Westminster Hall Sitting of 8 September 2004

Preamble
[MR. FRANK COOK in the Chair]

Nottingham, North (Regeneration)
Motion made, and Question proposed, That the sitting be now adjourned.—[Jim Fitzpatrick.]
9.30 am
Mr. Graham Allen: The first thing that I want to do is to pay tribute to all those involved in regeneration in Nottingham, North—we never want for effort and commitment from our community activists, full-time workers, councillors, Members of Parliament and Ministers. They and we are part of the answer, not part of the problem. I dedicate this debate to one of those selfless regenerators, Norman Allcock, the chief executive of Nottingham Business Venture, who, sadly, passed away on Friday. His sense of dedication and public service typified that of all those involved in regeneration in Nottingham. We will miss his experience and dedication.
My objective today is to draw on their and our experience, define the problems evident in the failure to regenerate Nottingham, North and come up with some possible ways ahead for the Minister and others to think about. I will hold an open discussion at the Crabtree community centre in my constituency from 10 am to 1 pm on Friday 3 December, to see whether we can take those suggestions forward, and I hope that the Minister will find time to pop along.
I have grouped the problems around some key themes, the first of which is low impact. However hard we have all tried, there is no doubt that, despite our efforts and years of generous funding, there is often little discernable impact on or sense of progress in the communities that we are trying to serve. That leads to cynicism and then distance between the regenerators and the community. Joined-up thinking must mean, above all, joining up with local people. Initiatives themselves need to join up.
Let me take housing as an example. Nottingham, North is a series of former council estates, unleavened by industry or recreation, brick-built semis described by one Home Office official as
"the most densely packed housing I've ever seen".
Residents in Nottingham, North make it clear that the quality of the environment and building out antisocial behaviour—"externals"—are at least as important as internals, such as the Government's decent homes standard, which means that 95 per cent. of spending goes into the internal appointment of houses. Unfortunately, implementing the decent homes standard is the key floor target imposed by central Government via our One City Partnership; it is the main string attached to housing funding. There used to be estate action funding, which allowed people to plan "externals" from year to year. Now we have a potpourri of different bits of funding. For many, the £5,000 per house that will come with the arm's length management organisations, welcome as it is, will not do it.
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Many identify the need for estate reconfiguration to provide security and social mix. However, there is no mechanism to do that systematically, so it can degenerate into speculative building on community assets such as parks and former school grounds, creating middle-class ghettos rather than integrated shared-ownership schemes. No one seems to know what regeneration is about any more.
What is the vision for the outer-city former council estates that feel so neglected? My constituents, with possibly the lowest educational attainment in the UK, have not read the Deputy Prime Minister's speeches, let alone examined websites or had access to them. More importantly, they do not have the feeling in their gut that all this is for them. Without people on the ground buying into a clear vision, priorities for regeneration funding are set by regeneration professionals and organisations with a vested interest. For example, a project might be funded by one type of funding and when that finishes, another source is targeted so that the project can continue. We rarely ask about the impact of a project on child road fatalities, teenage pregnancy or the reading skills of the under-fives, or of housing policy on antisocial behaviour.
One community worker told me that they had had a recent experience while action planning where it was possible to see professionals trying to put forward projects that they had an interest in rather than addressing local needs. In the urgency to show improvement we may be guilty of applying funds without fully understanding what we are trying to achieve and how.
The nature of some funding applications can be restrictive as it leaves little room for the flexibility to respond to, and grow with, acquired understanding. Outcomes have to be predicted, and we end up "bending" the monitoring and reporting to fit the funding rather than meeting a need. More local control over funding could enhance partnership and provide strategic and flexible responses, delivering regeneration that local people could see and feel, which would have a serious impact on key problems.
My second theme is the bypassing of local government. Many schemes seem to be designed to avoid giving locally elected councils the ability to spend money as they, rather than the centre or its appointees, see fit. That is partially because Whitehall, No. 10 and Ministers have less experience in local government than ever before; it is also due to past failings in local government. The Minister and I have debated the issue of independent local government, which should be able to decide for itself where its local share of the national income tax kitty should go. That is one end of the argument and is commonplace in most western democracies, but we are currently at the other extreme, where everything appears to be controlled by the centre.
All the "new localism" jargon cannot conceal the fact that the "one size almost fits all if you don't look too closely" model is in operation. That can only be ultimately resolved by constitutionally defining in writing the roles of central and local government. Until then, we will all continue to twist and wriggle around the issues, with regeneration being just one casualty of the lack of clarity.

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Despite that, the city council in Nottingham, on its own initiative and driven by two council leaders—Councillor Graham Chapman and Councillor Jon Collins—has developed nine area committees, of which three are in my constituency. They are council-led, multi-agency, and respond to the needs of two or three housing estates. Although resources are small, the early signs are good. At best, area committees are run less like council committees and are seen as a genuine forum for discussion and dialogue, although procedures in some still need to be more inclusive, informal and welcoming to the community. MPs, councillors and communities need to have genuine dialogue on the role of elected members as modern community leaders.
All nine area committee action plans are realistic and specific, and come together as one plan for the whole city. However, a lot of schemes or methods of working seem to be imposed on us by funding bodies such as the Greater Nottingham Partnership, the East Midlands Development Agency or the Learning and Skills Council, often late in the financial year when the struggle is to meet deadlines to spend money or to meet centrally set quotas. Even the pre-existing officers structure of the local council, if it is not given proper political direction, can arrest area committee development or obstruct regeneration: property professionals are the most obvious example of that.
If the Government wish to continue funding through a plethora of bodies, as a first step they could agree to fund only in support of the contents of agreed area action plans, echoing what Labour's founding fathers of planning aspired to in 1947 before bureaucracy overwhelmed town and country planning. Catching up with 1947 is not much of an ambition. Perhaps the vision needs to be not only independence for local councils, but a serious commitment in the manifestos of all parties to democratic structures at neighbourhood level, promoting the debate on what those democratic structures might be on the lower level. Come what may, helping local councils to get better without devising ever more Byzantine ways of bypassing them must be a key part of the regeneration answer that we all seek.
My next theme is confusion. I have yet to meet the Einstein who completely understands the multitude of bodies, even in Nottingham, North alone, that have direct and indirect connections with regeneration: all the funds, grants, and programmes, and all the initials and jargon. The commander of the city police tells me that he counted 36 different funding streams before he gave up. I spent the whole of last summer trying to come to terms with that and still do not feel confident about it, so how can one of my constituents grapple with it?
On structures, schemes overlap and reproduce rather than complement. Greater shared understanding would help to focus genuine partnership funding, planning and application. At the moment, too many partnerships are pulling in different directions on the same agenda. We need one integrated model that defines responsibilities and relationships between the people, local agencies and the big spenders of the Learning and Skills Council, the East Midlands Development Agency, the Government
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office for the east midlands and the Office of the Deputy Prime Minister, as well as local government. We operate within an environment of vague awareness rather than understanding. A high-level agreement between partnerships contributing to a single shared strategy would help. As professionals, we can all get caught up in blaming the partnership that we least understand.
Millions of pounds could be redirected by reducing duplication and reinvesting in delivering a service—for example, returning park keepers, and localising street cleaners and youth workers to do a job with just one set of targets and performance measurement and one clear line of account that hard-wires straight back into the community.
Again, I have spent hours trying to track the labyrinthine lines of account for various funds and if I do not understand it, how can my average constituent? Despite the best efforts of the excellent, high-quality people involved, I am still not really clear about why the functions provided through local learning partnerships have a line of account through, I think, Greater Nottingham learning partnership, the Greater Nottingham Partnership, and the framework for regional employment and skills action, finishing at the East Midlands Development Agency. Can hon. Members follow that? For that one example there are dozens more.
At regional level, our Government office might well be better co-ordinated with the regional development agency were it to be united under effective regional government. It is a shame that, eight years after our 1997 victory, coherent regional government is still not even a prospect in my region; we suffer the consequences daily. What should localities expect of the regional level? A tour of my patch by the dynamic chair of the East Midlands Development Agency resulted in a welcome yet unsustained burst of activity, yet a local school that ambitiously engaged an international motor company in the provision of further education on its site feels let down and unsupported by the region and makes progress only by using personal networks, including my and other people's good offices, rather than such matters being delivered because the structure is right.
Similarly, at local level, do we want just one funding stream or one spending body that everyone understands and can go to? If so, which? Should the social spending of One City Partnership for Nottingham amalgamate with the economic spending in the Greater Nottingham Partnership, or should both be subsumed within the city council and its area committees or, perhaps, an all-encompassing regeneration board, partly or wholly owned by local government and the various agencies. If that were to be the case, should the city boundary itself be redrawn to encompass the real Nottingham—the wider Greater Nottingham? At community level, should Nottingham, North's three area committees and its three partnership arrangements consider unifying in some way that does not result in some financial forfeit or the loss of the experience of the very good people who work within those arrangements?
One of the advantages of preparing and researching a speech of this length is that it is an interesting learning curve. I discovered on Friday that the Government are

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to pilot some amalgamations of funding streams in their local area agreements. No doubt the Minister will talk about that at greater length. I do not wish to be unkind, but allowing one of those per region displays neither the urgency nor the radicalism needed. I am sure that the Minister will correct me if I have misrepresented the Government's view.
I am also conscious of the irony that to correct the structural problems—one of which is interference from the centre—I must provoke yet another intervention from the centre. Frankly, it requires the brute force of the centre to cut some of the Gordian knots that we locals can only pick away at unsuccessfully.
In planning and the confusion of planning, area coordinators, local councillors and others often feel that they cannot influence regeneration funding. They sometimes feel consulted only when someone else has taken the decisions. The recent action planning for our area committees for neighbourhood renewal funding was a welcome break from that. However, I understand that, in achieving that break, many enemies were made, both in city council departments and in external organisations, which assumed that they would get the resources that ultimately went to the localities through the area planning process.
One funding stream or spending body may be out of immediate reach, but shared understanding should not be. Perhaps the different models tend to generate professional competitiveness about funding and claims to success. A single, inclusive regeneration strategy could identify partners and responsibilities with far greater clarity and could identify shared priorities in themes such as education inclusion and crime reduction.
Unusually, Nottingham, North is also amenable to a constituency-based solution, as it encompasses seven homogeneous former council estates with identical problems from one end to the other. Not many Members of Parliament have that level of sameness in a constituency. Perhaps the situation lends itself to a constituency-based answer. In Nottingham, North we could have a local regeneration board to replace the Greater Nottingham Partnership, the One City Partnership, the local learning partnerships and so on. It could work with the East Midlands Development Agency, the Government office for the east midlands and the city council.
At constituency level, issues could be addressed estate by estate, feeding into the three area committees and the one strategy and bringing together multi-agency groups to link education, law and order, environment and culture for one area. They could be given a recognisable and accessible public face—perhaps, God forbid, even giving Members of Parliament a formal role.
All those ideas may reveal my lack of knowledge about the work of existing structures and groups and may offend some people. That is not my intention, but it is not in doubt that the system is not working for those it was created to serve.
My next theme is lack of local involvement. Regeneration is "done to" Nottingham, North partly because of weak community networks and partly because of professionals with their own, mostly well-intended, agendas—although some plunder regeneration budgets cynically to resource their
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organisation's spending plans. Notoriously, regeneration moneys do not stick but flow out of the community unless it deliberately grips and roots them.
Similarly, there is a need for consistency and long-term involvement of key staff. Constant moving on undermines organisational knowledge and the perception of a real personal commitment. Beat officer policing is a classic example. I was in Holland last week. There, a beat officer contracts to an area for a minimum of four years. Having fought to retain beat officers in my own constituency, at one point I had six vacancies out of 16 beat officer posts.
Area co-ordinators move on, as do housing officers, yet we expect constituents and the public somehow to keep a grip of all those movements and to make progress as well. The personnel and career structures of all our local organisations must take account of, and attack, that problem, and give local workers and community workers—I include beat officers, probation officers and others—the merit, prestige and recognition that they deserve, rather than putting them at the bottom of the pecking order, as often happens.
Even a measure such as changing Sure Start into children's centres undoes continuity and undermines the word of mouth so vital for that client group. That is not to mention the fog of initials and jargon that conceals regeneration from all but the in-crowd. Everyone knows the NHS, but instead of referring to the local health service, we have PCT. Hardly a soul on the ground in our constituencies knows what a PCT—primary care trust—is. Instead of parents knowing the class that their kids are in by how old they are, we have year 1 and year 2, key stage 1 and key stage 2. Thankfully, getting the LAC's or PCSO's MO on NIM is always straightforward.
All of that comes under the heading of social capital, or capacity building. Social capital is central to local ownership of problems and solutions; there is a need to integrate it into one agreed community strategy, and into the way in which agencies deliver services to increase resident ownership of services and outcomes. Social capital means giving people the capacity to work out their own answers—which includes tenants' associations and neighbourhood watches, as well as having a healthy infrastructure of political parties and community activism. When local forums cannot get enough people to set up a committee or to sign off a set of partnership trust accounts, when political parties do not have a viable branch network and when witnesses do not have a greater mass than criminals, we do not have social capital and we can say that regeneration is not succeeding.
The new deal for communities programme in Nottingham did not cover my constituency, but I am told that it demonstrated that we cannot pluck people out of the community and expect them to be fully fledged board members the next day. Leadership and commitment do not just fall from a Christmas tree. So how do we build local community capacity, to control and direct money meant for local regeneration? Rather than delivering a package of help that conforms to national norms, local capacity has to be built by enabling communities. Can we train local people in the skills and knowledge to lead regeneration themselves?

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There is no serious capacity programme in my area. By serious, I mean three things. The first relates to scale. We need enough people being trained and recruited to make an impact—a minimum of 20 a year. There are several existing models to which the Minister could refer for such schemes, including those in Sheffield and Coventry. Any such programme must be long term, not least because of Nottingham, North's position as an educational blackspot. We need efforts to be sustained if we are to build capacity. The second aspect is content. We must give people graduate-level thinking and analytical skills relating to all the domains of regeneration—health, education, employment, community safety, housing and the environment—coupled with project management skills locally. For example, we could link architects' departments at our local universities with local communities to help their design schemes. That would benefit students and local people alike.
Thirdly, we need follow-through. A programme must lead to appropriate-level jobs in the regeneration industry, and existing agencies should commit to employing graduates of the programme. The model is an apprenticeship programme. For example, local Sure Starts are already starting to use local mums to work in the new Sure Starts that are coming on stream now. Such a programme is not cheap. The jobs must pay a wage that includes child care and housing costs. However, that is cheaper than failed regeneration programmes. A similar model is being piloted by the new deal for communities, and it would be helpful if the Minister would consider such an approach for Nottingham, North.
My next theme is the need to communicate what is being done. Ordinary people in Nottingham, North do not have a clue what is being spent on regeneration, why or by whom. Current poor practice demonstrates the need to get the basic structure right before moving forward. If we tried to communicate to ordinary people what is being spent, why and by whom, I am sure that we would serve to confuse and disappoint. The way that people have to monitor and report their work for Government purposes does not lend itself to telling real people what is actually going on. I am talking about the target-led, jargonised reporting back that we insist that our professionals undertake—sometimes for good reasons. However, we should let the communities help to set the measures of success, and then they will be keener to monitor progress and able to understand what is going on in their name.
We are in a state in which professionals and volunteers do not know what is being spent, why or by whom. To try to explain this more widely would not achieve any clarity at present. We do not yet have a shared understanding of the players in the ball park and what positions they play, but more players are being introduced as we speak. We produce many lengthy documents and excuse ourselves by saying that that serves as communication. Let us stop turning out documents that we do not have time to read, and start communicating. An immediate aim should be to produce a structure that identifies and maps all those involved in regeneration, at different layers of authority, and their contribution. That could be shared and honed by e-mail. We should then seek to identify and formalise
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communication routes between those involved: for example, there could be a single meeting structure rather than duplicate meetings.
It would be useful to attempt honestly to review the current structure and be brave enough to admit where it is not helping, rather than to forge on without a clear strategy. In education, for example, what is the relationship between local learning partnerships and area committees, between the Greater Nottingham Partnership and the One City Partnership Nottingham, and between Connexions and Aimhigher and local schools? I hear reports of Greater Nottingham Partnership meetings and One City Partnership Nottingham meetings and I try to spot the difference. Responsibility is increasingly difficult to recognise.
So, who would be able to draw up a new structure? Perhaps the local conversation in December that I have initiated could be a starting point for review and responsibility allocation. If so, it would need to be attended by all those with authority to agree change or propose it to Ministers. If no one else will, I suppose I will organise an annual regeneration conference in Nottingham North, at which players will stocktake and make further concrete proposals for reform.
However, basic workable structures are not going to be produced by entrepreneurial MPs. They should be the conscious product of that fount of all funding and source of all schemes: the Government, who need to become sensitive enough to get the best out of the localities and authoritative enough to cleave through the sclerotic duplication and vested interest that they have allowed to develop.
My next theme is the withdrawal of public services from the front line. On the one hand, Government regeneration tries to build up localities, yet on the other hand, Government mainstream services flee the outer city. In Nottingham, North post offices close, probation offices have been relocated away from clients, and local further education sites are sold or invested in for non-locals. We had to fight to regain local policing. The health authority headquarters has moved out of our constituency—the last Nottingham-wide headquarters to leave Nottingham, North. The agendas are contradictory and appear self-defeating to local people.
At local level, decisions driven by central budget controls and officers who rarely venture into my constituency can also mean that social infrastructure is stripped out, aggravating long-term degeneration. For example, park keepers' jobs are done away with to save money, but park keepers are soon to be replaced by antisocial behaviour teams. Rent increases for local football teams and bowls clubs drive them out of existence so more has to be spent on removing graffiti sprayed by bored youths and providing extra care for elderly people who have been made more housebound. Bulwell youth club is now open only one night a week, but the saving is tiny compared with the cost of providing the neighbourhood wardens needed to help police youth dispersal orders in the area. Instead of being in youth clubs, kids are standing on street corners.
Yes, we need centrally based specialists in our cities, but cost-cutting has swung the pendulum too far. As far as logistically possible, we need to return to services that are based at the sub-city level so that we can reach

