Westminster Hall Sitting of 15 October 2003

Preamble
[MR. FRANK COOK in the Chair]

Biofuels
Motion made, and Question proposed, That the sitting be now adjourned.— [Mr. Bradshaw]
9.30 am
Mrs. Gillian Shephard: I am delighted to have the chance to raise this important issue. As can be seen by the attendance here today in the Chamber, there is strong interest from all parties.
I shall make the case that the Government should seriously consider increasing their support for a sustainable biofuels policy on economic and environmental grounds, and for fuel security. In the past few months, the number of questions to Ministers, contributions to debates and early-day motions, together with the work being done by the Select Committee on Environment, Food and Rural Affairs, of which there are several members present, have shown that there is extensive support for increased measures to encourage the development of a biofuels industry in the United Kingdom.
In Norfolk, we practise what I am preaching today. After our disappointment over the amount of support given to biofuels in the Budget, we formed an all-party group in. Norfolk. I am delighted to see colleagues from all parties here in support. MEPs also support us, as do all the local authorities in Norfolk, the university of East Anglia, the Institute of Food Research, British Sugar, the road haulage industry, fuel and petroleum companies, the Royal Norfolk Agricultural Association, the National Farmers Union, the Country Land and Business Association, and the East of England Development Agency. We have had substantial and very welcome support from all our local media. Now that I have secured this debate, for which I am very grateful, our group's next step is to bring a delegation to meet relevant Ministers.
Outside Norfolk, there is strong support for further measures to help biofuels from the CBI, major manufacturers, the Road Haulage Association, Friends of the Earth, and the British Chambers of Commerce, which will make a strong submission to the Chancellor on the Budget. This is an interesting and diverse line-up of supporters, and the Government would be well advised to take notice of them.
The collective view from inside and outside the House is that, although the Government's duty reduction of 20p a litre for biofuels, which was announced in the last Budget, was very welcome, it is not enough to stimulate further development of the industry. If the Government really mean what they say, a further duty reduction and/or other measures are necessary. It is just as necessary that there be a clear cross-departmental Government strategy to achieve the Government's stated objections—I am sorry: objectives, although they may have objections—in this policy area.
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The Government is short neither of advice for the case nor of externally set targets. They have not been short of pronouncements either. Like everyone else, they must know that the public want access to environmentally friendly fuels without the expense of switching to hybrid vehicles or to vehicles that have to be adapted. They should be as shocked as everyone else by the fact that rape seed is exported from the UK by road and sea to Germany, where it is made into biodiesel and then imported back into this country by road and sea to be retailed here as environmentally friendly fuel. That speaks for itself.
The Government constantly repeat their commitment to the reduction of greenhouse gas emissions and carbon dioxide emissions. Research commissioned by the Government from Sheffield Hallam university shows that the reduction in CO2 emissions from conventionally produced bioethanol would be more than 60 per cent. British Sugar says that, with its efficient means of production, it could increase that reduction to 70 per cent. However, the duty reduction of 20p per litre promised for January 2005 will not be enough to encourage investment in the development of the industry. The great fear is that it will do nothing more than encourage imports.
The Government have stated their intention of meeting the renewables targets by 2020, and the requirements of the EU biofuel directive by 2005.
Gregory Barker:I am listening carefully to what my right hon. Friend has to say. Would she agree that although their moves are welcome, unless the Government go all the way and lower the tax hurdle to the trigger point at which capital will flow from the private sector to develop the industry, they may as well not bother? Missing by an inch is the same as missing by a mile.
Mrs. Shephard:My hon. Friend makes the point well. We hope that the Minister will clarify matters, but the simple fact is that neither of those targets can possibly be met with the UK biofuels industry in its current state, as our production of biodiesel is less than 10,000 tonnes per annum and we produce no bioethanol for road use. What real measures are being planned by the Government?
The Government are not short of stated aspirations. The report of the policy commission on the future of food and farming—the Curry report—states:
"England needs a long-term strategy for creating and exploiting opportunities in non-food crops, including starch and oils. This area should be a high priority for the research and technology transfers we have outlined. We recommend that the Government should reduce duty on biofuels to that charged on other clean fuels. We believe this will help processors to drive the market forward."
Yes, and many others believe that to be so, but what is being done?
The Government are committed to reducing greenhouse gas and carbon dioxide emissions. They are persuaded of the need for fuel security. They are aware that they must meet renewables targets by 2020, and the requirements of the EU biofuels directive by 2005. They have made a start, which is welcome, but it is not enough. Are other countries doing better? The answer is yes, much better. I shall not say more about that, Mr.

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Deputy Speaker, because many other hon. Members wish to speak, but the facts may emerge during questions or interventions. Most European countries are doing a great deal better than we are, as are the United States and Brazil.
It has been difficult to discover whether the Government have a cross-departmental strategy. It has also been difficult to persuade Ministers to reveal the reasons that led to the decision to make the 20p reduction in duty that was announced in the Budget. We have also had a problem trying to discover the rationale for the liquefied petroleum gas rate of 41 p on offer. Was it based on the carbon dioxide reduction of 12 per cent. that it offers, which is a great deal less than that offered by bioethanol, or on air quality benefits, which are similar to those derived from bioethanol? Apparently, we are not to be told.
The external targets loom, and environmentally conscious fuel users seem more aware than the Government of the present hazards. I have been sent a copy of a letter from Mr. Peter Howe, a constituent of the hon. Member for North Norfolk (Norman Lamb), who runs a successful cruiser business on the Norfolk broads. In a letter to the Chancellor of the Exchequer, dated 6 October, he wrote:
"There are, however, significant barriers to the use of the fuel being extended throughout the Broads, particularly because the price of the material is so much greater than conventional fossil fuel. While we are, at present, prepared to pay a premium because of our belief that the fuel is so much better for the environment, other businesses may not be in a position to take the same view."
Thanks to Mr. Howe, and thanks also to the work done by the hon. Member for North Norfolk, a loophole has been discovered. However, if the Government mean what they say, it should not be up to others to find loopholes in their attempts to keep the environment clean, especially on the broads.
Mr. Dennis Thouless runs a biodiesel production business in Norfolk and Suffolk that is based in the constituency of my hon. Friend the Member for Mid-Norfolk (Mr. Simpson). Mr. Thouless reprocesses used cooking oil, but he has studied and is enthusiastic about the possibilities of using oil seed rape. However, Ruth Rawling of Cargill plc told the Select Committee:
"There is an extremely small cottage industry … at the moment in the UK producing biodiesel, but in order to have an industry which would really make a difference in terms of environmental benefits, in terms of our farmers or indeed in terms of being able to go into a petrol station and buy something which contained biodiesel, we do not yet have an industry and the reason is very similar; we do not think that the duty derogation is large enough to make the investment worthwhile. We have argued consistently for the last three years that we need a duty derogation around 28 pence per litre … and we still have not got there. We have only got 20 pence and that is why we do not have a biodiesel industry of any size."
Mr. Thouless concurs. Fortunately for him, the forward-looking Breckland district council in Norfolk has just given him permission to expand his business. As Councillor Kemp said at the relevant meeting:
"This man is doing a fantastic job for the environment. We should remove the conditions and let him carry on."
I wish that the Government took the same view.
The same point is made about bioethanol in the excellent study produced by the East of England Development Agency, which was published in July.
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What response have the Government collectively made to the conclusions of the report, and what action is to be taken as a consequence? The most interesting feature of the report is that it was a Government agency, and not the Government, that saw the need for a proper economic, environmental and cross-departmental examination of the potential of biofuels. The report will have been seen by many hon. Members present who are interested in the issue. I will not go into detail, but it proposes a selection of options—I have the details, but I do not want to bore the Chamber or you, Mr. Deputy Speaker, which would lead to a fate worse than death, I know. Some propose a further cut in fuel duty, some infrastructure improvements and some grants for other options for the Government to consider. We hope that the Minister will give his view on those options.
In taking evidence for its report on biofuels, the Select Committee has made it its business to ask those giving evidence to sign up behind such options. As far as I could ascertain, there was such an agreement across the board. Obviously I cannot pre-empt the report, which will be produced in good time for the Chancellor's pre-Budget review. However, I will go so far as to tell the Minister that I think that it would be difficult for the Government this time to argue that there is no agreed view across the interests concerned. It would be nice if we were able to say the same for the Departments involved.
There are five Departments involved in the issue. No doubt as many as that are needed if we are to believe that the Government are as serious as they say they are about meeting their environmental and fuel security targets. The only problem is that no one Department is in charge of the policy. That emerged from the as yet uncorrected oral public evidence given to the Committee by Lord Whitty, the Under-Secretary of State for Environment, Food and Rural Affairs, on 15 September. The Minister was asked which Department was in charge of the Government's policy on biofuels. He replied:
"We have an overall committee in Government following up the Energy White Paper and also as far as the transport side is concerned on low costs fuels, within that different departments have different responsibilities: Defra is responsible for the agriculture environmental dimension, air quality and climate change, et cetera and agricultural production and agricultural markets; broadly speaking the DTI is responsible for the technology and the capital investment and the DfT is responsible for the vehicle fuel dimension, although they do act very closely with Defra … at the end of the day the Treasury is responsible for all the fiscal side."
The Minister was then asked if the Committee would be right in inferring from his answer that no one Department was in charge of the Government's policy on biofuels. He replied, "Yes, you would." He was then asked whether there was a group of Ministers who met to co-ordinate policy. He replied that there was, and that it met
"Not very often, maybe once a quarter."
On the substance of the debate, the Minister said categorically that the 20p concession granted so far was not stimulating the needed investment to deliver the outcomes in the UK, and that what was needed was either incentive for investment, a greater duty cut or a combination of the two.
Does the Minister agree with the view of Lord Whitty, as stated to the Select Committee in public? Those points were put to the Economic Secretary to the

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Treasury at the Select Committee's public oral evidence meeting on 17 September. One might ask why these questions are not being put by one Minister to another, rather than through the intermediary of the Select Committee, but there we are.
Dr. Ian Gibson: The right hon. Lady talks about interaction between Departments, but does she see any possibility of interaction between the Departments' policies, such as on transport or trade and industry? Can any of the political aims of the different Departments be linked up?
Mrs. Shephard:The hon. Gentleman is referring to a useful meeting that Norfolk Members had yesterday on transport issues, at which that idea was raised. It is extraordinarily brilliant. It issued from the mouth of the hon. Gentleman, so one would expect that.
Mr. Keith Simpson: That is enough.
Mrs. Shephard:My hon. Friend says that that is enough, so we will pursue the idea at a Norfolk level. Although one could say that that is our job, there are people who are paid to do it—they are called Ministers—and we are often told that we live in an age of joined-up government.
In the Economic Secretary's reply on the as yet uncorrected oral public evidence he rejected his ministerial colleague's view. He said:
"As a government we are not convinced that the 20p cut will not produce the developments that we are looking for."
No doubt the Economic Secretary will one day convey that view to the Minister responsible for agriculture, but meanwhile what is the Government's view? I want this Minister to tell us at the end of the debate.
Mr. Michael Jack: Has my right hon. Friend had an opportunity to examine the further supplementary evidence sent by Lord Whitty at the Department for Environment, Food and Rural Affairs to the Select Committee during its biofuels inquiry? It illustrates considerable environmental and employment gains for agriculture, and discusses qualitative issues about biofuels made from rapeseed and other agricultural products. That is in stark contrast to a Treasury policy that continues to promote an industry that is in effect based on recycled cooking oil.
Mrs. Shephard: I have had an opportunity to study that evidence, and I hope that DEFRA sent a copy to the Treasury. To be fair to the Economic Secretary, he made it clear that the Government are considering a range of options.
I should like this Minister to throw light on another interesting point that his colleague made. On the European biofuels directive, he said that he does not accept that
"the indicative numbers set by the European directive are necessarily appropriate and the best thing for the UK."
I thought that the Government had signed up to that measure, but perhaps the Minister will throw light on that.
There we have it. We have a Government who rightly preach their commitment to the environment. They make claims about their intention to observe their
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European and international obligations and their desire to establish and encourage manufacturing development, especially in areas where there is little. They have even been heard to say, though not loudly, that something might be done to help farmers, who have seen their annual incomes drop by 50 per cent. in successive years under this Government. However, in the one policy area of biofuels, they have the chance to demonstrate all those commitments to the environment—
Mr. David Drew: Will the right hon. Lady give way?
Mrs. Shephard: No, I am concluding my remarks. I hope that the hon. Gentleman will make his own contribution.
The Government have a chance to demonstrate their commitment to the environment, to Europe, to the international community, to the development of indigenous manufacturing industry and to the maintenance of rural prosperity—all in one policy area. The Minister must tell the House this morning how he sees these vital questions being taken forward by the Government.
9.48 am
Paddy Tipping: I am delighted to follow the right hon. Member for South-West Norfolk (Mrs. Shephard). I reinforce her initial comments that the biofuels campaign has support across the parties and across the country—within and outside Parliament. I am delighted that this debate is taking place. I hope that my hon. Friend the Minister, who takes a close interest in this matter, will listen to the voices and talk to his colleagues across Government.
The Government support biofuels, but I shall argue that the support needs to be converted into action. Unless priorities, policies and an action plan are produced, the United Kingdom will be put at a competitive disadvantage. The Government's position is clearly set out in the energy White Paper published earlier this year. I need not quote all that the White Paper says about biofuels, but suffice it to say that it recognises their value. Paragraph 5.21 comments:
"Drawing on the Low Carbon Vehicle Partnership and other expert knowledge, we will over the next year produce an assessment of the overall energy implications of both a hydrogen economy, and of large-scale use of biomass-based fuels".
That is a clear commitment to produce an action plan within a year. The White Paper was published in February, and it is now six months on. When will the action plan be published? Action has already been taken. It has been made clear that, following the 20p reduction for biodiesel, a similar reduction in duty on bioethanol will be introduced from 1 January 2005. The essential argument is whether that policy is sufficient to enable proper production in the UK. We need to consider the players in the field, particularly Cargill and British Sugar, which, in their submissions to DEFRA and the Treasury, made it clear that the 20p reduction will not create an indigenous production base.
Mr. John Horam: May I reinforce the point that we need to develop a clear implementation plan for the energy White Paper? The hon. Gentleman

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told us that the Government have not yet said when that will be forthcoming. Could the Minister make it clear what the Government have in mind? It must be something more than what is on the table already.
Paddy Tipping: The hon. Gentleman, who has a good deal of knowledge of, and a long commitment to, these issues, will know that the essential, broader criticism of the energy White Paper is that the mechanism to implement it is extremely weak. A sustainability panel reporting to two Secretaries of State will not effect the radical changes set out in the White Paper. Part of the problem, as the right hon. Lady said, is that different Departments are involved in the discussion about biofuels. No single Department is taking ownership of it. The situation is worse than she outlined, because Ministers are making contradictory statements.
Lord Whitty, a Minister at DEFRA, told the Select Committee on Environment, Food and Rural Affairs that the EU biofuels directive targets would be met. My hon. Friend the Economic Secretary to the Treasury, who has already featured in this debate, made it clear to members that those were indicative targets, and that it was important to get the trajectory right. There is a difference of opinion between two Ministers.
The DEFRA Minister also told the Select Committee that he wanted to see UK-based production, as he thought that there would be benefits to that. By contrast, the Economic Secretary underplayed that, saying that it was unnecessary, but that it was necessary to accrue environmental gains, and that the best gains could be achieved by importing biofuels. It is essential that the Government speak with one voice, because the clock is ticking and the EU biofuels directive has now been published. The Government must produce proposals by next summer on how to meet those targets. I understand that there will be consultation in February to April next year, so it will probably not be concluded until after next year's Budget. Those who produce crops that could be used in the development of biofuels have a planting cycle of 15 months. We need clear and consistent policy statements now from all Departments if we are to meet European targets.
The difficulty is that the Treasury has an environmental model to assess rate reductions. It has already been said that the duty rate reductions on road fuel gases are way in excess of those available for biofuels. It is important to test the Treasury's model. Why is the duty reduction on road fuel gases equivalent to 40p per litre, whereas biofuels are being offered 20p per litre? In previous discussions, the Economic Secretary argued that the environmental benefit from biofuels is only 2.7p per litre.
I do not pretend to understand the methodology, but it is clear that we all need to know why there are such large variations in duty reduction. I draw the Minister's attention to a parliamentary written answer given on 8 September on the question of road gases versus biofuels. The Economic Secretary said:
"It would not, however, be appropriate to compare the duty incentive for biofuels with those for road fuel gases."—[Official Report, 8 September 2003; Vol. 410, c. 102W.]
To put it bluntly, why not? After all, that is what the argument is about. I put it gently to the Minister that many people throughout the country feel strongly about
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biofuels, which have great environmental and economic benefits, especially for rural areas. I understand the Treasury's concern about not sucking in imports from the big players such as Spain and Brazil. However, the Government need to act by defining their policies and priorities and by producing an action plan that has a clear timetable. If they do not do so, the consequences are as likely as night following day. The United Kingdom will be dependent on income from abroad. That makes no sense for the economy, the environment or society.
Several hon. Membersrose—
Mr. Deputy Speaker: Order. The convention in these 90-minute Adjournment debates is that we commence the winding-up speeches 30 minutes before the end. Six hon. Members are seeking to catch my eye. The two Opposition spokesmen suggested that they should curtail their remarks a little to ensure that other hon. Members can take part in the debate. However, I suggest to those hon. Members that they should bear that generosity in mind when making their contributions and when accepting and responding to interventions.
9.58 am
Mr. Keith Simpson: Thank you, Mr. Deputy Speaker. I shall bear your comments in mind. It is a pleasure to follow the hon. Member for Sherwood (Paddy Tipping), and I congratulate my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) on initiating the debate. She has led the initiative on biofuels in Norfolk, and is a senior member of the Select Committee on Environment, Food and Rural Affairs. Again, we see that there is a cross-party, cross-country approach to this issue.
Like the hon. Member for Sherwood and my right hon. Friend the Member for South-West Norfolk, I reinforce the point about joined-up government. It is absolutely crucial when developing Government policy to know which Department is taking the lead; is it DEFRA, the Department for Transport, the Department of Trade and Industry, Customs and Excise or the Treasury? We all want to discover not only what the Government's policy is, but which Department is in charge. Will a Cabinet Committee be set up to co-ordinate Government policy on biofuels? Many old Whitehall hands would argue that that would be better than government by sofa, which we have seen lately in other areas.
I raised the issue of biofuels in a debate on farming in Norfolk in Westminster Hall almost a year ago. I will not repeat the arguments that I made then, but I want to put several questions and observations to the Minister, some of which have been covered by the hon. Member for Sherwood and my right hon. Friend the Member for South-West Norfolk.
What research are the Government undertaking on the utilisation of biofuels in the UK? Sheffield Hallam university is working directly for the Government, but my right hon. Friend pointed out that the main work seems to have been done by a Government agency. Does the Minister's Department believe that an increase in the cultivation of biofuels will assist farming and benefit the

