Westminster Hall Sitting of 15 January 2003

Preamble
[MR. FRANK COOK in the Chair]

2001 Census in Manchester
Motion made, and Question proposed That the sitting be now adjourned.—[Mr. Heppell.]
9.30 am
Mr. Keith Bradley: We meet this morning in very sad circumstances.
Mr. Graham Stringer: Will my right hon. Friend give way?
Mr. Bradley: Of course.
Mr. Stringer: I thank my right hon. Friend and you, Mr. Cook, for that indulgence. I should like to take this opportunity, the first that I have had, to offer my condolences to the family of Stephen Oake, who was murdered in my constituency last night, while doing his duty as a constable in the special branch. I also hope that the other offices who were injured in the line of duty make a speedy recovery.
Mr. Bradley: I am sure that the whole House shares those sentiments. We all send our condolence to the family of Stephen Oake.
The debate this morning is to challenge the accuracy of the 2001 national census as it applies to the city of Manchester, to highlight the financial implications of the discrepancy for the people of Manchester and to seek urgent action by the Government to resolve the fundamental and crucial problems that we believe should be clearly identified.
Manchester is one of the country's foremost regional centres and it has made great strides over the past few years to strengthen its economic base. Its success is important not only for the people of Manchester but for the north-west and the nation. Government policies over recent years have recognised that fact.
The 2001 census results published on 30 September by the Office for National Statistics showed Manchester to have a population of 392,800. That is a reduction of 10.4 per cent.—nearly 46,000 people—in Manchester's population between 1991, when the previous census was held, and 2001. It is a reduction of 10.6 per cent.—nearly 47,000 people—in Manchester's population for the nine-month period from the mid-year estimate in 2000 to the 2001 census.
In Manchester, we were, to say the least, utterly bewildered by these figures. During the 1990s, our city centre population increased by nearly 10,000. Mid-year estimates throughout the 1990s indicated that the city's population had stabilised and had started to grow. So the question is; how can these wide variances be justified?
We are told by the ONS that, in Manchester and elsewhere, previously unrecorded discrepancies going back nearly 20 years have flawed the 1991 census and the
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mid-year estimates since then. The ONS has speculated that the rate of young men in particular emigrating from England was previously underestimated by some 50,000 a year; nearly 1,000 a week. However, this trend has not been substantiated or picked up by alternative sources, including the international passenger survey. Therefore, in our view, it is not credible.
The view of the ONS will be debated by statisticians for years to come, but the issue for the people of Manchester is not an academic exercise. We want to know why the administrative sources available to us and to the ONS showed that the census results from Manchester seriously underestimate Manchester's population. We also want to understand why Manchester's residents are being penalised for these fundamental weaknesses and why serious questions must be asked in Manchester as the revenue budget for 2003–04 is prepared.
Manchester city council is a responsible local authority. It has sought, since the publication of the 2001 results, to enter into a detailed dialogue with the ONS to understand the rationale of its population figures. The initial signs were positive. The chief statistician went to Manchester and met council officers; they agreed a process of what I will call engagement. However, the outcome of these discussions remains as unclear and as worrying for the residents of Manchester as when the figures were first published.
It has taken nearly three months to obtain the information necessary to undertake even partial scrutiny of the results. Critical pieces of information are still awaited. For example, the aggregate general practitioner list data are not yet available. The ONS states that it needs the permission of the NHS security and confidentiality advisory group to release the information. We ask the Government to look at this urgently to facilitate that information being made available to Manchester soon.
A new aspect of the 2001 census was an independent follow-up face-to-face census coverage survey. In order to check the representative nature of this survey and the sample that was used, we need to see whether the survey missed households. We need to know the total number of addresses or household spaces and households in each postcode unit. We need to know the total number of addresses of household spaces and households responding in each postcode. We need to know the number of persons enumerated and inputted for each of the postcodes used in that survey. The ONS says that by releasing the postcodes sampled in the census coverage survey it effectively would be releasing information about the households and individuals sampled. We dispute that and request that the Minister intervene quickly to allow that information to be released to Manchester city council so that it can check the validity of the sample survey. What information has been produced demonstrates that the number of people who live in Manchester is underestimated by the 2001 census.
No substantive reasons have been given as to why alternative administrative sources have been disregarded by the ONS, which was always seen to be part of the quality assurance process and therefore the overall census methodology. I shall return to this point shortly.

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Crucially, it has also come to light that something like 10,000 properties that the council believes to be occupied, as council tax is being paid, were not canvassed or identified by census enumerators. We strongly believe that if people are paying council tax in the city, they may actually live in the city. We believe that unless we have an accurate property base, we cannot produce an accurate population estimate, irrespective of the competence or otherwise of the ONS.
The city council has asked the ONS to undertake a match between its own property base and that identified by the census. That would at least assist in identifying the differences and therefore those properties that appear to have been missed. That seems a reasonable request and I should have thought that this exercise was quite straightforward. I am afraid that that is not the case. The city council was first told that the ONS had resource difficulties that make such an exercise very difficult in the short term. It was also told that the ONS had additional information requirements, which we believe can be quickly met but are delaying the process. When the city council suggested that an independent specialist agency should undertake the work as agent for ONS, problems of confidentiality were again raised, and these are apparently still being considered. This needs to be resolved as a matter of urgency so that we can test the validity of the property base.
I return to the issue of quality assurance and alternative data sources. The ONS has given Manchester—in confidence, obviously—the child benefit data used for the quality assurance process, which show that there are more children receiving child benefit in the data used by the ONS than were found by the one-number census or the mid-year estimate. It is clear that there has been a miscount. Moreover, the pensions data used for the quality assurance process—again, supplied in confidence—show more people in the 65 to 79 age group in receipt of pensions than were found by the one-number census or the mid-year estimate. That supports our argument that the statistics need to be validated.
It was interesting that in oral questions on Monday, my right hon. Friend the Secretary of State for Work and Pensions said, with reference to pensioner figures:
"The ONS conducted a review of the statistics, and I think it wise to treat all pensions statistics with caution until that review has been fully implemented."—[Official Report, 13 January 2003; Vol. 397, c. 404.]
We concur with that, as it reinforces our case for a review of the data on the number of pensioners in Manchester.
The school census data used for the quality assurance process and supplied in confidence show more children aged five to nine and 10 to 14 in the school census than in the 2001 mid-year estimate, further reinforcing the point that when brought together, independent sources show a greater population in the city of Manchester than was shown by the 2001 census.
Similarly, the electoral register in Manchester shows an increase from 310,010 in 2001–02 to 313,573 in 2002–03. The census results for Manchester indicate that the city's total population aged 17 or more was 305,193. The electoral register figure was 4,817 higher
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than the estimate. If people are registering to vote in Manchester and, as I said earlier, paying council tax, that strengthens the argument that the census underestimated the numbers.
The quality assurance process was a key part of the ONS methodology, which was extensively consulted on by the ONS before the census was undertaken. The issue is not the principle of the process, but how it has been applied and, in Manchester's case, why the information has been ignored. The information given by the ONS shows as a recurring theme for Manchester that there are more people living in the city than were projected in the census results. We need to know the possible reasons why there are more children in receipt of benefit, more children in Manchester schools and more people in receipt of pensions than the census shows. The comparisons with the electoral register and the flaws identified in the ONS property base mean that the census results for Manchester have no credibility.
Mr. David Kidney: Does my right hon. Friend intend to deal with Manchester's status as a university town? Is he aware that Manchester is not alone in being an apparently thriving area, but having a reduced census figure? Other cities with a similar complaint include Cambridge, Oxford, Bristol, Nottingham and Stafford. Although not everyone may know of Stafford's status as a university town it is one—the others are well known. Is that a factor in my right hon. Friend's considerations?
Mr. Bradley: Yes. The large number of students in the city is an added factor; a complicating factor, because that is such a mobile population which, to be fair to the census enumerators, caused some difficulty in the count. That is why I have avoided using that as a key indicator of the reduced population, and have instead used data that are easy to substantiate from alternative sources. The student population is certainly another factor that has not been taken properly into account or counted as part of the overall population figure. The examples that my hon. Friend gave of similar situations in other towns with a high student population reinforces the argument for re-examining the census data and the extent to which the population has been underestimated.
Mr. Bob Laxton: I endorse my right hon. Friend's comments. Derby is also affected by a huge reduction in population—about 14,500, according to the ONS—and is also a university town, which must be factored in. My right hon. Friend may be interested to know that I have been contacted by two former employees of the ONS data centre in Widnes, who told me that gross errors were made in the processing of the data, that the optical character reading of the forms was, in many cases, gibberish and unintelligible and that there were huge pressures on the operatives in the data processing centre in Widnes to increase their hourly key strokes to a very high level. That was achieved by cheating; by people holding their fingers on keyboards and blasting through screens to try to get their key stroke figures up. Those two individuals, who have asked to remain anonymous as they are clearly whistleblowers, pointed out forcefully to me that there will be huge distortions and errors around the country

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as a result of the ineffective and inefficient way in which the data processing centre at Widnes, which was the only one handling the census details, operated.
Mr. Bradley: My hon. Friend makes a powerful point, which brings me to my next point. Whatever is said about the ability of the ONS to count, as an organisation it does not transmit an image of public accountability and responsiveness. We need to consider that carefully as a crucial issue, on which I am sure my hon. Friend the Minister will want to comment. While it prevaricates or fails to substantiate its decision-making for the results in Manchester and other cities around the country, as we hear, the decisions crucially feed into the rate support grant settlement for the coming financial year, which has been announced by the Office of the Deputy Prime Minister. We believe that in Manchester we would have lost more than£18 million worth of grant if the figures had been applied to the financial year 2002–03. I shall deal with the current year in a moment.
Such reductions are untenable in the light of what we believe to be the fundamental flaws in the census results and the grossly unfair impact that such reductions in grant will have on the people of Manchester, which is by no stretch of the imagination a wealthy community. It has many areas of poverty and deprivation that can ill afford any reduction in grant. We must address that issue urgently.
In Manchester, we all want to understand why the Government appear to be unwilling to scrutinise the results of the census and satisfy themselves that their resource allocation policies are a fair and accurate reflection of needs across the board. If the Government decide to use the ONS results, they are, by implication, telling everyone that they accept, at least for the time being, the adequacy of the information that has been supplied by the census. That is totally unacceptable. We also want to understand what steps the Government will take to make the ONS more responsible and accountable. The Government have rightly placed public service reform at the heart of the modernisation programme, but the ONS has clearly missed out in that process. The Government must urgently address that point.
We also want to urge my hon. Friend the Financial Secretary to examine the evidence that we are placing before her in this debate and to arrange an urgent meeting with Manchester Members of Parliament, the leader of the city council and other key players as soon as possible. As I have already made clear, we would lose £18 million under this year's rate support grant settlement and, under next year's settlement, we are again likely to lose millions of pounds. The settlement and the way in which it is now calculated rely heavily on the population of the city, so unless we get the figure for the population right, we will lose millions of pounds of grant. The city can ill afford that.
Unless we make an urgent reappraisal of the population of Manchester so that we can determine the true figure of grant that should go to the city from 1 April 2003, we shall perpetuate the problem in years to come. Unless we get the baseline right now, the loss of money will be rolled forward in whatever adjustments are used in mid-year estimates or future surveys. There is no sign that the Government will compensate us even if they find at a later stage that the figures are inaccurate in the way that I have suggested.
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Immense difficulties have been created for the budgeting process in Manchester. Determining what can be made available under a grant based on erroneous population figures means that services may have to be reduced to meet the reduced grant. That is totally unacceptable to a city such as Manchester that relies heavily on crucial education, social and other services. Any unjustified reduction for the city will be unacceptable to its Members of Parliament and population.
I therefore urge my hon. Friend the Financial Secretary to consider carefully the alternative data sources and to examine the validity of the arguments that my colleagues and I will make in this debate. I urge her to take quickly the view that the census figures are flawed and that they underestimate the population of Manchester. She must be certain that the rate support grant settlement from 1 April reflects the city's true population and the true needs of its residents.
Several hon. Members rose—
Mr. Frank Cook (In the Chair): Order. Some Members may not be familiar with the conventions of this Chamber, so I remind them that we begin the first of the three wind-up speeches 30 minutes before the end of the debate. We therefore have until 10.30 am for the general debate. I ask Members to bear that point in mind and to make their remarks pertinent. Will they bear it in mind particularly when they take interventions? Lengthy interventions will not be favoured.
9.54 am
Mr. Tony Lloyd: I congratulate my right hon. Friend the Member for Manchester, Withington (Mr. Bradley) on his remarks. He has laid out in a detailed manner the grievances of the people of Manchester. I am sorry that my hon. Friend the Financial Secretary and not another Minister is present for this debate; she is probably sorry to be here too. One thing that the ONS could do is calculate the distances from a Minister of the Members complaining. That would provide a serious measure of the ice or warmth in any relationship.
We come to this debate with a strong sense of grievance. I am aware of many occasions when Members have been responsible for special pleading, but I do not think that this is a case of special pleading. There is a genuine sense that the ONS has made a complete mess of the census results at least in Manchester and—quite possibly, given the anecdotal evidence—elsewhere.
On my point that it might have been better had a different Minister attended the debate, our essential grievance is that an erroneous census matters because the Government will deprive Manchester of many resources as a result. The people of the city—it is still one of our poorer communities, despite the enormous progress that has been made in recent years—simply cannot afford the Government to make decisions about resourcing on the basis of an erroneous census.
My right hon. Friend the Member for Manchester, Withington has given a detailed description of the doubt and uncertainty. In fact, the problem is more than one

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of doubt and certainty; there are clear signs of a lack of credibility in the census process. I shall illustrate that point by making a few anecdotal observations. A friend of mine was a manager in the census process and he told me of the way in which it was mishandled. For example, the people in one inner-city area of Manchester are not particularly used, for all manner of reasons, to regular form filling. My right hon. and hon. Friends from Manchester know that the ethnic mix in that area is enormous and that a great many languages are regularly spoken. The consequence is that English is not always the language that is first used.
My friend told me that he had encountered about a 100 nationalities in his work. Somalians are now a significant group in my constituency and in those of some of my hon. Friends. However, because of the employment rules, my friend was not able to employ anyone from a Somalian background. That restricted the number of census enumerators able to work in the Somalian language and to determine whether the form returned from a particular household was accurate to any degree. Such details might seem trivial were it not for the fact that they are part of a systematic pattern of doubtful competence.
My friend made a further point that is relevant to the position of students. He told me that people employed by the census physically delivered the forms, but that they were returned by the Post Office. He made the obvious point that the system would have been far more credible if the Post Office—which generally tends to know where people are because it regularly delivers the post to them—had delivered the census forms and the enumerators had collected them. Although it was not the Post Office's fault, it took about two weeks for the forms to begin to be returned and it was only at that point that the enumerators could get out on to the streets to deal with the problems caused by missing forms.
My friend told me that he knew of at least one street in which not a single door was opened when the census enumerators returned. He did not know whether anyone lived in those houses. We have to face up to the fact that it is possible that no one lived in them and that a nil return was accurate. However, it is also possible that many of those houses were students' houses, because the process took place when the students were already returning to their parental homes or were involved in examinations. They may have been reluctant to open the doors. Again, that might seem a trivial point, but the number of students in Manchester is enough to make a whole constituency. An enormous number of them live in the city; we have the biggest concentration of students in western Europe in a small area. Therefore, if the way in which the student population has been accounted for contains a systematic error, it will make a significant difference to the overall census.
I know that there are other problems in determining a student's real residence. However, not all students should be reallocated to the home from which they came. Lifestyles are different these days, and many students are permanently resident in the town where they study. My points may seem trivial and anecdotal, but they illustrate the sloppiness and incompetence that ran through the whole census process.
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Fairly senior people working on the census were seriously unhappy about the process, and felt that they did not receive an adequate response from line managers in the ONS. The real charge against the ONS is that it was not fit to carry out the national census. That is an extremely serious charge, but it must be made. I know that you are a traditionalist on such matters, Mr. Cook, but if the census in Bethlehem had been conducted in such an illegitimate fashion, the whole of Christendom would have been remarkably different in the past 2000 years. That illustrates the scale of the problem.
I also want to comment briefly on some of the important points that my right hon. Friend the Member for Manchester, Withington has made. If the quality control system and the existence of a number of significant variables—child benefit, pensions and the school register—suggest that there are more people in certain categories than the census allows for and if every alternative indicator shows that the census has got things materially wrong and has underestimated the figures, it is bizarre for the ONS to decide to reject the quality control process. Instead, the ONS has insisted that it got it right in the first place. Common sense says that we should be prudent; that is a good Treasury term. Although we might accept that the census has not made a complete idiot of itself, there is a strong suggestion that it may have done that. We should seriously examine the ONS data.
My right hon. Friend has pointed out that Manchester feels that it has been blocked when it has tried to carry forward the debate. The ONS has not made available the information that the city needs. I despair of a retreat into an argument that is based on data protection. I agree that it would be outrageous for the ONS to give details about individual children and pensioners—of course, that would be illegitimate—but the provision of aggregate figures falls well within Parliament's intentions on the right to public confidentiality. We are talking about the protection of the ONS's confidentiality so that it can protect itself from the charge of gross incompetence. However, we are making that charge anyway, so it might has well come clean, own up and say, "Yes, we have probably got it wrong. Let us begin to talk seriously about the figures and the database." That would enable it to convince the public and the people of Manchester that it has got things right.
I understand the position of my hon. Friend the Financial Secretary. She will have received a briefing from her civil servants, but I am sure that she has already thought about the issues. It is not her first exposure to the problems that we have outlined, and I appeal to her sense of justice. The census matters because it is a once-in-a-while account of the population, and we need to know the national trends on the structure of the population and the data on matters such as ethnicity and gender. However, it also matters enormously because of its redistributive effect. It would be a bizarre consequence if a Labour Government, of all Governments, took part in a process that allowed an incompetent census to redistribute resources from one of the poorest communities in the country to those who are generally better off. We have no business being involved that.
My hon. Friend the Financial Secretary must assure us that there is a way of resolving our doubts about the ONS's competence and that a process will examine that

