my hon. Friend say whether the Welsh Assembly Government have considered the situation in Blaenau Gwent and come forward with any suggestions to improve matters?
Llew Smith:I believe that there was a debate in the Assembly about a week ago. I do not think that any kind of policy statement was agreed on, but I do not know of any Assembly Member who supports the closure programme. I suspect that we have 100 per cent. support across the political parties. However, we do not want to make this a party political issue.
The only organisation with which we have problems is Postwatch. Postwatch rang me on Friday, asking me to return the call. which I did. The Postwatch representative—I think that it was Dr. Kelly Cryer—asked me whether I would like a briefing on the closure programme. I said, "Look. I don't want to be nasty; it's Friday, so let's be nice to one another. I do not wish to sound arrogant, but I am an expert on this subject, and the people whom I have the privilege to represent are even greater experts than I. We don't need a briefing paper; what we want is support." I asked Postwatch, as a body that represents the customers, what it had done, adding that I assumed that it had registered its objections to the closure programme. The representative said, "Well, no, Mr. Smith, what we are doing is conducting research". Postwatch, which is supposed to represent the customer, is still doing research even though the consultation is due to close in a few days' time. When 100 per cent. of customers oppose the closure and all the representatives from the community council to the Secretary of State oppose the closure, what have we got from Postwatch, the body that is supposed to represent customers? It is still carrying out research. I said, "Don't bother; I have got all the research and I will continue talking", but I do not think that Postwatch was particularly impressed. I had another meeting with its chairman, but things repeated themselves. Postwatch must do its job of representing the customers. If it does not, the Government should examine its role and consider abolishing it and replacing it with a body that really represents the customers.
Mr. Bill Wiggin: I congratulate the hon. Gentleman on gaining this debate, which is

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extremely important. As he is an expert, can he give us his opinion on why the Post Office, which was making £50 million a year profit, has during the past six and a half years moved towards this closure programme? What does he think has changed?
Llew Smith: I do not know whether that was meant to be a party-political point, but anyone who knows me knows that I do not always toe the party line. When the Government are right, I say so and vote accordingly; when they are wrong, I say so and vote accordingly. The first thing that I recognise is that post offices were closing prior to any plans from the Government. I also admit—I have said this already—that some of what the Government have done has not helped the situation. In fact, the reverse has been the case. I have no problem with telling the Government that they are wrong in certain instances. However, the problem we are discussing is the result not only of Government policy but of Post Office management. We have a Post Office management that is treating our community with utter disdain, that refuses to come to consult the community over one of our essential services, and that either does not understand the service or. if it does, treats it with disdain.
The community, like my speech today, has come to the end of the line. We shall continue to voice our protest. This afternoon at 2 o'clock, or half-past, there will be a demonstration outside the council offices in Blaenau Gwent. I am sure that our friends in radio and television will ensure that that message gets across to the people of Wales prior to the demonstration.
9.58 am
Hywel Williams: I congratulate the hon. Member for Blaenau Gwent (Llew Smith) on securing the debate and pay tribute to his concern for his constituents and for the standard of public services in Blaenau Gwent and throughout Wales. I assure him that there is cross-party support for him and his constituents on this matter.
As we know, the hon. Gentleman's constituency suffers from intense poverty and has seen a succession of proposed post office closures. I salute the community's response of pulling together to oppose the proposals, and the eminently reasonable proposals put forward by the Communication Workers Union.
Without doubt, lack of access to good services is a major component of poverty. Securing good access is a major step in poverty relief and, hopefully, poverty eradication. That is clearly the case in rural areas, such as the one that I represent. The hon. Gentleman might not be the biggest fan of the National Assembly for Wales, but I am sure that he will join me in valuing the Assembly's commissioning of the Welsh index of multiple deprivation, which measures poverty in a much more sensitive way and includes access to services as one of its indices. As a consequence of that, the National Assembly for Wales has identified certain wards in rural areas-especially in my constituency and others in the north and west—which were previously disregarded, as
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being in poverty. Access to services was one of the reasons why those wards were so identified. I hope that the change in the indices used to identify poor areas is a spur to Government action. I know that it has been to some extent in Wales, and one would hope that it might be a spur to the Post Office as well.
However, that index could be revisited in a creative manner to respond in a more sophisticated way to the geography and the social organisation of communities in the valleys. We should consider what is defined as "urban". Currently that definition applies to communities of more than 10,000 people. A post office might be just a mile away up the valley, but that valley might contain a series of villages that are physically joined, but are separate in social terms and in relation to ease of access—for example, as the hon. Gentleman has pointed out, they may be separate in terms of access by public transport. That might not be apparent to a manager sitting in an office many miles away, poring over a map.
I shall give the House an example of such geographical genius. About three years ago, when the Welsh Affairs Committee was taking evidence on social exclusion in Wales, we had a submission from one of the major banks explaining that there was a branch only four miles away from the branch that it intended to close. Indeed, as the crow flies it was four miles away, but people are not crows. In order to get to that branch, people would have had either to travel many miles down the valley—by public transport if they could find it—and many miles up the other valley, or climb over the mountain. Managers examining maps many miles away are not the greatest experts on the social organisation of valley communities.
Therefore, I ask the Minister what considerations are taken into account when a post office is scheduled for closure. Is it a purely commercial decision, or do the Government—a socialist Government—ensure that social considerations play a part? What consideration has been given to the effect of Government policies? The hon. Member for Blaenau Gwent has already noted the effect of benefit payments. Are such considerations taken into account or is the decision taken by the Post Office a purely commercial one? On the evidence that I have seen in my constituency and elsewhere, the Post Office seems to be operating on a purely commercial basis.
Lembit Öpik: Is the hon. Gentleman aware that 13 million people use their local post offices to collect their pensions or benefits each year? That figure has decreased from 18 million in 2000, so 5 million customers have already been lost.
Hywel Williams: That is a highly significant fact. I am aware of the difficulties that some people face—or think that they face—in ensuring that payment is made over the counter. My colleagues in Scotland in the Scottish National party have led strong campaigns to ensure that such services are retained if that is at all possible.
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): Is it not the case that people can still claim their benefits over the counter in the post office?
Hywel Williams: In my experience, from talking to my constituents, the least simple method of acquiring

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benefits these days seems to be having those benefits paid in cash over the counter. It might be a debate for another time, but some people think that it is extremely difficult to access that sort of service and they are encouraged to find other ways of accessing it.
To return to my point about commercial considerations, I would say that it is inappropriate for only such considerations to be taken into account when local post offices close. Local communities have a responsibility in that regard. How should we respond to closures? We should oppose them to the best of our ability. The people of Blaenau Gwent are clearly taking their future into their own hands and I salute them for doing that.
In my constituency, Caernarfon, very few rural post offices have closed, and none at all have closed recently. I know that local community councils and the country council in my area have done their best to ensure that that continues in the future, but we need to offer practical alternatives. In my constituency, successful local small businesses have grown around the post office due to the resourcefulness of local people. There is a post office in my constituency, the West End post office in Pwllheli, where two young people have been able to acquire sufficient capital and have shown great enterprise and vigour. They have become a vital part of the local community by dint of their very hard work.
I also draw the House's attention to the long tradition we have in Wales of co-operative enterprises. The village hall in Mynytho in my constituency was built during the darkest days of the economic depression and saluted by the poet Robert Williams Parry, even though it was built during a period of poverty. If I could beg your indulgence for a moment, Mr. O'Hara, I shall quote a brief stanza:
"Adeiladwyd gan dlodi—cariad
Nid cerrig yw' meini
Cyd-ernes yw'r coed arni
A chyd ddyheu a'i cododd hi".
That translates as:
"Built in poverty
Love is its masonry
Co-operations its timbers
Raised by our longing".
It was built at a time when the community was on its knees, but its spirit was unbroken. That is an example of the community pulling together in the most difficult of circumstances.
There are other notable examples in my constituency and in the village of Llanfrothen, which is in the constituency of my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd). I draw the attention of the House to Antur Aelhaearn, which was set up as a village co-operative in the 1970s. A producer co-op that, as far as I can tell, was set up without any significant state aid, it was promoted by a local GP and provided employment and important social regeneration to the dispersed local area of Llanaelhaearn. More recently—perhaps this is more appropriate to the debate—in the village of Llithfaen a local co-op has purchased the village shop and post office and has gone on to purchase the village pub. Llithfaen has one of the few co-operatively owned village pubs in the UK—certainly in Wales—and very
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good it is too. I encourage everyone to visit if they are in the area. That has been an example to the Welsh Affairs Committee, which came up to Llanfrothen and had a look at the community co-op and found it very instructive.
We have also had visits from people from south Wales. Recently, we were visited by local people from the Rhondda who were thinking of regenerating their own community and wanted to know how they could set up such co-ops in relation to their own post office and the village shop. There are positive alternatives: Welsh communities are pulling together and working with other Welsh communities. I finish by asking the Minister what steps the Government take to promote such vital community enterprises when a local post office is threatened with closure. Do we have to depend on the vision and hard work of a few local people? The Government have a responsibility.
10.8 am
Mr. Wayne David: I begin by congratulating my hon. Friend the Member for Blaenau Gwent (Llew Smith) on securing the debate. The issue is one of tremendous importance to people throughout the length and breadth of Wales. My hon. Friend has highlighted the situation in Ebbw Vale and its surrounding area, but there is also great concern in many other communities, north and south. In Llanelli, a closure programme has caused tremendous concern to local people. At this time, consultations on closures are taking place in such places as Bangor, Wrexham, Rhyl, Cwmbran, Newport, Pontypool and Abergavenny.
In my constituency of Caerphilly a post office in the small community of Rudry has closed. Rudry is a very small village, which is relatively prosperous, but its post office was a vital part of a small, relatively isolated community. Many elderly people have great difficulty in travelling to another post office, whether it is in Caerphilly, Newport or wherever, and undoubtedly the closure has undermined the quality of life of people in that small hamlet. Again in my constituency, there is concern about the post office in Ystrad Mynach, which was temporarily closed. Fortunately, because of the local postmaster's acumen and pressure from local people, it has reopened, and I am glad that that community service continues. None the less, there is tremendous concern the length and breadth of my constituency that perhaps we are seeing just the tip of the iceberg, that things will get progressively worse and that more post offices will close in the next few months and years.
I have been in contact and have had long discussions with Mrs. Ehrenzeller, who is the postmistress of my local post office in Trethomas. She has written to me at length about her view of the situation. She has pointed out that Trethomas is a fairly typical south Wales former mining village. It is a small community with an ageing population, and people are concerned about the breakdown of community spirit and the increase in antisocial behaviour. As my hon. Friend said, post offices are a vital part of the community in such villages. Elderly people especially like to pop out to meet their friends, have a chat and socialise. Irreparable harm would be caused to the area if the post office were to close. Also, let us not forget that there is, inevitably, a knock-on effect if a post office closes. Not only are jobs

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lost in the post office itself but other businesses go to the wall. In Trethomas, as Mrs. Ehrenzeller has pointed out, the butcher up the road would close, as would the betting shop and the newsagent. In other words, the heart of a small community would be decimated. We are considering not only post office closures but the wellbeing of small communities everywhere.
Post offices undoubtedly face several serious problems, but I am told that part of the difficulty that they all face is the move towards direct benefit payments. On average, 40 per cent. of a post office's income comes from benefit payments and the transactions around them. There is a great deal of concern that a change promoted by the Government as part of their modernisation process is causing real difficulty for postmasters and postmistresses. In Trethomas, Mrs. Ehrenzeller said that she is not against change and that she recognises that modernisation must happen. Her concern is that post offices are not operating on a level playing field and that preference is given to banks and building societies rather than to individuals opening a Post Office card account. She would like assurances from the Minister that that is not the case and that, for example, when her customers ring the Post Office call centre for advice on which account they should have, objective information will be given to them about what would be best for them, rather than there being some hidden agenda to encourage investments via banks and building societies.
On that point, I would appreciate the Minister's assurance that there is in fact a level playing field and that if people wish to continue to receive payments in the way that they have always received them, or if they wish to open a Post Office card account, every facility will be provided for that to happen.
Mr. Sutcliffe: Let me answer that point, as there may not be time at the end of the debate. More than 1.5 million people have opened Post Office card accounts, and the Government believe that that number will increase. I assure my hon. Friend that the Government are assisting with Post Office card accounts.
Mr. David: I thank my hon. Friend for that assurance. It is important that that message is conveyed to the country, because there is a great deal of concern and some misapprehension. I welcome his assurance and shall certainly do my bit to ensure that the message comes across clearly.
In conclusion, the future of post offices is absolutely vital. The people who run post offices and their customers raise current cases with me, but there is also concern about the future—concern that is expressed by elderly people in particular. It is important that clear guidelines are issued to the Post Office to ensure that it does things properly, that any consultation is proper consultation and that every effort is made to ensure that such a vital part of our communities is sustained. We must also ensure that there is close co-ordination with the devolved institutions that are in play in Scotland and in Wales so that they are able to work with central Government to ensure that post offices continue to operate for the benefit of our constituents.
10.16 am
Lembit Öpik: Back in 1909, the Liberal party and that great Welshman, David Lloyd George, introduced pensions to the British public. Therefore, I feel that my party has a particular duty as guardian of the interests of the elderly and of the methods by which they get their pensions and other benefit payments. It is for that reason that Welsh Liberal Democrats are especially concerned about the threat to post office outlets across Wales and, indeed, the United Kingdom. It seems that the restructuring programme will result in 2,000 to 3,000 post office branch closures in the UK during the next three years. As has already been mentioned, the in Wales Post Office proposes to close 154 sub-post offices out of a network of 440 branches, or one in three outlets. That is a really shocking cut in this important service.
The number of post office branches has been declining for some time. In 2001–02, 74 per cent. of closures took place in rural areas—four times as many as in urban areas. The Cabinet Office performance and innovation unit estimated that only 40 per cent. of rural branches generated enough income to break even, and that 56 per cent. of rural post offices were serving fewer than 70 customers a week, but that is the language of the accountant, not the language of a caring Government. The fact that the post office is often the only service left in rural settlements gives it a special, even unique, place in community life in rural Wales. Post offices often keep the last village outlet open—in fact, 80 per cent. of rural post offices run alongside a shop. The social support that they provide to the community and to vulnerable groups cannot be compared with the behaviour and the responsibilities of many other outlets. The hon. Member for Blaenau Gwent (Llew Smith) made that very point. My colleague Jenny Randerson, the Assembly Member for Cardiff Central, said in a debate on 8 October 2003 in the Welsh Assembly that the matter is of very serious concern. Welsh Liberal Democrats certainly take it seriously. The hon. Gentleman and I belong to different parties, but, as he rightly said, this is a far more important matter than simply an opportunity to have a pop at the Government. For that reason, we all implore the Minister to think again about whether the Government's strategy is right.
We must remember that the Post Office remains a company that is wholly owned by the Government. It has not been privatised, but it is treated as though it has been. If they wanted to, the Government could halt the closure process tomorrow simply by treating the Post Office not only as a commercial operation but as a service to the public. That service provides not only stamps and parcels, but pensions and benefit payments to some of the most vulnerable people in society. It is not only in rural areas but across all of Wales and the UK that post offices and their staff provide a kind of unofficial community centre for regular clients. For example, staff in urban areas also check on elderly people who fail to collect their pensions. I am sure that there are examples from all constituencies of a postmaster or a member of post office staff who has literally saved the life of one of their customers.