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environment—the two linked aspects? Does he know whether the Treasury is willing to zero rate biofuels to give UK industry a real boost? Would the action highlighted by the hon. Member for Sherwood lead to the UK market being flooded with European biofuels?
What will the impact be on the UK of the new European Union directive that will oblige Governments to support the production of biofuels, particularly from environmentally friendly fuels made from crops such as oilseed rape and sugar beet? The EU directive must be signed into national law by December 2004, and the EU insists that Governments set targets for increasing the production of biofuels over the next decade. The directive suggests a benchmark that biofuels should account for around 2 per cent. of an EU state's fuel market by 2005, and 5.75 per cent. by 2010. Is that target achievable or is it merely, as the hon. Member for Sherwood said, a trajectory or an ambition?
I understand that the Minister's Department supports biofuels and the EU directive. How can the Minister convince other Departments, particularly the Treasury, that they must comply with the directive, and how will it work on the ground? Biofuels could have a major impact on the environment, farming and transport in Norfolk and East Anglia. There is no doubt that they are cleaner and more efficient, and could offer a lifeline to the farming community. Will the Minister confirm that Franz Fischler, the EU Agriculture Commissioner, is a convert to the idea of using set-aside land to grow biofuels?
Farmers are conscious that they cannot argue the case for biofuels purely on the benefits to the farming industry. At a recent meeting in Norfolk, there was a wail of despair from a farmer who heard people discussing every aspect of biofuels except the benefits that they would bring to farmers. It is important to emphasis in the presence of a DEFRA Minister that biofuels will benefit farming. Despite the early proposal that farming should be omitted from the title of DEFRA when it was established, the Minister, having now been in his post, will understand the important contribution farmers make to food production and the environment.
East Anglia, with its long experience of arable farming, has the potential to become the UK centre for biofuel production by growing the raw materials for the new industry. Many factors need to be brought together, such as science and technology, which I am sure the hon. Member for Norwich, North (Dr. Gibson) wants to speak about, farming, environmental criteria and the requirements of transport. However—this is the reason for today's debate—the most significant role can be played by the Government. Unless the Government seize the initiative, as the hon. Member for Sherwood said, and make what Churchill would have called "action this day", the initiative will he with our European partners and other countries. There will be a biofuel market in the UK, but it will be supported by France, Germany, Spain, Brazil and others.
Mr. Drew: Will the hon. Gentleman give way?
Mr. Simpson: I am just about to finish. However, the hon. Gentleman is always the bridesmaid and never the blushing bride, so I will let him in.
Mr. Drew: We learned from the DEFRA trip to Brazil that its industry was kick-started by direct intervention,
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when its fuel producers were set a target to include a certain amount of bioethanol. Why are we not considering such a step in this country?
Mr. Simpson: I will pass that on to the Minister, as it was a good point well made. As the hon. Gentleman said, and as I was concluding, this all comes back to Government policy. The Minister may not be able to give one today, but we need a clear Government policy statement on biofuels that contains a clear agreement on the lead Department and, most importantly, has the active support of the Treasury. Lord Healy always said that the Treasury knew the cost of everything and the value of nothing. I hope that on this issue he will be proved wrong.
0.6 am
Dr. Alan Whitehead: I, too, have spoken in this Chamber and elsewhere about the importance of biofuels to the future transport strategy of this country. I will try not to repeat too many of my comments. However, the debate is crucial to how we sort out our future transport strategy. Undoubtedly, we will have to move substantially away from a petrol-based fuel strategy for transport, and if we do not grasp that in the near future, as other hon. Members have said, we will be left far behind.
In grasping a strategy,
"there is a 'chicken and egg' problem whereby vehicle manufacturers will not deploy new technologies if there is no refuelling infrastructure, whereas energy supply companies are reluctant to invest while there is no significant demand; and with a range of vested interests competing for future markets and the constraint on public policy not to pick winners`, there is a danger that the pathway dilemma` will persist making actors hesitate to back any one technology decisively."
They are not my words, but those of the Government energy review published last year. That seems to sum up the dilemma exactly.
The point to remember is that, although bioethanol is a pathway fuel, it is also a long-term fuel for a hydrogen economy. The production of hydrogen has to be done by finding the fuel to create the hydrogen, and if that fuel is a mineral fuel, the problem of CO2 is simply shifted one stage up the process. Hydrogen can be created by using bioethanol, which provides a zero emission fuel right up the line. As hon. Members have pointed out, bioethanol can be used as a fuel in its own right, and, with the strategy in mind, the question is how one does that.
As my hon. Friend the Member for Stroud (Mr. Drew) pointed out, one problem in picking winners and alternative fuels has been infrastructure. Do we have to set up new pumps to distribute the fuel around the country? The investment process is about not just the production of the new alternative fuel, but its distribution and sale.
In my view, the simplest and most straightforward way of kick-starting an industry in this country and ensuring that it has a secure future is to put the stuff in our petrol now. That would prevent imports from being sucked in because of the trajectory of increasing use of the fuel, and allow a domestic industry to get going. That is not a brand new idea. As my hon. Friend the Member for Stroud said, 20 to 25 per cent. of petrol in

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Brazil is ethanol, up to 10 per cent. in Canada, Peru and Australia, up to 5 per cent. in India and 3 per cent. in Japan.
Other countries do it, so we could, too. Would it wreck car engines? No. Petrol with less than 10 per cent. ethanol probably does not require any adjustments, while petrol with 5 per cent. ethanol certainly does not. I am afraid that I must mention the word "escalator" now, because my suggestion is that we have an ethanol escalator policy. The idea is quite simple, quite straightforward: 1 per cent. more ethanol in petrol for the next five years.
Dr. Gibson: Is my hon. Friend aware that several cars in the Le Mans 24-hour race this year used a petrol-bioethanol mix?
Dr. Whitehead: I was not aware of that, but I am sure that they did very well.
Dr. Gibson: Yes, they did.
Dr. Whitehead: That is useful information.
The calculations on a 5 per cent. ethanol mix in petrol are quite simple. Getting the escalator to the top of the process would cut 1 per cent. of CO2 emissions, which would be a substantial contribution on climate change and emissions saving in its own right.
The final question is whether we would have to import bioethanol, as hon. Members have suggested. The answer as far as I can see is that we would not necessarily have to do so. I am interested to hear the results of the Norfolk initiative. Bioethanol can be made relatively straightforwardly from crops, as other hon. Members have said. There is land available, and British Sugar is actively considering the idea. A Canadian company with which I was recently in discussions would like to put a European pilot plant in the UK, together with a production plant later. That bioethanol company can make bioethanol from straw, which is almost 100 per cent. CO2 restitution capable and therefore very environmentally efficient indeed.
The establishment of a policy structure requires a combination of lateral thinking, discussion between Departments and a determined effort both to pull and to push the market forward, but the rewards are enormous. This important debate points the way and shows why we should move forward successfully on such an urgent task.
10.12 am
Norman Lamb: I congratulate the right hon. Member for South-West Norfolk (Mrs. Shephard) on securing this debate and on all the work that she has done in leading such an incredibly important campaign to change the Government's policy and to secure a new, environmentally friendly industry.
I want to say a few words about the gap between the widespread acceptance of the case for developing a significant biofuels industry and the extent to which we have developed the means to do so. The Government are willing the end but not yet providing the means to
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achieve the end. It is remarkable how much opinion on the subject has shifted just in the past two years. I can remember bringing down a group of Norfolk farmers to see Lord Whitty at the Department for Environment, Food and Rural Affairs. I talked then to the Energy Savings Trust, which was sceptical about the case for biofuels, but the right hon. Lady has referred to the diverse range of interest groups that now support the case for biofuels, above all else the environmental case.
Mrs. Shephard: Does the hon. Gentleman agree that some of the work in Norfolk has directly contributed to that development? Norfolk chamber of commerce is so convinced of the case that it has persuaded the British Chambers of Commerce to include a strong submission for more help for infrastructure for biofuels in its Budget case to the Chancellor.
Norman Lamb: I very much agree with that and always love to see Norfolk leading the way. The discussions that we had two years ago led to the East of England Development Agency producing its study on the impact on the rural economy. I was fascinated to see that, in 2001, a European Commission report highlighted the fact that, if the UK could develop a biofuels industry, we could benefit to the tune of 20,000 to 30,000 new jobs, mostly in rural areas,. The EEDA study reinforces that view.
I recognise that any Government, of whatever political complexion, will be anxious about the loss of duty. However, I am sure that the Minister will be aware of a recent German study that highlighted the fact that 73 per cent. to 83 per cent. of the duty lost is recovered by way of increased economic activity, through more people earning incomes in rural areas and paying taxes. Therefore, the loss to the Exchequer is much less significant than might at first appear to be the case.
I will now say something about the environmental case, which is the most important issue. It runs in parallel with the case for helping the rural economy and tackling our over-reliance on fossil fuels and our concerns about fuel security. Achieving the targets set in the Kyoto protocol presents a massive challenge not just to the UK, but to the rest of the world. The Governments are funding a great deal of research on what the developed and developing worlds need to do to tackle the massive problem of global warming.
In the UK, the situation has worsened. The transport sector produces 22 per cent. of greenhouse gas emissions but, between 1990 and 2001, there was a 5 per cent. increase in those emissions. That should concern the Government, as well as the rest of us, and they need to find a way of tackling that problem.
There appears to be confusion in Government policy. We have heard other right hon. and hon. Members talk about the EU directive on biofuels. Comments made by Ministers on that issue appear to be contradictory. I hope that, in the Minister's response today, he will desrcibe a clear programme of action for implementing the UK's obligations under the biofuels directive. I know that the targets in the directive are indicative but, if we are to meet our Kyoto targets, it is essential that we implement that directive in the spirit in which it is intended. It is clear that the UK lags far behind many

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other European countries in developing a biofuels industry and in addressing the environmental imperative of tackling global warming.
The UK has failed to achieve the means to the end. A 20p duty reduction has been introduced for biodiesel and, in this year's Budget, it was confirmed that there will be a similar duty reduction for bioethanol from 2005. Is it not bizarre that the duty reduction for LPG—a fossil fuel—is double that amount? How can that contradiction in policy be justified?
we must introduce a significant enough duty reduction, or other measures, to kick-start the biofuels industry. The evidence that we need to do that is already there. A biodiesel industry has already been developed, based on the use of waste cooking oil. However, with the current duty reduction in place, no similar industry has been developed to use oilseed rape as a raw material. That has not happened because it is not considered to be commercially viable—producers need more help to get that started. The same is true of bioethanol. As other hon. Members have said, if we do not produce the catalyst to get the bioethanol industry under way, biofuels will be imported into the UK, and we will lose the great opportunity of securing all those extra jobs in rural Britain.
Dr. Gibson: How would the hon. Gentleman feel if it were discovered that a plant that had been genetically modified at one of the institutes in Norfolk produced a better, purer type of oil, that would help to reduce carbon dioxide even more? Does he think that some of the antipathy towards GM crops would die away in the pursuit of scientific excellence?
Norman Lamb: I thank the hon. Gentleman for that challenging question. I have always made it clear that I have an open mind on GM. The judgment that we reach must be science-based and not based on any emotional anxiety. We need to look at the actual impact of GM crops, but we must work on a precautionary basis in developing that policy.
The Government are not doing enough to develop the technology. Something must happen. Time is of the essence. If we delay much longer, the technology will be based on imports and we will not meet our objectives under the biofuels directive. Most important, we will not reach the Kyoto targets—something that we need to do to save the planet from the serious consequences of global warming.
10.21 am
Mr. Anthony D. Wright: I congratulate the right hon. Member for South-West Norfolk (Mrs. Shephard) on securing the debate, which is one of many in which all Norfolk Members have achieved unanimity. I support calls for an extension of support for biofuels, but I also welcome the measures that the Government have already announced.
In a speech on sustainable development in February the Prime Minister set out several pledges that will fundamentally alter the course of energy production. He set out his ambition to double the amount of energy supplied by renewables. An essential part of that commitment will be the rapid development of a strong biofuels sector. I want to talk about biofuels in
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transport. Alternative forms of transport fuel need to be developed rapidly to meet the environmental requirement to reduce CO2 and other greenhouse gas emissions, improving urban air quality and providing sustainable development.
Biofuel production has been encouraged and promoted for use as an alternative transport fuel through Government policies and incentives in Austria, France, Germany and Italy, among others. In such instances, national Government support is frequently also justified by the broader benefits of savings on imported oil, greater national fuel security, fuel diversification and reorientation, farming innovation and rural economic development.
It is essential that the UK Government provide the necessary financial support to get the industry off the ground. That support must, however, ensure that the production of biofuels proceeds on the basis of their relative worth and their positive effect on the environment. The Government have made a commitment to reducing greenhouse gases to 12.5 per cent. below 1990 levels by 2008–12 and, further, to reduce CO2 to 20 per cent. below 1990 levels by 2010. In addition to those targets, the Government are committed to the production of 10 per cent. of the UK's electricity from renew, ables by 2010.
In addition, the recent energy report produced for the Government by the performance and innovation unit called for a target of 20 per cent. of energy provision from renewables by 2020. What I am desrcibing shows the Government's commitment to the royal commission's target of a 60 per cent. reduction in emissions by 2050. The Government are working hard, and must continue to work hard, to reach agreement on that commitment with other EU members.
I welcome the fact that on 1 January 2005 the Government will introduce a new rate of duty for bioethanol, 20p per litre below the rate for sulphur-free petrol. We need to go further. The European Parliament wanted 2 per cent. of all petrol and diesel for transport purposes placed on its markets by 31 December 2005 to be produced from biofuels, with the figure increasing to 5.75 per cent. by 2010. However, the biofuels sector of the industry is the least well developed, largely as a result of the current price of fossil fuels. That means that further development of the sector is uneconomical. It is essential to do as much as we can to reverse the situation and there are several ways in which we could do more to promote the industry.
In transport, we must ensure that biofuels are supplied as quickly and effectively as possible for a market where there is sufficient demand for them. I sound a cautionary note, however: that is provided that the necessary research is undertaken to ensure that individual biofuels are viable in terms of their environmental impact and the net environment gain for large-scale production of such fuels. However, their potential benefits could be significant.
The use of bioethanol and biodiesels as fuels for road vehicles could have a large-scale impact on reducing carbon emissions and greenhouse gases in the UK. Compared with other fossil fuels, the Ca2 amounts produced by bioethanol are at least 50 per cent. lower. In the case of conventionally modified biodiesel from oil seed rape the figures, according to the Sheffield Hallam

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study, show 72 to 86 per cent. net savings in carbon dioxide emissions and 56 to 80 per cent. net savings in greenhouse gas emissions in comparison with ultra low sulphur diesel.
The Government are clearly committed to reducing CO2 and greenhouse gas emissions by 12.5 per cent. by 2008–12, with a target of reducing CO2 by 20 per cent. in that time. To meet those targets, significant and quick action must be taken as we face several difficulties. The transport sector contributes nearly a quarter of the UK's emissions of CO2. It is imperative that we set up a reducing emissions strategy, which includes a much greater focus on the potential of biofuels, to counter a growth in emissions of 5 per cent. from 1990. Although other sectors will probably see a stabilisation or reduction in emissions in the future, emissions in the transport sector will continue to increase until we take aggressive action.
The Government's 1997 national air quality strategy acknowledged that without further action periods of poor air quality will persist in the UK, mainly because of the continuous increase in road traffic, a major source of air pollution. Therefore, a new strategy setting measurable air quality objectives was outlined, to be met by 2005. At the time it was believed that existing programmes that control pollution from industrial plant and Europe-wide policies to improve vehicle fuel and emissions standards would go a long way to meeting those targets. A Government review of the targets the following year led to the conclusion that the date for achieving some of the target objectives should be accelerated, showing a genuine Government commitment to improving air quality in the UK. The aggressive pursuit of stricter and more rigorous standards would be made far easier and correlate to a large degree with the adoption of greater incentives for the wider use and larger production of biofuels. That would, in time, lead to a significant decrease in air pollution in the UK.
Another key environmental benefit regarding the wholesale adoption of biofuels in the UK is the accompanying sustainable development benefits that it would have. As part of a greater use of biofuels the UK would naturally move towards a reduction in the use of fossil fuels, which would provide the UK with more choice and leverage. The UK would be able to choose between maintaining the current rate of depletion of North sea oil and reducing the demands on our North sea oil reserves by using them over a longer period of time. It would also place the UK in a stronger position when negotiating oil imports in the future. That would, in turn, contribute to the reduction of the EU energy deficit through the provision of energy from renewable resources, similar to other EU members. The benefit of securing a renewable fuel from domestically produced sustainable crops would also have significant national fuel security implications. Such fuel diversification could lead to the development of a new industry with the consequent increased economic activity, job creation, and associated socio-economic benefits dependent on the sector's cultivation.
The 20p per litre excise reduction for bioethanol that the Chancellor announced in the Budget, to be introduced in 2005, is welcome. However, he needs to go
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much further to make it more applicable. Other incentives, for example a capital grant, would also greatly help to stimulate the growth of the biofuels industry.
I finish by asking the Government to consider carefully the cross-party support for this debate by Norfolk MPs and other hon. Members. The Government should find new incentives for the growth of the industry, benefiting the environment as a whole, developing and diversifying in the farming sector, and bringing many associated benefits.
10.29 am
Mr. Richard Bacon: I join other hon. Members in congratulating my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) on securing a debate on this very important subject which, as the hon. Member for Great Yarmouth (Mr. Wright) said, has all-party support.
I very much agree with the points that have been made about the need for any coherent transport strategy to take account of biofuels and, as my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) said, for joined-up government on this important issue. I am particularly persuaded by the environmental arguments. We would all like to hear the Minister try to justify why liquefied petroleum gas, which is a fossil fuel, has a higher tax break than biofuels. No sensible person believes that that is justifiable. I am also powerfully impressed by the economic case. Such a strategy would be a huge benefit to farmers in my constituency, which has significant rural economic deprivation.
I want to expand slightly on the subject of fuel security, which has been touched on, and to ask the Minister some questions. Our notion of energy security presupposes more than one source, even for one type of energy supply. For example, we should not be dependent on imported oil only from the middle east and countries such as Iraq, Iran or Saudi Arabia. We should also be able to depend on imports from Latin America, Russia, Alaska and so on.
Energy security also requires diversity of types of supply, not just oil or natural gas, but sources such as wind and solar power. Why would anyone not want to add biofuels to that list? Does the Minister believe that a biofuels industry is necessary, not just desirable, in the United Kingdom? If the answer is yes, do the Government recognise that they have a responsibility to introduce policies to help to start such an industry, either by fiscal means, such as the escalator suggested by the hon. Member for Southampton, Test (Dr. Whitehead) or through other tax breaks? Which would be better?
Are the Government satisfied with the rather bizarre situation desrcibed by my right hon. Friend in which rape seed produced in Norfolk and elsewhere is exported to Germany to be turned into biofuels, only to be imported back into this country with the concomitant extra CO2 emissions that that causes, never mind the lack of benefit that could be accruing to an industry in this country and, as the hon. Member for North Norfolk (Norman Lamb) said, the extra jobs that would go with it, including in my constituency? If the Government are not satisfied with that bizarre situation and believe that a biofuels industry in the United Kingdom is necessary