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appropriate agreements with service deliverers on the ground, such as the police and local authorities. We should then let the area committee measure performance and set targets.
Immense local efforts can be blown away by insensitive mainstream decisions. I put massive energy and hours into creating the post of an education champion for Nottingham, North and I do not begrudge any of that, but such initiatives can be dwarfed by a local further education college's decision to close one of its sites in an educationally deprived area or by a learning and skills council's decision to put millions of pounds into the only sixth-form college in my area, when there was no further education provision to attract local youngsters in addition to youngsters from outside.
I have spent three years trying to make FE provision on school sites a mainstream activity, and that is essential in Nottingham, North's circumstances. However, such initiatives do not fit with national norms, including the provision that one organisation should not receive 14–19 capital funding, so they are alien to the centralised target culture and tremendously difficult to achieve. Meanwhile, every June, we flush 1,000 kids out of school at 16.
Equally, and staying with education, all the Aimhighers and learning partnerships cannot hope to have an impact as long as the low "prior attainment" of Nottingham, North's 16-year-olds is not attacked by means of adequate disadvantage uplift funds. Currently, the distribution of those funds disincentivises local FE colleges from undertaking their educational mission. For all the talk of joined-up thinking, there is no question but that central and even local government mainstream policies often produce degeneration, not regeneration, and turn regeneration into an essentially remedial, rather than proactive, instrument.
My next theme is sustainable funding. Many excellent schemes have time-limited funding, resulting in employees spending much of their time trying to botch together new funding to keep themselves afloat, rather than doing the job required. Good projects often disappear when funding runs out. The problem is especially chronic in voluntary and community organisations, which will always be better than anyone else at reaching the most difficult client groups. As the patron of the Bulwell toy library, which gets toys to poorer families, I have kept our workers only by cobbling together bits of funding from—this is not the full list—the county council, the primary care trust, Sure Start, the single regeneration budget, the education action zone, the health action zone, Children in Need, the children's fund, the local network fund and the city council.
Of course, there will never be the resources to pick up everything supported by short-term funds within core budgets, but we must get better at identifying and learning from what has been done differently and at integrating the lessons into mainstream service delivery. We need far more effective evaluation and reporting on activity, and fewer free-standing, short-term initiatives running parallel to mainstream services. Any short-term projects must be designed honestly and planned as short-term projects, not designed in the hope that someone will come along to pick up the tab later. We need fewer high-profile, short-term initiatives launched
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out of No. 10 and the Departments, fewer bandwagons and fewer people trying to make their name. In their place, we need more local direction and involvement, and more consistency.
What makes a difference may not be fashionable, and it probably will not make a difference next week. Good, caring family support, parenting skills, child protection, long-term development work with young people, and putting the teaching of social behaviour alongside literacy and numeracy at the heart of the national curriculum should all be fundamental to local and national budgets, not the province of pilots, initiatives and one-offs.
In the broader context, inappropriate central government funding formulas dwarf the tiny amounts given in benign grants. For example, the funding formula in the NHS gives wealthy Rushcliffe in Nottinghamshire £8 million too much and the deprived city of Nottingham £7 million too little. That cannot be balanced by spending the odd few grand on smoking campaigns, healthy eating or photo opportunities for local MPs. As with many of the other themes that I have outlined, what is needed in sustainable funding is a lot more clarity and honesty about the rules and expectations. Even knowing where we are will produce the certainty and consensus that are regeneration's greatest allies.
My last theme is central skew. Central bright ideas, pet schemes and irrelevant targets for local circumstances often skew local priorities. Civil servants sometimes try to keep Ministers quiet by offering them their little schemes. The Under-Secretary of State for Education and Skills, my hon. Friend the Member for Bury, South (Mr. Lewis), for whom I have great respect, was as excited as I was about the concept of local learning communities—bringing granddad and grandma into the educational family. What the scheme boiled down to, however, was the estate in my constituency benefiting to the tune of a couple of thousand pounds. Local needs have to be squeezed into central criteria in order to qualify for largesse. Recently, our choice in Nottingham was not between trams and buses, but between trams and no trams. At the same time, local bus services for our immobile elderly communities were reduced.
How can we regenerate locally? I shuddered when the Prime Minister reacted to an increase in muggings with the street crime initiative, which sucked police officers out of my outer constituency to stand, at double time of course, on inner-city street corners and produced a massive rise in burglaries and car crime in Nottingham, North. There is little point in stating the intention to respond to local priorities but then cutting local government out of the equation and imposing centrally determined targets that may or may not relate to local needs. For example, focusing on five grade A to C GCSEs to the exclusion of all else promotes, in my patch, a tiny number of youngsters whose educational profile is like that of Ministers' families, but marginalises the majority of kids, who could be helped to get the "prior attainment" that I mentioned in order to better themselves in vocational training.
One example of the problem is the inability of the NHS to negotiate local health targets—in Sure Start work, healthy living centres, early intervention by district nursing, and health visiting for families that may

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become a problem in later years—because it spends so much time and community health resources helping hospitals to reach their national targets, but without having any extra money to do so.
Another pernicious example of central skew, via the targeting culture, is the difficulty in justifying pre-emption or preventive measures, where outcomes are hard to measure. For example, despite the low level of confidence in the criminal justice system in Nottinghamshire, its most popular face locally—the drug abuse resistance education programme—is unfunded by the centre because it catches no burglars. Programmes to get out into crime-ridden estates to explain witness support, crime prevention, and the role of the police and courts are subject to institutional pass-the-parcel, because reinforcing social behaviour cannot be bean-counted.
Schemes to get young offenders to do good works at the direct request of the community are regenerative at so many levels, but there are no brownie points there. In the target culture, no brownie points means no action if other priorities dictated from the centre have to be met. Capacity building, confidence building and regenerating in such a scoring system become difficult, if not impossible.
Regeneration in Nottingham, North is underachieving. It is being frustrated, but not by a lack of the right people. As I said, well-meaning, energetic, dedicated community workers, councillors and activists, and Ministers, Members of Parliament and others are involved. The problem does not lie there but in the profusion of schemes and programmes that are largely beyond the control or comprehension of local people. Although each of the programmes is well intentioned and many produce successful outcomes, taken together they give maximum scope for central Government and regeneration professionals to impose their objectives on local communities. Put simply, too many things are happening in Nottingham, North because someone had the money to make them happen, and too many things are not happening because the money, direction and structure are not there.
Making regeneration work will mean getting it right at the strategic, management and operational levels, then pushing forward local ownership and embedding it so that it is sustainable. That begins with trust—not treating Nottingham, North as some colonial outpost but trusting local people to define what regeneration means to them and training them, and enabling local structures, especially elected local government, to deliver it. Then we would be doing something worthy of the great people who work in regeneration at all levels in Nottingham, North and doing something for my constituents, who need and deserve better.
10.12 am
Matthew Green: May I begin by congratulating the hon. Member for Nottingham, North (Mr. Allen) on his excellent speech? He clearly outlined many of the problems faced in attempting regeneration in his constituency. Although his constituency provides excellent examples of the difficulties that are faced by Government, and the
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Government's failure to find solutions to them, the problems go far beyond Nottingham, North. It is tempting to come back after the recess and put the boot into the Government, but I do not intend to do that; nor do I think that the hon. Gentleman intended to do that. I sensed that his speech was made more in sorrow than in anger.
The problems are not necessarily of the Government's making. Some are long-term problems that have existed under many Governments. The difficulty for this Government is that they have not yet come up with solutions. Indeed, no Government have come up with effective solutions. The hon. Gentleman touched on many of the reasons why attempts at regeneration have not worked. I wish to draw on a few of his comments and offer some suggestions of my own. I welcome the positive new ideas that he put forward. I shall reiterate a couple of them and throw in a few more on top.
Clearly, housing is a major issue in Nottingham, North but, in terms of regeneration, it is also an issue in large parts of the country elsewhere. The hon. Gentleman was absolutely right to point out that antisocial behaviour is not being designed out of our communities. There is very little funding for that. As he said, all the money is being spent on the inside of the house rather than the outside. The Government's approach to antisocial behaviour is rather like sticking-plaster. They try to deal with problems afterwards, rather than come up with preventive measures such as designing out antisocial behaviour and providing funding for that. Draconian antisocial behaviour Bills are introduced to tackle the problem after it has arisen. That approach sums up too many of the Government's failures in regard to regeneration.
It is easy to see why this happens: young people causing problems make headlines in local papers, and Ministers come under pressure to deal with the situation. To be seen to be dealing with the situation means producing a Bill that says, "We are going to stamp down harder on this," because that gets the press back on to the other side and makes it look as though the Government are doing something. Frankly, many of the real long-term solutions do not attract that sort of publicity and do not get the headlines. Consequently, there is a great temptation when in government to adopt the easy, sticking-plaster approach. I can see why that happens, but it is a strong and brave Government who actually face up to the problem and put money into dealing with fundamental issues such as youth provision.
We have heard about the running-down—that is the best way of putting it—of youth provision in Nottingham, North, which has been mirrored in other parts of the country. Often, the only time that we have new youth provision is when the funds come from the Home Office in an attempt—again, rather like using sticking-plaster—to keep young people busy during the school holidays because that cuts crime. Why are we not increasing spending on youth provision in order to benefit young people, rather than simply the rest of the community, which seems to be the only reason why the funding is made available?
There are far too many central Government targets, which are the source of outputs. I know only too well that projects are made to fit the funding package, rather than the funding package being made available to suit

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the local project. Just to step outside Nottingham, North for a second, we saw that with the market towns initiative, which was led by the Department for Environment, Food and Rural Affairs and the Countryside Agency, and originally involved social as well as economic outcomes. They ran out of money for it and, in the west midlands at least, it was taken over by Advantage West Midlands, which is, of course, funded by the Department of Trade and Industry. The DTI wants only economic outputs and jobs, which means that market towns initiative projects are possible only if they create jobs. The number of jobs that will be created has to be calculated in order to secure the funding. It is a centrally driven target for which boxes can be ticked all the way up and some kind of table can be filled in so that a Minister can stand up and say, "X is the figure that we arrived at." What that actually means, however, is that the projects do not fit on the ground. The Government's belief that they must run their initiatives in that way shows a failure of trust in local people and local bodies.
The hon. Member for Nottingham, North mentioned area committees of councils, and I am delighted that he did so as I am a great believer in them. They can be a very effective way of making progress and of involving the local community much more directly in council decisions. Councils that have set their heart against area committees should reconsider them, because they are a very good way of involving the community.
Too many organisations deal with regeneration, and they tend to encounter two problems in particular. One of the problems, as we saw with many of the area-based initiatives such as the new deal for communities, is a very high administration cost. The body dealing with a new initiative has to be set up afresh each time, which costs quite considerable sums of money. On average, about 10 per cent. of the total funds for the new deal for communities initiative was spent on administration. Instead of using existing structures such as the local council, a new layer of organisation is created, new people are recruited, and the body is disbanded after a couple of years.
Secondly, centrally driven projects have also had a problem with underspend. There has been quite significant underspend on some of these projects in the past few years because of the assumption that the money will filter through if a project is announced and a new tier is set up. Surprisingly, however, certainly in the first couple of years of most initiatives, the infrastructure is not in place and the money does not get through. All that happens is that the Treasury banks it and the Chancellor announces that he has more money to play with than he thought he had last year. What has happened, in fact, is that he has banked some of the underspend from many projects. That, of course, leads to cynicism, because people believe that something will happen when an announcement is made, but the money does not filter through and does not even get spent.
The hon. Member for Nottingham, North also raised the issue of regional government. He is absolutely right that we need an effective regional tier, but an effective regional tier must go further than the Government's proposals. There is a lot of sympathy among Ministers in the Office of the Deputy Prime Minister for enhancing regional government, but they are fighting other Departments that do not want to hand over some of
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their pet projects to regional government. The enthusiasm in the ODPM must win through; we need the Deputy Prime Minister to act like a Deputy Prime Minister, use some muscle against other Departments and win some projects for regional government. Regional development agencies need to come under regional government and not just sit alongside it. It is astounding that we aim to establish regional governments, but that the RDAs will only sit alongside them. The Learning and Skills Council, which is now regionalised, should also come under their remit.
I imagine that getting the Department of Trade and Industry and the Department for Education and Skills to agree to these things is rather difficult for the Office of the Deputy Prime Minister. That is one of the problems that the Government face, and it is why they are hitting brick walls on their route to regional government. If they saw fit to go for it wholeheartedly, they would win much more public support and would not have to back out in their push forward.
The hon. Member for Nottingham, North made an interesting suggestion about the role of MPs. I agree with him entirely. Unless I actively sought to involve myself in such matters, I would never become involved in them. All that would happen is that my constituents would complain to me about them. Yet, we are the people who are most easily accessible to the Government and who invented the schemes in the first place. The assumption is that MPs do not want to be involved, but many of us want to engage more formally with regeneration efforts in our constituencies, and it is a failing of the system that some of the people with the greatest access to resources and the most influence in an area are the least involved unless they set out to be so.
Too many projects last for just a short period. That is not a failing of this Government, but a failing of Governments for generations. A project is announced, it lasts for about three years, then it is scrapped or repackaged with a new name, and the money is announced as if it were new, fresh money when it is in fact the old money under a new name. Somehow that is seen as moving the process along. We heard the excellent example of Sure Start, which many have begun to understand as a label, but which is being replaced by children's centres. We see schemes repackaged and relabelled all the time. That may give the impression that Ministers are doing something, but it leads to confusion on the ground and a long-term lack of confidence in the Government's ability to deliver regeneration.
I will end on the issue of trusting local communities. If central Government really trusted local communities such as Nottingham, North, they would trust local councils. Successive Governments—not just this Government—have failed to trust local councils and have taken power away from them. As a result, some of the best people do not seek election to councils, because they cannot change things, and there is a downward spiral in the abilities of councillors—and perhaps even the officers, as some of the most capable go off to work for regional development agencies and quangos.
The Government put sticking-plaster over the problems and put money into improving the leadership skills of councillors, which is welcome, but they must turn things around by trusting councils to deliver. It is clear that the Government trust their own, rather than the local electorate's ability to pick individuals to run

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schemes. That is a damning indictment, because they are failing to trust not only local councils but local people. Local people know best what the problems are. They might not have the solutions, but they can elect the people to run the projects that will provide the solutions from elsewhere. The most damning example of the lack of trust is capping, and Nottingham is one local authority that has been capped. It has been told that it was just under £200,000 over budget, and it will now have to spend about £250,000 to re-bill to make that £180,000 saving. It is perhaps the worst recent example of how the Government do not trust the people of Nottingham to run their own affairs. If the Government had any sense, they would get off the backs of the people of Nottingham, give power back to them and let them run the schemes, providing the money through a source such as the council, which is probably best placed to understand local needs.
10.25 am
Mr. Robert Syms: I should first like to declare an interest as a director of a property company with interests in the building industry. It may not be relevant, but it is best to be certain these days.
I congratulate the hon. Member for Nottingham, North (Mr. Allen) on a comprehensive and wide-ranging speech. There is little that I can say to add to the hon. Gentleman's knowledge and passion in representing his constituents. He has done them a great service today. He raised a lot of important issues and, more importantly and unusually for a Member of Parliament, he has come forward with several solutions. That means that the Minister will have a more difficult job, in that if he has sufficient time—and I aim to give him that—he will have to respond to those ideas.
We all know the difficulties of regeneration and the long-term problems that many communities have faced. Recent trends have shown that many of our proud provincial cities have been undergoing a renaissance, especially in their centres, whether that involves coffee bars, wine bars, gentrification or new build. However, there is a problem with many of the large, peripheral estates, which feel that they are not at the centre of regeneration in communities. Nottingham, North is one example, as the hon. Gentleman has illustrated.
The hon. Gentleman set out a theme with which I wholly agree. Indeed, there was not much that I disagreed with in his speech. I thought "Thank God" when he mentioned regional government, because there was a difference between us on that topic. The problem is that there are lots of schemes—we all know that Governments love to make announcements about what they are doing—and lots of funding sources. The hon. Gentleman referred to the police officer mentioning 36 different funding schemes, and the situation is extremely complex, even for Members of Parliament and Front-Bench spokesmen, to understand. If the various Front Benchers did a knowledge test on regeneration schemes, I do not think that we would get many marks. The Minister may comment later about how experienced he is with the schemes.
I thank the hon. Member for Nottingham, North for giving me a copy of his speech before the debate. I had wondered what, in a debate that is so specific, one could
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pick up on, but thank God for the worldwide web, as www.nottinghamcvs.co.uk gave me a flavour of what is going on.
These are a few of the schemes having an impact in Nottingham: the single regeneration budget challenge fund round 2: the "Capturing the Dynamics" Greater Nottingham Partnership regeneration scheme; the SRB challenge fund round 3: the "Secure in the Meadows" GNP regeneration programme; the SRB challenge fund round 4: the "Lifelong Success" GNP regeneration programme; the SRB challenge fund round 5: the "Connecting Communities" GNP regeneration programme; and the SRB challenge fund round 6: another GNP regeneration programme. There is also: regional selective assistance; Sure Start north-west Nottingham; Nottingham education action zone; Nobel Road home zone; urban management areas; healthy living centres; Nottingham health action zone; the social action research project; the new deal for communities, which the hon. Gentleman was disappointed was not having an impact in his constituency; Nottingham links; the European Community objective 2 programme for the east midlands; the European social fund objective 3 programme; community safety/crime reduction; the "Phase Ten" regeneration scheme; Sure Start St. Ann's; and the communities against drugs initiative.
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister: I think that's fantastic.
Mr. Syms:I would say to the Minister that there is common ground in this matter and that we all want to help and to do things better. However, if the system becomes so complex, and if those running the schemes have to spend most of their time looking for sources of money and trying to fit their programmes to the objectives that the Government have set, I can understand why local communities become slightly bewildered, and I am not sure that, on the ground, it achieves what it is supposed to.
The hon. Member for Nottingham, North made a good point about the conflict between the priorities of the Government and those of the community. We sometimes see that happening in local government, when performance indicators are set by national Government, whose indicators of what is important may not be important for local authorities. The authorities and their communities may have very different objectives. It would be interesting to know, when we are considering the schemes in Nottingham, how many of the people who work in regeneration live in the hon. Gentleman's constituency or, indeed, in Nottingham. If they do not, they might not be as plugged in to the community. The same is often true of senior officers in local authorities.
The hon. Gentleman has been a marvellous community advocate today. However, I believe that the Government should spend money on training people in such communities to put forward the objectives that they want. Quite often the people who represent those communities are not the most articulate, but given a little training and a bit of confidence, their ability to articulate their priorities would be far better.
Moreover, as we heard earlier in the debate, the fact that all the money comes from the centre skews priorities. Perhaps we should be considering

