Westminster Hall Sitting of 16 June 2004

Preamble
[MR. JOHN McWILLIAM in the Chair]

Defence Procurement
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Heppell.]
9.30 am
John Robertson: Thank you, Mr. McWilliam. It is a pleasure to see you in the Chair. I hope that we will have an interesting debate.
I believe that it was Napoleon who once said that military victory results from three parts courage and only one part equipment. I will not quarrel with such a renowned strategist, given that my military experience is confined to the more humble armed forces parliamentary scheme. Nevertheless, I want to focus on the equipment on which our forces rely, what is needed, where it is bought, and how it is made. First, I shall consider the way in which decisions about defence procurement are made, the security of Britain's defence requirements, and the scarce financial resources with which we must meet those requirements. Secondly, I shall consider in greater detail the marketplace for defence equipment and the role that our Government should play.
The central problem of defence procurement is how to plan for the uncertain threats in a rapidly changing world that the US Defence Secretary has described as "unknown unknowns". We are not certain about the equipment that our forces will require in future campaigns. For decades, the transatlantic alliance was focused on the containment of Soviet expansion, but in the early 1980s how many people predicted the end of the cold war? Likewise, no one could have foreseen the terrible attacks that were launched on the United States on 11 September 2001 and which caused the US and its allies to reassess the nature of the threats that they faced. In the face of such uncertainty, we are right to emphasise the need for broad-based capabilities.
In recent weeks, concern has been expressed about the resources that are available for procurement. It has been reported that the war in Iraq led to the Ministry of Defence's having to borrow £500 million from procurement budget funds to cover short-term costs and that that sum was due to be paid out on the Eurofighter programme in the mistaken belief that it would be delayed and therefore payment would be put off. Will the Minister comment on the procurement budget and update us on discussions between the Secretary of State, the Chief Secretary to the Treasury and the Chancellor of the Exchequer about the defence budget for the years ahead?
Although those concerns about funding are real, we should put them into context. Labour introduced five years of year-on-year real-terms increases in the defence budget, and the last round of spending was particularly beneficial to the armed services. That compares with a swingeing cut in defence spending of nearly one third in the previous decade. I am not making a party political
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point. Indeed, politicians across the spectrum recognise that the end of the cold war reduced the threats that our conventional forces and nuclear deterrent were designed to repel. I want to emphasise the wider context of these funding issues: massive long-term investment in the armed forces and a vision of the armed services as a worldwide force for good.
Having established the need for strong armed services and the Government's firm belief in the need for effective procurement, there are still controversial issues about what equipment is required. There has recently been controversy over the Royal Navy's needs as it transforms from a cold-war-based service to one that can genuinely project global power. As the Minister knows only too well from my frequent questions, the BAE Systems yard in Scotstoun in my constituency is building the first of the Type 45 destroyers. The decision to buy Type 45s has been much criticised, most recently by Sir Max Hastings in The Spectator and by a retired naval officer, Lewis Page, in Prospect. I want to make the case for the Type 45s, and I would appreciate the Minister's active and vocal support.
The arguments against Type 45s have focused on the changing threat to the UK—the end of the single, overwhelming threat from the Warsaw pact and the rise of less predictable, and unstable, threats from failed states, rogue regimes and international terrorism and crime. Sceptics say that where a global projection is required, destroyers such as Type 45s are of use for little more than as venues for cocktail parties. However, that does not recognise the fundamental role of destroyers and frigates in the successful delivery of maritime force projection. They are equipped with a suite of defensive systems that were vital in the Iraq crisis, during which 95 per cent. of all United Kingdom military equipment travelled to the Gulf by sea. They also contribute enormously to our layered defence. Aircraft based on land, on aircraft carriers and on destroyers and frigates form the outer layer of our defence. Medium-range ships are carried in escorts such as the anti-air missiles in destroyers and the anti-ship missiles in frigates.
Much has been made of the danger of obsolescence, particularly in relation to the Type 42 destroyer. However, I have seen in person the first of the new Type 45s that are being built in Scotstoun, and they are vastly more capable and therefore have the potential to make the Royal Navy even more effective. It is also important to remember that destroyers and frigates are useful and can be utilised when international events take an unexpected turn for the worse. For example, in 2003 the frigate HMS Iron Duke sailed to fulfil our north Atlantic patrol commitment. After it arrived in the Caribbean, the situation in Sierra Leone deteriorated and the ship was sent 3,500 miles to west Africa, arriving in Freetown less than two weeks later. The riverine operations and armed patrols that were carried out by the forces involved were decisive factors in reducing the strength of the rebels at that point. Not only that, but on returning to the Caribbean the Iron Duke conducted counter-drug operations and seized more than 3 tonnes of cocaine. Destroyers and frigates have been able to undertake tasks ranging from high-intensity war fighting in Iraq, smaller-scale regional engagements such as those in Sierra Leone, and humanitarian disaster relief such as that in Montserrat. Does my right hon.

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Friend agree that those ships are not merely relics of the cold war, but have an active role to play in the 21st century?
Another area of concern is that of equipment and clothing for our armed forces. That was the subject of a great deal of media criticism in the run-up to the war, some of which was fair, some less so. After all, Britain deployed a force comprising roughly the same amounts of men and kit as that which we despatched to the 1991 Gulf war, in half the time. We made great strides forward in the intervening 13 years, and that should be appreciated. Nevertheless, the need to modernise our communications, particularly in-theatre, is seen as of paramount importance. Will my right hon. Friend give an up-to-date position on new communications systems for our armed forces? If that is not possible today, will he be good enough to write to me? Clothing for our front-line troops in Iraq was not all that it should have been, although it was not quite as bad as the media presented. I would argue that a sufficient supply of desert clothes and boots could have been achieved in advance of deploying our forces. In the context of this debate, however, I make no apology for concentrating mainly on naval procurement, about which I have spoken many times in the House. I will continue to fight my corner for shipbuilding on the Clyde.
Now that I have established the strategic need for ships such as the Type 45, I want to examine the ability of the defence market to provide them. The Scotstoun yard, along with its sister yard across the river in Govan, is owned by BAE Systems. We should recognise the benefits that that company brings to the UK economy. In 2002, it employed 40,220 people in the UK and invested £500 million in fixed capital. BAE Systems represents a substantial base of intellectual capital in the UK and continues to invest in maintaining and upgrading that capital. I would therefore be grateful if the Minister gave his views on the need for a defence industry strategy that recognises the need to retain intellectual capital in the UK, because that generates employment and contributes to the independence of our foreign policy.
I want briefly to consider three points: first, the future of the Scotstoun yard; secondly, the performance of BAE Systems; and thirdly, competition in the defence market. As my right hon. Friend knows, there has been speculation about the Scottish shipyards in the media, especially the Glasgow Evening Times. Scotstoun appears vulnerable as more of the work on the Type 45s transfers to the Govan yard. BAE Systems has so far been able to provide little clarification other than to emphasise its obligation to shareholders to consider approaches from all of its businesses. That is of great concern in my constituency.
Decisions about defence procurement cannot and should not be based primarily on the need to protect jobs. The needs of our armed forces must, and always will, come first. The case that I want to make is twofold: first, that as the capabilities of the Scotstoun yard meet our current requirements, it is good for the Navy if those shipyards are secure; and secondly, whatever decision is made about the Type 45s, we owe it to the workers of the yard not to leave them in a state of uncertainty.
Mr. Mohammad Sarwar: These are not just speculations. When we met the managing director of BAE Systems, he told us clearly that if he received an offer for the shipyard he would sell it. That is causing a lot of anger and uncertainty among the work force in the Govan and Scotstoun shipyards. What does my hon. Friend think will be the impact on the work force if BAE Systems sells those yards? BAE Systems is a very large employer that is vital to the UK economy. Does my hon. Friend agree that there should be a better relationship and understanding between the Government, BAE Systems and trade unions?
John Robertson: I thank my hon. Friend, whose constituency shares the lower Clyde with my constituency, for making valid points to which I shall return later. It is important not only for BAE Systems, but for all shipyards, that the Government and shipbuilders understand what is required in terms of the need to keep shipbuilding both in this country and afloat—if Members will excuse the pun.
Can the Minister give guarantees regarding the contracts on which the Scotstoun and Govan yards rely? Can he confirm that our war vessels will be built only in the UK, and that no work, either for the Type 45 or for any other warship, will be lost abroad? There are rumours about some kind of get-together with the French in their design of the third aircraft carrier—it would be their fin t carrier—so that the work for the three carriers is split between France and Britain. Can my right hon. Friend assure me and workers in British yards that is not the case and that the two carriers will be built in Britain?
My hon. Friend the Member for Glasgow, Govan (Mr. Sarwar) referred to the wider issue of BAE Systems and its relationship with the Ministry of Defence. We all recognise that the position of BAE Systems as the principal defence contractor based in the UK means that the Government must have a close working relationship with it. My experience leads me to believe that both sides can take action to help each other to work together better. BAE Systems has delivered late and over budget on almost every project for years, although, to its credit, its latest accounts show improvements. I am in regular contact with representatives of the company in connection with constituency issues, and many of them are open and helpful. However, the management can be evasive and unhelpful in their contact with politicians. Although such an attitude by no means typical of all in the company, it is a particular problem at the upper management level. Does the Minister have a view about what can be done to improve the situation? Will he put on record his recognition of the improvements that the company is making?
A good relationship between the Ministry of Defence and our prime defence contractor is vital. It is a two-way street, and I hope that both sides will work hard to improve the relationship. During my debates and meetings with MOD representatives, I have found that, although they have the needs of the country at heart, a slight paranoia is creeping into the relationship with BAE Systems. That paranoia is perceived among those on both sides. Will my right hon. Friend try to ensure that the two bodies can get together to work in a

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constructive manner? That is of paramount importance to the armed forces for whom the company makes its goods.
A happy resolution to this matter would be in BAE System's interests, given the competition that it faces. The Government operate an open procurement system. There are other strong players, such as Thales, and on the continent EADS is working hard to build up its military and space businesses. Defense companies are working hard to break into new markets, and BAE Systems has been successful in that —according to Bank of America Securities, 21 per cent. of the company's sales are made in America.
Governments need to think strategically about cooperating with partners. It is natural that we should look first to our close ally, the United States. There are, however, impediments to US-UK co-operation in defence procurement—for example, America's protectionist legislation, as has been admitted by Bob Bruce, director of Atlantic armaments at the Pentagon. Likewise, the Americans are unhappy because they perceive a fortress Europe of nation; it champions and directed competition. What steps can the Government take to encourage competition and innovation?
I believe that there are many reasons for optimism about Britain's defence procurement policy and its future prospects. I thank the Minister for all his work and for his assistance in my attempts to help the workers of the yards in Scotstoun. I am sure that my hon. Friend the Member for Glasgow, Govan feels the same. I also thank the Minister for Defence Procurement, Lord Bach of Lutterworth, who has been unfailingly helpful and courteous in his dealings with me.
I believe that we are well placed to meet Britain's security needs in the years ahead. I am sure that my right hon. Friend will address the issues that remain to be resolved and that he will do his utmost to respond to my questions and the fears of the workers throughout the country.
9.49 am
Jim Sheridan: I begin by congratulating my hon. Friend the Member for Glasgow, Anniesland (John Robertson) on securing this debate, which is vital not only to the whole of Britain, but to the west of Scotland in particular. He, my hon. Friend the Member for Glasgow, Govan (Mr. Sarwar) and I have the privilege of representing constituencies in that area.
The defence industry is a vital component of the economy of the west of Scotland. I shudder to think what would happen to the economy of not only the west, but the whole of Scotland if it were threatened in any way, either by the Ministry of Defence not placing orders, or—the ultimate fright—by the Scottish people voting for independence, thus destroying an industry with a proud history.
I spent most of my working life in the defence industry, as I am a former worker at Barr and Stroud —now called Thales. I also spent years working in Yarrow shipyard on the River Clyde. I congratulate the people whom I worked beside on the education that I received during that period, for which I am eternally grateful. Working for those companies, I witnessed the deep frustration of both the management and the workers
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when dealing with the Ministry of Defence. Without being over critical, I have to say that it is one of the most difficult organisations to deal with in terms of procrastination in placing orders. It is extremely frustrating waiting for orders that keep getting pushed further back down the pipeline. Companies and management sometimes have difficulty retaining their work force while waiting for those orders to come through, and in holding on to the spare parts and components needed to fulfil the contract. The Ministry of Defence is not an organisation that one would choose to work with.
One of the benefits of working in the defence industry is the vast amount of money spent not only by Government but by private companies on research and development. A number of research and development offshoots from defence companies have benefited commercial markets, none more so than those in the medical field. I pay tribute to those working in the defence industry, particularly those involved in research and development.
There are also many shipbuilding offshoots. Ferguson, in my constituency, is a commercial shipyard. It does not wait for defence contracts, but goes into the commercial market for work. It is only right to mention the frustration that the management and workers at Ferguson felt recently when they lost out on a Government contract to build a ship for the Department for Environment, Food and Rural Affairs. Of the four companies that tendered, Ferguson was the only British yard, but it lost out to a Norwegian yard.
The most frustrating aspect is that the Norwegian yard will not be building the ship; the job will be subcontracted to Poland to exploit cheap labour in eastern markets. The management and workers at Ferguson shipyard are asking why British yards cannot win British contracts. The complex system of dealing in the European market and having to adhere to European legislation is part and parcel of life, but that does not appease those who depend on the British Government to defend British jobs and give them British work.
John Robertson: I pay tribute to the work that my hon. Friend has done for Ferguson shipyard. I have spoken to him many times about the problems that we have in gaining orders, particularly in contrast with European companies. Does he agree that there are rules in Europe that apply only to Britain? Other countries like to bend, twist and misuse the rules to their own advantage. Why can we not do the same?
Jim Sheridan: I thank my hon. Friend for that timely intervention. There is a perception—unfortunately, I can put it no stronger than that —that the British play by the rules while other European countries do not. I can put it no more strongly than that, because we do not have any evidence. I have raised the subject with the Department of Trade and Industry; it is time for us to take a closer look at how companies from other European countries manage to secure contracts when we in Britain cannot. It is deeply frustrating when British workers cannot get British contracts from the British Government.
Mr. Colin Breed: I entirely agree with what the hon. Gentleman has said. I was unaware of the situation at Ferguson, but does he not agree that it is strange that we have allowed a

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manipulation of the rules? A subcontractor from a business outside the European Union was allowed to subcontract inside it. If that had been done directly, it probably would not have been allowed or possible. It would be interesting to know whether that subcontract was made clear at the beginning. If it was, there has been a clear subversion of European Union rules.
Jim Sheridan: I thank the hon. Gentleman for that valuable intervention. He is right to say that this is an extremely difficult matter. DTI officials have told me that the situation was explained to them. The Norwegian company, whose name escapes me, made it perfectly clear that it would not build the ship in Norway, but that it would take advantage of—indeed, exploit—the cheap labour in eastern Europe to do that.
Not only the workers in Ferguson shipyard, but workers throughout Britain, are asking for a level playing field—no more than that. When they tender for contracts, they want to do so on the basis of fair competition, rather than on the basis of companies being able to subcontract their work to eastern European countries. We must take this matter seriously; perhaps we should look at it again later.
We go through lean periods, so defence companies should not be totally dependent on defence contracts. The country needs a strong defence, but the Ministry of Defence has to work within limits. I encourage all companies currently engaged in defence contracts to look seriously at the possibility of defence diversification where possible. In my trade union life, I spent a number of years working alongside people in the defence industry; I tried to encourage companies to move into defence diversification, but that was extremely difficult.
Let me explain what the situation used to be. When the MOD was not coming forward with contracts, BAE Systems—or Kvaerner, or Yarrow as it was then called—would send its shop stewards to lobby MPs and to say to them, "We won't vote for you if you don't get us an MOD contract." That is how it did its business. If the organisation had put the same energy and resources into trying to get into commercial markets as it put into trying to blackmail and bully politicians to get contracts that were not there in the first place, it might have got the contracts that would have secured the jobs.
We need to think seriously about how companies can get the money, the research and the resources to address defence diversification. Again, the MOD and the Government have a role to play; they have an opportunity to assist companies in their research and development on contracts other than defence contracts.
Another main element of the defence industry is the apprenticeship opportunities that it gives young people. When I visit the yards in Govan and other parts of Glasgow, I am proud when I see young people—not just young men, but young women as well—learning good quality trades that we need in this industry, and in this country. Not everyone wants to go to university; some people are particularly good at other skills. It is important that defence industries such as those that we
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are talking about are given the opportunity to offer quality training to such young people, because our wider society needs that.
John Robertson: My hon. Friend makes a valid point that I omitted to include in my speech. Although I have attacked various companies for misusing their unions, and BAE Systems is more than a little suspect in that respect, it should be congratulated on the apprenticeships that it has provided on the Clyde. I place on record the fact that more than 100 apprentices came into the yards in Govan and Scotstoun last year, and there will also be 100 in the coming year. That is a sign of what we want to do with our young people—give them proper jobs. My hon. Friend makes a valid point: not everyone goes to university. I did not go to university. I worked hard to get where I am today, and those young people will have the same opportunity to do that.
Jim Sheridan: My hon. Friend is right. When I return to some of the companies that I worked for, particularly Thales in Glasgow, and meet the trade unions and the management, it gives me great delight to see that some of the young people who were doing apprenticeships when I was there are now fully fledged engineers, doing a first-class job and producing high-quality goods, not only for the MOD but for the whole defence industry.
I was one of the people who, during the discussions about the contract for the aircraft carriers, was not tied into the belief that it should go to BAE Systems simply because that was a British company. I did not believe that it was a British company, and I still do not. It is a multinational company, out to make as much money as it can. If there is anything British that we should be celebrating, it is the British workers who produce the goods. When it comes to producing quality goods, British workers are as good as, if not better than, any other workers that I have seen, and the defence industry provides good-quality, well paid jobs. If we lose them, we will all be in serious trouble.
I have worked beside others in the defence industry, and my first-hand experience is that those workers are among the most efficient workers. They are also the most adaptable when it comes to accepting change, and I pay tribute to then for that. My experience of working in the shipyards in the 1970s was that there was a great deal of demarcation, discrimination, and people not being able to get on with their jobs because of outdated practices. However, the defence industry is adaptable, and has been and still is one of the first industries to make changes in that respect. That is no accident; it is a result of the good management of the companies and the pragmatism of the workers and trade unions. At the time that I described, the unions gladly recognised that there had to be change, particularly on the Clyde. If there had not been change, none of us would have survived.
One of the proudest moments that I have ever experienced came when I was working in a shipyard and saw a frigate being launched. It is an extremely proud moment for the workers when they see a frigate that they have worked on slip down into the Clyde, and they know that the product is of good quality and was delivered on time. Equally, from my experience of working for Thales, which builds some of the most