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rather than just desirable, and that they have a responsibility to promote such an industry, will the Minister stand up and tell us what they intend to do about it?
10.30 am
Andrew George: I congratulate the right hon. Member for South-West Norfolk (Mrs. Shephard) on securing this important debate. She set an appropriate tone, given the fact that there is much cross-party consensus, and explained the need for ministerial assertiveness on the issue. The debate has shown that there is a lack of cross-departmental co-ordination, or at least insufficient evidence that any Department has put pressure on the Treasury, and has been assertive enough to make the necessary policy decisions to provide the kick-start that the industry needs, the case for which hon. Members have made today.
The right hon. Lady drew attention to the disappointing Government response that she and others, including myself, have received in replies to parliamentary questions. A cross-departmental policy is necessary. The hon. Member for South Norfolk (Mr. Bacon) referred to the bizarre situation in which we export crops and import fuel, using fossil fuel to prop up that exchange. He clearly identified a number of arguments that were taken up by other hon. Members.
The hon. Member for Sherwood (Paddy Tipping) pointed out in a telling speech the need for an adequate lead-in time—at least two years is required for preparation—and the need to give the industry the necessary incentives to plan for the improvements that will be required. The hon. Member for Mid-Norfolk (Mr. Simpson) also identified the need for a clear plan.
The hon. Member for Southampton, Test (Dr. Whitehead) read a passage from the Government's energy strategy, which clearly identified the Government's ambivalence. We know that civil servants like to be on the cusp of a dilemma, but Ministers need to push them off it and to adopt clear policy positions. The hon. Gentleman also identified the need to set targets for the blending of ethanol with other fossil fuels.
My hon. Friend the Member for North Norfolk (Norman Lamb) emphasised the environmental case. I agree that pursuing this policy would make a major contribution to a reduction in greenhouse gases. He also appropriately identified, as did others, the need to establish parity in Government policy on LPG.
The hon. Member for Great Yarmouth (Mr. Wright) emphasised the need for a strategic review in the light of the predicted fall-off in North sea oil production, which the Government should take into account when considering their position.
We are aware of the low level of biofuel usage in this country. The Treasury has said that the reduction in fuel duty on biofuels has stimulated the production of biodiesel from waste cooking oil or animal derivatives, but that is based on sales of 400,000 litres of biodiesel a month and a proposed £10 million investment in a plant in Motherwell. Those figures should be considered in the context of the huge amount of road fuels used in the UK. The figure of 400,000 litres is only 0.01 per cent. of the UK's monthly road transport fuel requirement. The £10 million Argent plant in Motherwell promises to produce 45,000 tonnes-50 million litres—per annum,
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which is encouraging. However, the UK uses 37 million tonnes of road fuels a year, of which 45,000 tonnes is only 0.16 per cent. More action is needed on that front.
Clear co-ordination and cross-departmental effort are required. The right hon. Member for South-West Norfolk identified the need for Ministers to meet and to get off the fence to set a clear policy. They should give a clear lead and encourage civil servants to stop enjoying the intellectual pleasure of being on the cusp of a dilemma. They should establish a clear policy, which includes a further cut in duty and the provision of grants or allowances.
There has been a debate about whether a cut in duty would result in imports flooding into this country. The Central Science Laboratory recently studied the transport costs of fuels and the fiscal regime in the UK. It concluded that it was unlikely that there would be a flood of imports, but we cannot take that risk. The Government should review the situation intelligently to ensure that the balance is right. There needs to be parity with LPG, and the hon. Member for Southampton, Test is right to encourage the Government to set a target for increased blending.
The debate is timely. The Government can no longer faff around—if I may use that expression—but must set clear targets. We need a decisive view, a clear lead, co-ordination and a strong resolve to follow policy through.
10.32 am
Mr. John Hayes: I congratulate my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) on securing the debate. It is indicative of her mix of diligence and insight that she drew the Chamber's attention to this important matter. She will be mindful of the impact that it will have on her constituents, as will other hon. Members. It will also have a beneficial impact on my Lincolnshire constituents, as we are her near neighbours.
It might also be beneficial, not for this well-informed Chamber but for a wider audience, to remind the House what biofuels are. Biodiesel made from a vegetable or animal oil mixed with a small amount of methanol is non-toxic and biodegradable, and bioethanol is a simple alcohol produced by the fermentation of plant co-products such as straw, wheat and potatoes. The hon. Member for Southampton, Test (Dr. Whitehead), with his scientific mind, is probably srcutinising my every word, so I hope I have that right.
In that context, it is important to rehearse the principal environmental benefits of biofuels, which several hon. Members have highlighted. The main benefit is expected to be the reduction in CO, emissions by about 50 to 60 per cent. compared with emissions from fossil fuels. Some of the emissions are absorbed during the growth process. With biofuels there are fewer greenhouse gases and fewer air pollutants, and there is the possibility of recycling waste oils. Given the state of agriculture in the past few years, biocrops would give farmers the real and much-needed option of going into a new product area that provides additional business opportunities, as my hon. Friend the Member for Mid-Norfolk (Mr. Simpson) said.
Mr. Drew: Surely, the problem for farmers is that the structure of the EU predicates against that, because they

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are asked to sign long-term contracts. Commissioner Fischler should ensure that contracts reward farmers over an acceptable period, rather than their being front or end-loaded.
Mr. Hayes: That is an extremely good point. The hon. Gentleman is a keen contributor to debates on matters that affect agriculture. He is right; there needs to be a clearly defined strategy. We cannot expect growers to plan ahead unless there is clarity of direction both from the EU and the Government. At present, such clarity does not exist at either level. The hon. Gentleman is right to say that that is a necessary component of what I was desrcibing.
Against a background of the accepted environmental benefits of biofuels, the EU is proposing a series of targets for this country and other EU members. Although we are familiar with those targets, it is worth rehearsing them. In essence, the EU directive set out a target for the use of biofuels and other renewable fuels at a rate of 2 per cent. by 2005 and 5.75 per cent. by 2010. Member states will have until 31 December 2004 to develop a strategy to meet the targets. The EU proposes that we should replace 5 per cent. of the total automotive fuel market with alternative fuels by 2020.
As my right hon. Friend said, the Government's response has been to talk a lot: about aspirations. However, the only action taken to meet the targets was to reduce the duty on bioethanol by 20p per litre and it is widely acknowledged that that is insufficient to kick-start the industry. As hon. Members on both sides of the House have said, the judgment is that that simply has not done the job. I will not linger too long on that, but it is worth taking into account the remarks of the president of the National Farmers Union, who said:
"the Chancellor's decision to reduce the duty on bio-ethanol by 20 pence per litre merely brings the duty on this green fuel into line with that of bio-diesel, which is insufficient to provide any impetus to developing the bio-fuel industry."
Peter Clery, Chairman of the British Association for Biofuels and Oils, was also disappointed with the scale and timing of that change. Biodiesel accounted for 0.1 per cent. of UK road transport diesel consumption in 2002. Other countries are racing ahead of us—not only France and Germany, but, as my right hon. Friend pointed out, Spain and Sweden. Furthermore, the issue extends well beyond Europe, and Britain is being left behind.
For brevity and clarity I shall restrict my further remarks to a series of questions. I know that the Minister will have all the facts readily to hand, so answering them in the time available will not be difficult. On the off-chance that he does not have the information, he can drop me a note at his convenience.
The questions are simple. How will the Government meet the EU targets? What are the proposals to meet higher thresholds, which are likely to come later, and what time scales does the Minister envisage for meeting such targets? Will he estimate the level of biofuel that we import from, in particular, Germany and France? What was the Government's estimate of the likely effect of the reduction to 20p? What measurements have they made of the subsequent effect on the industry? What is the
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Government's estimate of the capacity to grow bio crops—if we can call them that—and what discussions has the Minister had with the farming industry about opportunities for hard-pressed growers? How much palm oil do we import to feed the biofuel industry? I said that the Minister might want to write to me, and if he does not know the figure off the top of his head I am sure he will be able to find it.
Which Department is responsible for co-ordinating the strategy? The hon. Member for Sherwood (Paddy Tipping) was absolutely right, and my right hon. Friend also raised the point when mentioning the evidence given to the Select Committee. There is an extraordinary lack of clarity about who in the Government is pulling policy together. What discussions are taking place? Who is co-ordinating policy? Which officials are dealing with it? Which Department has authority over it?
What proportion of biofuel sales comes from recycled cooking oil? I hope that the Minister will enlighten us on that subject, which has been mentioned by a number of hon. Members and is essential to the debate. Ultimately, what is the Government's strategy? It is one thing to have aspirations, and we know that there are targets, like it or not. However we are not sure, as the hon. Member for Sherwood said, whether the Government speak with one voice. In fact, it is increasingly clear that they speak with many voices or, in answer to some of these questions, with no voice at all.
There must be a strategy, because uncertainty and lack of clarity is causing us to suffer a competitiveness disadvantage, which is likely to grow considerably. There cannot be further delay. We need a clear Government position, not only to allow the industry to grow and develop, but to support growers in their long-term planning—they have to plan two or three years ahead, as the Minister knows.
As I have said to the Minister on other subjects and in other contexts, we have a Minister with a new opportunity. He is a fresh man with fresh ideas coming to the subject for the first time. [Laughter.]
Mrs. Shephard: Why are hon. Members laughing?
Mr. Hayes: It is friendly laughing; they are laughing with the Minister, not at him. With that fresh approach, new energy and helpful zeal, we hope that he will do what hon. Members on both sides of the Chamber have been calling for. I pay tribute to them for championing the issue. Their efforts did not start today, but some time ago. I hope that the Minister will meet those expectations, rise to the challenge and do what is in the interests of the environment, farmers and growers and, I think we would all agree, what is in the nation's interest.
10.50 am
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw): It gives me great pleasure to respond to the debate, especially given the constructive and consensual nature of the contributions, although at times the Government have not been given enough credit for what they have done so far, but I shall address that. The debate has also given me a chance to take a tour round my home county of Norfolk.
Dr. Gibson: Come back.
Mr. Bradshaw: I was not aware there was a vacancy.

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It is pleasing to hear so many Norfolk MPs talking with one voice. I do not intend to make a long speech on the background to this issue, because the opinions expressed in the debate have been fairly united. We all agree that biofuels are a good thing and should be promoted and encouraged. However, I will say a little about the background, because the hon. Member for South Holland and The Deepings (Mr. Hayes) has, as always, generated a great deal of work for my officials. That is his prerogative and a very good thing, too. I promise to write to him if I do not answer all his questions, and to other hon. Members if they do not feel that their points have been addressed.
Biofuels can provide significant life-cycle reductions in carbon dioxide emissions compared with conventional fossil fuels. Bioethanol and biodiesel from virgin crops can reduce such emissions by about half over conventional fuels. In the case of biodiesel from waste vegetable oil, the life-cycle benefits can be even higher. However, as several hon. Members said, environmental considerations are not the only issue. Establishing new markets for agricultural produce and maintaining and increasing rural job opportunities is important for farmers and policy makers alike. That point was well made by the hon. Member for Mid-Norfolk (Mr. Simpson).
The reform of the common agricultural policy is potentially very positive for biofuels. Reduced production of sugar beet, cereals and potatoes could make available more land for the growing of biofuel feedstocks, in addition to the existing set-aside land. Under the agreement for reform, biofuel feedstocks can continue to be grown on set-aside land, and they will receive payments under the new single payment scheme. Feedstocks grown on non-set-aside land will receive payments under the new single payment scheme plus the new €45 per hectare energy crops payment.
The Government have supported the production of biofuels through cuts in the duty rate. In 2000, my right hon. Friend the Chancellor of the Exchequer launched the green fuels challenge to produce proposals for environmentally friendly fuels. As a result, biodiesel was awarded a duty cut of 20p per litre compared with ultra-low sulphur diesel. The cut was implemented in July 2002 and has resulted in some useful production. About 500,000 litres a month—not 400,000 litres, as the hon. Member for St. Ives (Andrew George) suggested—are sold from more than 130 filling stations in the UK. That biodiesel is mostly from recycled vegetable oils—I will write to the hon. Gentleman to give him the exact proportion—so it provides additional waste reduction benefits over and above the benefits from reduced carbon dioxide emissions. He highlighted an example of progress when he drew attention to the Argent plant in Motherwell, which will produce biodiesel from animal fat, including tallow. That shows what can be done under the existing regime of the 20p duty cut and capital support from the regional development agency.
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Support is also planned for bioethanol. In the 2003 Budget, the Chancellor announced that a new duty rate would be set at 20p below the rate for ultra-low sulphur petrol, with effect from January 2005.
Mr. Bacon: Will the Minister give way?
Mr. Bradshaw: Of course, but I am about to come to the 20p reduction and the questions that the hon. Gentleman asked.
Mr. Bacon: Does the Minister accept that if all the cooking oil in the United Kingdom were recycled and turned into biofuels, the total contribution would be relatively small, not to say almost negligible?
Mr. Bradshaw: I do not accept that; the contribution made by recycling cooking oil should not be underestimated.
My hon. Friend the Member for Sherwood (Paddy Tipping) asked how the 20p duty reduction was calculated. I understand that the reduction takes into account the environmental benefits of biofuels. The calculation shows that, given the social costs of carbon emission, the environmental benefits can be valued at between 3p and 5p out of the 20p. The 20p reduction recognises the environmental, agricultural and industrial benefits delivered by biofuels.
The right hon. Member for South-West Norfolk (Mrs. Shephard) asked why more support is given to LPG than to biofuels. Several other hon. Members raised that issue. The duty rates for road fuel gases were set to reflect the benefits that they deliver to local air quality rather than the reduction of greenhouse gas emissions. Road fuel gases face significant market barriers, and require a dedicated and separate refuelling infrastructure. Vehicles must be converted or have a dedicated design to use gaseous fuels, so the difference in reduction in duty reflects the extra capital costs that using those fuels requires. The right hon. Lady argued that the duty cuts in the UK did not compare favourably with those in other EU countries. She may be right in one or two cases, but taken across the board the UK duty cuts compare favourably. For example, we are one of the few countries to be committed to offering duty incentives for biodiesel and bioethanol.
Mrs. Shephard: The Minister has four minutes left. Will he use them to tell the House whether he agrees with his noble Friend, Lord Whitty, the DEFRA Minister, that more help is needed than a 20p duty cut? As all hon. Members present have asked, will he also explain the Government's cross-departmental structure? Is it designed to bring about that change, and will there be extra help?
Mr. Bradshaw:I shall endeavour to deal with as many points as possible, and I could get through more if right hon. and hon. Members did not intervene. If they do, I shall have to write to them. I am going through the right hon. Lady's questions one by one, as she will notice.
The right hon. Lady complained about material being exported to Germany and imported back into this country. She will know that the German situation is a particular one dating from reunification when, because

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of the economic and agricultural inheritance of the former East Germany, the German Government took a strategic decision to invest a great deal of money in the East German industry and biofuels. I do not want to go into details, but I will be happy to expand on that in writing.
The hon. Member for South Norfolk (Mr. Bacon) asked whether the Government believe that biofuels are necessary. We believe that they are necessary as part of a package of renewable energy to help the UK to meet its targets. We recognise the need to provide support to kick-start the industry, and that may well include reconsidering the levels of duty and one or two of the other issues that have been raised.
We shall consider the following possible options: further duty cuts; enhanced capital grants; enhanced capital allowances; and mandatory blending. I agree that it is helpful for Governments to speak with one voice. It would not be the first time that Ministers in different Departments have emphasised different areas; that happens all the time in all Governments and I am sure that the right hon. Lady experienced that in her many ministerial roles. If my hon. Friend the Member for Sherwood is right to say that Ministers have been flatly contradicting one another, I will try to iron out such differences. I would be surprised if that were the case, but I shall certainly speak to the Minister in my Department who leads on this issue, Lord Whitty, and shall ensure that in future the Government speak with the same voice on the matter.
The right hon. Lady asked how the Government would respond to the East of England Development Agency report. We believe that it was an excellent analysis of the potential development of the bioethanol industry. We contributed to that exercise and have drawn on the data that it produced. The process has helped and has informed the Government's analysis, and we shall keep the duty rates under constant review.
The hon. Member for Mid-Norfolk asked what research was being undertaken. Considerable research has been undertaken, not only at Sheffield Hallam university, to which he referred. We have also worked with the EEDA on its study, and our Central Science Laboratory has produced detailed assessments on the potential for an impact—
Mr. Deputy Speaker: Order. We must turn our attention to the next topic for consideration today.

Affordable Housing (Torbay)
11 am
Mr. Adrian SandersIn approaching this subject, we must first understand what we mean by "affordable". For many of my constituents, affordable means a ratio of wages to house prices of close to four times, rather than the ratio of nearly seven times that exists today. From my constituents' point of view, housing is less affordable now. Secondly, we must define the term "housing". By housing, I mean decent, secure housing, whether for purchase, rent, part-purchase or part-rent.
Affordable housing is in short supply in my constituency. Until the sale of council houses, there were more than 6,000 units but now fewer than 3,000 of those units remain as rentable accommodation. They were not replaced as fast as they were sold. There is a scarcity of social housing, either housing association or local authority housing, which comprises about 7 per cent. of the total housing stock in Torbay, as compared with 14 per cent. in the south-west region and 21 per cent. nationally. For a town of its size, Torbay has one of the smallest percentages of social housing anywhere in the country.
The main problem is the level of wages in relation to house prices. Torbay is the 20th worst area according to the Joseph Rowntree Foundation' report entitled, "an work—can' buy" I believe that that position has worsened as a consequence of large-scale redundancies in the area in the high-technology industry. Some 4,300 jobs have been lost. The unemployment rate has increased only a little. People are now working in lower-paid jobs, often not full-time, which means that average incomes have fallen rather than risen in the past three years.
We also have a problem with second homes. I do not want to say that it is a great problem in Torbay—it is far greater in other parts of the south-west—and we are grateful that the Government are considering allowing councils to reduce the discount available to second homes. However, there is concern in the west country, particularly outside my constituency, that district councils with a housing function that collect council tax will have to pass 87 per cent. of that discount to the county councils that do not have a housing function. Torbay has a housing function and is a collecting authority, so it ought to be all right, but colleagues around my constituency are still concerned about the issue.
According to the latest figures published following parliamentary questions and available in the Library, the average wage in Torbay is now around £20,000 a year. Many people in my constituency will wince and say, " don't earn £20,000—that's an astronomic sum," but that is the average wage according to the statistics. According to the figures from the latest quarter, the average house sale is £134,537. The average wage is the 147th lowest in the table of 150 areas, and the average house price is in the highest quartile of house prices in the United Kingdom. One does not need to be a rocket scientist to see that a salary nearly seven times the average is needed to borrow enough money to pay the average house price in the constituency. That means that many people not only cannot now, but probably will never be able to afford to buy.