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endowments for the schemes, so that local schemes could have a bit of local money that they could contribute to projects or to match funding. That would be important in giving more independence to local regeneration schemes, and would make local people feel that they had a little bit of money to bring to the table, even if they were still relying predominantly on national funding.
I agree with the hon. Gentleman that one size does not fit all. There are different problems, and communities may have different priorities from those of the Government, so a more flexible and long-term approach is needed. The improvement of any of those communities will take place over a long cycle, so work will be needed to set the priorities under this Government, the next Government and probably the one after that. It is important that we find agreement on this issue across the political spectrum so that, when Governments change, things do not necessarily go topsy-turvy, with schemes being withdrawn or rapid changes taking place.
I thought that the hon. Gentleman was extremely deft when he talked about capping—
Mr. Allen: I did not talk about capping.
Mr. Syms: Well, the hon. Gentleman talked about the independence of local government, which I read to be about capping. He made the important point that the Government are focusing a great deal of initiative and money on that area, but that other Government policies—post office closures and the closure of probation offices, for example—also have an impact that could have the opposite effect on the community.
It is important to have a proud local authority—the Audit Commission said that Nottingham was a fair authority in terms of its performance—involved in what is going on in its communities. I was interested that the hon. Gentleman mentioned the area schemes that have been set up. I think that the hon. Member for Ludlow (Matthew Green) said that the Government's capping proposals have an impact only because they think that the authority has overspent by £180,000 and that the costs of re-billing, if that is what eventually happens, may be substantially in excess of that figure. The Government are sending out mixed messages, and should sort themselves out on this issue. As the hon. Gentleman mentioned, communication is very important.
Many important points have been made, to which I hope that the Minister will respond.
Matthew Green: Does the hon. Gentleman support the capping of Nottingham city council? I understand that the local Conservative group does. Given his comments, I would be intrigued to know.
Mr. Syms: No, I do not. I do not believe that the Government should cap. We are a broad and large party, and I see no conflict between my views in Westminster and those of local authority councillors. To presume that everyone must agree with everyone else in the Conservative party is a very "old politics" way of looking at things.
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The important point is that we have to work out what the cost of failure would be. If we consider family breakups, crime, and the impact that poor housing has on health, the cost of failure is unthinkable for the country and its communities. That means that we must do our best to turn those communities round, to build on what is best, and to give people the best opportunities that we can.
The general theme of the debate is that there are probably too many schemes, too many funding streams and too much complication. Simplification is needed—perhaps an audit of the schemes' effectiveness—in order to reduce the number of schemes and funding streams and to give more local flexibility.
10.35 am
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister: I congratulate my hon. Friend the Member for Nottingham, North (Mr. Allen) on securing the debate. I believe it is unique to have an Adjournment debate for an hour and a half on an individual constituency. My hon. Friend deserves great credit for having achieved that, and for taking the opportunity to act as an advocate for his constituents and to express their needs and concerns in his characteristically robust and analytical style, with his usual common-sense and plain-speaking approach. His constituents look to him to represent their interests in Parliament and he has done a good job of doing so this morning.
I will not necessarily agree with everything that my hon. Friend says; I hope to answer many of the points he raised because, like other hon. Members, he circulated copies of what he would say in advance. I will not respond to his speech blow by blow, but I will try to pick up some of his themes.
The debate has provided some good quality time to consider major issues, which affect not only Nottingham, North. As the hon. Member for Ludlow (Matthew Green) said, many of the issues that my hon. Friend raised apply in other parts of the country too, and we need to acknowledge that and to address those matters. The hon. Member for Ludlow mentioned the market towns initiative and issues that affect rural areas. Nottingham, North is, of course, largely urban and densely populated, but some of the issues affect urban and rural areas.
I shall address the concerns raised and talk about what the Government are doing to tackle the problems and issues in Nottingham, North. At the heart of my response is a theme that I want to emphasise, and it echoes my hon. Friend's theme: it is important to make progress, get improvement on the ground and support the funding streams mentioned in the debate and the sources of cash for areas such as Nottingham, North, but significant improvements can be made only if all the partners in those communities are willing to work together to resolve the deep-seated, long-term problems. By "partners" I mean not only the official bodies—the local authority, the police, the health authorities and so on—but the communities themselves, the tenants' and residents' representatives, the community workers, the volunteers and the many people who live and work in the constituency, those who grew up there, people of all ages who can work together as partners. There are

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complex problems and I was pleased that my hon. Friend paid tribute to all the people who contribute to helping to solve them.
My hon. Friend generously dedicated the debate to one of his constituents, Norman Allcock, who played a key role. That reflects the truism that regeneration and improvement are possible only if local people in local areas take part in the change and own it, and do not have change imposed from above. As my hon. Friend said, simply imposing change from above will not necessarily be sustained; it can achieve many things, but real, sustainable change comes when local people and their local authority work in partnership with regional and central Government.
As my hon. Friend said, too, many players are involved—local authorities, the police, the health service, Government Departments and many others. The challenge is finding a way to get the structures and the processes right to engage them effectively at local level. I am especially pleased that my hon. Friend mentioned his December meeting to bring all the partners in his constituency together, and to say, "Look, all of you have a role to play. All of you are doing things and playing your part. Can we do it better, by co-ordinating matters and working together?" I thank my hon. Friend for his invitation to attend. I cannot say yes or no—my diary secretary always goes crackers when I say yes to anybody immediately without checking that I can be there—but I will certainly consider it. If I cannot come, I can at least tell him that officials in my Department are keen to be involved with him on that initiative. I shall say more on this subject later, but there are concerns, certainly in the Government office, about how to join the various funding streams at a local level and how to get the right structures in place.
We have a close interest in ensuring that floor targets are delivered. The hon. Member for Ludlow made a point about the feeling that there is a top-down approach. The use of floor targets—that is to say that no part of the country should fall below a particular level of achievement or outcome for its residents—sounds like a top-down approach but is actually bottom-up. It actually means that nobody, no matter where they live or what local decisions are made, should suffer below a certain level. We should not allow people to fall through the holes in a floor to experience poverty, deprivation and disadvantage, and we need floor targets to prevent that. Of course we want people to do better than the floor targets, which is where local effort and partnership working comes in, but that minimum is set so that a local authority of any hue cannot abandon a community. No authority, whether it be a local police force or a health authority, should be able to walk away and say that it does not care. Authorities have to care, because there is a basic floor target.
We can debate how many floor targets we have and what they are, but the principle is not about a top-down approach; it is about a fundamental right to achievement and success for people across the country. I think that my hon. Friend the Member for Nottingham, North would agree that that is the right way to proceed. The question is how to ensure that we have the right floor targets and that they can be built on as a trampoline for achievement and future progress.
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The hon. Member for Poole (Mr. Syms) listed, in his brief contribution, the many funding opportunities and resources going into Nottingham, North, which I had not done before. I think that he was being critical, but I suggest that instead of "University Challenge", a regeneration challenge would be an interesting game to play to see how those things work together. There are many sources, and we might need to consider how to resolve some of the complexities, but we should not take resources away from a constituency such as Nottingham, North. It is not an issue of cutting resources going into an area, but of managing them more effectively.
This has not been a party political debate but you will forgive me, Mr. Deputy Speaker, for pulling out the point that resources allocated to local government since 1997 have increased by 30 per cent. in real terms, compared with a 7 per cent. cut in resources during the four years of the previous Administration. Also, we have pledged to increase resources given to local government by about 2.7 per cent. a year in real terms over the next spending period—compared with a cash freeze. The people of Nottingham, North communities will be able to make their own choices, faced with the contrast of a history of growth and investment versus cuts, and pledges of growth and investment versus pledges of cuts. That is the only party political point that I shall make, but it is important given the criticisms that we have heard about how we deliver resources, structure and funding. The money must be provided for there to be criticism of how it is spent. Without the money, the people of Nottingham, North would be disadvantaged.
Mr. Deputy Speaker, can you confirm that the debate finishes at 11 o'clock? Is that the time scale we are working to? I want to make sure that I have got my timing right.
Mr. Deputy Speaker: That is an interesting point of order. It depends entirely on your actions.
Phil Hope: Indeed; it certainly cannot go beyond 11 o'clock.
Mr. Deputy Speaker: That is correct.
Phil Hope: Thank you very much. In that case I shall say a few things about funding.
We have heard about the various funding streams and a point was raised about mainstream funding and funding that has been project-based or time-limited. I am pleased to say that there has been an increase in mainstream funding to Nottingham city council, which feeds into services in the local area. For example, there have been significant mainstream increases in education and health funding. Also—this is a fundamental philosophical point—as well as providing more for everyone, as I have described, the Government want to provide a little more for those who need it most: they want to target help. That carries difficulties, as the hon. Member for Ludlow suggested. How should we deal with the plethora of schemes and the extra resources? However, the idea of what has, I think, been dubbed progressive universalism—more for everyone but even

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more for those who need it most—is an important part of our approach. The aim is that the areas in most need should receive extra while everyone benefits.
Matthew Green: The point is not that money should not be targeted, but that an existing structure, such as the local council, should deal with the targeted money—there need not be a new invention every time.
Phil Hope: The hon. Gentleman makes an excellent point. I shall be talking about an initiative that the Government are developing, called local area agreements; my hon. Friend the Member for Nottingham, North referred to it and it is relevant to that point about how—when there are different initiatives for different problems—to get money into an area in a way that is developed in partnership between central and local government and the community.
I shall not go through all the figures, but we can say that more money has been going into the area. Money has been entering the area through different schemes and the question is how to organise things better, to improve targeting, delivery and local ownership.
Before I go into detail, I want to respond to my hon. Friend's discussion of the impact of the resources and of whether the plethora of schemes and the fact that the structures have not worked in some respects, and that we need more partnership—as I mentioned at the outset—amount to ineffectiveness. He may have under-emphasised some achievements in his constituency. Crime levels have fallen overall in Nottingham city, including volume car crime, burglary and robbery. There has been educational success in the hon. Gentleman's constituency, with Nottingham's GCSE attainment levels. I took his point about what indicators are used, but educational performance has improved. The GCSE figures show a rise of 3 per cent.
There are several relevant schemes including the city division's community safety officers fund, which is providing more money for police officers. My hon. Friend made a point about police officers being moved, and we are all concerned about that, but the new community support officers—we have announced our intention that if we are re-elected there will be more of them—are local people working with their communities, like neighbourhood wardens. They provide community support. The people know them and they do not get withdrawn to other work if there is a murder or other crime. They carry on working in their community. My hon. Friend's communities will know the benefit of that approach, which we have piloted and implemented. We are now implementing it in many more communities.
My hon. Friend was concerned about the rate of staying on in education post-16 in Nottingham, North. That is a problem in many constituencies. The importance of the education maintenance allowance, which is available to young people throughout the country, including those in his constituency, is that it provides people on the lowest incomes in the most disadvantaged areas—young people of 16 who are tempted to leave school, to turn their backs on education and all that it brings in personal self-development and to enter the world of work or, worse, the world of no work, no training and no future—with
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a financial incentive to stay on in post-16 education of various forms, to gain the benefits of continuing education. His constituents, and the young people in particular, will, I think, find that of great benefit.
My hon. Friend raised some key questions about structure and co-ordination. I accept his point that there have in the past been problems, when regeneration money has not been as well co-ordinated, targeted and used as it could have been. I want to stress two points in response. We have just issued a short publication called "The future of local government: Developing a 10 year vision", which places local government at the heart of local regeneration. It deals with the idea that the role of local government should include community leadership—taking on an empowering, facilitating and enabling role for communities, with the resources that are coming into an area through the local strategic partnership; the aim is to take that forward. We have a long way to go in setting up many of the structures that will back up that basic concept of the role of local government. My hon. Friend's speech today will play an important part in our thinking and the outcome of the review in December.
We had debates about the constitutional relationship between local and central Government. My hon. Friend will be pleased to know that as we develop our 10-year vision of how local government should be, while we may not be going all the way to have the constitutional settlement he describes, we wish to establish clarity about the roles and responsibilities at local, regional and central level—and indeed below local, at neighbourhood level. We also want to be clear about how these levels interrelate so that we avoid the difficulties that he described.
One initiative that we are currently discussing and will be piloting concerns local area agreements. Basically, a local area agreement is an arrangement between Government, the council and all the delivery partners in an area, bringing into play all those other areas such as the police, health and education. They will look at the national outcomes, the floor targets—the things that we want to see—and the local priorities and come up with an agreement about the funding that goes into that area under three major headings: children and young people spending, the safer and stronger community spend and the healthier communities and older people.
If we can reach an agreement about the money so that the communities are directly involved in channelling those resources we can come out of the silo mentality and get into an area mentality. That is very exciting. It is a fundamental change if we achieve it. We are running pilots because we need to ensure that all the inevitable wrinkles involved in such a change can be ironed out. If it is successful we will want to roll it out across the country.
Mr. Allen: I thank my hon. Friend the Minister for the positive way in which he has engaged in the debate this morning, as have the representatives of the other parties. It is a credit to the House. Could Nottingham, North itself be considered as a pilot for a local area agreement?
Phil Hope: Why am I not surprised by that intervention? I will take that bid away. It will go into the pot and we will look at it. We will be making decisions

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about that fairly soon. The important thing about these local area agreements is that the local authorities and all the local partners, through the local strategic partnership, will have fewer funding streams to deal with. All hon. Members spoke about different funding streams. The funding will all go into one area pot, thereby streamlining all the bureaucracy involved with those different funding schemes and the transactional costs. Bringing those partners together in that way to deal with real cash will strengthen the partnership.
This will not be a talking shop; this will be a real debate. That is critical. One of the key tasks for the partnership is to engage with the local communities in developing that local area agreement to ensure that the professionals in the various organisations relate directly to the communities that they serve. Importantly, the agreement offers a point of contact with Government. Only yesterday the Prime Minister called a meeting of front-line workers and managers to ask them what we can do to cut out unnecessary bureaucracy in their area of work in local authorities, the health services and the police. I was present at that meeting along with other Ministers. The local authorities' representatives saw local area agreements as a major innovation that they were keen to pursue.
There is a lot more that we can do to cut out unnecessary bureaucracy. We have done a lot already. We have reduced inspections by a third. If an authority is judged excellent under the inspection scheme, 90 per cent. of its inspections disappear. We have un-ring-fenced grants so that people can have local flexibility about how they spend that money. We have given local authorities freedom to borrow and to trade, to give them more flexibility to meet local priorities and needs.
We looked at all the area-based initiatives and funds that were available, and cut them by a half as a pre-runner to the local area agreements. We have heard loud and clear the problems and issues that my hon. Friend the Member for Nottingham, North raised in many other forums and have already taken direct action on them. There is clearly more that we can do. The Prime Minister himself is directly involved in listening to frontline staff, workers and managers in organisations. We are taking many steps forward but there is more that we can do.
How right my hon. Friend the Member for Nottingham, North is to say that we must do much more on community leadership and engagement. For some of the 88 most deprived areas, we have introduced the community empowerment fund, which is about developing community networks and building social capital. That is what the community chest and the community learning chest money is all about; it is deliberately targeted at areas where social capital has been most eroded and where most effort is needed to bring it through. There is also a plan for improving
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individual skills and knowledge; regeneration can come down to that, as well as to relationships between people in communities that need to be regenerated—in this case Nottingham. A scheme of regeneration apprentices is planned for that very purpose as part of the wider plan for Nottingham.
The first term of our Labour Government was about getting the economy right, getting people back to work, getting interest rates and mortgages down, and so on. The second term has been about reform of and investment in public services. The big challenge for the third term—this is my personal opinion—which we are addressing already, must concern the relationships between people in communities. Sustainable regeneration is not just about buildings, but about how people relate to one another. We must do a great deal more to build social capital, such as parenting skills and support for families—my hon. Friend knows my enthusiasm for that. We have got the hardware working, and decent homes are being built. However, the real challenge is what I call the software that binds communities together, which will tackle antisocial behaviour issues.
The hon. Member for Ludlow will forgive me, but I think that it is right that both happen at the same time. We must crack down hard on young people and others—much of the antisocial behaviour comes from adults, not young people, who are often the victims. At the same time, we must invest in educational maintenance allowances and youth schemes, for example, which engage young people in social and personal development and learning. It is both, not either/or. Our local communities expect that to happen
I have not mentioned the places project in Nottingham and would like to comment briefly on it. In recognition of such problems, the project was based on our need to map all the things going on, in relation to floor targets for example. Nottingham is one of the pilot areas where we have tried to map that activity. There was an interim report on that in July, from which some fo the ideas such as cutting bureaucracy and funding streams came. A further report is due in December, and the contribution that my hon. Friend the Member for Nottingham, North has made this morning can feed into that.
We have had a good debate. I did not think that I would have enough to say, but there is so much more to add, and I have not covered everything that I prepared in order to respond to my hon. Friend. It has been a worthwhile debate, and I hope that I have outlined some of the key themes that we are taking forward. It is very important that we maintain both mainstream and additional funding. We must tackle the problems of overlap and the silo mentality, and in standing up for his constituents, my hon. Friend's efforts are helping us to do that. I wish him luck in his meeting in December and look forward to hearing the outcomes, which will take forward a much better quality of life for the people whom he represents.