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The Government have changed payment methods for pensions and benefits under the banner of modernisation. That is not the main focus of our debate, but it is clearly connected. In so changing, or modernising, the payment method the Government have taken many steps to discourage people from collecting their money from the post office. All the Government literature insists on promoting bank accounts rather than post office accounts. People who are concerned about the high-pressure tactics that may be applied by banks have come to me, and I, too, am concerned that many new bank customers are on limited incomes and do not feel comfortable about the change. In Wales, a higher than average number of people still collect their pensions and benefits directly from the post office, and those people will be badly hit by post office closures.
Mr. Sutcliffe: The hon. Gentleman will accept that people can still claim their benefits over the post office counter. That has not changed in the sense that people still have that option.
Lembit Öpik: I will talk about the Minister later, so I do not want to dwell on that point at the moment. I will have some kind words for him as an individual later.
The Post Office proclaims that 95 per cent. of people will still live within one mile of a post office. However, the other 5 per cent. consists of hundreds of thousands of people around the country, many thousands in Wales alone. A mile is a long way for a pensioner. My mother is not blessed with great mobility and she lives in the countryside; to expect her to travel a considerable distance would be an unreasonable burden. My party accepts that change is needed and that people may find it more convenient to have their pensions paid into their bank account, but that is not the issue. The issue for us is the sheer scale of the destruction of the post office network in Wales. We think that that is the unacceptable difficulty in the strategy that the Government are allowing to be implemented.
The Minister said that members of the public can still have benefits paid to them across the counter. Here come the kind words: I have a lot of respect for the Minister and I do not hold him personally responsible for the Government's misguided approach to post office closures. I see him as the potential solution to the problem, because if there is one Minister who is willing genuinely to listen in the big conversation that the Government have started, it is he. The difficulty for me is not the Minister who is present here today, but the fact that I have not heard any Minister assure us that the big conversation involves listening as well as talking. The Minister has a chance to prove that we can be optimistic about the big conversation by responding in his winding-up speech to the many requests for a more open approach towards dialogue when it comes to closures.
On payment methods, the Minister is technically correct about people still being able to get money across the counter, but let us be honest: the Government certainly have not made the process of applying for the Post Office card account particularly easy. The process involves eight steps and requires the customer to make a telephone call to the Department for Work and
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Pensions, fill in two different forms and make two trips to the post office branch. The Post Office agrees that the process involves more steps than opening an ordinary bank account and says that the procedure was set down by the Department for Work and Pensions. It says that a simpler system could be established, involving opening a card account in one transaction at a post office, but that has not been instituted, so the complexity remains for many people, who will be naturally put off by having to take all those steps.
My next point is still more worrying. Others Members may have received a letter from the Communication Workers Union with a copy of a Department for Work and Pensions document that it has obtained. That document explicitly states the Government's true concerns It states that in the past, due to political and commercial constraints, many "soft" messages were issued, but that the Government are now making it clear that they want nine out of 10 customers to have payments paid into bank accounts, for which the cost is 1p, rather than Post Office card accounts, for which the cost is at least 30 times greater. The document goes on to list a number of messages that emphasise that Post Office card accounts are not the best option for customers. A person does not have to be a genius to appreciate the consequence of the pressure to move to the accounts. Money will be taken out of the direct incomes of post offices and that will make it much more difficult for them to sustain their economic viability. In fact, the move to direct payments will mean that many post offices could lose up to 40 per cent. of their income. Post Office Ltd. will no longer receive more than £400 million of income annually from the Benefits Agency—some of which is used for sub-postmaters' salaries and for the costs of central support.
It is not only that Post Office card accounts are not the best option for customers—they are not even the best option for Government, because they incur costs for every Post Office card account opened, although, admittedly, the lower the take-up, the lower the cost. Paying benefits into a Post Office card account costs 30 times more than paying them into a bank account. However, if the Government's motivation involves taking the social consequences of closures into account, they should recognise that the money that goes into post offices and is used for the salaries of post office staff is in a sense a social payment and a benefit to the whole community. It seems, however, that the Government's true motivation for not promoting the Post Office card account is to reduce Government expenditure, rather than the desire to meet the basic financial needs of benefits recipients and to take account of the social consequences of closures.
My party is also concerned about the consultation process. We heard a brief, but dramatic, history from the hon. Member for Blaenau Gwent, whom I congratulate on having secured the debate. He illustrated how hard it has been for Assembly Members and Westminster MPs to become involved in the process. Many have discovered to their horror that the consultation is not about whether a branch is to be closed, because that decision has already been made, but about the details of the closure. That is completely inappropriate and disrespectful to the democratic institutions of our country. In addition, the process

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involves sub-postmasters volunteering their branches for closure in return for a slice of compensation. We cannot blame people for making economic decisions. Again, we return to the point that the Government have the alternative of employing a different strategy, one that takes accounts of social consequences.
The Government deny the problem. The Secretary of State for Wales, in his capacity as Leader of the House of Commons, said that
"the phenomenon has being going on for decades; it is not particular to our Government, and is the outcome of many different factors."—[Official Report, 30 October 2003; Vol. 412, c. 441.]
However, in its first annual report on the network, Postcomm, the industry regulator, said that in 2000–01 there was a faster rate of decline in the number of post offices than ever before. In the 1990s, under Conservative Governments, approximately 200 UK post offices per year closed; in 1999–2000, under the Labour Government, there were 380 closures; and in the first nine months alone of 2000–01, there were 434 closures. Closures in Wales closely mirror the national picture. In March 1999 there were 1,501 Welsh post offices, and by March 2000 there were 1,459, and so it goes on. That is a rate of 50 post office closures in Wales every six months. I challenge the Minister to give an assurance that he acknowledges that the rate of closures has increased in the past few years.
On the promotion of Post Office card accounts and other services intended to generate income for post offices, as set out in the performance and innovation unit's report "Counter Revolution", the Government say that they are promoting those things, but they are not. My plea to the Minister is to recognise that, in the face of such cross-party concern on this issue, perhaps some alarm bells should be ringing. Perhaps the Government should be listening and pick up on the fact that, although we have had words of reassurance from the Secretary of State for Wales and others, that reassurance falls on stony ground at the point at which customers see their services decreasing.
I ask the Government to recognise that even the Assembly has been trying to stave off some of the impact of the financial pressures that are causing closures, and I ask them to be sympathetic to the need to support the economic drive to support post offices. More fundamentally, I appeal to the Minister to take heed of campaigns—such as the one in my area, which involves the County Times & Express newspapers—that aim to protect the use of pension books and other methods that local people regard as a genuinely effective way of ensuring that people go into their local post offices. Will the Minister indicate that he is willing to listen to the concerns of County Times & Express readers and the organisers of such campaigns about the importance of ensuring that the services that remain are sufficient to ensure that post offices remain open? We have heard much about the big conversation, but true conversation is a dialogue. The voice of local people in rural areas says no to closures. I know that the people of Wales do not feel comfortable about the closure rate of local post offices, and its acceleration. I will wait to see whether the Government really are listening, and, in that context, I look forward to the Minister's reply.
10.29 am
Mr. Bill Wiggin: The Government's move to direct payments of benefits and pensions in their automated credit transfer policy has resulted in a loss of £400 million to total Post Office income. The Government's threat to the financial viability of our post offices has been backed up with failing and unhelpful subsidy programmes. They are providing £350 million over three years, but the Post Office is losing £400 million a year.
Rural post offices are most important, as they comprise 70 per cent. of the post office network in Wales. They play an important role in each small community, as residents depend on them for not only stamps and letters, but pensions and benefits. It is also a place where they can pick up shopping at the same time. The proposed closure of the Blaenau Gwent post office will massively affect the ageing population and the high numbers of disabled people and young mothers. There are poor or non-existent levels of public transport, and low levels of car ownership in the area, so many people will have to spend money on taxi fares simply to collect their pensions or benefits. Post offices in rural communities such as those in Wales serve multiple purposes and are a central force in the community.
The payment of pensions and benefits is a necessary post office function, making up 40 per cent. of branch income, but the Government have taken that away. Their response to the large income gap is insufficient, and it has a minimal impact on post office regeneration and survival.
Mr. Sutcliffe: Will the hon. Gentleman give way?
Mr. Wiggin: If the Minister is going to tell me that it is the people's fault, I will happily give way.
Mr. Sutcliffe: I will certainly not do that. I am sorry to intervene so early in the hon. Gentleman's speech, but I wanted an answer to the question of whether he is against people being able to choose to have their benefits paid into the bank.
Mr. Wiggin: I do not believe that the Minister noticed that I was careful to point out that the level of subsidy provided by the Government in their sticking-plaster solution to the problem is inadequate. It is not a question of customer choice, and that is why I challenged him when he sought to intervene. He did not answer that question, but perhaps he will think about it and include it in his winding-up speech.
On 15 November, the Government announced the Post office development fund, which is a £150 million-ayear package of subsidies for rural post offices up to 2006. The Welsh Assembly made £2.5 million available for the fund until 2005. That was to sweeten the bitter pill of the announcement by the Post Office at the start of the year that 150 out of 1,355 post office branches across Wales will be closed over the next three years. The fund, which was to help the most isolated and deprived rural post offices in Wales, has been suspended by the Welsh Assembly until next year, in what the Labour party claims is a period of reflection

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Post offices could have applied for grants of up to £50,000 for refurbishment, investment and staff security in order to secure their business viability. The Assembly has put the grants on hold until January. That means that many post offices that have applied for grants will not receive a decision until the new year and receipt of the money will take months longer. Glyn Davies, AM, said:
"This is a shambolic situation. Why is this so-called stocktake taking place now, a year into the scheme? Why weren't things resolved before it was launched?"
Even if £450 million is to be spent over the next three years, it does not explain how those businesses are to be made viable in the longer term. My hon. Friend the Member for South Suffolk (Mr. Yeo) said:
"Labour's promised solution will not make these businesses viable, it will not allow benefit recipients to receive payments in cash, it will, however, spend £450m of public money in an attempt to cover up the consequences of Government mistakes."
Let us not forget the Government's 2000 rural White Paper "Our Countryside: The Future—A Fair Deal for Rural England", which promised to prevent any avoidable closures of rural post offices. In the following year, there was the fastest rate of decline in the number of post offices ever seen, with four times more closures in rural areas than urban areas. Rural post offices in Wales and across the UK are closing because they are hit hardest by a 40 per cent. loss in their income through the loss of revenue from paying pensions and benefits, but if we consider urban branches in Wales, we see that, despite the promises, the rot has set in there too. For urban branches, the Government have set aside £30 million for the reinvention of urban networks to make them "bigger, brighter, better". However, set aside is the operative phrase, as only £1 million of the £30 million earmarked for "bigger, brighter, better" has been committed, and we are currently halfway through the scheme. It is a closure programme, not a reinvention programme.
In theory, following public consultation with Postwatch, the Post Office makes a commercial judgment about the offices with the best and worst prospects. Using a device called brokering, the idea is to optimise coverage and access to branches with the best commercial future. It helps to decide between volunteering closures and those that must stay open for coverage, or those that must close because they are too weak. In practice, there is no brokering mechanism in place; instead, post offices that are volunteering to shut are driving the closure programme. The programme is not as strategic as it should be, and that concerns Postwatch. The problem is that the Post Office is immediately closing those post offices whose sub-postmasters go voluntarily and receive compensation, whereas often that branch is not the one that needs to close. There needs to be proper consultation, in which sub-postmasters who are not going voluntarily but who are in a weak office move into branches that are voluntarily closing but are more socially and financially viable.
The Post Office is cutting corners in order to achieve as many closures as possible without proper consultation. A programme generated by those volunteering to close at the taxpayer's expense is compromising consumer needs that are based on an optimised network. The concept of reinvention is
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instead a straight closure programme. That unsatisfactory flaw has seriously threatened the credibility of the so-called reinvention programme. It is neither open nor fair, and the consultation process is unacceptable. In order to remedy the credibility of the Government's bodged closure programme, we suggest that they do not automatically allow sub-postmasters who go voluntarily to determine that their branch will close. Some offices that volunteer for closure should be kept open to ensure proper coverage. It is vital to introduce a proper brokering mechanism. The Post Office must engage in earlier consultation with politicians and local authorities in order to act upon their concerns.
The Government's contradictory aims, statements and actions highlight the true extent of their threat to post offices in Wales and across the UK. The Government's response to the Trade and Industry Committee's 11th report on "People, Pensions and Post Offices: the impact of 'Direct Payment' on post offices and their customers"—I note that there is to be a debate on that subject on Thursday—states that they believe that the Department for Work and Pensions is providing sufficient information about Post Office card accounts and that there is no evidence that customers are being put off from applying for Post Office card accounts. If that is the case, why does a recently published Department for Work and Pensions document entitled "Direct Payments" boldly emphasise that Post Office card accounts are
"probably not the best option for customers"?
Why does that document clearly state that its aim is to get nine out of 10 new claimants immediately on to direct payments in order to meet business case requirements? It completely contradicts the Government's response and it is exactly what they promised they would not do. The hon. Member for Montgomeryshire (Lembit Őpik) mentioned that in his speech.
The Department for Work and Pensions document underlines the significant difference between the Government's declared position on direct payments in relation to post office closures, and the reality of the implementation of policy by the Department. I believe that it reflects the Government's decision bluntly to ignore the fact that accounts at post offices generate essential income for sub-postmasters. It is ironic that the Labour party accuses Conservative Governments of having threatened rural post offices, given that its compulsory automated credit transfer policy introduced in April 2003 has dramatically increased the closure of sub-post offices.
Between March and September, 37 post offices were closed in Wales. Closures involved 25 urban and 18 rural post offices. Across the whole of the UK within the same six-month period, 547 post offices were closed, with 484 closures under the urban reinvention programme. The Government's policy is failing. They are throwing subsidies at it to hide their mistakes, but the truth is that their policy presents a clear threat to the survival of post offices in Wales.
10.38 am
The Parliamentary Under-Secretary of State for Trade and Industry(Mr. Gerry Sutcliffe): I congratulate my hon. Friend the Member for Blaenau Gwent (Llew Smith) on securing the debate on the post office network in Wales. He has described the issues that affect the post offices throughout Wales and the importance that communities attach to access to post office services. The issues that have been raised are relevant to every Member of Parliament, and I welcome the opportunity to respond to the points that he and other hon. Members have raised.
I congratulate the hon. Members for Caernarfon (Hywel Williams), for Montgomeryshire (Lembit Őpik), and for Leominster (Mr. Wiggin) and my hon. Friend the Member for Caerphilly (Mr. David) on their contributions to what is an important debate, judging by the strength of feeling that it generates. I acknowledge the work done in his community by my hon. Friend the Member for Blaenau Gwent. He is solidly behind his constituents and I shall deal with his concerns in my speech.
I assure my hon. Friend that the Government are committed to maintaining a viable nationwide network of post offices. We fully recognise their importance as a focal point for local communities, particularly for elderly and less mobile customers. I am also pleased to reassure hon. Members that we are committed to ensuring that benefits recipients can continue to collect their entitlement in cash from the post office if they wish. I shall come on to specific points about the post office branches in my hon. Friend's constituency in a moment, but I wish first to explain that the recommendations of the performance and innovation unit's 2000 report form the basis of the Government's policy for the post office network.
The performance and innovation unit's report was an in-depth study of the state of the Post Office and made 24 recommendations on how the network can be sustained. It was widely welcomed, particularly by the National Federation of Sub-Postmasters and the consumer watchdog, Postwatch. We accepted all the recommendations that were made, which included that, if the Post Office decided that fewer offices were needed in some urban areas, the Government should consider providing funding to ensure that those sub-postmasters who were affected could be compensated adequately for the loss of their business. Last November, following parliamentary approval of the funding, Post Office Ltd. initiated its urban network reinvention programme.
Many hon. Members voted in support of the Government's funding of the Post Office's programme under the terms currently proposed by the company, which is to close the seven urban offices to which my hon. Friend referred. He has been diligent in representing the views of his constituents and those who will be most affected by the closures if they go ahead. However, it is important for hon. Members to recognise the difficult conditions that the Post Office faces. We shall need to work constructively with the company to ensure that we can achieve the aim of ensuring a viable network for the future. In the past financial year, Post Office Ltd. made losses of £194 million before exceptionals; in the preceding year, losses were £163 million. The Post Office has again reported significant
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losses of £91 million in its recently published half-year results. During the years of Conservative Government, 3,500 post offices were closed, so it was increasingly necessary to take decisive and urgent action.
At present, the network of post offices is made up of 16,500 branches, which is more than all the banks and building societies in the country put together. More than 1,000 urban sub-post offices have at least 10 other post offices within a mile. Sub-postmasters have been finding it increasingly difficult to earn a reasonable income from their businesses and have been leaving the network. Without rationalisation of parts of the network to improve its sustainability, there will be an unmanaged decline as individual postmasters continue to shut down and leave. That would bring on the real prospect of serious gaps in provision opening up, which would be much more damaging to the interests of communities and to the viability of the network as a whole than the current managed process.
My hon. Friend the Member for Blaenau Gwent referred to Mr. Dave Barrett, who, I must put on the record, is the Post Office area manager for Wales and has responsibility for decisions and closures. He leads a team of staff who draw up the proposals. He has visited local communities, but I accept the point raised by my hon. Friend about his ability to speak to Mr. Barrett.
Llew Smith: Mr. Barrett addressed a demonstration yesterday. He was asked whether he had visited each post office in Blaenau Gwent, to which he replied, "Definitely, yes." Another constituent asked, "Well, if you visited the community and each and every one of the post offices, can you tell me the position in Garnlydan?". Mr. Barrett replied, "Ah, I haven't visited there." Some of the people on the demonstration were angry, but I said that we must thank Mr. Barrett because at least he admitted that he is a liar.
Mr. Sutcliffe: I note the points raised by my hon. Friend. Clearly, the matter is of concern and I shall return to it in my speech.
A serious contraction in the customer base has affected Post Office Ltd. and the financial standing of the business of the individual sub-postmaster and sub-postmistress. The company has been slow to develop new income streams and offices have become over-dependent on making benefit payments. More than 43 per cent. of benefit recipients already choose to access their benefit payments via bank accounts rather than by order books, compared with 26 per cent. in 1996.
It is essential for the post office network to adapt to changing lifestyles, changes in people's preferences and new ways of doing business. With profitability in the network as a whole declining, the ability of sub-postmasters to sell on their businesses—the way in which people have moved on in the past—has taken a severe knock. Without a managed programme, there is a great danger that haphazard closures brought about by sub-postmasters choosing to leave, or by Post Office Ltd. not being able to attract a suitable replacement when a sub-postmaster had left, would continue.
Lembit Öpik: I am sure that the Minister will come to my more detailed points later, but he said that it is important that the Post Office adapts to people's