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The big change for my constituents in the past 20 years has been that larger numbers of people, in jobs that 10 or 15 years ago would have enabled them to get their foot on the housing ladder, now cannot purchase. One must question where, in future, gardeners, street cleaners, dustbin men, chambermaids, barmaids, nursing assistants, care workers, nurses and junior teachers—all the essential workers—will live. We have heard the argument about London. According to the Joseph Rowntree Foundation, the problems in Torbay are closer to those of a London borough than to those of the south-west region.
As at 31 July, there were 1,451 households on the council's housing register and 2,153 on the Riviera housing trust list. That includes the council's 1.451 and a further 702 with no local connection. There were 331 lettings in 2002–03, of which 304 were local authority nominations, and 60 per cent. of those went to homeless households. Torbay council's housing needs survey, which was conducted by Fordham Research, determined the net need for new affordable housing to be 1,816 units a year for the next three years. The provision in the local plan is for just 135 a year, which relies on windfall sales and has not yet been achieved.
The Joseph Rowntree Foundation report by Steve Wilcox, published in 2003, compared household income and property prices. Torbay was fourth outside the south-east, and was less affordable than several London boroughs. The report concluded, as I have said, that for working households the south-west is less affordable than the south-east.
Why, then, does the Government's sustainable communities plan pump new money into the south-east and midlands, giving no real additional funding to the south-west in 2004–05 or 2005–06, when there is clearly a need and demand there? Torbay's allocation from the Housing Corporation for 2003–04 was £2.9 million, which will provide 68 units. That is somewhat short of the 1,816 that are needed.
Many things can be done. The Government need to provide help in several areas, not just resources and money. The section 106 agreement needs to be amended. It does not work consistently across the country and it is clear that not all councils are getting as much out of it as they might. The Government need to examine that state of affairs and find out why some authorities are getting good deals out of section 106 and others are not. If it is a question of putting in training and support, that should be considered.
Planning policy guidance 3 needs some reform. It should clarify the definition of affordable housing. Under the current definition, many of those who cannot get on the housing ladder cannot get access to the affordable housing that the Government say needs to be made available. It is very important for my constituency that PPG3 should apply to sites of less than half a hectare. Torbay is an urban constituency in an urban borough. It is protected by hills that mean that there is a clear barrier between it and the hinterland. In the other direction, of course, is the sea. We cannot build in the sea and we are restricted as to how far back we can go into our hinterland.
There are, however, a large number of small—below half a hectare—brownfield sites, dotted across the constituency, on which only private housing will be
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developed, because the council has no power to say to developers that they should build affordable housing. The Government could easily assist authorities such as Torbay, including those in both urban areas and rural communities—villages that perhaps have small plots of land—to ensure that affordable housing is secured for their communities. It is bizarre that, at present, the Sunday newspapers contain advertisements for executive-style homes in the south-west region, promoting a lifestyle to people throughout the UK and beyond, while we do not have the power to meet our own local housing needs.
Torbay and other parts of Devon should be included in the sustainable communities plan. It is clear from the Government's statistics, and from more than one independent research study, that our problems are akin to those of some of the areas that will be provided with support.
Our biggest challenge, however, is the weak economy in Torbay, which has been devastated by the loss of 4,300 jobs in the opto-electronic industry. At the turn of 2000, for the first time in our history, manufacturing overtook tourism as the biggest generator of income in our economy, but that is no longer the case with the loss of those jobs. The reason that those jobs were lost was well beyond the control of Torbay, or the Government—it was due to the downturn in the global economy and in that industry.
Sadly, some people who are desperate for work have returned to jobs that they did before working in the fibre electronic industry, but on lower pay and under worse conditions—there are many examples of that. There is therefore less money circulating in the economy, and it has become evident that our economy is over-dependent on tourism. That is not to say that tourism will not play a leading role in helping us to improve our weak economy—it must. However, we must also diversify from our dependence on that one industry.
The council and the community recognise those problems and have got together. We are influencing regional bodies, such as the regional development agency and the regional assembly, and our Members of the European Parliament and anyone else who will listen. We say that we know what our problems are and that we have plans to tackle them. However, the Government could assist us in our plans to tackle some of those problems by tweaking the current legislation and by ensuring that available resources are pumped in. At present, they are not doing so.
My friend and neighbour, the hon. Member for Totnes (Mr. Steen), and I met local housing associations and other housing providers to discuss those issues, and I know that he has a particular point that he may wish to raise.
Mr. Anthony Steen: May I make the point a little later?
Mr. Sanders: The problem for the hon. Gentleman is that I have timed my speech at 15 minutes, and I do not wish the time for him to make his point to run out. The issue that he wishes to raise is important.
Torbay's housing problem is not new—it has persisted for many years. It is due to the fact that, for generations, we have not provided enough social

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housing. The problem is now becoming acute, because of the right-to-buy policy, the fact that the houses bought are not replaced and the rise in house prices.
We also have a problem in the private rented sector. Some 85 per cent. of the private sector landlords in Torbay are not members of the South Devon Residential Landlords Association. I wish that they were, because the SDRLA does a fantastic job in ensuring that we have caring landlords who draw up proper tenancy agreements that are enforced, and ensure that tenants are not a nuisance to their neighbours. However, 85 per cent. are not members, and many of those 85 per cent. are absentee landlords, who live not just in other parts of Torbay but out of the county or even the country. We have seen a growth in people with social problems who exhibit antisocial behaviour accessing some of that private sector rented accommodation. If people want to find the drug dealers and users and unruly children, they will find them not on the council estates or in housing association accommodation, but in private sector rented accommodation.
The Government have rightly tightened up some of the rules relating to the allocation of affordable housing. A housing association may decide that a family have made themselves intentionally homeless and then not allocate a house or allow them on to the waiting list. That family will then move to the private rented sector. Indeed, families are moving into our area having been evicted from social housing in other areas. A wide variety of private sector rented accommodation is available, so they are able to secure accommodation.
If we were able to provide more social housing, we would reduce the level of private sector accommodation. That is a vital problem, which is recognised by the police, social services, education system and the local authority in general. Like many coastal communities, our area suffers from a high turnover of people. The Fothergill report by researchers at Sheffield Hallam university, which was published a few months ago, identified 43 coastal resorts as having potential problems with employment and sustainable economic development and noted that they attracted people who were economically less active than migrants moving to the south-east and other boom areas.
It is an interesting study. It shows that people want to move to coastal resorts and identifies them as people close to retirement who are winding down economically, retired people who are not economically active and benefit dependants. There is no reason for them not to move to the coast, but the trend has an impact, which the study did not identify. It places extreme burdens on health, education and social services, which is not reflected in the way in which the Government view such coastal communities. Although the report identified the factors, it reached the wrong conclusion in saying that migration to an area is of itself a good thing. It is important to identify who is moving in and whether the areas can cope.
Schools in my constituency have extreme problems with the high turnover of pupils, partly because of the high level of private sector rented accommodation. That has implications not only for the kids of the people who are moving, but for the classroom as a whole. Those
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factors are not being picked up by the Government when they decide how to distribute grants to areas with social deprivation. 1 hope that the Minister will take that point on board.
I am moving towards my conclusion, but I know that the hon. Member for Totnes wants to make an important point, so I shall give way to him.
Mr. Steen: First, I pay tribute to the hon. Gentleman for the quality of his contribution and for securing this important debate.
I want to raise the problem of land value. Land within the local plan is worth a lot more than that outside the local plan. If someone has planning permission within the local plan, they may get £300,000 an acre but, if it is outside the local plan, the land may be worth only £3,000 an acre. Affordable housing cannot be built inside the local plan unless there is Government subsidy. It can be built outside the local plan only by housing associations, and landowners can sell to housing associations. Does the hon. Gentleman agree that, if affordable housing is to be built and the Government are not going to subsidise housing inside the local plan, either they must subsidise land outside the local plan, or farmers and landowners must be prepared to sell land outside the local plan and accept less money for it?
Land will be sold for less outside the local plan. A covenant must be included to prevent an owner of affordable housing who wants to sell it on from making that housing no longer affordable for the next purchaser.
Mr. Sanders rose—
Mr. Deputy Speaker: Order. I draw the Chamber's attention to the fact that we are almost 21 minutes into this 30-minute debate and the Minister has yet to reply.
Mr. Sanders: I shall be brief.
I agree entirely with the hon. Member for Totnes that the subject deserves an Adjournment debate in its own right, as does the whole subject of taxation of land.
I have made my points. I look forward to hearing the Minister's reply and whether she can give some help to the many homeless families and people in inadequate and poor accommodation who desperately want to access decent, affordable housing in my constituency.
11.21 am
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Yvette Cooper): I congratulate the hon. Member for Torbay (Mr. Sanders) on securing this debate, and on bringing this issue to the Chamber again. It is just a few weeks since my hon. Friend the Minister for Housing and Planning responded to a debate on affordable housing in the south-west that my hon. Friend the Member for South Dorset (Jim Knight) had introduced. I know that many hon. Members are concerned about this matter.
The south-west is grappling with rapid house price inflation, which has occurred in a relatively short time in many places in the region. The situation is exacerbated by the fact that the south-west suffers the double impact of significantly higher-than-average house prices and

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lower-than-average incomes. The hon. Gentleman desrcibed the impact of that on his constituents. Torbay is a desirable part of the country in which to live and many people are attracted by its quality of life, but it also suffers significant deprivation in some areas with the highest unemployment rate in the south-west and is among the 100 most deprived districts in the country. The average earned income is £18,000 compared with a national average of £23,000 and a regional average of £21,000, and the impact of that can be seen. House prices in Torbay have risen by more than 58 per cent. in just three years, which is in line with rises in the south-west. Throughout the south-west, the average house price stands at £164,036, which is the highest outside London and the south-east. With rising prices and lower-than-average incomes, it is clear that affordability for people wishing to own a home has become complex.
The factors at play in Torbay are seen elsewhere in the south-west, where rapid growth in house prices is a product of increasing population and economic growth in an attractive region. It has the fastest growing population, as the hon. Gentleman said, which has been more than double the national average.
Even within the south-west region there are wide variations in the figures, such as those for gross domestic product in Swindon compared with Cornwall and average house prices in Cotswold compared with Plymouth. Overall, the regional figures for homelessness show an increase of 23 per cent. between 1990 and 2000. with the third highest proportion of homeless people in England.
The Government are fully aware of the challenges and difficulties facing many places in the south-west, including Torbay. We are increasing our investment in affordable housing, including no less than a 30 per cent. increase in funding in 2003ndash;04 under the main approved development programme for social housing. That represents an extra £20 million for housing in the south-west, bringing the total to £81 million, which will deliver about 2,000 new affordable homes for the region in 2003–04.
The hon. Member for Torbay raised another key issue, which is related to planning. Under the proposals for the reform of the PPG3, we want to concentrate development in towns and cities as a priority, promote well-designed housing developments that do not waste land, and have a more sustainable approach to housing. We recognise the need to consult on changes to PPG3. My right hon. Friend the Minister for Housing and Planning announced on 17 July that we would consult on changes to PPG3 in order to widen the range of housing in terms of size, type and affordability. I will ensure that the points raised by the hon. Member for Torbay are fed into that consultation process. We must do whatever we can with the planning and housing systems to ensure that we deliver more affordable housing while improving overall housing numbers and better matching communities' housing needs with supply.
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The hon. Member for Torbay also discussed section 106, and the hon. Member for Totnes (Mr. Steen) raised issues about planning gain and the impact of the approach to land value. Again, the Government are alive to those issues, and discussions are under way on section 106 and what more we could do. We recognise that complex issues are involved and that various approaches are being advanced.
The Government also want very much to support greater regional debate, because many decisions about housing allocation and housing support are better taken at the regional level. That is why we set up the regional housing boards. Each region has had the opportunity to identify its key housing priorities and to create its own response within a coherent national framework. One size cannot fit all; we cannot decide in London what the approach should be in every region. The south-west housing body has just prepared its first housing strategy for the region, and we shall be responding formally to that document. I am pleased that the south-west housing body has promoted a debate on the future of housing in that region with an impressive range of stakeholders across the south-west.
The hon. Member for Torbay raised his concern about the private rented sector. We also have some concerns about the nature of that important sector. We want to promote its growth in many areas of the country. However, we must deal with problems such as absentee landlords—they may even be out of the country—not enforcing tenancy agreements, particularly in areas with antisocial behaviour.
We have put proposals for the selective licensing of private landlords in the draft housing Bill. Under that legislation, landlords would need to meet particular standards for housing management and dealing with antisocial behaviour. If they are not licensed but continue to rent out property in a licensed area they will be liable to a penalty of up to £20,000. We believe that private landlords need to recognise their responsibilities. As the hon. Member for Torbay rightly said, many organisations and landlords across the country are keen to do that, but some are not. The issue needs to be addressed.
It is important that regional needs are recognised, and that every area sets its own priorities. We also need to consider the overall position of housing supply and the nature of the housing market across the country. That is one area being considered by the Barker review, which will report on the housing market across the country. Following that review, we will need to consider the regional consequences.
Again, I congratulate the hon. Member for Torbay on raising those important issues.
11.29 am
Sitting suspended until 2 o'clock.

Tenancy Deposit Scheme
2 pm
Mr. Andrew LoveA viable national tenancy deposit scheme is critical for the one in 10 of all households—accounting for approximately 2.2 million people—that are in the private rented sector, which is characterised by relatively poor conditions. The most recent survey shows that in one in five houses in multiple occupation people are living in dire circumstances, and many of those are young people under the age of 30. The sector is also characterised by an appallingly low standard of management and highly fragmented ownership of properties, with most landlords owning no more than a couple of properties and very few belonging to the professional associations that can help to drive up standards.
Comprehensive action is needed to deal with the problems in the sector, and that must include a tenancy deposit scheme. Research shows that 70 per cent. of all private tenants pay a deposit to secure a home, and for assured shorthold tenants that figure rises to more than 80 per cent. The deposit is usually around one month's rent, and the national average is just over £500. However, according to the survey of English housing, one in five tenants whose tenancies ended in recent years were unhappy that their deposit was unreasonably withheld. Half of all tenants whose deposit was withheld were not given a satisfactory reason.
That is a significant problem and must be addressed. It is compounded by the fact that research also shows that it impacts disproportionately on the less well off. The National Association of Citizens Advice Bureaux carried out research and believes that about half of private tenants believe that they have had a deposit unreasonably withheld. Of those, around two thirds lose either all or part of the deposit, which many of them simply cannot afford to lose.
According to Shelter,
"Tens of thousands of people lose out to this scam or rent rip off and are often forced into crippling debt to pay the next deposit. A few face the even more extreme outcome of becoming homeless".
Work by organisations such as Shelter suggest that many of those who have difficulties, face homelessness and lose their deposit find that if they try to regain that deposit through the available legal remedies, proceedings in the small claims court are expensive, take time and are often subject to delay. They also often prove unsatisfactory. Middlesex university wrote to me about tenancy deposits and the experience of its students, as follows:
"It is daunting, time consuming and expensive to those on a low income. Every penny counts for a student and so the idea of spending money to try and get their entitlements back is very off-putting."
Mrs. Anne CampbellI congratulate my hon. Friend on securing this important debate. More than 7,000 students at Anglia Polytechnic university, in my area, seek accommodation in the private sector each year, and I hope that my hon. Friend will agree that unreturned deposits are a real problem for students, who are often about to start off on their careers with
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little money, and do not wish to hang around after they have finished their courses. It is particularly difficult for students to fight when deposits are not returned.
Mr. Love:That is undoubtedly the case. Students, many of whom live on low incomes, are particularly badly affected by the loss of a deposit because it makes life so much more difficult when they move on to further accommodation.
As a result of the experiences of students and others in the private rented sector, the Government introduced a voluntary tenancy deposit scheme in 2000. I congratulate them on that. The scheme was primarily aimed at dealing with two issues. First, it was intended to ensure that deposits were held safely and were distributed to the tenant or the landlord, depending on the circumstances. Secondly, the scheme was intended to set up some form of independent arbitration machinery that would decide whether the deposit should be returned to the tenant or to the landlord.
Mr. Kelvin HopkinsIs it not the case that the well behaved landlords have participated in the voluntary scheme and the bad landlords have avoided it?
Mr. Love: There is some evidence to suggest that—but the real problem is that most landlords have not taken part. Only a small section of landlords have been involved. I suspect that my hon. Friend is right and that that section already comply with good practice.
Mr. Eric Pickles: Is the hon. Gentleman as disappointed as I am to learn that only a quarter of letting agents belong to professional bodies? Having considered the pilot scheme, he expressed his disappointment at the relatively small number of organisations that have joined. How long does he feel the pilot scheme should continue before a definitive decision is taken on whether to develop it nationally?
Mr. Love: As the hon. Gentleman will know, the pilot scheme was adapted to make it more attractive. That is especially true of the insurance option. Moneys that should have been due were not taken, and bureaucracy was reduced to a minimum. Even with those additional features, the scheme did not manage to attract many outside the organisations of landlords and agents to join. One of the lessons is that in such a fragmented market, it is extremely difficult to reach out with a voluntary scheme. That is one of the reasons why many people present believe that we need to move to a statutory base and ensure that all landlords come into the system in some way or another.
Ms Oona King: I have received many representations from constituents on this point, which is why I strongly support the introduction of a statutory scheme for the tenancy deposit. Does my hon. Friend agree that, given the urgency of the issue and the scarcity of parliamentary time, the draft Housing Bill that is to come before Parliament soon would present the Government with the best and swiftest way of dealing with the problem?
Mr. Love: I agree with my hon. Friend. I will deal with that point in detail later.

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The aim of the pilot scheme was to test two things: first, whether a voluntary scheme could be self-financing, and, secondly, whether legislation was necessary to ensure the compliance of everyone involved in the private rented sector. Sadly, the response of agents and landlords proved disappointing. Even when we made the scheme more attractive to them and less onerous in terms of bureaucracy, there was a slow take-up. As a result of that—and, I suspect of some frustration—the Minister with responsibility at the time, the present Lord Chancellor, said in February 2002 that there wass
"a strong case for legislation".—[Official Report, House of Lords, 13 February 2002; Vol. 631, c. 1090.]
Let us consider the experience in other countries, including Commonwealth countries such as Canada and Australia. Admittedly, circumstances are different from those in this country, but experience shows that a statutory tenancy deposit scheme can deliver fairness between landlord and tenant at a reasonable cost and can be self-financing. That is what the Government intended to happen.
What of the case for such a scheme in the United Kingdom? The evaluation of the pilot scheme drew several conclusions. First, it suggested that the fear of the deposit being withheld was much greater than the abuse of the system. I was mystified as to how it reached that conclusion, given the experiences in my constituency.
One of my constituents, Mrs. X, a lone parent with two children, was an assured shorthold tenant who paid £1,600 to her landlord, £800 in advance rent and £800 as a deposit. The landlord started possession proceedings in August 2002. During the court proceedings to evict her, she mentioned that she was concerned about the fate of her deposit, and the local council contacted the landlord to ask him when he was likely to return it.
Following a further intervention in January this year, the landlord would not confirm how much of the deposit he was willing to return. In February, he had still failed to return anything, and the local council pursued him on behalf of the tenant and suggested that she take up legal remedies. In June she started proceedings in the small claims division because she was so unhappy and wanted to get her money back. Today she is still waiting, and nothing has been done to return her deposit. Such experiences lead independent advocacy services, voluntary housing groups and local authorities to believe that we need the statutory backing of a national tenancy deposit scheme to ensure that there is justice and fairness not only for the tenant but, in certain circumstances, for the landlord.
The evaluation's second recommendation stated that the consultation was evenly balanced. Tenants were strongly in favour of a national statutory scheme while landlords, who felt that the present system worked reasonably well, were not minded to support one. Examined superficially, that seems all right—as far as it goes. A more careful examination, however, reveals that the scheme's opponents were overwhelmingly from the landlord sector and that other organisations did not oppose it. Indeed, most of the organisations that submitted views—the National Association of Citizens Advice Bureaux, the National Consumer Council, Shelter and other housing organisations, and local
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authorities, which are all involved with the issue—overwhelmingly supported such a scheme. I must therefore ask the Minister this question: should the landlords, who appear to be the only sector opposed to a scheme, be able to veto its introduction?
It has been suggested that such a scheme would not be good value for money. In June 2002, the winding up of the voluntary scheme was announced in a ministerial statement, which suggested that the scheme's benefits in deposits returned to tenants would be about £20 million, while its estimated costs would be £19 million. The wording of the evaluation was finely balanced, and although almost everyone accepts that the estimate of the rent that would be returned to tenants was fairly accurate, the estimate of the cost of the adjudication system was based on a flawed assumption. The evaluation calculated that the 127,000 tenants who expressed a grievance would all have gone to appeal, but we know from the experience of the systems that are already up and running in Australia and Canada that only 2 to 3 per cent. of completed tenancies end up at the appeal stage. Indeed, only 1.5 per cent. of completed tenancies in the pilot ended up on appeal. It is not credible to assume that the 20 per cent. who complained would all end up going to appeal.Furthermore, no estimate has been made of the savings that would arise from not using the small claims court for that purpose.
Importantly, evidence from abroad suggests that a tenancy deposit scheme deters people from bad practice in the private rented sector. That is a strong feature, and would make a significant difference. As a result, the £19 million figure is undoubtedly inaccurate and should be much lower.
Additionally, with a custodial scheme in which deposits were handled independently, the interest from the £790 million to £800 million in deposits held nationally at any time, which would amount to about £30 million, would pay for a self-financing scheme. I was pleased to read that, the Office of the Deputy Prime Minister was reviewing the cost element, and I ask the Minister to update us on how far it has got in estimating the benefits and costs of introducing such a scheme.
It was recently suggested that a tenancy deposit scheme would more appropriately be dealt with as part of the Lord Chancellor's review of tenure reform. I disagree with that for several reasons. I am not a lawyer and I do not know the intricacies of tenure reform, but one concern is that compulsory written tenancy agreements do not, and cannot, ensure fairness and equity for the tenant. The agreements do not address how the tenant's money should be held, give them confidence that it will be returned, or address how disputes should be resolved. Under the scheme, taking court action would remain the only remedy.
The present barriers to small claims court action would continue to exist in the future. Those barriers are the costs, especially for people on very low incomes, the delays, which are inherent in the system, and the doubt about whether the agreement could be adequately enforced to the satisfaction of the person who had lost their deposit.
As has been said, there is likely to be a lengthy consultation on tenure reform, with no guarantee that at the end of consultatic n, parliamentary time will be made available. We know from past experience that waiting for time to become available can cause significant delay.