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point. We must also know that if the ONS is found to have been negligent, there will be proper recompense: my right hon. Friend has already made that point. It is no good saying—as happened in the past when Manchester lost money from previous Governments—that the loss will be made up in the future. That never happens and you know that as well as anyone Mr. Cook. Money is never made up. If the census is found to be inadequate, we want a guarantee that there will be proper and adequate compensation.
Perhaps the real point is that we should wean ourselves off the big-bang view that the census will determine all local government spending. If things go wrong, the process becomes incompetent. Even if it can be demonstrated that the census is absolutely right—I do not believe that that can be done—it is impossible to say to a community such as Manchester that it can afford to lose at the levels that my right hon. Friend has described. We need assurances that our points will be examined in a way that provides proper justice to the people of Manchester.
10.6 am
Mr. Graham Stringer: My right hon. Friend the Member for Manchester, Withington (Mr. Bradley) and my hon. Friend the Member for Manchester, Central (Mr. Lloyd) have enabled me to make my remarks relatively brief. They have comprehensively covered the inadequacies and inaccuracies of the 2001 census. However, I make it clear to you, Mr. Cook, that when I refer to a Mr. Cook of the ONS—some of my criticisms will be sharp because I am not one of his admirers—I am not undermining your position. I do not want there to be such a misunderstanding.
Since I have become aware of the problems in the 2001 census, I have tried to find out as much as I possibly can about the operation of the ONS and the census. On 28 October 2002, I went to a meeting of the Public Accounts Committee to watch it question M r. Cook. It was a painful and revealing experience that shed light on why the census does not contain figures on which we can rely. At first, I thought that Mr. Cook just could not count up to 60 million. It is a large figure. However, he also has problems with other figures, statistical projections, administering the organisation and morale. I shall quickly go through the points that the Public Accounts Committee brought to light.
There is a limit of £20,000 on the letting of contracts in the ONS. However, the consultant firm, Vogue, spent nearly £1 million without going through the proper procedures. I remember from the arithmetic that I studied that there is a big difference between £20,000 and £1 million. Even after Mr. Cook initially checked the figures, he failed to detect that one of his officers had let a contract of £500,000, which led to £1 million of extra expenditure, to one of that officer's mates. The official lost a bonus of 4 per cent. but then received a bonus of 8 per cent. Therefore, he did not lose out, and he left the organisation without any penalties imposed on him. That did not reassure me that things were being carried out correctly.
One would expect a national statistician to come up with a correct estimate of the number of census forms that would be returned. He estimated that 70 per cent.
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of the forms would be returned. In fact, 88 per cent. were returned. Having got that wrong, one might suspect that it would make things easier, but it did not. Instead, the people who should have been checking up on those who had not returned their forms were kept in the office to sort out the forms that had been sent back. He also estimated that there would be 600,000 phone calls. Wrong again, Mr. Len Cook; there were 2.6 million calls, more than half of which went unanswered.
In addition, 30 per cent. of the 70,000 or so staff employed were not paid for a considerable time. Chessington, which was responsible for making the payments, ended up overpaying them by £500,000. Mr. Cook could not get the money back because he could not provide the statistics and information to Chessington to allow him to do that. In the light of that background of comprehensive incompetence in the ONS, it should come as no surprise that the figures do not match our expectation and knowledge of what is happening on the ground.
Mr. Cook estimates that 1 million people did not return the forms, so he is 2 million short. How many people were prosecuted for that? A mere 39. We must consider how effective the incentive was to persuade people to return the forms, although as my hon. Friend the Member for Manchester, Central said, they were not delivered to many people because the normal postal service was not used. The 39 who were prosecuted were honest people. They did not agree with the census and told Mr. Cook that they were not filling in his form. For that, they were prosecuted. The 1 million people who did not fill them in because they wanted to dodge something in the system or were just too lazy to do so were not prosecuted. That is a strange way of ensuring an accurate census.
As I have become more and more interested in the ONS, I have started to collect paper cuttings. Almost daily I see it retract information and I see people complaining about it. The latest complaint is that Mr. Cook has double-counted pension funds. He has counted the transfer of pension funds as new contributions to pensions, which gives a double estimate of people's savings in pensions. That is not a man who is doing a job properly. Professor Coleman is professor of demography at Oxford university and a professional in the sector. He simply cannot credit that 1,000 young men a week—1 million in all—have left the country to go to Ibiza to enjoy discos or whatever.
Mr. Lloyd: All of them from Manchester.
Mr. Stringer: Quite. It just is not credible and no other source of information supports that evidence.
Right hon. and hon. Friends have asked for a correlation between other sources of information. More people are paying council tax than are accounted for in the census for Manchester. Manchester people are very honest, but they are not paying council tax on behalf of imaginary people. There are more pupils, more pensioners and more voters than Mr. Cook accounts for in the census. It is more likely that he has got it wrong because the people who went to collect the forms were frightened of going into certain parts of Manchester, probably unreasonably. They did not know the area. Students who had temporarily left the city and people who were dodging the council tax by not registering on the electoral register did not appear on the census.

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All the sources from city council underestimate the figures. It is possible that people saw the forms but did not want to fill them in. Recent asylum seekers who have the right to stay here were probably worried about them. The common factors in all areas where the population has been underestimated are large ethnic minority populations, large student populations and, in some cases, poor populations, which has an effect because the second person in the household does not register.
My hon. Friend the Financial Secretary was decent enough to meet Manchester MPs at short notice. I ask her to look thoroughly at the census. I understand that she cannot put herself in the place of the officer of national statistics. I accept that the Government must have an independent source of information with which they do not interfere, but that does not mean that they should not take seriously our concerns that Mr. Cook has got it wrong and has done an extraordinarily bad job. The Government cannot rely on the information in the census when they plan future services. Cities such as Manchester do not like some of the services that they provide to be based on population because they are not related to the number of people in the population. The census would distort that further.
Mr. Cook has managed to make more people disappear from Manchester than General Galtieri ever managed to make disappear from Argentina. Although he has not had the same tragic consequences, there will be other tragic consequences for services if the census is not reviewed. It is the worst census for 200 years.
10.17 am
Paul Goggins: I congratulate my right hon. Friend the Member for Manchester, Withington (Mr. Bradley) on obtaining this timely and important debate, and other colleagues on their forceful arguments. No one could argue that Manchester lacks leadership and determination. We are certainly not a city that whinges about what other people do to us, or what happened in the past. The city is increasingly successful. We continue to combine, as we have over the centuries, the quest for economic progress with a commitment to fairness.
Last Saturday, I went to a concert in the Bridgewater hall, which is a world- renowned facility. Next season, I will support my football team in the new 50,000-seater City of Manchester stadium, the centrepiece of the Commonwealth games that grabbed the nation's attention last summer. It also showed that the regions can lead successful national and international events. As my hon. Friend the Member for Stafford (Mr. Kidney) said, Manchester's universities are among the finest in Europe. The metrolink system is doing well and is about to be extended to bring world-class public transport to our constituents. While the rest of the country was consulting—or not consulting, as it turns out—on the future of aviation, Manchester airport in my constituency, with two runways and three terminals, continued to deal with its 19 million passengers a year, which will double over the next 30 years.
All those successes and many others that I do not have time to mention have been achieved by a city that punches well above its weight in terms of its population.
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I will not use the census figures because I concur with my right hon. and hon. Friends on their reliability, but in the mid-year estimates for 2000, Manchester had 440,000 people, Leeds had 726,000 and Birmingham around 1 million. So there are far fewer people in our city than there are in others. As my hon. Friend the Member for Manchester, Central (Mr. Lloyd) said, many of our citizens are relatively poor. Indeed, about half rely on some form of means-tested benefit.
My right hon. and hon. Friends have argued forcefully that the census is a travesty, with 46,000 fewer people than the 1991 census and 47,000 fewer than the 2000 mid-year estimates. As I go around the city, I see new businesses rising up and new homes being built. So common sense tells us that the census cannot be true. My constituency experience also tells me the same thing.
I hope hon. Members forgive me for taking a little time to share facts about my constituency. When the boundary changed in 1993, about 3,200 people who were previously in the city of Manchester were moved out of it. They did not move away. Someone just drew a line on a different place on the map. Since 1997, however, because of new investment in housing and the growth of owner-occupation, 3,000 people have moved into Wythenshawe. At the same time, some buildings have been demolished and probably about 1,500 people have moved out. That process over the past few years has meant two things; an extra 1,500 people are living in Wythenshawe and about 1,700 fewer people are living in Manchester. There has been a small reduction in the population, which perhaps even the city council could accept. However, the reduction is considerably less than the 11 per cent. suggested by the census.
If my hon. Friend the Financial Secretary is not persuaded by the common-sense observations or the details of my constituency, I hope that she will be swayed by the information provided by my right hon. Friend the Member for Manchester, Withington and other colleagues on the statistic provided by the city council on the missing 10,000 properties on which council tax is being paid. The ONS evaluation report observes:
"there is real evidence that the interviewers found whole properties that were missing from other address lists during their on-the-ground property listing phase".
Let me translate the jargon. That means that properties and people that do not exist in the virtual world of the census do exist in the real world of the city of Manchester. The city's own evidence shows that there are more pensioners, more children and 5,000 more adults are on the electoral register than the census shows. It is not good enough for Mr. Cook to say that all previous surveys have been wrong or that 1,000 people a week are leaving for sunnier climes. The evidence simply is not there.
As we heard, Manchester is not alone. According to the census, Westminster has lost a quarter of its population. Kensington and Chelsea, Cambridge, and Oxford have also lost considerable numbers. Again according to the census, there has been a fall in the population of every one of the 10 districts in Greater Manchester. A third of my constituency covers the borough of Trafford, which is supposed to have lost 10,000 people from its population; about 5 per cent. of the total. Altogether, Greater Manchester is supposed

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to have lost more than 100,000 people. Again, that cannot possibly be true according to common sense or the data.
All of that would be interesting were it simply an academic debate, but population totals mean hard cash. Manchester is set to lose millions of pounds over the next decade if we continue to rely on the figures in the census. For the current year, that would have meant a loss of more than £18 million. We are told that there is some protection for next year because of the capping that would limit the loss to £8.2 million, but that is considerable in terms of the amount of resources that would be lost to the city. Who knows what might happen? The protection could disappear and we would have to rely on the statistics for grant distribution for many years to come. It would he a travesty if that were allowed to happen.
What can be done? The Government need to take a long-term view on the census. We need a longer gap between the publication of the census results and the implementation of the statistics for the distribution of grant. That would allow disputes, such as this one, to be resolved. It would also allow other factors such as ethnicity to be included. We need greater scrutiny of the process of the census; the methodology, the data sets and the conclusions. There has to be fuller public examination.
We also need a formal disputes procedure. That would deal with all the rowing between the city and Mr. Cook about what information the city can and cannot have. We should establish an independent system of assessing alternative sets of data when they are so at variance with what the census has uncovered. In the medium term, we need greater scrutiny of the ONS. The integrity of statistics is vital in the development of public policy, whether that is on unemployment, crime, poverty, homelessness or population trends as a whole. It is essential that the statistics are reliable. Government and Parliament need to do everything that they can to scrutinise the statistics.
We need more clarity on the rules on data sharing. We heard about Manchester's efforts to obtain data from the ONS. Either the supply has been slow or the ONS has refused outright to provide information on the grounds that it would breach confidentiality. Let me give one example of that. The city asked for data on general practitioner lists, but it has not been given. I do not know whether the membership of the national health service security and confidentiality advisory group is an official secret, but its members should be told that we are not after information on individual patients. We think that we have a right to know the total figures and expect to receive them. I fully accept that the registrar general cannot disclose personal information because it is an offence to do so, but the code of practice on access to Government makes it clear than the ONS and others should "respond openly" to requests for information.
On immediate action, I suggest that my hon. Friend the Financial Secretary does three things. First, she should inform the Deputy Prime Minister of the serious concerns about the accuracy of the 2001 census. She should advise him to make interim arrangements for next year's revenue support grant settlement. It is unacceptable that those with a variation of more than
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10 per cent. in their populations should be expected to have to live with the new figures without a thorough evaluation of what has happened.
Secondly, a thorough review of the 2001 census should be undertaken and all alternative data carefully scrutinised. Thirdly, my hon. Friend should do everything she can to ensure that Manchester has access to all the information that it has requested. If she is prepared to do those things, she will begin to restore faith in the integrity of statistics and ensure that the city of Manchester gets the resources it needs to run the services required in what is still a great city.
10.28 am
Mr. Andrew Stunell: May I add my condolences to the family of Stephen Oake, the constable who died tragically in the course of duty yesterday? I am sure other hon. Members will want to associate themselves with that.
The Financial Secretary may not know that my constituency is called Hazel Grove and is part of the metropolitan borough of Stockport, which is adjacent to Manchester. I am sure Manchester Members would agree that people from Stockport do not automatically have the same view of the world as people in their city. There tends to be a rivalry between us which I hope is always friendly. On this particular occasion, however, I want to make it clear that I strongly support the points made by Manchester Members.
I am sure that the Financial Secretary will agree that the right hon. Member for Manchester, Withington (Mr. Bradley) gave a measured, thoughtful and thorough presentation of an almost incomprehensible set of figures. I am sure that the hon. Lady will respond in an equally measured and thoughtful way; she is noted for that. Furthermore, I hope that she will not be content with speaking to a bland ministerial brief but that she will come through with positive suggestions and an acknowledgement of the need for changes in the current approach.
The right hon. Member for Manchester, Withington made clear the statistical differences between previous estimates and the numbers in the census. He drew attention to one or two obvious gaps. I want to build on one point that he touched on. He noted that the initial explanation for the discrepancy was that a large number of young men had gone overseas. It is true that large numbers of young men and women go away on gap years, perhaps remaining overseas for some time. However, in Stockport, which is adjacent to Manchester, a high number of young people stay on at school and go on to university and many of them take a gap year. It would thus be common sense to expect that a higher proportion of young men and women from an area such as mine in Stockport, with its middle-class and higher education background, its mobility and resources, would go overseas and stay there than from inner-city Manchester. Given the differences between Manchester and Stockport, if it is valid that 40,000 young people from Manchester opted to go overseas, where are all the young people from Stockport who should have done so? Some of the figures that have been chucked into the debate by people who are trying to justify the census figures need serious academic criticism.