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complex equipment that the British armed forces use—indeed, it is used throughout the world—I know that it is extremely gratifying to see such equipment being put together at the end of the production line.
However, the debate is not just about ships or weapons; it is about other services in the defence industry that we depend on. I well remember looking inside a Challenger tank—what a formidable piece of equipment that is! Again, we should celebrate the fact that people can produce such equipment. That said, for a time we had some difficulty in marketing the British Challenger tank, particularly under previous Governments, when we had some difficulty in convincing them that that tank was the best. We did so eventually, but if the British Government do not show confidence in British products and British workers, how can we convince others to buy such equipment?
However, as I said, the debate is not just about equipment such as tanks and ships, but about other services that we provide in the defence industry, which are equally important. I shall digress slightly and mention my concern about the possibility of the defence fire service being privatised. Again, that idea should be examined seriously.
Many jobs have been lost in the defence industry over the years. In fact, more jobs have been lost there than in any other industry that I am aware of. I am proud of the fact that that was done by companies and trade unions getting together, recognising the dangerous situation that they were in and taking the appropriate action to deal with it. I pay tribute to them, because if they had not acted at the time, I doubt that we would have any shipbuilding left, particularly on the Clyde.
If we are to have a strong, efficient and robust defence industry, we have to give the management and the workers the tools to do the job. That is why we need a long-term strategy that allows the employer to plan, where possible, some years ahead in placing contracts and getting the tools to do the job. It is not just about the employers, it is also about the suppliers to the major contractors, who have a right to know about that strategy. More importantly, the employees in the defence industry must have some idea about where the Government are going with their strategy for defence and how that will impact on them.
10.6 am
Mr. Colin Breed: I welcome this timely debate, and I congratulate the hon. Member for Glasgow, Anniesland (John Robertson) on securing it. It is timely, because we have a considerable military presence throughout the world, and how we perform in that respect will be dependent on the procurement policy that has been developed over recent years.
The formulation of any defence procurement policy must be based on a firm strategy that takes account of the perceived and actual threats and how they will be countered. However, I suppose that we all accept that in recent years, it has been difficult for anyone to decide what the perceived threats are, and where they will come from. The world has become a more dangerous and difficult place, so it is a lot more difficult to produce firm strategies to counter such threats.
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Inevitably, cost will always be an important element, but I agree with what we have heard already this morning, which is that it is almost more important that there is a budget with stability over the long term, and that any short-term unexpected emergency expenditure should be found from contingency funding or reserves. Treasury demands for cutting expenditure in the middle of defence procurement programmes inevitably lead to knee-jerk reactions, and when we look back at what was spent and achieved, we often see inefficiency and poor value for money. Far too many defence contracts undergo huge changes during their lifetime, to the inconvenience of the contractor and at the expense of the Ministry of Defence.
We have learned something that the Minister may like to comment on. There is to be a 5 per cent. cut in the funding of the MOD, which will reduce the amount of money that it thought it had to spend next year. Much of that money will be directed towards running costs, rather than the acquisition of new equipment. The meaning of that for our present deployments in Iraq, Afghanistan and the Balkans needs to be explained more clearly. Will those be affordable on current budgets? Where is the additional money coming from?
Iraq is a huge cost. It is estimated that it costs about £80 million a month to keep our 11,000 troops in Iraq. Although I accept that the Chancellor has said that the war will be funded in full, we have not learned what sort of time scale is involved; it could be months or years. In the meantime, it appears that the money, in a cash-flow sense, has to be found from the defence budget, with all the implications that that will have for existing procurement programmes. It is precisely such expenditure that should be found from defence contingency budgets and reserves, and not through unexpected raids on the defence budget as a whole. That funding issue has been at the heart of many problems, and particularly those between the MOD and its contractors.
I accept that there will always be difficult choices to make in this fast-moving and technological world, but it appears to me, and to many others, that too many of our recent contracts have been elongated; they have been drawn out far too long. Equipment almost becomes obsolete before it is delivered—yet our ability to maintain a technological edge is often at the heart of the contract renegotiations that cause the process to take longer and cost more.
Of course, affordability and capability are the key considerations in any defence procurement policy. In the defence White Paper published in December 2003, the MOD confirmed that it had shifted to network-enabled capability, with a stress on anti-terrorism measures such as information gathering. Looking back at the situation before and after September 2001, that seems entirely appropriate.
What needs to be cut to pay for the new capabilities? They are, without doubt, extremely expensive. Some of the expenditure needed may not even be precisely known, and that creates even more uncertainty in the budgets. It is estimated that there could be a shortfall of about £4 billion in the procurement budget as a result of the need to pay for big-ticket items such as the future carrier, Eurofighter and the joint strike fighter in the next few years. Again, there is a cash-flow issue, and we need to know how the MOD is coping with it. The

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subject was referred to earlier. For companies that have received contracts and are relying on payments, uncertainty about whether they will indeed receive that payment is a worry.
In a former life, I managed many cash-flow situations, and am only too aware that customers often invoke tiny conditions in order to escape having to pay what they should, or dispute such conditions long enough to place contractors in a difficult position—they have had to pay their work force and acquire the material and everything else, so they are relying on payment. Far too often, large companies dealing with small companies, and Departments dealing with contractors, invoke small aspects of the conditions of the contract to avoid making payments on time, placing companies in extreme difficulties.
Clearly, we need a constant review of what is being purchased and of the number of items required. The defence procurement budget needs to be tightly controlled; we all accept that. Certainly, we do not want unnecessary waste, but sometimes we incur it by being too restrictive in our contractual arrangements. Often, there could be a far closer working relationship, which would benefit both the taxpayer and the contractor.
I hope that the Minister can clarify an issue raised recently in the newspapers —the potential sell-off of new Eurofighters once they have been received. I am not certain, but I think that the claims are being refuted. However, while the RAF may well be the primary customer for those Eurofighters, a number have been earmarked for immediate sale. If the contract is big enough, they could even be sold at a loss. I am not certain where that fits in the overall budget, and why it may be necessary, but it is perhaps an example of the fact that procurement budgets need to be more closely managed.
Once we have considered strategies for the countering of threats and the acquisition of appropriate assets, it is also important for a procurement policy to take account of the likely sources to which orders will be given. Reference has already been made to that aspect. In defence, in common with almost every other commercial industry, globalisation is creating fewer but larger suppliers. In telecommunications, aircraft manufacture and the pharmaceutical industry we are moving ever further in the direction of huge global companies.
That is also happening in the service industries. There are only four or five large international firms of accountants, making it almost impossible for some businesses to find alternatives for their auditing requirements. That mainly happens through acquisition and merger, although in this country, in Europe and in America there has been clear competition policy. We have the recent example of the Westland helicopter business becoming wholly owned by an Italian company, Finmeccanica, which formerly owned 50 per cent. of it. There are also continuing rumours that one of the MOD's principal domestic suppliers, BAE Systems, may become owned or partially owned by an American defence contractor.
The Government are on record saying that the ownership of companies or contractors is unimportant, and that only their location and the retention of their
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intellectual property rights should matter. I beg to differ. Similar arguments were used 20 or so years ago in the south-west when a number of companies were acquired through acquisition and merger. Yes, it was laudable if a business was still Operating there and still had the same personnel, so its ownership was regarded as immaterial. However, in the next 10 to 15 years when rationalisation took place—when there were cuts in the company, or it was acquired by others—it was the peripheral locations that suffered.
Over the last 10 to 15 years we have seen a slow but almost inevitable drift towards closure of those larger businesses. They have moved elsewhere. Exactly the same could happen on a national scale. We used to have large businesses with good research and development operations, employing many people and with worldwide customers. Through a series of acquisitions and mergers we have seen research and development facilities disappear to other places. Only a rump of those original businesses remains.
John Robertson: I am following the hon. Gentleman's arguments closely, and I agree with much of what he says. Can he tell me what he would do about those companies? What safeguards would he incorporate into businesses to prevent that from happening?
Mr. Breed: That is part of our competition policy. It is difficult when we are subject to European competition rules too. I do not disagree with the idea that in order to be competitive on a global scale, many companies need to be on that scale themselves. But certain industries—the defence industry is the key one—need various protections to ensure that the domestic contractor is maintained.
Threats of moves abroad, and of British defence companies being owned by foreign companies, need to be faced by the Government. It is not enough to hope that companies will continue to choose the UK as their base. I hope that Westland helicopters will continue to be a firm provider of good helicopters from its base in Yeovil, but it cannot be beyond the bounds of possibility that if there is a further round of acquisitions, the Italian company itself might ultimately be acquired by someone else. The new owner would examine the operations that Finmeccanica was undertaking and would see that it had a large base, perhaps in Yeovil, and other locations in Italy. The requirements of any company that acquired it might be totally different, and the operation at Yeovil might well be thrown to the winds. There must be far more longer-term strategic thinking about the ability to provide our own defence equipment.
The UK has opened up the defence market, and I accept that the Government's wish to do that is probably the right thing. It will benefit the British taxpayer, and I hope that it will help to achieve global stability. However, it is vital that other countries do the same. In the meantime, I hope that the Government will look closely at the loss of any further domestic defence contractor to foreign ownership. This must not be a case of the UK forging ahead and everyone else protecting themselves in the background and leaving us vulnerable for the future.
Of course, the more we procure and manage capabilities jointly, the more possible savings there will be for the UK and the more so-called "bang for our

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buck" we will get. We should not worry too much about pooling capabilities and sharing costs with European allies—and, indeed, with the United States. However, it is vital that in concert with that aim there is a clear policy to ensure that cross-border mergers and acquisitions will provide security of supply and maintenance of vital research and development work in the UK, and that intellectual property rights do not disappear from this country. Our troops stationed around the world are engaged primarily in nation building and peacekeeping. Our immediate priority must be to keep them well trained, well supplied and well looked after, and in ensuring that in the immediate future, the MOD thinks radically about its current procurement programme.
We have obvious short-term demands that must be factored into the long-term requirements. Procurement policy must be flexible enough to meet those inevitable short-term demands, but have an inbuilt dependable stability to maintain expenditure on the big-ticket items; that ensures value for money and proper commercial relationships with our defence contractors. The immediate past has been described as not a particularly happy time for balancing those sometimes conflicting objectives. I hope that the Minister will be able to reassure us that his policies will address the vital issues that have been raised this morning.
Finally, may I raise a matter that has arisen during the past day or so? The Minister might be aware of it. There was an incident in Devonport dockyard concerning the slight derailment of a fuel train. Presumably, it involved radioactive material—submarine fuel. It was a minor incident and I am sure that it was handled correctly, but what disturbs me is that when I received a telephone call from the local newspaper, I did not know anything about it; there have been no MOD press releases.
If we are to secure and maintain the public's confidence in our nuclear facilities, it is vital that details of any incident, however small. are immediately published, along with details of what action has been and will be taken. It is difficult for us, who want to support the dockyard with all its facilities, when reporters come along and tell us about incidents involving radioactive material, which should have been made known to us at the earliest opportunity. The incident was minor, but the way in which it has been handled is not helpful to DML—Devonport Management Ltd.—the MOD or us. I hope that in future there will be immediate notification of incidents, as that will secure the public confidence that is so vital with nuclear installations.
10.25 am
Mr. Gerald Howarth: I congratulate the hon. Member for Glasgow, Anniesland (John Robertson) on providing us with the opportunity to debate this extremely important issue. The debate has been particularly interesting in that it has revealed a great deal of common ground, at least among hon. Members in the Chamber, on the importance both of the defence of our country and of the contribution that Britain's hugely successful defence industry has to make to the provision of services to our armed forces.
I welcome the general agreement among Members. If I make some critical comments, they are not designed to be dismissive of the Government's overall position. I do
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not question the Government's commitment to the defence of the realm—I might have done so in relation to previous Labour Governments, but not this one. The characteristic difference between the debates that we hold today and those that were held in the 1980s is that hon. Members from all parties clamour for more business for their constituencies. That is a hugely healthy development in British politics.
The hon. Member for Glasgow, Anniesland talked about BAE Systems in Scotland. The other day I had the privilege of visiting Crewe Toll and seeing at first hand the magnificent work that is being carried out at the forefront of technology—it is very exciting. As the hon. Member for West Renfrewshire (Jim Sheridan) said, investment in that development—£65 million—is being made by the private sector in the defence industry.
I declare an interest in that BAE System's headquarters are in my constituency. However, I take a fairly independent view on such matters. The industry is more important than one company, although BAE Systems is dominant. I join the hon. Member for Glasgow, Anniesland in paying tribute to BAE, specifically its work in encouraging young people, especially those with good qualifications in technical skills, to join the aerospace industry.
We all acknowledge the battle between the Ministry of Defence and the Treasury to which the hon. Member for South-East Cornwall (Mr. Breed) referred. I would say privately to the Minister that I am on his side in that battle, and if he needs my help, I will be there to support him.
It is five years since the introduction of so-called smart procurement—since renamed smart acquisition—and we are well into the second year of the defence industrial policy. I have to say that progress has been disappointing. Ministers trumpet extravagant claims for the success of the new policy, while the noble Lord Bach of Lutterworth, courteous though I fully acknowledge him to be, liberally heaps all the blame at the door of the Conservative Government of seven years ago. All that hype was brutally punctured when the new chief of defence procurement, Sir Peter Spencer, gave evidence to the Defence Committee on 12 May. He admitted that only one of the seven aims of smart acquisition had been met, and cited what he described as a cycle of failure at the Defence Procurement Agency. He also said that on some projects, smart acquisition had not been implemented as it should have been, and expressed concern that certain smart acquisition projects had passed through the main gate—for the uninitiated, the main decision point—without adequate design maturity. Sir Peter boldly observed that achievements prior to his tenure had been limited—I am not sure when he can next expect to share a drink with his predecessor—and said that there was much to do if the aims of smart acquisition were to be realised. In other words, he flatly contradicted all the extravagant claims made by Ministers for the success of the policy.
Time does not permit me to go through a raft of examples, but I shall outline one —the future rapid effect system, or FRES as it is known in the trade. We have no pictures of the series of vehicles involved in that battlefield system, which was described the Chief of the General Staff, General Sir Michael Jackson, as
"critical to the British Army's future capability".

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According to Sir Michael, it is required to be in service by 2009 at the latest, but the Ministry of Defence is not even at the stage of appointing a system house to assess the project. We warned last year that the decision to put it out to a system house would delay it by as much as a year; and more than a year since it was announced, the assessment phase has still not begun. In last October's debate, I said that we were promised a decision last spring. That was delayed until the autumn, when Ministers assured us that a decision would be made by the end of the year. We are now approaching this year's summer recess and we are still no further forward. I challenge anyone to give me a picture of what the vehicle will look like. FRES's in-service date has already slipped from 2009 to 2010, but 2011 appears to be the only realistic date.
I readily accept the argument for seeking the maximum de-risking of projects in advance of decisions to proceed to production: that is unquestionably sensible. I do not blame Ministers for delaying a project if they are operating so close to the edge of high technology that they have to undertake another assessment to ensure that they get it right; otherwise, they will be accused of putting a project into production without having de-risked it fully, or at least to a sensible extent. However, all the contractors to whom I speak say that their projects are moving further to the right.
On the aircraft carrier programme, we welcomed the Government's decision to bring together the combined expertise of BAE Systems and Males UK, but early progress is petering out. Why cannot Ministers decide who will direct that vital and significantly expensive project? Have they heeded the warnings given by the Public Accounts Committee in the 1980s that the Ministry of Defence should not seek to make itself the prime contractor? While we are on the subject of the future of the carrier vessel, what precisely was the agreement between the Secretary of State and the French that was signed on the Charles de Gaulle aircraft carrier last week?
In the case of private finance initiative projects, delays in decision making are, as the hon. Member for West Renfrewshire said, driving up the cost of bidding as consortiums have to hold their teams together pending a decision by the MOD.
This debate is not only about smart acquisition and the procurement process, but about the defence industrial base, for which the Government have failed to meet their targets. Since General Dynamics' bid for Alvis and GKN's sale of its stake in Westland —the last British helicopter manufacturer—to Italy's Finmeccanica, the issue of ownership and indigenous defence manufacturing capabilities has been brought to the fore. Commercial activity has been frenetic, but the Government have been virtually silent about the ownership of the UK's defence industrial base. Apart from the understandable concerns expressed by Labour Members about the job prospects of a highly skilled work force, the country needs to know whether Ministers are content to see control of the destiny of the bulk of Britain's defence industry pass out of UK hands.
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This is not a question of xenophobia: key issues of national security are at stake. The Secretary of State may not believe that ownership is of great importance. but it has consequences for our ability to retain our indigenous defence industrial base and, ultimately, our ability to prosecute military action. That is a material consideration, given that the UK is second only to the United States in committing to a war-fighting role.
The extensive transfer of ownership abroad could have serious consequences. Overseas managers will make investment decisions on strictly economic grounds, taking into account their home market first. As the hon. Member for Glasgow, Anniesland said, BAE Systems has made a significant investment in Crewe Toll. Reliance on foreign suppliers would unquestionably raise serious issues about the security of supply. The ability to ramp up production in time of war may be reduced if those directing the business owe no allegiance 1 o this country. Similarly, where the UK and the home country of the business are seeking urgent supplies, it must be probable that the home country will come first.
Should offshore companies purchase BAE Systems—we know that they are in the market, and that many UK defence prime contractors go abroad—how will the MOD procure major weapons systems? The options are limited to two. First, it could procure off the shelf; that has the advantage of allowing it to obtain developed systems with a proven operational record at minimum risk and with minimum requirements in terms of the execution of the purchase by procurement staff. The primary disadvantages to that approach are the flow of funds offshore, the loss of UK defence-related jobs, and the loss of national engineering and systems integration expertise. Secondly, the MOD could establish a cooperative develop vent programme with another Government for a major defence article. The difficulty for the MOD, with no national prime contractor, would be that all the work allocated to the UK would be fixed-price and second or third-tier companies and assemblies would probably suffer. Intellectual property, systems engineering and integration expertise would reside with the offshore contractor. A significant amount of funding would be provided to the prime contractor, most of which would never re-enter the UK economy.
The Secretary of State considers intellectual property to be of greater importance than ownership. I agree that it is critical, but there will always be the temptation for foreign-owned companies to suck out our intellectual property and transfer it back home. Ministers have to keep a close eye on what is happening at Qinetiq in my constituency. Too often, technology is developed with British brains and expertise but is not followed through and disappears abroad because there is no market here. That is a serious issue that I flag up as a warning to the Minister.
We cannot be sure what is happening as regards the joint strike fighter. Although we are in pole position with the United States in co-operation on building a first-class aircraft, the fact that we are being denied access to some of the source codes means that we do not have control. Ownership will continue to matter for as long as we intend to maintain an independent defence industrial capability