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By way of contrast, as several Members have stated, the draft Housing Bill has already been discussed in Parliament. The Select Committee on the Office of the Deputy Prime Minister: Housing, Planning and Local Government comprehensively examined the Bill and made several recommendations, which included its support for the inclusion of a tenancy deposit scheme. It is also important to tap into the experience that we have gained from the voluntary scheme. It has several features which, if taken into account, would make a national scheme so much better.
If we were to include the tenancy deposit scheme in the new Housing Bill, which we hope will be introduced in the next Session, the Bill would be more comprehensive. It would be ready for immediate enactment, so people in the private renting sector would not face further delays, problems, complications and difficulties. The scheme would fit in with the other provisions in the Bill to address all the problems faced in that sector.
There would be no need for further consultation, although I accept that there could be pre-legislative srcutiny. When the Leader of the House came before the Select Committee on the Office of the Deputy Prime Minister: Housing, Planning and Local Government, he said that that might be the case. The scheme would not only protect tenants from the worst conditions, but protect their money, so that they would get a fair deal on their tenancy deposits. Overall, that would promote better value for money and more affordable accommodation. One of the greatest difficulties faced by my constituents is that without a deposit, they can access only the worst of the private rented sector. If they can protect their deposit, they are likely to get better quality accommodation.
I hope that the Housing Bill will encourage and stimulate more institutional investment in the private rented sector, which is the most important factor for the future. That would do two things. First, it would reverse the decline in the private rented sector. During the last 50 or 100 years it has decreased from accounting for more than half of all dwellings in this country to covering only 10 per cent. today. Secondly, and more importantly, at a time when we know that there is not enough social housing on the market to address our problems, it may be able to make a significant contribution to the supply of accommodation at reasonably affordable costs. We should be looking towards that, but if we are going to achieve that institutional investment, a tenancy deposit scheme along the lines that have been outlined many times by many people—is absolutely essential to give trust and confidence to the tenant and the reputable landlord, and to the institutional investors that will make such a difference in the sector.
Several hon. Members rose—
Mr. Deputy Speaker (Mr. Frank Cook): Order. It may be advantageous if I remind all ho n. Members that it is customary to commence the winding-up speeches 30 minutes before the conclusion of the debate. I see that, although only two hon. Members have given prior
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notice of their intention to intervene, four are seeking to catch my eye now. I appeal to all hon. Members present, when making their contributions or accepting or responding to interventions, to bear in mind the fact that we need to move to the winding-up speeches at 3 o'clock.
2.21 pm
Vera Baird: I congratulate my hon. Friend the Member for Edmonton (Mr. Love) on securing a debate on this issue, which is of the highest importance to a relatively poor and excluded sector of society, and finds strong echoes in Redcar and Cleveland, where my constituency is located. There are about 3,500 privately rented tenancies there, and deposits and bonds are anywhere between £50 for a bedsitter and about £400 for a house. Although he accepts that landlords have to safeguard their properties from damage and obtain recompense if it occurs, it is the view of the Teesside Homeless Action Group's organiser Francis Owens that deposits have now become a "perk" for unsrcupulous landlords. He desrcibes the problem of non-return of deposits in Redcar and Cleveland as pretty bad, and he hears of cases of deposits and bonds being withheld almost weekly.
Typically, a person is asked to leave a property because housing benefit is not paid on time and the deposit is held to replace the lost rent, but when the benefit is made up, it is rarely returned to the tenant. The landlord will claim damage has been done to the property or furnishings, despite protests from the tenant. Often the damage was there, although not necessarily noted by the tenant, when the tenant moved in. People moving in and out of substandard property will often be paying out of their bond or deposit for "damage" that has been paid for by several previous tenants in exactly the same way.
If people are evicted or asked to leave before their tenancy is up, landlords frequently keep the deposit as compensation for their trouble. Some landlords simply do not return it. Francis Owens told me of one person he is chasing—and has been chasing for several weeks—who will not return a deposit to a couple who are now homeless. That person will not even reply to letters.
It is quite clear that, exactly as my hon. Friend has said, most people who lose their deposits just give up. The local authority, although it has power to act in cases of illegal eviction and has some protective powers to deal with cases of harassment by landlords, has very limited powers to intervene over the loss of deposits, so tenants have recourse only to the courts, and they frequently do not want to go to the small claims court.
We are talking about relatively poor people, whose first language is often not English, and who will not necessarily know how to go to law, or have any confidence in doing so. There is much research that shows that it is the relatively socially excluded who do not enforce their rights, but that is obviously going to be the case. I can say, as many cannot quite say quite so strongly, that the image of the justice system—full of middle-class people with funny clothes talking in-crowd language and using procedure that immobilises those not in the know—is not a friendly, welcoming, sympathetic one to people who feel that they have been wronged.

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Let us be practical: the small claims court costs money. It costs at least £50 to recover a deposit. If the landlord does not respond, the process becomes wearisome. If he does answer and appears, that involves a daunting face-to-face experience—and if people get a judgment they have to pay even more to enforce it if the landlord does not pay up. Mostly, tenants just give up. That is a pity, is it not?
That example demonstrates the wickedness of stealing from the poor. It is not only that they cannot afford to enforce their rights, which is partly our fault as legislators, but they adjust more and more to going without things that they need for their well-being. Such situations disempower the already disempowered, so that they become even more like inert sitting ducks for the next exploiter or, as Francis Owens, with his feet more on the ground, puts it more specifically, they become used to being pushed around by landlords and just give up.
At present there is no tenant deposit scheme in Redcar and Cleveland, although an organisation called Junction was involved with a bond guarantee scheme until last spring. By guaranteeing a deposit, the scheme allowed landlords to let dwellings without charging one. It cost some £30,000 a year. It checked out tenants and supported them in being good tenants, so that the landlord rarely had a legitimate claim for holding the deposit back. It is believed that that scheme helped hundreds of vulnerable people find somewhere to live.
The housing strategy manager at Redcar and Cleveland, Roger Kay, to whom I am indebted, tells me that the termination of shorthold tenancies in the private sector is the third most common cause of homelessness in my local authority area, and accounted for 11 per cent. of cases last year. He feels that for many of those households, the requirement for deposits acts as a barrier to accessing further private rental accommodation. The local voluntary scheme, like the national one, struggled to attract private landlords. Partly because of a shortage of funds, it was wound up, reflecting very much the experience of the Government's national tenancy deposit scheme.
I support what has been suggested. It is likely that landlords who voluntarily join such schemes are those with higher management standards anyway. It is plain from my local experience and from the Government's national experience that there is every argument for a national scheme of that kind, which should be mandatory.
Such a scheme would be multi-faceted. There would have to be an independent deposit holder to protect tenants against landlord abuse. Shelter says that £790 million of tenants' money is held by landlords nationwide. As has already been said, between 30 and 50 per cent. of tenants experience difficulty in getting their money back. The scheme would also guarantee landlords' rights. It would have to have a mediation arm to deal with disputes, thereby taking them out of the courts. That would be better for poorer, disempowered people. It is also part of the aim of the new Department for Constitutional Affairs to take disputes out of the courts.
The second facet is that such a scheme would be part of a homelessness strategy. It would provide a guarantee to a landlord for those who do not have deposit moneys
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and would be able to assist in the prevention of homelessness by enabling those on low incomes to get into private rented accommodation.
It seems that the Government have seen the potential benefits of the scheme, because they have had a voluntary one. They have also seen the prospects for righting those wrongs, and have seen such a scheme as part of their policy for wider social inclusion of relatively powerless groups that are now exploited. However, the national voluntary scheme has not worked, and it seems that the voluntary scheme in Redcar and Cleveland is not capable of working, either. Frankly, it is hard to come up with disinterested arguments for not having a mandatory scheme and for not adding it to the next Housing Bill. I, too, suggest that delay while tenure is reformed is not justifiable; that is almost beside the point, and the issue is critical for many people.
The question of cost has been rehearsed. I would hope that deposits earning interest subject to a liquidity ratio could cover many of the revenue costs once such a scheme is established.' congratulate my hon. Friend the Member for Edmonton on raising the issue, and on behalf of private tenants and those who are trying to tackle homelessness in Redcar and Cleveland, I urge the Government to add a scheme to the next Housing Bill.
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Geraint Davies: I, too, congratulate my hon. Friend the Member for Edmonton (Mr. Love), on raising this important issue. I thank the National Association of Citizens Advice Bureaux and Shelter for pushing the issue forward. I have a long-standing interest in tenancy deposit schemes. Before becoming an MP, I was leader of Croydon council and at one point chaired the London boroughs housing committee. I also thank Lord Falconer for keeping the pilot scheme going and for saying that there is a strong case for legislation.
We have had a voluntary scheme but, predictably, it has not been very successful because the people who have volunteered to be in it are the good landlords, not the rogue landlords who are ripping off something like one in five tenants in Britain. This is a massive issue. There are 2.2 million tenants, of whom 70 per cent. pay deposits, and it is estimated that between one fifth and half of those people are ripped off. If the deposits being held total something like £790 million, that money, placed in a separate bank account at the current Bank of England base rate, would generate some £32 million— far in excess of anyone's estimate, even the Government's overestimate, of the costs of running such a scheme.
We are talking about protecting the weakest and poorest, often the fast-moving tenants who can be exploited by powerful landlords who simply sit on their hands and avoid the legal system and small claims court, which is already massively overburdened and clogged up with people taking up disputes. Many people give up, for reasons that have already been outlined, so landlords are in a strong position. The Government must live up to their pledge of five years ago and act.
The scheme that we are discussing would be cost-effective. The Government have suggested that the costs and benefits are evenly balanced but in fact they are not.

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They assume that the costs would be in the order of £19 million, but that presupposes that all disputes—namely, the 20 per cent. that are known of—would go to an adjudicator and each adjudication would cost about £150. In fact, where we have seen tenancy deposit schemes working in real life, particularly in Australia and New Zealand, the take-up rate of disputes is between 2 and 3 per cent., so the estimated cost would be more like £2.4 million—against, as 1 have said, a revenue stream of more than £30 million. Other benefits have already been estimated by the Office of the Deputy Prime Minister: £20 million in savings from court costs. and so on. The scheme would be an opportunity for fundraising to provide extra services to make the quality of the private sector market better for landlords and tenants. It would not be an opportunity for losing money, unless there were gross mismanagement.
Looking at the legislative timing, I would suggest, as have others, that we should take advantage of the forthcoming Housing Bill, partly because it is at the tail end of the pilot and largely because the whole aim of that Bill is to raise standards in the private sector, so it is uniquely appropriate. It has already been made clear by my right hon. Friend the Leader of the House in his interviews with the Select Committee that the inclusion of such a scheme in the Housing Bill would not jeopardise that Bill. I therefore urge the Minister to consider including it.
The alternative being considered, which I think would cause uncertainty and prevarication, is to introduce the scheme in the Law Commission's report, which is refocused on something quite different: simplicity and transparency. The consultation on the Law Commission's report already runs to two volumes and 300 proposals. This important scheme could be lost in all that. We need to grasp the nettle and get on with the job of protecting the millions of people who are under threat.
The consultation that has taken place was said to be evenly balanced, but if we take out the groups with a vested interest—those who let, landlords and others who make a profit—the overwhelming impact of the consultation is that there should be a statutory scheme and that we should make progress on that. The Government should take decisive action now to protect weak consumers in an imperfect market and to improve the market, rather than prevaricating, which would lead to the abuse of thousands more people by unsrcupulous landlords. This Government are best when they are boldest, and they said five years ago that they would deal with the problem of tenants being ripped off. I urge my hon. Friend the Minister to advance in that spirit.
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Ross Cranston: I, too, congratulate my hon. Friend the Member for Edmonton (Mr. Love) on having initiated this debate on a national problem. It is acute in certain parts of the country, and bears particularly on those on low incomes. The presence of a significant number of my hon. Friends shows the weight of support for a compulsory measure, and I am sure that my hon. Friend the Minister will report that.
My hon. Friends have already desrcibed the problem that we face, and I shall not go over it again. I have not had a huge number of constituency cases, but there has
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been a trickle, some of them involving students who are going to other parts of the country. As my hon. Friend the Member for Cambridge (Mrs. Campbell) said, those people will not stay in London, but will return to the west midlands and will not bring cases before the small claims courts.
I want to raise three issues. The first is that of access to justice. My hon. and learned Friend the Member for Redcar (Vera Baird) referred to the problems, delays and disincentives associated with bringing a case in the small claims courts. People have to know that that is an avenue. In Dudley, there has until recently been a problem with housing. There is no law centre, and people have not had housing advice. There is access to advice about welfare, law and family matters, but the regional office of the Legal Services Commission has identified a gap in relation to housing. People have to get advice before they can bring a case. The citizens advice bureau does sterling work in Dudley, but people have to and it in order to access its advice.
Then there is the problem of bringing a case before the small claims court. To those of us who have some association with the law, that might seem to be relatively easy, but for the ordinary person it is far too complicated. In addition, a fee has to be paid. It might be recoverable— the district judge can order that the fee is recovered if he finds in a person's favour—but, as my hon. and learned Friend the Member said, even if someone is successful, they have to pay another fee for enforcement. That is why there is a problem; tenants who are ripped off do not pursue their legal remedies.
The second point I would make about the need for the scheme touches on the argument put by my hon. Friend the Member for Croydon, Central (Geraint Davies). He pointed out that one has to take into account the change in behaviour that the introduction of a compulsory scheme would bring about. The Government's calculations of cost were made on the basis that there would be no change in behaviour; and that there would still be the same number of disputes about deposits in future. That is not so. When new systems are introduced, people change their behaviour. The evidence—my hon. Friend the Member for Edmonton referred to the issue in the Australian context—is that disputes run at 2 to 3 per cent. of tenancies. Therefore, there will be far fewer disputes than there are now.
There is also the possibility of raising income on the basis of the amounts deposited. My hon. Friend the Member for Croydon, Central argued very effectively for that. That used to be done in other parts of the world, and it is unfortunate that we never took that path in this country with respect to funding legal aid. In other jurisdictions, the client accounts of solicitors are used to generate money for legal aid schemes. However, what I am desrcibing is a parallel system enabling the use of deposited money to generate income to support the administration of the scheme.
Experience in other jurisdictions, such as New South Wales, is that the amount generated from the deposited moneys is sufficient not only to cover the administration of the scheme but to provide effective housing advice services: the surplus can be used to assist tenants in other ways. I am not persuaded by the Government figures that have been presented in the past. I understand that they are to be reworked.

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My third point is that we should consider not only the operation of the pilot scheme but experience elsewhere. My hon. Friend the Member for Edmonton talked about the pilot scheme and I will not go over that ground. However, the experience in Canada, New Zealand and the Australian states shows that such schemes can run.
Interestingly, some years ago the Department collected information on the operation of schemes elsewhere. Some jurisdictions set an obligation for the return of deposits. However, we are not talking about that. In some jurisdictions, the tenants' deposits must be put into separate trust schemes. However, we are talking about a centralised scheme. In places with centralised schemes, such as New South Wales, the number of disputes declines. Landlords compromise in disputes, even when tenants complain to the boards, and there is widespread—almost universal—support for the scheme. Landlords come on side; the good ones see that there are advantages to them and some of the bad ones are driven out.
Mrs. Campbell: Does my hon. and learned Friend agree that, because of the fear and suspicion surrounding many tenancy agreements, tenants often withhold the last month of their rent before they leave, because they are concerned that the landlord may not return their deposit? That may mean that landlords do not receive the money that they need to make good the damage and to repair the property. The schemes are in everyone's interest, to increase confidence in the system.
Ross Cranston: My hon. Friend is right. Such schemes have advantages for everyone. Landlords benefit in the long run. As I mentioned, in other jurisdictions such as Australia and the one Canadian province with a compulsory custodial scheme, real estate agencies and landlords' associations widely accept the need for these schemes. In New South Wales, the scheme has led to a valuable introduction of new technology, giving landlords the opportunity for direct viewing of the rental bond records for properties managed by their agency. My hon. Friend the Minister might want to take note of that, with reference to advancing e-government.
I wholeheartedly support the introduction of a compulsory centralised scheme. I acknowledge the problems of drawing analogies with much smaller jurisdictions such as New South Wales, New Zealand or the Canadian provinces. We have a much larger jurisdiction and many more properties to cover. Perhaps the scheme will have to be introduced on a regional basis, and it may have to be phased. If that were the case, I would want the west midlands to be considered at the top of the tree for the introduction of a compulsory scheme.
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Mr. Kelvin Hopkins: I congratulate my hon. Friend the Member for Edmonton (Mr. Love) on securing this important debate. I agree with what he has said, and with the additional supportive comments made by other hon. Members. I will try to make some different points about the landlord-tenant relationship, which historically has been fraught.
In the past, bad landlords were, as we all know, the scourge of many poor families. It was necessary for Governments to intervene to regulate the market and to
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provide alternative housing to overcome the problem. That was perhaps a contributory factor to the formation of our own party. We have a duty to ensure that the poorest people, who often live in private rented property, continue to be protected and supported.
There have been different waves of liberalisation and regulation in housing as political fashions have changed and Governments from different political parties have come and gone. In the 1950s—perhaps that is a little before most people's time, but I certainly remember it—there was a period when the Conservative Government liberalised renting, after the stricter controls of the war and post-war eras. That led directly to what became known as Rachmanism and the terrorising of tenants by bad landlords. Subsequently, the 1960s Labour Government introduced legislation to regulate private renting, and tenants had more protection.
We have to remember that Governments have a duty to protect tenants from exploitation. Even though the problem is perhaps riot as big as in the past, it is still significant. Unfortunately, liberalisation gives the whip hand to landlords. The relationship between landlord and tenant will always be difficult, because there is a direct and sharp conflict of interests, and that is often very personal.
The Government have apparently prayed in aid the idea that there is not sufficient parliamentary time for such legislation. I am afraid that I have heard that excuse so often in the past on so many issues that I think it is rather thin, especially when a simple section could be added to a current Bill to overcome the problem. Indeed, a short new Bill could be introduced. I do not think that it would be difficult, and it might even have support among Opposition parties.
Resistance to regulation has unfortunately become the modern zeitgeist: the ideological spirit of our times. We are at a turning point. The ideology of deregulation and liberalisation is wearing thin. People are looking for a more interventionist approach by Government. I welcome that as a traditional democratic socialist; I think that Government's role is to intervene in a market, to ensure that it does not have damaging effects on the less well-off in particular.
Unfortunately some people hold to the 19th-century dogma that laissez faire—leaving the economy to itself as far as one can—benefits people, and that interfering with the market will distort it and reduce the benefits it can bring. I think that that is mistaken and wrong and so do many others, particularly when it comes to essential areas of life such as housing. Not long ago, John Kenneth Galbraith said, as others have said before, that at least a third of the population of developed societies needs Government intervention to ensure that those people have decent housing conditions. The market will not provide for them; either they should have houses provided for them or the market should be strictly regulated to ensure that they have decent housing conditions and are fairly treated by landlords, whoever they may be.
In the past our party in particular, and other parties too, built millions of council houses. Many millions of families have had decent lives only because of the building of council houses. We need legislation on the issue, and we need it now. It is vital, and voluntarism clearly still does not work.