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The right hon. Gentleman said that there was a problem with the release of data. Will the Financial Secretary confirm that she will expedite the release of information about the total number of patients on GP lists? The right hon. Gentleman mentioned that postcode samples are not being carried out. The Financial Secretary now has the opportunity to tell us that she will expedite that matter.
The right hon. Gentleman said that there were 10,000 more council tax payers than the number of enumerated households. The hon. Member for Manchester, Blackley (Mr. Stringer) pointed out that although his constituents were honest, even they were hardly likely to pay their council tax twice, or as phantom residents. In fact, most people who read the Manchester Evening News might say that the problem is underpayment rather than overpayment of council tax.
When we consider issues such as data checking and quality control, we have to acknowledge that the argument is on the side of the Manchester Members who have spoken in this debate, rather than on that of the ONS. The number of child benefit cases exceeds the total shown on the census, as does the number of people receiving pensions. It might be argued that as those benefits must be claimed, there may be fictional claimants who would not show up on the census. However, the figures on council tax payers must give the knockout blow to that argument.
The number of people on the electoral roll exceeds the number in the census, yet ever since the days of the poll tax we have heard the story that, especially in inner-city areas, there has been serious under-recording on electoral rolls. For the past 10 years and more, many of us have bemoaned that fact; yet Manchester, which has many inner-city characteristics, turns out to have 4,000 to 5,000 more people on its electoral roll than were recorded in the census. That does not make sense.
There is undoubtedly an enormous student population in the Greater Manchester area, especially concentrated in the city itself. Obtaining accurate records from students is bad enough for their tutors; I do not suppose it is any better for census enumerators.
All those things have dire financial consequences. The problems are not exclusive to Manchester, or to the university and other towns that were mentioned earlier. May I remind the Financial Secretary of the purpose of the census? It is not simply a neat academic exercise that continues a series of historical studies stretching back 200 years. It was not designed to enable genealogists to work out who was descended from whom and who moved from where. It was originally designed so that Governments could measure and design public services that were appropriate for communities and arrange for their delivery. The census was not designed for some other purpose, which has now thrown up a bizarre side effect. The core point of the census is to enable the Government to allocate resources and decide on appropriate services. On this occasion, it has clearly failed to do that job.
I have some questions for the Financial Secretary. If she cannot answer them now, I hope that she will be able to deal with them later. First, is she satisfied that the process of quality control—the check-off against the
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raw census figures—is adequate? Plenty of evidence has been produced today to show that even where there is quality control, it is either ignored or fails to deliver the necessary checks and balances.
Secondly, does the Financial Secretary accept that the rush to produce results has been at the expense of accuracy and checking? Does she agree with the hon. Member for Wythenshawe and Sale, East (Paul Goggins) that it might have been better to hold back from using the data until there had been a proper opportunity to check the discrepancies? Can the Government answer for the discrepancies that were found on child benefit, pensioners and school rolls?
Incidentally, the sum of school rolls in Manchester does not include all children of school age in Manchester, as those of us in Stockport know well. Plenty of children from Manchester go across the border to Stockport or to Trafford. If the sum of the school rolls is greater than the sum of children, we can be sure that the total number of children in Manchester is even greater.
Finally, will the Financial Secretary order the release of the additional data on GP lists, commission work on postcode samples and cut through the smokescreen of data protection? Will she do all that she can to restore faith in the census as a sound basis for describing the demographics of our complex society? It is nowhere more complex than in the mosaic of different communities in Manchester and Greater Manchester.
10.39 am
Mr. Howard Flight: I, too, express my condolences to the family of Stephen Oake.
I congratulate the right hon. Member for Manchester, Withington (Mr. Bradley) on securing this important debate, which, as we all know, has a wider application, beyond Manchester. We are expecting the Financial Secretary to tell us how the Government propose to resolve the problems caused by self-evident errors in the 2001 census figures. The Government's current position—as I think The Times reported on 9 January—is to dismiss pleas from councils for extra cash to cover multi-million pound funding shortfalls triggered by the census figures unless the mistakes are admitted by Len Cook, the national statistician. The Government have also said that they will not override the census figures, despite all the evidence and a vigorous campaign by individuals such as the two chief executives of Manchester.
As we have heard, the population discrepancy for Manchester is more than 10 per cent.—47,000 people—which translates into what is likely to be a recurrent funding shortfall of about £18 million a year until the next census in 10 years. In six other authorities there were even greater proportional discrepancies between the census figures and the 2000 estimates. The largest discrepancy was in Westminster, at 25.9 per cent., but it was also more substantial than Manchester in Forest Heath, Kensington and Chelsea, Cambridge, Richmond upon Thames and the City of London. Unless the problem can be resolved, the annual loss for Westminster is £63 million per annum. In Birmingham, the census discrepancies were fewer, but it faces losses in Government grants of £40 million per annum and could suffer a reduction in its European Union regeneration funding.

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Prima facie, the inaccurate census results seem to have occurred where returns were poor. As has been well aired, those results matter to citizens because of their importance not only in the recurring allocation of local authority grants but in the funding of primary care trusts. That point has not been adequately explored. I do not know how much it matters, but it would be logical to assume that in Manchester 46,000 patients will not be funded for their GP or hospital needs unless a correction is made.
The whole matter is in the same territory as the Government's control mantras and their somewhat discredited targeting process. What sounds fine in principle—the requirement for evidence for central Government policy in order to direct funding—is in practice proving counter-productive for deprived inner-city areas when based on census figures that are, prima facie, incorrect. As Members have already argued, transient populations are reluctant, for a variety of reasons, to complete complex official forms. People are daunted by a census form that has grown from five questions in 1801 to 40 questions at present; not all of which are necessary, especially as regards the important funding decisions for which the census is used.
The central criticism of the ONS and of Len Cook, its head, is that they failed to adjust the figures to reach a sensible, overall estimate of population where census participation seems to have been adequate and where the census results contradict reliable and established property-based data. In Westminster, the response was only 74 per cent; in Manchester, as we have heard, there are more council tax payers, more voters, more children, more pensioners and more children at school than the census figures show. I cannot understand why the ONS has not sorted out the problems in Manchester where the prima facie evidence shows that the figures were incorrect.
Attempts have been made to restructure the ONS and to improve its independence and reliability. However, as we all know, there have been disturbing spats with the Statistics Commission, which was set up to monitor the work of the ONS. Decisions have been questioned on the classification of receipts from the third-generation mobile telephony licences, on the status of Network Rail and, especially, on data relating to pension saving.
The ONS could have increased the accuracy of the status. There should have been more door knocking and the ONS should have been willing to examine substantiated evidence of mistakes when it was presented with unexpectedly large changes in population. The ONS could have made greater use of new survey techniques and could have adopted administrative records that have proved accurate in the past, especially for pinpointing data in inner-city areas.
As we have heard, the ONS figures for Manchester do not match property-based data. One would have thought that that problem was capable of speedy resolution and reconciliation but the ONS appears to have dragged its feet. In that context, I challenge the Financial Secretary's recent response to my hon. Friend the Member for Chipping Barnet (Sir S. Chapman) that the 2001 census had undergone vigorous testing and quality checking in both fieldwork and processing. The evidence that we have heard today suggests that that was not the case. However, I am glad that the Financial Secretary has advised us that the Treasury is working
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with local authorities that experienced unexpectedly large and, prima facie, unlikely population shifts to find explanations. I look forward to hearing the results of that exercise.
After some unsatisfactory correspondence with the ONS, Westminster has started judicial review proceedings against Len Cook for alleged non-discharge of his duties under the Census Act 1920. The council is also considering an application to the Chancellor, under section 6 of the Act, to rerun the census in Westminster. If Westminster is successful but the issue remains unresolved for Manchester, I am sure that Manchester would follow suit; so rather than wasting more time and effort, the pressure is on the Government to sort out the problem.
Manchester faces a further problem because the council pledged to keep its council tax increase modest—about 2.5 per cent.—yet, on its own figures, its budget needs to increase by more than 10 per cent. to offer the same level of services as last year. It is not satisfactory or sufficient for the Government to stall by arguing that the local government grants for 2003–04 will provide a one-year floor of a 3.5 per cent. increase. The Government have acknowledged that, mostly due to their own actions, there will be significant cost increases throughout the country of about 7 per cent. a year, so the floor may not even cover those increases.
The Government should accept the limitations of the census data when allocating funds for a wide range of policies. Manchester will lose at least £18 million this year and possibly even more each year for the next decade unless the process is corrected. Furthermore, as I stressed, its primary care trusts will be substantially short-changed.
I hope that we shall now hear from the Financial Secretary how these unfortunate and unnecessary problems are to be resolved.
10.48 am
The Financial Secretary to the Treasury (Ruth Kelly): May I begin by saying how pleased I am to be serving yet again under your chairmanship, Mr. Cook?
I, too, add my condolences to the family of Stephen Oake.
I congratulate my right hon. Friend the Member for Manchester, Withington (Mr. Bradley) on securing this important debate. I am, of course, aware of the economic significance of Manchester; indeed, my constituency, Bolton, West, is within the boundaries of Greater Manchester. I also understand the significance of the census results for the allocation of resources, although the Treasury is not directly responsible for that allocation and I would expect hon. Members not to hold me answerable today for the way in which the census results are used by the Office of the Deputy Prime Minister.
I am also aware of the interest that hon. Members have taken in these issues. I met a delegation of Manchester MPs, including those present in this Chamber, and MPs from other local authorities that have been affected.
Before turning to the detail of the Manchester census, I affirm that we are confident that the census figures for England and Wales, released on 30 September last year,

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provide the best ever estimate of the population nationally and in each local authority. I wholly reject the charge of gross incompetence that has been made against the Office for National Statistics.
Of course, serious concerns have been expressed by local authorities whose census results differ in particular from the previous year's mid-year estimates. The vast majority of local authorities, however, are satisfied with the census results. Any Government must have authoritative figures that establish the size, make-up and geographic distribution of their people to provide a benchmark population derived on a coherent basis across the country. That benchmark has been established according to agreed statistical methodologies and has been subject to rigorous scrutiny, not just by the Government but by outside professionals and academics. In the United Kingdom, the accepted definitive benchmark for the population is the 10-yearly census.
Carrying out a census of the population is a significant task—it is the largest civilian exercise undertaken by any Government and involves a huge amount of planning, not simply in data collection but in the statistical methodologies used to determine outputs. The difficulty facing statisticians is that no census in the world ever achieves a 100 per cent. response rate. If such a result could be achieved, conducting a census would be relatively easy, but the world does not work like that. The 2001 census was designed to achieve the most accurate result using the best methods available. It was designed from the outset to take full account of what users of statistics really want—figures representing everyone. As a result, the 2001 census is the first in this country to represent the entire population.
That representation was achieved through a new and rigorous statistical strategy known as the one-number census. Census response in England and Wales—the proportion of people returning a valid form—was 94 per cent. The 6 per cent. of people estimated to have been missed by the census have been added to the counts using that statistical process which, prior to its adoption, had been the subject of extensive consultation.
One of the key elements of the one-number census is an independent follow-up survey. The census coverage survey involved an intensive face-to-face survey of a sample population of 300,000—by far the largest independent check on a census ever carried out. By combining the results of the census and the census coverage survey it was possible in 2001 to estimate the total resident population to a high level of precision, plus or minus 0.2 per cent.
Mr. Stringer: Is my hon. Friend prepared to provide the information on which those assertions are based? My understanding is that in Manchester the checks were done in areas such as the constituency of my right hon. Friend the Member for Manchester, Withington where there were very few problems, but not in areas where there were difficulties, such as my constituency or that of my hon. Friend the Member for Manchester, Central. Will the Minister check that?
Ruth Kelly: Of course I will. That is one of the issues that has come up in the attempt to reconcile
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administrative data with the census figures while respecting confidentiality—an issue that I shall return to if I have time.
I shall not dwell on the survey's statistical basis—I know that hon. Members want to hear more about the way in which the census was conducted in Manchester— save to say that in England and Wales there was an extensive quality assurance process for comparative data sets. I shall address some of the points made by my right hon. Friend the Member for Manchester, Withington, such as the preparedness and speed with which the ONS responded to requests for data.
The first letter from Manchester city council was received by Len Cook, the head of the ONS, on 7 October. He responded on 11 October, and meetings between him and council representatives took place on 4 November and 6 December, and there were further working meetings and correspondence. Available information was supplied at each stage of the process. The only outstanding information that has not yet been supplied, but which has been requested, is on NHS patient data, as genuine issues of confidentiality are involved. My office has tried to discover the position on that data set, and has been assured that the data will be released soon. I am hopeful that they will be released today, but I assure hon. Members that there have been serious confidentiality considerations that could not be treated lightly and had to be taken into account before the data were released. However, the ONS has assured me that it will be released as soon as it has received it.
Turning to the administrative data, it appears odd that many of the figures used by Manchester city council for population estimates do not at first sight tally with the census results, but there are serious problems with much of the administrative data. Many of the data sets are prone to data inflation—when people move house, for instance, they do not automatically remove their names from a register. That is particularly true of GP registration lists, the numbers on which are commonly much higher than the underlying population estimate in many local authorities.
Electoral registers were not used by the ONS as comparative data sets in the one-number census because of well-documented data deficiencies. For example, students may register both at their term-time and vacation addresses, but the published census figures count them only at their term-time address. People with two homes may register at both addresses—the census only counts people at the address where they spend the majority of their time. There are problems then, and Manchester is certainly not the only local authority whose electoral register exceeds the estimate of the underlying population base.
Manchester city council and hon. Members have raised with me and the ONS the issue of whether the property data sets held by the city council and the ONS could be reconciled. The ONS is considering that, and is prepared to undertake such an exercise. However, that would not be simple. A significant proportion of the difference between the two figures can be accounted for. For example, much of the discrepancy between the 177,000 properties on the Manchester list and the 168,000 on the census list can be explained by communal residences being counted as individual households by Manchester but as communal residences by the census.

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I am advised that if the communal residences that Manchester, according to ONS, may have counted as individual households housed an average of 38 people, that would account for far more than the 6,000 difference between the two sets of figures. Reconciling the lists is not straightforward and would involve an extensive process of checks taking several months that would have to be agreed by both parties. The ONS, however, has agreed to co-operate as much as possible in that process.
Another issue that has been raised is the release of postcode data. Again, the ONS is prepared to look at that, but I am advised that some postcodes include only one address, so the issue of data confidentiality arises. In such cases, postcode data could not be released on a straightforward basis.
Turning to the follow-up to the process, it is clear that the ONS mid-year population estimates have in many areas overestimated both the size and growth of the population for the past few areas. The national statistician considers that the reason for that is not so much the addition and subtraction of figures for births and deaths but migration—both external migration between countries and internal migration between local authority areas. He has already set up a fundamental national statistics quality review into the international migration figures, which is expected to report in the second quarter of this year. In addition, we need a more far-reaching review of cross-Government requirements of population figures to support Government objectives. The national statistician has discussed with the permanent secretary and his colleagues the need for strong action to find solutions.
11.00 am
Sitting suspended till Two o'clock.

Rural and Island Transport
2 pm
Andrew George: I am pleased to have secured this debate, and having had one on exactly the same subject on 8 January 2002, I am pleased, too, that so many people have turned up to what is now my annual debate. It is good to have an opportunity to assess the Government's progress against the measures that I set for them last year. The Government set targets for themselves, but I set mine for the Minister.
I could use valuable time in this 90-minute debate congratulating and thanking the Minister for investment in rural transport, but I shall not do that because I want to raise difficult issues that need to be addressed. I am not blaming the Minister, but simply using this opportunity to draw matters to his attention in the hope that he will use his good offices to assist us in Cornwall and the Isles of Scilly, which are the two areas on which I shall concentrate. The Minister could equally take up valuable time telling me that I should have congratulated him on the investment, initiatives, funds and subsidy grants, but I am sure that he will want to concentrate on addressing the points that I raise. I know that he considers such matters in a measured way and understands the challenges of transport to Plymouth and onward to Cornwall.
I intend to raise three issues. The first is bus services in Cornwall, where there are specific challenges. Such challenges vary throughout the country and the commercial and market environment in which bus services operate in Cornwall is unique because the geography of Cornwall is unique. Some solutions for other parts of the country may not apply there. I also want to speak about rail services into Cornwall and then to raise some of the issues I raised last time concerning important lifeline services to my constituents on the Isles of Scilly, who have specific concerns.
I can talk only about Cornwall when it comes to buses; although I know a little about bus services in other parts of the country, there is a particularly challenging environment in Cornwall. Cornwall is not just a long, thin peninsula with many small towns and no large urban centre. There are a number of peninsulas and many services run not between large market towns but down the peninsulas to small villages. That makes it extremely challenging to run services.
I appreciate—as does the county council, which congratulates the Government—the rural bus subsidy grant and the rural bus challenge bid process, which enable the county council to seek further assistance to bolster services in Cornwall. However, the history of bus services in Cornwall shows that there are many challenges. Some 90 or so 24-year-old double-decker buses still run through Cornwall's lanes. There are but another 30 of those buses in the Government's south-west zone, so there are three times as many of those buses in Cornwall as there are in the rest of the zone. That demonstrates that the legacy of the system that used to operate presents a number of challenges.
In addition, there are very few profit-making routes in Cornwall. The main operator of services in Devon and Cornwall is First Western National, and I understand that ours is the one region in which services run at a loss. It is inevitable that the operator's reward is that it gets