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In May, Sir Richard Evans, the chairman of BAE Systems, told the Select Committee on Defence: "I think that if we just leave this completely to market forces without actually giving any thought to future potential requirements, which are national interest issues, what we will see is continuing decline in mine and other companies' interests in the UK markets and I think that would be a sad day for the UK."
As the former head of the Defence Export Services Organisation, Tony Edwards, said in a letter to The Daily Telegraph last week:
"The remaining British companies will conclude their best option may be to sell themselves to the highest bidder while their value is at the maximum."
Where do the Government stand? Are they prepared to preside over a grand summer clearance sale of Britain's defence industrial base? Britain is at a crossroads, and we have to make some fundamental decisions about where we stand.
I agree with hon. Members who say that there must be a more mature, sensible relationship between BAE Systems and its principal customer. I put it the other way round: the relationship between the MOD and its principal supplier must improve. Those of us who—dare I say it—love this industry and believe it to be the great jewel in the crown of British manufacturing industry look on aghast at the spat that is going on. The only people rejoicing will be our competitors.
In the defence White Paper published last December, the Secretary of State said that platforms and units did not matter as much as capabilities and effects-based warfare, and promised that he would make specific announcements shortly. I hope that that does not happen on the day before the summer recess and that we will have time to consider what we expect to be major Government decisions. I want to remind hon. Members of a significant matter to which I drew attention during the debate on the White Paper, supporting essay 2 of which stated:
"Since SDR our Armed Forces have conducted operations that have been more complex and greater in number than we had envisaged. We have effectively been conducting continual concurrent operations, deploying further afield, to more places, more frequently and with a greater variety of missions than set out in the SDR planning assumptions. We expect to see a similar pattern of operations in the future."
In other words, as I said at the time, the Government expect multiple, concurrent, small-to-medium-scale operations on counter-terrorism, counter-proliferation and enduring peace support that are well beyond the assumptions of the strategic defence review to be the norm, or to be carried out without creating overstretch. That is a massive challenge for any Government.
I recognise that the Government have difficult decisions to make. However, if they fail to ensure that the British defence industrial base retains the skills, critical mass and ability that are necessary to provide what this country needs, they must carefully consider their procurement policy and the risks to their being able to prosecute operations of the kind to which they have set their mind.
10.42 am
The Minister of State, Ministry of Defence (Mr. Adam Ingram): I congratulate my hon. Friend the Member for Glasgow, Anniesland (John Robertson) on securing this debate. He opened by referring to Napoleon, who
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apparently said that military victory was three quarters courage and one quarter equipment—I assume that my hon. Friend was quoting accurately. May I remind him that Napoleon lost? What he said may still have some resonance, but recent events in Iraq show that equipment is an important issue, which we have to get right.
My hon. Friend was right to raise in passing some of the difficulties that we experienced in Iraq. We put in place the lessons learned from Operation Telic so that we could be sure about the key ingredient of equipment supplies to our troops, who gave 100 per cent., not 75 per cent., courage in the difficult task that we asked them to perform.
My hon. Friends the Members for Glasgow, Anniesland and for West Renfrewshire (Jim Sheridan) and the spokesmen for the Conservative and Liberal parties raised a number of specific issues, which I will try to deal with. However, it is important first to set out the MOD's overall approach to procurement. This year, the Defence Procurement Agency and the Defence Logistics Organisation will spend almost £13 billion on the acquisition of equipment that allows our armed forces to do their job, usually in difficult and dangerous circumstances.
The Department's job is to provide our forces with the equipment that they need at a price that is affordable to the taxpayer and represents good-value through life. However, given the sophisticated nature of much of the equipment that we purchase, it is not surprising that problems are experienced in delivering to specification, on time and to budget. However, we should not let the projects that invariably capture the headlines obscure the many success stories in defence procurement. For example, operations in recent years have demonstrated the outstanding capabilities of equipment such as the Tornado, the Storm Shadow missile, the Merlin helicopter and the Challenger 2 tank and the Warrior armoured fighting vehicles.
In addition, we have a powerful range of new capabilities that have either recently entered service or are under contract to do so soon. The C-17 aircraft has already demonstrated its worth in providing strategic lift, and the Bowman combat radio system, which entered service earlier this year, nine months ahead of schedule, is a critical enabler for increasing operational tempo, firepower and survivability for all three services.
As we seek to advance our ability to project military force and to provide an effective, flexible response to a wide range of threats, both conventional and unconventional, the equipment that we procure must meet the military user's requirement. Moreover, our armed forces, rightly, want it to deliver a battle-winning edge.
The reality is that most, if not all, of the problem projects relate to a procurement policy that has been consigned to history. There is a new set of processes at the heart of the Department, which is enshrined in the smart acquisition process. The MOD has come a long way on procurement over the past five years. Smart acquisition has delivered integrated project teams, a much more coherent military customer organisation and an increasing sense of partnership with industry. The National Audit Office's major projects report,

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which was issued at the beginning of the year, recognised that. However, there is no escaping the fact that a lot more needs to be done.
As part of its review of acquisition processes, the MOD has introduced a more rigorous regime of senior level review of the progress of projects and is implementing proposals to strengthen the Defence Procurement Agency's financial management. We have recognised the critical need to tackle project risk early in the procurement cycle, particularly during the key assessment and demonstration phases. With reference to the point made by the hon. Member for Aldershot (Mr. Howarth), that is why we will not move to main gate—when the main financial commitment is made—until sufficient risk has been removed from a project. In that way we will avoid the costs and delays that historically have affected projects late in the process.
Mr. Gerald Howarth: Will the Minister give way?
Mr. Ingram: Let me move on now; I want to deal with a range of issues, but I will see if there is time for me to give way later.
Competition remains the best procurement strategy for delivering value for money for the defence budget. Competition encourages innovation, flexibility, efficient use of resources, and the development of skills and knowledge.
The hon. Member for Aldershot referred to the defence industrial policy, which the Secretary of State for Defence launched 18 months ago. That policy seeks to sustain and enhance the competitiveness of our defence industry while ensuring that our armed forces have access to world-class equipment at the best value for money. The policy also, for the first time, makes it clear that Ministers must have regard to the impact that our decisions have on our domestic industry, which means that jobs, skills and export potential must be key factors in our procurement decisions. I believe that many saw the Secretary of State's decision to choose the Hawk 128 as the advanced jet trainer aircraft for the Royal Air Force as proof that our defence industrial policy meant something in practice. There was a hotly contested debate, but the decision was based on elements in the defence industrial policy. That decision represented a massive vote of confidence in British industry, and in particular, in the 2,000-strong work force at Brough.
However, in defence, as everywhere else in the modern world, the only constant is change. The industry must therefore constantly look to the future and develop the technologies and processes needed to meet the demands of a rapidly evolving international marketplace. In working together to implement the defence industrial policy we have sought to be open about how we conduct our business and how we make our decisions, and we have also sought to understand fully the pressures faced by industry.
The MOD's job is to deliver the equipment that enables the armed forces to mount rapid and sustainable expeditionary operations. That vision of operations was intrinsic to the strategic defence review. It was reaffirmed in the SDR new chapter and in last year's
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defence White Paper. Maritime platforms—both present and future—are vital in projecting the capabilities set out in those policy statements.
My hon. Friend the Member for Glasgow, Anniesland was right to stress the importance of our future shipbuilding programme and the shipbuilding industry. I will now turn to his contribution to the debate, which, understandably, focused on the shipbuilding industry, and on the Clyde in particular.
The Government it have embarked on the largest shipbuilding programme for the Royal Navy in many years. In the past three years, 15 new ships have been ordered, including six Type 45 destroyers, two amphibious assault ships, two survey vessels and four landing ships dock. I was pleased to be able to join my hon. Friend at the launch of one of those ships, the RFA Mounts Bay, in Glasgow only a few months ago. It was encouraging to see that the next ship of class, the RFA Cardigan Bay, was on the stocks on the Clyde, and that ship will be launched in due course. Given our relationship with BAE Systems, we may be invited to that event too.
Looking further ahead, our shipbuilding plans include the purchase of two new aircraft carriers and the maritime afloat reach and sustainability project to provide new support vessels to replace many of the existing Royal Fleet Auxiliary ships. As my hon. Friends the Members for Glasgow, Anniesland and for West Renfrewshire said, the current shipbuilding programme will crate or secure several thousand jobs in UK shipyards and their ancillary industries throughout the country.
I fully recognise that shipbuilding faces unique challenges at present, not least in Scotland. It remains our policy that all warships for the Royal Navy will continue to be built in the United Kingdom. My hon. Friend the Member for Glasgow, Anniesland asked about the relationship with the French. I do not have time to go into all the details of that now, but I can say that as both the French and the UK Government are involved in a major procurement stream, the industries may find points of compatibility that allow them to maximise best design techniques, knowledge and expertise. Perhaps they can use their skills to ensure that the UK is offered the best price and delivery by companies that are in partnership with the Ministry of Defence.
I do not see that as a threat to the British shipbuilding industry; I see it as in encouragement. We are ahead of the game. Both the French and the UK Government are committed to procuring very advanced ships. Therefore, when we talk about these things, we should ask how we can maximise the best effect for both countries. That is a sensible approach.
Our future programme in the shipbuilding sector is a demanding one, which is why we have commissioned the RAND organisation to examine whether the UK shipbuilding industry has the capacity to deliver our future naval programme. We plan to publish a report of RAND's findings at the end of this year.
The future programme provides a solid basis on which UK shipbuilders can plan. It is essential, however, for industry to seek to widen its customer base, particularly for export orders, by offering attractive designs at competitive prices. Our country's present

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shipbuilding capacity cannot be sustained on defence contracts alone. We need to be successful in wider markets. We constantly say that to tie shipbuilders, and I know that my hon. Friends who rep resent shipbuilding areas recognise that. We encourage companies to market abroad.
My hon. Friend the Member for Glasgow, Anniesland raised concerns about BAE Systems transferring work from Govan to Scotstoun. [Interruption.] I have got that the wrong way round; it is transferring work from Scotstoun to Govan. My hon. Friend the Member for Glasgow, Govan (Mr. Sarwar) was gesturing that I had got that wrong. I knew that I was trying to please one out of two of them.
Mr. Sarwar: BAE Systems' decision to sell its shipbuilding wing is causing uncertainty in the work force and among the shop stewards. They are rightly extremely concerned, because they have gone through this uncertainty for the past four years. Gone is the time when there were going to be new apprenticeships and people were feeling comfortable. The decision has caused the work force considerable difficulty. BAE Systems is able to sell the yards because of the orders. What assurances can my right hon. Friend the Minister give that the work allocated to those shipyards will not be moved elsewhere if the sales go through?
Mr. Ingram: That would be much further down the line. The fact is that the commitments have been made to continue to build within the UK shipbuilding capacity. It is for the market to determine who owns which company. I do not think that my hon. Friends are arguing that we should take over the shipbuilding industry again. Therefore, things are conditioned by where the new ownership rests and what then applies. However, we have strategic interests in all this, and we must have proper oversight at what is happening.
That goes back to my earlier points about the capabilities that we require. We would not want those to be threatened at all. As for a need to put preconditions on any purchase of those yards, or any sale by BAES, discussions are not on the surface; indeed, I do not think that they are even below the surface yet. However, we will have to keep a close eye on that.
My hon. Friend the Member for Glasgow, Anniesland asked whether £500 million was borrowed from the procurement budget to cover the cost of operations in Iraq. That is simply untrue; it is another of those newspaper stories that gains credence because everyone quotes it. We try to rebut it, but no one recognises the rebuttal and newspapers, keep running the story. The additional costs of operations in the Gulf were met from the reserve, which is the normal process for meeting the cost of such operations.
My hon. Friend also asked about the outcome of the ongoing spending review, and the hon. Member for Aldershot said that he would give me every help in that respect, but I am not even going to discuss it today. Hon. Members will have to wait for a lacer debate on those important issues. I would love to be able to say what is in my mind in that respect, but time precludes my doing so.
We have discussed the maritime environment at length, but the rapid delivery of military effect far from the UK requires investment across all three
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environments —sea, land and air—and our equipment
programme recognises that. There are significant aerospace projects in various stages of planning or entering service, the JSF—joint strike fighter—and Typhoon being two obvious examples. The hon. Member for South-East Cornwall (Mr. Breed) referred to the possibility of Typhoon being sold abroad as something that was not to be welcomed. I take a different point of view: this is about quality European technology, and if we can market it internationally—Austria and Singapore have expressed interest in the
aircraft—it can only help our industries.
I realise that the Liberal party's policy is that we should not have a Defence Export Services Organisation, and that we should not actively seek to promote abroad what this country produces, as that is what the hon. Member for Twickenham (Dr. Cable) said when he was the Liberal Democrat spokesperson on trade and industry. If the policy has changed, it would be nice to know that, because it would be nice to know that we had a joint approach in this country, to maximise the best effects of the quality of what we produce.
Mr. Breed: The Minister should not draw the inference that we are not in favour of exports. Our concern about the aircraft was that it was our tranche that we were getting and then selling on, because we could not afford to buy them.
Mr. Ingram: The hon. Gentleman should not obscure a clear announcement—or rather, restatement—of
policy: that his party does not want our expertise to work alongside industry to export to other countries the quality equipment that we produce in this country. If we believe in exports, there must be a mechanism by which we can do that. In terms of Typhoon, we are committed to the 232 aircraft, and we are involved in negotiations on the tranche 2 element. The hon. Gentleman would not expect anything other than tough negotiations between supplier and customer. This is not a case of writing industry a blank cheque; we must continue to ensure that we get the best deal, which applies no matter what we are procuring or from whom we are procuring it. Our commitment to that aircraft remains as strong as ever.
My hon. Friend the Member for Glasgow, Anniesland asked about communications systems, which I take to mean the network-enabled capability, and I will write to him about that. The hon. Member for Aldershot also raised the matter in the context of what is likely to be coming downstream. We are making great progress in developing our processes, and we will make announcements on the matter in due course.
Finally, I compliment my hon. Friend the Member for West Renfrewshire who has done a tremendous amount of behalf of the shipbuilding industry, especially Ferguson's yard in his constituency. The ship he referred to in connection with recent procurement was, of course, not part of defence procurement, so I cannot add much to the points that he made. However, I take issue with the view of "fortress Britain". We cannot stand isolated; we are an exporting nation. We import and export and we must try to buy the best for our armed forces at all times, in shipbuilding, in the air and on the land. They deserve nothing less.

Men and Cancer
10.59 am
Dr. Howard Stoate: Thank you, Mr. Deputy Speaker, for giving me the opportunity to raise this issue in this Chamber.
We are now in the middle of national men's health week, so there could not be a better time to debate the issue of men and cancer. Few health issues could be more serious for men than cancer. It is now the single most common cause of death for them. Every year, 80,000 men in the United Kingdom die from the disease, and 134,000 are diagnosed with it. One in three will be diagnosed with cancer at some time in their lives, and one in four will die from the disease. I am sure that, in one way or another, these statistics will have touched the lives of all Members of the House in a very personal way.
As hon. Members may know, the theme for this year's national men's health week is men and cancer, which means that the debate is doubly well timed. The Men's Health Forum, which organises national men's health week, has done an excellent job in raising this sensitive issue with the male public, not least by producing, in conjunction with the Haynes Publishing Group and several national cancer charities, an excellent book, written by a friend and colleague, Dr. Ian Banks, in a car manual format. The book gives essential information about the disease in a male-friendly style, and offers a practical, step-by-step guide for men to preventing, detecting and beating cancer. I commend it to hon. Members, and thank the Minister for the financial support that her Department gave to the Men's Health Forum to help to produce the book.
I was particularly pleased to learn that the manual and national men's health week have secured the support of the Football Association. Hon. Members may have seen in press reports this week that SvenGoran Eriksson and his coaching team took time out from their busy schedule in the run-up to Euro 2004 to help to promote it. I understand that one reason why the FA was keen to become involved is that Brian Kidd, Sven-Goran Eriksson's assistant coach, is recovering from prostate cancer surgery and has been forced to miss events in Portugal. I am sure that hon. Members will join me in wishing Mr. Kidd a speedy recovery.
There is no doubt that much progress has been made in recent years towards the "our healthier nation" target of reducing the death rate from cancer in people under 75 by 20 per cent. by 2010. The NHS cancer plan, in particular, is improving, and will continue to improve, cancer prevention, diagnosis, treatment and care. These initiatives and others like them are benefiting the whole population, and the Government deserve the congratulations of health professionals and patients alike on their successes in this area.
The establishment of the prostate cancer advisory group, which is working in close partnership with the prostate cancer charter for action, will be instrumental in improving services, stimulating research and raising public awareness about cancer in men. That important development is very welcome, but we must be wary of the pitfall of assuming that tackling cancer in men means simply addressing male-specific diseases such as prostate cancer and testicular cancer. That is emphatically not the case. Action is required against a broad range of cancers.
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I should also make it clear from the outset that I am not seeking to diminish the issue of cancer in women, or to argue that resources should be diverted from work on women and cancer to fund more work on men. Such a step would be disastrous. Nor am I seeking to criticise or to undermine the fine work that is being done to tackle cancer on a population-wide basis. This debate is about how we can improve still further the outcomes for men and in doing so improve the health of the population as a whole.
Men are more likely to develop cancer than women and to die from it. Age-standardised data for England shows that the incidence of all cancers for men is just over 400 per 100,000 of population. The figure for women is only 340 per 100,000—a difference of almost 20 per cent. The comparable figures for mortality show an even starker difference between men and women. Men are 40 per cent. more likely to die from cancer than women. Several of the most common cancers in women are, however, sex-specific and include cancers of the uterus and ovary. The most common cancer in women, breast cancer, is not strictly sex-specific, but it is exceedingly rare in men and is generally regarded as sex-specific for statistical purposes.
The most common cancer in men, prostate cancer, is obviously also sex-specific. We need to examine particularly closely the cancers that can affect both sexes if we are to make a more meaningful comparison between the incidence of cancer and death between men and women. It cannot be doubted that this is an issue of proper concern.
Of the 10 most common cancers that affect both men and women, nine are more common in men—in many cases, markedly so. Extraordinary as it may seem, men are almost twice as likely to suffer from those nine cancers. When it comes to death rates, the picture is even starker, because men are twice as likely as women to die from one of those cancers. The statistics show that for the one cancer for which the incidence rate is lower in men —malignant melanoma, the most serious form of skin cancer—the death rate is higher for men than for women. If we could reduce the incidence of those most common shared cancers in men to the level experienced by women, we would make a significant impact on cancer rates in the population as a whole and, therefore, make progress towards important targets.
It is worth noting that cancer, in common with all other serious illness and disease, is subject to a social class gradient. The poorer a man is, the more likely he is to develop cancer and to die from it. The very poorest men are no less than twice as likely to develop cancer as men in the highest income brackets. If properly targeted, therefore, any strategy to reduce the incidence of cancer in men would also help to reduce health inequalities. Although tackling such inequalities is, quite properly, already a central objective of health policy, the action that is taken often lacks the necessary awareness of, and focus on, the increased effect of gender on health in such circumstances.
Why are men so much more likely than women to develop cancer? There are no established biological reasons why that should be so. We must therefore look to two other sets of factors: men, their attitudes and behaviour, and, more importantly perhaps, the way in which the NHS and other service providers treat men.