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The reality of many private landlords is that they too are poor. They are not wealthy exploiters, but poor people who perhaps have only one or two houses and, to a large extent, live on that income. They might be elderly people whose modest pensions are supplemented by rent from a private property. They are concerned about such sums of money, which may be significant to them, although they appear small to some people. Some poor landlords may be hard pressed to hold on to deposits and may spend them as part of their income. When it comes to paying them back, they may not have them to hand. That is the real world. We are not talking about big companies, but about poor people who perhaps have one house to rent that they may have inherited from a relative. That is a factor to bear in mind: we want to help those landlords as well as their tenants.
I have read the briefings from the CAB and Shelter, and the costs are usually tiny sums of money, which many local authorities would not even blink at. The difference between cost and income might be £1 million across the whole economy. The sums are infinitesimal in relation to our total economy, so the cost argument is not great. If a small cost were incurred by the landlord, no doubt he or she might increase the rent slightly to cover that cost. That will not be a big disincentive to the landlord or the tenant, as it would only be a small sum. If the new regulation were a disincentive to some landlords, we should look beyond that to try to ensure that their property stays in housing use in the rented sector, or is bought and municipalised by the local authority and used to house tenants on the long waiting lists in constituencies such as my own.
I was an enthusiastic supporter of municipalisation in the 1970s, which was something of a golden age in house building. Millions of houses were built in that era, including some by my local authority. I only wish that we could build as many houses now as we did then and municipalise some, particularly those that are in bad condition because their poor, private landlords have not kept them up to srcatch, and have not repaired or renovated them. When houses are municipalised, the local authority can bring them up to standard. They are often good sound houses with a long life ahead of them if they are looked after, which local authorities should be in a good position to do. Some might suggest that housing associations should do that, but I believe that local authorities should do so, as they are democratically accountable.
Many issues arise from this debate. Housing is obviously still in desperately short supply. We want to encourage as much housing as possible to be presented to the market for rent by less well-off people. Supporting poor landlords with a bit more regulation and support, or perhaps through local authority involvement, would help them and their tenants. I strongly commend the proposals made today by my hon. Friend the Member for Edmonton, and I hope that the Government will act soon.
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Matthew Green: I congratulate the hon. Member for Edmonton (Mr. Love) on securing the debate. With the possible exception of the Minister, I expect that everyone will be singing from the same songsheet.
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It is clearly a national problem, which will not go despite the introduction of some voluntary schemes. It affects all constituencies, both urban and rural, particularly those with students. Every constituency in the country will have tenants who have been ripped off—to put it simply—due to the way in which the deposit system works.
I do not want to go over the same ground, but we have heard about the scale of the problem five times: there are some 2.2 million tenancies, and some £790 million held in deposits. Why do such problems arise? Often there are disputes—genuine or not—over cleaning costs and whether deterioration can be attributed to reasonable wear and tear. There are cases in which the deposit is withheld at the end of the tenancy without a reason being given, or where cheques are issued and then stopped. We heard about the difficulty of pursuing a landlord in the small claims court. Sometimes the landlord simply never pays, or gives no indication that he will pay or that he believes that he should pay, and the tenant fails to get any answer out of him. These problems are commonly experienced and are regularly reported to MPs, to the CABs and to organisations such as Shelter.
Hon. Members have spoken today about the Government's reasons why the scheme should not be included in the Housing Bill. We have heard excellent explanations of why all their arguments are deeply flawed. I hope that the Minister will not repeat those arguments. Roughly surmised, they are that the tenancy deposit scheme should not be included in the Housing Bill because it will not be cost-effective. Some very strong arguments have been advanced about why that is completely fallacious. I welcome the fact that the Office of the Deputy Prime Minister is considering the possibility of reworking its costings, given that they have been so clearly shown to be inaccurate.
Another Government argument is that the scheme lacks sufficient support. I believe there to be widespread support for it from members of all parties. There is certainly support for it among any organisations dealing with tenants. As we heard, some 50 per cent. of organisations representing landlords support it. It is only the other 50 per cent. of organisations representing landlords that have not supported the idea of a national scheme. Far from a lack of support for the scheme, there is a lack of support for not implementing it.
It has also been argued that there is insufficient parliamentary time, but only a couple of clauses would be needed to include the scheme in the Housing Bill. I hope to serve on the Committee that will consider the Bill, and I assure the Minister that we will seek to move through our deliberations at some pace to ensure that time can be made to accommodate any extra new clauses. I hope that the Conservative spokesman agrees so that we can deal with it in the Bill. The argument that there is insufficient parliamentary time is incorrect.
The final Government argument is that the protection of tenancy deposits is better addressed by the Law Commission's forthcoming proposals on tenure reform. The worrying word is "forthcoming", because the legislation that might result from the Law Commission's work could be a very long way off and tenants will lose out in the interim. It may be that the end of the commission's deliberations, the Bills that it proposes are

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not even suitable vehicles for dealing with the issue. That is an argument for saying, "Let's put it on the shelf and hope that it goes away."
The hon. and learned Member for Dudley, North (Ross Cranston) and the hon. Member for Cambridge (Mrs. Campbell) touched on the fact that the scheme is in the interests of landlords. There are two reasons for that. First, as has already been explained, landlords often find that tenants, especially those who are a little more clued up than others, simply withhold their last month's rent. Consequently, if damage has been done, the landlord seeks to chase the tenant to recover the money through the small claims court, which they fail to do. The landlord is therefore the loser.
Secondly, some tenants have so little expectation of their deposit being returned that they do not look after the property as well as they might if they believed that they might get the deposit back. That may affect student areas more, but certainly I know of cases where that has happened. The deposit ceases to have any effect because they assume that they are not going to get it back, so they might as well not look after the property. Greater damage is therefore done to the property than would otherwise be the case, so a national scheme would work in the interests of landlords, not just tenants.
I shall be intrigued to listen to Minister; perhaps she will show a welcome change of heart and give an announcement that the proposal will be in the Bill after all. I struggle to see how the Minister can justify not including the idea in the housing Bill, but if she does not do so, we shall bring forward the appropriate clauses. That way, the Minister will have to justify in debates on the Bill why the scheme should not be introduced.
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Mr. Eric Pickles: I congratulate the hon. Member for Edmonton (Mr. Love) on his success in raising this important issue. I am also grateful to the hon. Member for Luton, North (Mr. Hopkins), because for one dreadful moment I thought that I was in consensus hell. No one had said anything that I disagreed with, so I am pleased that the Chamber has at least retained some degree of normality.
The hon. Member for Edmonton was right to say that the problem relates to a relatively small number of landlords, particularly those with a relatively small number of properties. I, like many others, am disturbed and disappointed to learn of the number of tenants who hand over their keys at the end of their tenancies to find their damage deposits withheld for no real reason.
Hon. Members have picked their favourite state in Australia to show how the proposed system runs, but I shall leave New South Wales to one side and commend to the Chamber the system that operates in Queensland, which has a very small number of disputes and seems to function within a light regulatory framework.
It behoves the House to recognise that the report that the National Association of Citizens Advice Bureaux and Shelter issued and the figures that it contains are a matter of dispute, particularly as no one has said anything to the contrary. In order to understand the problem fully, we cannot ignore the Small Landlords Association, the secretary of which suggests that the National Association of Citizens Advice Bureaux's report is misleading and verges on the irresponsible. The
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association cites a recently conducted professional survey that shows that only 5 per cent. of private tenants said that the relationship with their landlord was bad. Moreover, that example concerned only a particular type of tenant, so the incidence of dissatisfaction seemed very high.
The association made the point, which we would do well to listen to, that a massive, unwieldy quango would be necessary to administer such deposits, where there is only a minor problem. Therefore, before we take a decision to move further on to something, we must be clear that it will not create another problem.
Almost in contradiction to that point, however, I note that the chairman of the Small Landlords Association, a Mr. David Salusbury, has proposed some degree of regulation in a letter to a number of periodicals. He suggested to the Government that
"provision for redress could be included in tenancy agreements whereby aggrieved tenants could pursue a claim against their landlord with an independent adjudicator. Such a body would have the authority to require the landlord to lodge an appropriate sum pending resolution c f the dispute."
I suspect that that would work extremely well for reasonable landlords. We must bear in mind that those entering into such agreements will not necessarily be on an equal level; they may not be in a position to negotiate a tenancy agreement or to have a clause inserted stating a particular amount. However, it is precisely that kind of tenant whom we seek to protect.
Deposits are required for several reasons. They are necessary to assess the, financial standing of prospective tenants, and to ensure that tenants understand the value and importance of the property. They are necessary because the landlord needs protection against tenants doing damage beyond fair wear and tear. Lastly, they are necessary to cover possible arrears of rent.
The Small Landlords' Association has taken great pains to say that deposits are to cover only damage that goes beyond normal wear and tear at the end of a tenancy; it says that it is important that tenants should know that such deductions would be the norm. The association says that it is relatively easy for a tenant to make a claim against a landlord through the small claims court, but I thought that the arguments put by the hon. and learned Member for Redcar (Vera Baird) were very persuasive. I may not have had experience of the small claims court, but I understand the system, and I know that those who have pursued cases through the small claims court, as many of my constituents have done, know just how hard it is to get a judgment. Indeed, many such people do not have the necessary financial resources to put a case together.
I appreciate and understand the Government's reluctance to introduce further regulation. Much depends on the facts And on the size of the problem, so I hope that the Minister will be in a position to put it right—and I intend to ensure that she has adequate time to respond to the debate.
We are concerned about the Shelter report, which suggested that a fifth of private tenants believe that a part of their deposits had been unreasonably withheld. Particularly worrying, given the strains on student finance, is the fact that as many as 35,000 students face that problem at the end of term. My right hon. Friend the Member for Haltemprice and Howden (David Davis), the shadow Deputy Prime Minister, said on the publication of the report

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"Shelter's report shows that some abuses are little more than legalised theft. Conservatives will consider any intelligent and light regulatory regime and will examine Shelter's report in detail. We would want to ensure that the majority of landlords and letting agents who are doing the right thing are not burdened with red-tape."
As I suggested in an intervention on the hon. Member for Edmonton, we know that the pilot schemes have been anything but a success. It was inevitable that those landlords who are good and reasonable, and who, as my right hon. Friend said, wanted to do the right thing, have had no problem in joining the scheme. However, the landlords who have not joined the scheme are those whom we wanted to change their attitude and their practice.
Common practice in other jurisdictions is different, most notably in Germany. There, deposits cannot equal more than three months' rent, they must be held in special accounts and generally returned with interest within one year after the end of the tenancy. Similar regulations apply in France, where deposits are limited to between two and three months' rent and are returned within two months of the tenant handing back the keys. A rather different approach is taken in Belgium, with an end-of-tenancy cost being guaranteed by the country—landlords are not allow to hold deposits. We have heard also of schemes in Canada and Australia, and I am very taken by the Queensland model, which lays down a clear way of dealing with disputes.
Mr. Love: Given that the pilot scheme clearly showed that the vast majority of landlords were reluctant to be involved in a voluntary scheme, and given the significant abuse of tenants' deposits, despite the publicity raised by the voluntary scheme, is there any alternative to a national statutory scheme that would work for landlord and tenant?
Mr. Pickles: If such a scheme exists, I am not aware of it. However, we are beginning to move down that path. The hon. Gentleman may understand the reluctance of the Conservative party to commit itself to further regulation. However, Members on the Opposition Front Bench will doubtless be aware of such cases in their constituencies. In truth, they are not entirely unaware of such cases in relation to those whom we employ. The nature of this place and working for a political party means that young people tend to be here at the beginning of their career, and I am aware of a number of cases where a lot of effort and intellectual muscle had to be put into getting their deposits returned.
Geraint Davies: For clarity and for the record, will the hon. Gentleman make clear whether he is in favour of a mandatory national tenancy deposit scheme, to be applied through the Housing Bill?
Mr. Pickles:I was dancing delicately on the end of a skewer.
Geraint Davies: That is what I thought.
Mr. Pickles: I realise that the hon. Gentleman wanted to give the skewer a thorough jerk in order to see me well and truly impaled. I hope that he will allow me to dance a little longer.
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My party is in the process of looking into the detail. I was about to mention some of our research. However, to be frank, we are moving close to the hon. Gentleman's position. We want to ensure that the Government do not introduce a regulatory regime that will use a sledgehammer to crack a nut. We want the regime to be light and reasonable; we want it to be timely and we want it to ensure that it has no detrimental effects on the amount of property that is available in the private rented sector. I hope that the hon. Gentleman will not push me.
Mr. Love: We on the Government side of the House sympathise with the hon. Gentleman's dilemma. The Government tried the voluntary scheme approach to avoid the concerns that he expresses, but if he is concerned about the national deposit scheme it would help if he indicated where those concerns lie—and what alternatives might be available that would act in a similar way but without the onerous bureaucratic burden that concerns him.
Mr. Pickles: I suppose that I should refer the hon. Gentleman to the reply that I gave earlier. If there are other schemes available, I am not aware of them.
I do not think that I shall give details of the Queensland system, because I want the Minister to have time to reply to the debate.[Interruption.]The hon. Gentleman would miss a rare treat.
It behoves the Government to give us a clear indication of what they believe the true figures are. I shall be interested in what the Minister has to say. If the Government say that it is a question of parliamentary time, I can understand that, but who controls parliamentary time? The Government control it. The Government lay down the guillotines. If they want to include the matter in the Housing Bill, the official Opposition have no objection.
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The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Yvette Cooper): I, too, congratulate my hon. Friend the Member for Edmonton (Mr. Love) on securing the debate and choosing to discuss the tenancy deposit scheme. This debate follows from a debate that took place on 4 December last year, and concerns an issue that many hon. Members feel strongly about.
Hon. Members have set out the difficulties that many of their constituents have faced. Those constituents have been exploited and ripped off, or have had frustrating experiences with deposits going missing or being unfairly withheld. My hon. Friend the Member for Edmonton desrcibed the experiences of Mrs. X in his constituency, and my hon. Friend the Member for Cambridge (Mrs. Campbell) referred to the difficulties experienced by students. My hon. and learned Friends the Members for Dudley, North (Ross Cranston) and for Redcar (Vera Baird) pointed out clearly that often the most vulnerable tenants are highly unlikely to pursue their claims in court and, no matter how great the injustice done to them. are unlikely to get the remedy to which they are entitled.
There are different estimates of the extent of the problem. Previously, in the consultation documents, we used the figure of 20 per cent. of tenants being involved

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in disputes over deposits. It is clear that this is not simply a problem for tenants. It is also a problem for the private rented sector as a whole and for landlords, as the hon. Members for Ludlow (Matthew Green) and for Brentwood and Ongar (Mr. Pickles) pointed out. My hon. Friend the Member for Luton, North (Mr. Hopkins) was right to argue that we need proper safeguards for tenants, and we also need to consider the wider relationship between tenants and landlords. However, I disagree with his claim that the interests of landlords and tenants will always be in tension. Both landlords and tenants have a long-term interest in the future of the private rented sector and in having a proper, professional, reputable private rented sector, so they would have interests in common.
This issue tarnishes the image of the private rented sector at a time when it is widely recognised that the sector may have a much bigger role to play in achieving housing targets, providing housing and addressing problems of homelessness, particularly in high-demand areas. That idea was raised as part of the London housing strategy, which was published just a couple of months ago. The sector provides needed flexibility in the housing market. For example, it responds to the needs of the growing student population, those who need to be mobile and those who are not in a position to buy their own homes. The sector is increasingly seen as an important resource by local authorities dealing with the needs of the homeless. Resolving the issue and addressing concerns about unfairly withheld tenant deposits is in the interests of tenants and landlords across the country and has wider repercussions affecting our ability to tackle homelessness and housing demand.
As hon. Members have said, we have tried voluntary pilots, alongside considerable research and information gathering. The pilots were set up in March 2000 and were managed by the independent housing ombudsman with Government funding for their costs. The pilots had the two elements that my hon. Friend the Member for Edmonton identified. First, they needed a way to keep the deposit safe. Two ways were tried: a custodial and an insured option. Secondly, there was independent adjudication, in this case by the independent housing ombudsman.
The scheme told us some useful things about mechanisms by which deposits can be safeguarded and ways to deal with disputes. However, it also showed that, even with all the costs being met by the Government, only a minority of the most professional landlords were likely to participate. The pilot clearly offered no prospect of a national scheme that was voluntary and self-financing. We should be clear about that. The failure of the pilot schemes powerfully makes the case that legislation is needed.
Last year, we launched a consultation paper on options for the way forward, including looking at the Australian and Belgian schemes and a series of other models. There was a wide range of responses to that consultation. Some opposed action altogether. We will publish the results in due course. Many hon. Members have mentioned the different costs and benefits. There have been different views on the costs and benefits of such a programme, and we are looking at that further. The cost and benefit analysis produced for the consultation showed quite a close balance between the
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costs and the benefits. Hon. Members have raised concerns about that, as have other organisations. We are looking further at those issues.
The Select Committee has now recommended that the measure be included in the Housing Bill. Many hon. Members have made that point, including my hon. Friend the Member for Croydon, Central (Geraint Davies). My right hon. Friend the Minister for Housing and Planning will respond to the Select Committee shortly. We have said that we want to consider the scheme as part of the Law Commission's review of tenancy. My hon. Friend the Member for Edmonton raised some concerns about that approach, so I shall explain a little further why we think that it would be valuable.
The Law Commission is due to publish proposals later this month, particularly on written tenancy agreements. My hon. Friend rightly said that written tenancy agreements do not themselves solve tenancy deposit problems. That is clear, but we think that it would be helpful to examine the issues together. The problem of written tenancy agreements is significant. Many tenancies have no written agreement; there is nothing more than the rent book to establish entitlement. There is a strong case for compulsory written tenancy agreements. The Law Commission is expected to recommend that tenants' rights, including security and rights of repair, should by law be contained in the agreement in compulsory terms.
If we go down that route, which the Law Commission is expected to recommend, it may be possible to consider the tenancy deposit scheme in parallel. One approach that we have been exploring in the Department is the possible introduction of compulsory terms in the written agreements to say that any deposit must be held in a scheme. That could allow all kinds of different schemes, provided by different organisations, perhaps on the condition that they are Government-accredited or approved, and that they address the two issues that my hon. Friend raised—safeguarding the deposit for the tenant and allowing independent adjudication in disputes. Again, the use of the independent housing ombudsman might be one approach. That would link the structure of the scheme quite closely with the written tenancy agreement, so we have been keen to explore those issues together to see if that is a workable way forward. Obviously, with such an approach, a series of matters would have to be explored and discussed with stakeholders.
I recognise that all Members are interested in including provisions in the draft Housing Bill. They will know that the Government always have to take into account a range of considerations, including how quickly we can develop good, effective legislation, and issues of parliamentary time. I noticed the suggestion of the hon. Member for Brentwood and Ongar regarding Government control of parliamentary time—but my experience is that the length of time we spend debating particular issues often has an awful lot to do with the decisions of Her Majesty's Opposition, so obviously it would be helpful to know his view on the issues, and the length of time he thinks is needed to discuss them.
I should also say that we have seen Shelter's proposed draft clauses on the mai ter. Shelter has campaigned on the issue, and drafted clauses relating to it. We are looking carefully at the matter, but there are some

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difficulties with the approach taken in the draft clauses proposed by Shelter that we will consider further. The hon. Member for Ludlow suggested that we would only need a couple of clauses, but I would be very cautious about such a claim; in fact, those proposals would mean putting an immense amount into secondary legislation.
Very often in Parliament we discuss concerns about how much is put in secondary legislation and the effect of that on the opportunities for proper parliamentary srcutiny. We have to be careful about the balance of what is in primary legislation and what is in secondary legislation. srcutiny in this area is very important. As a result, I would caution hon. Members about the logistics of achieving immediate legislation that is also good legislation.
I take very seriously the points that hon. Members have made. We will respond to the Select Committee and its recommendations shortly, and we are also looking forward to considering the Law Commission's relatively imminent proposals. As my hon. Friend the Member for Luton, North pointed out, it will be important to consider that in the context of the wider relationship between tenant and landlord. I was interested in the point made by the hon. Member for Brentwood and Ongar about the recognition by many landlords' groups of the importance of the issue.
Mr. Love: Will my hon. Friend also take into account the consensus that seems to be developing throughout the House, and the good will that exists towards finding a way forward that suits both landlord and tenant?
Yvette Cooper: I certainly will. I have listened very carefully to the points made by hon. Members from all parties today, which I take very seriously indeed. I want
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to assure hon. Members of the Government's concern about the issue, and our recognition of the important points that have been made this afternoon.
Geraint Davies: Is my hon. Friend reassured by the unanimity in this Room that the discussions on the Housing Bill will be rapid and effective so that we can move forward quickly, even given the points that she made about the Law Commission? There is a real opportunity to get a result quickly.
Yvette Cooper: As I have said, I recognise the wide range of support on this issue, and we all agree that there is a problem that must be resolved. We also agree that a voluntary approach does not work.
Matthew Green: Will the Minister confirm that the Law Commission is unlikely to report in time for any proposed legislation emerging from that to be announced in the next Queen's Speech? Conceivably, then, we are looking at the legislative year following that. Any Bill following that report may become law in about two years' time, whereas the draft Housing Bill offers an opportunity to deal with the issue in a matter of months.
Yvette Cooper: I recognise hon. Members' concern about that. The Law Commission will make proposals this month. Detailed legislation will then be drawn up, which does take further time. The hon. Gentleman will recognise that I cannot make commitments about the Queen's Speech in any respect; that is the way in which the parliamentary system works. I would again caution Members who think that the matter can be dealt with swiftly. We shall of course consider all the points made by hon. Members and respond carefully to the Select Committee. I assure hon. Members that we are concerned about the issue. The failure of the pilots has shown a strong need for legislation, but we must ensure that we get it right and that it is effective. That is not always possible within as swift a timetable as we would all like.