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not new buses but older rolling stock. There is also a wider problem related to providing drivers. First Western National and other service providers have excellent drivers. Drivers are terribly poorly paid, considering the multi-skilled job that they have to perform. After all, sometimes they have to deal with issues of public order; they have to take fares from passengers in a way that does not happen for rail services. As a result of the difficulty of securing necessary drivers, First Western National has failed to meet its timetable obligations on several routes over the past year. Indeed, the situation has become worse over the past year and many of my constituents have complained.
Mr. Paul Tyler: My hon. Friend will be well aware that the crisis in the group is hitting very hard in the rural areas of my constituency, where the situation is worse even than it is in his constituency. Does he accept that that is a direct result of the very long period over which a virtual monopoly has developed? The group has been allocated more and more subsidised routes and school contracts—there is an additional crisis in that area—and some of the smaller, family-run operators have been driven out. That means that, when the big group pulls out, there is very little flexibility for anyone else to come in. It is the supermarket situation on wheels, and that is extremely dangerous. Does my hon. Friend accept that the situation is a direct result of the Conservative deregulation legislation of the early 1980s?
Andrew George: I agree entirely and I am well aware of the particular challenges and problems of running services in north Cornwall. My hon. Friend is absolutely right to draw attention to the failure to provide adequate services in that area, just as my constituents in west Cornwall have complained about buses not turning up. The regulatory environment in which providers operate arose from the Transport Act 1985. Liberal Democrat and Labour Members protested strongly about the deregulation of bus services, warning that it would create the sort of problems that we are experiencing.
While buses are failing to operate to timetable, there are also difficulties and challenges in meeting the six-minute window obligation. Only 90 per cent. of buses arrive within the six-minute window, which allows buses to be between one minute early and five minutes late against their schedule. When I complained about services in Cornwall and the failure of buses to turn up in some remote villages, the response was that the operators had met 99.5 per cent. of timetable service obligations. If that happened in metropolitan areas, one would not notice the difference. My point, which I have made to the company and the regulators of the service, is that services to remote villages, which may have only two or three buses a day if they are lucky, suffer most. There is not a failure across the whole service, but when services to remote villages fail, it has a substantial impact not only on individual users, but on the confidence of users, and that is clearly unacceptable. The failure to meet those obligations resulted in the transport commissioner fining First Western National £35,000. Although I support what the company is trying
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to do and recognise the challenge that it faces, I was disappointed that it went to a transport tribunal and successfully overturned the fine. If sanctions are to be imposed to ensure that obligations are met, it is important that they stick.
There have been a number of proposals, and I congratulate First Western National on undertaking a review with the TAS partnership. On 16 December, it published a new proposal, which will result in its contracting its bus services to the more profitable routes and possibly withdrawing from the less profitable routes.
Ms Candy Atherton: Does the hon. Gentleman agree that starting consultation on 16 December, near to Christmas, was not the most participatory way in which to run the exercise?
Andrew George: I agree with the hon. Lady, who has helped me to make my next point. The deadline for responses to the consultation was 6 January. Not only was the consultation launched as people were preparing for their Christmas festivities, but they had to respond by twelfth night, which was not the best scenario. Many people, including me, complained about the limited time in which they could write, respond and object to the document. The company has responded by being more flexible, and the county council has likewise recognised that it needs to give people more time to consider the proposals. Having said that, the county council has to prepare itself for implementation of the programme, which will result in First Western National operating between 80 and 85 per cent. of its original obligation.
The county council takes the view, with which I have some sympathy, that it is far better for a struggling company to operate 80 to 85 per cent. of services than struggle with its original programme. I agree with that, provided that the county council's tendering process successfully finds the kind of companies that my hon. Friend the Member for North Cornwall (Mr. Tyler) has identified. If local, family companies can put in tenders that are acceptable to the county council, they are the companies to which we will turn to meet the service obligations on those scheduled routes. That process has already commenced, and by early February the county council will know whether the tendering process has resulted in an acceptable alternative to First Western National. It will be interesting to see whether First Western National tenders new, more expensive bids for providing services. That would clearly result not only in raised eyebrows across Cornwall but in considerable protests. There are some important challenges ahead.
On the routes that are being withdrawn—those in my constituency serve remote villages such as Zennor and Gwithian—constituents have written to me saying that they depend on those services. Indeed, in some cases people's businesses depend on those services. A hotelier from Zennor, for example, has written to me and explained that many of the guests arrive at his hotel by public transport, which means that the withdrawal will dent his business. Mr. Taylor, who is the secretary of the Gwithian residents association, has protested most strongly against the proposed withdrawal of services from Gwithian. The current services are essential to many people living in the village. They may be few but the bus service is very important to them, providing an essential service to Camborne.

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I do not want a witch hunt in order to find culprits for what has been, in many cases, a failure of services during the past year, even though there are worries about the way in which the service will develop in the future. We could easily end up blaming the company, the county council or someone else. That is not what we want. The challenge exists, however, and we must raise our standards to respond to it. I commend both the company and the county council and encourage them to work closely in future to address some of the challenges ahead.
One option for the future in the far west of Cornwall is a rural bus challenge bid for a demand-responsive service in west Penwith. I understand that the decision on that will be made in early February, along with all others. That is a particularly exciting bid. Four such services operate in Cornwall, including in north Cornwall, which are successful, as far as I am aware. Will the Minister look favourably on that bid and consider it carefully?
I spoke to the Minister and his staff before the debate to make them aware of my next point. Last summer, I asked the Minister questions about the future of community buses. About 13 of them run in the smaller villages throughout Cornwall, and I worked for a community development charity when the rural transport development fund was used to purchase them. They all run extremely well, providing an essential and scheduled service.
The Government have undertaken consultation on the continuation of the fuel duty rebate—I think that it is now called something else—available for community buses. It would be helpful to have clarification on what is happening with the entitlement to fuel duty rebate, especially for community buses that need to offer a flexible, almost demand-responsive, service on scheduled routes from village communities to the nearby recreational and shopping centres.
Representations have been made to me about regulations that mean that non-profit-making community groups are not entitled to pay their drivers. That has caused significant difficulties in that some community buses have not been able to operate as extensively as the operators would like. Voluntary car schemes are allowed to pay their drivers; although they do not receive a salary, they receive a return rate that is, strictly speaking, more than the car's running costs. Many such schemes have little difficulty finding drivers, but it is difficult for community bus schemes to offer enough financial inducement to attract drivers. Will the Minister address that point if he has time?
I mentioned train services in my previous debate,and I know that other hon. Members will want to mention them. During the five years of Labour Government, reliability has, if anything, got worse. I know that there have been particular challenges during the past couple of years but the Minister will have seen the figures. My hon. Friend the Member for Truro and St. Austell (Matthew Taylor) recently analysed figures showing the reliability of all operators' services to Cornwall and found that passengers suffered from 120 per cent. more delays and almost 50 per cent. more cancellations in 2002 than in 1997. That has dented people's confidence in services running to Cirnwall.
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First Great Western's response is that it plans to introduce a 200 mph service to Plymouth, but it would be far better for the company to walk before it can run. I do not care whether services take three, four, five or six hours to get to London, but what business users, other passengers and I, as a service user, want to know is that trains are going to arrive at the expected time. That should be the starting point of any changes to the service.
I do not want to detain the Chamber unnecessarily because I know other hon. Members want to speak. The Minister will be aware of the issue of lifeline services to the Isles of Scilly because I have raised it with him personally. Last year, I made the point that the Isles of Scilly receive no public subsidy for the helicopter, fixed-wing aircraft or ferry services that connect them with the mainland, which is 30 miles from St. Mary's. I gave figures that I will not repeat for subsidies now available through the Scottish Executive, which were previously available through the Treasury, to Caledonian McBride—
Mr. John Burnett: MacBrayne.
Andrew George: I am grateful to my hon. Friend. Subsidies were provided to Caledonian MacBrayne for services to the off islands in Scotland. That has meant lifeline service ticket costs for Scottish users significantly below those charged to those living in the Isles of Scilly.
Mr. Burnett: I congratulate my hon. Friend on securing the debate. I agree that ferries are a vital ingredient of a sustainable rural and island transport policy. However, those ferries have to be built. The tendering process for the Torpoint ferries is now underway and Appledore shipyards in my constituency is part of that process. Does my hon. Friend agree that Appledore Shipbuilders—the last commercial shipyard left in England—has a record second to none, with an outstanding work force, product satisfaction and the finest quality ships built on time, at a fixed value-for-money price?
Andrew George: My hon. Friend sets me a challenge. He knows his constituency well, and he knows the quality and efficiency of the work in the Appledore shipyards. I do not doubt that he is correct, and I wish that company well in its future tenders, whether for the Torpoint ferry or other contracts.
The Minister may have views on the Isles of Scilly because he comes from a maritime constituency with shipping interests. One never knows but the Appledore shipyards may tender for the Scillonian contract as well.
I spoke about services to the Isles of Scilly last year, and the Minister rightly said that further studies should be undertaken on the options available to the Isles of Scilly concerning air and ferry services. Those were completed in April, and the Government said that they could not consider the issues under objective 1 funding, or match funding, unless the council of the Isles of Scilly produced a transport strategy. Councillors have run off and produced a transport strategy, which was published last month.

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Unsurprisingly, that strategy has several options, which include the necessity of replacing the Scillonian III. It is quite clear to anyone considering the matter— and I know that the Government have done so—that the Isles of Scilly Steamship Company Ltd. does not have the revenue stream to fund the replacement service between the mainland and the Isles of Scilly that modern users would expect.
Cornwall has a window of opportunity under objective 1 to put the matter right and make the investment, but match funding would have to be available. I urge the Minister to consider the issue carefully and not set the Isles of Scilly further hurdles to jump. Despite the studies, consultations and strategies that have been undertaken, the issue has not gone away. It still needs to be addressed, and I would be grateful if the Minister addressed it.
I appreciate that issues such as buses, rail and, certainly, transport links to the Isles of Scilly are challenges. I did not expect the Minister to come to the Chamber this afternoon with cheque book in hand or answers ready made, although of course my constituents will be deeply disappointed that he has not. However, I hope that he will meet me to discuss bus services, and perhaps he will come to the beautiful Isles of Scilly to meet the council and the operators of the service to discuss the transport links, so that the significant challenges faced by the community may be properly addressed. I thank hon. Members for listening to my case.
Mr. Frank Cook (in the Chair): I remind hon. Members that the standing convention in Westminster Hall is to commence the first of the three winding-up speeches 30 minutes before conclusion. I ask those participating to bear it in mind that we have only 34 minutes left and to keep their comments as pertinent and as brief as possible, especially when making or accepting interventions, which undoubtedly prolong the agony.
2.27 pm
Ms Candy Atherton: I congratulate the hon. Member for St. Ives (Andrew George), with whom I share west Cornwall, on securing the debate. I have been applying for an Adjournment debate on the issue for some months. Indeed, I felt rather like the unlucky lottery loser—every time I put my name down I knew that I would not be the one. It has been very frustrating. This is an opportunity not to be missed, so much so that when I met the Prime Minister last week, the top item on my agenda was transport issues.
I shall be honest and admit that transport in Cornwall is somewhat of a curate's egg. There are some very good parts, with which I am proud to be associated and with which the Government have been involved, but there is also a post-privatisation hotch-potch that has caused problems. More must be done.
The first issue that I want to raise is air links. The south-west has the lowest number of flights in the United Kingdom, not because the people in the southwest do not want to fly but because they lack the opportunity to do so. It is not helpful for people who live
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in a rural area to know that they can get from Gatwick to New York more quickly than they can get from Falmouth to Gatwick on public transport.
Ryanair's popular daily service into Cornwall has proved that there is a real demand for a range of air links. Nevertheless, British Airways announced that as part of its restructuring it is selling off its link, which is primarily used by the business community. The service is profitable and so popular that often one cannot get on it. I have no doubt that the link will be bought but, in the meantime, the decision sends out negative signals about access to rural communities to people who may want to conduct business in Cornwall.
Let me give some examples of how Cornwall will be affected if the nightmare scenario occurs and we lose the link. The 2001 study for the then Department of the Environment, Transport and the Regions concluded that losing the Newquay-Plymouth-Gatwick link would mean annual passenger disbenefits—that means costs—of £8.4 million if people were forced to use surface transport such as road or rail. It would mean 3,000 job losses in the wider economy of Devon and Cornwall. That represents a huge number of people in a predominantly rural economy such as ours in Cornwall.
People say to me, "Ah, but now we've got Ryanair." That does not provide the business service that people who fly on international routes need if they are to conduct business in the area. I tell the Minister that our party said in 1997 that we would use European Union regulations to protect regional flights. France uses public service orders to ensure that peripheral regions are connected. There is a campaign in Devon and Cornwall—and countrywide, I have to say—to earmark a third Heathrow runway for regional flights, and I am inclined to support that. Government consultation is currently going on, although I understand that the Government are saying that EU regulations may not allow for the protection of existing slots because that could be seen as state aid.
The pressure on the slots is high and they are subject to heavy and extensive lobbying. However, if an airline ceases to use a regional slot, it should surely be ring-fenced for other regional slots and not given to international, and mostly trans-Atlantic, flights. There is also a campaign for regions to buy the slots. That is currently against EU regulations but I understand that the European Commission is minded to examine the matter. Will the Government and the Minister look into it?
We now come to roads. Goss moor is a high priority to my constituents. Anyone who has tried to get in or out of the county will know the nightmare that Goss moor can be. In the summer, it seems impossible to get through because of tourists coming into the county, although we welcome them, of course. In the winter, we dig up the road to repair it so that tourists can use it in the summer. The blockages cause everyone misery and I am delighted that we are moving forward.
A fantastic nature reserve, called, I believe, the Cornish everglades, will be created when the new dual carriageway is finished. [Interruption.] Hon. Members may laugh, but that is what will be created. The needs of the Cornish economy will be well served when the new road progresses. It is a great success of which the Government can rightly be proud. The Highways

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Agency is due to publish its plans for the A30 at Goss moor this year—followed by the inevitable public inquiry. I suspect that a protest by Swampy will follow, although technical engineers reliably inform me that he will immediately sink into the mire.
Mr. Tyler: As the hon. Lady knows, the section of the road is in my constituency. I would not want her to give the impression that a public inquiry is inevitable. Under the previous Conservative Government, as she will recall, there was considerable consultation about the stretch of road. Sadly, that Government stopped work on it as part of the road investment cuts that occurred at the end of their period of office. We could make rapid progress because there is broad support for improvements to the A30, and I endorse what the hon. Lady said about it. I also endorse what she said about air links, and the Minister knows that we had a useful exchange about that.
Ms Atherton: I am glad that we can agree about something. I hope that there will not be a public inquiry because I know that 99 per cent. of my constituents are 110 per cent. behind the scheme and pray daily for the opening of the road, as do I.
This year's transport settlement was excellent for Cornwall. The local transport capital settlement means that it will receive £18.5 million next year, and £150 million has been spent on improvements to the A30.
The other burning issue for Cornwall is across the border in our neighbour, Devon, on the A303 east of Illminster. I am sure that the Parliamentary Secretary, Privy Council Office, my hon. Friend the Member for Exeter (Mr. Bradshaw), has an interest in that. I tell the Minister that we need a resolution to the Blackdown hills issue as soon as possible. There is great news about the improvements to the A303 that were announced before Christmas, but not having a decision on the Blackdown hills is a real problem and a disbenefit to the region.
Now we come to railways—oh dear. Virgin Trains has announced cuts to south-west links, and especially evening trains between Plymouth and Bristol. I am sure that the Minister is more than unhappy about that. It is also halving the number of trains stopping at Gloucester. That is a negative. I know that it is a matter for Virgin, but any pressure that the Minister could bring to bear would help.
When I met the Strategic Rail Authority and Railtrack in October, there seemed to be progress—this is the good news—on the Probus to Burngullow dualling, which is our main link through the county.
Richard Younger-Ross: Is the hon. Lady aware that Virgin has not only cut the service but kept the published timetable in place? People will go to catch a train, because it is in the published timetable, but the train will not be there.
Ms Atherton: Branson should be ashamed of himself for doing that, and the Western Morning News can quote me on that.
However, there are some positives, and the dualling of Probus to Burngullow is critical for trains coming to my end of Cornwall. As I said, before Christmas I met
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Railtrack, which has a circular rail map of investment: the further from the centre a place is, the less likely it is to get its rail improvements. For those nearer the middle, the investment may just happen, so naturally I looked at the outer rim for the Cornwall improvements. However, I had to look further and further into the centre because Probus to Burngullow is a central priority for what is now Network Rail, which is good. I congratulate the county council on leading on that work and on the branch line between Truro and Falmouth. The Minister will be pleased to know that we now have a Sunday service, which we have not had before.
None the less, we want to double the number of trains. This September the combined universities project is taking its first students in Penryn. Thousands of students—and more each year—will need access, and we do not want them to travel by car. We want them to be on trains, so we need to double the number of trains. There is real potential, and I hope that Network Rail will get on with the work led by the county council.
Reducing journey times to London is critical, and rail must complement road and air travel, rather than be an alternative to them. We have had the farce about voyager trains and sea water at Dawlish—the Monty Python team could not have invented it, and nor should they. Will the Minister put more pressure on Virgin to sort out the problem? First Great Western's plans for the future include increasing to eight the number of trains a day to Cornwall. It also plans to cut journey times between Penzance and London by 12 minutes in the next two years. Oh dear me—12 minutes hardly makes us feel that the company is getting to grips with the problems, does it?
To highlight the issue, I received a letter yesterday morning from a constituent, Catherine Hayes-Davies. She went to London before Christmas and was half an hour late arriving. She writes:
"However, the return journey was a different matter. The 18.03 service was cancelled, although no announcement was made, and no information to that effect appeared on the display boards. The next train was posted as the 18.17 to Penzance, platform 8 When I arrived at the platform and reached C carriage I was unable to board the train for the crush of people already inside. About 10–12 of us were standing on the platform, trying to board, and this pattern was being repeated all down the train. Even the 1st class was packed with people standing all down the carriage and at all access doors. At about 18.30 an official—presumably a guard, attempted to close the carriage door. When my group refused to stand back—we all had reserved seats, valid tickets and were going to stations in Cornwall—we were threatened with the police. The others were, like myself, all senior citizens, so maybe it was our age that prevailed with the official."
My constituent was eventually able to get on to the train, which finally arrived two hours late. That highlights the problem.
I am aware of time and will talk only briefly about the subject of buses, which is high on the agenda in my constituency postbag. The Government have undoubtedly done great things in Cornwall with buses, including the new Bissoe Valley scheme, which has for the first time provided new bus services and a calling system to get the buses to come to individuals. That is a totally new experience for some of my constituents and is warmly to be welcomed.
The hon. Gentleman mentioned the appalling consultation that took place over Christmas. Some 57 school routes and 27 bus routes are under threat in the