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preferences. Unquestionably, one of those preferences is to maintain the pension book. Is he saying that, being sympathetic to that wish, post offices should be allowed to maintain them?
Mr. Sutcliffe: I said that people should have such a choice and continue to do so. That has been set out in the various announcements made by the Government through the Department for Work and Pensions and the Department of Trade and Industry.
I turn now to the urban reinvention programme. Initially, closure proposals under the Post Office Ltd. urban reinvention programme were focused on single offices known to be most at risk of closure because of poor viability, in order to minimise the possibility of unplanned closures occurring. The company accepted that there was much uncertainty about the future shape of the network and has now undertaken to produce its proposals on an area-by-area basis, using each parliamentary constituency or geographical groupings of them. In its recently published report on the post office network, the regulator, Postcomm, commended Post Office Ltd. for its constructive response and welcomed the more co-ordinated approach, as did the Trade and Industry Committee, whose report we shall be discussing on the Floor of the House on Thursday.
Producing an area-wide plan of post office provision in the constituency of my hon. Friend the Member for Blaenau Gwent brings the benefit of giving a clear view of the level and location of service provision at the end of the urban reinvention programme in a given area. We will know what the position is, but I take note of the points raised by my hon. Friend, especially his comments about consultation. It is vital that the views of Members of Parliament and local authorities about the wider plans are taken into account. That is important in ensuring that the offices in my hon. Friend's constituency are sustainable and are in the right locations for his constituents. In addition, such a process helps to reassure sub-postmasters about their prospects and should therefore help guard against further unplanned closures. I understand that, to minimise further uncertainty, Post Office Ltd. will also bring the programme forward by a year with the aim of completing all public consultations by the end of December.
I recognise what my hon. Friend said about the comments of my right hon. Friend the Secretary of State for Wales and my hon. Friend the Under-Secretary of State for Wales. I am concerned that no frank consultation is taking place, so I shall speak to my right hon. Friend about his remarks and give any support that I can to ensure that full and proper consultation takes place.
Llew Smith: I assume that the Minister is aware that the time in which to take such action is limited, given that the consultation process ends in a few days. Until now, there has not been any consultation or dialogue.
Mr. Sutcliffe: That contradicts my information. I understand the answerable case to which my hon. Friend referred. However, for my right hon. Friend the Secretary of State for Wales to be so clear about his views, he must have concerns, given that he received representations from my hon. Friend and others
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yesterday. There must be some doubt about the detail of the consultation process. If that cannot be completed within the time limit, which I understand is 16 December, I expect an extension to be made. I am sure that my right hon. Friend will make recommendations based on the information that he received yesterday.
It is important to note that, in accordance with the code of practice on branch closures, every proposal is supposed to be subject to public consultation. The consumer watchdog, Postwatch, has a key role in the process. My hon. Friend the Member for Blaenau Gwent was critical of the role of Postwatch, but it is looking at the situation nationally and will be making representations to Post Office Ltd. at the end of consultation period. That is why we are considering the research and Postwatch's views in respect of the consumer and how it should respond to the plans of Post Office Ltd.
Llew Smith: I accept that Postwatch has to carry out the necessary research, but the people in the community have the information. When I said that I was an expert and that people in the community are even greater experts, I meant not to sound arrogant, but to reflect the fact that we are part of the community. While we expect Postwatch to do the research, we must realise that the consultation comes to an end in a few days and that the research will not be completed because there will have been no opportunity to respond to local people. There is a time problem.
Mr. Sutcliffe: I understand that, but there will be an opportunity for Postwatch to respond on a national basis to the national closure programme and to have a view about that. Within the consultation period, Postwatch managed to get Post Office Ltd. to extend the consultation period from four weeks to six weeks. I support the way in which my hon. Friend has addressed the consultation process. I acknowledge that he does not believe that it has been a frank process, but the fact that he is supporting his community and that other colleagues are raising issues in the way that they are means that the concerns that people have raised should get across to Postwatch and Post Office Ltd.
I acknowledge my hon. Friend's description of his constituency and of the wider problems facing it. He knows about the plans for the offices in his constituency because he is heavily involved in that, but I am sure that he will forgive me for not naming each of those offices—[HON. MEMBERS: "Go on!"] I am forced to have a crack at naming them: Badmington grove, Beaufort hill, Cefn Golau, Garnlydan, Rassau, Waunlwyd and Willowtown. As my hon. Friend said, these proposals have generated great local interest, as is evidenced by the public demonstrations outside the Ebbw Vale office last Thursday and yesterday and by the petition that I understand was presented to the local Post Office area manager.
The Post Office says that it entered into public consultation on its proposals for my hon. Friend's constituency on 5 November, with a closing date for representations on 16 December. The Government do not normally play a role in such decision-making processes. It has been the policy of successive

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Governments that decisions relating to individual branches are operational matters for Post Office Ltd. However, I will tell the Secretary of State about my hon. Friend's concerns. During the consultation, important points were raised by my hon. Friend, the customers who use the offices concerned, and Postwatch. They will have to be given due consideration by the management of Post Office Ltd. before decisions are made.
It is important to note that once decisions on the proposals have been reached, Post Office Ltd. has no intention of returning to my hon. Friend's constituency with any further proposals. The company maintains that if the proposed changes go ahead, it will have fulfilled its objectives by ensuring that there is the right level of service in the area for the level of custom. Those decisions are an operational matter for Post Office Ltd.
Llew SmithIf I heard the Minister correctly, Post Office Ltd. does not intend to return to my constituency and bring about another closure programme. That is diametrically opposed to its warning in its consultation document. I do not think that Mr. Barrett has read that document—although I pay him the compliment of saying that he can probably read—but I have read it, I know what it says, and I have repeated its comments.
Mr. Sutcliffe: I acknowledge my hon. Friend's point. The point that I am making is that Post Office Ltd. is saying that if its proposals go through, it will not come back for a second bite. It is clear that my hon. Friend does not agree with that, and that he will pursue the consultation in the way that has been outlined today.
Mr. Wiggin: Will the Minister say what the time scale will be?
Mr. Sutcliffe: That is difficult. Yesterday, my right hon. Friend the Secretary of State for Wales met a delegation from the constituency of my hon. Friend the Member for Blaenau Gwent, who stridently stated that there is an unanswerable case for these offices not to be closed. Therefore, I expect that it would be difficult to get through the necessary frank discussions by December 16—which is the current time scale—as it is now 9 December. However, I cannot second-guess what my right hon. Friend will say to me, or how he will pass his message on to me, as a result of yesterday's meeting. I will wait to hear his comments. I have had an informal chat with my hon. Friend the Under-Secretary of State for Wales, who has described concerns about his own constituency with regard to the proposals.
These decisions are best left as operational matters for the Post Office. It would be neither practical nor appropriate for the Government to become involved in the process itself. It is important that Postwatch acts as an effective customer champion in this programme. The Government have ensured that Postwatch receives sufficient funding to carry out its important role in examining each proposal and monitoring the programme.
An additional element of the urban reinvention programme is the £30 million that the Government have provided for modernisation and for adapting those
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offices which remain in the network. The key to improving standards in those offices will be the increased volume of business that they can expect, but the grants of up to £10,000 for each office that expects to take on a significant number of additional customers—to be matched by the same sum from the sub-postmaster—will be an important boost, too. I understand that if the current proposals for the offices in the Blaenau Gwent constituency go ahead, there will be an investment of more than £30,000 in the offices that are expected to receive an increase in custom as a consequence of a nearby closure. The Post Office will generally require the receiving offices to improve their facilities and to extend their opening hours so that, increasingly, sub-post offices will maintain the same hours as the associated retail businesses that run alongside them, thereby improving their service to customers. I should make the point that that is the first ever programme of Government investment in urban sub-post offices and that it is an additional measure to those recommended in the performance and innovation unit's report, which started the whole process.
In agreeing to fund compensation payments to sub-postmasters whose offices are closed under the urban reinvention programme, we have asked Post Office Ltd. to ensure that after the programme 95 per cent. of the urban population will still be within a mile of their nearest post office. We have also asked the company to ensure that, except in exceptional circumstances, its urban reinvention proposals do not include offices in the most deprived 10 per cent. of urban wards where there is no other post office within half a mile. That may affect my hon. Friend's constituency.
In accordance with another of the recommendations of the performance and innovation unit's report, the Government have made available support for post offices in the most deprived urban areas that are at risk of closure. In England, a £15 million deprived urban post office fund operates in the most deprived urban areas and is administered by the neighbourhood renewal unit of the Office of the Deputy Prime Minister.
In November 2002, the Welsh Assembly announced an equivalent scheme with the aim of supporting a viable post office network across Wales. The Welsh Assembly scheme is structured more flexibly in its coverage to accommodate some of the particular considerations to which my hon. Friend the Member for Blaenau Gwent has referred in order to include isolated offices as well as those in deprived urban areas, but the support that is available takes the same form as that introduced for England by the Office of the Deputy Prime Minister. Some £2.5 million has been allocated to provide for grants of up to £50,000 to develop and improve post office and associated retail facilities. I understand that under this scheme a grant of just over £28,000 has been awarded to the Llanhilleth post office in my hon. Friend's constituency. The grant will be used to improve and renovate the shop frontage, including a ramp allowing for disabled access, the refurbishment of the post office area and the installation of a new security counter.
I am aware that I have not answered every question that has been raised. Hon. Members made detailed comments, and I will write to them to ensure that their

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points are properly addressed. However, given the time that remains, it is important to reflect on what my hon. Friend has said about the position in his constituency and in Wales. I acknowledge and take note of the views of the Welsh Assembly. Post offices are important to our communities for the reasons that I have described. I would like to make sure that appropriate consultation takes place—that people fully understand the reasons behind the post office proposals and that they are included fully in any consultation that takes place. It is important that the Government make sure that people have the right to choose whether they want benefits to be paid across the counter or into their bank accounts, and it is important that Members of Parliament who make representations on behalf of their constituents are fully involved in the consultation process. If that does not happen, Post Office Ltd. will have made a mistake. I hope that Post Office Ltd. and Postwatch will examine our debate and ensure that they learn from the exceptional contributions that have been made by hon. Members who feel that the post office network needs to be sustainable and viable and that it must meet the needs of local communities.

Midwifery
11 am
Mr. Kerry Pollard: I am grateful for the opportunity to debate the very important subject of maternity services. I shall focus in particular on the role of midwives.
I have seven children, five of whom were born at home with the help and support of our local midwife, so my family are big fans of midwives. I was recently honoured by being appointed as a fellow of the Royal College of Midwives. That is an honour that I greatly prize, although perhaps it should have been awarded to my wife.
The Select Committee on Health has taken a keen interest in midwifery. It has made several important pronouncements that it considers helpful to potential mothers and to the health service generally, which have the full support of the Royal College of Midwives. The Select Committee believes that midwifery is still too medicalised and based in the acute sector, and that it needs to be brought into a community setting. My family experience fully supports that contention, and a low-risk birthing unit at St. Albans city hospital, like the one at Edgeware, would be an ideal way of delivering that.
The Select Committee also suggested making midwives, instead of GPs, the first point of contact. That would establish at the beginning of the pregnancy the important relationship between the mother-to-be and the midwife. It would also remove an additional burden from the GP, and would recognise the midwife as a professional in her own right. It has the added benefit of making midwifery a much more attractive career option.
A big problem with midwifery, as with other caring professions, is the shortage of qualified practitioners. The Select Committee has noted that, and the Secretary of State for Health has singled it out as an issue of concern for the Government. The average age of midwives is going up. As midwives retire, they are not being replaced by younger midwives. The average entrant to midwifery tends to be older: often a mother returning to work after having children of her own. Strategies need to be developed to attract more people into midwifery. I look forward to hearing any thoughts that my hon. Friend the Minister has in that regard.
I want to focus on our local situation, in which we have a first-rate team of midwives. Two years ago, our special care baby unit had to be shut down due to lack of staff—not because of funding problems as used to be the case in years gone by. There was an inability to recruit, so the unit was transferred to an expanded unit in nearby Watford hospital. Many of us worked hard to re-establish the closed unit, and none worked harder than my hon. Friend the Member for Hemel Hempstead (Mr. McWalter). I am pleased to say that about nine months later we had the privilege of welcoming Dame Karlene Davis, general secretary of the Royal College of Midwives, to open a brand new, low-risk birthing unit, which is now operating well.
I would like to see an equivalent unit opened in our own St. Albans city hospital to complement our other excellent units, such as the minor injuries unit run by

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Sister Rita Dunkerley, the day surgery unit run by Sister Eileen Kent and all the other services run for our local community by dedicated professionals. Our local primary care trust is doing sterling work, and it is my hope that before too long it can make a foundation status bid for St. Albans city hospital, which can then be run by local people for the benefit of local people—a winning combination.
We were grateful for a recent visit from my hon. Friend the Minister to St. Albans city hospital. He was fact finding and getting to know his new regional responsibilities. He was well received, and all the staff were grateful for his visit. Only two weeks ago, the Secretary of State for Health also visited St. Albans city hospital. He met many members of our team of professional health workers—consultants, sisters, nurses and ancillary workers—and he spent more time talking to them than doing anything else. He also toured our hospital and chatted to Sean, who was having a splinter removed from under his thumbnail in our minor injuries unit.
While he was with us, the Secretary of State opened a brand new orthopaedic operating theatre. We now have five fully functioning theatres, with supporting wards, that are able to perform many more routine operations, thus reducing waiting lists and leaving the acute hospitals to carry out more complex operations. A figure approaching £1 million has been spent on those new facilities. That is in addition to a new hydrotherapy pool and other rehabilitation facilities for those recovering from strokes. Facilities are much improved, and more are to follow.
Recently, a full consultation exercise was undertaken by the strategic health authority on the future of our acute services throughout Hertfordshire and Bedfordshire. I am pleased to say that there was a big majority in favour of option two: the provision of a new acute hospital to serve south-west Hertfordshire, which would be situated adjacent to my constituency. I am also pleased to report to my hon. Friend that every PCT in the two counties except one voted for option two. I hope that the Secretary of State for Health will approve option two, so that I can look forward—in a few years time to his opening our new hospital linked to a medical school at the nearby university of Hertfordshire.
11.5 am
The Parliamentary Under-Secretary of State for Health(Dr. Stephen Ladyman): I congratulate my hon. Friend the Member for St. Albans (Mr. Pollard) on securing this debate, and on the work that he has done on behalf of midwives and maternity services. I had not appreciated that he was a fellow of the Royal College of Midwives, which is a considerable honour given by an impressive organisation. On hearing that he has seven children, I wondered whether it was given as a loyalty bonus to one of its best customers.
We all know that midwives are key members of the maternity service team, and that they play an important role in the provision of high-quality maternity care in the national health service. They are key to ensuring that women and their families receive appropriate
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information to help them to make choices during their pregnancy and childbirth. Midwives are rising to the challenges that we have set to tackle health inequalities, and to modernise NHS maternity services. I would like to express my personal gratitude to them for the wonderful work that they do.
In recent years, there has been an increase in the number of midwives working in the national health service, and we hope to encourage 500 midwives to return to practice during 2003–04. So far this year, 173 midwives have returned or are returning to the NHS.
My hon. Friend raised some concerns about the recruitment and retention of midwives. I frankly acknowledge that progress in increasing the number of midwives has been slower than we had hoped. By no stretch of the imagination am I ignoring that. Indeed, just a couple of weeks ago, Sarah Mullally, chief nursing officer, hosted a summit with key stakeholders, including representatives from the Royal College of Midwives, NHS managers, midwives themselves, obstetricians and users of maternity services. The purpose of the summit was to explore the main barriers to increasing midwife numbers in the NHS, and to identify what needs to be done to tackle that.
I attended the summit, and I made it clear that progress was not acceptable and that radical and ambitious thinking was needed. I also threatened them by saying that if the proposals that came out of the summit did not work, I would keep calling them back until they came up with plans that would work. In the event, the team developed a package of measures that will help considerably. I am grateful to those who took part in discussions for their assistance and commitment to continuing to work with the Department of Health and the Government to ensure that we get more midwives into the NHS, and keep them there. I am particularly pleased to tell my hon. Friend that the Royal College of Midwives has given its commitment to work with us directly to take the action required.
The summit produced a six-point action plan. I am grateful to my hon. Friend for securing today's debate because it gives me the first opportunity to place the action plan in the public domain. First, the summit identified the issue of leadership. We know that good midwifery leadership is crucial to our being able to modernise maternity services and midwifery care, and to ensuring that midwifery in the NHS is an attractive option. We have asked the leadership centre to ensure that there are appropriate leadership programmes for all midwives, and that appropriate succession planning is in place.
Secondly, we want to examine the geographical variations. We know that areas around the country find it difficult to recruit and retain midwives, but we also know that there are trusts within those work force hot spots with fewer difficulties. We will take action to share good practice, explore further what attracts midwives to those units and learn from organisations where work force issues have been resolved.
Thirdly, we must raise the profile of midwifery. The action plan includes a national recruitment campaign and a conference to highlight the midwifery profession and the contribution of midwives to the NHS. We will also use the commitment and leadership of the Royal College of Midwives to market the midwifery