Milton Keynes Local Plan (Interim Report)
10.59 am
Brian White: I applied for this debate back in April, just after the local inspector published the interim report. Having made the last application immediately before the recess, I had given up, so it is typical that this debate should come up now. I originally wanted to talk about the interim report to try to influence its outcome. However, the full report has been released in the past week without substantial change, so I want to highlight some of the issues that have come out of the process.
The process of creating local plans is a long one. Despite my efforts as chair of the Local Government's Association planning committee nearly a decade ago to speed it up, the procedure is still fairly long. Milton Keynes's local plan started in early 2000 and has been through a number of alterations. In addition, the Deputy Prime Minister has made an announcement about sustainable communities and there have been amendments to the regional plan—in our case RPG9.
Milton Keynes is subject to market forces, which will force us to have growth. Milton Keynes will grow, and the question is not "Will it grow?" but "How will it grow?" Will growth be planned or will it be subject to market forces and develop ad hoc? Will we learn the lessons that have made Milton Keynes successful? The key message that my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) and I have been pushing and, which, I am pleased to say, the Government have accepted, is that any development must have the infrastructure to accompany it. I do not just mean roads. I should like to place on record my appreciation for the way in which the Office of the Deputy Prime Minister, particularly Lord Rooker, has responded to the efforts of my hon. Friend and myself to put the case for Milton Keynes and to the local concerns that have been expressed.
It is also important to say how well conducted the local plan process has been, from the start, in 2000, right through to the inquiry. There has been openness, the involvement of local groups and the community, and accessibility. One can therefore imagine the concerns that were expressed when many of the policies in the local plan were challenged in the inspector's interim report. That should not have been a problem in itself, but a matter for debate. The problem was that that came the week before the examination in public of the regional plan was due to take place. That was done either to scupper or influence the regional plan, or, as the inspector put it, to "inform" it.
A number of issues give rise to concerns. There are social housing problems in Milton Keynes: tonight 1,500 families will be in temporary accommodation. I met a family at the weekend with a child with special needs. That family were third generation in Milton Keynes, but were unable to get housing and were living in a friend's house as it was being rebuilt simply because that was the only accommodation available. There is a crisis of affordable housing and a need for social housing in Milton Keynes, but the inspector's report does not address those issues. Indeed, the inspector challenged the plans that address them.
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The inspector addressed transport issues and we could have an entire debate about that. My hon. Friend and I have been pressing Ministers about the east-west rail link and on commuting into and out of Milton Keynes. I have also taken up the issue of a new canal to Bedford. There are real transport issues, but what does the inspector say about them? He says:
"The Council also produced a variety of calculations relating to viability. I attach relatively little weight to these calculations as they are based on many assumptions".
He then goes on to make his own assumptions, which counter a lot of the work done in various studies. One of my concerns about the report is that the inspector's assumptions are viewed as okay, but the council's work and the many studies that have been conducted are not.
An example of that is the removal of policy on areas of our attractive landscape, which was designed to protect rural villages so that people did not think that they had to re-fight the battle of the 1960s when Milton Keynes was first proposed. That policy reassured people, but it has been removed from the local plan. The inspector has therefore caused unnecessary fears that those villages will be overrun.
The downgrading of the standards for the linear parks has compromised Milton Keynes's flood defences. Energy concerns have been dismissed, yet Milton Keynes development corporation set the standard for many of the energy ratings. If we built new homes in Milton Keynes, we could create zero carbon requirements that would go a long way to tackling the climate change issues that the Prime Minister rightly identifies as one of the most important challenges that we face. So why does the local plan minimise the opportunities?
In the previous debate, we heard about designing for crime. Thames Valley police wanted to add a target related to the percentage of applications that meet safety by design standards. The inspector says:
"The Secure by Design standards go beyond what is appropriate for planning control."
An area called Stantonbury Park Farm in the north of the city is to be proposed for 500 houses. The school that serves that area is already full, and the inspector says:
"Stantonbury Campus…would be expected to accommodate pupils from a development on this…site",
but that it is already at capacity, and that the situation will
"get worse with the planned change in the age of transfer."
Some 55 children were not able to get into Stantonbury school this week because of that. The provision of secondary school places to serve that site and the area in general is likely to occur as the result of a long-term review. The inspector says:
"On this basis this land would contribute some 500 dwellings to the supply side of the housing land equation albeit likely that the site could not come forward until late in the plan period once the education issue has been resolved."
In other words, the planners create a problem then say to the local authority, "Get on and solve it." That is not particularly helpful.
Similarly in Wavendon, Walton high, which is the school that the Prime Minister visited along with the Chancellor in March, is already over-subscribed. Someone with two daughters who came to Milton

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Keynes found that one was accepted at the school and the other was not. There are 3,000 houses proposed for that area in the regional plan.
My major concern is the way in which the balance in Milton Keynes has been changed by the inspector's report. After a great deal of work, the local plan proposed certain areas, and I know that, in a moment, my hon. Friend the Member for Milton Keynes, South-West will want to raise an issue that affects her constituency. The local council, with local groups, proposed areas for development round the western flank of Milton Keynes, but the local planning inspector says:
"The area to the west is a distinctive 'natural area' with strong landscape features and attractive views. It is part of the Whaddon/Whaddon Chase ambience."
That is despite the fact that the other studies, including regional planning studies, say that the work favours westerly and south-westerly growth in Milton Keynes in preference to continuous major eastward expansion over the M1 motorway. However, the inspector simply says:
"I agree that the land to the east of Milton Keynes is suitable for long-term development as I consider that this area is much less sensitive in landscape terms than the Whaddon Valley…In reaching this conclusion I appreciate that the assessment by Landscape Design Associates ruled out the designation of the Whaddon Valley as an area of attractive landscape."
So, the inspector has removed the area of attractive landscape to the north of the city to protect the villages there, but when other villages cannot reach that standard, he still thinks that they are "sensitive". Such inconsistency in the inspector's report has led him to say:
"My view is that the Ml should not be seen as a long-term barrier to development."
When areas are owned by the great and good of Buckinghamshire, they are somehow sensitive, while the areas of the ordinary people of Milton Keynes are not. I appreciate that my hon. Friend the Member for Milton Keynes, South-West has argued strongly for the regeneration of Bletchley and Wolverton, and such a policy has a major impact on her position.
Dr. Phyllis Starkey: May I take this opportunity to say that I wholeheartedly concur with my hon. Friend's overall critique of the inspector? However, does my hon. Friend not agree that one particularly egregious part of the inspector's findings is that by removing the area known as 10.4, which he has just described, on the basis of recommendations primarily from a developer, he has increased pressure on area 11, which is owned by that same developer? That is a matter of huge concern to my constituents in Stony Stratford and Calverton.
Brian White: My hon. Friend makes a strong point. Which should take preference: developers' legitimate aspirations or the local community? The unfortunate timing of the inspector's report means that there has been no chance to debate such issues. Had we had the chance to do so in the run-up to the regional plan public examination, many of these concerns would not exist. However, because the examination took place the
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following week, the impression was given that the inspector was trying to influence—or as he put it, to "inform"—the examination in public.
If I believed in the conspiracy theory, it would lead me to question such issues. For instance, why do the great and good of Buckinghamshire seem to benefit when the ordinary people of Milton Keynes do not? Why, when considering their land interests, do certain developers benefit and others do not? Why were previous reports, such as the Milton Keynes in-field study, not considered and developed? Why, at the last minute and against its planners' advice, did the South East England regional assembly executive committee remove certain growth options and insert others into the assembly's planning policy for the area that my hon. Friend spoke of. These options went for examination in public.
Such matters give rise to a number of concerns, and those who subscribe to conspiracy theories will have noted them. I do not believe in the conspiracy theory. I believe in the cock-up theory, and those who try to conspire will still cock it up. However, it raises the possibility of those disappointed developers opening the process to judicial review, and that could raise further issues.
Since the interim report, the examination in public has reported. Luckily, it was not influenced by the local inspector's report. However, the local plan report and the regional plan are at odds. The question is how to resolve that. The Milton Keynes partnership committee has been established, and the recruitment of staff at English Partnerships for developing Milton Keynes is going ahead. The delivery of the Government's sustainable objectives rather than the developers' wishes is moving ahead. That is something that my hon. Friend and I have been pushing for.
The Deputy Prime Minister visited Milton Keynes only a few weeks ago. He said that people should learn the lesson of what has worked in Milton Keynes and recognise that the developers have to bring the community with them; we should remember that it is about developing communities and not just buildings. If it was down to what my right hon. Friend said, we would be fairly relaxed, but will the courts take note of what he said or will they consider the words of the inspector and the local plan? It is the conflict between them that concerns me.
Ministers will need to consider a number of questions when they come to consider the inspector's final report. The way in which the Office of the Deputy Prime Minister considers those issues will be critical to the development of the city. Particularly important is the relationship between the Milton Keynes partnership committee, English Partnerships and Milton Keynes council. Given their interrelationship, to whom will their officers be accountable, and which plans will they follow?
A number of applications have been made under section 7(1) of the New Towns Act 1946, the Act under which Milton Keynes was built and designed. The new partnership committee and the council both have planning powers; that is why the interrelationship between those bodies will be important, and the Department needs to give guidance on the matter. What will be the role of the Government office? How will departures from the local plan be dealt with?

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Caldecote in my constituency was built under a section 7(1) application, but part of the estate was left undeveloped. In 1995, the existing local plan designated part of that area as open space. In 2000, English Partnerships told the council that it wanted the promontory to be developed, as in the original plan. English Partnerships's brief, which is contrary to the local plan, is currently before Milton Keynes council development control committee; its decision is due at the end of the month.
I have asked the Government office to call in that decision, because the principle that we are discussing is important—whether precedence should be given to the local plan, the inspector's report on the local plan or the existing local plan. What happens if an application fits into the regeneration aspirations of central Milton Keynes but not into the inspector's report? Which should take precedence? We heard in the previous debate that one size does not fit all. That is why it is important to get the process right.
Milton Keynes has always been an innovative city. It is a can-do city, and it has delivered for its citizens. My concern is that the inspector's report creates a number of obstacles, and the Government's vision for a sustainable community in Milton Keynes and the south midlands is right and important. To ensure that it happens, Departments need to work together. We need cross-regional working. At the moment, there are Highways Agency proposals for dualling the A421 as far as junction 13, but Bedfordshire county council and Milton Keynes council have not done similar work on extending dualling from junction 13 to the Kingston roundabout in Milton Keynes. The Highways Agency is doing good work, supported by local people, and the dualling is absolutely right and necessary, but it is not being completed, because Government offices, agencies and local authorities have not got their acts together and are not working to the same time scale. The role played by the Government offices for the south-east, the east of England and the east midlands will therefore be crucial to delivery. However, there is a perception that the inspector's report has ignored Milton Keynes's success and the reasons for it.
Today is not the day to debate funding, although we could have several debates about it. However, my hon. Friend the Member for Milton Keynes, South-West and I have consistently reiterated to the Minister that the provision of infrastructure must go ahead at the same time as development. The Government have accepted that in principle, and, to his credit, Lord Rooker said so publicly in Milton Keynes. However, success will be determined by whether highly individual Departments and agencies, such as the Highways Agency, can co-ordinate their individual plans with the Milton Keynes partnership committee's plans and the south midlands plans. The local plan will be a key means of delivering that success, but if we do not get it right, the issues that arise could compromise the Government's aspirations. The inspector's report is not an auspicious start, because it has raised fears without providing solutions.
I do not expect the Minister to be able to answer my points today, nor do I want an instant remedy. However, Ministers will need seriously to address them when they come to consider the council's final report, because they raise several serious issues. The way in which the different agencies react will also be important.
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The local plan is the vehicle by which we can turn some people's fears into opportunities and ensure that my city remains the success that it is.
11.17 am
Paul Clark: At the outset, let me congratulate my hon. Friend the Member for Milton Keynes, North-East (Brian White) on securing the debate. He has raised many issues and, at the heart of them, is the question of how we promote joined-up thinking and joined-up government at all levels—nationally, regionally and locally—to ensure that we deliver the communities for which he and my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) have argued at every possible opportunity at ministerial and local level.
My hon. Friend the Member for Milton Keynes, North-East said that Milton Keynes was a can-do city, and he is right about the success that it has enjoyed. We want to celebrate that success and build for the next phase to ensure that we have sustainable communities in which people want to live and work.
Several of the detailed matters that my hon. Friend raised are for the local council to decide through planning processes. He has substantial expertise in that regard because, in a former life before he came to the House, he was chairman of the Milton Keynes planning committee. He will recognise that many of the decisions will be taken at the local level, rather than anywhere else.
It is worth while setting out to the Chamber the processes involved. Everyone should recognise that there are still substantial opportunities for public consultation. All sections of the community should be involved, not just key stakeholders. I am sure that my hon. Friend and other colleagues in the area will do their utmost to ensure that people take those opportunities.
Let me attach a Government health warning to what I have to say. I am constrained by the fact that the independent panel report following the public examination of the Milton Keynes and south midlands sub-regional strategies was published at the beginning of last month and my right hon. Friend the Deputy Prime Minister is now considering his response to its recommendations. Although the contents of the report are public, no comments can be made on them at this stage. However, we expect to publish our response in October, and that will lead to a further round of public consultation.
Let me give the background to the Milton Keynes process. There are two key documents: the Milton Keynes local plan, which is the responsibility of the local authority, and the Milton Keynes and south midlands sub-regional strategy, which was jointly presented by the three regional assemblies to my right hon. Friend the Deputy Prime Minister last year. Both are relevant to the debate. We recognise that there might have been some confusion due to their running concurrently, so I shall deal with them separately.
The first document, the local plan, was placed on deposit in October 2002 by Milton Keynes council. It covers the period up to 2011, and contains detailed policies about land use for specific areas of land.
Brian White: Does my hon. Friend appreciate that one of the difficulties is that the local plan covers the

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period up to 2011, the regional plan runs until 2016 and the sustainable communities plan covers 30 years? The interaction of the three is causing concern.
Paul Clark: Absolutely. I realise that that does not make things easy. It has become clear in Milton Keynes that in order to deliver the sustainable communities plan, we need to run the processes concurrently. Then we can achieve what I know my hon. Friend desires—joined-up thinking that will allow us to get it right for all who live there now and who will do so in the next 10, 20 or 30 years. The processes have to come together at some stage, and part of the difficulty relates to the concurrent running of the documents.
As hon. Members know, we have introduced changes to the planning system to speed up the process and increase its transparency. They will come into force at the end of the month. Yesterday, the Minister for Housing and Planning launched two new advice notes concerning spatial strategies and local development frameworks, precisely to enable communities to have greater and earlier involvement than they have had in the past.
Returning to the Milton Keynes plan, the inspector who conducted the inquiry into the local plan is due to submit his report to the council later this year, and the council will then, if necessary, advertise any modifications that it wants to make in light of it. Further consultation will then take place. My right hon. Friend the Deputy Prime Minister was consulted on the draft local plan and commented on how it fitted with national policy guidelines. As my hon. Friend will know, it is the responsibility of the local authority and its elected officers to implement it.
I have already mentioned that we are changing the system to bring forward a better, more streamlined system. Many of us have been involved in local councils in the past and are well aware that housing and the demand for it—where it ends up and the levels of it—are invariably the most contentious issues. However, we have to deliver. As my hon. Friend has pointed out, some 1,500 will be sleeping rough tonight.
Brian White: They are in temporary accommodation.
Paul Clark: I am sorry. They will be sleeping in temporary accommodation tonight in Milton Keynes. I am aware that within the local authority stock there were only 140 voids—or there were at the end of April, according to the figures that I have—and I recognise the problems with that. I am sure that my hon. Friend, and my hon. Friend the Member for Milton Keynes, South-West have had many cases in their surgeries of people seeking accommodation. I know that they will recognise that we have to meet those demands, but in a sustainable way.
The plan identifies 36,700 additional homes in Milton Keynes in the plan period up to 2011. My hon. Friend the Member for Milton Keynes, North-East will
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recognise that the plan period runs from 1991 and that many of those homes were already built or had permission through the planning permission system to be built when the plan was being drawn up. Therefore, in reality, the additional number of homes being sought is about 6,800. That is largely to be achieved through developments in the centre of Milton Keynes. A development is being considered as part of the centre of Milton Keynes expansions that would include some 10,000 residents returning to the town centres, where we are seeing a major renaissance and revival.
The second document is the Milton Keynes and south midlands sub-regional strategy, which was submitted to the Government by the three regional assemblies in July 2003. Although the regional assemblies bring forward proposals for regional guidance, regional planning guidance—RPG—is approved and decided by my right hon. Friend the Deputy Prime Minister. Those are to change regional spatial strategies under the new system. A proposal to alter regional guidance in such a way during the final stages of the local plan is unusual, as I have said, but it was made necessary for us to make sure that the implementation of the sustainable communities plan went ahead.
All the comments in the inspector's report will be dealt with by the council as the local planning authority. As far as the Office of the Deputy Prime Minister is concerned, we would get involved only in extreme circumstances. Many of the matters raised by my hon. Friend are matters of detail and would not have been discussed at the sub-regional examination whenever the inspector's report had come out. The interim report was put out to inform debate. A substantial number of opportunities are still available at different stages of the process for members of the public, Members of Parliament, key stakeholders and the community to be involved in the sub-regional strategy and the local plan process.
I want to comment on one or two points that have rightly been made. If we are to have sustainable communities, they are not only a matter of bricks and mortar, but a matter of the social infrastructure that binds those together into communities. My hon. Friends will be aware of the Deputy Prime Minister's personal commitment to seeing that happen, and of how much he puts into it. In fact, the underlying strategy of the Office of the Deputy Prime Minister is to create such sustainable communities.
The comments made about health and education provisions were absolutely right. The moneys given under the growth area fund, for example, include about £800,000 for studies into what is needed for health provision and so on to meet the expansions, and about £135,000 for a sustainable strategy in terms of education and training in skills. That work is under way.
In terms of the designing-out of crime features, the ODPM and the Home Office have worked closely—
Sitting suspended till Two o'clock.