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county. People are very concerned. I note that my hon. Friend the Member for Bristol, West (Valerie Davey) is here. Excellent partnerships exist with the county councils in Avon and Devon. It has been suggested that the partnership in Cornwall is not all that it could be. I ask the Minister to look into that. Finally, transport issues in Cornwall affect not only the hon. Member for St. Ives and his constituents, but my constituents in Falmouth and Camborne. As one of the Cornish MPs present, I should like to be included in the meeting to discuss transport links with Cornwall if it is decided to have one.
2.40 pm
Mr. Andrew Turner: I apologise to the hon. Member for St. Ives (Andrew George) for arriving in the middle of his speech. As hon. Members will know, my constituency is the only constituency in England that cannot be reached on foot from Westminster, however important it is to try. We were therefore particularly disappointed that the Minister's announcement at the end of last month did not mention ferries or offshore shipping, although we welcome the money that has been provided for the Ryde interchange. I do not propose to repeat all the points that I made in the debate last year on this subject.
I should like to update the House on the progress of the work following the cross-Solent study which reported in March 2001. The study was designed to investigate how assistance can be given for people crossing the Solent for health reasons or for education, training or job seeking, and has so far generated two schemes. The first is a trial scheme under single regeneration budget 6 to help unemployed people and jobseekers who are looking for work on the mainland. That scheme will benefit residents of the six wards in Ryde, which is only one eighth of the population of my constituency. The second scheme involves health and hospital transport, and it is being put together by the primary care trust. It is nearly ready to implement, and I am pleased to have been able to assist through my office.
Regrettably, no progress has yet been made on cross-Solent travel for the purposes of education, although I am informed that the Learning and Skills Council is now willing to fund transport if local courses are not viable. Many of my constituents share my disappointment that, 22 months after the report was received, the schemes are still awaiting implementation. It is also disappointing that those schemes will benefit only a small proportion of my constituents. They have to be unemployed, seeking work, live in Ryde or need to cross the Solent for purposes of health.
Cross-Solent costs are expensive. Young people and other travellers need to cross the Solent less expensively in both directions. We obviously want to improve our tourist trade. We find it difficult to understand why the Government are so energetic at promoting new airports in the south-east to encourage tourists to go to Malaga, the West Indies and goodness knows where, when they are not encouraging work to reduce the cost of crossing the Solent. The county council is legally empowered to subsidise cross-Solent fares, just as it currently subsidises bus fares, but despite a 13 per cent. rate
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increase last year and despite the Government's settlement this year, it cannot afford to do so. The council tells me:
"We have…discussed the issue with Government Office for the South East and…can confirm that GOSE officials briefed the Minister on this issue prior to his recent visit to the Island."
I presume that that means the Minister for Local Government and the Regions. The council adds that it is
"keen to explore other possible funding opportunities and hope to raise this issue when we meet GOSE officers later this month."
That shows the level of urgency with which this matter is being dealt, although it is not the level of urgency that I or my constituents would like. These issues have been raised not only with me but with my predecessor and my predecessor's predecessor. It would help if Isle of Wight council had a policy on cross-Solent fares. For years my constituents have wanted reductions in ferry fares but, as far as I am aware, the council has yet to put any concrete proposals to Ministers. In any response that Ministers give to the council, I hope that they will encourage it to present concrete proposals.
Finally, I wish to discuss car parking. That may seem a terribly parochial issue to raise but, at the beginning of the previous Parliament, Ministers said that they wanted car parking in towns to be reduced. They wanted a reduction in commuter parking and in parking for shopping purposes. That will be unrealistic in rural areas until there is a highly effective bus service. I am glad that the Secretary of State has reversed, or at least watered down, his aspirations to reduce traffic. I hope that he will also water down his aspirations to get rid of car parking in towns—aspirations that my local authority is quoting as a justification for allowing houses to be built without adequate parking. That has led to the clogging up of the streets of Cowes, which is one of our key ports for people commuting to work on the mainland. The council has sold off car parks in Cowes and Newport because it says that the Government do not want local car parking to be provided and want an end to such car parking. I hope that the Minister will clarify the position for the benefit of the council and, more importantly, for the benefit of my constituents.
2.47 pm
Mr. David Drew: I shall try to keep my remarks as brief as those of the previous speaker. I wish to join those who have criticised Virgin's decision. I will say a bit more about that later. The decision has caused difficulties in the whole of the south-west and, I presume, beyond. We need to say to the Minister, loud and clear, that negotiations with that company are required at the highest level.
I want to start with buses. I am always pleased to come to a debate that has been initiated by the hon. Member for St. Ives (Andrew George). This debate may seem like a rerun, because the people who speak will be more or less the people who spoke last time. However, there is no reason why we should not have an annual event to consider this important issue.
Many points have been made on the principles of how to improve bus transport. In my constituency in Gloucestershire, we have been able to make use of some of the Government's initiatives. However, there are a few caveats, and there have been problems with the

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parish transport grant. I am aware that that comment will provoke sensitivities, and I know that that grant is not the sole responsibility of my hon. Friend and that he has to work with the Department for Environment, Food and Rural Affairs. Some capacity building is required to make parish councils realise that they have to work with other parish councils to come up with suitable plans. I hope that we will be able to analyse what has happened so far. It may sound ridiculous to say so, but we cannot give the money away. I have been trying to encourage many of my parish councils to come forward, but there is a nervousness because of the usual worries about where revenue streams will come from in future.
Ms Julia Drown: Does my hon. Friend acknowledge the ongoing problems with the co-ordination of bus services because of the impact of competition on authorities? Sometimes, competitor bus services cannot co-operate on joint ticketing and joint timetables. Does my hon. Friend agree that it is important to get rid of such bureaucracy so that our constituents in rural and urban areas get the best co-ordinated, most appropriate bus services?
Mr. Drew: I was going to make those points, so I thank my hon. Friend for saving me the effort. There have been calls to establish a strategic bus partnership similar to the Strategic Rail Authority. It need not be a national organisation, but could be organised at a regional or sub-regional level. We need to recognise what is happening to bus services. They were fragmented under deregulation, so it is difficult to co-ordinate initiatives and the money made available by the Government. I hope that the Minister will try to find ways in which we can do some valuable work through greater co-ordination between local authorities, the bus industry and bus users.
We have a promising bus service initiative called village link, which is an interactive run-around. It is responsive to passengers' needs, which leads to a series of problems. By the nature of things, people have to be organised enough to know when to book the bus in order to get on it. Systems of communication need to be examined more effectively.
Problems with reliability and information bedevil rural bus services. We should solve the two problems together. I am not saying that we should have the same interactive kit that is on London buses at every rural bus stop, but it could be installed at the main bus stops. If people know that there is only a 10-minute wait for the next bus, they will wait. At the moment the problem is that they could be waiting 10 minutes or two hours—or three days in some places, although that is a different kettle of fish. We cannot overcome such problems immediately.
There are some good initiatives in my area. Dursley and Cam plan to run an interactive bus and draw down the money that I mentioned. We must not forget the voluntary sector—there is a ring and ride in my area. We do not fund such services adequately or make enough use of them. The statutory services often dump on the voluntary services. In the unsavoury past, when the ambulance service was under pressure, the health transport people assumed that the voluntary bus service would pick people up and take them to hospital. That is
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not acceptable. We need to fund and use voluntary services more appropriately. We must also ensure that they work properly within the statutory sector.
On the subject of trains, I have already made a plaintive plea about Virgin Trains. Virgin has dropped plans to run the Paddington to Birmingham service via Gloucester and Cheltenham, which has caused a new problem. Hindsight is always a wonderful thing, but Virgin was going to run that service without any subsidy at all. It has pulled out because it cannot get space at Paddington. We must now find another operator to take on the service, and it looks likely that Wessex Trains will be able to do so, but it is seeking a subsidy of £250,000 from the Strategic Rail Authority. Will my hon. Friend the Minister consider that case? We cannot afford to lose those trains, for all the reasons identified earlier.
Such problems give the railways a bad reputation. Anybody who has travelled by train to Paddington over the past couple of months will know that the station has had what can only be described as a nervous breakdown. The station coped commendably well with all the problems that came on the back of the Paddington rail crash, but more recently there have been new problems with flooding and signal breakdown. Those problems are regular rather than occasional occurrences, and we must do something about them. It would be wrong to blame the operators, because these are infrastructure problems. The signalling must be renewed.
I make my usual plea for the redoubling of the line between Kemble and Swindon, through the constituency of my hon. Friend the Member for South Swindon (Ms Drown). Now that the fourth platform is open at Swindon there are extra trains going through, and we must avoid a bottleneck further along the line.
I hope that my hon. Friend the Minister will put pressure on the SRA, which is considering the matter. There is money available, but I gather that the scheme must be evaluated. I am grateful to my friend Clive Morforth, who always brings rail problems to me. It is people like him who make us appreciate that trains are needed.
I come now to a different subject. I join the hon. Member for Torridge and West Devon (Mr. Burnett) in his plea for Appledore Shipbuilders. I met representatives of one of the shipping companies in my constituency, which contains a big port called Sharpness. That company would join in any appeal for more British build and more repair. It would also ask that we recognise that the commissioning of transport in this country through shipping is greatly in need of—I will not say renationalising—a bit of patriotic fervour, because all the competitors seem to be able to overcome state aid, whereas we do not.
Mr. Burnett: I am delighted to hear of the hon. Gentleman's support for Appledore Shipbuilders. He has hit on the crucial point that competition must be fair and, in order to be fair, there must be the same ground rules. Does he agree that it is grossly unfair when United Kingdom shipbuilders and other companies are competing against overseas companies for orders? It is

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unfair that those overseas companies receive huge subsidies, particularly in steel, which they can obtain at a reduced price.
Mr. Drew: I have never been a great fan of the state aid rules under the EU, but I wish that we would interpret them in the same way as the Germans and the Dutch.
2.56 pm
Mr. Alistair Carmichael: I congratulate my hon. Friend the Member for St. Ives (Andrew George) on securing the annual debate on rural and island transport. I also welcome the Minister to Westminster Hall. I have often referred to him as the Minister with special responsibility for Westminster Hall. Last week, we tried to have a debate on marine pollution without him, but it did not really work, however hard the Minister for Rural Affairs tried, so I am delighted to see him back today.
I was slightly fazed to see the preponderance of hon. Members from the south-west of England and, indeed, Cornwall, as my hon. Friend the Member for St. Ives reminds me. While remaining in the United Kingdom, it is impossible to get further away from my constituency than to visit my hon. Friend's end of the country. I draw attention to the number of hon. Members who have spoken about trains. My constituency has not a single yard of train track in it, so I do not consider that I am particularly well qualified to pick up on some of the points that have been made. However, it did strike me that the basic issues of planning and investment, co-ordination and integration are much the same wherever we go and whatever places are involved.
My hon. Friend the Member for St. Ives started his contribution with remarks about buses, and his was a familiar story in many parts of the country. He was speaking about old stock running on unprofitable routes in rural areas. The point was first made by my hon. Friend the Member for North Cornwall (Mr. Tyler) and picked up later by the hon. Members for Stroud (Mr. Drew) and for South Swindon (Ms Drown), who said that such problems stem from bus deregulation in 1985. That is absolutely true.
Rural Britain is reaping a bitter harvest of deregulation. Although I accept that that was something that no doubt the Minister at the time would have opposed, the underlying problems caused by deregulation will not be fixed and will not get better on their own. I accept that the Government have undertaken several useful initiatives, but unless and until the underlying problems of integration and—dare I say it, not being a big advocate of big government myself —regulation are addressed, anything else that is done will just be tinkering.
My hon. Friend the Member for St. Ives referred to the difficulties caused in the Isles of Scilly. I was astonished to hear that there would not be automatic investment in new ferry infrastructure there. If there is, ferries will no doubt be built at the splendid boatyard that my hon. Friend the Member for Torridge and West Devon (Mr. Burnett) advertised magnificently. I hope that the Minister will afford the islands in the
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constituency of my hon. Friend the Member for St. Ives the same opportunities that are given to those north of the border. Generous though those opportunities may be by comparison, they are only the very basic opportunities that Government should provide.
The hon. Member for Falmouth and Camborne (Ms Atherton) made a cri de coeur—one that is close to my own heart—for public service obligation orders. I noticed that the Minister just managed not to wince as those words tripped off my lips. The hon. Lady rightly identified the importance of air links to rural and island communities for business and tourism. I sympathise with what she says about the withdrawal of British Airways. What happens to the slots in Gatwick and Heathrow for regional air services once they have been withdrawn? That is a familiar problem for those in the highlands and islands—British Airways used to operate a service from Inverness to Heathrow, but it was withdrawn. We only have the Inverness to Gatwick service left. If the Minister has anything new to say about a public service obligation on the Inverness to Gatwick route, I shall be equally interested to hear that.
Through ticketing and transferring from another operator on to a British Airways flight taking people elsewhere in the country causes problems for business. There are difficulties for tourism also. Advertising and marketing are not as readily available to smaller companies as they are to companies such as British Airways. I share the hon. Lady's frustrations, which other hon. Members have also outlined, at the implementation of EU regulations.
Mr. Michael Weir: I wonder whether the hon. Gentleman will comment on landing charges at airports. Landing charges would be incongruent to smaller airlines that might come into many of the regional airports, particularly Inverness, to fill the gap left by British Airways.
Mr. Carmichael: Landing charges, in particular on the route operated by Highlands and Islands Airports Ltd. to which the hon. Gentleman refers, is an issue on which I could probably fill another 90-minute Adjournment debate. Although I sympathise with the issues that he raises, I shall resist the temptation to address them at length today.
The hon. Member for Falmouth and Camborne made the most eloquent remark of the day when she said, "Now we come to railways—oh dear." That really says it all.
The hon. Member for Isle of Wight (Mr. Turner) made a commendably succinct speech. He is one of a select group of three of us in the House who have island constituencies. I hope that the Minister will address his points. He made the link between transport and jobs and training. Likewise, the hon. Member for Stroud spoke of the need to co-ordinate bus authorities. He made an interesting point about interactive bus stops and highlighted the importance of the voluntary sector. I endorse that point. We have a dial-a-bus that seems to struggle from one financial crisis to another. None the less, it is a service that is appreciated by many in my constituency.
I wish to air one other area of transport policy, although I appreciate that the Minister does not have direct responsibility for it. It is a matter worth