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profession, and we will try to harness the input of every midwife in the NHS to ensure that their skills and expertise are recognised by those contemplating training or returning to the NHS.
Fourthly, we must do more to improve midwives' working lives. At the summit, we heard about the importance that midwives place on how, where and when they practise. We heard that some feel frustrated by the constraints of organisational structures, and that that leads them to leave. Midwives want flexibility, and they want to provide models of care that meet the needs of women and families, but in a way that meets their own needs for job satisfaction and family life. We will work with NHS trusts to ensure that all aspects of improving working lives are encompassed and implemented in maternity services, and we will issue a good practice guide for maternity services by spring next year.
Fifthly, we must do more to encourage a return to the practice of midwifery. We heard from midwives at the summit that returning to midwifery practice was often a tortuous and off-putting process. To increase and maximise the potential for return to the midwifery profession, we will work with work force development confederations and NHS trusts to streamline the process for midwife returners.
Sixthly, we must address education and training issues. The number of training places for midwives has increased: there are 450 more places than in 1996–97, which is an increase of 28 per cent. However, students attending the summit told us of their financial difficulties, and about the problems that they face during their clinical placements. They want their education programmes to prepare them to practise midwifery in the NHS, and they want role models to nurture and support them. We will work with representatives of higher education institutes and the Nursing and Midwifery Council to ensure that education programmes and clinical experience are appropriate and meet the needs of future midwives, and that student midwives are confident and competent to take up their role in the NHS.
Those six action points emerged from the summit, but they are in addition to actions already taken. For example, we allocated almost £1 million to focus on recruitment and retention and return to midwifery practice. The money is being used to fund a package of initiatives, including a full-time post to lead on recruitment, retention and return to practice for midwives. Also, an allocation of £750,000 was made to work force development confederations in 2003–04 to fund 500 return-to-practice places.
We have also worked in collaboration with the Royal College of Midwives and the Open university to develop a distance learning pack to assist those midwives who may find it difficult to access full-time courses to return to practice. The first midwives to use it are currently returning to the NHS.
To ensure that we really understand what prevents midwives from returning to work, we are funding a research project on why midwives stay in the NHS and why they return. It is being carried out by Dr. Mavis Kirkham, a well-respected midwife researcher. That will provide follow-up data to her previous work, "Why Midwives Leave", and will give us an insight into what
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keeps midwives in the NHS. We are confident that there will be transferable practices that can be applied across the NHS.
Of course, pay is an important issue, and I was encouraged by the strong support of the Royal College of Midwives for "Agenda for Change". We are testing the new pay system in 12 early implementer sites to ensure that it delivers the intended benefits for staff and patients. Those sites began to implement "Agenda for Change" in June 2003. What is learned in the early implementation phase will be used to inform the national roll-out, which is planned for October 2004.
My hon. Friend also raised issues relating to the training of midwives. Health care professional students, including midwives, are crucial to the future of the health service, and I recognise the challenges that they face while undertaking demanding programmes of education and training. We want, and students are entitled to expect, a system that ensures that as many students as possible qualify and go on to work in the service, as well as one that provides the widest possible access to the health care professions.
Following devolution, it was acknowledged that there were differences in student support arrangements across the United Kingdom. For students, including student midwives, undertaking health professional training at colleges in England, the Department of Health keeps the support arrangements provided by the NHS bursary scheme under review. That ensures that the scheme continues to support the Government's plans for the expansion of the health professional work force and the modernisation of the service.
Mr. David Drew: I congratulate my hon. Friend the Member for St. Albans (Mr. Pollard) on securing the debate. Does my hon. Friend the Minister accept that one of the problems with midwives' training is that there is now an obvious shortage of midwife-led units, because many have been closed down? I am pleased that this Government have ended that process. We have a midwife-led unit in Stroud, which was recently described in a book written by two of my friends, Tracy Spiers and Diane Harris. That book shows the love that the community has for that unit.
We have been bedevilled by the many reviews looking into the maternity-led unit's efficiency, and its role within the modern health service. It is almost a case of death by review. Will my hon. Friend the Minister assure me that we now value such institutions? Can we end the continual review cycle that saps the energy of all who love that place?
Dr. Ladyman: I am happy to give my hon. Friend that assurance. I have visited several midwife-led units, including the one to which my hon. Friend the Member for St. Albans referred. I found the standard of care and the atmosphere of calm and professionalism that pervades those places inspiring. If I were ever to have a baby, I would want to go to a midwife-led unit, so I understand why such units would be the first choice of many women.
There have been differences of opinion. There are obstetricians across the country who do not think that midwife-led units other than those co-located with

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obstetrician-led units are safe. However, midwife-led units are increasingly being developed away from such centres, and they are proving safe and effective, so long as proper careful decision-making is made in the run-up to labour. As long as women are being given the proper information, and know whether there is any particular risk from their birth, they can make the right choice about whether they want to go to a midwife or obstetrician-led unit.
I strongly support the development of more midwife-led units. We allocated £100 million of capital to the development and refurbishment of maternity services across the country. I am pleased to say that in quite a few places people chose to use that £100 million for the development of those maternity-led services. I certainly want more such units to be developed where local services identify that there is a benefit to be gained from them.
We have increased the support provided through the NHS bursary scheme, both by the basic bursary and other elements of the package. Bursary rates have increased every year since 1998, and by 10.4 per cent.—well above inflation—since September 2001. Moreover, NHS-funded students are eligible for a tuition fee contribution, worth £1,125 for this academic year, without means-testing.
The Government believe that, overall, the NHS bursary scheme, supported by the further improvements that we have made, continues to provide effective support for students, as evidenced by the increasing numbers of students embarking on health professional training programmes, including midwifery. However, we are keeping the matter under review.
I now come to maternity services, and I thank my hon. Friend the Member for St. Albans for describing his aspirations for a midwife-led unit in his constituency. I am sure that he would not expect me to comment on that specifically, because it is a matter for the local health organisations. I am sure that his views are well known. I have now expressed my support for such midwife-led units and, from my visit to the midwife-led unit in Hemel Hempstead, I know that the high-quality care provided there, and the benefits to the users who deliver there, will be well known in the local health community. The lessons will be learned by those who will make decisions about whether a midwife-led unit should be built in my hon. Friend's constituency.
Like my hon. Friend, I want health communities throughout the country to give consideration to this model of care. Midwife-led care should be considered as one of a range of options available to women when they are choosing where to give birth. Having a range of care allows people a meaningful choice. As my hon. Friend knows, choice is central to our plans to reform health services across the country. Today we published a document called "Building on the Best; Choice, Responsiveness and Equity in the NHS", which sets out the main themes emerging from the consultation that we conducted during the autumn. The consultation reached 110,000 people—the biggest response since the NHS plan.
Clear and consistent themes emerged from the consultation. Patients want to be more involved in decisions about their health care. They want more and
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better information to help them to make decisions and choices about their care and treatment, they want services to be shaped around their needs, instead of being expected to fit the system, and they want choice to be genuinely available to everyone. Those themes are just as important in maternity services. We will be asking local services to publicise details of how women can access midwives directly, as my hon. Friend requested in his speech. We will promote the use of birth plans, which record women's preferences for the birth of their child. We will also ensure that the response to the consultation, including the task group recommendations for maternity services, are taken into account in the development of the national service framework for children, which we plan to publish in 2004.
The children's NSF, including the section on maternity services, will be a key statement on the way in which we expect maternity services to develop in future. I look forward to discussing the children's NSF with my hon. Friend and the Royal College of Midwives when it is published—and I particularly look forward to his, and its, support in implementing it.
Mr. Drew: I thank my hon. Friend for his generosity in giving way. He mentioned earlier the view of some consultant obstetricians. Would he also accept that it is vital that we continue to engage with general practitioners, because more often than not they are the person whom a pregnant woman would contact for professional advice? The GP's role is to offer a degree of choice, at least, when that is sensible. It is sometimes put to me that GPs tend to be rather conservative in their recommendations to women about where they should have their children. Perhaps that is not necessarily the best way of putting things.
Dr. Ladyman: My hon. Friend is right. We must ensure that GPs are fully aware of the options available to women, and can give them proper counsel and advice. As I have just announced, we will try to make it possible for women to go directly to midwives in future, if that is what they want, and to get advice from a midwife's perspective. However, my hon. Friend is right. I suspect that pregnant women will, more often than not, contact their GP first. If we are to ensure that there is a comprehensive, high-quality information service, without which choice is just a figment of the imagination, and make it available, we must make sure that all the professionals women can contact, including GPs and midwives, have a full range of quality information and the time to provide the support and advice that women need to make choices.
In addition to setting that out in the national service framework for maternity services, and setting the standards that we want to achieve in maternity, other work will be going on at the same time—including the National Institute for Clinical Excellence guidelines, which are in development. We already have a number of clinical guidelines from NICE on antenatal care, induction of labour and the use of electronic foetal monitoring. We are awaiting further guidelines on caesarian sections, which will be published next year. I have no doubt that those will lead to a further improvement in clinical care in the NHS for women during pregnancy. These guidelines will complement the

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national standards that will be set out in the national service framework. It is still intended that the national service framework for children will be published in spring 2004.
Just over 600,000 babies are born in the UK each year. The NHS spends around £1 billion a year on maternity services. That area of the NHS has not been afraid to modernise and respond to the needs of users. Improvements are needed in many areas, but maternity services represent one of the success stories of the NHS. That is due in no small part to the contribution made by midwives. Over the past 50 years childbirth has become much safer for both mother and baby. The latest confidential inquiries into maternal deaths report covering the years 1997–99 found that the overall maternal mortality rate was down. There were 11.4 deaths per 100,000 maternities, which is a decrease from the 12.2 per 100,000 maternities in the previous report.
There have been similar improvements for babies. The perinatal mortality rate—still births and deaths within seven days of birth—was just under 40 per 1,000 births during the period 1946–50, and has reduced to fewer than eight per 1,000 births in 2001. There is clear evidence that pregnancy is far safer today that it has ever been, and much of that improvement is due to the excellent care provided in the NHS. There is also a much greater range of choice in maternity services. As I announced today, the Government intend to extend that range of choice even further with the help of midwives and professionals throughout the NHS.
We can all be proud of the maternity care that is provided for women in this country. It is a prime example of partnership between the midwives and doctors who provide the service and the women and their families who use it. The Government will continue to keep maternity services high on our agenda, and will ensure that we have the right number of skilled personnel to maintain a high quality service.
Once again I congratulate my hon. Friend on his endeavours in this area, and I look forward to further opportunities to debate these matters with him in the coming months.
11.27 am
Sitting suspended until Two o'clock.

Affordable Housing
2.10 pm
Mr. Edward O'Hara:I apologise to the House for the delay in starting the debate; I had a domestic emergency.
Andrew George: I am pleased to have the opportunity to lead the debate on affordable housing. I was becoming concerned that Members on the Government Benches were so worried about the case that I was going to make that they nobbled you, Mr. Deputy Speaker, to disable us from going ahead. Once I had secured the debate, I apologised in advance to the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Corby (Mr. Hope), in case I need to attend the fisheries debate in the main Chamber later, although I hope that that circumstance will not arise.
The purpose of the debate is to address perhaps the greatest social crisis facing communities in constituencies in many, albeit not all, parts of the country. My constituency in west Cornwall is certainly affected, as are the Isles of Scilly. Some 10 or 15 years ago, the issue would undoubtedly have been high unemployment. There has always been the residual problem of a large mismatch between earnings and house prices in the area owing to high second home ownership and low private and rented sector accommodation, but that has never been the case to the current extent.
To be fair, the Government are not in complete control of the way in which the housing market operates; that is not in their gift, but they can pull on some fiscal and policy levers to influence how the market works and the private rented sector operates to ensure the availability of social public rented accommodation.
I want to raise several issues, but I know that many other hon. Members want to contribute, so I shall try to be brief. The first issue is housing need and how it is assessed. The second—high levels of second home ownership—has a significant impact on my area. I will then talk about some of the initiatives that have been introduced in recent years, and their impact on housing availability.
I am aware that the Government considered housing need and, through their starter home initiative for key workers, which was announced in September 2001, identified housing need in the south-east of England as their primary concern. A three-year, £250 million programme was announced, 63 per cent. of which money was to be spent in London and 28 per cent. in the south-east with the remaining 9 per cent. to be divided between the eastern and south-western Government zones. In September 2002, the right hon. Lord Rooker announced the challenge fund—a fund of £200 million-which is intended to deliver 4,000 new homes for rented and low-cost ownership in the southeast.
I am in no way diminishing the very serious housing problems in London and the south-east, but there are equally severe housing problems in many communities in other parts of the country. The impression is that the Government have been blinkered; they have focused largely on the south-east of England and seem to have

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turned their back on some of the serious problems affecting many other parts of the country, particularly the rest of the south of Britain where house prices are very high.
The housing problems in my constituency are as severe as ever. There is a significant mismatch between very low earnings—people in my constituency have been
on the bottom of the earnings ladder pretty much since records began— and very high house prices. The arrangements are clearly inadequate for families in my area whom public authorities cannot house. I appreciate that the Government have targets for ending the practice of putting people in bed-and-breakfast accommodation next April, but such families will inevitably live often in very cramped and entirely inadequate temporary accommodation, away from where the main income earner works and where the children go to school.
Mr. David Drew: The hon. Gentleman and I have discussed housing numerous times. Does he accept that one way of dealing with the problem is to examine the structure of housing? Older people often live in houses that are larger than they want. We seem to have lost sight of the fact that the market no longer wants to build bungalows or appropriate accommodation for older people. If such accommodation were provided, however, that could free up family housing in our communities.
Andrew George: That is true. The hon. Gentleman takes great interest in the issue, and I am grateful to him for making that important point. Incentives can be provided, particularly in the public sector. Some housing associations and local authorities try to use incentives to attract single, older people out of very large family housing that is no longer appropriate to them and into single-person bungalow accommodation with one or two bedrooms, where available. Such properties need to be available.
My part of the world has seen high rises in house prices in the past seven or eight years, as exposed in recent editions of the Western Morning News. One study showed that in the past eight years, house prices in many communities in Cornwall have risen by more than 250 per cent.—faster than they have in London during the same period. Many people in London and the south-east complain about, and are shocked by, the house prices and the rate at which they have increased. However, house prices have increased at a much faster rate in Cornwall, and most properties on the market are simply well out of the reach of local people on local wages. In addition, we must recognise that the proportion of public sector housing in Cornwall has historically been very low—between 10 and 12 per cent., depending on the district. In most urban and metropolitan areas, the proportion is significantly higher—in the upper teens and even over 20 per cent. The public rented sector is also significantly lower; it is sometimes as low as 8 to 14 per cent. in many districts, although, again, the proportion is much higher in many urban areas.
There is a very large waiting list on the Isles of Scilly, in Kerrier and in Penwith. Penwith has 28,500 homes, but 1,359 households are registered as being in need,
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which is close to 5 per cent. of households in that district. Many people have taken a strange view of house price increases. For example, yesterday, a Cheltenham and Gloucester press release entitled, "How Much Have You Made?" celebrated the fact that house prices are still increasing. If one is moving between properties, the money is toy-town money, but in many areas the bottom rung of the ladder is being taken away from local people.
I said that I would mention second home ownership. It is at a high level in my part of Cornwall, and it seems to be increasing as a proportion of stock ownership. That is understandable: partly because of the failure of many pensions schemes, those who have spare cash want to invest in an appreciating asset, which gives them a recreational benefit and, whether or not they stick entirely to the 120-day rule for letting, can make them a tidy annual rental income as well. One can see the attraction for those with the money of buying a second home in west Cornwall or the Isles of Scilly. In Penwith alone, 10 per cent. of the housing stock is second homes, and in the Isles of Scilly the figure is above 25 per cent. All the indications are that those proportions are growing.
With 1,300 or more families in need on waiting lists, that level of second home ownership and the fact that the opportunity to buy second homes in the west of Cornwall and the Isles of Scilly is celebrated and promoted in the Sunday supplements of some of the heavier newspapers are seen by many as an obscenity. They are deeply offended by it.
To be fair to the Government, when I was elected in 1997, I brought to their attention the arguments against the use of taxpayers' money to subsidise the second homes of the wealthy. Even now, 50 per cent. of the council tax of those with second homes is met by the taxpayer, so those people are subsidised to enjoy the advantage of the income and investment and the recreational benefit of their second homes. Various parliamentary questions have demonstrated that although it is difficult to identify the exact —sum perhaps the Minister can advise us—if we extract those properties that are used as second homes, as opposed to charitable and other uses that are entitled to 50 per cent. subsidy. some £200 million of taxpayers' money is used to subsidise wealthy people's ownership of second homes, while many thousands of people on very low incomes in areas such as mine cannot afford to have a first home. I argued that point with various Ministers, by letter and in meetings and debates, and I am pleased to say that the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Sunderland, South (Mr. Mullin), who was the responsible Minister at the time, accepted in a debate on 9 February 2000 that the situation was no longer acceptable, and agreed to review it. To the credit of the Government, they produced the rural White Paper and have, in the Local Government Bill, introduced measures to reduce the subsidy by 40 percentage points or more.
That is welcome, but there is a great deal more to do. Certainly, the Government should do a great deal more than they are doing about the 40 per cent. additional council tax that local authorities can levy from second home owners. In my area, the district councils have clearly made the case—as I did with Ministers-that the main consequence of high levels of second home