Electricity Market (Scotland)
2 pm
Mr. Alex Salmond: It is a great pleasure to introduce the debate. I make no comment on the fact that the Minister for Energy, E-Commerce and Postal Services is not present; I understand that he is in China. He told me on the telephone the other day that he had been inspecting the great wall. If Ofgem, the subject of this debate, had been in charge, the great wall would never have been built. If Ofgem's plans proposals and theories go ahead, it will make it extremely difficult to exploit Scotland's renewable energy and electricity potential.
It is entirely suitable, and very welcome, that the Minister for Trade and Investment is present, as the debate is about whether there can be trade in electricity between the nations of Scotland and England.
This extremely serious matter is coming to a conclusion: in November we will know whether the proposals being made by the National Grid company will be accepted by the Ofgem board, and pursued. If the proposals in option B of the consultation exercise are carried through, there will not be a significant increase in the generation capacity of renewables in Scotland, and we will miss out on the renewables boom that so many of us hope for, exploiting Scotland's vast energy potential and allowing it to supply markets across the UK and perhaps further afield. I thought that all parties shared that desire.
I hope we can agree on the scale of the renewables potential. Scotland already has 1,200 MW of hydropower because of the vision of a Minister, Tom Johnstone, after the second world war. He pursued hydro schemes against a huge amount of official opposition and blockage by landlords and vested interests. He wanted to develop the project because he had a vision that the highlands and islands of Scotland, especially the highlands, could have a vast generating capacity, serving the whole of Scotland. No one would now argue that we do not welcome our 1,200 MW of installed hydro capacity; indeed, many would argue that there is scope and room for more.
There is a huge array of energy resources in Scotland, both traditional forms of energy generation and hydrocarbons, including Europe's finest and most technically efficient combined cycle gas station, which is in my constituency of Peterhead. The station has 73 per cent. technical efficiency, which shows that even hydrocarbon stations can be so technically efficient that they help the Government's targets in respect of energy balance and the greenhouse effect.
Scotland has substantial coal-fired stations and nuclear capacity, but many debates on the subject concentrate on what will happen in the renewables sector. According to the Risoe laboratory in Denmark, which has a long-established wind farm industry, Scotland has 25 per cent. not of the UK's wind capacity but of Europe's. The other Scottish Members present in the debate know that we are a windy nation, and sometimes our constituents suffer the consequences. None the less, 25 per cent. of Europe's potential wind capacity shows Scotland's enormous potential in that respect.
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Scotland also has 10 per cent. of our wave power capacity—at present, the only working commercial wave power station is on the island of Islay. Professor Ian Bryden of Robert Gordon university described the Pentland firth as the Saudi Arabia of tidal power. Let us start with the agreement that there is enormous potential for renewable energy in Scotland, which is the why the Government's 40 per cent. target for Scotland is higher than the target for south of the border.
It would therefore be a tragic missed opportunity if exploitation of that renewable energy were prevented by regulations and the arbitrary imposition of unfair and discriminatory charges. Yet that is exactly what might happen under the National Grid company's proposals, which are unfortunately being put forward because it is adopting charging policy based on theories conducted within Ofgem about how to decide the interest charges on a system. Let us be clear that we are not talking about charges for transporting electricity—we all accept that a transportation charge should be built into the transmission of electricity. We are talking about entry charges: what is paid per kilowatt to get electricity on to the national grid.
The absurdity of the proposals can be best shown by the following example. In the north of Scotland, option B under the National Grid company's proposals would be to charge generators £20 per kilowatt to get on to the grid. However, the good news, I suppose, is that someone who wants to put a wind farm on top of Big Ben would be paid a subsidy of £9 per kilowatt. So a wind farm up Big Ben brings a £9 subsidy, whereas a major offshore wind operation in the north of Scotland carries a £20 a kilowatt tax.
The theory behind the proposal is locational pricing. Basically, Ofgem wants power stations in the UK to be approximately configured to the population: they want the population to match the power stations, or vice versa. There are a couple of obvious difficulties with that for renewables and particularly for wind power. I do not think that the population of London wants a wind farm up Big Ben. Indeed, the population in many areas of the country is resisting wind farms anywhere. I do not think that the population of London would be particularly enthusiastic about any power station in the precincts of outer London. In many senses, it does not matter what subsidy Ofgem comes up with; it will not reflect the reality that there will not be many new power stations in central or outer London.
The other obvious difficulty is that if there was a wind farm up Big Ben, the wind required to keep that station operational blows about 30 per cent. of the time. A wind farm offshore—in the Moray firth, for example—would be up 50 per cent. of the time, because the Moray firth, and this may come as a surprise to the academics and to Ofgem, is somewhat windier than central London.
If only the economists and Ofgem could have had a tutorial from the late Member for Portarlington, David Ricardo, one of only two great English economists in history, the other being John Maynard Keynes. Some of us remember that David Ricardo developed a theory of comparative advantage, which states that one should produce things where it is technically best to do so in order to increase the wealth not only of that area, but of the international community. I am sure that the Minister in charge of international trade is absolutely up on the international trade theories of David Ricardo.

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Therefore, to increase the benefit under that theory to both Scotland and England, the right place to produce renewable energy, such as wind power, is where the wind blows most and where it is technically most efficient to produce that power. That would certainly benefit the economics of Scotland hut also the economics of England. Instead of creating obstacles, trying to prevent that happening, putting barriers in the way of that development, and trying to strangle at birth the development that we all hope for in wind and other forms of generation, Ofgem should be encouraging the development of renewable energy in the places of best comparative advantage.
Ofgem's latest press release was issued before this debate—they must have got wind of what I was going to say. Ofgem is in a state of some confusion. On the one hand, the press release repeatedly states that the proposals are those of the National Grid Company and that Ofgem has still to judge them when they are submitted. For example, I quote:
"The company"—
that is, the National Grid Company—
"will then submit final proposals to Ofgem for its approval at the end of September."
That is technically true, but it is under the Ofgem scheme and its theory of locational pricing that the National Grid Company has produced these ridiculous proposals.
It is not only me and other Scottish Members who are jumping up and down about the issue—if one looks at the exchanges at Scottish questions yesterday, it is fair to say that the Secretary of State for Scotland is also deeply concerned. I do not think that the former Energy Minister, the right hon. Member for Cunninghame, North (Mr. Wilson) would mind me saying that he is equally concerned about the implications. For many years, he had a vision of the north of Scotland being the powerhouse for renewable energies and—if I interpret his remarks in debate correctly—I believe that he is deeply frustrated at the prospect of an obstacle being placed in the way of that development. If it was just politicians talking about the matter, we might have to bow to the experience of the experts in Ofgem and the National Grid Company, but the very companies on which we will depend to develop the resources are saying the same as we are.
A week last Thursday, I attended a glittering dinner in Fyvie castle, which is not currently in my Banff and Buchan constituency, but will be shortly, although the event was not to celebrate that. It was to celebrate Talisman Energy's 10 years in the North sea. The dinner was addressed by the Minister for Energy, E-Commerce and Postal Services and by the First Minister of Scotland, both of whom celebrated the fact that one of the projects that Talisman is engaged in with Scottish and Southern Energy Group is the development of the Beatrice field in the Moray firth, which is potentially Europe's largest offshore wind farm.
It seems to me that offshore wind has many advantages over onshore wind. There will be nothing like the same environmental resistance that is experienced with onshore wind farms. Despite a relatively benign climate at present, Scotland has only
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200 MW of installed capacity in wind farms. If the Beatrice project comes to fruition, that single offshore project alone will generate 1,000 MW of power, which is five times the entire installed wind capacity onshore. That single project would meet some 20 per cent. of Scotland's entire electricity needs, and would be up and running for 50 per cent. of the time, as opposed to installations in even the best location for onshore wind, which would run for less time than that.
Let us agree that it would be marvellous to have the Beatrice project come to fruition—that was certainly the view of the Energy Minister. The Government, the European Commission and, to a minor extent, the Scottish Executive, have backed the demonstrator models that will go on to the Beatrice platform over the next year or two. There is funding for the research and for the demonstrator models, which will establish and prove the technology, but what does Talisman Energy say about the proposals that are currently being made by the National Grid Company? I shall read exactly what it says:
"It is bad news for us and for anyone producing renewable energy in remote parts of Scotland. The changes Ofgem is talking about are 50 per cent. to 60 per cent. higher than we thought. At the moment it is the biggest single threat we see and it could threaten the viability of the project."
The very company that is being celebrated by Ministers both for its huge success in 10 years in the North sea and for its vision in being one of the partners in that amazing project, which would put 200 wind farms into the Moray firth and generate a gigawatt—1,000 MW—of electricity says that the proposals from the National Grid Company and Ofgem are "the biggest single threat" to the viability of the entire project.
Moreover, it is not just Ofgem. I am sure that the Minister knows of the proposals relating to Scottish Power. I am considering legal action against the discrimination that is implicit in the proposals if they come to fruition; although in its area of generation the charges are less than they are in the north of Scotland, they are still discriminatory. Ian Marchant, the chief executive of Scottish and Southern Energy Group has said:
"Whilst Scottish generators account for 14 per cent. of total installed capacity they will pay all of the UK's generation and transmission charges. Yes, England and Wales will net pay nothing.
I can't believe this is true but my experts assure me it is. I have even double checked it."
The major generator in the north of Scotland is perfectly clear on the discrimination implicit in the charges.
One might of course say, "Well, that's MPs. They are up in arms and so are the major companies going ahead with the projects, but the MPs have a vested interest in getting development in their constituencies and the companies have a vested interest in not paying huge charges." However, I was impressed to receive this morning a message from Maf Smith—I was more impressed than I was by the Ofgem press release. Maf Smith is the chief operating officer of the Scottish renewables forum. He writes:
"Under BETTA Scottish generators will subsidise English and Welsh generators by £70 million per year."

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He adds:
"If you wanted to remove the £70m subsidy you would need to reduce the Scottish locational charges by at least £10/kW…The corresponding increase…in English-Welsh generation charges would be approx £1/kW. Thus a small increase in English-Welsh charges would allow significant drops in Scottish charges and make the system equitable."
It is Ofgem's view, and the Government will no doubt echo it, that all the huge increases, which are not denied, and the amazingly high charges in Scotland and, to some extent, the north of England are offset by the fact that under BETTA the interconnector will now be paid for by the entire system as opposed to the Scottish generators alone. There are two difficulties with that argument. First, it is not true. There will still be a net loss to Scottish generators—with respect to existing capacity; never mind what comes on stream in the future—of £6 million a year under option B of the National Grid Company. With, hopefully, increased generation in Scotland, that net loss will become greater. There will be more power stations paying those large charges. There is a moving target, and the figure is already net.
The second reason the argument is wrong is that the fact that the interconnector fell only on the Scottish generators was already a block to competition in the system. That is why more electricity is not being exported from Scotland to England and Wales now. The fact that that a system was created under the vision of the previous Energy Minister to remove the blockage in the system and allow proper competition across the generating capacity of the UK and to allow Scottish generators to sell more of their technically efficient energy into the UK market, is being used to justify unfair discriminatory charges on new power stations in Scotland. Surely the Energy Act 2004 was designed to remove the blockages to competition and allow the increase in generation capacity—not to institutionalise charges by introducing them in another way.
Things could not be graver. We do not know definitely that option B of the National Grid Company will go ahead or that Ofgem will accept it. Neither of the two options is good for Scottish generation, although option A, despite the fact that it still includes discriminatory charges, is slightly better. There is much informed comment in the industry, and the attitudes displayed in Ofgem's press releases would lead one to believe that that it is so thirled to the ridiculous theory of locational pricing that option B might well be the one to come forward.
If we can we want to get our retaliation in first. The Government will look ridiculous if on the one hand they help and stimulate the development of renewable energy, and set it hugely ambitious targets of 40 per cent. of generation in Scotland, while on the other hand Government agencies such as Ofgem prevent the realisation of the dream of Scotland as the renewable energy capital of Europe.
The stakes could not be higher. Not only will the Beatrice field development generate 1 GW of electricity, but the total investment costs of the project will be approximately £1 billion and it will generate, directly and indirectly, thousands of jobs—300 alone in the construction phase and many others in the long term. That is only one of potentially half a dozen major projects of such a scale across the variety of renewable energy resources.
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Not only are such new developments under threat of being strangled at birth by the ridiculous charges. Existing generation, the hydro power and the Peterhead power station are also threatened by the imposition of the charges. The Government say that they have given a 10-year protection for renewable energy—five years that then rolls on for another five years. That is true if we are talking about a small wind farm development up a hill somewhere. If it has a short payback period and can be up and running in nine months to a year, the protection might be effective. However, even if the Beatrice project demonstrators work perfectly and show that the project can come to fruition, it cannot be up and running until 2010 or 2011, and the payback period for the project is estimated at 15 years. Even in the best possible scenario, a major project such as Beatrice would have two, three or four years of protection before facing the full blast of paying £20 million tax just to get into the national grid.
What I hope to have demonstrated is that both arguments—first, Ofgem's claim that the charges on Scottish generators are offset by the removal of the interconnector charges, and secondly, the Government's argument about the 10-year protection for renewables—do not apply. The first is simply not true, and in any case, the balance would change over time, institutionalising unfairness in the system. On the second argument, although the provision might protect small-scale renewable projects in the 10-year horizon, it will not protect major projects such as the Beatrice field and the ones that the Government like to boast about their help for.
The stakes could not be higher. On the one hand, if we have a fair and equitable pricing regime to get into the electricity system, there could be billions of pounds of investment and thousands of jobs, particularly in the north of Scotland but all over Scotland as well. On the other hand, we could be undermining our existing capacity in the north of Scotland and strangling at birth the hope that we can become the renewables capital of Europe.
My final point takes me back to the former Member for Portarlington, David Ricardo. I repeat the point that producing renewables in the areas of technical efficiency and taking advantage of Scotland's range of amazing resources in wind, wave and tidal power is certainly a good thing for Scotland. However, it is also good for the rest of the UK and for Europe as a whole in making a more effective contribution to the protection that we all want to give to the environment. I appeal for consistency in Government policy and the removal of the unfair charges, and I hope that, as the Minister for Trade and Investment is now acquainted with the subject, David Ricardo will prevail and Ofgem will be defeated.
2.24 pm
Mr. Alan Reid: I congratulate the hon. Member for Banff and Buchan (Mr. Salmond) on introducing this important topic and his excellent explanation of what is a complicated matter.
Any proposal that involves higher connection charges for electricity generating stations that are far from centres of population is bound to discourage investment in renewable energy in the north and west of Scotland. Since much of the UK's potential resources for