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The critical factor is almost certainly to be found in the field of cancer prevention. It is now widely accepted that the majority of cancers are preventable, although risk determinants have been established in only about 50 per cent. of cancers. We know that men in general are more likely than women to drink alcohol at levels that are harmful to health, to eat a poor diet and—this was especially true in the past—to smoke and to do so more heavily. On the face of it, that seems to place the emphasis squarely on the individual man and on the need to change his behaviour. As we all know, however, the real world is rather more complicated.
Putting aside for a moment the relationship between an individual's lifestyle and the intractable structural factors in his environment, as well as the cultural pressures on men to conform to traditional behaviours, we must ask why cancer prevention strategies have been so much more successful with women. The answer is almost certainly that we have not yet got to grips with the need to construct services and deliver advice in a way that is directed specifically at men.
For that reason, I drew attention a few minutes ago to the Haynes cancer manual. The Men's Health Forum has developed considerable expertise in understanding how to communicate with men, and it has supported and encouraged innovative approaches to service delivery. Examples from within the NHS include initiatives to introduce health improvement programmes and basic health cheeks on men's own
turf—in working men's clubs on Tyneside, village halls in Devon, pubs in Wolverhampton and barbers' shops in Bradford. Indeed, Bradford's "Health of Men" project, of which the barbers' shop initiative is part, is an exemplar of good practice in the field. It has just won the northern region health and social care award, and I congratulate it on that achievement
Most significantly of all perhaps the workplace has been shown several times in recent years to be a highly effective setting for work directed at improving the health of men. The Royal Mail, for example, which is the largest employer of men in the country, is using national men's health week to deliver health advice to large numbers of its employees and as a springboard for other, longer-term health-improvement strategies.
The success of this year's national men's health week in England and Wales in engaging the support of the England football team's backroom staff leads me to ask whether the Minister will encourage the football authorities, in conjunction with the Men's Health Forum, to consider developing health improvement initiatives at league grounds. Small-scale work along those lines is already going on in the rugby super league, and men's health messages, which I have been developed by the Men's Health Forum, will appear on line-side signs at 10 televised matches. That is something that we can learn from, and I would very much like the Minister to tell us whether more could be done at football grounds. As I say, it has already been done at rugby grounds.
I am sure that the Minister is aware that the Scottish Executive are committed to investing substantially in a network of outreach health check services for men in a variety of community-based settings. Fittingly, the Scottish Executive are announcing the winning bids for those new services this week. I hope that she will ensure
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that the health services for which she has responsibility consider the Scottish initiative so that men south of the border do not get left behind.
I have been able only to touch on cancer prevention: there is much more that could be said. However, it is important to leave enough time to explore another reason for the great disparity in the incidence of cancer in men and in women. It is commonly believed by many experienced clinicians that men are less good at early detection of potential symptoms and are much less likely to seek help when symptoms are present. That has certainly been my experience in my work as a GP.
Although there is limited research to back up that hypothesis, what evidence there is seems to bear out the perception. One study in Oxford in 2002 found that, of 45 men diagnosed with testicular cancer, some had put off seeking help for weeks or even months after first becoming aware of the symptoms. At a recent meeting in this House of the all-party men's health group, which I chair, a patient who had suffered from cancer very bravely told us that he left it 10 months after he developed rectal bleeding before he saw his GP. He kept putting it off by saying, "It's only a bit of bleeding. It's probably piles. I've been working too hard: it's just stress." He kept on rationalising why he did not need to see a doctor, and it took him 10 months before he received the treatment that he needed. I am quite sure that a woman in that situation would have taken action much more quickly.
At the beginning of the debate, I drew hon. Members' attention to the fact that men have higher incidence rates for nine of the 10 most common cancers that can affect both sexes and higher death rates for all 10. It seems extraordinary that in the case of malignant melanoma, of which there are fewer male than female cases, men are still more likely to die. The reason may well relate to the failure to act soon enough to early signs of disease. Malignant melanoma is an aggressive disease and even a short delay can prove fatal. The cancer tsar, Professor Mike Richards, interviewed in the current Men's Health Forum magazine suggests that the explanation of the paradox is
"almost certainly due to women coming forward more quickly."
Forgive me for returning one last time to the Haynes cancer manual, but the function of helping men to recognise the importance of acting in good time is one that it fulfils admirably. One of the predecessors of the book was the generalist Haynes "Man" manual, which was published in 2002 and has sold more than 80,000 copies in mainstream retail outlets, including car spares shops. That proves that men will take an interest in their own health provided that the issues are addressed in the right way—in a way that is appropriate to them.
For last year's national men's health week, the advice on sexual health in the "Man" manual was reproduced in a pamphlet—a mini-manual—for free distribution to men in a wide range of settings. Some 40,000 copies were given away to punters in Ladbrokes betting shops around the country. That is another good example of how to get health information into the right hands. The mini-manual was extremely well received.
I would like the cancer manual to be made available in a similar format for distribution by national cancer charities and in the NHS. A significant number of cancer charities have been partners in writing the manual,

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including CancerBACUP, the Prostate Cancer Charity, Beating Bowel Cancer and the Orchid Cancer Appeal. The content is therefore reliable and up to date, as well as being delivered in a suitably blokeish style. I urge the Minister to continue to support the production of such a version of the manual and I would like to see whether that can be progressed.
The policy document prepared by the Men's Health Forum to inform the public debate about men and cancer during national men's health week proposes a five-point action plan to improve what is a most unsatisfactory situation by any standards. I do not have time to deal with all the points here and now, but I encourage all hon. Members who are interested in the issue to read the copies sent to their offices.
I endorse all the recommendations, but the one that stands out as deserving the most serious consideration by the Government is the proposal that we set targets for the reduction of cancer in men that are separate from the targets for the population as a whole. That proposal seems well worth trying, at least at a local level, and I would like to see some primary care trusts encouraged to pick up the baton and run with it.
We require medium-term targets for the reduction of risk behaviour in men and longer-term targets aimed at reducing the incidence of cancer. I concur with the view of the Men's Health Forum that it is only by setting male-specific targets that minds will be concentrated on the delivery of male-friendly services and prevention strategies predicated on the recognition of men's health concerns and sensibilities. Such an approach would be challenging and would require innovation, but it would also be hard-hearted and practical.
The recommendations have already been endorsed by 10 cancer and other charities and by the Royal College of Nursing, and I urge the Minister to act on them. I hope that she agrees that closing the gap between men and women in terms of the incidence of cancer and rates of mortality would be a realistic, achievable and measurable objective that could be pursued without any detriment to women.
A successful outcome would be an important contribution to the achievement of gender equality in health, and a leap forward in the pursuit of population-wide targets. I hope, too, that the Minister will take forward an awareness of the importance of men's health in her discussions on the forthcoming White Paper on public health. It is my firm view that we cannot improve the health of all unless we take action to improve the health of men.
11.15 am
The Parliamentary Under-Secretary of State for Health (Miss Melanie Johnson): I congratulate my hon. Friend the Member for Dartford (Dr. Stoate) on securing the debate. It is particularly timely, as he said, because we are in the middle of national men's health week. The theme of this week is male cancers, and I would like to take this opportunity—the second I have had this week—to congratulate the Men's Health Forum for its efforts in raising important issues about men and cancer. I am delighted to say that it does an extremely good job.
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I turn first, as did my hon. Friend, to the excellent Haynes cancer manual. Despite its blokeish style, I enjoyed reading much of it. As my hon. Friend says, the Department of Health has contributed £30,000 to the publication of the excellent manual "Cancer: any age, any time". It is written in a way that is accessible and appealing to men. Our funding has enabled the publication of the manual, and 20,000 copies are to be distributed free of charge by voluntary organisations. Of course, I will be delighted if it meets the target of 80,000 copies set by its predecessor volume. I join him in welcoming the Football Association's support for the manual and its involvement in raising important issues about men and cancer. I hope that the FA will seek further involvement in such public health issues.
I also welcome my hon. Friend's support and congratulation for the work being done under the cancer plan. We have taken great strides, and they can be recognised not I least through the fact that there has been a 10 per cent. cut in deaths from cancer in the period from 1996 to 2002–03. There is much more to do—we need to make continued progress—but we can be pleased by the p ogress that we have made so far.
I agree strongly with my hon. Friend that action is required on all cancers and on improving health and preventing disease. It is therefore important that we raise awareness of cancer and its early symptoms in men of all ages; that is important. I also agree strongly that men need to seek medical advice sooner; earlier diagnosis leads to better outcomes. It is indeed worrying that there are such differences between the outcomes for the two sexes when it comes to cancers, and both the incidence and mortality rates are bound to give people pause for thought.
Of course, most Department of Health campaigns are designed to address a mass-market audience, with special emphasis on socially disadvantaged groups that risk exclusion. The inclusiveness in which we believe is reflected in the creative development progress. We actively seek the views of men in a bid to move beyond having women as the only family health gatekeepers.
Where certain audiences need to be addressed separately or specifically, we have developed bespoke strands. The current tobacco campaign includes a testimonial from male lung cancer sufferer. The advertisement is aimed at both sexes, and has performed well for both male and female audiences. We also address men via public relations activity—for example, via our recent tobacco campaign pull-out in the "Goals" supplement of The Sun. Most of our campaigns are developed according to an understanding of how men consume media differently from women. Radio, tabloid newspapers and online are key environments to reach the male audience. We know that men prefer to access health information directly, rather than to go to doctor's surgeries or a health centre, and that has resulted in the introduction of dedicated websites and telephone helplines, both from the NHS and a number of the key charities. That has increased men's access to health information and the general knowledge of health issues.
As my hon. Friend said, we must do more to reach men in their own settings. I have seen innovative work, and he mentioned some examples, including the work being done by Royal Mail, which we are pleased to learn about. I have also seen more local work done in a

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number of community settings. People have developed materials to distribute in local communities to alert men to the importance of getting checked out for prostate cancer and so on.
We will continue to scope our health campaigning around key target groups, adapting messages and creative work where need be. We wi11 also continue to make our centrally driven campaigns relevant to health promotion at primary care trust level,and complete the circle by obtaining feedback on the efficacy of our approach and its relevance to the target groups.
For example, in my hon. Friend's constituency, partnership work with the local councils is under way through health action teams. During national men's health week this year, the teams are engaging with workmen at Springfield industrial estate to raise the issue of men's cancers and preventive health issues, such as those relating to physical activity, alcohol consumption, drugs, smoking, nutrition and sun safety. Those are all very important.
The issue of giving health information in the workplace is important. I would like to ensure that hon. Members are aware of the home page of the Department of Health's internal website for staff which has a direct link to the Men's Health Forum's men's national health week website.
My hon. Friend mentioned prevention, which is very important. It is particularly close to my heart because of my wider role in respect of public health. The five-a-day programme is an important strand of that. The aim is to raise awareness of the importance of eating at least five portions of fruit and vegetables a day. The programme recognises that attitudes and awareness differ greatly by age and gender. Over the next year, the Department will develop detailed plans to convey the five-a-day message to teenage boys and young men, who consume less fruit and vegetables than older men or women.
I agree with my hon. Friend that all such work will help to tackle health inequalities, which is a big priority for the Government. We share his concern about closing that gap. He also mentioned the gap between men and women. It is important to recognise that some programmes will simultaneously address the latter as well as the former. If we implement the programmes effectively, we will inevitably be targeting and working with those who are most in need of the messages and of the change.
My hon. Friend spoke about football match and line-side information. I visited Middlesbrough. Just before no smoking day, people were planning to put no smoking messages for supporters on the screens at its stadium at the start of a match and in the break. It is important to recognise that there are many avenues for getting the messages across. Some of those people who are highly respected and in leader ship roles in their communities have a key role, particularly with younger people. They are important vehicles for us to use for these purposes. The initiative that I have described was entirely a Middlesbrough-based initiative, but a number of clubs have been working on helpful initiatives. Any further suggestions or ideas that we can encourage them to take up will be welcome.
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I also agree with my hon. Friend's comments about the delays in men seeking treatment and in men getting to treatment fast enough. That is another area in which the cancer manual will prove helpful in alerting people to the need to come forward quickly.
It may be useful if I mention some of the work that is being done in some of the major areas. Some of them are the sex-specific cancers, such as prostate cancer. We spent £4.2 million on research into that cancer in 2003–04, and that investment is beginning to pay off. Only last week, Professor Colin Cooper—director of the southern prostate cancer research collaborative and a member of the prostate cancer advisory group—announced that his team had found a significant gene in the battle against prostate cancer. The gene, E2F3, will help clinicians to decide whether a prostate cancer is aggressive or very slow-growing. It is hoped that a test could be developed within the next two years.
Much of the work has been funded through the prostate cancer collaborative. Of the £7.7 million funding over five years, the Department of Health is contributing £4.2 million, and the Government-funded Medical Research Council a further £1.3 million. The remaining £2.3 million is provided by the key partner, Cancer Research UK. As part of the cancer risk management programme, evidence-based primary care resource packs were sent to all general practitioners in England in September 2002 to aid them in counselling men who are worried about prostate cancer. From earlier debates that my hon. Friend has secured on this subject, I know that he takes it very seriously.
Some 98.8 per cent. of patients with suspected urological cancers, including prostate, are seen for their first out-patient appointment within two weeks of their GP deciding that they should be urgently referred. Since 1997, there has been a 40 per cent. Increase—from 343 to 473—in the number of consultant urologists. All that, as well as efforts on public awareness and the national prostate cancer website, indicates the Government's commitment to a very important issue, and one in which there is still considerable uncertainty for men receiving the diagnosis.
Earlier detection is particularly important for testicular cancer, which is why we have collaborated with Cancer Research UK in the production of a testicular self-awareness leaflet, "Testicular cancer: spot the symptoms early". That echoes the points that my hon. Friend has been making throughout the debate.
I shall move on to something that is not gender specific: bowel cancer. That accounts for the lives of around 7,500 men a year. My hon. Friend has already given us the sad, but graphic description of the difficulty that people have in coming forward with that cancer. We are developing a programme in partnership with all the key stakeholders, and Professor Mike Richards, the national cancer director, has set up an advisory group, supported by four working groups, on the key strands of the programme: screening, patient pathway, treatment and endoscopy.
That programme is developing a national screening programme for bowel cancer for both men and women. The methodology is not clear cut, and there are some difficult issues to be addressed, but we are striving to improve services for people with bowel cancer symptoms, and work is under way on making the

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patient pathway more streamlined. We have also made a major investment in training, which is vital to the diagnosis of bowel cancer, and have established three national and seven regional centres to train more staff in endoscopy.
Finally on bowel cancer, we are developing a communications strategy, and consulting key stakeholders on what the key messages are about bowel cancer for the general public. I would welcome in particular the views of the Men's Health Forum; it might think that certain angles should be pursued in order to reach men early.
I do not have time to say much about lung cancer—another cancer that affects both men and women. It is killing around 17,000 men a year in England and Wales. We have a comprehensive service for smokers who want to quit, and have announced a deal on products: manufacturers are giving away free NHS stop smoking products, such as nicotine patches and gum. We have obviously done a lot: 99 per cent. of suspected lung cancer patients are now seen by a specialist within two weeks of being urgently referred, and we established an advisory group in November last year to support the development and delivery of high-quality services for lung cancer patients. The National Institute for Clinical Excellence will produce clinical guidelines later this year.
I hope that my hon. Friend agrees that we are not complacent when it comes to men and cancer. The consultation on the public health White Paper ends on 28 June, and I urge him and others with whom he is working to feed in their comments on men's health. We are determined that professionals and managers should have the freedom to innovate, including on service delivery—another point that he made. We will make sure that we continue to make significant progress on cancer for both men and women, while recognising that there is a lot more to do in engaging key stakeholders in making that progress.
11.30 am
Sitting suspended until Two o'clock.

Regional Government
2 pm
Ann Winterton: After many weeks of applying for this debate, it is sod's law to have secured it while there is a debate in the main Chamber on EU finance; indeed, there was another one yesterday afternoon. That's life, but I am nevertheless delighted to open this debate, especially now that super Thursday is over. The next political event for my constituents and others in the north-west—which stretches from my constituency to the Scottish border—and for those who live in the north-east and in the Yorkshire and Humber region, is the regional assembly referendum.
I hope that the Minister will be able to lift the veil and tell us when these long-awaited referendums will take place. It is rumoured that they will now be held in early November, and we are waiting with bated breath to hear what the plans are. In such a short debate, I can touch on only the tip of the iceberg, so I shall concentrate on the financial side of regional policy and the implications of what might lie ahead.
First, we have to understand some of the past, which warrants a debate on its own. Regional government is not a new concept. There was a Labour manifesto commitment in 1929 to supporting the creation of separate legislative assemblies in Scotland, Wales and England. Regional policy emerged in response to unemployment between 1934 and 1937, and during the second world war We had nine civil defence regions. The Wilson Government set up regional economic planning councils, and a royal commission on the constitution was established in 1969. It reported in 1973, and that report was known as the Kilbrandon report. Further changes have continued to be made to the present day.
Contrary to what many believe, there is no unique European treaty obligation to have regions, but they have been introduced—bit by bit—with the objective of moving finance from richer to poorer areas on a Europe-wide basis until there is level pegging. Lady Thatcher's first Government were forced to maintain a basic regional policy in order to access European Community structural funds. In 1986, the Single European Act transformed regionalisation into a central policy of the European Community, formally established the European regional development fund and gave its objective a more precise definition:
"to help redress the principal regional balances in the Community, in regions where development is lagging behind and in declining industrial regions".
In 1988 regional funding substantially increased. Interreg and PHARE—the programmes for temporary aid in a transitional period?began in 1989 and started cross-border schemes under unified operational control, bringing in regional and local authority involvement. The Maastricht treaty—I remember it well—which was ratified in 1992, created the Committee of the Regions. In 1994, regional government offices were created that took on the functions of the previously separate regional offices of the Departments of the Environment, Transport, Employment and Trade and Industry. Their remit was to manage regional programmes and to foster the development of policy areas, becoming the voice of the Government in the regions in order to apply for European Union structural funds. They were also permitted to raise loans.

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The regional development agencies were created by legislation in 1998. They work with chambers, and many of those chambers have taken the title of "assembly", which causes confusion. They each have an allocation of £600,000 per annum to develop their capacity, specifically including their ability to undertake scrutiny of the RDAs. Most of the issues to be dealt with by the RDAs are core European Union legislative competencies.
Over a long period, various functions and responsibilities have been gradually removed from local government and given to quangos. There are 19 such quangos in the north-west, 21 in the north-east and 20 in Yorkshire and Humber. Those figures do not include Departments and agencies with regional or local offices in northern England, which are now proclaimed to require the so-called "democracy capping" of a regional assembly.
The Planning and Compulsory Purchase Act 2004 is one example of the removal of major planning powers from local authorities. Other proposed changes relate to tourism and transport, and they will also have major effects.
Matthew Green: Does the hon. Lady share my dismay at the fact that Conservative peers in the House of Lords caved in to pressure by the Government and allowed those powers to be transferred—after several attempts at ping-pong—whereas the Liberal Democrats held firm in trying to prevent their being transferred?
Ann Winterton: The hon. Gentleman can probably read my mind on that matter. I do not want any powers to be transferred, as I have just indicated.
No doubt other Members will dwell on the apparent squandering of unlimited public funding on propaganda for the assemblies, but let us look at the contents of the "Your Say" booklet. A proposed regional assembly in the north-west would have "influence"—the phrase used in the booklet—over £1.6 billion. Some 61 per cent. of that influence would be allocated to the learning and skills councils. The proposed regional assembly would have two votes out of the maximum of 16 serving on the board of a learning and skills council. One is rather reminded of the "influence" that we are alleged to have by being at the heart of the European Union. If my arithmetic is correct, that influence currently stands at just 10 votes out of a total of 114, so one can see that there is little hope of changing anything of importance. Influence is one thing, but control is quite another.
Mr. Philip Hammond: My hon. Friend is absolutely right. I am sure that she will be aware that Ministers are currently fighting each other over the question of learning and skills councils. The Deputy Prime Minister says as he goes around the country that he will transfer powers relating to learning and skills councils to elected regional assemblies, and the Secretary of State for Education follows him around the country saying, "Over my dead body." We need to clear up such confusion within the Government, so that when my hon. Friend's constituents vote in October or November, they will have a clear picture of what they are voting for.
Ann Winterton:My hon. Friend makes a very valid comment and we have been following those matters in
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the local newspapers. He highlights one of the problems facing people who will vote in the referendum—if one is eventually held. There is so much confusion about what might or might not happen that it switches people off; they like to know precisely where they stand.
The Government annual grant is £780 million for the north-west, £350 million for the north-east and £570 million for Yorkshire and Humber. That is, on average, only 11.5 per cent. of the central Government grant provided to local authorities, based on 2002–03 figures. I am sure that the Minister will agree that no guarantee could be given as to what a regional assembly might receive. In yesterday's debate, the Minister for Industry and the Regions said that the level of domestic regional funding might have to be reassessed.
Of those figures, the following amounts come from European Union funding: £250 million for the northwest, £88 million for the north-east and £185 million for Yorkshire and Humber. The UK pays £1 into the EU budget, and gets back approximately 50p—or €1.6. On top of that, we have to match-fund a further 40 to 60 per cent. There are strict criteria governing how, and on what, that funding is to be spent, which often produces no end-product, such as wealth creation. All too often, projects are left high and dry when the funding ceases. However, the Government have given a financial guarantee for that level of funding, which is to be based on certain European Union reforms that they believe fall within the terms of the current EU treaties.
It is important to know from the Minister how the process is progressing, whether the reforms that the Government support will be achieved and whether the financial guarantee will be honoured. If so, from which public funding source or Department will the money come? Will the Government stick to their proposal of a 1 per cent. contribution to the EU budget, rather than the 1.24 per cent. requested by the Commission, to meet the needs of the enlarged Union? If the Government are successful, but have already budgeted for 1.24 per cent., will they use the difference to give assistance to areas in the United Kingdom, subject to the state aid rules by which we are bound? I understand that yet another consultation is to take place on the Commission's newest proposals on regional state aid rules. If the reforms fail, the amounts available, which are mentioned in the booklet, will be substantially reduced.
I hope that I get a better reply than I got when I asked the Prime Minister on 11 February whether the Government intended to supplement the shortfall in respect of the £3 billion in regional funding between 2007 and 2013 that the United Kingdom is set to lose. Indeed, the Minister for Industry and the Regions touched on that subject yesterday.
The reason for the difficulty is enlargement. It is fair to say that the House of Commons has supported enlargement of the European Union across the board, but the consequences mean that from 2007 we will lose objective 1 funding for Merseyside and south Yorkshire of €893 million and €785 million respectively, in addition to reduced objective 2 and 3 funding, based on the 2000–2006 figures. I hope that the Minister will use this opportunity to update us on EU regional funding post-2006, because agreement to it will require unanimity. That is not an easy task when 25 member states are involved.