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ownership is lack of affordable housing for local people. If local authorities are to take advantage of their ability to levy further council tax, they should use the majority of the money that they raise to address that problem, so that local people can benefit. The problem is that in places such as Cornwall, the levying bodies-the district councils—receive only 14 or 15 per cent. of council tax income. They are arguing with the higher-tier authorities—the county councils-that they should receive a higher proportion. It would be helpful to have an indication of the Government's view. When I have asked Ministers previously, they have refused to intervene and have left it to local authorities to sort themselves out. At the moment we are close to a squabble between the district councils and county councils. I hope that they can resolve the issue amicably, but some kind of intervention from the Minister would be welcome.
Mr. Simon Thomas: As the hon. Gentleman knows, in Wales, council tax has been levied at 100 per cent. on second homes for a long time. He has fought valiantly for a similar arrangement in England. Would he go even further and support what is being talked about in Wales, where it is acknowledged that, as he has just said, second homes not only receive a subsidy if they are not charged 100 per cent. council tax but are a cost to the community in that they make communities less sustainable in terms of schools, shops, post offices and so forth? He has made an argument for using some of that money for housing; we would suggest that there is also an argument for empowering local authorities to increase council tax beyond 100 per cent. on second homes, rather than fixing it at the 90 per cent. or 100 per cent. that he has long advocated.
Andrew George: I am grateful to the hon. Gentleman for raising an interesting point. It is one of the arguments that the county council in Cornwall is constructing. The lack of people living in some of its communities during many of the autumn, winter and spring months undermines the viability of a number of rural services, such as schools, shops and village halls, so one could make a case for using some of that income for other purposes.
The primary result of the high level of second home ownership is the lack of affordable housing for local people. I have made proposals to previous Ministers, and I hope that this Minister will listen to me, as his predecessor did, on the issue of council tax and second home ownership. I do not believe that just because I have been rebuffed once by a Minister, I will always be so rebuffed on the possibility of using the order on planning use classes to define the distinction between permanent residents and non-permanent residential use. Local planning authorities should be given the tools not to outlaw all second homes but to outlaw excessive second home ownership in many parts of the country. I am thinking of communities in west Cornwall such as Helford, Cadgwith, Sennen, Mousehole, St. Ives and Porthleven, where levels of second home ownership sometimes exceed 50 per cent. I would like local planning authorities to be given the power to stipulate
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the number of second homes that they are prepared to tolerate in the local community, thus constraining people's ability to purchase second homes there.
Mr. John Hayes: It is unusual for me to have the opportunity to be more liberal than the hon Gentleman—I do not really have a liberal bone in my body. Is he suggesting that we tell people whether they can sell their house to the person of their choice or buy a house in the place of their choice? That would require an extraordinary imposition on people's freedom and choice, things in which I thought the Liberal Democrats at least pretended to believe. While the hon. Gentleman is talking about such issues, perhaps he can comment on the idea of local income tax, which his party advocates. If a young couple were to buy a small house to get on the housing ladder, they might pay considerably more in local income tax than they would in council tax.
AndrewGeorge: I shall resist the temptation to extend the debate and talk about the clear, strong case for local income tax, although perhaps my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) will take that up later.
The hon. Member for South Holland and The Deepings (Mr. Hayes) says that my proposal would constrain people's liberties. However, local people on low incomes are already having their liberties and choices constrained, and it is their liberties and opportunities that we should address. Of course anyone can sell any property to anyone, and they would continue to be able to do so under the change in the use of planning orders that I have suggested. The use to which a property is put is the important thing. In other words, the hon. Member for South Holland and The Deepings could come down and buy a property, but if he rented it to local people, he would benefit from the investment in that property, local people would use it and a local need would thereby be met. That is not the same as using a property for recreational purposes, which is a significantly different use of a valuable resource. Such properties are a limited commodity in areas such as mine. The planning system cannot allow properties to be built absolutely everywhere or the very landscape and environment that many people come down to enjoy will be spoilt. The supply is limited, so there must inevitably be rationing. The question is how we provide it.
Mr. Edward Davey: If I have understood my hon. Friend's argument correctly, he is talking about the notion of saturation in the planning use order system. I note that New York uses such a concept with respect to excess licensed premises, for instance. Has my hon. Friend considered whether we as legislators could play with the concept of saturation to develop planning use orders in that regard?
Andrew George: My hon. Friend is absolutely right. I do not say that people should not have second homes. My point is simply that the relevant mechanism should be available to local authorities that can prove to the Government that using it would be a prudent and appropriate way of tackling high levels of housing need.

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In some communities, the rate of second home ownership would be so high as to be beyond saturation. That needs to be addressed.
The Minister's predecessor, the Under-Secretary of State for Transport, the hon. Member for Harrow, East (Mr. McNulty), responded to me following an offer that the local authority on the Isles of Scilly made to test the initiative there. Within the existing legislation, the Minister could pilot a new planning policy on the Isles of Scilly, establishing a use class order for second homes, without setting a precedent for anywhere else in the country. I urge the Minister to consider that offer carefully. On many of the islands, the rate of second home ownership is at least 20 per cent., and sometimes 25 per cent. or more. Allowing the authority to implement the policy would demonstrate whether it works. The policy could then be rolled out across the country—a favourite Government expression, I believe.
I realise that time is marching on, so I should like to make some brief general points about the planning system. Many people see the planning system as a means of delivering private wealth rather than public goods. To be fair to the Government, there is a debate in the Chamber today about matters relating to PPG3 exception sites and so on. However, the Government could further strengthen policy by enabling registered social landlords to bring forward exception sites in rural areas, or even market towns, where the planning policy has been drawn up tightly and the planning committee sticks to it tightly. In those circumstances, an exception could be made on the edge of the town or village to meet a local housing need, which, in many cases, would he managed by a registered social landlord in the long term. That would help to deliver land at significantly below market value, which is essential to develop affordable housing for local people. Otherwise, registered social landlords end up buying land at £500,000 or more an acre, which puts affordable housing out of reach.
There should be support from the Government for developing a new intermediate market, particularly for shared equity and leasehold properties. Intermediate markets are necessary in rural areas such as mine, which have low wages and high house prices. People on local incomes recognise that the availability of rented accommodation is limited. Shared equity accommodation should be developed and perhaps managed by registered social landlords. At present, however, people who want to move on from a property where they own, say, 50 per cent., cannot take advantage of other shared equity properties, because there is an insufficient supply. Also, many people who purchase such properties have difficulties raising mortgages, so intervention from the Government on that would be helpful as well.
In previous debates the Government said that they had established regional housing boards, which are quangos and are established over surreal planning areas. Although the boards are supposed to match planning priorities with housing priorities, they have prioritised principal urban areas in the south-west Government zone. The secondary areas relate to Government targets to deliver rural housing in
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communities of less than 3,000. Many small market towns have been left out altogether, which is a matter of concern.
Time is moving on, so I shall not take up any more of it. I have written to the Minister with questions that I have not had a chance to raise today. I look forward to the rest of the debate.
2.39 pm
Ms Oonaking:
I am pleased to contribute to such an important debate. I want to raise two key issues: how we deal with overcrowding as part of the Government's strategy both to create more affordable housing units and to reach the decent homes standard, and how we free up more units for affordable housing. I would also like to consider the future of council housing, which in many areas will be through stock transfer.
In my constituency, the council has carried out a detailed review of its housing stock, using PricewaterhouseCoopers to do an option appraisal. In trying to determine how best to bring our housing stock up to a decent standard, the council has determined that the only realistic way forward is through partial stock transfer. However, the problem is that, although money is attached to the other means available to councils to bring their stock up to standard—such as arm's length management companies and the private funding initiative—there is no clarity as yet about how we would deal with gap funding to bring houses up to a decent standard. Might the Minister be able to talk briefly about how we can deal with that problem?
Many tenants in Tower Hamlets have backed a review and further consideration of stock transfer. However, if registered social landlords are unable to engage in the programme because the risk appears too great, we will obviously not be able to move that programme forward. We will be unable either to bring our housing stock up to a decent standard or to guarantee the numbers of affordable housing units that we would wish to see reaching that standard.
I am pleased that we have reversed the £19 billion backlog on housing in the affordable housing sector since we came to power, and that some authorities will be able to reach the decent homes target when dealing with their affordable housing stock through their own resources. That is not the case, however, in areas with significant negative values. Tower Hamlets is one of those areas. Following a recent intervention in a debate on overcrowding, I was pleased that the Minister undertook to write to me about the moves that the Government will make to deal with the issue.
I am glad that the Government have decided to undertake research into overcrowding. It is a huge problem in Tower Hamlets, and it affects everything about a child's upbringing. It affects their health, education and employment prospects. Research by Shelter has shown, as one would expect, that if a child is brought up in overcrowded accommodation, they are more likely to have respiratory tract infections. There are other simple consequences; they are more likely to be prone to accidents and less likely to do well in their education.

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On a personal note, I see many families every week who are either unable to access decent homes or feel that they cannot afford to enter the private market to look to access decent homes there.
Mr. Andrew Love:
I apologise for arriving late for this important debate. Does my hon. Friend agree that since the Government have set a standard of halving child poverty within the next 10 years, not addressing overcrowding would make it much more difficult to achieve that target?
Ms King: I agree wholeheartedly. That is why I raised the issue of overcrowding within the scope of the Government's target on the decent homes standard. The definition of decent homes should be widened to include overcrowding and the issues that local people in areas such as my own get upset about, such as lack of security and maintenance of communal areas. If we do not expand that definition, we will risk missing an opportunity of achieving the target that my hon. Friend mentioned. Reducing the numbers of children living in poverty is a key plank of Government policy.
Specifically, will the Minister say whether the new regional housing boards will be directed to take the problem of overcrowding into account, especially when determining how they are going to allocate their resources? Supplementary to that, and to the issue of child poverty, we should recognise that the 2001 census showed that 1.5 million children live in overcrowded conditions. The vast majority of those live in families under the poverty threshold. I know that everybody assumes that the streets of London are paved with gold, and Londoners are not the first to win sympathy when we talk about problems relating to poverty. However, 48 per cent. of the children in England who live beneath the poverty threshold live in inner London—children whose lives are crippled by poverty. I would be particularly grateful if the Minister might elaborate on what the Government will do to ensure that overcrowding, which affects £1.5 million of the poorest children, is dealt with.
I will end by returning to stock transfer. It is important that tenants understand what the process involves. They need to be engaged in the decisions and options. It is important that they understand that housing transfer is not privatisation and that if stock is transferred to registered social landlords, at least one third of the housing association board members would have to be tenants. Could the Minister outline what other assurances residents can have about stock transfer? I was speaking to someone recently, for example, who wanted to know what the worst-case scenario was, and what would happen if the RSLs went bankrupt. I explained that that was not a likely scenario, and that I was unaware of any circumstances in which it had taken place in the past. However, I could be wrong and would be grateful if the Minister could outline the pitfalls as the Government see them?
I hope that the Government will continue to ensure that increasing the number of affordable housing units is at the top of their agenda and that money follows housing need.
Mr. Edward O'Hara:Order. For clarification, the debate will last a full one and a half hours and the wind-up speeches will start at ten past three.
2.49 pm
Mr. Mark Hoban:I congratulate the hon. Member for St. Ives (Andrew George) on securing this debate. We have heard from him and from the hon. Member for Bethnal Green and Bow (Ms King) about the housing issues that affect their parts of the country.
I want to talk about affordable housing in the context of my own constituency, which is on the south coast of England. There is a lack of social housing, because of the structure of the housing stock in the constituency. Even a relatively small one or two-bedroom flat will cost a six-figure sum. With an average wage across the country of £24,000, that sort of flat becomes difficult for a single person to afford. In the constituency, because of the relative expense of private housing stock, there is a relatively small and expensive private rental sector.
When I talk to constituents about trying to find private rented housing, they often tell me that they cannot afford it in their circumstances. Consequently, affordable housing in Fareham tends to be social housing. That is the main source of properties in that category. Fareham district council has 2,450 council houses and has nomination rights to 900 housing association properties across its area and just outside it. At the end of September, the housing waiting list, which includes people waiting for a transfer to a larger property, was more than 2,100. In the last year, only 170 vacancies arose from the total housing stock of 3,500—taking into account he properties for which the council has a nomination right.
There are 123 families in temporary accommodation, 23 of whom are in bed-and-breakfast properties. The council is well aware that its priority over the next few months is to reduce to zero the number of families in bed and breakfasts. However, it also expects that by the end of March 2004, some 25 families will become homeless and will end up in bed and breakfasts, and that they too will need permanent accommodation. Therefore, it needs to rehouse just under 60 families and move them out of bed-and-breakfast accommodation in order to meet the Government's deadline.
The council is taking steps to tackle the issue. It is considering leasing properties from the private sector in Fareham and adjacent areas to house some of those homeless families. It provides rent deposits and rent guarantees to help families find accommodation in the private rented sector, but the expense of such housing makes it difficult for those families to afford that. Some 18 units, which are being built by the Portsmouth housing association, will come on stream in March 2004. The priority for nomination rights for those properties will go to those families who are currently homeless.
The council is making progress towards tackling the bed-and-breakfast problem, but it considers it a difficult issue and is looking at how other forms of social housing can be provided. It identified a scheme to create more social housing on the site of an existing homeless shelter in Fareham, but the application for funds for the replacement shelter was turned down by the Office of the Deputy Prime Minister for three reasons. The first reason was that the site was privately owned, although that was rectified in 2002. The second reason was that the commercial occupants were still in residence, but

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they moved out in December 2002 and the site is now clear. Thirdly, the ODPM said that the scheme did not have planning permission and that there were likely to be local objections. Indeed, there were local objections, but they have been resolved, and the planning committee has voted to accept the homelessness scheme. Of course, there has still been no money from the ODPM, so the existing homeless shelter, which I have visited and which is in dire need of replacement, is still there, occupying a site that could be used for social housing, and the site for the new shelter remains vacant. That site is being cleared, but the money to fund the new shelter is not available. I ask the Minister to consider that scheme in particular. I have corresponded with his colleague, the Minister for Housing and Planning, and I await a further response from him. We need long-term imaginative schemes such as that to tackle the shortage of affordable housing in my constituency.
I now move on to the role of the development of large sites in resolving some of the social housing problems in my area. Fareham has undergone rapid expansion in recent years. Where there is large-scale development, there is benefit to the local community, given that the developer will contribute towards the building of social housing. However, the Department's guidance of recent years, which has focused development on brownfield sites—in Fareham that means focusing development on relatively small brownfield sites— has meant that that dividend does not emerge any more. Very few new houses are built on large sites, so relatively little social housing is being funded through planning gain. Applications for development on greenfield sites have often been called in by the ODPM. As a consequence of the call-in process and the wait for a response from the inspector, provision of social housing has been further delayed. Where sites have been identified for social housing, the size of those sites and the number of dwellings to be built that have been forced on those sites is an issue.
A scheme is currently proposed for Laburnum road in the centre of Fareham, in the midst of a residential area where there are many two-storey houses. In order to try to accommodate the number of people on the housing waiting list, the developer, Portsmouth housing association, has been forced to consider building a three-storey block of flats Flats are not ideal for families, and I would rather that families could be accommodated in houses with a garden, but I appreciate that the pressure on land and finances is such that they sometimes have to be accommodated in flats. The scale of the development in relation to the surrounding housing has caused a great deal of concern among local people.
Underpinning a lot of this issue is the funding available from central Government for affordable housing in my constituency. The council is concerned that the abolition of local authority social housing grants and the transfer: resources to the regional housing board will penalise places such as Fareham, where there is moderate affluence but pockets of deprivation. It believes that resources will be sent either to older urban areas or to the new housing developments that are projected for Ashford and places such as Milton Keynes.
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Will places such as Fareham receive a fair allocation of the moneys that are being made available to the regional housing board by the Department? I would welcome the Minister's assurance that places such as Fareham will not miss out on a share of those funds, because it is difficult to see how the council will continue to meet the Government's housing targets without those funds, or how it will meet the deadline for the clearance of families from bed-and breakfast accommodation by the end of March 2004.
Fareham district council has made tremendous strides towards coping with the problem of homelessness and affordable housing in my constituency, but it is aware—as am I—that there is much to do to tackle the problem. I hope that the Government will think again about the impact of their policies on development and on the funding of social housing in areas such as mine, and that they will consider what contribution they can make to resolve some of the problems that affect my community and those of hon. Members who have spoken today.
2.58 pm
Ms Candy Atherton:I congratulate the hon. Member for St. Ives (Andrew George) on securing this debate, and I remind him that we have the honour of sharing west Cornwall.
As I am unsure how long I have to speak, I will speak briefly on an issue relating to my constituency. When it comes to affordable housing, money is important. I welcome press reports that the Chancellor may make housing a priority in tomorrow's pre-Budget report. Imbalances in the housing market need to be addressed, and money helps. I am glad about restrictions on the right to buy and that the Government are tackling the much maligned second homes council tax discount.
As the hon. Member for St. Ives said, there are more second homes than first homes in some parts of Cornwall. Recently, I asked local town and parish councils if they wanted money gained from the abolition of the second homes discount to be earmarked specifically for affordable housing. Every single one that replied said that it did. I ask the Minister to send a strong message to Cornwall and to the town and parish councils that the Government strongly support their corner and that the county council should not use the money that it raises from the abolition of the discount for other parts of its budget, but to put the money back into affordable housing to tackle that great problem.
Getting rid of the discount is not the answer to the problem; it is one answer, but it is not the complete answer. Those who can afford a second home can usually pay the tax, and it will be interesting to explore ways to influence the market. Perhaps we could think about utility bills and higher standing charges for people with second homes. If they can afford a second home, they can afford to pay a higher charge. Currently, the rest of the community subsidises them.
We all know the age-old problem of the nimby. In the Camborne, Poole and Redruth area, there is an urban regeneration company. We are planning for 2,000 homes of mixed tenure, but we need Government support. I do not have time to explore this issue as I wanted to, but I hope that Ministers come and see our plans, because we have brownfield sites, and we can