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recognising. Public transport does not really exist in many remote parts of the country. On the west of Shetland—a remoter part of my constituency—it is next to impossible to run conventional public transport because of the sparsity of the population. I suspect that with the best will in the world that will always be the case. For that reason, many people rely on the private car. That causes real difficulties. I anticipate, considering world events, that oil prices will rise, and that will have a knock-on effect at petrol pumps all over the country.
My constituents routinely pay between lop and 20p a litre more for petrol than people on the mainland. If the price rises, they will be hit disproportionately because as well as higher prices they must pay fuel duty and value added tax. If the price is higher to start with, we end up paying even more. Many of my constituents are on low or fixed incomes and live in the remoter parts of island communities, and it is particularly regressive that they should get hammered in this way. I suggest to the Minister that this, along with so many other aspects of transport policy, is an issue of social inclusion.
I do not know who is to blame. The retailers blame the wholesalers, and the wholesalers blame the distributors, who in turn blame the retailers. It goes round in a vicious circle. The Petrol Retailers Association made several suggestions to me that it might be possible to franchise the selling of petrol. Recently, the Select Committee on Northern Ireland Affairs suggested that the vehicle excise duty rate could be varied in some areas to compensate. I hope that that suggestion gets a fair hearing from the Treasury.
We have heard from different Members from different areas about a variety of problems, but the fundamental issues are the same. I wish the Minister well in dealing with them, but judging by performance to date there remains a great deal to do.
3.6 pm
Miss Anne McIntosh: I congratulate the hon. Member for St. Ives (Andrew George) on securing the debate, and I congratulate all those who participated in it. I assure the Chamber of my continuing interest in transport: my husband works for an American airline company, which, I regret to say, does not have immediate plans to fly from Cornwall to the States. I also have interests in the Royal Automobile Club, Railtrack, Eurotunnel, British Airways, British Aerospace, and First Group plc. I hope that that qualifies me to speak today.
The personalities on the Front Bench may have changed since last year's debate on this topic, but the content does not appear to have changed greatly. Contrary to those who expressed surprise at the preponderant presence of Members from the south-west and Cornwall, I am delighted to note the number of Celts and Scots represented today. Perhaps that could form the new alliance in the House.
The main theme in the contribution of the hon. Member for St. Ives was parity of investment in public transport services. That is one of the themes that he explored last year, particularly as regards recognition of a public service obligation through possible public subsidies for air and sea services, such as those provided in Scotland. He did not rehearse the point that he made
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last year on the objective 1 funds that Cornwall could use. Has progress been made on that? Representing as I do a constituency in north Yorkshire, I know that we look with some envy at objective 1 funds. We also look with envy at the Barnett formula, from which most of the possible subsidies to the ferry service in Scotland are paid—and the hon. Member for Orkney and Shetland (Mr. Carmichael) referred to that. I will return to the public service obligation on ferry and air services later.
Like many Members present, I represent a deeply rural community, containing four market towns and a large part of the outskirts of York. We know that the price of fuel has soared under Labour, and that has affected all forms of transport, particularly bus users and motorists. It is of most pressing concern to the road haulage industry. We took soundings from our contacts in Cornwall, and their points reflected the content of this debate. The service is of poor quality, rail journey times must be improved and roads, particularly the A30, could do with being dualled. The delays at Goss moor were heavily underlined by contacts there.
It was also put forcefully to me that the transport difficulties mean that crops, fish and other products from Cornwall cannot get to the markets quickly enough. However, rather than a handout, people want sufficiently modern transport links. Funding a replacement for the Scillonian ferry was certainly of great interest to them. I will return to my personal campaign to improve short sea and coastal shipping. That may be a way forward, and the Minister might like to support it.
Fuel tax increased by 6 per cent. in the Government's first three Budgets. Indeed, in the third Budget, the increase for diesel was 12 per cent., giving the United Kingdom the highest fuel prices in Europe. Our priority must therefore be to improve public transport. It is interesting that the Liberal Democrats in general, and the hon. Member for St. Ives today, place great emphasis on improving public transport, yet in certain areas, where the obvious way forward is public-private partnerships, they notably oppose them.
Labour pledged in its 10-year transport plan to increase the number of passenger journeys by bus by 10 per cent. in England by 2010. Contrary to what other hon. Members have said, I think it important to note that bus usage has increased since privatisation, particularly in urban areas, although it has materially declined in rural areas under this Government. They must say what the reasons are for that. In 2001 in particular, bus use declined in every area apart from London, Birmingham and eastern England. My question for the Minister is why.
It is commonly believed, and I firmly believe, that Labour is letting rural communities down. The £50 million that I gather the Government provided for rural bus services is a paltry sum compared to the huge amounts taken from rural motorists in fuel tax. For many in rural areas, a car is a necessity, not a luxury. According to figures provided by the House of Commons, some 37 per cent. of households in rural areas have two cars, whereas 40 per cent. of households in London and inner-city areas have no cars. That shows the dependence on the motor car in rural areas.
Only 20 per cent. of the money going to rural bus services can support existing services; the rest must go to create new bus services. I think that all those of us who

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represent rural areas recognise that rural bus services have been cut. Like many colleagues, I have had to write strong letters to the bus companies and the local authorities depending on sparsely—
Ms Drown: Will the hon. Lady give way?
Miss McIntosh: In view of the time, I am afraid that I will not be able to accommodate the hon. Lady on this occasion. I place on the record how disappointing we find it that bus services have been cancelled as a result of what could be seen as a lack of Government funds meeting the right targets.
Labour now appears to want to abolish the fuel duty rebate. It was the Conservatives who first proposed extending the fuel tax rebate to community transport in 1999, so we were delighted to see Labour belatedly adopt that policy in its 10-year transport plan—we can claim that as a Conservative achievement. In view of the Government's consultation, we should now like to know what the Government's proposals are for the future of the fuel duty rebate.
On rail investment, the 10-year transport plan promised that old standard rolling stock would be withdrawn by the end of 2004. Will the Government confirm that the 10-year transport plan targets for that will be met? We are also concerned whether existing track-side electricity supply will be powerful enough to run the proposed longer 12 to 15-carriage trains. The hon. Member for Stroud (Mr. Drew) raised the question of the reduced level of Virgin train services. What assessment have the Minister and the Government made of the impact of that reduction in services to the southwest and Cornwall on the local economy and employment prospects?
I should like to put on the record the fact that the reliability of train services has decreased. In 1997, one in 10 trains ran on time, but by 2002 the figure was one in five. The number of complaints from rail passengers recorded by the Rail Passengers Council last year rose by 146 per cent., so clearly all is not well on the railways.
We would like more freight to be moved by rail. We recognise the role that rail freight facility grants have played—the take-up of those grants for last year alone was £30 million. Will the Minister reassure me—and those who have put their concerns to me—that the rail freight facility grants will continue?
Will the Minister respond to the statement by the senior Government adviser, Richard Bowker, the Chairman of the Strategic Rail Authority, that the £33.5 billion of public money earmarked for the railways over the next 10 years is running out, and that the expansion of projects that have already been identified has been put on hold?
Will the Minister support my personal campaign to increase the quantity of goods transported in and around the UK on water? Does he share my regret that both the amount and volume of goods carried by coastal shipping decreased dramatically over the past five years, and that fewer of those goods are now carried by UK-flagged ships? Some 10 years ago, 46 per cent. of all freight carried on coastal shipping was carried by UK-flagged ships: that figure has now decreased to 16 per cent.
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My final question to the Minister concerns public service obligations. In this Chamber, some two or three months ago, we had a discussion on whether the Government would create such public service obligations for air services between Inverness and London. The Minister has been asked today whether he will consider creating public service obligations for air and ferry services between Penzance and the Isles of Scilly. If he is prepared to consider that, could he tell us what the public sector spending obligations would be, and how they would be met?
3.17 pm
The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson): I congratulate the hon. Member for St. Ives (Andrew George) on securing the debate, some 12 months after he secured a similar debate. I notice that the players in the debate today are similar to those who were here before—I see some familiar faces.
The hon. Member for St. Ives said that it was a year since the previous debate, and that much had changed. I will tell him of three things that have changed, among many others. Local transport-planned funding in Cornwall has increased substantially. We have announced the cross-moor improvements, which I know will be welcome in his constituency, and the Dobwalls bypass, which is vital to his constituency and to Cornwall.
I was reading in my local newspapers last night—the Plymouth Evening Herald and the Western Morning News—both of which are excellent, that the Government were going to be pressed by eight Liberal Democrat Members from across Devon and Cornwall. It is unfortunate that only two of them have stayed to hear the summing-up. Perhaps that shows that one must be cautious when putting out a press release. If someone were being unkind, they might say that that information was a little like a Liberal Democrat publication of their "Focus" leaflets—about 25 per cent. accurate.
The hon. Member for St. Ives also congratulated the Government on the great improvements in rural public transport, and I thank him for his comments. I will respond later to some of the specific points that he raised, but before that I will respond to points made by other hon. Members. We will do as we did before, and respond in writing on any matter that is not covered this afternoon.
My hon. Friend the Member for Falmouth and Camborne (Ms Atherton), who was present in the previous debate, raised the importance of air links. There is no doubt about the importance of air links to the peripheral areas of the country—in particular, the service to her area of Newquay. We had a useful and interesting cross-party meeting yesterday at which we discussed the matter. I hope that the temporary uncertainty will be resolved.
I remember lobbying on this issue some 10 years ago with the hon. Member for North Cornwall (Mr. Tyler) and the then hon. Member for Plymouth, Sutton. If my hon. Friend wants to head a delegation to see me on some of these matters, perhaps with the hon. Member for St. Ives—I know how well they co-operate on important issues concerning Cornwall—I should be happy to see her.

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I share my hon. Friend's concern about the time of rail journeys. Penzance to Paddington is an exceedingly long journey, but reliability and predictability are important to passengers as well as the time a journey takes. People want to know that a four-hour journey does indeed take four, not five, hours. That is more important than slicing a few minutes off the journey time. It is unpredictability that people do not like.
The hon. Member for Isle of Wight (Mr. Turner), who serves a true island community, asked about car parking and planning. PPG13 sets out our policy on car parking. We want planning authorities to set out sensible local parking policies in rural areas. We have to find a balance between ensuring that traffic does not undermine and reduce the attractiveness of an area, and providing places for people to park, particularly where there is inadequate public transport. The hon. Gentleman needs to take up the issue with his local authority, as I am sure he has done. If he feels that our policy is not being implemented, I am sure he will come back to me or to the Deputy Prime Minister's Department.
My hon. Friend the Member for Stroud (Mr. Drew), who took part in the debate last year, made some good points, particularly about greater co-ordination between local authorities and bus providers. He would be interested to know that my right hon. Friend the Minister of State is now involved with the bus forum, which is bringing together all the players to co-ordinate many of the issues that my hon. Friend was talking about. I agree that they have been too dissipated and we need to bring those issues together.
My hon. Friend also referred to the weaknesses of deregulation under the Transport Act 1985. I can only agree with him. It was implemented by the party of the hon. Member for Vale of York (Miss McIntosh). I take it from her remarks that she is critical of what happened at the time. The hon. Lady shakes her head. She is not critical of what happened at the time, despite saying that it destroyed the bus services in her area, which is interesting. The Transport Act 2000 addressed some of those issues, certainly in England, by introducing powers for quality bus partnerships and contracts. My hon. Friend the Member for Stroud should look at how they operate in his area to see whether improvements can be made.
The hon. Member for Orkney and Shetland (Mr. Carmichael) is now sitting on the Front Bench for the Liberal Democrats. He was on the Back Benches last time. We have here hon. Members representing the two extremities of the United Kingdom, from the top of the Shetlands to the southern tip of the country at St. Ives. I do not want to bring party politics into the debate. I am not one to do that, as you know, Mr. Cook. The hon. Gentleman accepted that much had been done and then said that there was much to be done, which I accept. I wonder what he would have said if we had here one of the other Liberal Democrat Members from the south-west—perhaps the hon. Member for Yeovil (Mr. Laws), who has been given the task by the hon. Member for Truro and St. Austell (Matthew Taylor), the Treasury spokesman for the party, who was obviously given the job by his party leader, of finding £2 billion of spending cuts. I wonder whether the hon. Member for Orkney and Shetland has thought that through; if there is £2 billion in spending cuts, some of which will fall on
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transport, perhaps he should take us into his confidence a little and tell us whether that will affect any of the issues he has raised.
I cannot let go the many little gems in the hon. Member for Vale of York's contribution. I shall pick up one or two. She talked about short sea shipping. That is an issue we are very involved with and we can see great potential for the sea around our shores taking some traffic off the roads. The hon. Lady will know that we have provided freight facilities grants to enable freight to be carried on inland waterways, too, and off the road.
The hon. Lady referred to the decline of bus use but, for goodness' sake, it was her own party that brought in such legislation. I emphasise that this Government introduced some of the rural and urban bus challenge funding that has brought new money and services to many communities. We did not hear anything about that in her speech.
The hon. Lady referred to the United Kingdom flag and the number of ships plying the sea around the country. However, under this Government, we have seen a massive increase of tonnage under the UK flag. She shakes her head, but it has doubled over the past five years. Her party did nothing about it. We saw ships drift from our flag, but now we have seen a massive increase in their return. I know that the Liberal Democrats will have to find some cuts, but the hon. Lady's party has promised the people of this country a 20 per cent. cut in the budget. We shall be reminding her constantly where those cuts will fall. How will the cut be achieved? Which services will be cut? Which services will be reduced?
Miss McIntosh: The hon. Gentleman is putting words into my mouth. There will be cuts not to services, but to bureaucracy and red tape. There is a good illustration in the magazine of the National Union of Marine, Aviation and Shipping Transport Officers this month showing how much transport carried by UK flag ships has decreased under his stewardship as the Minister with responsibility for shipping. Has he had a chance to read it?
Mr. Jamieson: Yes. I have regular contact with NUMAST and it recognises that the number of ships on the UK flag has increased substantially. I should be interested to know where such cuts in bureaucracy will be made to give a 20 per cent. increase. Why did such matters never happen during those 18 years? It sounds like a policy that one has the luxury of talking about in opposition, but that could never form part of a Government's policy.
I say to the hon. Member for St. Ives that the Government recognise the importance of better transport and economic social regeneration in rural areas, especially in his constituency. It is a long way from anywhere. It is a little like the Shetlands. It is a difficult place to access and in which to set up new businesses and industry. Transport plays a vital role in such matters. The hon. Gentleman has recognised the fact that we obtained objective 1 funding for Cornwall. Some years ago, my hon. Friend the Member for Falmouth and Camborne met the Prime Minister and talked through the matter. I am delighted that my right hon. Friend argued the case strongly for Cornwall and the United Kingdom. It was largely the intervention of

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my hon. Friend and the Prime Minister that achieved the funding. I note that the hon. Member for St. Ives is nodding in agreement.
Andrew George: The Minister's response has not reflected the consensual approach that I thought I was taking. There was a certain rewriting of history in his latter remarks. Does he accept the fact—whether or not it be cross-party—that we are deeply worried about transport? Will he keep a close monitoring brief on the current bus service problems in Cornwall? Will he meet me to deal with links between the mainland and the Isles of Scilly?
Mr. Jamieson: Yes, I will. There is too little time left to deal with the latter point now. It is of such importance, so it would be better if we met with interested parties to discuss it. I accept his worries about the review of the bus services in Cornwall that is being carried out by First Group. I understand that it has stated publicly that its proposed new network will improve the quality and quantity of bus services. It will be up to Cornwall county council to hold First Group to its word and ensure that proper notice is given to people of any changes that take place. I understand that Cornwall will not be able to assess the budget implications of a re-tendering process or the result of the review until the beginning of February.
Cornwall has been particularly successful in bidding for money for buses. The hon. Gentleman made a point about us making an announcement on some of the rural bus challenge funding in about a fortnight. I will not make an announcement today, but certainly, the matter will be one our priorities.
There are points to which I have not replied., but I am willing to take them up with hon. Members in correspondence.

North Bristol Airport
3.30 pm
Mr. Steve Webb: Perhaps I may begin by sympathising with the Minister, who, I assume, will carry on and show himself to be a man of many talents by dealing with a different topic.
In many ways, the proposed north Bristol airport at Pilning is the dog that did not bark. With all the row and fuss about proposed new airports at Cliffe and Rugby, the possibility of one in north Bristol has somehow not managed to hit the headlines. Indeed, I was rather taken by surprise when the Secretary of State for Transport made a statement to the House last July about the consultation. He went through each of the regional papers and the possibility of a north Bristol airport was not even mentioned. That is not a criticism, just an observation. The airport was not deemed sufficiently important or likely to warrant mention in the oral statement. The possibility of a new airport at north Bristol was first mentioned on page 148 of the consultation document.
I should like a steer from the Minister on how serious a possibility that airport is. I have raised the matter with a number of people in my part of south Gloucestershire, and there have been two reactions. Some local residents, many of whom have written in response to the consultation document, have said that it would be a completely unsuitable place for an airport. As the Minister might expect, I shall suggest one or two reasons why they might be right. However, the other people to whom I have spoken have said, "Don't waste our time. It's so implausible. This was obviously just thrown in as an afterthought. It's a decoy for expansion somewhere else."
The Minister looks sceptical. I am glad to have this opportunity to ask him to put on the record the Government's approach to a north Bristol airport. Is the scheme a runner? Is it pie in the sky, or do the residents of Pilning and Severnside need to think seriously about it? In addition to the proposed north Bristol airport mentioned in the consultation document, a different group this week has proposed a Severnside airport on the other side of the Severn estuary and is putting plans before the Government. It would be helpful to have a steer from the Minister about what the response will be. I do not expect him to pre-empt a long consultation process, but the people I represent will be disappointed if he does not say something about how realistic some of those schemes are. Is the north Bristol airport a slim possibility, or are the Government taking the scheme very seriously? I hope he will at least tell us that.
Last year, the Secretary of State for Transport announced:
"The Government will next year publish a White Paper on air travel. As part of that, we will set out our concluded views on how much additional airport capacity is needed and where it should be sited."—[Official Report, 23 July 2002; Vol. 389, c. 847.]
It is fairly clear that when the White Paper comes out—and I appreciate that it has been delayed—it will be about not just "How much?" but "Where?" I gather that the most recent suggested date for the White Paper is autumn or perhaps slightly later. I am sure that the Minister will comment on that. It might be expected