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There is no doubting the priority of the Department of Trade and Industry when it states that spending on regional policy will be targeted on areas of high unemployment, just as it was 60 years ago. However, today we are interwoven with EU regional policy and have to contend with EU state aid in competition rules; the UK is no longer a free agent. It is also fair to say that EU regional policy plays an important role in the function of the euro, as regions in the eurozone have a one-size-fits-all interest rate.
The system in the regions of the European Union is triangular, operating between the Commission, the region and national Government. If England is ever burdened with regional assemblies, I foresee a constant battle between the Office of the Deputy Prime Minister and the Commission, because the ODPM intends to retain the Government offices for the regions. However, I would put my money on the Commission winning, as it has the final say. So Westminster will, as usual, lose out and will once again be sidelined.
Over time, the proposed 35 assembly members for the north-west will progressively deal directly with the Commission, leaving out Westminster and thereby leaving the north-west's 76 Members of Parliament in isolation. What kind of local representation or democracy is that, given that the rural areas especially will be overshadowed by the great cities?
To those who say that United Kingdom local government by regional assemblies has no European Union involvement, my reply is that the answer lies in the Department of Trade and Industry document entitled "A Modern Regional Policy for the United Kingdom", which states:
"There is an important European Union dimension to regional policy."
It continues:
"These EU regional policy objectives clearly complement the UK Government's regional policy goal."
The latter quote should surely be the other way round, as the Government's regional policy is determined by European Union policy, and Westminster continues to lose control and to have its powers eroded. It could be described as rapidly becoming a middle tier of management, complying with orders from Brussels. How often do we hear the word "flexibility"? The desire is often expressed to have devolved regional policy to ensure the necessary flexible environment at national, regional and local levels. However, as Parliament has relinquished so many of its responsibilities, what the Government ideally might like is not what they can necessarily have within the constraints of current EU policy.
No doubt the issue of subsidiarity will be thrown into the debate. However, it is clear from the Amsterdam treaty that the subsidiarity principle will not be allowed to bring about any devolution of powers from Brussels, even in those sectors in which national or local authorities could perfectly well act on their own. Instead, there will be a constant one-way centralisation of authority. Those who control the direction of finance control virtually everything. One of the major problems with the EU is its rigidity, which can be changed only through a unanimous vote.
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Why do we need regional assemblies, which are being foisted on us? Why should additional money for the proposed assemblies come from a precept on the council tax and be left to local authorities to collect? Sixty years ago, regional policy was entirely and rightly focused on alleviating problem, in some of the most disadvantaged areas in the United Kingdom. Regional policy now operates on a Europe-wide basis, and our country and its people will be disadvantaged by the movement of resources from the west to the east. Although successive Governments have tried to airbrush the EU out of its pivotal role in regional policy, the truth should be told. There is no doubt that regionalisation is a device for furthering political integration. [Interruption.] The Minister and his Parliamentary Private Secretary laugh, but it is no laughing matter.
The Minister for Local and Regional Government (Mr. Nick Raynsford): We are laughing at the hon. Lady's proposition.
Ann Winterton: Well, the Minister and his PPS may laugh at my proposition, but in due course people in this country may laugh at the Minister and the Government for leading them down that path. I rust that the people of the three regions involved in the referendums—the north-west, the north-east, and Yorkshire and Humber—will decisively vote no and reject regional government, with all its adverse financial repercussions.
2.18 pm
Mr. Michael Foster: I attended the debate intending to make only a brief contribution. I hoped that many hon. Members from all parties would be present to talk about the financial implications of regional government. I did not realise that we were here to talk more about its European dimension. The hon. Member for Congleton (Ann Winterton) has very anti-European views.
Ann Winterton: They are all fact.
Mr. Foster: I have no reason to dispute that one way or the other. I am here to talk about the financial implications of regional government.
Mr. Deputy Speaker(Mr. John McWilliam): Order. Sedentary interventions are not helpful in debate. For the guidance of the hon. Gentleman, I point out that we are debating that the sitting be adjourned, so the debate can be quite wide ranging.
Mr. Foster: Thank you, Mr. Deputy Speaker.
I represent a region that will not have a referendum and where there is perhaps not the strongest affinity with the idea of a regional assembly, although that may change over time. One aspect of the financial implications of regional government that I want to consider is the nature of local government under the regional government umbrella. I understand that, if an area agrees in a referendum to have a regional government, it must cease to have two tiers of local government. Substantial savings could therefore result from regional government. I say to the Minister that the Government should not exclude areas that do not vote

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for a regional assembly. They, too, could consider the financial implications of having two tiers of local government.
I shall explain the situation in Worcestershire, which forms part of the west midlands region. There is a county council, six district councils and a considerable number of parish councils, which are predominantly in the shire parts of the county. Those district councils each have a chief executive, a treasurer, a solicitor and a host of teams that duplicate service provision in a relatively small area, with a population of about 100,000 in each district.
The district where I live and that I represent is governed by City of Worcester council. It has 35 councillors, who together are responsible for a budget of about £11 million. Responsibility for council housing has been transferred to a housing authority. The nine county councillors who are elected to represent my constituents in Worcester are responsible for spending about £400 million. They are responsible for the major services supplied by local government such as education and social services. I am concerned that, if the Government limit the change in the structure of local government to those areas that have a regional assembly, they will miss an opportunity to make considerable financial savings in local government.
Mr. Graham Stringer: I am following my hon. Friend's argument in favour of unitary authorities with interest. I come from an area that has the benefit of a unitary local authority and, by and large, I agree with him. Does he accept that, were his area to achieve the status of a unitary authority, to impose an elected regional assembly would create an extra tier of local government? It would spend what was originally local government finance —the hon. Member for Congleton (Ann Winterton) mentioned the figure of £1.6 billion. Therefore, all the current inefficiencies that he describes in local government would be recreated.
Mr. Foster: I fully understand my hon. Friend's arguments about the imposition of regional government on the west midlands. My argument is that the structure of local government should change, with or without a referendum on the question of a regional assembly in the west midlands.
Apart from financial savings that can be made, the important issue of democratic accountability, which should not be underestimated, is also at stake. The bulk of my constituents probably do not have the foggiest idea which local authority delivers which service. At local elections, many vote for the party that they have always supported and they do not necessarily take into account the delivery of service by the relevant local authority. If we are serious about improving local government and the services that it provides, having a direct democratic link is important, so that, by their vote, people can reward, or penalise, elected members who have delivered, or failed to deliver, improvements in public services. To have that enhanced democratic accountability with a backdrop of substantial cost savings represents the right way forward.
There is further evidence of the tendency to drift towards unitary authorities in Worcestershire. With some local government services, the question of who is
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providing the services is already being blurred. In effect, local authorities are realising that two-tier systems do not work for them, so partnerships are being created between district councils and county councils. For example, the City of Worcester transportation partnership helps to deliver a county council service under the remit of city council officers. Although that is a great concept for taking democratic accountability to a smaller level, it still does not enable voters to make the distinction between who provides the cash and who provides the service. The Government should recognise that and take a leading role in speeding up the movement towards a unitary authority.
Matthew Green: I am following the hon. Gentleman's train of thought and I agree. Does he agree that, if Worcestershire were to move to a unitary authority, one could achieve the same effect through area committees? One would obtain the saving that he talks about, but still have the local democracy taking decisions for Worcester.
Mr. Foster: I agree. I have two parish councils in my constituency, even though it is an urban constituency, which provide a forum for a very local democratic role. One of the election pledges of the Worcester Labour party at the local elections last Thursday was to create area forums as a way of enhancing the local role in decision making in the city for areas without parish councils. I am delighted to let hon. Members know how pleased we were with our local election results. We held our seats and the Conservatives lost one to the Liberal Democrats.
Mr. Hammond: I am pleased to tell the hon. Gentleman that to compensate for whatever happened in Worcester the Conservatives won one of the only four Labour seats on the council in Runnymede. Before the hon. Member for Ludlow (Matthew Green) intervened, he seemed to be urging the Minister to take powers for the greater use of unitary authorities. Is he aware that the Government have those powers within existing primary legislation? It is within the Minister's gift. Is he urging the Minister to use his powers under Local Government Acts to accede to requests from local authorities for reorganisation along unitary lines?
Mr. Foster: Since 1997, I have increasingly held the view as a Member of Parliament that two-tier local authority systems do not deliver the best possible service to the electorate. Where there is agreement over the nature of the unitary authority to replace the two tiers, I am looking for the Government to facilitate movement in that direction as soon as possible.
Mr. Hammond: Is the hon. Gentleman aware of research by Professor Michael Chisholm at Cambridge university that suggests that the one-off costs of reorganisation would be about £90 per capita in two-tier areas, were they to be reorganised into unitary structures, and that the long-term savings from unitary local government are clear only where unitary local government is organised on a county-wide basis?
Mr. Foster: I am not aware of the research to which the hon. Gentleman refers. I make no judgment about

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the nature of the unitary authority that I wish to see replace the two-tier system in the county, be it a unitary Worcestershire or a north and south Worcestershire authority. I make no judgment about what would be best. We are considering the cost savings as part of any decision made. Democratic accountability for the delivery of service and the clear relationship between the voter and those who are elected to manage the service are also important.
Another example of the blurring of the two-tier system is the crime and safety partnerships. Initially, a partnership was set up for Worcester city—the Worcester safer partnership. That was not progressing as quickly as those who worked in the system wanted, so there was a new creation—the South Worcestershire safer communities partnership, which covers the city of Worcester and the Malvern Hills and Wychaven districts. That exactly mirrors the West Mercia constabulary's division of the police. It makes for a sensible organisation of resources.
Other agencies that are showing the lead in the movement away from a two-tier system include the South Worcestershire primary care trust, which covers the three districts I mentioned, the Worcestershire Acute Hospitals NHS Trust, which covers the whole county, Hereford and Worcester combined fire authority, which the Minister knows all too well, and the West Mercia constabulary. All those agencies believe that there are economies to be gained from the service covering a greater population. I agree that cost savings could be made.
While I have the Minister's attention, it would be remiss of me not to mention that local government funding will have to be examined clearly. He will know of my desire for the area cost adjustment—the three magic words for Worcestershire—to be reconsidered, as it is a long-running problem for my county. If we move to a regional dimension, that will have financial implications for the services that are delivered.
The important point that I make in conclusion is that I want the Government to be more proactive in engaging with local government and encouraging it to move towards unitary authority status where two tiers exist—with or without regional referendums and regional assemblies—as a way of delivering better services for constituents and cost-savings for taxpayers as a whole.
2.32 pm
Mr. Gordon Prentice: Like my hon. Friend the Member for Worcester (Mr. Foster), I had not intended to make a contribution, but I am driven to make one to put my views on the record. I think that we need regional government like we need a hole in the head. We just do not need it; it is a distraction.
I am not sure whether the referendums at the end of October will be held as promised. I say candidly to my colleagues in the parliamentary Labour party that there is no guarantee whatsoever that, if we hold the referendums in the three northern regions at the end of October, we will win them. There is a real possibility that we would lose all three. I do not think that the ground has been adequately prepared for those advocates of regionalism. There are advocates, but the work has not been done.
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My plea to the Minister, to my hon. Friend the Member for Worcester, to the Prime Minister and to others is to put the issue on the back burner. Those who proselytise for regionalism should spend more time speaking to people and winning them over to their point of view, rather that pressing ahead with referendums that we could well lose.
I am fed up with constant reorganisations, whether it is local government reorganisation—the last of which, under the Conservative Government, cost £450 million—or the endless reorganisations of the national health service. As I recall, 18 such reorganisations were listed in the Health Committee report on the issue. If we asked people on the street, "Has all that reorganisation delivered a better service?", I am not sure that they would say yes.
There is a tremendous pressure to reorganise. A kind of Maoism has infected the Government. They believe that to persuade people that things are changing for the better, they just have to change. There is no guarantee that a huge reorganisation, under the mantle of regional government, which is itself a misnomer, is going to produce beneficial change. Why do I say that the term "regional government" is a misnomer? A year or two ago, my right hon. Friend the Secretary of State for Wales described the Welsh Assembly as local government on stilts. A regional assembly would be local government on stilts. It would not have any powers to raise taxes. Many important services, such as health, would not fall within the remit of the regional assemblies; they would have some responsibilities for public health, but that would be all.
How can people be motivated to go out and vote for a tier of government that does not have any real powers? It has powers on planning and infrastructure, but it does not have the kinds of powers that touch people in their everyday lives.
Mr. Hammond: I largely agree with the hon. Gentleman's powerful point on powers, but I would not like him to leave the Chamber with the impression that elected regional assemblies will have no power of taxation because they will have a power of precept with regard to the hard-pressed council tax payer. That is another factor that weeds to be taken into account.
Mr. Prentice: Of course I understand that there will be that precept power but there will not be a regional income tax, for example, which would connect the regional assembly with the elector in the regions.>
Some people—including people on my own political side—say that regional assemblies will make a huge difference. However we know that the areas that vote for a regional assembly will not get any more money than other regions of England—the Government have made that clear. It is disingenuous to give lots of nods and winks, and to hint that if people vote for a regional assembly their housing and their environment will be transformed overnight, because it will not be like that. During a referendum campaign, when Labour MPs like me speak out against the policy advocated by their own Government, it will become as plain as a pikestaff that those benefits of regional assemblies are alleged, not real.
My hon. Friend the Member for Worcester mentioned democratic is accountability. If there are these regional assemblies and a move to unitary local

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authorities, there will be a huge reduction in the number of councillors. The Electoral Commission has pronounced on the reorganisation of local government in my area. There are 14 district councils in Lancashire, and there is Lancashire county council. The commission's preferred option, which voters can vote on at the end of October if we have the referendums, is for Lancashire county council to be the unitary authority. The second option would be for Pendle council to join with Burnley council, Rossendale council and Ribble valley. That would make a unitary authority for about 250,000 people. That is not very local. A lot of local councillors under the present system will lose their jobs.
Ann Winterton: The hon. Gentleman has been describing how he hates reorganisations and how they cost so much money, and I agree with him. He has also touched on the number of councillors who will no longer represent their people. Has he given a thought to council staff? Because of all this uncertainty about regional assemblies, many good people have left their posts and moved on because they cannot see what the future might hold for them. If we are going to have good local government, we need to have good local government staff. Not much thought has been directed towards them—towards how they are feeling and coping with this situation.
Mr. Prentice: I would respond to that by saying I am against reorganisation for the sake of reorganisation. The case for it must be compelling. It must be set out, and we must be able to convince people that moving to unitary local government from the present two tiers would bring a measurable increase in service levels. I am not entirely sure about that.
I used to be a big fan of unitary local government. To be perfectly honest, I think that I have changed my view on this subject a number of times. [Interruption.] Is that an unusual admission? I do not think so.
I share the frustrations that many people have about two-tier local government where the buck can be passed so easily. Lancashire county council is Labour-controlled and now there is a Liberal Democrat-controlled Pendle borough council—that grieves me, but I just have to live with it for the next few years. Huge amounts of responsibility will be passing via the Liberal Democrats and that is frustrating—[Interruption.] I can see that Conservative Members are agreeing, because they are nodding vigorously. It is our responsibility to educate the electorate about which tier of government is responsible for what. The county council is responsible for education, which is not difficult to remember, is it? It is responsible for social services and for care homes, which was a big issue in Lancashire a year or two ago, and that is not too difficult to remember. Therefore, the responsibility falls on people, such as myself, who want a system of local government that is based on two tiers to continue, to make that point.
Mr.Michael Foster: What would my hon. Friend say to a constituent in Worcester about the provision of youth services? That is a statutory county council provision, but a discretionary one that is made by the district council. The two bodies work together and the buck passing goes on with considerable gusto.
Mr. Prentice: Well, there are these bear traps—youth services and so on—are there not? We do not fall out of bed in the morning just thinking about where responsibility for local services lies. People do not need to know the minutiae, but they must have an understanding that housing is a district council responsibility and that education is a county one. When people voted in the European elections just a few days ago, they probably did not have the foggiest idea that a huge number of decisions that used to be made in Westminster are now made in Brussels and Strasbourg. What is our response to that? It should be, "Let's educate the public." That is our job as politicians.
I have spoken for longer than I intended, but let me finish on this matter. Our resources should go to frontline services. People in my part of north-east Lancashire are fed up living in rotten, decaying housing that should have been torn down a generation ago. There are 2,000 empty and abandoned properties in my constituency; in neighbouring Burnley, there are 4,500 empty, abandoned, rotten, decaying houses. That needs to be tackled and my right hon. Friend the Minister knows about it, because he is an expert on housing issues. That is what people want to see addressed; they do not want a lot of energy to go into the creation of a regional assembly that will not deliver.
The balkanisation of Britain —the setting up of regional assemblies—will have a damaging effect on service levels across the country, because the whole rationale of regionalism must be to allow services to develop differently in different regions; otherwise, what is the point? If we were to transfer something that is crucially important, such as the health service, to regional assemblies, it would grieve me if in 10 or 15 years' time there were different standards—different service levels—of health provision in the north-west and north-east, which is your area, Mr. Deputy Speaker. I do not want to see that divergence. I want money to go into front-line services across the nation that will benefit all equally.
2.44 pm
Matthew Green: I start by congratulating the hon. Member for Congleton (Ann Winterton) on securing the debate. I thought that we were going to hear a little more about the cost of regional government and the possible savings, but there we are. I will stick more firmly to the title of the debate, although I appreciate that it is an Adjournment debate, Mr. Deputy Speaker.
I agreed with virtually everything that the hon. Member for Worcester (Mr. Foster) said. It is a delight to speak in a debate on regions and for once have someone from the same region as me in the Chamber. That is probably a first. I was pleased to hear what he had to say, and I might touch on a couple of his points.
One problem with any reorganisation is that it is easy to see the costs of it. When a level of government is set up—local, regional or national level—there are running costs, and it is easy to trot them out. I acknowledge that there will be costs; inevitably the structure to support regional government will cost something. However, there are also savings; it is fallacious to argue that there are only costs.
Those savings can come from two areas. The first, as we heard from the hon. Member for Worcester, is from the reorganisation of local government. I have some