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build on them. There is no nimby factor. The attitude is, "Yes—in our backyard", because we need the housing: 1,500 people are on the housing list in the Camborne, Poole and Redruth area alone. I strongly urge my hon. Friend the Minister to come and see what we are doing and give us a hand, because our area has a "Yes, can do" attitude.
3.1 pm
Mr. Edward Davey:I congratulate my hon. Friend the Member for St. Ives (Andrew George) on securing the debate and on the way in which he has championed in Parliament the policy of removing council tax discounts for second homes. I do not think that the Government would have taken such a measure were it not for his dogged persistence and determination. Although he was modest enough to praise the Government, he, too, should take hon. Members' praise for the work that he has done for his constituents in Cornwall and for the rest of the country.
This is a timely debate, not least because it is taking place on the eve of publication of the interim report of Professor Barker's review of the supply of housing, which was commissioned by Her Majesty's Treasury. There is a bizarre aspect to housing in this country. We have high house prices, but often the market does not respond to them quickly by producing new houses. That is why the Government set up the review, and many of us are waiting to see Kate Barker's conclusions.
According to various stories in the press, there will be changes to the planning system. It is rather ironic that the Planning and Compulsory Purchase Bill is taking an awfully long time to go through Parliament. Whether the new ideas that we are about to hear will run counter to current ideas or build on them, we have yet to see.
One idea that has been leaked in the press—whether the Barker review will come up with it, we do not know-is that we should adopt the proposal from the review by Lord Rogers several years ago for equalisation between VAT on repairing existing homes or homes that are in disrepair, and VAT on new build. Currently, no VAT is paid in respect of houses on greenfield sites. Liberal Democrat Members have argued that there should be equalisation between VAT on new build and VAT on repair, not to generate extra revenue for the Treasury, but to remove the perverse distortion against reusing and recycling existing homes. It will be interesting to see whether the Barker review makes that proposal.
When one considers the numbers, one wonders whether the Treasury was right to focus so much on this issue. Let us consider the numbers being produced by the private sector in respect of new build. Over several decades, the numbers have been pretty constant. There has not been a massive increase or a massive trough in private sector house building at any time over that period. The reduction in the number of new homes being built really comes from the social sector and the fact that Governments of differing political hues have taken a lot of money out of that sector over a number of years. I simply question whether the Barker review will be able to find a solution, given the true macro picture of funding of that sector.
I hope that the review will consider real reforms on the planning side. Local authorities must be far more proactive in the way in which they use the planning
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system. They must encourage developers to build more homes that are affordable for people in their communities. We need to consider pre-application consultation, so that developers learn about the community's needs from the community. There is no reason why the private sector will not meet those needs. Sometimes the issue is poor
communication
Lembit Öpik:Is my hon. Friend aware of the work of Mick Bates, a Liberal Democrat Member of the Welsh Assembly? He has been promoting four things: a definition of affordability; accurate assessment of housing needs; greater rural exemptions where appropriate; and community housing trusts. That ensures that there is joined-up thinking about supplying affordable housing, especially in rural areas.
Mr. Davey: I am grateful to my hon. Friend for that intervention. I was not aware of the excellent work being done by our colleague, but I will certainly get hold of a paper on it.
When we consider affordable housing—perhaps this is similar to the work happening in Wales—we decide that one size does not fit all in respect of the needs of different areas and communities and of different groups of people. Many of the key workers in London whom we are discussing are young professionals who want to rent only for a time. They want affordable rents for high-quality, well maintained apartment blocks—one might call them condominiums. If we can encourage that type of building, the private sector will go into that market, because it can make a commercial return on it, and we will be able to deliver the types of property that those key workers want. Once they have saved enough to move on and buy their own home, they can meet their own needs, so we must try to persuade the private developers to consider the needs of particular groups.
Mr. Love: The hon. Gentleman mentions professional groups in the private rented sector, but I argue about whether that is affordable according to the current definition. He also mentioned owner occupation and the social sector. Of course, the private rented sector has a great role to play. Does he expect the Barker review to say something about how the private rented sector can provide affordable accommodation for those in need?
Mr. Davey: I certainly hope that it will. I hope that the hon. Gentleman does not misunderstand my use of the word "professionals". I was talking about health care professionals, police officers and teachers. They are professional people who need housing, but because of the current structure of the private rented sector—certainly in my constituency, arid I imagine that the same is true in the hon. Gentleman's constituency, given that he is a London Member—sometimes they cannot afford private sector rents. The proposal that I was trying to back, which comes from research by the Joseph Rowntree Foundation, says that if we think about the issue more imaginatively than developers have done in the past, we can meet that need through the market, but pointers and encouragement are needed from Government.
The really difficult sector in terms of affordable housing is those very low-income workers who will never move on. They may be elderly. They may be in

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jobs that mean they will never move up the scale. The Government need to produce subsidies in that area, as is currently the case, through housing associations and housing authorities.
One issue on which the Government have been dragging their feet and could take immediate action is empty homes. There are many empty homes in the public and private sectors in areas of high housing demand. In London, more than 100,000 properties have been empty for a considerable time, 83 per cent. of which are in the private sector.
In my constituency, several streets have empty homes that have been sitting idle, unused and unoccupied, for years. If one goes off the A3 at the Hook junction to Gladstone road, Haycroft road and Brook road, one will find 29 family properties that have been empty for more than a year. Indeed, some have been empty for several years. I have been working with the local councils to see whether we can persuade the owner of those properties to bring them back on to the market. The gentleman happens to be very elderly and seems not to take the advice of some of his advisers, so there are difficult problems. However, when more than 1,000 families are in temporary accommodation in the royal borough of Kingston while 29 large family homes sit empty, people can see the need to act on this issue.
What have the Government done? In a debate in Westminster Hall on 19 June, I urged them to have a consultation on new compulsory leasing powers for local authorities. The Government reacted to that and, just before the summer recess, or perhaps during it, they published a consultation paper, which I welcome. The problem is that they are being slow on the consultation. The Housing Bill contains provisions for orders that will allow local authorities to make quite severe interventions in their local communities to try to ensure that some of their problems are dealt with. However, the Government are not minded at the moment to bring into the Housing Bill some of the empty property management orders in the consultation paper.
When will the Government get another chance to legislate on the issue? Given that the Select Committee was sympathetic to the proposal, I hope that the Minister will give us some explanation of why the Government are failing to act, even though they have the chance to do so and the ideas are ready to go. I hope that they will consider that again.
Time is short, so I will bring my remarks to a close. The Government have been slow to react to the affordable housing crisis. In previous parliamentary Sessions, my hon. Friends and I, particularly those with constituencies in London, have talked about the problem time and again. The Liberal Democrats have warned the Government that they are undermining their public service reform agenda because of the skills shortage in public services in London and elsewhere. I am glad that they are addressing it at long last, but they must be far more imaginative and ambitious if they are going to make an immediate impact.
3.10 pm
Mr. John Hayes:This has been a wide-ranging and useful debate, and I hope that the Minister will draw on all his expertise to deal with it in as wide ranging a response.
It is important to note that a broad-minded approach is required. The issue of affordable homes is not just about the simple matter of outright home ownership, but about the possibilities of shared or part ownership and the rented sector. Affording to rent, let alone being able to afford to buy, is a big issue for many of our countrymen. In large parts of Britain, people cannot get on to the first rung of the housing ladder even though they want to.
Addressing the problem requires the kind of innovative schemes mentioned by my hon. Friend the Member for Fareham (Mr. Hoban), who talked about some of the experiences of his constituency, and the Government need to reflect that in their policy approach. We need to be more creative in bringing affordability back into the marketplace, and we hope that the Barker report and the proposals that will follow from it will reflect a broad-minded approach.
The problem is not universal. It is felt strongly in particular areas—certain types of areas and certain parts of the country. In rural communities, affordability is a massive problem, as I know from my constituency. It is profoundly felt since many young people are unable to stay in the communities in which they were born and bred and in which they work because of the prices of local housing and the lack of rented housing from either local authorities, housing associations or the private sector. That is driving them into having to travel long distances to see their families, go to work and engage in all the normal things that people do in their social lives. It is fragmenting communities in an unacceptable way.
There are also problems in particular parts of the country. We know that there are massive problems for key workers and people who need to live close to their work, especially in the south of England. Ironically, in some other parts of the country, supply outstrips demand. That irony lies at the heart of the debate, and it must be addressed by a policy that is sufficiently targeted to tackle differing problems in different parts of the country and in different types of area.
As we know from what has already been said, the Barker review will undoubtedly focus heavily on that. Before I came to the debate, I was looking at the Chartered Institute of Housing submission to that review. It tries to answer the question posed by the review, which is why the private housing sector has not expanded to replace the provision of social housing. That is partly about housing for rent, but also about the building of private housing at prices that people can afford. The Government can do something about that, and I shall shortly ask the Minister some specific questions to elicit the Government's intentions.
The Chartered Institute of Housing submission suggests that there are real problems concerning the demographic profile of tenants. It states that there is strong evidence that young social housing tenants often aspire to leave the sector at some point to become private home owners or private tenants but cannot because of a series of problems. One problem is mortgage eligibility, as people have problems getting on

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the ladder because they cannot afford to borrow. The second is that the mismatch between supply and demand means that people often want to buy a house where they can least afford to do so. There are also concerns about housing benefit rules and the private rented sector, to which the hon. Member for St. Ives (Andrew George) referred. Problems of security of tenure also particularly affect young people.
As well as the Barker review, it would be remiss of me not to pay attention to both the Planning and Compulsory Purchase Bill, which is being debated in the main Chamber as we speak, and the Housing Bill, which was published yesterday. There are worries that the changes to section 106 agreements in the Planning and Compulsory Purchase Bill may make the building of affordable housing even less likely. Much of the affordable housing now available, especially the social housing, has been built through planning gain and as a result of negotiations that have taken place around section 106 agreements when a developer applies for planning permission from his local council. If the changes in the regime prevent sufficient opportunity to insist on specific types of developments, they may dry up the supply of affordable housing to an even greater degree. I will be interested to hear the Minister's comments on that.
On the Housing Bill, will the Minister comment on the effect of the seller's pack on the market? Some groups, including estate agents, representative bodies and, to a lesser extent, the Royal Institution of Chartered Surveyors, claim that the seller's pack will slow down the market and reduce the number of houses on it at any one time. That would affect the people who want to get on to the ladder, move into a house for the first time and fulfil their dream of becoming home owners.
We must also consider the standard of housing, which the hon. Member for Bethnal Green and Bow (Ms King) rightly mentioned. That will be covered in the Housing Bill, and we will have more chance to debate it at length at a later stage, but it should not be ignored in debates about affordable housing or policy for it. It is no use taking an approach on affordable housing if we do not simultaneously look at its quality. I am sure that the Government will want to pay proper attention to that when the Bill comes before the House.
Given the necessity for brevity, I will sum up by posing a series of questions to the Minister. What aspects of mortgage eligibility have the Government examined, and how do they fit into future policy? What role will changes to and Government influence on mortgage eligibility play in making housing more affordable, particularly for young people?
What planning guidance have the Government considered for mixed developments? They have said that they are in favour of mixed developments, but one problem is that the instruments that local authorities have to bring that to bear are relatively slight. They have to rely on housing needs assessments, which are not always specific enough in terms of the sites that might be considered for mixed development and affordable housing.
What will the Government do for the special needs of disabled people in relation to affordable housing? That point has not been raised today, and time does not permit me to elaborate, but it is an important issue.
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What specific ideas do the Government have on shared and part ownership? One important way of making progress on affordable housing would be to be much more creative in considering the ways that people can get on to the ladder through shared or part ownership, perhaps working with a housing association or local authority.
What is the Government's strategy for empty homes? It is nonsense that there are 720.000 empty homes throughout England and Wales yet that resource is not being developed. Those empty homes provide an opportunity for many people to afford a home for the first time, but there is no financial incentive to encourage it. Local authorities do not fully understand their powers and have not had sufficient training for their role as financial institutions. The housing benefit proposals may do even more damage. The Government's empty homes strategy will be critical and I want to hear from the Minister precisely how he intends to take it forward.
3.21 pm
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister(Phil Hope): We have had a stimulating and full debate this afternoon and during the nine or 10 minutes remaining, I may not be able to do justice to all the contributions that have been made.
Andrew George: On a point of order, Mr. O'Hara. I seek your guidance on whether the debate will finish at 3.40 pm because of the late start.
Mr. Deputy speaker:I stand corrected. The debate will finish at 3.30 pm, which is why I advanced the windup speeches to start at 3 pm.
Phil Hope: My hon. Friend the Member for Bethnal Green and Bow (Ms King), the hon. Member for Fareham (Mr. Hoban) and my hon. Friend the Member for Falmouth and Camborne (Ms Atherton) raised concerns that came from the heart. Different concerns were raised by Members from the furthest parts of the south-west, Wales, London and the south-east. We have had a tour of the country's housing needs and problems and some good debate on the solutions with interventions from the hon. Members for Montgomeryshire (Lembit Öpik) and for Ceredigion (Mr. Thomas) —I apologise if I pronounced that wrongly-and my hon. Friends the Members for Edmonton (Mr. Love) and for Stroud (Mr. Drew).
A major aim of Government policy is to tackle social exclusion and to provide increased quality of life. The provision of good-quality housing is a key element in that, but, as my hon. Friend the Member for Bethnal Green and Bow said, it is about the impact on people's health and educational attainment.
We have made good progress. Public funding to address the problem is, inevitably, limited and difficult choices must be made, but around £4 billion has been allocated for mainstream housing investment in 2003–04. That is well over twice the amount allocated in 1997–98. Having inherited a £19 billion backlog in housing repairs when we came to office in 1997, our release of a huge amount of capital receipts to improve social housing has been an important part of our programme.

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The hon. Member for St. Ives gave a graphic description of the housing problems in his constituency, many of which I recognise. We understand the need and the problems, not just in his constituency, but in other parts of the south-west and the rest of the country. We know that sometimes the attractive chocolate-box exterior of some rural communities hides serious problems of rural deprivation.
Mr. Drew: Before coming to the Chamber, I attended the Calor Gas village of the year lunch. I hope that my village of Coaley wins, but I do not yet know if it has. The point was made—Stephen Wright, who represents Gloucestershire community council, has made the same point-that the Government should understand that they do not want changes to the exceptions rule or the raising of the minimum level of a community from 3,000 to 10,000 because that would make a huge difference in small rural villages. I hope that the Minister will pass that comment on.
Phil Hope: I am sure that when my right hon. Friend the Minister for Housing and Planning reads the debate he will take account of that contribution.
I am pleased to say that real progress is being made in Cornwall. The West Cornwall Together partnership is taking a real step forward in tackling problems in the constituency. Some £6.5 million of neighbourhood renewal funding has supported people with problems in those neighbourhoods and in the constituency of my hon. Friend the Member for Falmouth and Camborne, who referred to the urban regeneration company. I have an urban regeneration company in my constituency and know the value of such partnerships in bringing together different players in district and county councils, local redevelopment agencies, English Partnerships and other private sector players into a partnership to bring about progress. I shall consider her comments about the importance of taking that forward.
The hon. Member for St. Ives asked about second homes and was right to do so. He acknowledged the change that has been made to the council tax rules to reduce the 50 per cent. discount for second homes. The hon. Gentleman and other hon. Members who referred to the matter would like Government intervention to tell district and county councils how to use the proceeds, but he probably knows that the Local Government Association wants more freedom and flexibility for local government to make decisions. [Interruption.] I was not going to point out the contradiction that that is also Liberal Democrat policy, but my hon. Friend the Member for Edmonton made that point well from a sedentary position. I understand the difficulties, but we believe that it is for local authorities to decide how to use additional income raised in the light of local needs and priorities. In areas such as St. Ives where there is a shortage of housing, we expect careful consideration to be given to the use of funds to provide additional affordable housing.
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The hon. Member for St. Ives said that building more homes might reduce house price inflation and thereby solve the problem with changes in the market. To reduce house price inflation to zero would involve a level of provision not seen in this country for some time. There are huge problems of environmental constraints and pressure on achieving such provision. We must make choices, prioritise needs and plan carefully to meet those needs if we are to make real progress.
The Government recognise the need for affordable housing, and we are endeavouring to deal with the problem in different ways in different areas. We are spending more money specifically on affordable housing and have given no less than a 30 per cent. increase in funding under the main approved development programme for social housing amounting to £20 million extra for housing in the south-west. That brings the total to £81 million and will deliver 2,000 new, affordable homes for the region in this financial year. We also aim to deliver 350 new affordable homes in villages in the south-west in this financial year and increase that on average to more than 380 a year during the following two years.
The hon. Member for Fareham asked about local authority social housing grant. I understand his concern, but we believe that as that money has been fairly taken, put into a central pot and distributed to regional housing pots, it is important that the regional housing boards should assess housing needs in their region—that is part of the Government's devolution policy—and then reflect action to respond to those housing needs in their funding proposals. Devolving that decision and providing those extra resources means that the provision can meet local needs as defined by local people.
In the brief time available to me, I want to mention PPG3, which is an important piece of planning guidance that addresses one of the issues also raised by the hon. Member for St. Ives about the need for a better mix of housing. PPG3 will give local planning authorities the ability to reject housing developments that do not broaden housing choice. We do not want large housing developments of one sort or another. We want a mix of size, type and affordability. We shall give local authorities the tools to deliver that and will back those local authorities in that direction when necessary.
My hon. Friend the Member for Bethnal Green and Bow raised a number of different problems in her area in London. We recognise that gap funding for negative value transfers or partial transfers is a significant issue for authorities such as hers. The regional housing boards must consider the need to fund those if their overall regional strategies are to work effectively. The local authority and the regional housing board must address that issue.
On assurances for council tenants who are transferring to housing associations, the transfer process requires a statement of the services and investment that will be provided by the new landlord on transfer. The transfer can take place only when tenants are happy with what will be provided. No transfer associations have gone bust, and surveys show that tenant satisfaction rises after transfers.