Consumer Protection (Unsolicited Mail)
3.30 pm
Mr. Ben Chapman: I am delighted to have secured this debate this afternoon and to have the opportunity of raising an issue of considerable concern to my constituents and others. Members of Parliament receive a phenomenal volume of mail, both junk and other, which we effectively solicit because of the nature of our work. As well as being a Member of Parliament, I am also a consumer and private citizen and in that context I receive my share of the 21 billion pieces of unsolicited mail that are sent to British citizens every year and the 14.5 billion spam e-mails that are sent every day, apart from countless telephone calls and text messages. Those constant intrusions have become part of our everyday life.
When picking up the post in the morning or checking our e-mails, we are accustomed to filtering out countless unsolicited adverts and offers. I have with me just one unsolicited offer that I received this morning telling me that I have reached the third and final stage of a £130,000 prize draw and that all I have to do to claim my winnings is to send the form back and do the necessary. We have become used to filtering out paper mail, but that applies less to e-mails and text messages. The barrage of junk correspondence constantly arriving in our homes constitutes an invasion of privacy. Now that text messaging has fallen prey to the same misuse, unsolicited messages and interruptions are sent not only to our homes but to our person.
People shy at the thought of their names, addresses, employment details and retail patterns being sold between companies and find that abhorrent. The sheer volume of unsolicited mail that is delivered in the post should not be underestimated. Last year, more than 78,000 tonnes of such mail ended up in landfill sites throughout the country. Most of it was probably never read. The industry is based on the premise of extreme over-production and if one in 1,000 recipients takes note of the mailing, the exercise is probably worth while. Mr. Colman may have made his money from the mustard that was left on the side of the plate, but wastage from ill-targeted junk mailing is uneconomic and poses an environmental hazard. With due regard to environmental concerns in 21st Britain, I do not believe that it is sensible or sustainable for the cycle of self-serving over-production and waste to continue.
There is a difference between direct mail and junk mail. Many UK charities use direct mail to generate much-needed awareness and to raise funds. The umbrella term "direct mail" incorporates many an enterprise of great substance and moment. As a sales medium, direct mail accounts for an estimated £25 billion of goods and services purchased by British consumers each year. That is why it is on the increase. Many reputable banks and businesses operate a direct mail system on entirely legitimate terms. Clearly, direct mail has a valid role to play, but it is the prevalence of junk mail that obscures its worth and blurs the lines of recognition for consumers.
Greater targeting of direct mail is necessary, as are improved measures to eliminate junk mail. Eliminating junk mail is relatively complex, as one man's—or woman's—junk mail is another person's important bit
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of correspondence. Direct mailers do not aim to send junk mail. It is, however, in the nature of the industry that marketing pitches are based on speculation, so although targeting is positive, wastage will always occur.
Apart from the industrial waste and hassle that unsolicited mail can cause, numerous other consumer protection issues arise from it. Misleading advertising, offers and prize draws are often delivered through direct mail. The Office of Fair Trading has issued warnings regarding unsolicited promises of cash and prizes, but its substantive involvement is relatively rare. The standard scam involves sending letters, texts or e-mail containing announcements of cash prizes to individuals, often the vulnerable. They are always personalised in a way that gives them a pseudo-legitimacy. They are, for example, addressed to the individual at their home address and make references to the area in which they live.
One becomes familiar with such scams and quickly learns to put them in the waste bin. With newer forms of communication, however, that familiarity is not yet established. Even direct mailers need to cater for the people who are vulnerable to these scams. People are often urged to send a small processing fee so that their good fortune can be realised. Of course, it is not good fortune but the opposite. Individuals who respond are not only fleeced of their money but are put on hit lists of the gullible so that they can be targeted again, no doubt with promises of bigger prizes or free gifts.
A variation on the scam is that the recipient must ring a premium line phone number to claim their prize. They are put on hold while they listen to various announcements, perhaps answer one or two questions and, I imagine, listen to music while they are waiting. They are on the line for minutes at a time and the cost soars. The person responding often does not know that they are incurring costs as they do so. They are certainly unaware of the level of those costs. Some scams even have people signing up to hospital insurance plans or transferring money to Nigerian bank accounts. Others simply require them to fill in a form to claim their winnings. I received one such form this morning.
The stop now orders, which came into force in June 2001, facilitate EU-wide action against the problem. However, misleading mail emanating from outside the Union is still almost impossible to act on. The Consumer Protection,(Distance Selling) Regulations 2000 provide for protection of the consumer when involved in transactions that do not involve face-to-face contact. However, individuals rarely pursue the offending companies via this mechanism, perhaps because of the size of the losses or embarrassment at their foolishness.
Credit cards are another favourite of direct marketers. Although much of this trade is legitimate, there have been numerous cases o f companies duping consumers into taking on an account without knowing about the various strong repayment clauses that are hidden in the small print. The Department of Trade and Industry has recognised the problem, as have industry leaders, and the Association for Payment Clearing Services is co-ordinating work on behalf of the industry on transparency initiatives such as the new honesty, or summary, box.

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All this serves to highlight the problems inherent in distance selling, which can be exploited by anyone wanting to make a quick buck. The issue of companies sending unsolicited credit ca rd cheque books to consumers remains, and I appreciate the fact that the Minister acknowledged the problem in the House. We await moves by the credit industry to address the issue.
British consumers currently owe £48 billion in outstanding debts to credit card companies. That is twice the public sector bcrrowing requirement. Consumer credit also feeds into the problem. There are currently 215,000 licences for traders to lend money under the Consumer Credit Act 1974, although I understand that the legislation is under review.
Household debt is an increasingly huge problem in the UK and across the developed world. Currently, hundreds of debt collection businesses are operating in the UK. It is perhaps unsurprising, therefore, that one of the most common services advertised in junk mail is personal loans. In my constituency it is not uncommon to receive leaflets advertising loans at an APR of 445.7 per cent. The concept of payday lending, to bridge the gap to the end of the month, is newly revamped. There was a time in my life when I needed such things, although, thankfully, I do not so much now. However, there are people who fall prey to the scam, and phenomenal rates of interest are involved.
The organisations concerned sidestep consumer credit regulations and their actions are controlled only by codes of conduct. Going down the path of debt, as many junk mailings would have us do, can lead to a person's being tarred with a bad credit rating—something that can stick for life. They then enter the murky world of the credit agency, of which I have had some experience, although I assure hon. Members that it was for no bad reason. If one has been given a black mark, it is very difficult to find cut why. Sometimes it is given erroneously and unjustly, but correcting it is a difficult job.
In my opinion, junk mail is responsible for a multitude of sins. It provides daily access to a wilderness of rip-off loans, scams and extortion, most of which people could well manage without. Consumer protection from those dangers provided through, for example, the OFT, the Financial Services Authority and the Advertising Standards Authority, but often scams are engineered—as they would be—to meet all legal criteria, and the consumer is left without recourse.
Encouragingly, there has been a great deal of action on direct mail in recent months. New measures derived from article 13 of the EC directive on processing of personal data and protection of personal privacy in the electronic communications sector, on which the DTI consulted early this year, will come into force in December. That will require senders of advertisements via e-mail and text to have the prior consent of the recipient. Without that, offenders will be liable to a fine of £5,000. However, it will remain legal to send unsolicited mail unless the material is obscene or threatening. No legislation exists that can protect a householder from receiving it. Nor, to my knowledge, are there plans to develop such legislation.
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The only option for besieged consumers is to register with the Mailing Preference Service, which is an effective and very worthwhile initiative. I urge people to join the 1.1 million people who are already registered. Its scope should be broadened. At present the MPS deals only with those who are responsible—srcupulous companies that want to subsrcibe. Why should not direct mail companies be placed under an obligation to subsrcibe? It will always be difficult to prevent unsolicited mail from abroad from reaching consumers here, but we can at least act to protect those consumers who do not want to be targeted from the advances of companies in the UK.
A major publicity initiative has just been launched by the environmental pressure group Planet Ark, in conjunction with the Direct Marketing Association, and with the support of the Government. It concentrates on cutting down junk mail through increased awareness of the MPS and increased emphasis on recycling. The MPS operates a strict code of practice and is essentially good for business, in that it allows companies to target only those people who want the mail.
Firmer action is required, in my view. A positive example is set by the new regulations on e-mails and text messages. Could not such a system apply to unsolicited postal mail as well? The plan of a default customer opt-out would put the responsibility in consumers' hands to opt into mailings that they wanted. Enforcement could be carried out on an EU basis. There is an EU-wide agreement on the prevention of obscene or misleading advertisements and the pursuit of those who send them. The next step might be to introduce an EU-wide version of the MPS, covering all EU direct mailing firms.
I call for more responsibility and more power to be placed in the hands of consumers. The new agreement on producer responsibility is very welcome, but consumer choice and control should come first. Companies' ability to write to individuals without their prior consent constitutes an invasion of privacy, a hassle, an environmental threat and, sometimes, just plain fraud. It should be tackled and narrowed. I call on my good friend the Minister to address the problem as forcefully as he can in the interests of my constituents and the wider public.
3.45 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): I congratulate my hon. Friend the Member for Wirral, South (Mr. Chapman) on his success in obtaining a debate on a matter about which I share many of his concerns, not only as the Minister with responsibility for consumers but as a constituency MP with a mailbag similar to the one that he mentioned. I am pleased that he dealt with the breadth of the issues that consumers face.
Direct marketing is a legitimate and valuable method for companies to promote products, services and special offers, but it can be regarded as a nuisance. For that reason, the Direct Marketing Association operates the Mailing Preference Service, which provides a means whereby consumers can have their names removed from the lists of legitimate marketers.
Consumers can also reduce the volume of unaddressed mail such as leaflets by registering with the Royal Mail "Door to Door" service. In addition, the

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draft code of practice launched by the DMA in May requires its members to have in place a structure to enable every effort to be made to respect a householder's wish not to receive unaddressed items.
A national campaign launched by the DMA this month aims to promote the recycling of direct mail and the MPS as the means for consumers who view all direct mail as junk to exercise their choice not to receive it. The MPS cannot function as it should if consumers are not aware of its existence. Consumer awareness of the MPS is not as high as it should be. I commend the DMA's initiative.
The DMA code of practice makes registration with the MPS obligatory for its members. It is also a condition of the British code of advertising, sales promotion and direct marketing, which is administered by the Advertising Standards Authority. Nearly all such suppliers are DMA members and, if marketing companies act on a supplier's behalf, they will use the MPS because it is an efficient way of approaching customers.
The DMA has global links and the MPS operates globally. The latter is regularly accessed by overseas companies, either directly or via their local trade associations. There is wide compliance with the MPS. Nevertheless, the DMA regularly researches consumers' views on the service. According to the most recent survey, consumers appear to be satisfied with it. The DMA continues to monitor their views regularly.
Of course, new communications technology means that unsolicited mail now appears in other forms, as my hon. Friend the Member for Wirral, South said. Regulations implementing the EU directive on privacy and electronic communications regulations will give individuals more control over the marketing that they receive through electronic communications networks such as e-mail or text messages.
However, to some extent, the new measures reflect the particular nature of the new marketing media. In a competitive market, the contact data used—e-mail addresses and mobile phone numbers—change very quickly. That is generally not the case with postal addresses. There needs to be a fair balance between the interests of consumers and the interests of business in this as in other areas. As my hon. Friend pointed out, consumers spend £25 billion per annum via the new media. The MPS, in conjunction with the Data Protection Act 1998, which ensures that consumers are able to prevent their details being passed on to other companies, provides the balance at present.
The real risk to consumers comes from mail, frequently from abroad, which aims to persuade them to part with their money through misleading claims or promises. Unfortunately, once a consumer replies to such an approach, contact details are passed among scam operators and more mailings follow.
Scam mailings can present particular problems because most are sent from outside the UK. However, we have started to address that—we are not powerless. The Office of Fair Trading European enforcement team investigates scam mailings from outside the UK. The OFT can now pursue injunctive actions in other EU member states against scams based there by ultimately seeking enforcement orders under the Enterprise Act 2002.
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The OFT currently has under review more than 420 different mailings from overseas and is gathering intelligence on each deceptive mailing in order to trace the originators and pursue those responsible. It has taken a lead in Europe in using the new powers. That has been acknowledged by the European Commission and even featured in a report by the European Consumer Centre. The OFT also works with the European branch of the International Consumer Protection Enforcement Network. ICPEN-Europe co-ordinates Europe-wide action against cross-border scams and supports fast and effective communication between enforcers.
My hon. Friend touched on mailings that originate from countries outside the EU, which represent a more difficult problem. However, the OFT also works with ICPEN-Main, which supports communication and enforcement in the same way as ICPEN-Europe, but on a global scale. Member countries include the US, Canada, Australia and Japan. Complaints from UK consumers are regularly sent to ICPEN for investigation. For example, the Canadian authorities have initiated several successful civil and criminal investigations and the OFT continues to assist with the preparation of evidence to ensure that it can act against the perpetrators.
The Advertising Standards Authority also investigates misleading mailings, and when they originate outside the UK, it liaises with overseas regulatory bodies via the European Advertising Standards Alliance. The Royal Mail cannot intercept or open mail that quotes or is addressed to a UK post-office box. It can, however, withdraw individual UK PO box contracts when complaints are upheld and mailings are not corrected. The ASA and the Royal Mail work together closely on that.
This week, the Chairman of the OFT and I are announcing new arrangements to strengthen international co-operation between consumer law enforcers. We have concluded two memorandums of understanding, one with Canada and one with Australia and New Zealand. They follow arrangements that we have already implemented with the United States. The memorandums provide practical frameworks for day-to-day enforcement, liaison and information exchange. That reflects a shared determination to tackle global abuses that harm consumers.
This summer, the Organisation for Economic Co-operation and Development announced the publication of new guidelines for international co-operation to combat international scams and internet fraud. The guidelines seek to ensure that every country has the necessary authority and powers to take action in cross-border cases. They also set the stage for future work on consumer redress.
The European Commission has proposed more formal co-operation between member states. We are currently negotiating a regulation on consumer protection co-operation to strengthen the ability of EU enforcers to share information and co-operate effectively to challenge cross-border scams. We hope that the regulation will reach the statute book in the next couple of years.
My hon. Friend made some serious points about the use of credit cards. Some 30 years ago, one credit card was available, but now there are 1,300. The industry has

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grown tremendously, which has created some attendant problems. He will be aware of the work of the Select Committee on the Treasury. Hopefully the consumer credit White Paper, which is the result of a lot of work, will appear in the next few days.
I welcome moves by the credit industry to address credit cards. I commend the Association of Payment Clearing Services on its best practice guidelines, which it recently issued to its members. The guidelines cover the responsible assessment of a consumer's ability to handle new credit and improving the information on charges, costs and other important features.
I hope that that action sorts out the current problems, but I stress that enforcement authorities stand ready to intervene when the industry does not adopt the necessary high standards. For example, the OFT recently acted promptly to stop Marks and Spencer from mailing unsolicited credit cards to store card holders. The OFT took the view that that clearly breached section 51 of the Consumer Credit Act 1974, and Marks and Spencer has agreed to stop such marketing methods.
Legislation and enforcement are important in combating rogue trading practices of all kinds, but they are only part of the answer. Legislation may create loopholes, which the unscrupulous can exploit. Enforcement action can be taken only when bad practices have come to the attention of the authorities, by which time consumers may have suffered detriment. The most effective weapon against bad trading practices of all kinds is greater awareness on the part of consumers. The Government's objective is to place informed and protected consumers at the heart of an effective competition regime.
My predecessor, now the Under-Secretary of State for Health, my hon. Friend the Member for Welwyn Hatfield (Miss Johnson), launched a public awareness campaign on postal scams last summer that aimed to raise consumer awareness of the risks and warning signs associated with scam mailings; help consumers to avoid becoming scam victims by ignoring bogus promises and claims, and encourage consumers to send suspect
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mailings to the OFT for investigation. That campaign received wide media coverage. The campaign posters and leaflets are much in demand, and the OFT is investigating substantially more suspect mailings.
Public awareness is vital to putting the scam merchants and rogue traders out of business, and I want the work of increasing that awareness to continue. Like my predecessor, I want consumers to be informed and empowered. My Department will work closely with the OFT and other authorities to achieve that objective. It is important for us, as Members of Parliament, if we are aware of scams, to make sure that the OFT knows about them and to work with the other agencies involved.
Tackling mail scams in the form of unsolicited approaches, in a variety of forms and via a variety of media, is a challenging task. However, the level of detriment suffered by consumers necessitates an appropriate response. The OFT estimates that UK consumers lose about £100 million a year to postal scams alone. Legislation and effective enforcement play an important part in tackling the scam operators. Close co-operation with overseas authorities to form effective cross-border partnerships and tackle the scam operators is also vital and will continue.
For the measures to achieve optimum affect, we must have informed and empowered consumers. I am grateful that my hon. Friend has brought the issue to the attention of the Chamber today and that he and other hon. Members are working to make sure that we put the right mechanisms in place to prevent people from being exposed to scams. We must ensure that consumers have the confidence of knowing where to go to complain. As has been said, it is usually the vulnerable, particularly the elderly, who are the targets of unsolicited mail and who are tempted to respond. Once they have responded, they are hit with many more scams and end up worse off. In many cases, they feel so embarrassed that they do not report the matter.
I look forward to working with my hon. Friend and other hon. Members to ensure that we put a stop to such exploitation.
3.57 pm
Sitting suspended.