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figures, which I am sure the Conservatives would claim are biased, from the Yes4theNorthEast campaign. It has produced some figures, which I am sure are based on good information. The Minister may be able to provide more information. The campaign estimates that changing to a unitary government would save about £21 million a year in Durham, and £8 million a year in Northumberland. There is a saving of £29 million. The estimated annual costs of an elected north-east assembly are £25 million. Clearly, there is a potential saving. We can argue about whether the figures are accurate, but there is a case that savings can be made as a result of change.
Mr. Hammond: The hon. Gentleman has just tried to make the case, as did the hon. Member for Worcester, that the reorganisation of local government to a unitary structure may produce savings. That is contentious, but it has absolutely nothing to do with the case for elected regional assemblies.
Matthew Green: I agree; the reorganisation of local government does not have to have anything to do with regional assemblies, and could be done anyway. Nevertheless, the Government have chosen to do the two things at the same time and are linking them. Whether that is the route that I would have chosen or not, the two are happening together and I am raising the issue. I would happily have a unitary Shropshire tomorrow, as would the Conservatives and Labour. All three main parties in Shropshire want a unitary Shropshire. I have been asking the Minister about that since I have been in Parliament, and he keeps saying, "Wait until you have an elected regional assembly." I do not want to wait that long.
The fact is that there are cost savings to be made from the change in local government. As the hon. Member for Worcester has already said, in Shropshire there are five districts or boroughs and a county council. There are six chief executives, and merely getting down to one chief executive and the attendant secretaries would save well over £1 million a year for Shropshire, which is quite a small county.
I want to talk about the other main area for savings, where the Government could do more. They are going at regional government a little too gently; they are not trying hard enough. In doing so, they are in danger of throwing the baby out with the bath water. The Minister will know that Liberal Democrat support for regional government in the forthcoming referendums in the north is based on the fact that we see that as a starting block, certainly not the finishing point. If it were the finishing point, it would be a poor point to be campaigning for. The savings would come from the devolution of power and services from Westminster to regional government.
Mr. Hammond: Which?
Matthew Green: I will come to exactly which ones we would like to be devolved. If the hon. Gentleman had listened to earlier debates on regional government, he would have heard us speak about that before.
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The Minister still has a chance to convince his colleagues; perhaps the Deputy Prime Minister will win his arguments with his Cabinet colleagues. As the Minister knows, there are areas that we would like to be pushed down more. The hon. Member for Congleton was right to point out that the learning and skills councils are not truly devolved to the elected regional assemblies—they should be. On transport, the ability to decide on the priorities is to be devolved to elected regional assemblies but the funding will still come from central Government. The North West regional assembly, for example. could decide that its priorities are 1, 2, 3, 4 and 5 but the Department for Transport could agree to fund only No. 5. The Minister will say that that will not happen, but he cannot be sure that there will be a Labour Government forever—he might not be the Minister and there may not be a favourable Minister in the Department for Transport. The system must be set up so such things cannot happen and we get proper decision making at a regional level.
Mr. Hammond: I said a moment ago that responsibilities for learning and skills councils will not truly be devolved to elected regional assemblies. In a written answer to my hon. Friend the Member for North Essex (Mr. Jenkin), the Minister for Lifelong Learning, Further and Higher Education put it more starkly. When asked:
"what plans he has to transfer powers and responsibilities held by Learning and Skills Councils to elected regional assemblies where they are introduced"—[Official Report, 3 February 2004; Vol. 417, c. 763W.]
he replied:
"None."
Matthew Green: That is even more helpful to my case, because they should be devolved. If the Minister took regional government seriously and believed in it, he would seek to devolve more functions, and Departments in Westminster could be abolished because they would no longer be necessary. The Department of Trade and Industry is an obvious candidate for abolition. At a regional level it acts is a dead hand; it restricts the ability of regional development agencies to exercise their function. Too often they are told that they cannot fund a project because it does not fit the DTI's tick boxes. Allowing funding to decrease but getting rid of the DTI would make considerable national cost savings and would enable effective regional economic regeneration.
If we achieve regional government throughout England—I will come to how that should happen—there would not be much need for the Office of the Deputy Prime Minister. It would be a brave Minister who abolished his own job, but that should be the Minister's priority. If I were in his shoes, I would be seeking to create the conditions to abolish the job. Much of the ODPM's functions can be sent down to the regions. Such devolution of power allows considerable cost savings at the centre and can lead to considerable savings overall.
I do not want hon Members to think that I would like the system to be rolled out along the current boundaries, because there are difficulties. For elected regions to work, the public must believe that they belong to a region. People in the north-east believe that they belong

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to the north-east. The Yorkshire and Humber assembly effectively recreates Yorkshire—the people believe that they are in Yorkshire.
Mr. Hammond: When did the hon. Gentleman last visit Humberside to see whether that is the view there?
Matthew Green: I realise that part of Humberside was historically Lincolnshire, but that is not as significant a problem as the hon. Gentleman would like to pretend.
In the north-west, there is a reasonable sense of regional identity, although there are differences. [Interruption.] There is not the same degree of support among Labour Members in the north-west as in other regions—perhaps that was too dangerous a course to go down. I knew that it would spark a reaction, so I will not go into too much detail on the north-west.
Mr. Prentice: Will the hon. Gentleman give way?
Matthew Green: Go on then.
Mr. Prentice: Part of my constituency—West Craven—used to be in Yorkshire, and many people still feel a great affinity to Yorkshire. However, are there any divisions among the Liberal Democrats about this plan for regionalism? Will he tell the Chamber what Lord Greaves thinks about the proposals?
Matthew Green: Lord Greaves is not actively backing the yes campaign for the main reason that not enough powers are to be devolved to the regional assemblies. Where I disagree with Lord Greaves is that I think that the proposals are a starting block. We support the campaign so that we can build on it whereas he thinks that it is not worth supporting be cause not enough powers are to be devolved. I hope that he is persuaded otherwise if the draft Bill proposes more powers.
I want to deal with the rest of England. The Minister has an opportunity, when the three referendums in the north are out of the way, to look long and hard at a boundary review of the remaining regions. The current boundaries were set up by the Conservatives for the administrative purposes of Westminster, not to reflect where people feel that they belong. I am firmly of the view that Shropshire, Herefordshire, Worcestershire and Gloucestershire, which is currently in the south-west, should form a marches region, as we did historically. We were a region and we share a lot of commonality with West Mercia. The area is about the same size as the north-east, so if that region is viable, we must be too. Such a region would command a huge amount of support among local people.
Mr. Michael Foster: May I say how delighted I am for the hon. Gentleman that he is present it for a debate with Members from the same region? He is of course the only elected Liberal Democrat in the region of the west midlands.
Matthew Green: Hereford.
Mr. Foster: Has he had any discussions with local government representatives in the west midlands on whether Shropshire, Gloucestershire and Worcestershire
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should form a marches region? Has he discussed that with constituents in the north of Worcestershire, who see no distinction between themselves and people in Birmingham, because the boundary is not clear and, indeed, moves occasionally as a result of local government reorganisation?
Matthew Green: I have certainly not done the latter. It would be a huge task to travel round the region that I have proposed asking people that. We may have to do that if there is a boundary review. I hope that we can consider the proposal and that the hon. Gentleman is not ruling out the possibility, because I believe that there is support for it. I have discussed the matter with councillors and officers in at least one Worcestershire council—Malvern Hills—and in Shropshire and Herefordshire, and there is broad support for it. I have even done some survey work in Shropshire showing that the public overwhelming back that idea in preference to a west midlands region.
The point is that to win referendums in other parts of the country and to get to the position where we can make cost savings by abolishing Departments as a result of having elected regional assemblies, such assemblies are needed throughout Britain. In order to do that, they must be based on areas that the public would support. There is no reason, for instance, why Kent could not be its own region. It is large enough; its population is bigger than that of the north-east. That would solve many of the problems of Conservative councillors in Kent. If they discovered that they could have an elected regional assembly, referendums might be much more likely to be won. Huge savings can be made.
Ann Winterton: The hon. Gentleman has built so much of his case on cost savings. Having lived through a local government reorganisation in 1974 and seen the establishment of the Scottish Parliament, and so on, I am not so sure that there will be any cost savings at all. If he can cite one such case, I should be delighted to learn about it, because usually savings are soaked up by new, expensive offices and equipment, and the money just goes.
Matthew Green: I suspect that whatever I said, I would not convince the hon. Lady. I thought that I had given some examples of where savings can be made.
Many local government reorganisations have been botched. Let us take Shropshire, which was reorganised under the Conservative Government. After the county had made it clear that it wanted to retain two-tier government, the Government said, "No, we do not like that answer; do the exercise again." They then came back, took Telford and made it a unitary council, leaving the rest of Shropshire virtually unviable, as a much smaller two-tier area. That was a botched reorganisation, and it is botched reorganisations under the Conservative Government that have cost money. If they had done things properly and offered us two unitaries, there would have been a lot more support for their proposals, and cost savings, too.
Finally, I return to a theme that the hon. Member for Worcester mentioned: democratic accountability. One major reason why we should have regional government is that we have it at the moment. The most powerful person in my constituency in terms of getting a

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chequebook out and allocating money to something is not anyone on the district, county or town council, or the local MP or MEP; it is the chief executive of the regional development agency Advantage West Midlands, John Edwards. I believe that he is able to support a scheme to the tune of £3 million without seeking broad approval. He does an excellent job, and I have no qualms at all about his work; but he is essentially accountable only to Ministers in London—
Mr. Hammond: Who are accountable to Parliament.
Matthew Green: Yes, but in a very long-winded, involved way.
The present tier of regional government was largely set up by the Conservatives; they set up Government offices. The result is that we now need accountability at that level, and democracy costs money.
Ann Winterton: Will the hon. Gentleman give way?
Matthew Green: No, not any more, because I am sure that the Conservative Front-Bench spokesman would like to speak.
Democracy can cost money, but the argument for not having a democratic tier when powers are already exercised at that level is an argument for doing away with MPs. People might say that it must cost a lot to have MPs in Westminster. It is also an argument for doing away with councillors. One might say, "Let the officers run councils; it's far cheaper if we get rid of all the councillors." That is the argument being deployed. There could be much greater cost savings if only the Government were really enthusiastic about regional government and used it to its full potential, instead of making their rather half-hearted efforts. The case is that regional government can save money. However, for the sake of democratic accountability, it should go ahead even if it is cost-neutral.
3.2 pm
Mr. Philip Hammond: I congratulate my hon. Friend the Member for Congleton (Ann Winterton) on securing this important debate. She is right to raise these issues. There are deep concerns about the Government's intentions as regards regional government. Conservative Members certainly recognise the particular needs of those regions that have suffered from major structural economic change. My hon. Friend dealt with some of the real regional issues relating to funding. She talked about the European Union funding available and issues that impact directly on the lives and success of people in the regions.
I want to focus on the direct financial implications of the Government's plans—that is, to the extent that we know about them —and focus Members' attention on the large and unacceptable degree of uncertainty that still surrounds a project that, unless something has changed, is to be put to the electorate in just a few months.
There is a widespread and growing feeling in all three northern regions, particularly in Yorkshire and Humber and the north-west region, that the imposition of an
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extra tier of government is simply not the answer to the region's problems. The Government's preferred option reflects Labour's rather tired approach, which is that more government equals better government, and that constant change equals progress. It also reflects Labour's disillusionment with local government, which will be the big loser from the imposition of elected regional assemblies, as powers will be sucked from local government and will go to the regional tier.
The needs of the regions, particularly the three northern regions, are for economic regeneration, investment, skills and—in some cases—a change to a more entrepreneurial culture that will allow businesses to flourish and that will attract investment and lead to reform of the public services. Public services provide a larger percentage of total employment and economic activity in the northern regions than in other regions. Some of those issues are being addressed by the regional development agencies in the three northern regions, but I can tell the Minister and the hon. Member for Ludlow (Matthew Green) that the last thing that the regions want—someone who is not a Government figure would say this privately— is for their business-led focus to be diluted by being subordinated to a politically motivated regional assembly. The truth is that elected regional assemblies will not deliver on any of the key issues for the three northern regions. My hon. Friend the Member for Congleton is quite right to draw attention to the issue.
I want to talk about the financial implications of imposing an additional tier. I will focus on elected regional assemblies, but I do not want the Chamber to miss the point that he Deputy Prime Minister's agenda for regionalisation has already kicked in, with or without elected assemblies. Additional costs are already being imposed. In the fire service, there are regional management boards, and fire authorities up and down the country tell me that the boards are already out of control in terms of the costs that they are incurring. There is the Learning and Skills Council, in which we can see the creation of a regional structure in response to a clear steer from central Government. There is also the cost of the unelected regional chambers.
Interestingly, while this trend is developing in response to a steer from central Government, English Heritage, which is a quango answerable to the Minister's Department, has just scrapped its regional structure because it found it too bureaucratic and inefficient. It has returned to a different structure and has moved away from having nine regional directors.
I come to the financial implications of elected regional assemblies. We ought not to be having this debate. We ought to be quite relaxed about the issue because hon. Members will remember that, in 1997, the Labour party manifesto pledged that the establishment of regional assemblies would require
"confirmation by independent auditors that no additional public expenditure overall would be involved."
I do not know whether the Minister is prepared to repeat the manifesto pledge that no elected regional assembly will be created unless an independent auditor has certified that no additional public expenditure overall will be involved. I suspect that he is not prepared to do so, therefore we must look at the costs that we believe will be involved.

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So far, the Government have spent more than £5 million on what they laughingly call an information campaign: that is to say, on propaganda for the yes campaign in the three regions. The referendums themselves will cost £16 million to conduct. The Government estimate that, if elected regional assemblies go ahead in the three regions, they will cost £30 million in each region simply to set up. We are talking about the one-off start-up cost. That means a cost of more than £120 million, including the referendums, the information campaign and the start-up costs in the three northern regions. That is before taking into account the direct and indirect costs of local government reorganisation.
My hon. Friend the Member for Congleton has already referred to one of the important indirect costs, which arises from the uncertainty that has been introduced into the local government community and the additional difficulty that that creates in recruiting and retaining good quality staff to carry out the main function of local authorities, and what should be main purpose of elected politicians: the delivery of ever-improving public services.
There are also direct costs. As I have already explained, Professor Michael Chisholm of Cambridge university has estimated the one-off costs to be more than £90 per head. That is £350 million for the three northern regions, if all the two-tier authorities are transformed into unitaries. Contrary to what the hon. Member for Worcester (Mr. Foster) has asserted, the evidence suggests that, except where unitary counties are created, there will be few if any ongoing savings from unitary structures.
All that is before we look at the running costs. The Government estimate that each elected regional assembly will cost £25 million per annum to run. However, working on the basis of the one elected regional assembly that we have as an example—the London assembly—and extrapolating on the cost per capita, it is likely that the regional assemblies would cost three times the Government's estimate. If anybody doubts that it is possible for the Government to get their estimate of the cost of regional government so wrong, they need only look at the estimate; for the cost of the Scottish Parliament's new building at Holyrood. The overrun is standing at 12 times the original estimate. We cannot even begin to quantify the potential cost if all these elected regional assemblies were to embark upon such a folie de grandeur as the Scottish Parliament in Edinburgh.
Mr. Raynsford: As always, the hon. Gentleman is selective in his choice of examples. Would he like to tell the Chamber about the Greater London authority headquarters building, City hall, which was delivered on time and in budget? It is an extremely good value-for-money procurement.
Mr. Hammond: I would like to tell the Chamber that the Government's estimate of the impact on London council taxpayers of the Greater London authority—[Interruption.] That was not the right hon. Gentleman's question, but if he wants to accuse me of selective quoting, I must draw attention to the facts that he wants to ignore: the massive cost of the elected regional
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government in London that is in excess of what the Government told us it would be when it pushed through the Greater London Authority Act 1999.
Significant indirect costs are already occurring. An article from The Guardian yesterday tells us that, in Ribble Valley, one of the reasons for turning down a PFI project was the uncertainty over the district council's future. Already, local authorities' activities are being blighted in areas where referendums will be held.
Where will the money for all these costs come from? Some of it will come in the form of central Government grants—more wasted taxpayers' money—but regional assemblies will also have the power to impose a precept to raise additional funds, which will be an additional burden on the already hard-pressed council taxpayer. The White Paper makes it clear that they will be expected to make a contribution to their administrative costs through a precept on the council tax. We do not know whether the Government propose to impose any limits on the powers of elected regional assemblies to set a precept. Perhaps the Minister will clarify that.
The publicity campaign, the referendums, the reorganisation of local government, the administration cost of elected assemblies and the buildings are all going to cost us hundreds of millions of pounds, and for what? For the answer, I turn to the Minister's colleague in the other place, Lord Rooker, the Minister responsible for matters involving the Office of the Deputy Prime Minister. He assured the other House that there would be no new money and no new powers for elected regional assemblies. From what we have seen so far, it is clear that the powers that elected regional assemblies will have will largely be taken from local government: fire, planning, housing and so on.
Our problem with scrutinising cost is that we simply do not know the extent of the assemblies' powers and functions, and thus the cost that will be imposed. The White Paper set out the powers that the Government propose to give elected regional assemblies. The Deputy Prime Minister has then run around the country talking up those powers, telling a closed meeting in the northwest that an elected regional assembly will be an opportunity to reopen the Barnett formula, and telling others that transport, the police and learning and skills councils will be transferred to elected regional assemblies—all in a desperate attempt to shore up a rather flagging Government policy agenda.
Tony Flynn, the ousted leader of Newcastle city council, asserted that the closure of the Swan Hunter yard would never have happened if there had been an elected regional assembly. We were also told a few weeks ago that the trans-Pennine rail link would be safe if only there were an elected regional assembly.
Conservative Members have serious concerns about the time scale involved. The Government have reluctantly indicated that they will try to publish a draft Bill setting out the powers of regional assemblies before the referendums. That is an absolute requirement, and I hope that the Minister will be able to tell us in more detail today when that Bill will be published and how much detail it will contain. It will be of no use to anyone if it simply contains enabling powers that provide for Ministers to set out the powers in secondary legislation later.