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renewables are located there, it is difficult to see how the Government's renewable generation targets will be met if a connection charging system is introduced that discriminates against electricity generating stations that are located in the north or west of Scotland. There is protection in the Energy Act 2004 for renewable generators but, as the hon. Gentleman explained, the 10-year sunset clause will discourage investors because they will be worried that whichever Government are in power in 10 years might have a very different renewables policy and not be as kind to them as the current Government, who introduced the clause, might be.
As a result of land reform in Scotland, many more communities are buying the land on which they live and work; the island of Gigha in my constituency is one example. After years of rule by absentee landlords, the islanders bought their island, and one of the many schemes in which they are investing is a scheme to build three wind turbines to generate electricity for their own use and to sell the surplus to the grid. Schemes such as that one on Gigha will be adversely affected if a charging system is introduced that places higher connection charges on schemes on remote islands.
In addition, a Wavegen experimental station on the island of Islay is leading the world in research into generating electricity from wave power. Given the strength of the wind, waves and tides that we get in the north and west of Scotland, this is clearly an ideal part of the country for generating electricity from onshore wind, offshore wind, and wave and tidal power. We should not discourage that enormous potential by adopting any proposal that involves higher connection charges.
Both the Government and the Scottish Executive have policies of investing large amounts of money in the research and development of renewables, and the logical extension of that policy is surely fair connection charges. Once we have developed wave and tidal power to be commercially viable, we do not want to discourage the resultant schemes from going live. In summary, the north and west of Scotland have a tremendous role to play in allowing the Government's policy of greater renewables to be put into effect, and we should not adopt any policy that involves higher connection charges in that part of the country.
2.27 pm
Mr. Michael Weir: Having spoken on Second and Third Readings of the Energy Act 2004 and served on the Committee that considered it, I seem to be thinking about energy in my sleep these days.
It will come as no great surprise that I very much agree with what my hon. Friend the Member for Banff and Buchan (Mr. Salmond) said about transmission charges. I shall concentrate on a slightly different point in a moment, but I want to make another point about transmission charges before I move on. Section 185 of the 2004 Act states:
"The Secretary of State may make an order under this section if it appears to him…that a particular area of Great Britain is suitable as a location for the generation of electricity from renewable sources".
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That area is assumed to be the north of Scotland; any other area would be completely illogical. The point is that this is an area-based scheme, not a project-based scheme. Subsection (11) states:
"A scheme shall not be applied in relation to a time more than ten years after the commencement of this section."
Subsection (12) states:
"A scheme…shall not be applied for a period of more than five years; but…may be renewed…by a further order under this section for a period of no more than five years".
The effect is that there will be an area-based scheme for a maximum of 10 years, which means that only a scheme that was up and running when the area-based scheme was brought into being would get 10 years of benefit from the capping of the charges. Any scheme that was not up and running at that time would not get the benefit even of the 10 years, the five years, or whatever the length of the scheme would be. If the scheme in the Beatrice field, which my hon. Friend mentioned, was up and running when the area-based scheme was introduced, it might get 10 or so years' benefit. Another similar scheme a few years later would not get that 10 years' benefit, but it might get four or five years' benefit, depending on when it was up and running. So there is a disincentive to the scheme under section 185 for the future development of renewables. I make that point to back up what my hon. Friend said.
Section 184 relates to distribution charges as opposed to transmission charges. As hon. Members will know, distribution charges relate to the cost of distributing electricity to consumers, while transmission charges relate to accessing the national grid. That is important for the north of Scotland. When the then Energy Bill introduced BETTA, we were told that it would benefit Scottish consumers. In various debates during the passage of the Bill, I asked several Ministers what those benefits would be. Frankly, the best they were able to come up with was that consumers could benefit by switching to new suppliers. I find that argument unconvincing, because, in my experience, consumers benefit from switching only if they are high users or pay by direct debit, although even the savings for those who pay their existing supplier by direct debit are fairly minimal.
In any event, Ministers' arguments have been somewhat undermined by the substantial price increases announced by British Gas last week and by npower only this morning. Those of our constituents who do not have bank accounts or who pay by means of prepayment meters—I spoke about this issue at length in Committee and I do not propose to do so again—would not benefit from any switch in supplier, even if they could find one willing to take them on. Those with prepayment meters pay far more for their energy, although they tend to be less well off. The Library notes that accompanied the original Energy Bill put things very clearly:
"The tariff paid by domestic electricity consumers depends, in part, on the method of payment used. Broadly speaking there are three distinct options: standard credit"—
that is, payment by quarterly bills—
"direct debit and prepayment. Standard credit is, in effect, the default method of payment for most electricity consumers. Choosing to pay by direct debit confers a discount, while prepayment involves a surcharge."

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That means that those who are least well off and have to use prepayment meters pay most for their energy.
The issue is even more important in Scotland. Figures produced by Energywatch Scotland show that until 1997 electricity consumers paid less in Scotland than in England and Wales. Since then, however, people in Scotland have not seen electricity prices fall at the same rate as people in England and Wales, contrary to the Government's original argument for introducing BETTA. Since 1990, consumers in England and Wales who pay by standard credit have seen prices fall by 31.4 per cent. in real terms, while the figure in Scotland is about 20 per cent. The gap narrowed slightly in 2002 and 2003, but, strangely, it has widened for those who pay by direct debit and particularly for those with prepayment meters. Again, the system is penalising the least well off.
The Government's much trumpeted reduction of the number of households in fuel poverty has, according to Energywatch Scotland, largely been brought about by lower fuel prices, not Government action. Even so, as the regulatory impact assessment published with the Energy Bill showed, 13 per cent. of households in Scotland meet the Scottish Executive's definition of fuel poverty. However, it is important to note that the incidence of fuel poverty in the 16 local authorities that lie wholly or partly within the hydro area is approximately 4 per cent. above the Scottish average. In some areas, particularly island areas, the figure is much higher. The price increases announced by British Gas and npower may well reverse the declining trend in the number of households in fuel poverty, because prices will rise dramatically.
To return to my point about distribution charges, the Energy Act presents Scotland with a particular problem: hydro benefit. I urge those hon. Members who are not au fait with the history of hydro benefit to read the regulatory impact assessment, which contains an detailed and interesting account on page 119:
"Hydro Benefit has existed in various forms since 1943 when the North of Scotland Hydro-Electric Board…was created in order to electrify northern Scotland. More generally, the NoSHEB was established to help promote economic development in the Highlands and Islands, which had experienced relatively high unemployment and depopulation in the preceding decades."
The regulatory impact assessment also states:
"Given the abundance of hydro electricity in northern Scotland, Hydro Benefit was devised for social reasons as a means of ensuring that some of the advantages enjoyed by SHE",
which NoSHEB, as we knew it, became,
"through its ownership of cheap hydro generating assets could be used to offset some of the expense that its customers would otherwise bear through the relatively high costs of transporting electricity to and within the Highlands and Islands."
The assessment goes on to say that
"average distribution costs in North Scotland were easily the highest of any region in Great Britain—over 50 per cent. higher than the national average—in 2002/03 even after the reduction afforded by Hydro Benefit. The average cost in North Scotland without the subsidy would have been around 100 per cent. higher than the overall GB average, largely because of the large, sparsely populated terrain that must be wired to transport electricity to local consumers. Indeed, SHE served only 2 per cent. of all electricity customers by number (both domestic and non-domestic), yet had by far the highest system length per customer of any distribution area in Britain".
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Unfortunately, hydro benefit also came under threat from Ofgem, which seems to be the villain in this debate and the debate on the Energy Act 2004, although this time it cannot offload the problem on to the National Grid company. It was Ofgem that stuck the knife into Scottish consumers, by deciding that the hydro benefit was illegal under European law, despite the fact that the Monopolies and Mergers Commission had already conducted an investigation in 1995 and concluded that hydro benefit was in the public interest. That caused a great deal of controversy in the north of Scotland, as can be imagined.
It is fair to acknowledge that the Government reacted to that and introduced in the House of Lords what is now section 184 of the 2004 Act, which, as I have said, allows the Secretary of State to introduce a price cap and distribution charges in an area in Great Britain. Again, however, as with transmission charges, that area is not defined or is assumed to be the north of Scotland. The provision was widely welcomed in Scotland, but there are problems with it. The reduction in the replacement of hydro benefit is not guaranteed in the same way that hydro benefit was. Subsection (11) of section 184 provides that the scheme be reviewed three years after its introduction and at three-yearly intervals thereafter. It is also worth noting that the decision to introduce the scheme at all is at the Secretary of State's discretion. Presuming that it is introduced, however—I understand that Scottish Hydro-Electric has undertaken not to change charges until then—it will be for only three years. That is the only guarantee that consumers in the north of Scotland have for that benefit. They can have it for three years, but there could then be a fairly dramatic increase in prices.
I mentioned percentages earlier, but the situation should be put in context, with pounds, shillings and pence. Whatever happens to electricity prices over the next few decades, the reasons of geography that make electricity distribution much more expensive will not change. Distribution in the highlands and islands is now costed at £225 per customer, as compared with the next highest area, where the figure is £131. That is a substantial difference. If Ofgem were to use the same madcap economic theories as for transmission charge, and to go to locational charging, I dread to think what the charges would be for distribution to some of the island areas of Scotland.
Mr. Salmond: If Ofgem had been around in the immediate post-war period, two things would be certain: first, the hydro stations would never have been built and secondly, there would have been no benefit in their being built in the north of Scotland. Neither would have been allowed by Ofgem.
Mr. Weir: Given the history of the matter, my hon. Friend is correct. There might have been an attempt at hydro generation in the Thames—the Thames barrier might have looked rather different. I have to ask the Minister why there is such a short period for the benefit, and why is it to be reviewed at three-yearly intervals. Its mainstay, the geography of the highlands and islands, is not going to change. Distribution will always cost more in those areas than in the south of England or a more densely populated area.

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What is the reasoning behind the frequent reviews? They cause nothing but uncertainty to consumers and businesses in the north of Scotland and to the electricity generators, who face the double whammy of not knowing the future charges for either transmission or distribution. That could hurt consumers in remote and rural areas of Scotland very badly.
The combination of the ludicrous system of locational charging for transmission and opposition to the hydro benefit by Ofgem delivers a double whammy to the people of Scotland. An energy-rich nation faces higher energy costs and the sabotage of a huge renewable potential. That must not be allowed to happen.
2.41 pm
Mr. Alistair Carmichael: I add my congratulations to the hon. Member for Banff and Buchan (Mr. Salmond) both on having secured the debate and on the substance of his speech. There was very little in it with which I disagreed. I should also, as this is my first chance to do so on the record, congratulate him on having successfully reapplied for the leadership of his party. I have never been sure why he wanted it, and it remains to be seen whether he reflects on the best political advice that I have ever been given, which is to be careful what one wishes for. However, he has it, and I am sure that he will again be effective. I have also to thank him for his endorsement of one of my political and economic heroes, John Maynard Keynes.
Mr. Peter Duncan: Another one!
Mr. Carmichael: The hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) expresses some surprise from a sedentary position. Perhaps he has seen the press reports that some on the fringes of my party have cast aspersions on the efficacy of Keynsian thinking. I am not one of them. John Maynard Keynes was a Liberal.
Mr. Salmond: I am sure that if he had been a Scot, he would have been in the Scottish National party.
Mr. Carmichael: It is idle to speculate on that. He was, rightly, a Liberal and it is difficult for many liberals to exist within today's SNP, but I take the hon. Gentleman's intervention in the spirit in which it was offered.
Much comment has been made about how Ofgem regulates the markets with whose regulation it is charged. The hon. Gentleman has already speculated that, had we had Ofgem at the time, we would not have seen the development of hydro energy in the post-war period, and would not have had the hydro benefits. It is true that the parts of those two crucial planks of Government policy not accounted for by Ofgem would be caught by state aid rules. The highly artificial way in which Ofgem seeks to regulate the market, driven in some ways by free market zeal, is exceptionally unhelpful.
All hon. Members who have spoken today have highlighted the tension at the heart of Government policy between the desire to promote markets as a
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mechanism for delivery and that for a particular social good, the promotion of renewable energies. Ofgem is a major potential barrier between the two.
It has always escaped me why Ofgem has an office in Millbank. On the basis that generation should be done where it is best done, surely regulation of markets is best done where generation is done, and there is precious little generation done on Millbank. If the staff were to get out of their office on Millbank and into the areas where electricity generation is important, they would see at the sharp end the impact of some of the things that they seem to regard as abstract.
Mr. Salmond: The hon. Gentleman is on to something, because Government policy, as I understand it, is to distribute public sector jobs across the country. That is the Government's locational theory of the civil service. Can the hon. Gentleman think of somewhere to which the new Ofgem's headquarters could be moved?
Mr. Carmichael: I can think of a number of places, Kirkwall and Lerwick being the most obvious. If, however, it were just a question of getting away from London, I have a particular ambition to get the Northern Lighthouse Board out of the offices on George street. It is ridiculous to have a lighthouse board based in George street in Edinburgh, so once I have achieved that, there will be a vacant building that Ofgem might be able to occupy. I fear, however, that we are straying a little from the main thrust of today's debate.
It has been said by all contributors that there is tremendous potential for the development of renewables, particularly in the highlands and islands. Two barriers to that make me pessimistic, however. First, we have been speaking long enough now about the notion of communities benefiting from having renewable generating facilities sited locally—principally, at present, wind farms. Everybody agrees that that is a good idea, but somehow it never seems to happen. The Government must now start to consider it seriously, and come forward with concrete schemes that will make such pious thoughts a reality.
Secondly, our local authorities must show greater strategic thinking in planning policy for wind farms. I perceive, particularly in the highlands and islands, a growing unease in many communities, a lot of which could be addressed with more strategic thinking in local authority planning policies. I know that that does not happen quickly or easily, but it is important none the less.
Mr. Peter Duncan: I hope that the hon. Gentleman is not suggesting that it is appropriate for local democracy for scrutiny of the proposals to be removed and replaced by central Government diktat.
Mr. Carmichael: No, absolutely not. I do not think that the hon. Gentleman has listened to a word that I said on that point. All that I said is that the local authorities, in constructing their planning policies, must have a greater strategic view of what is appropriate for their area. That is not at all the same as what the hon. Gentleman is suggesting, which is the withdrawal of powers from local government. In fairness to him, that was very much the hallmark of 18 years of Conservative

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Government so it is not in any way surprising that the hon. Gentleman should think along those lines, but I can assure him that my mind runs along very different lines.
The financial regime for the transmission of electricity, largely established by the Energy Act 1994, is extremely important, not least to my constituents. Communities in the northern isles face very significant economic challenges, and we see renewables as an important part of ensuring our long-term viability as communities. It was a particular pleasure for me during the recess just past to witness the opening of the European Marine Energy Centre—EMEC—in Stromness in my constituency. That is one point on which we have not dwelt sufficiently: we have used renewables today as a synonym for wind power, but there is a lot more to renewable energy than wind farms. The next phase, and the long-term contribution beyond wind farms, is the development of wave energy, to which other hon. Members have briefly referred, and tidal energy. Because of its predictability, tidal energy has the potential to contribute to the base load generation capacity, which will be of supreme importance if renewables are to play the part that we think that they can play.
Some time ago, an answer was provided to a question asked by the hon. Member for Salisbury (Mr. Key), in which the Department for Trade and Industry identified 40 sites of tidal streams that were suitable for the generation of electricity. 13 of them were in the Pentland firth or north of it, that is to say in my constituency. That will be the next opportunity. However, unless we get wind generation right and the framework correct, it will not happen because the infrastructure will not be there to ensure that the developments that will inevitably come from the peripheral, coastal and island communities are developed to their full potential. That is why this is a matter of supreme importance for the general renewables industry.
Just yesterday Shetlands island council agreed to a £150,000 funding package for a major community-owned wind farm project known as Viking Energy. It is therefore vital that renewable energy producers in the north of Scotland do not face punitive charges that threaten their future development. The hon. Member for Banff and Buchan referred to the charge of £22 per kilowatt that has been calculated as an example for mainland Scotland. He may not be aware that if one applies that same line of thinking to projects in Shetland it will be in the region of £70 per kilowatt. That is as good as saying that these projects will never happen. That is the real danger of the economics that are applied in a doctrinaire manner. The hon. Gentleman described it as discriminatory. My objection to the Ofgem thinking is that it is not discriminatory enough. I should like to see discrimination in favour of the development of renewables. I know why he used that term, and I do not take issue with it but I want to see the discrimination moving in another direction.
I am prepared to give the Government some credit for reaching where they have. I have been involved in this issue for some considerable time. I give the Minister for Energy, E-Commerce and Postal Services some credit for having stuck to his guns and to ensure that he has a power to cap excessive charges. I met him along with the chairman of Ofgem and the hon. Member for Western
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Isles (Mr. MacDonald) in February and it was apparent to me—I am fairly sure that the hon. Member for Western Isles would agree—that the Government were facing significant pressure from Ofgem to abandon a proposal that is now part of the Act and which would leave our energy producers to the vagaries of the market.
In their unceasing quest for cost-reflective pricing, Ofgem seem to be indifferent to the impact on Scotland's burgeoning renewables sector. Of course such an approach is a result of Ofgem viewing every policy decision from a narrow free-market economic standpoint. The real problem is that renewable generators are at present totally unaware of how Ofgem will meet the new requirement. That is critical in the run-up to the post-BETTA situation that will operate after April 2005. The Minister will be aware that Scottish Power and Scottish and Southern Energy currently charge flat rates. Reference has been made to the fact that there will effectively be a £9 subsidy in the south of England as opposed to the £22 charge. To my mind that is regulatory nonsense.
The Department of Trade and Industry has indicated that it will consult on a rebate or a cap on renewables in the highlands. When will this consultation take place? It is anticipated that it will occur this autumn but as far as I am aware that has not been confirmed. Could the Minister, either today or later in correspondence with his colleague, provide a clear timetable for consultation on the issue of a rebate or cap for peripheral locations? A cap or rebate will help individual schemes, but until we know the level we do not know what benefit it will be. What does the Minister envisage happening after this 10-year period elapses? The uncertainty that that generates is unhelpful in the extreme.
Finally, I turn to the analysis offered by Ofgem. It maintains that BETTA is broadly cost neutral and notes that generators in Scotland pay £92 million now in charges and will pay £90 million under BETTA. Although the figures used have an accurate basis, I would suggest that the analysis is simply wrong. The figures used relate to conventional generation, as in practice only conventional generation is traded via the interconnector with England. They do not account for the costs that renewables will face. Renewables are not currently traded over the border, so the costs proposed represent large increases for renewable generators of up to twice the current level.
As I understand it, the Government are also using Ofgem's analysis. However, Ofgem's analysis is irrelevant here, as it does not factor in charges that are faced by renewable generators. The Scottish renewables forum estimates that as a result of the new charges, Scottish generators will be subsidising English and Welsh generators by about £70 million a year. That is hardly the level playing field that BETTA is supposed to create. At best, it only preserves rather than removing any qualities.
Ofgem is right to want to introduce some cost reflectivity into charging, but it is wrong to make that the only consideration. A high cost reflectivity brings higher instability and also raises the costs of generation that cannot move. The wind and waves are where they are; one has to generate from them where one can find them, and that is in our peripheral areas.