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that, when it comes out, the residents of Pilning and the greater area will be put out of their misery one way or another. I am pleased to see the Minister nodding at that suggestion; that is encouraging.
In the short time available, I do not propose to discuss the background to the entire consultation, or the modelling and projections. I should like to give the Minister a quick tour of Pilning and some idea as to why it might not be the right place to put an international airport. First, the runways might run from north to south through Pilning. As they fly in from the north, passengers will have a scenic view of Berkley power station. Further on, they will be able to have a nice look at Oldbury nuclear power station. So, just a few miles from the proposed site, they will pass one closed power station and one active nuclear power plant. Could the Minister clarify the current rules on flying over nuclear power stations? There is obviously heightened sensitivity because of 11 September, but what general constraints are there on flying over nuclear power plants? In this case, aeroplanes coming from the north would go near a nuclear power station. We all occasionally hear of tragic accidents in which aeroplanes come down just short of airports, and one gets very nervous when nuclear power plants are involved. One, therefore, worries about proposals to build an airport next to a nuclear power plant.
If the planes came from the south, they would pass the major chemical plants at Avonmouth and Severnside. Underground oil and gas stores and the gas-fired power station at Hallen are also very close to the proposed site. Again, those are not places over which we would want planes to fly.
Perhaps the idea is that the planes will fly east to west. However, they would then have to fly over the densely populated areas of north Bristol, such as Bradley Stoke, and perhaps over the new north field at Filton airport, which is used by BAE Systems. Some 2,000 houses are yet to be built there. One starts to wonder whether the proposed site is the best place for an airport.
Pilning, which is at the centre of all this, is a fairly small village with many rural characteristics. There are excellent views across the estuary, and the area is flat and level. I have never seen an otter there, but I am reliably informed—I have learned a lot about the habitat around Pilning in the past few months—that it is quite the place to be for an otter. I assure the Minister that we are also working on great crested newts. Seriously, however, part of the area is a site of special scientific interest, and areas of nature conservancy would have to be taken into consideration.
That green-belt site nestles among power plants, chemical works and heavily populated inland areas. Across the area, there are high-voltage, high-tension power cables that take power across the Severn estuary to Wales. Talking of going across to Wales, I can add that the old Severn bridge and the new second Severn crossing are within spitting distance of the proposed site. From my conversations with the authorities at Bristol's existing airport, I understand that the proximity of the bridges and of some of the higher inland areas may present real problems with using the site at Pilning.
The document says that there are considerable environmental implications of using such a greenfield site, because the damage could be considerable. The
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area is also prone to flooding, so there are reservations about proposals to build thousands of houses there. Again, is that the sort of area in which we want to build an airport?
Building an airport at Pilning would result in massive urbanisation of a rural area. The consultation document refers to a car park that would hold 25,000 to 35,000 cars, so the area would never look the same again. The document also mentions 15,000 jobs. During Prime Minister's Question Time, I was interested to hear the hon. Member for Don Valley (Caroline Flint) demand an airport for her area because of the regeneration that it would bring. However, page 140 of the consultation document states:
"in areas of low unemployment"—
such as south Gloucestershire—
"workers filling new vacancies are likely to be drawn from further afield and therefore additional housing may be needed."
Essentially, Pilning airport would not be about jobs for local people, but about massive urbanisation, massive house-building and a massive inward migration of labour. Claimant unemployment is 1 per cent. to 1.5 per cent. in my constituency, and the project would not bring much benefit to people in the area. Rather, it would cause a huge inward movement and urbanisation.
The flipside of Pilning airport is the end of Bristol airport. It is clear from the consultation document that Pilning will be viable only if Bristol airport shuts—I see that the Minister is nodding at that. Bristol airport is south of Bristol and much closer to areas that are in need of regeneration, such as south Bristol and Weston-super-Mare. Shutting that airport and bringing more jobs to overheated parts of south Gloucestershire cannot be right in terms of the Government's regeneration strategy.
We have two options. We could take the single runway option, which would offer limited extra capacity. Indeed, much more capacity could be created by expanding operations at Bristol and Cardiff and making greater use of other regional airports, with which the Minister will be familiar. The alternative is a multi-runway airport in the longer term, which, as the consultation document admits, would have vast environmental implications for a green-belt site.
On the viability of the site, page 153 of the document concedes:
"We would therefore expect a new site north of Bristol to be financially viable only if no new runway capacity is provided in the South East or the Midlands and if the existing site"
at Bristol "is closed." The Minister will not be surprised to learn that Bristol International airport is not a great fan of a new north Bristol airport. The private company that owns, runs and has put millions of pounds into upgrading Bristol airport—it has moved on a great deal in recent years—is not simply going to sit back and watch.
I have a genuine question for the Minister because I do not understand the proposed mechanism. Let us suppose that the Government give the go-ahead and say that north Bristol, or Pilning, is the right place for a new international airport and the way in which we can meet our 20-year or 30-year strategic objectives. What will happen to Bristol airport? Will the company just go on

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running that airport until the new one comes on stream and it realises that it is losing money, shuts and goes away? Or will the company be invited to run the new site and shut its existing operation, in which case what will be done about the millions of pounds that have been put into that? I simply do not understand. If north Bristol airport will work only in the absence of south Bristol airport, by what process will we get from one to the other? Can the Minister clarify that?
I hope that he will mention the Severnside proposal that has been raised only this week. That would be on the other side of the estuary but would also have implications for the viability of Bristol airport. When I have consulted local residents, the possibility of using underused military sites has been mooted. I am not trying to use that idea to put an airport in someone else's back garden, but how well have the Government considered that proposal?
I have read previous debates that have taken place on the consultation during recent months and the Minister's comments in them. Quite understandably, to any Back-Bench constituency MP who says, "Don't put the airport near me", he has replied, "Well, where would you put it?" It is a perfectly reasonable question. I point out, however, that it is not only me as the hon. Member for Northavon who is saying that Pilning is not the right place for a new airport; the regional development agency has backed the expansion of Bristol and Cardiff airports rather than the building of a new north Bristol airport. South Gloucestershire council has set out a structure plan and a local plan, which north Bristol airport would violate, and has objected. My point is not just a local constituency one. In my judgment, there is potential for further expansion at Bristol and Cardiff airports. We could do much more on accessibility and transport, to make it easier to get to Bristol airport. More could be done with other south-west airports.
The consultation document makes the case for Pilning almost half-heartedly. It feels like an afterthought. There is no detailed assessment of it. For that reason, some people have asked why their time is being wasted even talking about the idea. Yet the Government consultation document is raising a village in my constituency as a possible airport site. My constituents want to know whether that is in the running or not. That is the key question.
To draw all my threads together, I believe that existing south-west airport sites have the capacity for expansion, especially if the transport infrastructure is improved. However, if another single site is sought, we should not choose a place that is a few miles from a nuclear power plant to the north and a few miles from chemical plants to the south, is in an area that high-power, high-voltage electricity runs across, is in the green belt and environmentally sensitive, has underground oil stores and gas plants on the doorstep, and is near areas of vast population, over which aeroplanes might end up flying. Pilning is a lovely place to live, but the worst possible place for an airport.
3.43 pm
Mr. Jamieson: This is my third scheduled debate in this Chamber today. I should perhaps congratulate myself on securing all those debates but instead, I
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congratulate the hon. Member for Northavon (Mr. Webb) on securing a debate on an issue that is of concern to his constituents. There have been similar concerns in other constituencies since the consultation document on air services throughout the country was issued.
I am very pleased to see that my hon. Friend the Member for Bristol, North-West (Dr. Naysmith) is here, keeping a careful eye, as always, on matters that relate to Bristol. My hon. Friend the Member for Stroud (Mr. Drew) also takes an interest in such matters.
The hon. Member for Northavon asked me whether I could give him a steer on the probability of a new airport. I am afraid that that question was a triumph of optimism. He will understand that I cannot comment on the merits of any one scheme because we are in a consultation period. The consultation is genuine; we are listening to people's views and weighing them up.
The hon. Gentleman asked how realistic the north Bristol airport proposals are. He is an academic, so he will know that one should carefully weigh matters up after listening to the various arguments, and that is what we are doing. The Department is receiving information all the time, and we will have to weigh it up most carefully in the coming months, before publication of the White Paper.
The hon. Gentleman asked whether we will take seriously representations that are made. I assure him that we will. We are scrutinising all comments that are coming in; the process has started and will continue until the entire consultation is over.
I can give the hon. Gentleman a more positive answer on the White Paper. He asked whether it would address how much extra capacity is needed. He also asked whether we will address where any development will take place, and the answer is that we will, because it is clear—especially with the elongation of the process following the Gatwick appeal—that some properties are blighted. The more rapidly such decisions can be made—commensurate with proper consideration—the more helpful it is to those people in many parts of the country who are blighted. We have empathy for those people, which is why we do not want the process to last any longer than is absolutely necessary for proper scrutiny of the comments that are made.
The hon. Gentleman raised an important point about what would happen to Bristol airport if the new scheme were given the go-ahead, and I hope to be able to provide some clarification on that, although he will appreciate that it is a complex matter. Any decision on an airport is dependent on several factors—what may be happening in other parts of the country, for example, or recommendations that may have been made. I shall try to cover that point in some detail.
Air travel is a fact of modern life for both business and leisure. Last year, 50 per cent. of the UK population travelled by air at least once. In my parents' time, that would have been unheard of—even 20 years ago, the percentage would not have been so high. Our forecasts suggest that demand for air services will increase significantly over the next 30 years, from 180 million passengers per annum in 2001 to between 400 million and 600 million in 2030. Additional airport capacity will be required if that demand is to be met.

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The Secretary of State has already made it clear that the one option not available is to do nothing. We have to ask the following question: do we carry on increasing the ability people have to fly—including the hon. Gentleman's constituents? If we are to increase capacity, we must address the important question of where people will fly from. It would be irresponsible of any Government not to do that: development would happen on a piecemeal basis, and there would be no structure or plan to what was being done.
That is why we are currently consulting on the future development of air transport across the UK. The consultation documents set out potential demand under a range of policy scenarios from facilitating growth to constraining growth. They also set out the airport and associated developments that would be required to meet demand under the different scenarios. The documents also set out the positive and negative impacts of each scenario and seek views on the arguments for and against airport development. All responses to the consultation will be taken seriously, and when the White Paper is produced we will need carefully to balance economic, environmental and social needs.
The hon. Gentleman raised some specific issues. South-west airports currently handle about 2.9 million passengers per annum. However, more than 5.3 million people whose journeys begin or end in the south-west—about 65 per cent. of the total—travelled by surface modes, predominantly road, to access air services outside the region. Of that leakage, as it is sometimes called, more than 4.1 million passengers went to Heathrow and Gatwick, although I believe that about 15 per cent. travelled to Birmingham to catch their flights.
Bristol airport is the largest international airport in the south-west, and it handled about 2.1 million passengers in 2000. In 2001 it experienced significant growth of about 26 per cent., following the decision of the no-frills carrier, Go, to base aircraft there, serving a wide range of business and leisure destinations. Similar growth is expected in 2002. Bristol is well placed to develop further as it serves a wide catchment for population and businesses—particularly for sectors that use air transport often, such as banking, finance, information and communications technology, and advanced engineering. Many of those industries have grown rapidly in the Bristol area.
Other airports in the south-west are much smaller than Bristol and are expected to grow to a lesser extent as they serve smaller catchments and smaller markets. Bristol is therefore likely to remain the primary airport for the south-west for the foreseeable future. I hope that what I have said partly answers the hon. Gentleman's questions. I shall move on to deal with the future.
By 2030, if current policies are continued—that is the so-called RASCO reference case scenario—demand for air services from the south-west airports could rise to 15.9 million passengers per annum, with around 8.6 million of those at Bristol. However, if it were decided to constrain capacity in the south-east—the south-east constrained scenario, as that policy is called—many of the 50 per cent. of passengers who currently travel to the south-east airports to use air services would no longer be able to do so. Some might not fly at all, but most would use other airports and there would be pressure to use airports in the south-west.
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That clawback of passengers could mean that the total traffic through south-west airports would increase to nearly 28 million passengers a year by 2030, with around 13.4 million of those wanting to fly from Bristol. The hon. Gentleman may see that a strong argument could be made by people living in the south-west that they would want facilities that would obviate the need to travel to Birmingham or London to take business or leisure flights.
Our analysis suggests that Bristol airport could handle around 6 million passengers per annum from its existing runway, subject to the expansion of terminal facilities. With a runway extension and a second terminal, the airport's capacity could increase further—possibly to around 12 million passengers a year—although that would be subject to resolving constraints arising from important environmental, land, property take and surface access issues. Topographical constraints also make expansion beyond 12 million passengers per annum an unrealistic prospect.
If those issues can not be resolved, or if we seek to accommodate the higher demand forecast under the south-east constrained scenario, we would need to consider developing additional capacity at another site in the locality. Need would also be exacerbated if no new runway capacity were to be developed in the midlands. Additional capacity, in the form of new runways, will be required in the midlands by around 2015 under all the policy scenarios that provide for growth, irrespective of decisions on capacity elsewhere. We have therefore examined options for new runways at existing airports in the midlands, and an additional detailed study has been carried out on a new site. That included a site search and the drawing up of an airport plan, with appraisal of the impacts.
As the need for a new site in the south-west will emerge only towards the end of the forecast period under scenarios giving the highest levels of demand, and is highly dependent on decisions regarding major capacity constraints being imposed elsewhere, it was decided that a full study of the north Bristol airport was not justified at present. Instead, a less detailed appraisal of a new airport on a site previously proposed by a consortium—the so-called UK One proposal near Pilning—was assessed. That allowed a means of comparing the costs and broad impacts of building a new site in the Bristol area, including its possible impact on the existing airport.
The results of the analysis are set out in the consultation document. The site would be well connected, close to the M4, M5 and M49 motorways. It would therefore offer good surface access from many parts of the south-west, south Wales and further afield to the north and east. For all we know, people from Birmingham, the hon. Gentleman's old city, might even travel down to use it. It would be more easily accessible to a wider catchment area than is the existing airport, but the analysis suggests that a new site north of Bristol would be financially viable only if no new runway capacity were provided in the south-east or the midlands and the existing Bristol airport was closed. The building of a new site would have to be predicated on all those issues.
We have received several responses, including responses from relevant local authorities, regarding the potential for a new airport north of Bristol. We are

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aware of concerns about the proximity of potentially hazardous installations, such as nuclear power stations and fuel storage facilities, as well as the impact on designated wildlife sites and the risk of flooding. Local concerns will be considered carefully in our analysis of the consultation responses and when we draft the White Paper.
Clearly, if the new Bristol airport proposal or any other significant development were to be taken forward in the White Paper, detailed plans would be drawn up, planning permission sought and an environmental impact assessment prepared. Detailed issues would have to be considered as part of the process. I am aware that the extended consultation will also extend the period of uncertainty for those who may be affected by the development.
Mr. Webb: Will the Minister clarify something? If the White Paper suggests that a new north Bristol airport is the way forward, do the Government have the power to shut Bristol airport? How would Bristol airport be closed in order to make the new Bristol airport viable?
Mr. Jamieson: If the White Paper suggested that a new site offered a viable option, there would still be many bridges to cross. The case would need a promoter, who would have to go through all the necessary processes, and market forces would then put pressure on Bristol airport. If such a decision were made, a lot of thinking would he needed over the next 20 or 30 years. There is a long way to go and views in the area may change over time. It is interesting that existing airports are backing some proposals for new airports in other areas, and some interesting reconfigurations of view may take place. It is difficult to answer the hon. Gentleman's question at the moment because so many things would have to happen before a new airport could be opened. Were Ito go further, I would be entering the realms of speculation.
Extending the consultation has afforded the opportunity to consider alternative schemes suggested as part of that process. The hon. Gentleman referred to the Severnside proposal, but I shall not go into detail on that because I would be straying from the subject of the debate. When we drew up the consultation documents, analysis of the initial scheme suggested that a new airport in the Severn estuary was unlikely to be commercially viable in its own right. However, we have just received a formal, detailed response from the scheme's proposers and have yet to analyse it in depth. Unfortunately, at this stage I cannot rule any options in and I cannot rule any options out—I have heard that somewhere before. We hope to publish the White Paper by the end of the year.
I appreciate how important this issue is to the hon. Gentleman's constituents. It is important for them to be able to access flights for business and leisure purposes, but there are other issues relating to blight and the environment. No decisions have been made and we shall carefully weigh up all arguments made during the consultation process. I dare say that some of what has been said today will help to inform that process.