Dartmoor National Park (Military Exercises)
Mr. Deputy Speaker: We come to the final topic for our consideration today.
4 pm
Sitting suspended for a Division in the House.
4.17 pm
On resuming—
Mr. Anthony Steen: I am grateful to have the opportunity to raise the matter of environmental damage to Dartmoor national park from military exercises, and I should also like to highlight the damage from military litter.
My credentials as a champion of Dartmoor national park are, I hope, well known in the House. Dartmoor is one of the last great wildernesses remaining in the United Kingdom and fortunately part of it lies within my constituency. I piloted the Dartmoor Commons Act 1985 through the Commons, which was a watershed for environmentalists and farmers, as well as for walkers and riders. It gave them a statutory right to walk and ride over all the national park, and set up the commoners council to administer, manage and enforce against those commoners who exploit and overuse common land.
Although the national park authority, in conjunction with the commoners council and the Dartmoor Preservation Association, has done a sterling job in preserving and conserving the landscape, flora and fauna, the military's record is not quite as impressive, certainly if the activities of recent months are anything to go by. In 1991, the Duchy of Cornwall gave the Ministry of Defence a 21-year lease with no break clauses, unlike all previous leases. Although I realise that the importance of the defence of the realm was uppermost in people's minds, I suggest that they were also extremely conscious of the sizeable sums that the Government pay annually for the use of the moor by the military, although the Government have not disclosed the amount to date.
The Government and I are both fervent supporters of the right to roam, and we believe in the importance of an unbroken footpath along the length and breadth of the west country coastline. Despite that fervour, the Government remain silent on why they permit one of Great Britain's 13 national parks to be closed for at least eight months a year while live firing and military exercises take preference over walkers, ramblers and others who seek to enjoy the national park. It is as if the Government are suffering from amnesia over the reasons why national parks were established in the first place: to provide places of peace, solitude and recreation for the public, especially urban dwellers. There are only 13 in the whole country.
This debate is about not live firing, however, but dry training and the damage done by the most recent military exercise on Dartmoor, which took place in July, when 600 commandos and 18 BV206 tracked vehicles caused extensive damage to the moor. It is also about the disregard by the military command of basic rules. That cries out not only for an explanation but for recognition that it must not happen again.
Let me make matters plain. I am as patriotic as the next man and as committed and loyal to our forces as anyone. I recognise the important job that they do and the immense
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debt of gratitude that we owe them. I realise the importance of training, but I have some difficulty in squaring the objectives of the National Parks and Access to the Countryside Act 1949 with the military objectives of live firing.
Heaven knows why exercises cannot take place off the moor. Bodmin moor is nearby and is not a national park; Dartmoor is. I realise that exercises cannot be moved to Scotland or Ascension Island and that the south-west must have its own training ground.
Mr. John Burnett: Does the hon. Gentleman concede that, rightly in my view, the cornerstone of this country's defence policy is the ability to conduct expeditionary operations, which invariably means amphibious operations? Does he understand that it is essential for the Royal Marines and other troops to be near the fleet? Those commando troops must train under realistic conditions, including live firing, or their lives will be put in jeopardy. We owe them no less than the opportunity to undertake their training. If they cannot train on Dartmoor, where else can they go?
Mr. Steen: The answer is that they can go to Bodmin moor. We have a national park in Dartmoor—one of the 13 in Great Britain. There are no other national parks in the whole European Union where military exercises are allowed. This debate, however, is about not live firing but military exercises. I hope that the hon. Gentleman will recognise that there is a distinction between military exercises that can take place outside the national park, on Bodmin moor just down the road, and live firing.
The hon. Gentleman ought to recognise that the Ministry of Defence recently told campers that they should not dig their tents too deeply or build latrines because they may blow themselves up. Again, that is a live firing issue, but there are serious implications if we have a national park where campers cannot dig tents and latrines. That is a serious issue, but my point is that Dartmoor is not a national military park—or perhaps it should be renamed. Bodmin moor is not a national park, and exercises could be conducted there. On one occasion, Bodmin moor was partly used; I am suggesting that it should have been completely used. I digress. I am grateful for the hon. Gentleman's interest and I do not disagree with him, except to say that that should not happen on Dartmoor.
I do not object to dry training, even though it is a little disconcerting for those picnicking on the moor to get mixed up in training programmes, especially when smoke mortars are fired and dozens of commandos appear out of puffs of smoke. As one is enjoying one's thermos of hot tea, one suddenly finds 200 commandos coming down—the Assyrians coming down like a wolf on the fold. That can be disconcerting, but I am not complaining about that. What I am talking about is that, at the end of June this year, a two-week military exercise ordered on the higher moor above the 1,400 ft contour. As part of that exercise, it is understood that the training area commandant authorised the movement of 18 BV206 tracked vehicles between the Okehampton range and Ringmoor on southern Dartmoor. Those vehicles are permitted under the terms of the Duchy of Cornwall licence to conduct military training on its land. The national park authority had no prior notice of the nature of the exercise.
When the general use of such vehicles was proposed six years ago, the authority expressed serious reservations and said that they should not be permitted to travel off hard

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tracks. It is fair to say that, in the interim, despite some use of the vehicles, the ranger service of the Dartmoor national park authority reported only one incident involving a BV206. The scale of the most recent exercise and the manner in which the BV206 was deployed have clearly had a major visible impact and have serious ramifications for Dartmoor national park.
The new tracks in the Hare tor and Lynch tor areas were inspected on 8 August 2003. I might mention that they are high tors, well over 1,400 ft. They are dramatic tors, and are often used by ramblers and walkers. In some areas, several tracks run across the same general area, but in others there are only single tracks. The number of BV206s that used individual tracks varied: there have been single passes as well as passes by as many as 18 vehicles.
As expected, damage to vegetation has tended to be greater in areas of blanket bog and heather, and less in areas of purple moor grass. A combination of the vegetation and the number of vehicle passes has determined the damage that has been caused on individual tracks. A noticeable additional factor is the number of sharp turns made on slopes. Those invariably produce bare patches of ground where the vehicle tracks lock and twist.
In areas of blanket bog and mire, the tracks tend to cut into the peat in short sections only. That may take several years to recover, although it is heavily dependant on future track use. Young heather plants are not damaged, but wherever the growth is old enough to include woody stems they have been abraded. That has led to desiccation, which is likely to cause the death of many plants. Recovery in those areas will be slow, dependent on seedling regeneration, and perhaps the re-growth of plants that have not been too badly damaged.
The greatest number of tracks around Hare and Lynch tors were on purple moor grass. The vegetation in those tracks is likely to recover provided that the tracks are not used further. The new tracks are mainly in areas of lightly grazed vegetation through which it is difficult to move. There are signs that many of the tracks produced by the BV206s have subsequently been used by people for walking, stock grazing and for some stock movements, and by other vehicles such as Land Rovers and quad bikes. That factor is of most concern, as it is likely to determine the length of recovery, and it could lead to permanent tracks and paths being established in some areas. Many of the tracks are still highly visible across wide sweeps of the most beautiful open landscape.
The areas most notably affected are those south of the existing Dinger tor hard track, thro ugh the Brim brook up to the western side of Great Kneeset, west of Little Kneeset, the east and south flanks of Great Amicombe, the western side of Fur tor, which is nearly 2,000 ft high, over the meads, north-east and south of Lynch tor, west of Cocks hill, and parts of Langstone moor towards Roos tor. Other tracks from the Willsworthy camp, on the west of the moor, exist around Hare, Sharp, Doe and Chat tors and through the Rattle brook below Deadlake Foot. The head ranger of Dartmoor national park has recorded the general extent of those tracks, and photographic illustrations have been presented to the national park authority.
The authority's ecologist has visited a number of locations in the company of an ecologist from the Department for Environment, Food and Rural Affairs' rural development service. Initial reports of the damage were received from
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DEFRA in connection with the forest of Dartmoor's recent entry into the environmentally sensitive area scheme and the accommodation of military use within the scheme's objectives and achievements. Although recovery is expected, its speed and permanence is heavily dependent on deterring all potential moor travellers, walkers, commoners, military personnel and others from following the tracks created, which is no mean task given the temptation and convenience that they now provide.
Since the Duchy of Cornwall renewed the licence for military training on the estate in 1991, some very positive MOD conservation activities have benefited both the historic environment and the wildlife. The general standards of care and range maintenance have improved. That damaging incident is, therefore, all the more regrettable.
The Dartmoor national park authority has expressed concerns that a new contract recently awarded to Landmarc to deliver various aspects of range maintenance and operations may be affecting standards and may have been a contributory factor in that instance. Whether the impact of the BV206 exercise is long term or not, the complaints and dismay expressed in various quarters are sufficient to justify an investigation, this debate and whatever action is needed to avoid any repetition of the incident. The Dartmoor national park authority has made robust representations to the MOD, the Duchy of Cornwall and the Dartmoor steering group.
Will the Minister confirm that the use of BV206 vehicles away from hard tracks will now be prohibited? Will the MOD monitor recovery and carry out at the Government's expense any restoration agreed necessary by DEFRA and the authority's ecologists? Will the MOD bear responsibility for discouraging commoners, the public and service personnel from following the routes created until recovery is complete? Finally, will he confirm that standards will not be diminished by the engagement of Landmarc?
As a life member of the Dartmoor Preservation Association, I cannot allow this opportunity to pass without raising the matter of military litter. In a letter, the splendid chief executive of the association, John Bainbridge, told me of an ex-soldier who, on 4 September, led a walk around Gutter tor mire and Ditsworthy farmhouse and encountered untold rubbish, probably 90 per cent. of which was military.
There were more than 50 spent 5.56 mm cartridge cases, 11 empty cardboard cartridge boxes, which hold 25 rounds each, six used smoke canisters, untold ration pack wrappings and one damaged Hexi stove. While looking around Ditsworthy farmhouse, green twine, which looks like wool, was found but it was strongly tied against the walls to keep the public out. That illustrates a lackadaisical approach in the military, which is new; it has not been seen before.
It is difficult to sustain the untamed wilds of Dartmoor while permitting hundreds and sometimes thousands of military personnel to use it for training. I have always advocated Bodmin moor as the right place for training. Therefore, while the Dartmoor national park authority watches powerless from the sidelines and the Dartmoor Preservation Association howls in anguish, in reality, nothing can halt the destructive forces and preserve for the nation that unique environment, unless the Minister is minded to intervene, and intervene he should to protect from destruction the last great wilderness in Britain.
4.33 pm
The Parliamentary Under-Secretary of State for Defence (Mr. Ivor Caplin): I congratulate the hon. Member for Totnes (Mr. Steen) on securing the debate and giving me the opportunity to talk about the work of the Ministry of Defence on Dartmoor.
The hon. Gentleman has raised concerns about environmental damage to Dartmoor national park arising from military exercises. He has exchanged correspondence with my Department about military activities in the past, and I hope that my remarks will assure him of our recognition and appreciation of Dartmoor's special qualities. The MOD takes its responsibilities to the environment very seriously, and I intend to say more about that.
We are very aware of Dartmoor's place in people's affections. It is held in special regard by all branches of the armed forces, whose first recorded use of it was for training during the Napoleonic and Crimean wars. Okehampton camp, south of Okehampton, was built during 1892, and 4,050 hectares of land were rented from the Duchy of Cornwall for training artillery. That use continued until the second world war, when virtually the whole of the moor was used in preparation for the D-day landings invasion. A reduced area of Dartmoor has continued in such use ever since, playing a valuable role in preparations for the Falklands conflict in 1982 and again more recently for operations in Afghanistan and Iraq.
The terrain and climate of Dartmoor provide conditions that challenge the recreational user and armed forces alike. Walkers and riders enjoy Dartmoor for much the same reasons that it provides an ideal training area for the military: challenging walks, strenuous climbing, unpredictable weather, featureless navigation, and remoteness. Those special qualities allow the military to develop character through resource, self-reliance and leadership skills—qualities that are called on wherever the armed forces are deployed.
Of course, simulation has much to offer these days with advances in technology and we are already exploiting that wherever possible, but simulation cannot replicate all the tests of character and skill provided by the natural environment.
Mr. Burnett: Will the Minister give way?
Mr. Caplin: No. I am sorry.
As well as the regular forces from all three services, not just those based in the south-west who use the moor, locally based Territorial Army units and cadets depend on Dartmoor to provide them with an area to practise tactics and to maintain their weapon skills. In fact, 50 members of the local TA are about to deploy to Afghanistan on operations—[Interruption.] I hope that that is not them calling. I am sure that the Chamber will wish to join me in thanking them for their continuing commitment and dedication, and wish them well.
The hon. Member for Totnes asked me about 45 Commando's training exercise on Dartmoor at the end of June. He was right to say that there was a recent occurrence of surface damage caused by the cross-country vehicle known as BV206. That is a matter of the greatest regret to me and to my Department. It was
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recognised that some damage might occur as a result of the Commando exercise, but with a return to Afghanistan imminent, it was considered that the operational imperative outweighed the argument for not proceeding with the training. In some ways we are the victims of our own success, as the damage is much more noticeable because of the damage-free record in recent times. I am pleased to inform the hon. Gentleman and the Chamber that the repair work was quickly started and, with the help of the Dartmoor national park and English Nature, efforts are being made to minimise any long-term impact. That incident should be considered against the background of a good and improving record of conservation, not just on Dartmoor but throughout the defence estate. In particular, I want to reassure the hon. Gentleman that we have agreed with the Dartmoor national park authority to discourage users from walking or riding along the tracks caused by the BV206. The Ramblers Association and the Dartmoor Preservation Association have also recommended avoidance, and I hope that that will be significant in allowing the rehabilitation of that area of Dartmoor as speedily as possible.
Mr. Steen: I have walked over Dartmoor for the past 40 years so I know it well. The Minister is right to say that the Ministry's record is pretty good. The recent incident is a departure and there is concern about Landmarc. Will he say something about the BV206 in the future, because that is the concern? The exercise also took place on Bodmin moor, so could not the Dartmoor national park, one of Britain's 13 national parks, be avoided if at all possible? The terrain on Bodmin is very similar to that on Dartmoor.
Mr. Caplin: We shall take those views into account, but, because of the operational nature of the training, only Dartmoor was suitable, not Bodmin. However, I shall certainly reflect on the hon. Gentleman's comments.
The Ministry of Defence has been set the challenging target of having 95 per cent. of MOD-managed SSSI sites in favourable or recovering condition by 2010. The Army training estate is responsible for many of them, and current information suggests that it is ahead of the national average with 53 per cent. in the favourable or recovering status. We still have a long way to go, but the chief executive of English Nature tells me that this is indeed a promising start.
It is also worth pointing out that for the third successive year the Army training estate has won the coveted Silver Otter conservation award. This is an award made annually to the best project by a conservation group on MOD land. This year's award went to Foxglove Covert in Yorkshire, where we have developed an ultramodern field centre on a local nature reserve. I cite those as some of the examples of the MOD's environmental and conservation work.
I am pleased that Dartmoor was one of the first areas to introduce an integrated land management plan, which brought together all interests to inform its management and development. With the introduction of an environmental management system to the wider MOD, Dartmoor is again leading the way, with valuable contributions coming from statutory bodies

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such as English Nature and English Heritage, as well as the volunteers who make up the local conservation groups.
In addition, those essential programmes are supported by the rural element of the estate strategy funding programme, which sees £2 million annually ring-fenced across the Army training estate in support of our statutory obligations. Dartmoor is part of that programme. Contrary to the opinion of some, it simply is not in our interests to cause environmental damage, but it is in our interests to protect and conserve our training areas. Let me add that not all military training impacts are adverse; some are positively beneficial to the environment. For example, land used for military training often prevents intensive agricultural practices.
Mr. Steen: The most beautiful part of Dartmoor national park is the northern part—the highest part. It is closed to the public for the best part of eight months a year. It is a contradiction to have a national park that one cannot actually get to. It is true that the conservation and environmental record of the MOD is very good. People cannot access the land because the Army is firing on it and the public are cleared from it: if one closes the land, the corollary is that the environment will be improved. However, that is not the point of the national parks; the point is to get people to visit them, not to prevent them from going.
Mr. Caplin: I was about to come on to access, so the hon. Gentleman's intervention is timely. I know that public access is a matter dear to his heart and to the hearts of his constituents and many other Dartmoor users, including those who visit the moor regularly.
Unless live firing is taking place, the whole training area is open to the public. I am aware that the hon. Gentleman takes a close interest in the opportunities available to his constituents as well as visitors to the area, but I can assure him and the Chamber that the ranges are operational for only the minimum time consistent with our troops achieving their training objectives. When those objectives are achieved more quickly than expected, or when the unpredictable weather I have already referred to closes in, the ranges are opened. In those areas not used for live firing, there are no closures and people are free to walk and ride while training takes place.
I deal now with the hon. Gentleman's point about military litter. Units are instructed not to leave litter on the moor at any time, but it does happen occasionally. I can assure him that range staff rectify the problem as quickly as possible, as soon as it is brought to their attention.
I accept that the paraphernalia of military activity such as flags, poles and lookouts are an intrusion on the landscape, but with the safety of the public paramount
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they are necessary. It is regrettable that a small minority of members of the public fail to accept their responsibility to avoid entering the danger area during published live firing periods. I also accept that there are some visitors who find the presence of troops disturbing. There are also, however, those who enjoy watching their activities, and who appreciate both the contact with them and the economic benefit brought to the south-west by their presence. It also helps to create an essential understanding between the public and the services through increased exposure to the role of the military.
I shall deal briefly with the issue of why military training has to take place in a national park and not elsewhere. Ideally, the military would not choose to exercise in such an area. However, alternative sites of similar size and scope, especially those without an environmental designation, are difficult to come by in the United Kingdom. With the exception of the newly created Scottish national parks, there are military training areas in all national park areas. They predate the creation of the parks. Their military use has meant that there has been no urbanisation, and no use of intensive agricultural practices; that has led to sites strong in landscape and conservation value—hence their designation. The MOD occupies less than 3 per cent. of the area of national parks, but that represents about 30 per cent. of the Army training estate.
At a recent debate convened by the Dartmoor Society to consider the military use of Dartmoor, the Ministry of Defence made a significant contribution to the discussion, and our presence there was warmly welcomed. However, we are not complacent about our use of the Dartmoor national park, or indeed of other national parks. I am aware that some people fervently believe that the military have no place in areas of special beauty and wilderness, and that such activities are inconsistent with the objectives of a national park. I am also aware of an issue with the licence for the use of Duchy of Cornwall land, which will fall due in 2012. We and the Duchy will consider how the renewal will be dealt with closer to the time, and I would not wish to second-guess anyone's views. For my own part, I am keeping an open mind.
In conclusion, it is worth reminding ourselves that in order to maintain our freedoms, and those of others, it is necessary not only to persuade potential foes of our political will and military capability to respond to threats, but to persuade them that our forces are effective and capable of preventing future adversaries from achieving their objectives. It is therefore essential to have a highly trained, well-motivated force that is operationally ready.
It being thirteen minutes to Five o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.