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I urge the Minister to provide a clear signal to the national charging company about how it is to develop charges. Ofgem must adapt to fill its obligation under the Energy Act 2004 to ensure sustainability. That means that Scottish renewable power generators must not be priced out of the energy market.
2.57 pm
Mr. Peter Duncan: I share in the common congratulations to the hon. Member for Banff and Buchan (Mr. Salmond) on his timeous selection of this debate in our first week back after the summer recess. I suppose that a lot has changed over the last couple of months. For him to have shown such foresight over that period is truly remarkable.
Obviously this is an important and pertinent debate, but I greatly enjoyed—I thought it was one of the most important debates—the discussion about which party John Maynard Keynes would belong to. I thought that that was an instructive indication of the way in which Scottish politics is likely to head in the coming months and years. We look forward to that juncture. If there is any doubt remaining in the minds of hon. Members, I reassure them that he would not have best found himself in my party.
The market for electricity in Scotland is clearly different. It has been historically different—hon. Members have referred to the foresight of the hydro engineers in the past, but there is a different commercial field in Scotland. Research by the Scottish Energy Environment Foundation shows its importance: three out of the top 10 companies by turnover in Scotland are electricity utilities. That is clearly a different emphasis to the rest of England and Wales. The Scottish market is much more integrated and much less fragmented than that south of the border.
I reiterate the welcome made by my hon. Friends in the passage of the Energy Act; we look forward to the better provision of new opportunities for Scottish energy generators after the passage of the Act. I hope to provide considerable support for the substance of what the hon. Member for Banff and Buchan said. We will probably diverge in emphasis a bit later on, but it is always useful to start on common ground.
The hon. Gentleman has made an important and succinct summary of the case against discrimination in energy transmission. His opening remarks have shown how clearly existing Scottish generators will suffer if the proposal—option B, as it has been described—is allowed to go through. Locational pricing was originally an Ofgem concept. The National Grid Company has brought forward proposals to comply with that concept. Ofgem has to look long and hard at the way that it has taken this debate. It is not going to move forward an important sector of Scotland's economy and, on that basis, Ofgem will need to look long and hard at it before moving forward.
I want to provide the hon. Gentleman with support for his suggestion, which was reiterated by the hon. Member for Orkney and Shetland (Mr. Carmichael), that wind projects should be located where they are most efficient and effective. There is clearly little point in creating a market that will encourage the creation of
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renewable projects in areas where they are least effective. That would be crazy, and it would not add anything to the wider debate on energy needs in Scotland or the GB market. I found little to quibble with in what the hon. Gentleman said on those two points.
I hope that Scottish consumers will see some improvement in the cost of electricity. Consumer prices have been attractively low in recent years, but that has provided a huge challenge for policy makers and companies in the energy sector. As the hon. Member for Angus (Mr. Weir) pointed out, the Scots have missed out relative to those in other parts of Britain on the benefits since deregulation. I read this morning that Energywatch has found that Scottish prices have increased by 10 per cent. since privatisation, whereas they have decreased by 5 per cent. in England and Wales. Clearly, that will not help in the wider selling of an effective market in Scotland. It has even been advocated that we switch to English or Welsh companies, a truly extraordinary remark for a Scot to make. Prices may have fallen in real terms, but we clearly have not shared in the benefits of privatisation. I was interested to hear that the National Audit Office has recommended that Ofgem should review the differences in consumer prices. I look forward to its response.
Much of the debate has focused on wind and renewable energy. That is inevitable, given that they tend to be the most peripherally located forms of generation. The Scottish Executive's target—it wants 40 per cent. of generation to be renewable by 2020—figures significantly in that debate. I understand that we are currently approaching the 12 per cent. mark. Scotland is rich in wind and wave resources, but I counsel hon. Members that my party does not necessarily share the common dash for wind. We see a place for it, but we see a place also for renewable energy and a balanced energy mix. We are hugely concerned at the unrestrained dash for wind energy in Scotland.
I sympathise entirely with the comments of the hon. Member for Orkney and Shetland that we tend to focus on wind to the exclusion of other forms of renewable energy. I will share a personal anecdote. When researching the purchase of a solar panel for my house recently, I was interested to note that the technology had not moved on significantly since my father undertook a similar purchase in 1975. The photovoltaic sector has not made an incremental jump in those 25 or 30 years. However, although renewable energy has huge potential, I would not support those who wanted to focus exclusively on wind energy.
Mr. Salmond: I can see a community benefit in onshore wind power—it would be even better with community ownership—but if one power is to make a significant contribution to the renewables target, it must move offshore. The projects that I mentioned, some of which have caused much angst in Scotland, now contribute 200 MW. A single offshore project would produce five times as much energy.
Mr. Duncan: The hon. Gentleman is absolutely right about the considerable benefit to be gained by moving offshore. However, the issue is not entirely straightforward. I am reminded of a proposal approved for the Solway firth, adjacent to my constituency. I

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understand that it is not a long distance offshore, but some of the arguments are pertinent. A proposal was made for an area adjacent to a stretch of coastline that is a site of special scientific interest, one that is significant in the UK and Europe for environmental preservation. Although farmers were precluded from erecting a single turbine to support their own premises, approval was given in a relatively short time for 60 wind turbines to be built some six miles offshore. Such inconsistency does not endear the wider public to the planning process.
I ask the hon. Gentleman if he can reconcile a perceived inconsistency in what he said in his intervention. He said that Scotland had the potential to provide 25 per cent. of Europe's wind energy. He will be pleased to know that I listened to the opening debates in the Scottish Parliament yesterday. Unusually, the Official Report of the Scottish Parliament has not yet reached the website, so I have not been able to clarify the precise wording, but I understand that Nicola Sturgeon suggested that Scotland could be the source of 40 per cent. of Europe's wind energy. As I would not want to engender conflict at such an early stage between the hon. Member for Banff and Buchan and his deputy leader, vice leader or assistant leader, perhaps he would clarify the target figure.
Mr. Salmond: The figure of 25 per cent. is the available resource. The 40 per cent. figure is what is done with the available resources. For example, Scotland contributes about 90 per cent. of the UK's hydropower at present, but the available resource is only about 60 per cent. It is something that economists get to understand, and I am sure that the hon. Gentleman will catch up.
Mr. Duncan: I look forward to reading the Official Report when it is available to see how closely the wording reflects what the hon. Gentleman said.
Anger is mounting in Scotland as huge numbers of proposals come forward and there has been a step change in public opinion on the issue.
Mr. Alan Reid: The hon. Gentleman will recall that some time ago some of his colleagues in the Scottish Parliament called for a moratorium on all wind farm applications. Is that his party's policy?
Mr. Duncan: I can confirm that we have called for a moratorium on wind development in Scotland until the Scottish Executive can prove to us that that policy is worth pursuing. There is huge concern that we are embarking on a course to have 40 per cent. wind power that will put our stability at risk. I will come to that issue later.
Mr. Salmond: Does the moratorium include the Beatrice project? My constituents in Peterhead and people in other constituencies are extremely anxious that the Conservative party wants to deprive them of job opportunities.
Mr. Duncan: I assure the hon. Gentleman that we are looking forward anxiously to the Scottish Executive justifying the continued pursuance of wind power. There is a lack of accountable decision-making by the Scottish Executive.
The Minister for Trade and Investment: I agree with the hon. Member for Banff and Buchan (Mr. Salmond) that it is important that the Conservative party clarifies its position. It seems clear from what the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) said that the Conservative party is prepared to put jobs at risk in Scotland. He needs to clarify the matter.
Mr. Duncan: There is no confusion. Our policy is clear: we need a moratorium until such time as the Scottish Executive can come forward with a rational basis on which to support 40 per cent. of Scotland's power coming from renewable resources.
Long term, there is a change in the balance between nuclear power, which is being decommissioned, and wind power. That is playing Russian roulette with the energy mix. The market is about supply and demand. The security of supply should be one of our primary concerns.
Wind development across Scotland is scarring the landscape and we want the assurance that that can be justified by providing us with long-term, stable power supplies in Scotland.
Mr. Reid: What measures does the hon. Gentleman have to help the 300 employees at the wind turbine factory in Campbeltown who would lose their jobs as a result of his party's policies? What is his message to those employees?
Mr. Duncan: My message is clear: we are looking forward to the Scottish Executive's early justification for pursuing the 40 per cent. target. There will be question marks over the stability and security of supply in Scotland if that target is pursued. The Scottish Executive must produce that reassurance very quickly.
The market needs to supply electricity in a stable as well as a secure manner. In my constituency and in other parts of rural Scotland, there is great concern about unstable network supplies. The current measure of network stability is customer minutes lost, and the figure in my constituency is higher than the Scottish average, but investment in the rural network tends to be assessed on a Scotland-wide basis.
Mr. Carmichael: I appreciate what the hon. Gentleman says about wanting a moratorium pending justification of the target, but, as he reminded us, something like 12 per cent. of generation comes from renewables, against a target of 40 per cent. In those circumstances, does he not feel that calling for a total moratorium is somewhat disproportionate?
Mr. Duncan: No. It is reckless and irresponsible to propose a target when the Scottish Executive cannot justify it or provide a reassurance that Scotland's electricity generation will be stable and secure in the future.
To return to network stability, there is an imbalance in the assessment of customer minutes lost across Scotland, but that is not reflected in figures for the investment that is required to provide a secure and stable network in rural Scotland.

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To conclude, I agree that the price structure for supplying electricity needs to be fair and that generators should be located in areas where they are most effective and efficient. However, I question whether we need to pursue a policy that envisages a dash for gas and a dashfor wind, but does not provide a place for nuclear, which is a key part of a balanced energy mix.
3.12 pm
The Minister for Trade and Investment: It is a pleasure to reply to the debate. My right hon. Friend the Minister for Energy, E-Commerce and Postal Services is on a visit to China and has, I think, already apologised to the hon. Member for Banff and Buchan (Mr. Salmond) for not being here, although he has asked me to pass on his regards. In congratulating the hon. Gentleman on securing the debate, let me also congratulate him on his re-election as leader of the Scottish National party, although I should perhaps congratulate the Scottish National party on having elected him since he was obviously the most outstanding of those available. Only months ago, he was perhaps regarded as one of the politically dead, but—like me, to some extent—he is now an example of life occurring after death.
The hon. Gentleman made some strong, cogent arguments, but despite their substance, he overstated them at times and often missed some countervailing arguments about the benefits to the Scottish people. That said, he made some good points, which deserve a clear reply.
Throughout the debate, concern has been expressed about the impact of transmission charging on the Scottish electricity industry. It is right to raise such concerns, because the industry is crucial in Scotland, not only generating electricity, but supplying jobs. However, it is also important, as the hon. Member for Angus (Mr. Weir) said, to consider the benefits for the Scottish consumer. The Government are introducing the new BETTA system to benefit the Scottish consumer. For too long, Scottish consumers have had less choice than their counterparts in England and Wales. As a Government who believe that people should be able to have some element of choice, we think that that is unacceptable.
Overall, the BETTA package will deliver a better deal for the Scottish consumer by creating more competition and bringing down prices. The hon. Member for Angus wanted more information about that, and Ofgem estimates that, because of BETTA, the average domestic customer's bill in Scotland will be about £13 lower than it would be otherwise. The hon. Gentleman rightly referred to fuel poverty in Scotland, and it is a key issue for many families. However, the way in which the new regime operates should allow some of the problems of fuel poverty to begin to be addressed.
Mr. Weir: On what basis is that £13 calculated? We have heard today that the generators will face a massive increase in costs as a result of the transmission charges. Where does the Minister think that those costs will go, and what figure is taken into account in his calculations? Does he think that the companies will absorb the costs
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and reduce profit, or will they be passed on to the consumer? What figure is used in calculating that fall in the bill?
Mr. O'Brien: As I understand it, the figures are available in the statements that have been made by National Grid and Ofgem. The hon. Gentleman can find them too, but I will be happy to supply him with them.
Mr. Salmond: Why, we ask ourselves, can we not have the competition and its benefits without the discriminatory transmission charges?
Mr. O'Brien: Let me deal with the points one by one. My key point was that in putting his argument, which had some substance, the hon. Member for Banff and Buchan ignored the Scottish consumer. He was rightly concerned about the impact on the Scottish generators, as they are important employers, but he ignored the impact on consumers. His colleague the hon. Member for Angus did not, and it is important to look at the balance of the argument. As with everything, there are judgments to be made, and the overall judgment is that what we are doing will benefit the Scottish consumer. The figures that have come out will address some of the concerns about fuel poverty put forward by the hon. Member for Angus.
Mr. Salmond: My colleague and I operate as a team, which the Government should perhaps try, given the events of the last few days.
Talking of operating as a team, when my hon. Friend and I met Ofgem, I asked representatives three times whether they accorded to the Government's renewable target and three times they refused to answer. Can the Minister tell us whether in his opinion Ofgem operates to the Government's renewable target?
Mr. O'Brien: I shall come to renewables later. The hon. Gentleman is taking me away from the Scottish consumer—I understand why he is doing that, having ignored the consumer in his opening speech—and towards transmission charges and renewables. I want to deal with each of them in turn, and I shall now move on to transmission charges.
To claim that transmission charges under BETTA will rise for generators and that that will be bad overall for industry in Scotland is to distort the overall picture. There will be some difficult effects in certain areas, but overall the picture should be positive. It is not true that it will be bad for industry, and the hon. Gentleman's characterisation of the increase in transmission pricing is misleading. Let me say why.
The hon. Gentleman said in a press release on 5 September that charges will increase from £5.44 to £20.69, and he has referred to similar figures today. He has conveniently left out the fact that under the existing arrangements generators in the north of Scotland pay charges amounting to between £32 and £37 per kilowatt to sell their electricity into England and Wales. Those figures are based on figures that are publicly available in

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SHETL and National Grid's transmission charging statements. They are the real comparison for the new transmission charges.
Mr. Salmond rose—
Mr. O'Brien: I have given way twice, but let me finish my point, and I shall give way to the hon. Gentleman again.
We now have a different comparison from the one that the hon. Gentleman so eloquently made. Scotland is already a net exporter of electricity. Most new renewable projects will expect to export their electricity out of Scotland. It is wrong to claim that a reduction in charges from a potential £37 to £20.50 per kilowatt, which is the highest charge currently proposed—the hon. Gentleman got his figures wrong—is damaging to renewables. It is not.
Mr. Salmond rose—
Mr. Carmichael rose—
Mr. O'Brien: I promised to give way to the hon. Member for Banff and Buchan, but if he will bear with me until I have made my point, he may well want to respond. One example that he keeps giving is the Beatrice project. It is important, but it is at an embryonic stage of development and has some distance to go before transmission charges are even an issue. He is right that if it comes to fruition it will be a major employer. I share his concern about what the Conservatives are doing, and their damaging proposals, but to predict dire consequences at this stage for that project is alarmist and very premature.
Mr. Salmond: The Minister's colleague, the Energy Minister, was more enthusiastic about Beatrice a week last Thursday, but I have already dealt at some length with the matter that the Minister has raised—the question of interconnector charges. It may not be set out in that way in the Minister's speech, but what he was referring to are the interconnector charges. Even the Energy Minister argues that the effect is neutral between the interconnector charges and the new discriminatory charges. My point is that the change was sold to us as the removal of a major barrier to competition within the system. Even if the Energy Minister is right, and I doubt whether he is, how is it possible to justify removing from the system one barrier to the export of electricity while erecting a new one in this unfair and discriminatory way?
Mr. O'Brien: The hon. Gentleman seems to be making the point that if the consultation that is now going on produces a particular result, there may be difficult consequences. We say that the process of consultation is still under way. It is right that hon. Members should make their voices heard in that process. I know that many of my colleagues are concerned that Ofgem, the National Grid Company and Ministers should all listen to the points that are being made.
I listened with great care to the hon. Gentleman's points, which he put very well. However, there are too many "ifs" at this point. Let us see where we are at the
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end of the consultation period. We take the view that we need a system that to some extent reflects the overall charges caused by the costs of transmission. I hope that the outcome of the consultation will be a system that allows that.
Mr. Carmichael: I thank the Minister for giving way again; he is generous with his time.
We can argue indefinitely whether £22 is neutral in effect. No one would entertain the idea that the figure of £70 per kilowatt that is expected for access to the grid for projects in Shetland will be neutral. Is the Minister content that that figure should be imposed, with the result, effectively, that Shetland will be excluded from contributing its potential to the market in renewable energy?
Mr. O'Brien: Let us see where we are at the end of the consultation process and how the costings work out then. The potential contribution of Shetland and the whole of the northern part of Scotland is enormous. We need to ensure that we establish an energy policy that will realise that potential, for the benefit of all the people who use that electricity and power. That is part of the process of working our way through the arguments. We have taken the view that Ofgem should have a certain degree of independence, in order to be able to work through the arguments in a sensible and objective way. We have taken some powers to intervene if necessary. However, we have attempted to put in place a system that can allow all the issues to be considered in a way that is not seen to be at all politically biased and in which, to some extent, the substance of the real arguments is seen to be considered. We must allow that process to proceed.
The hon. Member for Banff and Buchan suggested that we were not enthusiastic about Beatrice and Talisman, so before I leave that issue I reiterate that the Department of Trade and Industry put £3 million into researching the project. The Department has strongly backed the scheme, so let there be no suggestion that £3 million is not greatly supportive—in my book, £3 million of taxpayers' money is considerably supportive.
Furthermore, BETTA provides many benefits for Scottish generation. There will be financially firm access to a Britain-wide market. Another important point is that under BETTA the cost of upgrading the Scottish transmission system will be spread across all British users. Without BETTA, the cost of that work would have to be recovered solely from the users of the Scottish transmission system. We would be talking about hundreds of millions of pounds falling just to Scotland, which would make charges rocket. The hon. Member for Banff and Buchan needs to consider for a moment what the situation would be like for Scottish generators if Scotland were independent, had its own market and was trying to export the majority of the electricity that it produces.
In addition, there would be a single, tangible set of rules under BETTA, replacing the vast variety of different rules we have now. It is better to have a straightforward system, which we are trying to put in place, than the complexities that the hon. Gentleman seems to prefer. Under that system generators would