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When my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) was a shadow Secretary of State, he wrote to the Deputy Prime Minister—
Mr. Raynsford: A wise man.
Mr. Hammond: Indeed. My right hon. Friend set out our concerns and asked the Deputy Prime Minister for the assurance that the Bill would be published in draft form so that we would know precisely what the powers would be. Eventually, a couple of months later, my hon. Friend the Member for Meriden (Mrs. Spelman), being a persistent sort of a person, managed to get a reply from the Under-Secretary in the Office of the Deputy Prime Minister who said:
"We have already published the White Paper, Your Region, Your Choice. This set out the powers that the Government intends for elected regional assemblies … The draft Bill will reflect the proposals outlined in the White Paper."
That is pretty clear. We put out a press release saying that the ODPM confirms that there will be no additional powers for elected regional assemblies.
The ODPM countered with its own press release in which the Deputy Prime Minister's spokeswoman, an official in the Department in which the Under-Secretary resides, said that the Government had already added to the powers originally set out in the White Paper and that discussions on other issues were continuing. In other words, the official spokeswoman directly contradicted what the Under-Secretary said in his letter to my hon. Friend. Ministers are fighting like ferrets in a sack over what powers will be transferred to these elected regional assemblies.
The hon. Member for Pendle (Mr. Prentice) is absolutely right about the nods and winks. We know exactly what is going on. We know exactly why the Minister and the ODPM were so coy about the precise powers that elected regional assemblies would have until after last Thursday. The Deputy Prime Minister, probably even now, is in Downing street warning the Prime Minister that unless he gives more powers to the elected regional assemblies, he faces another rout in October on the scale of the rout he suffered last Thursday.
I do not know who will win that battle within the Government, but I know that the people of the three northern regions when they go to the ballot box in October—if the Minister will confirm that these referendums are still on—have a right to know what powers they are being asked to vote for the assembly to be given so that they can calculate the precise costs and benefits of going down the Government's preferred route. It is simply not acceptable to ask the electorate to vote for a pig in a poke.
I will not be quite as ambitious as the hon. Member for Pendle who asked the Minister to confirm that the whole thing was off the agenda and would not be going ahead. I will simply ask the Minister this: if it is going ahead in October, will he at least give us the assurance that a draft Bill, clearly setting out the powers that elected regional assemblies will have, will be published before the summer recess and that Parliament will be
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given an opportunity to debate it so that we can tease out the questions that will undoubtedly arise before the people of those throe northern regions go to the polls?
3.18 pm
The Minister for Local and Regional Government (Mr. Nick Raynsford): This has been a curious and in some ways intriguing debate on an important subject. I congratulate the hon. Member for Congleton (Ann Winterton) on securing this opportunity to discuss regional government. As hon. Members know, the Government are committed to a far-reaching and radical programme of constitutional change and devolution, transforming what was one of the most highly centralised countries in the western world in 1997 into one in which there is far greater and more appropriate devolution of powers to different levels.
We are taking substantial steps to reverse the trend of excessive centralisation that characterised the Conservatives in government. They now seem to be trying to distance themselves from their record. Our record, by contrast, is strong and demonstrates how seriously we have addressed the need for devolution of power from Westminster and Whitehall. We have devolved power to Scotland and Wales and restored city-wide government it in London; now, we are offering the English regions the chance of devolved power.
That poses a problem for the Conservatives. They are trying to present themselves in a new light, and not as the ultra-centralists who took power away from local authorities and at abolished whole tiers of devolved government, such as the Greater London council and various county councils. They present themselves as the friends of the county councils, yet they seem to forget that they abolished Berkshire when they were in government. Instead, they are trying to present themselves as the party of devolution.
The problem is that the Conservatives cannot bring themselves to follow this devolutionary logic. They have put themselves in the absurd position of opposing devolution to Scotland, Wales and London, and now to the English regions Despite mouthing the rhetoric of devolution, in practice they have vehemently opposed it whenever they have had the opportunity to do so in the past seven years.
There is one notable exception to that trend, and he was referred to by the hon. Member for Runnymede and Weybridge (Mr. Hammond). I am very happy to pay tribute to the right hon. Member for Skipton and Ripon (Mr. Curry), and I would like to quote what he said on this subject less than three years ago:
"There is actually a case for regional devolution, and it is silly to pretend that that case does not exist. There are two arguments in favour of regional devolution. One is that there is a serious problem with representative democracy in Britain today. We have passed power out of the hands of people who are accountable."—[Official Report, 26 November 2002; Vol. 395, c. 218.]
That is a fair criticism, and it has been echoed by my hon. Friend the Member for Worcester (Mr. Foster), the hon. Member for Ludlow (Matthew Green) and many other Members who recognise that the extension of regional government under the previous Conservative Government—the hon. Member for Congleton referred

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to it—involved devolution of power to non-elected bodies and unrepresentative quangos, or to the government offices that were created.
Ann Winterton: Can the Minister answer a simple question? Why did the then Government act in that way? If he recalls what I said, he will have the answer to hand.
Mr. Raynsford: I do recall why they did it, and the right hon. Member for Suffolk, Coastal (Mr. Gummer)—the then Secretary of State with responsibility for such matters—frequently talked about it. It was recognised that an increasing number of Government issues needed to he handled at regional level, and that there had to be greater coherence among different Government Departments which had been acting separately. That was a perfectly logical and sensible approach, and the only criticism that I make is that it did not take account of the democratic deficit that the right hon. Member for Skipton and Ripon rightly highlighted.
I must tell the hon. Member for Congleton that the right hon. Member for Suffolk, Coastal does not share her Eurosceptic views about the origins of regional government in Britain. It did not owe its origins to Brussels, as she likes to assume, any more than our proposals do. It resulted from a proper analysis of the importance of good, efficient administration, and from ensuring the pulling together of different strands out of their separate silos, which I entirely endorse as an objective.
Ann Winterton: The Minister can stop calling me a Eurosceptic because I am a Euro-realist, and there are a growing number of Euro-realists in this country. I suggest that the Minister goes back a bit further in my speech. Most of the provisions introduced by the Conservative Government and the current Government are based on the European Union. It is about time that we recognised that fact and stopped trying to fool the British people about the origins of matters such as regionalisation.
Mr. Raynsford: Well, we can tell that the hon. Lady is a bit rattled by the success of the United Kingdom Independence party in her constituency in the recent elections. However, there is no substance to her allegations that our proposals for elected regional government in the English regions are the product of Brussels. They are not, and I can tell her that with some authority because I have been involved in this right from the beginning. In 1997, I was the Minister responsible for developing proposals for the Greater London Authority, which was the first of the English regions to have a devolved governmental structure. And since 2001, when I took up my current post, I have been involved in the development of proposals for the devolution of power to the English regions.
Those proposals and developments have been worked up here in London by the British Government. Obviously, we have taken advice from people overseas—in America, Australia and Asia, as well as in Europeߞand we have looked at overseas examples; that is proper, and any sensible and prudent Government would do so. However, we have developed our own
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proposals for the benefit of the English regions. They are not beholden to Brussels, and it is a monstrous travesty of the truth to suggest otherwise.
With the honourable exception of the right hon. Member for Skipton and Ripon, the Conservatives have been totally misguided on the issue of the regions. They were wrong on Scotland. They voted against regional government there, but had to change their minds and accept it. They were wrong on Wales, and had to change their minds and accept it. They were wrong on London, and had to change their minds and accept it. They will be wrong on the English regions, too, and they will have to change their minds and grovel once again. Sadly, they fail to learn any lessons from history. As I commented in a previous debate. their inability to learn reminds me of the Bourbons. So let us have a few facts from them, rather than scaremongering and nonsense.
This debate is about costs, and it is important to know the reality of those costs. The set-up costs for elected regional assemblies will be about £30 million in each region, as we have made clear. The expected running costs will be about £25 million a year, because the authorities will be small and streamlined, with 25 to 35 members. When we produced our initial proposals for London and the English regions, many people criticised us and said that there would not be enough councillors. Now, most people recognise that this is a sensible provision that provides adequate representation to ensure that we focus on the matters that must be handled at regional level, without excessive proliferation and certainly without duplicating the work of local government.
We recognise that there will be some initial local government reorganisation costs, but there is also the potential for significant savings down the line. We have received the report from the boundary committee and its final recommendations. It would not be right for me to comment on the recommendations at this stage, as Members will understand, but it is perfectly fair to highlight their implications in terms of the costings set out by the committee.
Under the recommendations, the number of local authorities in the two-tier areas in the three northern regions would be reduced from the current figure of 50 to between seven and 19 unitary authorities. That would be very different from the reorganisation of local government by the Conservative party in the 1990s, when it simply turned existing district councils into unitaries. That created a lot of additional cost and achieved no savings. Our approach is entirely different, involving a significant reduction in the number of authorities and scope for substantial savings.
Mr. Hammond: Will the Minister confirm that electors will not be offered only the choice of county-wide unitaries?
Mr. Raynsford: As I said, there will be between seven and 19 councils in total in the three northern regions, rather than the existing 50. There will be seven if people vote for a wholly unitary county, and 19 if they opt for the more extensive arrangements. As my hon. Friend the Member for Worcester and the hon. Member for Ludlow pointed out, there will be significant scope for reductions in unnecessary administration. I am

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astonished that the Conservative party seems to be pooh-poohing attempts to achieve efficiency and better value for money in public services. We shall remember that in future debates on this subject.
Mr. Hammond: Will the Minister give way?
Mr. Raynsford: I cannot because time is short, as the hon. Gentleman will recognise.
The debate is about the implications of regional assemblies. Assemblies will exist to bring financial benefits to the regions. They are part of our framework for the continued improvement of regional economies. Their functions will be focused on the twin pillars of economic development and improving the quality of life. The way to address regional disparities is to give the regions the tools to improve their economic performance, rather than seeking to constrain growth in better performing regions. Economic development will be a prime function and responsibility of elected regional assemblies. They will also improve the coordination of policy and services by bringing together regional strategies on a range of issues—including planning, housing, transport, employment and training and skills—all of which support the economic development agenda.
Through elected assemblies, people will have control over how significant proportions of central Government money are spent in their region. According to figures for 2002–03, an assembly in the north-west would have direct responsibility for programmes to the value of more than £1 billion, and it would have an important influence on other budgets totalling a further £1.6 billion. Such an assembly would thus take, or be involved with, decisions on some £2.6 billion of funding.
For almost a century, there has been economic division between the regions of our country. Development and prosperity have been disproportionately focused in the south, while the northern regions have faced the severe problems of industrial decline, unemployment and disadvantage. The Government are committed to an agenda to promote economic success and prosperity in all our regions, and we have already taken important steps in that direction. Regional development agencies—the Opposition opposed them, too, before they were set up, but they have had to eat their words—are helping that process. The next stage is to allow the people in each of the northern regions the opportunity to have a greater say in the future of their regions through democratically elected assemblies.

School Nursing Service (South-West Norfolk)
3.30 pm
Mrs. Gillian Shephard: I am delighted to have the chance to raise some important issues about an unsung, yet vital part of the health service—the school nursing service. When Minister for Health, the hon. Member for Pontefract and Castleford (Yvette Cooper) said:
"School nurses clearly provide an extremely valuable service to children. They have been looking after children's health for more than 100 years—the first was appointed in 1894—and they are often the first point of contact for teachers, parents and children requiring health advice in school. They often work closely with general practitioners, with primary care and sometimes with specialist paediatricians, when the need arises. They also play an important part in providing a safety net for children who have perhaps slipped past the routine development checks or immunisations offered under primary care in the early years".—[Official Report, 20 April 2000; Vol. 348, c. 1128.]
It was that role of
"providing a safety net for children who have perhaps slipped past the routine development checks"—
or rather the lack of such a role in the case of six-year old Lauren Wright a constituent who died from abuse in May 2000—that alerted me to the present day work of school health advisers, as they are now called, and that led me to raise issues concerning the school nursing service today.
I do not intend to revisit the case of Lauren Wright, not least because I have been able to pursue it on many occasions in the House. However, it is worth pointing out that the independent NHS review of Lauren's case produced by the then Norfolk health authority concluded:
"The health agencies did not give Lauren Wright the best service. If they had, despite all the faults identified by social services, it is most likely that she would have been protected."
That general criticism of the role of the health service was repeated in the review's detailed criticism of the working arrangements for the school nurse in the case. There were substantial criticisms of the other agencies involved, namely education and social services, following the case. I had the opportunity to present evidence about it to the Victoria Climbié inquiry. As became all too common in such cases, there was a lack of liaison and communication between the professionals involved, but I am glad to say that a great deal has been done locally to tighten up procedures.
Some time after the Lauren Wright NHS review was published, I was contacted by Mrs. Jenny Atterwell, a school health adviser now working in the Southern Norfolk primary care trust. She wrote to me very fully in the spring of 2003 and I will read some extracts from her letter. Among other things, she said:
"I became aware that your understanding of the current school nursing service was slightly out of date."
That was the case, but she put me right, as have subsequent things that I have done. She explained the work done by the school nursing service and said that

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the advisers and members of the team in her area consist of school health advisers, a staff nurse and a school health assistant. The school health adviser's role
"mainly consists of child protection work … working with school aged children/young people and their parents who are experiencing health or social problems and managing the day-to-day running of the team. Staff nurses mainly provide health care plans for conditions such as diabetes, epilepsy, allergies etc … reviewing of child health records moving in and out of the area and providing advice and support to parents on issues such as bed wetting and behavioural problems. The School Health Assistants, who are nursery nurse trained, provide a screening service of vision, hearing and height to 5 year olds in school. The Staff Nurse and assistant work independently but and under the guidance of the School Health Advisor."
Mrs. Atterwell gave further details of the child protection role of school health advisers. She went into detail about what was required when there were case conferences from the health service, what was required in reports and in working with child health records. I think it significant that she added:
"The child protection role of the School Health Advisor has increased dramatically over the last 2–3 years … I have no reservations whatsoever in saying that child protection has to be of the utmost priority … However I would also say that I did not enter the school nursing profession to deal almost exclusively with child protection and at times I almost feel like a glorified social worker. The public health role of the school nursing service has almost disappeared. This role includes a lot of preventative and supportive work with children and young people, e.g. health promotion and drop-in services in high schools. I feel strongly that if there is a lack of preventative work by a number of agencies, then we will see, and I believe already are seeing, a significant rise in children and families experiencing increasing difficulties with health and social problems."
She concluded with concerns about what she described as the need to address the current serious under resourcing of school nursing services in central Norfolk. I shall raise with the Minister later the implications of that last remark. What is clear from Mrs. Atterwell's letter is that we cannot do without the essential role played by the school health advisory service, not only in child protection work but in preventive public health work with children, young people and their parents and other agencies. There will be increased demands on the service as a result of the Green Paper on children, and no doubt the forthcoming public health White Paper, which I believe will be published this summer.
The demands on a service that I already perceived as being overstretched were clarified further in two excellent meetings that I had recently with the school health advisory teams in the Southern Norfolk and West Norfolk primary care trusts. Both meetings revealed teams of enthusiastic and committed professionals. They were brimming with ideas about what their service should do, how it could be improved, how it might be expanded and so on. At present, the Southern Norfolk team is in the throes of reorganisation and there are problems about access to files and other information, but it has not diminished the team's appetite for the job and it is time-limited—the reorganisation will one day be completed.
Both teams defined their areas of responsibility in a similar way and had similar views on the way in which the skills of differently qualified members of the teams should be used. I should be interested to hear the Minister's view of the career path in the school health advisory service, what kind of qualifications people
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should have at different stages in their career and how easy it is to progress from one set of qualifications, and therefore the duties and responsibilities, to another.
In the two teams, the lead school health adviser takes responsibility for organising the service, for service development and for professional development. The lead adviser also has an important child protection role to ensure that there is an extremely prompt response to child protection cases, for which everything must be dropped, and to other crises.
Newly qualified school health advisers are the major case load holders, setting up and running clinics and drop-in centres, care planning for children's complex health needs in schools—the cases are increasing all the time—dealing with child protection involving health assessments, conference attendance and working with a core group of the other professional agencies in health, education, social services and so on. They also undertake health education, facilitating the training of school staff, curriculum development and responsibility for looked-after children. Team members at staff-nurse grade share that work and review the movement of health records in and out. The importance of that responsibility cannot be over-emphasised, given the mobility of the population and the fact that so many child abuse cases eventually reveal a defective sharing of information.
School nursing support workers, who perhaps have an NNEB qualification, organise and run screening for five-year-olds. They refer children as appropriate to GPs, audiology, ophthalmic services and so on.
The Minister will be familiar with the main message from my meetings with the teams: overstretch. In the West Norfolk PCT team, in order for staff numbers and grades to come into line with the national case load size, as outlined by Dobell and Jackson, there needs to be an additional 157 hours a week, or to put it another way, the team is running with 42 per cent. of its appropriate staff quota. The staff nurse role has 38 per cent. of its required capacity, and the nursery nurse role only 22 per cent. On the other hand, a specialist school adviser, who works in the two special education schools in the area, provides 115 per cent. of the required capacity. That is an organisational difficulty, but it does not help much in the other areas of the work.
The Southern Norfolk PCT team describes itself as "seriously depleted", adding that its
"lack of numbers is not reflected in our enthusiasm, dedication to our client group, and our professional standards which remain high."
However, all team members
"agree that the level of activity in some areas of practice has increased significantly leading to a reduction in overall service, increased invisibility of the service to schools and raised levels of stress amongst team members that borders on being unhealthy. The School Nursing Team agree that this situation cannot continue."
The Minister should be concerned about that evidence. It is not that the Government have not put more resources into the NHS, but the members of the teams, and my perception, point to a lack of policy priority for this area of work relative to other parts of the health service. That was probably always so. There are more glamorous and high-profile areas, and areas to do with the Government meeting targets, reducing deaths from

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cancer and heart disease. All of us understand that, but the requirements of the Children Bill and the public health White Paper can only put more emphasis on the role of school health advisers.
Now is not too soon for the Minister to be clear about her strategy for the future of school health advisers. She is bound to say that a review is going on under the chief nursing officer, but I am sure that she has her own views about what that review should say. I cannot believe that, if she has had any exposure to these professionals in the health service, she will not agree that those groups of people could do much by way of early intervention to prevent escalations of health problems and behavioural difficulties in children as they become young people.
From my experience in public service over a long period, I know that the school nursing service plays an invaluable part in helping and supporting young carers, for example. That is particularly apposite, because it is national carers week. It provides a discrete, confidential service for young people with health or emotional difficulties in school. In our county, it backs work in schools through projects such as the healthy Norfolk schools initiative and it provides the necessary professional expertise in child protection. It would like to be able to provide a full screening service for all five year-olds. Not so long ago, it was possible for it to do that in our area, but now it does not have the resources.
The Minister might like to give us her views on how valuable she thinks such a screening service would be. There may be professional differences of opinion. Some may say, "What's the good? It is a snapshot. Once you have done it, all kinds of other things can emerge, and you are not going to go back and revisit it." I understand that, but I am breaking my promise to the Minister somewhat in saying that, in the case of Lauren Wright, such a screening might have been enough to avoid her death. We cannot say whether there were many other factors. There is no doubt that, had there been a routine screening of five-year-olds in that school, the bruising that that child was suffering over 18 months—she died when she was six—would have had to be discovered by a professional view.
If school health advisers had the resources, they could give early help and advice to the parents of children with disabilities. Perhaps the Minister will comment on that. I would be glad if she did. Only last week, I visited a marvellous special school, the Chapel Road school in Attleborough, Norfolk, where parents were saying that it provided an immense amount of support, once the children were at school, on how to cope with one member of the family who happens to have disabilities. However, if professional health advisers were involved as well, that would be an extremely useful step. There could be so much more support for those parents.
In "Every Child Matters: The Next Steps", published earlier this year by the Minister for Children, much was made of the need for early intervention, or, to put it another way, for preventive work on the part of all
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relevant agencies. That document states on page 7 that consultation established that there was a need
"to intervene earlier through better information sharing, a common assessment framework, lead professionals, multidisciplinary teams, and the co-location of services through extended schools, Sure Start Children's Centres and other community sites."
The Minister will feel that that could be a text for the work of the school health advisory service but, obviously, it needs to be equipped for the job. In a letter that it prepared for my meeting with them, the Southern Norfolk primary care team spoke about the public health role:
"The School Nursing Team agreed that this was an area of practice that had become sadly neglected. We agreed that many of our current areas of practice had a public health link. Many issues regarding Child Protection are related to public health e.g. poor housing and poverty leading to poor health. However all we, as a primary care group, are doing is crisis managing such public health issues and not providing any early intervention or preventive input."
It put forward, as a team of professionals, proposals to improve that situation: helping curriculum development in schools, health focus days, improving access to the school nursing service, up-to-date materials, knowledge, classroom support and so on. The Minister will undoubtedly be familiar with all those things. She is bound to be an enthusiast for this area of her responsibility—she could not have had contact with the service without being an enthusiast for what it does, which is very infectious and very impressive. She is bound to see the curious discrepancy between the aspirations of "Every Child Matters" and what is happening on the ground.
The school health advisory service could do so much to fulfil the promise of intervening earlier through better information sharing and so on, as outlined in "Every Child Matters". It now needs a clear Government strategy for its work. Those in the service need to know more about ministerial thinking on the qualifications framework and on the career paths of those who work in it. I hope that Ministers understand that they have, in that part of their service, a group of dedicated, enthusiastic and committed professionals, whose provision and expertise are entirely in line with the demands of today's children and parents. I know that I shall not be disappointed by what the Minister is going to say.
The resources arc in the health service. It is a question of making this part of the service as much of a priority as possible. The school health advisory service needs the resources and that policy priority. I hope that we will hear from the Minister today that she intends to equip it to fulfil its role to the utmost.
3.49 pm
The Minister of State, Department of Health (Ms Rosie Winterton): I congratulate the right hon. Member for South-West Norfolk (Mrs. Shephard) on securing this important debate. I assure her at the outset that the Government recognise and agree with her about the important contribution that school nurses can make to health priorities such as obesity, sexual health, teenage pregnancy, health inequalities and child protection, and in giving support to carers.
The other day, I was talking to my father, who happens now to live in Norfolk, but who used to be a head teacher in Doncaster, in an ex-mining area. He