The Euro
Mr. Frank Cook (in the Chair): Perhaps I should point out that this is a 30-minute Adjournment debate and that interventions are not normally permitted. However, I have been approached about one, with the agreement of the hon. Member for Rhondda (Mr. Bryant) and the Minister.
3.59 pm
Mr. Chris Bryant: I am delighted to have an opportunity—even though it is for only half an hour—to speak about one of the most significant issues that will face the United Kingdom in the next five to 10 years. We have had remarkably few debates about it in the House, and I can find no record of one in Westminster Hall since debates started taking place here, so this is a first.
The debate is about Government policy on the euro which, as I understand it, although the Minister may correct me later, is that it is right in principle for the UK to join the euro, but in practice certain economic tests—the famous five—must be met, because it would not be a good idea for Britain to choose to join the euro if it could be proved that it would not be in our economic interest. A decision on those economic tests will be made by the end of June, within the first half of this Parliament, as promised in the Labour manifesto. Thereafter, depending on the result of the evaluation, there should be a referendum.
I believe passionately and wholeheartedly that a referendum should be held soon, primarily because the UK economy is suffering from two problems. The first, and more obvious, is our economic isolation. Over the past few weeks, we have heard from nearly every senior figure in the tourism industry about the effect that Britain's isolation from the euro is already having. We are losing between 2 per cent. and 5 per cent. of international travel: American travellers have decided not to come to the UK as well as to avoid the eurozone, many British travellers choose to go abroad and many eurozone travellers decide not to come to the UK because of the high cost of the pound and the uncertain cost of their visit.
Some may sneer at the importance of the tourism industry, but it is the fourth largest employer in the United Kingdom. In certain regions, in particular in Wales, it is the third largest. It is the fifth largest industry in terms of gross domestic product. If we consider the manufacturing industry—I represent a constituency in which the main source of manufacturing is long gone, because the last mine closed in 1990—we find that yesterday's figures from the GM B make it clear that we are still haemorrhaging jobs.
Many of the businesses that move their operations out of this country and into places that are about to be part of the eurozone, in particular to the candidate countries of the European Union, cite at the top of their list of reasons for moving the fact that Britain has as yet no commitment to joining the euro. That leaves them with great uncertainty as to the value of their product and their labour costs so, for their own economic reasons, they go elsewhere. The isolation of the UK from the euro is, therefore, already a significant problem for jobs.

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That isolation is also significant for trade. The UK is, by its nature, a trading nation. We rely more heavily on trade than nearly any other member of the EU. However, we are now posting our worst trade deficit since records began in 1697, while the eurozone countries ran a current account surplus of €5.2 billion in the second quarter of 2002. In case anyone is wondering why 1697 is important, it was the year in which Daniel Defoe wrote "An Essay upon Projects". That is when income tax was first mooted to the United Kingdom and it was the first time that there was a Whig Administration. That Administration laid down that the poor must wear badges to identify them. We have significant trade problems if we are posting our worst deficit since 1697.
That is the isolation problem. However, there is another problem—uncertainty. That goes to the heart of why we need to have a referendum at an early date with a positive vote for joining the euro. We have already seen that inward investment is falling, whereas it is rising in the eurozone countries. I also worry about the game of catch-up that we shall have to play. There will be 10 new members of the EU in 2004, many of which have already declared their heartfelt desire to join the euro as well as the EU.
There is a problem with Britain delaying even longer its decision to join the euro. If Poland, Hungary and the Czech Republic join the euro over the next three to five years, Britain will end up having to negotiate its entry rate—which is key to the economic benefits or disadvantages of joining—with the Prime Ministers of Poland and the Czech Republic.
We should not be playing catch-up but learning the lessons of the past and ensuring that we are wholeheartedly at the centre of European policy. Incidentally, it is important to note that the stability pact will be renegotiated and tidied up over the next year or two, perhaps in line with the suggestions that the Chancellor has already made. If that is the case, it is essential for the UK to be part of those negotiations, not excluded from them.
Mr. Wayne David: Will my hon. Friend give way?
Mr. Bryant: Of course.
Mr. Frank Cook (in the Chair): Order. I made it clear at the start that this is a 30-minute debate. The interventions must be agreed beforehand. That intervention was not agreed.
Mr. Bryant: I apologise. I had not understood that rule of the Chamber. I thought that it applied only to speeches, and that interventions could be taken at any point in a half-hour debate.
Llew Smith: On a point of order, Mr. Cook. I have a limited command of the English language, but this is meant to be a debate. I understand that only three people will be allowed to participate in the debate, but they are all singing from the same hymn sheet.
Mr. Bryant: I have no intention of singing, as hon. Members will be delighted to hear.
Mr. Frank Cook (in the Chair): Order. I must point out to everyone in the Chamber that the time already
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taken is time out of a 30-minute Adjournment debate. The agreement was made beforehand, and my ruling stands.
Mr. Bryant: Before I was not interrupted, I was referring to the uncertainty and instability that the UK faces because it is outside the euro. Those are powerful reasons why it is in the UK's interests to join, and to join soon and resolutely. One need only think philosophically about certain issues facing UK businesses such as Burberrys, which happens to be based in the Rhondda. When Burberrys manufactures a cashmere jumper or scarf and chooses the price at which it wishes to sell it in the eurozone, it must make complicated decisions about what its profit margin will be.
There are the costs of exchanging between one currency and another, which most businesses estimate at about 5 per cent., as well as the uncertainty about what price one may eventually get because of variations in the exchange rate. The exchange rate between sterling and the euro has fluctuated more than it did before the euro came fully into being a year ago. In the future, such currency fluctuation may be more, rather than less, dangerous and troublesome for the pound. That cost erodes British businesses and potential profit, and makes it more troublesome for UK businesses to trade in the eurozone. It also makes many businesses, especially the smaller ones, which are the lifeblood of the UK economy, decide to go into the wider market and trade. As I said, 5 per cent. of businesses' profits are lost to the cost of exchange. There is also the possibility of their entire profit being wiped out because of currency fluctuation.
In addition, European businesses must make a decision about whether they will invest in the UK.
4.9 pm
Sitting suspended for a Division in the House.
4.21 pm
On resuming—
Mr. Bryant: We have had no interventions, but one interruption, and we may yet have another.
I talked at some length of the instability and uncertainty besetting the UK economy which is linked to our staying outside the euro. However, there are many nay-sayers in the country, and some are gathered in the Chamber today. The nay-sayers mainly tell us to look at what is happening to Germany's economy. They say that the fact that Germany's unemployment is growing and that it has economic problems is self-evident proof that the euro is not working, and it would therefore be bad for the United Kingdom.
The nay-sayers are sometimes rather selective in their quoting of economic statistics. If the euro were the primary cause of Germany's economic problems, all the other countries in the eurozone would be suffering exactly the same problems, and the trends in the countries outside the eurozone would be exactly the opposite of those inside. However, it is predicted that Sweden and Denmark—both outside the eurozone—will have lower growth than the UK this year, so being

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outside the euro does not necessarily lead to higher growth. Some of the other economic statistics for Germany show that its situation is not quite as the nay-sayers portray it. Wages and productivity are considerably higher in Germany than they are in the United Kingdom.
If one looks at unemployment figures across the eurozone, one finds that there has been a fall in all those countries since 1998 which is rather similar to the fall in unemployment in the United Kingdom. In the eurozone as a whole, the figure has fallen from 10.2 per cent. to 8 per cent. In France it has fallen from 11.4 per cent. to 8.6 per cent., and in Germany from 9.1 per cent. to 7.8 per cent. It is difficult to attribute precisely the rights and wrongs of the economic situation in Germany to the euro.
The nay-sayers also frequently say that the very process of joining the euro inexorably leads to inflation. Many people in Greece and in Spain believe that, and there has been significant inflation in those countries in the past year. However, inflation in eurozone countries has not done what many people predicted. Inflation last year was 1.8 per cent. in France, 1.3 per cent. in Germany and 1.1 per cent. in Belgium. In several eurozone countries, inflation is lower than it is in the United Kingdom, so there is not necessarily a link between inflation and joining the euro. When Britain joins the euro—a significant majority in the UK believe that we will eventually do so—it will be important to ensure that anti-inflationary measures such as maintaining dual billing in pounds and euros are in hand in the two years or so before and after joining. That is an important part of preventing inflation.
The third thing that the nay-sayers state frequently is that a single interest rate for the whole of Europe, including Britain, would be inimical to its future economic development and stability. However, the United States of America has a single interest rate and so, for that matter, does the United Kingdom, different unemployment rates in London, Glasgow, Newcastle, Manchester and Cardiff and the fact that few people move from area to area to seek employment. Not many of the nay-sayers suggest that Wales or Scotland should have a separate interest rate.
The economic tests that are central to the Government's policy on the euro are vital. Of course, we should never recommend joining the euro unless it is in Britain's economic interests, unless there is significant convergence and unless it is in the interests of UK jobs and inward investment. There should be sufficient flexibility in the UK economy and in the euro system to allow for significant growth. However, we should not assume that a negative assessment of the tests in June would be risk free; it would do significant harm to the UK just by itself, politically and economically. It would signal a lack of confidence about the UK's economic future and signify to inward investors and to trading partners that Britain had economic problems.
Britain's economy is strong now thanks to the many tough decisions that the Government have taken since 1997. But its economic future could be stronger, and it will have to be stronger within the euro if it is to withstand the dangers of greater exchange volatility. Let us avoid instability and uncertainty by having a
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referendum as soon as possible, and let us avoid economic isolation by securing a yes vote in that referendum.
4.27 pm
Mr. Kevan Jones: I congratulate my hon. Friend the Member for Rhondda (Mr. Bryant) on securing the debate. I will concentrate on the effect of not adopting the euro on the economy of the north-east, especially the manufacturing industry.
The north-east has a long tradition of manufacturing industry. At one time, it was part of the workshop of the world. Today, the industry is smaller but clearly efficient and high tech. Manufacturing industry in the north-east accounts for 20 per cent. of the region's economy, employing some 175,000 people. Proportionately, the north-east is the largest exporter of manufactured goods in the UK, and that is where the problem lies, because the region is not part of the eurozone. Last year, the north-east lost just under 5,000 jobs in manufacturing, not because the smoke-stack industries were inefficient but because of the strong value of the pound and because it is outside the eurozone. Some people might ask why that should matter, as service sector jobs will fill the gap, but manufacturing jobs are important for skills and employment, not just in the north-east but throughout the country. They are skills that the country cannot afford to lose.
I have already mentioned that the manufacturing industry in the north-east is efficient, and I want to draw on the example of the Nissan motor corporation in Sunderland. Not only is the car plant the most efficient in Europe, it is one of the most efficient at producing motor cars anywhere in the world, outstripping some indigenous plants in Japan. I find it remarkable that the recent decision to build the Micra car in Sunderland was taken at a hair's breadth, despite a large Government grant and a 30 per cent. efficiency lead over any other European car plant. Last week, a story appeared in The Northern Echo that the decision to produce the Almera and Primera models in Sunderland is in doubt because of the strong value of the pound. The plant's competitive advantage, which has been clearly demonstrated, is wiped out at a single stroke by the strong value of the pound and by Britain being outside the eurozone.
What is the problem? What are people afraid of? There is the paranoia about loss of sovereignty, and we have the great and interesting debate about whose head should be on our currency. I agree with Sir Ian Gibson, the chair of Nissan UK, who said:
"Why can't we just as a nation rise above it all? We're not anchored off the east coast of the US, but off the western coast of Europe…we cannot be anything else but European."
The competitive advantage of UK manufacturing is being lost because we are wedded to an outdated notion that this country's destiny lies somewhere other than in Europe. Manufacturing jobs in the north-east and the rest of the UK continue to be in crisis because we remain outside the eurozone. While the values of the euro and the pound remain worlds apart, we will continue to see a loss of manufacturing jobs not only in the north-east, but across the country. The only way to stop that decline is by joining the eurozone at a realistic rate as a matter of urgency. My message is that joining the eurozone will be good news for the manufacturing industry in this country and for the UK and the north-east economies.
4.32 pm
The Financial Secretary to the Treasury (Ruth Kelly): May I say, Mr Cook, that it is an additional pleasure being under your chairmanship for the second time today?
I congratulate my hon. Friend the Member for Rhondda (Mr. Bryant) on securing this important debate, and I notice the interest shown by other Members, which indicates a strong and correct concern with the issues. I also congratulate my hon. Friend on his recent election to the chair of Britain in Europe, and I am sure that he will make a valuable contribution to the debate in the coming months.
First, I want to restate the Government's policy on UK membership of the single currency, which remains unchanged. In his June 2002 Mansion House speech, the Chancellor said:
"In principle British membership of a successful single currency offers us obvious benefits—in terms of trade, transparency, costs and currency stability—and could help us create the conditions for higher and more productive investment and greater trade and business in Europe."
More than half our total trade is with the European Union, and about 3 million jobs depend on our economic ties with Europe. The EU is the UK's largest trade and investment partner. The Government are in favour of UK membership of European monetary union in principle, but we will recommend UK membership only if it is in the national economic interest and the economic case for joining is clear and unambiguous. The Government believe that if that is the case, there is no constitutional bar to joining. My hon. Friend the Member for Rhondda summed it up neatly by saying that in principle it is right and in practice the economic conditions must be met.
As the Chancellor said in his October 1997 statement to the House, the five economic tests will define whether a clear and unambiguous case can be made. In that same statement, the Chancellor set out the five tests, which are: whether there can be sustainable convergence between Britain and the economies of a single currency; whether there is sufficient flexibility to cope with economic change; whether there is an impact on investment, which my hon. Friend highlighted; whether there is an impact on the financial services industry; and whether joining is good for employment.
I note with interest the comments made by my hon. Friend the Member for North Durham (Mr. Jones), and I know the interest that he takes in the manufacturing industry in his constituency and across the north-east. However, the five tests provide a framework for robustly analysing the decision on economic and monetary union. As the Chancellor said in his Mansion House speech:
"To join without a proper, full assessment of the five tests could…prejudice our stability, risk repeating past failures of exchange rate management, and could return us to the days of stop-go at the expense of our ambitions for high investment, full employment and high and sustained levels of growth."
I was heartened to hear my hon. Friend the Member for Rhondda put such emphasis on the economic factors. There is a serious economic debate to be had. The Government have consistently made it clear that the Treasury will complete an assessment of the five tests within two years of the start of this Parliament. We
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remain fully committed to doing so. On the basis of their assessment, the Government will decide whether the five tests have been met. If the Government decide to recommend joining, that decision will be put to a vote in Parliament and then to a referendum of the British people.
I turn now to the preliminary and technical work that will inform the assessment of the five economic tests. As the Chancellor noted in his November pre-Budget report:
"The preliminary analysis supporting the five tests assessment—technical work needed to enable the assessment to be completed within two years of the start of the Parliament—is well underway."
Hon. Members will be aware of the detailed paper on the preliminary and technical work that was produced by the Treasury for the Treasury Committee in September. A copy may be found in the Library. That paper built on the Chancellor's June 2002 Mansion House speech, and stated that a number of supporting studies would be published alongside the assessment, encompassing the preliminary and technical work. The supporting studies will cover key issues that relate to particular tests or that apply to more than one test. The paper for the Treasury Committee makes it clear that, when the assessment is complete, the detailed supporting studies will be published alongside it, and that everything will be subject to intensive public scrutiny and debate. I am sure that there will be much material in that preliminary and technical work when the assessment is published. It will take pundits and academics a long time to digest that material, which will provide much food for debate and comment in the months following publication.
On practical preparations, since 1999 the Government's strategy has been to prepare and then to decide. That work has included the publication of two outline national changeover plans and regular updates on the detail of changeover planning. Most recently, the sixth report on euro preparations was published in July last year. The Government are maintaining their commitment to prepare and decide. By planning now, the United Kingdom could make a smooth and cost-effective changeover should the Government, Parliament and the people, in a referendum, decide to join the single currency.
The introduction of euro cash in the euro area took place on 1 January 2002. The Government are pleased that the euro area countries experienced a broadly smooth changeover. The UK has taken the opportunity to monitor and learn from the experience in the euro area during the changeover. The findings have been published in the sixth report on euro preparations, and have now been reflected in the UK's own preparatory work.
For example, following the euro area's experience of a two-month dual currency period, we should, in the event of the UK joining the single currency, be able to adopt a dual currency period of no more than two months. That is less than our original estimate of six months for dual circulation.
We also work closely with consumer representatives in the voluntary sector to develop a communications strategy in case we decide in a referendum to join a single currency—to establish some of the issues about which

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my hon. Friend talked, such as scale of value, to establish ways to protect consumers, and to think about communications strategies for vulnerable groups that would have more difficulty coming to terms with a change of currency than other citizens.
The Government are committed to working with UK businesses to secure the right level of preparation that would enable them to work with the euro now. It is obvious that in many respects the euro is already operating in the eurozone and businesses in Britain have to come to terms with that, whatever their views on the merits of the UK joining the euro. The existence of the euro in the eurozone has implications for those businesses, and that should be reflected in their strategies.
The Treasury euro website has had more than a million visitors since its relaunch in March 2001. The Government have distributed more than 400,000
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factsheet packs and they have sent information to around 1.5 million small and medium-sized enterprises, first in autumn 2001 and then in autumn 2002. The Government have produced, and recently updated, a wide portfolio of simple, practical business case studies, and they operate a national telephone helpline for those without access to the website, which provides businesses and travellers with practical information about the euro. Although such information has helped many businesses to address issues posed by the euro, our surveys suggest that many more could be affected.
We continue to work closely with the business community to provide it with the practical advice and assistance that it needs. Hon. Members are able to see that we take seriously the assessment of the five economic tests and, were we to make a positive assessment and were there to be a positive referendum result, we must be in a position to join—
It being nineteen minutes to Five o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.