NHS Management
3.30 pm
Mr. Archie NormanFirst, I should like to draw Members' attention to my declaration in the Register of Members' Interests. Secondly, I thank the Minister for making time available to respond to the debate. I have a high regard for his expertise, and he has a reputation for being one of the less partisan Ministers. I hope that he can respond to my remarks in the spirit in which they are made, and can perhaps cast away his pre-prepared script and respond directly to my points.
Management in the health service need not be a party political issue, because it concerns how we can deliver effective results for patients. In 1983, Sir Roy Griffiths stated in his landmark study of management in the NHS:
"One of our most impressive observations is the lack of a clearly defined management function throughout the NHS. The NHS requires enormous resources…it demands top class management."
The world has moved on since then, and the NHS has moved on substantially. With larger NHS trusts the challenge is greater than ever. We have aggregated groups of hospitals into single trusts, which are more complex and technologically advanced than before and are under intense financial pressure. They are complex people-management organisations that depend on the attitudes, motivation and good will of the nurses, doctors, administrators and others who work in them for their success.
That people-management challenge has also moved on in the outside world. People's attitude to employment, whether it is within public or private service, is different from that of 20 years ago. The days when people went to work to earn a daily crust and hung up their brains at the door when they arrived are gone. People are no longer motivated regardless of how they are treated, and they expect their bosses to show them respect.
The world of employment has moved on substantially, but it is not clear whether it has moved on commensurately within the NHS. The Government's policy on the health service is clear: simply put, there has been a substantial increase in funding. In order to get value out of the funding, the Government have sought to retain accountability through a network of targets.
3.33 pm
Sitting suspended for a Division in the House.
3.43 pm
On resuming—
Mr. Norman: The Government's model for delivering value from the new investment in the health service has been built around a network of targets and performance measures, which are designed to ensure that patients and the taxpayer get value for money. However, it has been motivationally blind. The emphasis has been on mechanics and finance. There has been relatively little emphasis on the motivation of people and the need to attract talent for what is an increasingly demanding task.
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The results are well publicised and are a matter of fact. Hospital chief executives now have 420 different targets. According to my research, which uses answers to parliamentary questions, there are 151 different performance indicators, which is up from 86 last year. There has been an enormous increase in administrators and senior managements, which is not necessarily a bad thing in itself, but the scale is out of proportion with what must be delivered. Between 1995 and 2001, there was a 48 per cent. increase in senior managers and only a 7.8 per cent. increase in nursing staff over that period. The increase in senior managers and middle managers has continued since that date
Dr. Ian Bogle, the British Medical Association chairman, has said:
"We now have a healthcare system driven not by the need of individual patients but by spreadsheets and tick boxes."
Nobody would criticise the Government for making sure that we get value for money by measuring outcomes. The question is the management culture created within the health service and the productivity that it delivers. All the evidence shows that the productivity outcome is depressing.
Between 1999 and 2001, we spent 21 per cent. more on health care for a 1.6 per cent. increase in completed operations. The Minister may say that that is not the whole story, but the challenge is not to spend taxpayers' money—anybody can do that—it is to achieve successful outcomes and to create a health service that is more capable in the long term. I fear that we have put a donkey into the Derby. When the Government came to power, the management structure was not capable, but they invested with money rather than investing in people. Having put the donkey into the Derby, they attached performance targets to it and wondered why it did not go fast enough. The charge facing the Government is not whether they invested in health care but whether they invested in the people with leadership and motivational characteristics to deliver a worthwhile outcome for the money invested.
The evidence shows that there are few more demotivated and demoralised institutions in Britain today than our struggling NHS trusts. A recent MORI poll sought the views of NHS chief executives. The Minister will know the results: 62 per cent. of chief executives think that their role is becoming increasingly unattractive and that it is harder to recruit people into the profession. Some 66 per cent. of them—two thirds—
think that the NHS risks losing its best leaders, and 69 per cent. think that negative perceptions of the NHS make it hard to attract clinicians into management and leadership roles.
The Minister will know that the models of success elsewhere are very different from the model that the Government have pursued, and I shall give three primary examples. First, successful hospitals the world over tend to have fewer administrators and clearer management accountability. Research by Solutient in the United States shows that the 100 best US hospitals employ on average 25 per cent. fewer managers and administrators per hospital, yet they deliver better health care by US standards—let alone by our standards.
Studies in the private sector conducted both over here and elsewhere also show the need for absolute clarity of accountability. Obviously, private sector hospitals in

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the UK tend to be much less complex and are less likely to have acute services, such as accident and emergency, than hospitals in the NHS, but none the less the point is clear—it is not only a question of resources. National health service chief executives are unusual by world standards in being bereft of the powers to manage. A conspicuous example of that is their inability to move staff who have underperformed in their duties out of the hospital. They also cannot manage and deploy their own team of consultants.
Last week's announcement of the new methicillinresistant Staphylococcus aureus tsars in every NHS trust shows how little the Government have changed. It must have been greeted with a groan by every chief executive up and down the country, all of whom will be hoping that it is just another shallow political initiative and not something that will impose extra costs and extra administrators on them. The management of MRSA is centrally a line management responsibility, and not something that can be dealt with by sticking on an elastoplast in the form of an extra administrator.
We should collapse the 420 targets into six or seven rounded measures of performance, which would give an effective audit while allowing chief executives the discretion to manage and interpret which of those targets they can exceed and beat and to focus on local clinical priorities.
A characteristic of successful health care models all over the world is the deep clinical involvement in management. In the United Kingdom, the best performing hospitals typically have a shared clinical vision between doctors, consultants and administrators, which they work hard to achieve. That is true in Great Ormond Street hospital in this country and in the John Hopkins University hospital in the United States. That common clinical vision depends on the intense involvement of clinicians and consultants in management, and on their understanding management pressures.
The British Medical Journal study of the Kaiser Permanente network in California, published in January 2002, demonstrated the same point: it delivers better care at the same costs partly through superior integration of clinical management. That study found:
"Today, the mutual commitment to an exclusive partnership between the physicians and management is deeply ingrained in the organisation. Many factors may be credited for this success, but three stand out."
Those are joint leadership between administrators and clinicians, alignment of objectives and management training for physicians—all characteristics on which this country lags seriously behind.
Worse than that, the culture of targets and the stress that that places on local priorities and on chief executives drives a wedge between consultants and clinicians, and administrators. That is why there is a serious problem, creating huge resentment among clinicians. They do not like the sight of large amounts of money being spent on administration and additional staff, particularly as many consultants are extremely highly qualified and very able people, often with views on management. Some are much more capable than we would allow of moving in and contributing to the management process.
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I refer again to the British Medical Journal article of 22 March, which studies the attitude of clinicians to management and chief executives to clinicians. It cites just short of 60 per cent. of clinical directors as disagreeing with the statement:
"Doctors have confidence in management leadership capabilities".
I do not have time to go through all that survey, but it is very clear that in this country there is a growing divorce between clinicians and management, which is exactly the opposite of what we need. Commission for Health Improvement reports show time and again that the most frequent causes of failing hospitals or serious service failures—where there is the highest correlation—are
poor team working among clinicians, lack of clinical leadership and poor doctor-manager relationships. Those are CHI's words, not mine.
The Government have not invested substantially in the development of management talent in the NHS. I know that latterly, in 2001, we had a new initiative in the NHS leadership centre, apparently costing £150 million. It is not easy to discover exactly what goes on in the leadership centre for our 1£150 million, but I am sure that some of it is welcome. However, we are aware that, of nine skill development courses for chief executives, five are essentially to do with public services and politics, including relationships with the media, Government, Whitehall and Westminster, rather than with the management and involvement of clinicians and the management of the hospital.
We know that what chief executives say is very disillusioning. The recent Centre for Policy Studies report quotes one chief executive as saying:
"More and more I realise what my job is really about is politics. We are an extension of the civil service".
That is not very encouraging. So little interest have Ministers shown in how we are attracting people into management, and what their quality and backgrounds are, that, as my parliamentary questions reveal, they do not even know the background of most of our chief executives or what qualifications they have for the job.
According to the answers that I have received, we have no data on the career background of 60 per cent. of chief executives. If that were the slightest priority for the Government, one would have thought that they would at least be tracking the small, elite group of chief executives to see if we are getting the quality that we need. However, they do not even know where 60 per cent. of' those chief executives have come from, what degrees they have and whether they have clinical qualifications or outside experience. Of the 40 per cent. on whom the Government do have information— which is pretty depressing—only 1.5 per cent. have any medical background, and 3 per cent. come only from the private sector. That shows what a narrow career path this must be. It is very introverted, with very little attempt to bring in people from outside and very little emphasis on the quality and calibre of leadership being introduced.
Furthermore, according to parliamentary answers, Ministers have no information on career progression, turnover and wastage rates, and no systematic tracking of career succession. The Minister may want to correct me, but whatever he has to say, it appears that to all intents and purposes the Government have negligible interest in the quality of management that is developing. Yet a stated objective in the 2001 NHS plan was:

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"To deliver a step change in the calibre of leadership."
Since then, it is evident that nothing has been done to follow that through.
Many other issues are involved in NHS management, which I do not have time to address, including the fact that many of the wrong things are centralised or decentralised. However, there are also some welcome developments. If I had time I would discuss the new investment in information technology systems. I know that that has attracted some criticism from some of my colleagues but I think that, generally speaking, it is a welcome development.
The major NHS trusts are complex, intensely pressured organisations that depend fundamentally on people. We have not moved on with management culture, and given managers the ability and power to make things happen, within a framework of decentralisation. A very different culture and approach are required. We must move with the times and enable hospitals to create a collegiate organisation with clarity of responsibility and the freedom to deliver the real changes in people and approach that are needed.
We need substantial reduction of administrative costs and redeployment of resources to the front line. We need clarity over what is decentralised and what chief executives are entitled to do. We need some job security, because according to Hoggett Bowers, most chief executives have a life expectancy of 700 days in their job, which means that many are so insecure that they cannot make the bold moves that are needed. We need a strong emphasis on people, motivation and attitude, all of which should be measured regularly in every NHS trust and reported back. If there is one measure of leadership, surely it is the attitude and motivation of the people who work in the team. NHS trusts must be protected by a firewall against the corrosive interests of capricious political initiatives, which simply cut across their powers and degrade and erode morale throughout the health service.
3.57 pm
The Minister of State, Department of Health (Mr. John Hutton): First, I warmly thank the hon. Member for Tunbridge Wells (Mr. Norman) for his kind words at the beginning of his speech. He described me as the least partisan Minister in the Government; I am not sure whether that will help me at all, but I thank him very much for it.
I shall probably discard most of my notes, but not all of them because I do not want to make a mistake on the substantive issues that the hon. Gentleman raised. All the issues that he raised are substantive. At the risk of embarrassing him, may I say that I thought that the thrust of his remarks was constructive and that I agreed with a great deal of what he said on the importance of good management in the national health service, not as an end in itself but as a means to an end? The end, as I am sure that he would agree, is a better health service, which can deliver for the people of our country—his constituents and mine—the sort of service that we are entitled to expect in the fourth largest economy in the world. Clearly, we have much work to do in that regard.
For the record, I want to contest one or two assertions that the hon. Gentleman made. The first is his claim at the end of his remarks that the Government have a
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negligible interest in the quality of national health service leadership. I strongly take issue with him on that. Improving the quality of leadership, including the motivational skills of senior managers, is of the utmost importance to the NHS. I agree that the problems and challenges that the NHS faces are not entirely down to resources but are about how those resources are used, how we motivate key staff at all levels in the organisation and how we constantly strive to make our services more responsive and to give patients in England more choice over what their NHS is capable of delivering for them locally
Much of that is, of course, dependent on the overall amount of resources available to the service locally and nationally but a great deal, in my experience over many years in the Department, comes down to good management at local level and good performance management at the level above that. The hon. Gentleman has extensive experience in all those regards—much more extensive than mine. The Government would be remiss if they failed to take into account some of his constructive remarks today, and I shall say later how I intend to go about that.
Given the long list of initiatives that we have taken, I disagree strongly with the hon. Gentleman's claim that we have negligible interest. I shall go through those, although perhaps I could deal with that point by writing to him instead. Some of those initiatives emerge from the leadership centre, some from other parts of the Department and some locally, from primary care trusts and NHS trusts themselves, which is a good thing. Not everything has to be dictated and managed from the centre. There is a great deal of activity going on.
I would say to the hon. Gentleman and critics of NHS managers and management that we have a better framework for improving the quality of NHS management now than at any time in the history of the NHS. The hon. Gentleman will probably say that that is not saying very much because we started from a low base. I agree about that, but it would be remiss of him, in the spirit of fairness and balance that characterised most of his remarks, not to at least nod in the direction of the fact that the Government have spent a significant amount of time—not just money because I agree that that is not the main issue—focusing the efforts of the local NHS and strategic health authorities on that issue.
Based on my own experience—I hope that the hon. Gentleman's experience will confirm this—I sincerely believe that the NHS has some of the best managers in the country. I agree with hint strongly that NHS organisations such as acute trusts and primary care trusts are highly complicated organisations to run. They have large numbers of staff and high turnover, and they operate in an environment of intense public scrutiny and accountability, which, to be fair, is not directly analogous to the private sector. It is an intense and robust environment in which we expect a lot from the NHS and we demand a lot from local managers.
It is a sad tradition in this place—it has become something of the folklore—that the first people we bash around the head in relation to such issues are NHS managers. There are times when NHS management fails the service and we need to act robustly to deal with that failure. The attempts we have made in NHS franchising where poor management is simply shipped out and new managers—some from the private sector—are brought

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in to replace failing managers is part of the right response to the problem. The growing portfolio of initiatives and courses in the leadership centre will help deal with that, and there are other initiatives, which I shall go through quickly.
My view is that NHS managers do a tremendously difficult job and many of them do it brilliantly, but the performance of some NHS managers is not good enough. The challenge for any Government, and Ministers of this Government in particular, is not to pass the buck on that. For too long in the NHS, we have not acted when we should have done to correct failing management. The result may have been a quiet time, but it led to a poor service for our constituents, which is not acceptable. It goes with the territory of being in Government that one cannot avoid making some difficult decisions about intervening on, and replacing, failing management.
The main focus should not be on remedial measures, but on how we can constructively engage with the many thousands of committed, able, talented and skilled brilliant young men and women who will be the next generation of managers in the NHS. We need to improve the performance at the very top of the organisation and I shall set out in a moment how we intend to do that. I take great comfort from the fact that the NHS management graduate scheme is the most popular of its kind in the country. It has been voted as such by university graduates, and our financial management scheme was the fourth most popular management training scheme operated by any employer in this country. The signs are that people see NHS management as a constructive career, which contradicts the thrust of the hon. Gentleman's argument that people are worn out, burnt out and want to quit. I do not think that that is a fair or accurate description of most NHS managers.
I would be the first to acknowledge that things are difficult for many managers because the pace of change in the NHS has increased. We are often criticised by Opposition Members for not reforming the NHS enough. If one put that point to any NHS manager, one would quickly get a brush-off. Most NHS managers to whom I have talked complain about the process and the pace of change—the depth, breadth and scale of the changes that have taken place in the NHS. I shall give one example of that to the hon. Gentleman because he mentioned repeatedly the issues of motivational leadership and human resource management. That has been an issue on which the NHS has not been as effective as I would have liked for many years, and we are trying to make progress on that.
There have been expansions in capacity, an effort to make the NHS more responsive so that people have more choice and efforts to improve the health of the poorest at the fastest possible rate and raise the quality of care. If all of those were not sufficiently large management challenges, on top of them, during the next 18 months, the NHS is to introduce three major new contracts regulating the employment of its staff covering general practitioners and primary care, hospital consultants and doctors, and every other group of staff—from nurses to porters, from cooks to cleaners, and managers. In any organisation— suspect the same
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would hold true for Asda—one would think, "Goodness me. That is an awfully tall agenda." We are redesigning every aspect of the service during a very short period of time and we are asking a relatively small number of managers to do that.
The hon. Gentleman drew an analogy between the NHS and health care in the United States. We could argue the toss about that; all the evidence I have seen suggests that in the United States the overall cost and burden of administration in the health service is significantly higher than it is here. The burden of the cost of management to the NHS is falling as a percentage of the overall NHS budget, not rising. One might have thought that the hon. Gentleman was saying that the costs were going up as a proportion of the overall budget. Those costs stood at 5 per cent. when we came to office, and they are about 3.9 per cent. now. Most people would regard that as a sign of progress in any well-run organisation.
The motivational side of human resource management is very important, and we have an opportunity through the contract modernisation to engage some of the skills of NHS managers in trying to turn that around. I agree with the hon. Gentleman that we need to place more emphasis on motivational management. I would take issue with his comments about productivity and how we measure it in the NHS because, as he knows all too well, the number of operations in the service is simply one measurement of that. We are dealing much more with health prevention— people are seeing their GPs more quickly and receiving treatment in accident and emergency departments more quickly. We are treating more patients according to every objective measurement, which is a result of the investment going in.
I shall make my last general point about the hon. Gentleman's remarks before I move on to the substantive comments that I have to make in the last two or three minutes. I agree with him that we should learn, and be prepared to learn, about best management practice from other countries, including the United States. I have been to California and talked to senior managers in Kaiser Permanente, and I have no doubt whatever that the NHS can learn from some of their management approaches, particularly in the area of chronic disease management, which is one of the biggest health care challenges that the NHS faces. We have to up our game in relation to chronic disease management, and there is plenty of evidence to suggest that Kaiser Permanente has some of the solutions to that problem.
I want to draw attention in the substance of my remarks to the following points. A huge amount of change is going on in the NHS at the moment, and in relation to management those changes can best be described as taking place on two levels. First, there is organisational change of a substantive nature to ensure that the management function adds value at all levels of the service. Secondly, there is a systematic drive under way to raise management standards in order to deliver all aspects of the NHS reform programme. In organisational terms—I do not intend to spend a lot of time on those today—the Department is changing the way that it manages the NHS.
We are halfway through an 18-month programme to change radically the way in which the Department works. It is moving the institution away from attempts