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talked to me about the important role that his school nurse played at that time in tackling some of these issues. That conversation and meetings that I have held with school nurses have given me an understanding of the points that the right hon. Lady makes.
The contribution of school nurses was also highlighted in "Making a Difference", our strategy for nursing, which was published in 1999. Following that, the Government funded a three-year national development programme for school nurses, including the publication of a school nurse practice development resource pack, the establishment of leadership posts and the consideration of funding for specific projects that would support school nurses.
Mrs. Shephard: I wonder whether the Minister understands that although specific projects can be useful in addressing a particular need, they can also be a plague for professionals—whatever profession they are in— because they can distort their local priorities. Such professionals may also sometimes feel threatened by specific initiatives. I am sure that she knows what I mean—I am not sure how much such initiatives help.
Ms Winterton: Particular projects can be of great assistance in, for example, spreading best practice and re-emphasising the particular contribution that can be made. It may sometimes be difficult, but it is right that we should devolve power. Shifting the balance of power is about allowing local primary care trusts to make decisions that suit their local priorities. However, it is often helpful to show how specific projects can contribute towards making a difference in some of the areas that I have outlined.
Mrs. Shephard: May I give the Minister an example?
Ms Winterton: Of course.
Mrs. Shephard: In the West Norfolk primary care team, the school health advisory service has been asked to provide a particular service for the "healthy Norfolk schools" initiative, which has its roots in a national initiative. The criteria that must be applied in identifying the schools to take part in that initiative are based on the numbers of free school meals taken by the pupils. However, the measures of deprivation applied by the team are slightly different, and do not necessarily coincide. I am sure that the Minister can see that although there is much value in such initiatives, they may, on occasion, cut across local judgments.
Ms Winterton: I would be interested to know whether there are particular difficulties in the project that the right hon. Lady mentions. However, I believe it to be important that we use local projects and local initiatives—particularly in the school nursing service—to show some of the benefits that can be brought.
The right hon. Lady mentioned the 2003 Green Paper "Every Child Matters", which highlighted the importance of preventive services for the school-age population, and the need for integrated children's services, including school nurses and health visitors. She drew particular attention to the case, in her own constituency, of Lauren Wright, in which that lack of integration led to tragic results.
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The right hon. Lady also said that we were undertaking a review through the chief nursing officer. The review is examining the contribution of all nurses, midwives and health visitors to children's services. However, it has specifically considered how school nurses can be supported in promoting and protecting the health and well-being of vulnerable children as part of their child-focused public health role. The recommendations of that review will be published shortly, but all those different strands point to the need to build the school nursing work force. I also acknowledge that the work force's present small number in relation to the range of important health issues that they have to tackle means that we must take steps to ensure that it is possible to enlarge it. We have undertaken a range of initiatives to support local organisations in the recruitment, retention and return to practice of school nurses and others in nursing disciplines. Most importantly, we have increased the number of nurses by about 67,000. Therefore, there is a larger pool to draw on. In the right hon. Lady's strategic health authority, about 3,000 more nurses and midwives are working in the national health service than there were in 1997.
As we have said, it is up to primary care trusts, which are the cornerstone of the NHS and are best placed to ensure that the local health service reflects the needs of the local community, to examine the changes that need to be undertaken. Between them, the Southern Norfolk and West Norfolk PCTs have been examining how to spend some of the increase of £27 million that they have received this year on improving school health services. A number of actions have been taken and I am sure that the right hon. Lady is well aware of those. I do not have time to address them in enormous detail just now, but I am sure that she will know that only last Friday, a conference was held in Norwich. It examined the services that are currently available, the skill mix in the nursing teams, and future requirements. That means that Norfolk county council and the PCTs are working closely together to ensure that they have a properly integrated service. At a local level, the message is getting through that the issue that we are discussing can play an important part in public health matters.
The right hon. Lady referred to "Choosing Health?", which will be published later this year. I have every expectation that it will receive many responses about school nurses and about what can be done with the school age population, particularly on preventive health, but also on some of the screening to which she referred.
In the time that is left to me, I want to address some of the particular points that were raised, for example, on career paths and training. We are examining the development of core competencies for those working with children, as was set out in the Green Paper, to see how their career development can be improved. As I said, the chief nursing officer review has also considered the training needs of nurses who are working with children—particularly those who are vulnerable.
On examining child protection issues, we are encouraging more proactive work with children who are most vulnerable and examining promoting early intervention, in the way that the right hon. Lady outlined, and offering support to families. Again, that is in keeping with the Green Paper's recommendations.

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She referred to screening—routine weight measurements on school entry. Evidence from several reports is being considered that such screening can lead to improved protection. That consideration is taking place within the overall national framework for children; again, publication will be later this year. There is a range of ways to do things at national and at local level.
We are examining the important points that the right hon. Lady made about the role of schools nurses. I endorse that completely and the Government have been committed over a number of years to examining the role of such nurses and to how we can develop it further. The whole agenda, involving the public health consultation and the examination of the role of nurses and carers and the support that they can be given, means that the role of school nurses will be increased as she has suggested.

Pilots' Flying Times
4 pm
Mr. Mark Lazarowicz: I am very grateful to have secured this debate on the important and topical subject of limits on flying hours for airline pilots. I applied for the debate because I was approached by a number of my constituents who are airline pilots and who were concerned about the proposals under discussion at European level. I have considered the points that they raised and they are very important. They certainly deserve highlighting further in Parliament, so I am glad to be able to do that and I look forward to the response from the Minister.
The issue is topical because, as the Minister knows, Europe has for some time been considering plans to harmonise flight time limitations across the European Union. Only last week, Ministers discussed the proposals at the European Union's Transport Council. Owing to the fact that five countries opposed the proposals, they will be discussed further and I am glad to raise the issue today. I hope that because the Minister will have more chance to pursue the matter through the Council, he will be able to take account of the points made in the debate and the concerns outside the House.
Until now, it has been up to each country to set its limits on flying times. I am not opposed to a framework for the regulation of flying hours across the European Union; indeed I strongly welcome it. There should be Europe-wide regulations and standards to maintain high levels of safely and to ensure fair competition. However, the issue is about the level at which that regulation should be set. The UK currently has the best and strictest system of flight time limitations in Europe. No doubt partly as a result of that, our aviation safety record is the best in Europe, and we must not see a lessening of that. There must be a levelling up of European standard to match the high levels of safety provided for UK passengers and aircrews. If the proposals go forward as they stand, the fear is that the UK's high safety standards will be compromised.
The detailed proposals drafted after amendment are not yet widely available. Having tried to understand some of their complexities, I know that it is difficult to make like-for-like comparisons between current UK and proposed European standards. The bottom line is that the proposals under discussion in Europe would lead to pilots in the UK working longer hours, which concerns my constituents and me.
The bystander may ask, "What's the problem with airline pilots working an extra hour or two? How can that make such an important difference to airline safety?" When it comes to aviation safety, it can make quite a lot of difference. In an extreme case, it can make the difference between safety and a plane crash—between a safe journey and a tragic accident that could, at worst, cost hundreds of lives.
The European Cockpit Association has quoted research carried out in the United States by the Federal Aviation Authority which points to a greatly increased probability of accidents with an increase in duty time and, in particular, cumulative duty time. The research suggested that the probability of an accident increases

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sixfold if the length of a pilot's duty in the air increases to 13 hours from 9 hours. As the European Transport Safety Council pointed out in a recent report:
"The operational demands of the aviation industry"
inevitably entail
"shift work, night work, irregular work schedules, unpredictable work schedules, and time zone changes".
All those factors pose challenges to human physiology. Since they relate to fatigue and performance impairment, they pose a risk to safety.
There has been a considerable degree of data collected over the past two decades on transport accidents and fatigue. In the case of commercial aviation operations, it is suggested that about 70 per cent of fatal accidents are related to human error. Not all of those will be caused by fatigue, but one reasonable estimate suggests that the risk of fatigue of the operating crew contributed about 15 to 20 per cent. to the overall accident rate in commercial aviation. It is therefore essential that we do not add to that risk through the changes that could come about from harmonisation of rules in Europe.
It is particularly important that flight duty periods are limited in line with scientific research in the area, which has been carried out in this country and elsewhere. It is essential that sufficient minimum rest periods ensuring quality sleep are guaranteed, and that provision is made for time zone transitions so that the effects of jet lag are dealt with.
Unfortunately, according to the advice that I have been given, many expert bodies believe that the current European proposals still do not make a sufficient commitment to limiting flight duty periods or guaranteeing minimum rest periods. Indeed, the case for the regulation of time zone transitions was not even included in the draft regulation of the original proposals. I am told that that is the view of the European Committee for Aircrew Scheduling and Safety, and I have no doubt that the Minister will be aware of its report some months ago. It concluded:
"Based on our current understanding of physiological and psychological factors contributing to fatigue in aviation operations, it is our view that there would be a significant increase in the risk of fatigue-related incidents and accidents if operators were permitted to operate to the limits specified in the EP-proposal."
The committee has not had an opportunity to comment on the most recent amended proposals, but there is still concern that they could have the same results that are highlighted in the above quotation.
I am aware that new regulations would not compel UK airlines to increase the hours operated by their pilots, and I know that several UK airlines have said that the changes will be unlikely to affect them. However, it is naive to assume that commercial pressures will not influence the situation in the UK. As a result, UK pilots could end up flying more hours, even if that is not the intention at this stage. Even if they do not, it is anomalous for other European pilots to continue to fly for longer hours. It would be more reassuring to know that when a plane flies over my
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constituency, or your constituency in Newcastle, Mr. Deputy Speaker, all pilots are getting appropriate rest rather than just those working for UK airlines.
Mr. Deputy Speaker: Order. My constituency is not in Newcastle; it is in Gateshead and is called Blaydon.
Mr. Lazarowicz: I am grateful for that correction, Mr. Deputy Speaker. I should have known that, and I hope that I have not caused offence to you or your constituents.
In the answer to my parliamentary question given earlier this week, the Minister told me that the Civil Aviation Authority believes that the current proposal, since it has been amended, is acceptable. I respect the expertise of the CAA, but the Minister will be aware that many are still concerned about the proposals—in particular, but not only, the pilots who fly the planes in which millions travel across the UK skies every day.
Will the Minister investigate why the CAA did not consult its own expert body, which is concerned about these issues? I am told that the flight time limitation group, a sub-group of the fixed wing advisory group, set up after the Bader report of 1972, was not consulted when the CAA gave its views on the proposal. I hope that, if nothing else, the Minister tells me why that did not happen, and ensures that the appropriate expert group, which involves pilots' organisations, will be consulted on the details of the revised proposals going through the European institutions.
Given that the consequences of an air crash can be so serious, we cannot afford to have anything less than the highest possible standards of air safety in the UK skies. I know that the Government are committed to aviation safety and concerned about the link between fatigue and transport accidents. Indeed, the Government have an excellent record on introducing measures designed to improve safety, not just in the air but for road, rail and shipping. Last year, I was privileged to serve on the Standing Committee that dealt with one of those measures. As we have such a good record on high safety standards, it is even more important that we maintain them.
Now that the proposal for European regulation has been sent back for more discussion, I hope that the Minister will take the opportunity that it gives him to consider the points that I have made today, listen to the points raised by the pilots' organisations and the many safety experts, and see whether we can make an improved proposal over the next few months. I know that he has been in constructive dialogue with pilots' organisations and other bodies, but I hope that he takes on board my concerns about the need to consult, in particular, the expert group of the CAA.
At a time of considerable competitive pressure on airlines for lower and lower fares, we must never forget that our top priority in air travel must be safety. Longer hours for pilots might well cut airline costs, but that must not be at the expense of the safety of airline passengers and crews.
4.13 pm
The Parliamentary Under-Secretary of State for Transport (Mr. Tony McNulty): I know that Blaydon is not in Newcastle, Mr. Deputy Speaker, but that is by the

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bye. I congratulate my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) on securing this timely debate. As he pointed out, flight and duty time limitations—FTL, as they are known—are a very important safety requirement. I am grateful to him for his comments on the safety record not just of this Government but of successive British Governments. Safety is paramount throughout the transport world, not least in aviation. As he suggests, it has long been recognised that fatigue could be a contributory factor in aircraft accidents. The Civil Aviation Authority's current requirements have their origins in a 1973 review of the subject, chaired by Douglas Bader. Since then, they have been subject to continuous development in light of scientific evidence and operational experience.
The current UK legal requirements on flight time limits are contained in the air navigation order. That requires operators to establish an FTL scheme to ensure that no member of the crew of an aircraft will suffer from fatigue while he is flying to the extent that it endangers the safety of the aircraft. Such schemes must be approved by the CAA. In addition, the order sets absolute limits of 100 hours of flight duty in any 28 days, and 900 hours of flight duty in any 12 months.
The preparation and presentation by an operator of any FTL scheme is complex and time consuming. A scheme needs to strike a balance between the needs of the many members of the crew and the operational requirements of providing services to various parts of the world at various times of day. Schemes also need to cover a wide range of issues and eventualities to achieve the goal of maintaining an appropriate level of safety on all flights, as my hon. Friend suggested.
The CAA therefore gives guidelines on how to establish an FTL scheme in its publication "CAP 371: the Avoidance of Fatigue in Aircrews—Guide to Requirements". The limits quoted in CAP 371 are for guidance only, and the CAA can agree variations to the limits if an operator can show that an equivalent level of protection against fatigue can be achieved in another way.
Of course, as my hon. Friend intimated, the air navigation order and the CAA guidance apply to UK airlines only. Foreign airlines operating in the UK have to comply with any FTL requirements established by their national aviation authority. Such FTL requirements need only follow the provisions of annexe 6 to the Chicago convention, which does not set specific limits.
Within Europe, the need for harmonised operational requirements providing a high level of safety has long been recognised, and was highlighted by the creation of the single market in air services in 1991. There have since been a number of attempts to produced harmonised flight and duty time requirements, which we fully supported. However, in view of the different FTL requirements, operational patterns and workplace agreements across Europe, this has been a fraught process. It may be useful to outline efforts made to agree harmonised FTL requirements since 1991.
The European Joint Aviation Authorities, with considerable input from our own CAA, developed standards for the certification of airlines in its "Joint
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Aviation Requirement on Commercial Air Transportation (Aeroplanes)", known as JAR-OPS 1. A section of that document, known as sub-part Q, dealt with FTL and was not too dissimilar from current UK requirements. The CAA was satisfied that it achieved an acceptable level of safety. However, sub-part Q was not adopted by the JAA with the rest of JAR-OPS 1, as some JAA member states had differing concerns about various aspects of the requirement and its effect on their aviation industries.
After the failure of the JAA to agree on FTL, the European Commission had a go. It held a series of meetings with stakeholders and regulatory authorities, but was unfortunately unable to reach a consensus on a set of requirements with the interested parties. Consequently, when the Commission issued a proposal for the incorporation of the requirements of JAR-OPS 1 into EC law, it did not contain any detailed FTL requirements. When the European Parliament reviewed the proposed regulation adopting JAR-OPS 1, it decided that it was incomplete without any FTL—an understandable viewpoint.
The Parliament's rapporteur on the proposal, Brian Simpson, a UK MEP, put considerable effort into producing, in consultation with the airline and crew representatives, baseline flight time limitation requirement. It was subsequently adopted by the Parliament in September 2002 as an amendment to the proposed regulation. That formed the basis of the Commission's proposal for flight and duty time requirements.
The CAA reviewed the Commission's proposal on our behalf. Its FTL experts advised that, with a small number of amendments, the proposal could form an acceptable baseline requirement, supported by the additional requirements of individual member states. However, given w lat my hon. Friend has said, I will check that point and make sure that the FTL group of the CAA was indeed so advised.
During the consideration of the proposal by the Transport Councils aviation working group, we sought to have the proposal amended in line with the advice we had received from the CAA. During those negotiations, held just last week, as my hon. Friend said, we succeeded in having almost all the amendments we proposed incorporated in the text, which was considered by the Council last Friday.
At the Transport Council, it was agreed to defer a decision on the proposal, as some member states still had some outstanding areas of concern. Those related mainly to the differences between the proposal and their current requirements, invariably less than those of the UK, and the effect that they might have on their industry. There was no suggestion by any member state that the proposal was in any way unsafe. Indeed, during negotiations on the proposal, most member states said they believe that operational experience shows their existing FTL requirements are safe. That is the situation today. We await future developments with interest.
As my hon. Friend suggested, I have a good working relationship with British Airline Pilots Association, among others, and intend to speak to it in the time between last week's failure and any subsequent replay of the FTL directive at subsequent Councils. Thanks to the assurance of the CAA about safety considerations and

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the acceptance of most of the amendments that the CAA and ourselves put forward in the Council, we were satisfied with, and were one of the countries that supported the passing of, the directive last week.
With any flight limitation scheme, one has to consider the effect of the scheme as a whole and its ability to protect against unsafe levels of fatigue. I do not demur from anything that my hon. Friend suggested in that regard. Therefore, I do not believe that it is necessarily useful to compare individual limits for the EC proposals with the equivalents from CAP 371.
However, it is worth noting that the limits set by the proposal would have been legally binding, rather than just guidance—as CAP 371 is—and could be varied only through a defined process. Furthermore, a key provision of the requirement placed an absolute obligation on operators to ensure that crew have sufficient rest time and that duties are planned to ensure that crew members remain sufficiently free from fatigue to operate to a satisfactory level of efficiency and safety under all circumstances. I assure my hon. Friend that the CAA was confident that the final proposal taken as a whole would have allowed it to ensure an adequate level of safety for UK airlines, but as I said, I am more than happy to meet BALPA, and other interested parties, to allay any concerns.
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I congratulate my hon. Friend on securing the debate in such a timely fashion. If all hon. Members managed to secure debates on issues two or three days after those issues had been dealt with in European Councils, we might have a higher degree of topicality in Westminster Hall and parliamentary debates. My hon. Friend will have more to say on the matter, given the time that we have before it comes before the Council again. I am sure that I will spend as much time on the matter between now and when it next comes up in Council.
In conclusion, I emphasise that the CAA has an excellent—I think exemplary and unparalleled—record on safety in civil aviation. It is entirely right and proper that we turn to the CAA for guidance on issues as important as safety. It says that what was on the table last Thursday and Friday was appropriate, as amended. I would need a lot of persuading that someone knew better than the CAA what should prevail. In the gap before the next time that what is on the table is presented to Council, I am more than happy to be engaged with and persuaded that we need to do more and go further in terms of the FTL. I again commend my hon. Friend for raising such an important matter in such a timely fashion.
Question put and agreed to.
Adjourned accordingly at twenty-four minutes past Four o'clock.