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to manage the NHS daily—the hon. Gentleman described that as not being a terribly good idea—and towards providing effective leadership in a much more devolved health and social care system. In future, the job of the centre should be to set the overall direction, ensure national standards are set, ensure the appropriate resources and best value are in place and oversee major investment decisions. However, I do not think that we should be in the business of micro-managing the NHS. As a result, we shall be losing about 1,400 posts from the centre by October next year. That is a major change by anyone's standard.
Management at trust level is focused on service delivery. Managers are working side by side with clinicians to improve the services provided to patients, and in the process ensure effective levels of patient safety. By way of an illustration to the hon. Gentleman, let me point out that in the past 13 months we have introduced new programmes to attract middle and senior management levels. We have introduced the first career development and succession planning scheme called "NHS Leaders". The hon. Gentleman said that we were not doing enough about that; I would acknowledge that we have not done so in the past, but we are attempting to remedy that.
Incidentally, the NHS Leaders programme is tracking the progress of all of our chief executives. The hon. Gentleman said that we had no effective tracking mechanisms; I do not think that that is true, but perhaps I should write to him and set out the position in more detail, if that would be helpful. That tracking is linked to a more systematic executive search function. We have
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also introduced the first national performance review scheme for chief executives, a new programme to draw on management talent from black and minority ethnic backgrounds, and a range of programmes where clinicians and managers work together to deliver improved services.
I do not think that good management is just about those at the top. The NHS leadership centre, with the Modernisation Agency, is working to develop effective leadership and management skills at all levels in the service. Our priority has been to strengthen managerial and clinical leadership in all NHS organisations to improve patient care. We are doing that and involving not just managerial grades. as many people would have thought, but also nurses, allied health professionals and doctors, all of whom are involved in the programme.
The popularity of graduate recruitment programmes in the NHS, to which I have already referred, is an encouraging sign. I also said that it is important to learn from other parts of the public sector and, indeed, the private sector in developing future strategy. The new gateway to leadership programme was developed to do that by attracting good managers from other sectors, and the NHS has recruited significant numbers from the private sector.
I have not been able to respond to all the hon. Gentleman's points. In the time that has been available to me, I have tried to point to areas on which I believe he and I probably could reach agreement and to assure him that it is our intention to invest in NHS management.

Teesside Centre of Excellence and Cancer Research
4.11 pm
Dr. Ashok Kumar:I have been trying to secure this debate for a year and a half. It has taken a long time, on and off, but I have finally secured it. I am happy to have the opportunity to debate such an important issue, and I am delighted that my hon. Friend the Minister is in her place. She is familiar with Teesside, which she has visited many times on the campaign trail and at other times post-election, so the issues that I shall raise today will be no surprise to her.
This is my second debate in the House on the subject. I first spoke about it in January 2001 during a debate on the Science and Technology Committee's report "Cancer Research: A Fresh Look". My comments today will follow on from the spirit of what I said then, but I shall try to extend the debate in two ways. First, I shall spell out the sheer depth of the problem of cancer on Teesside. Secondly, I hope that the Minister will be sympathetic to what I have to say and will examine the case for setting up a new centre of excellence based in Teesside for the research and treatment of cancer.
Cancer is one of the greatest, if not the greatest, scourges of our times. It has yet to be eradicated. One person in four will at some time be diagnosed as suffering from a cancerous condition, so every family in this country will almost certainly experience the loss of a close member from cancer. One third of all cancer sufferers will die of the disease.
The disease has no natural borders of class, race, country or gender. However, it affects some groups more than others; for example, women, people who have worked in polluting industries, people who live in areas with significant levels of deprivation and poorer people who live in areas neat industrial processes. Those last three factors make up much of the social demography of urban. Teesside. Teesside itself is set within the north-east region of England, which has the highest premature death rite in the country for all cancers.
Tragically, the incidence of cancer in my area is very high. I wish to cite a few figures provided to me by the County Durham and Tees Valley public health network. They show that in 1999 and 2001, the number of deaths due to cancers of all types was well above the national averages. In those two years, 3,164 people from a population of 0.5 million died on Teesside. That is equivalent to the entire population of one of the villages in my constituency or one of Teesside's council estates.
The standardised mortality ratio figures, for which 100 is the national average, show the divergence between urban Teesside and the rest of the country. SMRs for all cancers are 128 for Hartlepool, 123 for North Tees and 129 for Middlesbrough. The gap is even wider for specific forms of cancer. For lung cancer among women, North Tees has a staggering SMR of 205, Middlesbrough 162, Hartlepool 169 and Langbaurgh 114. I am told by the South Tees Hospitals trust that one figure—deaths from lung cancer for women under 50— is particularly frightening. For that group, the SMR is 350. That means that the chance of
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dying from lung cancer for a woman in that age group who lives on Teesside is three and a half times the national average.
The figures continue remorselessly. For female stomach cancer, Langbaurgh has an SMR of 154 and Middlesbrough 121. The SMR for cancer of the cervix among females in the Langbaurgh PCT area is 169, and in Hartlepool it is 165. In neighbouring Middlesbrough, it is 184. Only in five isolated instances across all Teesside's PCT areas and across all the spectra of cancers are the figures below the national averages.
Dr. Mark Reilly, the strategic health authority's epidemiologist, tells me that the figures, bad as they are, are not totally representative of the real level of suffering in the area, as they measure only deaths. The number of new cancers now being detected and treated significantly outweighs the deaths. Although they will not register on the SMR index, they represent a tidal wave of suffering, prolonged hospitalisation, treatments that are sometimes painful and family grief.
Ms Dari Taylor: The figures that my hon. Friend has given are frightening for the people whom we both represent. When he considers the details, does he believe that one cause of the stark figures is the lack of research on Teesside? We spend about 3 per cent. of the research finance that is available, whereas Oxford, Cambridge and London spend more than 60 per cent. of it. Does he believe that with greater finances and research we would have greater competence to handle the problems that he is outlining?
Dr. Kumar: My hon. Friend makes a very good point, which I shall address a little later. I concur with her analysis that the issue is very important in the debate about the setting up of such a centre. I am thankful to her for drawing attention to the subject.
The link between poverty and illness is also graphically shown in the geography of Teesside, which includes areas of comparative wealth and social mobility and areas of high social deprivation. The index of multiple deprivation shows that there are sharp differences in the domains of deprivation. Eleven wards in the Tees valley are in the top 100 of the overall index of multiple deprivation, and 25 are in the top 300. It is in those wards that the majority of cancers are found.
There are, of course, personal as well as social and ecological reasons for the high incidence of cancer on Teesside. Smoking and drinking, particularly so-called binge drinking, play their part. Moreover, people from poorer areas have a poorer diet. A consumer culture in which people rely on street corner, eight-till-late mini-supermarkets and convenience foods sold from local delivery vans does not bring about a balanced diet. Sugar and salt intakes are high, and there is no real balance because of the lack of fresh vegetables and fruit. Housing standards in some areas of Teesside are poor, which leads to ill health. We have a high incidence of estates with a large number of void properties, and a large number of old, Victorian terraces. We have homes that are substandard, and estates and neighbourhoods in which there are few social and health-related amenities such as clinics and GP surgeries. It is therefore no surprise that we have a cancer problem.

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So far I have tried to highlight the magnitude of the problem, but I want to move on to the centre of excellence. I hope that my hon. Friend the Minister, from listening to my arguments, realises that there is a need for a new centre of excellence for cancer research and treatment in my area—a centre that can back up the work of local cancer charities and organisations. A well-developed network of cancer trusts and charities is working in the wider Teesside area, and I pay tribute to the work of those organisations. I have met many of those groups, and they wholeheartedly and strongly support my call for a new centre of excellence.
Where could such a centre be based? Crucially, the South Tees area has one of the most modern hospitals in the UK, if not the most modern: Middlesbrough's James Cook University hospital. It was due to the excellent planning of the officers and members of the South Tees Hospitals NHS Trust that that hospital was conceived.
4.22 pm
Sitting suspended for a Division in the House.
4.33 pm
On resuming: —
Dr. Kumar: It was due to the excellent planning of the officers and members of the South Tees Hospitals NHS trust that the James Cook University hospital was conceived and built with a physical research centre. The centre's standing is high. It is a division of the hospital in its own right, and it has equal footing with the clinical groupings and equal representation on the hospital's management committee. It is staffed by a multidisciplinary team whose work now pervades the whole trust.
From the outset, the hospital was also designed to have links with universities in the north-east, and most notably with the new Stockton campus of the university of Durham. The campus houses the Wolfson research institute, which is home to the Northern and Yorkshire public health observatory and to a wide range of medical specialisms, such as the north-east's health development agency.
I have spoken on several occasions to Professor Rob Wilson, director of research at the James Cook University hospital. He passionately believes that more could be done to make the hospital and its research facilities a centre of excellence for cancer treatment and investigation in the UK. However, as my hon. Friend said, he has also observed that there are massive disparities in funding in cancer research and treatment.
At its inception, the South Tees research base was allocated £192,000 of research income. Other centres get far more. As a former member of the Science and Technology Committee, I recall working on a report on cancer research and treatment in 2000. In that report, the Committee called for a greater spread of funding across the nation and for 12 new centres of excellence. That call is still valid, nearly three years on. As much as 60 per cent. of cancer research funding is spent in London, Oxford and Cambridge, but the area between
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Leeds and Newcastle gets hardly any direct funding. Those disparities mean that talented people may not get the best backing for their competencies.
The South Tees trust employs some 270 consultants, and although only between 10 and 12 have a research element in their job description, many of the others have done academic and applied research and could easily do so again. They are willing to face the challenge. It was the only European recruiter to run trials on behalf of the United States national cancer institute. It now collaborates with the regional universities of Newcastle, Durham and Teesside on a large number of key research areas, including cancer and cell biology.
A mark of the esteem in which those consultants are held is shown by the fact that they have recently won £4 million from academic sources to build an extension to their clinical academic centre. That will allow the teaching of an increased number of medical students, and it will incorporate new purpose-built laboratories. I believe that that track record, that talent and that expertise could become a base for a regional cancer research centre for the north-east. It could also be part of a wider regional partnership.
As well as the universities, we also have new projects such as the Newcastle-based international centre for life. There is no reason why that centre should not have a Teesside presence. For instance, it could work with James Cook University hospital in cutting-edge research in the entire field of life sciences, which includes cell research—something that could ultimately benefit cancer sufferers and the medical profession.
The work with regional universities would expand naturally and organically if more funding were in place. That work would complement what is being done now, and could provide high-quality research focused on the needs of a community, as argued for in the NHS plan. I guarantee that any Department of Health funding made available for that purpose would attract other funding, and would be matched pound for pound. Properly applied, it could grow to be a major source of investment.
Quite simply, if a centre were built on Teesside it would have immense symbolic importance. It would be entirely fitting for such a centre to be based in an area where the killer condition is at its worst. The work of the centre, visible to the community and supported by a proud region, would also be a tremendous instrument for health awareness and education. It would be a focus for civic pride, and it would improve the health of local people.
The time has come for the establishment of a centre of excellence, and I look forward to hearing the Minister's reactions to the proposal. I wish to take the matter further, and I hope that this debate represents the beginning of a dialogue between the people of Teesside and the Department of Health. Such a dialogue would be of immense benefit to the people of Teesside, as more people would live longer, healthier and more satisfying lives. It would be a hard task, but believe me it would be well worth attempting.
4.40 pm
The Minister of State, Department of Health (Ms Rosie Winterton): I congratulate my hon. Friend the Member for Middlesbrough South and Cleveland, East

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(Dr. Kumar) on securing the debate, especially as he has been trying to do so for a year and a half. His background in research at Imperial college London and British Steel makes him especially well placed to talk about research issues. I also congratulate him on the passion and eloquence with which he talked about social deprivation and its impact on health. We need to get that point across much more clearly, so that people understand that several factors may contribute to poor health. That is very important if local communities are to engage in the process of examining how they spend their resources on alleviating health problems. He spoke about the devastating effect of cancer on the lives of people in Teesside.
My hon. Friend will be aware that we published the NHS cancer plan in 2000, and produced a three-year progress report this October, which showed that cancer remains a top priority for the Government. We are making great improvements. Prevention, screening, diagnosis, treatment and care are all improving due, I must say, to the hard work done by staff in the NHS and elsewhere, which has been backed up by millions of pounds of new investment. As a result, death rates have fallen by more than 10 per cent., which is halfway to our 2010 target. Lives are being saved and patients are receiving better care.
My hon. Friend highlighted the dreadful mortality rate for lung cancer in Teesside. especially among younger women. I am pleased to report that NHS smoking cessation services have been especially effective in the north-east. The figures will be of interest to hon. Members. The highest proportion of people in England who have successfully given up smoking through those services is in the north-east. Some 740 people per 100,000 in the northeast quit in 2002–03 compared with 312 per 100,000 nationally. Last year in Middlesbrough, 1,049 people successfully quit through an NHS smoking cessation service. Those figures are incredibly impressive.
We are also making real progress on research, as my hon. Friend the Member for Stockton, South (Ms Taylor) highlighted. I should add that the national cancer research network is designed to bring the benefits delivered to patients participating in research to all parts of the country. The amount of funding allocated to Teesside, South Durham and North Yorkshire per head of population is the same as that allocated in other areas, but I take her point on board.
In the past three years we have managed to double the number of patients entering clinical trials. The cancer plan identified two key weaknesses in cancer research: insufficient high-level strategic planning and co-ordination between different funders, and an inadequate infrastructure for clinical research. We have made major steps forward in both those areas with the establishment of the National Cancer Research Institute, the National Cancer Research Network and the National Translational Cancer Research Network.
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The National Cancer Research Institute was launched on 1 April 2001. It brings together the major funders of research, including the Government, the voluntary sector, which my hon. Friend the Member for Middlesbrough, South and Cleveland, East mentioned, and industry, together with cancer patient representatives, to ensure that we have a national strategic approach to identifying and supporting cancer research. The NCRI oversees two research networks, both funded by the Department of Health: NCRN, which provides infrastructure for larger, multi-centre clinical trials; and NTRAC, which leads on translational research.
The NCRN is already achieving its aim to provide a world-class base for the conduct of clinical trials. The percentage of cancer patients participating in trials in England is now twice that in the United States of America. Teesside has played its full part in that success. The Cancer Care Alliance of Teesside, South Durham and North Yorkshire joined NCRN in October 2001. Its clinical lead for research is Professor Robert Wilson, to whom my hon. Friend referred. This year, Department of Health funding to that research network is £250,000, and the network has put it to very good use: last year, only 3 per cent. of cancer patients in Teesside, South Durham and North Yorkshire were entered into clinical trials of new cancer therapies, but this year the figure has doubled to 6 per cent. That is an impressive achievement.
With regard to translational research, NTRAC was established in May 2001 to help to improve the quality of cancer care by speeding up the process for bringing scientific breakthroughs from the laboratory bench to the patient's bedside. It will ensure that a greater number of patients are able to take part in early clinical trials of the newest diagnostic agents and treatments.
That was the national picture, but I should like to consider in more detail the contribution that is being made to cancer research in my hon. Friend's area. He highlighted the track record of the local NHS and academic organisations in cancer research, and made particular mention of the work of South Tees Hospitals NHS trust in collaboration with the universities of Durham and Newcastle. The trust receives £368,000 per year in NHS research and development funding from the Department of Health, of which £120,000 is used to support its ongoing programme of research on cancer cell biology. The programme is led, as has been said, by Professor Robert Wilson. I was pleased to note that the trust has attracted a further £200,000 of research funding from other sources, including Cancer Research UK.
I know that the programme based at James Cook University hospital in Middlesbrough is making progress in the fields of colorectal, ovarian and prostate cancer, and my hon. Friend also mentioned the Queen's campus at Stockton, which is the focus for Durham university's new school for health and the home of the Wolfson research institute. Professor Pali Hungin, whose clinical practice is based in Teesside and who has been active in NHS research and development for many years, has been appointed dean of medicine at Durham university.

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My hon. Friend suggested that Teesside should become a centre of excellence for research into and treatment of cancer. I reiterate that the contribution that Teeside has made—and continues to make—is incredibly impressive. I hope that, through the debate, we have acknowledged the strides that have been made. We congratulate those in the area on their hard work and encourage them to continue to build, in collaboration with near neighbours, towards a centre of excellence such as my hon. Friend described. We will watch developments with interest. Both my hon. Friend the Member for Middlesbrough, South and Cleveland,
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East and my hon. Friend the Member for Stockton, South made particular mention of the voluntary organisations that work so hard in the area. It has been impressive that many organisations have come together and have been able to access funding.
I shall ensure that my ministerial colleagues are fully apprised of all the points that have been made today, particularly the comments about the centre of excellence and the progress that is being made, of which we are all very proud.
It being nine minutes to Five o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.