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continue to face a number of different charges and the costs of upgrading the transmission system would be recovered solely from the small base of Scottish users, which is not right. That is why we want to put in place a better system. Perhaps the hon. Gentleman's aim is to inflict extra expense and extra bureaucracy on Scottish generators. That would surprise me, because I do not think that that is his aim, but that would be the outcome of the concerns that he has expressed if he does not get the balance right in the argument.
BETTA will also allow Scottish generators to provide services to the national grid, the transmission system operator, especially by providing balancing services. Those contracts can be lucrative and Scottish generators have not been in a position to realise the value from those services before. On a number of fronts, far from being bad for Scottish generators, the creation of the British market in fact provides a range of new and exciting opportunities for Scottish generators and will therefore develop the Scottish electricity industry.
We have heard some statements that I have concerns about, although we do not have time to deal with all of them. For the record, however, I should like to make it clear that the transmission charges are neither set nor capped by the Energy Act 2004. The Government, with Ofgem, consulted on the criteria to govern the transmission charging methodology. We very much support a methodology that is cost-reflective and promotes competition. We also concluded that National Grid should be asked to develop a methodology to meet those criteria. National Grid is still consulting on its methodology, and it would be for Ofgem to decide whether to approve it in the final instance. However, I note the valid point that the hon. Member for Banff and Buchan made about the nature of those proposing the methodology. That is something that we need to consider. I am sure that National Grid would be interested to receive the views of all hon. Members on the issue and I hope that they will be prepared to put those views forward.
Things are not yet finalised. We are still very much in the discussion phase and the Government are still listening to the points that hon. Members from Scotland are raising. We are concerned to ensure that Scotland realises its potential for energy generation and renewables, which we certainly back and want to be a success. Our main interest is to ensure that the Scottish consumer benefits, and when we look at the changes overall, we see that the Scottish consumer will indeed be the major beneficiary.

Asperger's Syndrome
3.30 pm
Mrs. Angela Browning: I am pleased to see the Under-Secretary of State for Health, the hon. Member for South Thanet (Dr. Ladyman) in his place in what is becoming an almost annual occasion, for which I make no apology. You will recall, Mr. Deputy Speaker, that I secured a debate on Asperger's syndrome on 10 September 2003 to discuss the impact on adults and adolescents who had been misdiagnosed by psychiatrists, particularly provincial psychiatrists, who confused their autistic behaviour with schizophrenia. They were the, to their detriment, treated as schizophrenics, with all the drugs that that treatment involves. Difficulties then arose in managing their lives, and damage was done.
To set the scene, I shall repeat something that I said at the beginning of my speech last year because it is still relevant to today's debate: very few provincial psychiatrists have been trained in either the diagnosis or the management of Asperger's syndrome; even fewer have gained the necessary experience in their working lives to be able to differentiate between a mental health condition and what many of us would regard as normal autistic behaviour, which sometimes even professional psychiatrists might well interpret as something quite different.
Very few psychiatrists in this country have the expertise to differentiate between autism and schizophrenia, and yet, day after day, people with Asperger's syndrome are admitted to mental health hospitals and are diagnosed and treated by people with that lack of experience. I want to build on that point this afternoon because it is still as much a problem today as it was when I raised the matter last year. Indeed, my hon. Friend the Member for Aylesbury (Mr. Lidington), who is sitting next to me, told the House on 30 April of the tragic case of his constituent, Mr. Piers Bolduc, a young man with Asperger's syndrome who had been diagnosed quite mistakenly as schizophrenic and who had been in Broadmoor hospital for 10 years. As a result of my hon. Friend's intervention—I know that the Minister is familiar with this case—Piers was moved to the Hayes unit, which is a much more appropriate placement for him. With permission, I shall read part of a fax that his mother sent to me this morning when she saw that the debate was going to take place. She wrote:
"After one month there he is doing his laundry, helping on kitchen cleaning duties, hoovering, kicked a football about outside, played scrabble, monopoly and chess and has even made some design patterns on the computer…In Broadmoor he just shuffled from his windowless bedroom to the dayroom and tried to keep himself safe for ten years."
That sums up what can be done for adults with Asperger's syndrome when they are given the appropriate help, support and treatment, but it also signifies the desperate vulnerability of these people and the damage done to them when their condition is not recognised by medical professionals.
I singled out provincial psychiatrists, but I now want to discuss some of the other problems that psychiatrists acting in various areas of life are causing and that are

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affecting adults with Asperger's syndrome. This is not just a question of health. People with Asperger's syndrome get caught up in the court system and find themselves in prison. They also become involved in tribunals fighting for benefits or for appropriate packages of support. I particularly want to mention the case of Mr. X. It would not be appropriate to name him because his case is likely to come before the courts.
Mr. X is a married man with Asperger's syndrome who ran his own business and fell foul of the Court of Protection and other parts of our legal system. As a result, a psychiatrist attempted to pass an opinion on Asperger's syndrome without understanding the condition and without a working knowledge of the specialism. I advised the spouse of Mr. X to inquire about the background and qualifications of that psychiatrist who was appearing as an expert witness against him. When pressed, the psychiatrist withdrew because it became quite clear that he had no expertise in Asperger's syndrome at all, yet he was identified as someone who was available at huge remuneration to himself to appear as an expert witness in legal cases. That, too, gives cause for concern.
These are serious matters. These are life-changing circumstances that affect people with Asperger's syndrome. I particularly want to raise my concern about the medical professionals who put themselves forward in court cases as expert witnesses against the person with Asperger's, causing havoc to their lives and infringing their human rights. We have already a classic example of what happens when so-called medical experts put themselves forward as expert witnesses without the proper qualification and validity in the cases of Munchausen's syndrome with which the Minister will be familiar. This is an area in which he should be personally involved. He should talk to the health bodies to ensure that we do not have these people who quite clearly see a lucrative future for themselves, but a future that is bleak for the person against whom they speak.
Mr. David Lidington: Would my hon. Friend agree that not only is there a duty on the Minister to take action in order to prevent the sort of case she describes, but that the precedent of Munchausen's syndrome should stir the Government into carrying out a review of the cases of misdiagnosis which everyone agrees have taken place in recent years? There are still people who have suffered the same fate as my constituent Mr. Bolduc and are still in secure mental hospitals as a result of misdiagnosis and mistreatment.
Mrs. Browning: Indeed, Mr. Deputy Speaker. I do not want to repeat much of what I said last September. My hon. Friend has identified how we simply do not know how many cases of misdiagnosis there are. These cases are purely anecdotal at present, but as all those of us who take an interest in this subject have discovered, they are too frequent simply to be odd cases. Every odd case is bad enough in itself but there are just too many of them.
Liz Blackman rose—
Mrs. Browning: I give way to the chair of the all-party group on autism.
Liz Blackman: Alongside the recommendation that both hon. Members have made, would the hon. Lady
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not agree that we need more dialogue with the Royal College of Psychiatrists to ensure that expertise and capacity are properly increased during psychiatric training?
Mrs. Browning: I certainly agree. When the Minister replies, I hope that he will give us the assurances that we seek about his Department's involvement with the royal colleges to set out a blueprint for how we take this forward. We cannot leave this lying on the table any longer. That is why, for the second time in a year, I bring this subject to the attention of the Chamber. I would like to run through one or two of the issues that I have raised in the last year with the Minister, both in correspondence and written questions.
Two things are in the back of my mind. The first is the Mental Health Bill, which was published today and on whose scrutiny Committee I will serve. The second is the Mental Capacity Bill, which has had its First Reading and will proceed through the House. We are in the process of making changes to the way that people who lack capacity are represented. On the mental health front, it fills me with horror to think that we are still dealing with misdiagnosis, yet the Mental Health Bill will give professionals even more draconian powers to exert on people. I have no confidence that, uniformly throughout this country, there are psychiatrists who, as yet, can even differentiate between schizophrenia and Asperger's. How will they deal with personality disorder, another rather nebulous condition, which even the professionals admit is a spectrum?
I want to raise another issue with the Minister. In June, I tabled the following written question:
"To ask the Secretary of State for Health what assessment his Department has made of the appropriate qualifications and experience required of psychiatrists treating (a) in-patients and (b) out-patients who have an autistic spectrum disorder."
The Minister replied:
"None. This is a professional matter. It is the responsibility of the Royal College of Psychiatrists."
I know that officials draft such replies in all good faith, but the Minister has a detailed understanding and knowledge of autism. I put it to him that his Department should speak to the royal college, because such an assessment is desperately needed.
I tabled other questions on that same day and I am sure that they are in the Minister's folder. I apologise if I am becoming autistic in my behaviour, but I make no apologies for the fact that this is becoming an obsessive subject for me. I hope that he will see this as an opportunity to sort out my questions so as not to have to repeat his answers next year. I asked,
"what assessment his Department has made of the number of people with Asperger's syndrome who are misdiagnosed as schizophrenic."
Again, he replied:
"None. Where people have Asperger's syndrome or any other form of autistic spectrum disorder, it is important to distinguish behaviours due to their autism from any that might be attributable to a mental health problem".—[Official Report, 15 June 2004; Vol. 422, c. 892W.]
As I have already made clear in previous debates, like any other member of society, somebody with autism can develop a mental health problem—depression is a common problem. However, being misdiagnosed with

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schizophrenia is a very serious matter. I beg him to take another look at the issue. It should not be left to medical professionals. Direction is needed. There must be a strategy to deal with the problem; we cannot keep leaving it.
On the question of expert witnesses, I tabled a question to the Home Office asking
"what criteria are set for doctors and psychiatrists who offer themselves as expert witnesses on autistic spectrum disorders."
The Under-Secretary of State for the Home Department, the hon. Member for Wythenshawe and Sale, East (Paul Goggins) sent me a long reply and I will not repeat all of it. However, he said:
"The decision whether or not to allow the evidence of an expert witness to be admitted rests with the court, which must be satisfied that the material comes within a recognized field of expertise and that the witness is indeed an expert in that field."—[Official Report, 18 June 2004; Vol. 422, c. 1157W.]
As it happened, in the case of Mr. X, it was not the court that made a judgment about the doctor's eligibility and qualification. Judgment was made because, out of the blue, I suggested to the wife that she make inquiries.
I have seen correspondence with the royal college and it is not satisfactory for somebody to self-nominate in such cases. That is a cross-departmental matter that needs to be examined carefully by all sections of Government. It should not be left to the old boy network—the Minister will know what I mean by that. A chum in the hospital should not be able to nominate or second someone to be an expert witness.
In this country, we have some very good, although too few, psychiatrists. It would be invidious to name them, but many here know who they are. They are excellent psychiatrists and experts in autism, particularly Asperger's syndrome. We cannot go on praying in aid that the syndrome is difficult to diagnose. However complex the case, it is difficult only if the person trying to diagnose an adult does not have a life's working experience and is unable to untangle those symptoms that might present as some form of mental health disorder but are in fact symptomatic of somebody with autism and not just mental illness. I must emphasise that autism is not a mental illness. In the case of Mr. X, a very concerning comment was made by a Lord Chancellor's visitor—a retired psychiatrist employed by the Court of Protection—who wrote an opinion stating that the person concerned suffered from mental disorder, namely Asperger's syndrome. Asperger's syndrome is not a mental disorder under the Mental Health Act 1983. It is critical that the matter be dealt with—not just left to the royal colleges—and that the Government take a hands-on approach with the royal colleges on some of the suggestions that I humbly made in my approach to the Minister last September.
For example, when psychiatrists in provincial hospitals, who genuinely do not have a working knowledge of Asperger's syndrome, are presented with either an in-patient or an out-patient, there is no reason why, as in other medical disciplines, they should not have an list of authorised people with expertise from whom to obtain a second opinion. They could, at least, pick up the phone and share the case with a recognised expert—such people are genuinely out there.
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However complex the case—some cases become very complex indeed when adults with Asperger's syndrome fall foul of the criminal justice system and of in-patient mental health services in the provinces—all that is required is a structure that obliges non-specialists to make contact with a specialist and to get a second opinion and guidance as to how to manage and treat the case. That is not unreasonable, and it should not require loads of money. I am not asking for a hike in the budget, or telling the Minister to go to the Chancellor to ask for umpteen more pounds for his Department; it can be achieved at minimal cost. That is why it is so sad that it is not being done. I hope that the Minister will give me the reassurances that I seek, because we have made no progress in the past year. I hope that all of us can work together before next September to make sure that I do not have to stand here again and repeat bits of this year's speech because no progress has been made.
3.47 pm
The Parliamentary Under-Secretary of State for Health: The hon. Member for Tiverton and Honiton (Mrs. Browning) has again shown herself to be a true champion of people with Asperger's syndrome and autistic spectrum disorders. I pay tribute to her energy and will be very happy to come back to answer her annual Adjournment debates on the subject if for no other reason than that it will mean I have survived not only reshuffle week but the general election that might intervene between now and next September. The hon. Lady knows that I share her wish to improve the life experience of people with autistic spectrum disorders.
In recent years we have made significant progress. It might seem as though we have not made as much progress as the hon. Lady would wish in the area on which she has concentrated today, but she might find some messages of comfort later in my speech. A week today, with the national service framework for children, we will launch the next step in improving the life chances of autistic people. That will include an exemplar for autism, and I think she will find a great deal to be pleased about in that document. I am sure that the all-party group chaired by my hon. Friend the Member for Erewash (Liz Blackman) will find a great deal in it to be pleased about as well.
As the hon. Lady said, some aspects of service provision for people with higher-functioning forms of autism require a specific understanding of the conditions. We need to do all we can to ensure that those with responsibilities for service delivery have that understanding, and that it is shared outside the specialist health and social care services—across housing, employment, leisure, the police and the court services—as has been so eloquently pointed out.
Asperger's syndrome is a developmental disorder on the autistic spectrum, and there is wide variation in the social adaptation of people with the syndrome in adolescence and adulthood. As a result, it is often difficult to identify the best way of supporting each individual. Those who need health or social services sometimes find themselves less than ideally served by learning disability or mental health services; I recognise that they often fall between them. Next week's national service framework will have something to say about that aspect of the care system.

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This afternoon's debate is specifically about services for adults with Asperger's syndrome, and I fully acknowledge that those are not as well developed as I would like. It is clearly the responsibility of government, nationally and locally, to ensure that good, effective support services are in place. It is important that people with Asperger's and other forms of high-functioning autism should get their fair share of resources and services, according to need.
In her Adjournment debate last September on the mental health issues affecting people with Asperger's, the hon. Lady raised the issue of professional education in autism for psychiatrists. She has mentioned her concerns again today, with particular reference to provincial psychiatrists and others. She said that the matter needs leadership from the Department of Health. By instinct, I am a bossy boots, and I would be prepared to order people from the Department of Health about in all sorts of ways that are not fashionable these days. However, we have devolved responsibilities, and leave professional standards and training to the royal colleges. That does not mean to say that we do not talk to them, or that we do not express our concerns and engage in conversations with them. However, we do not do so in a Stalinistic way, or order them to take steps.
The matter is one for the Royal College of Psychiatrists, which recognises that psychiatrists in every area of psychiatry need specific training in autism, to raise their awareness of issues such as consent, capacity, mental health legislation, diagnosis and treatment. It also recognises that although psychiatrists should have such training, not all of them do at the moment. It is particularly conscious of the problems of overlapping diagnosis and misdiagnosis that the hon. Lady identified. I am pleased to be able to tell her that it has set up a working group to consider psychiatrist services for adolescents and adults with autistic spectrum disorders. The group's report is awaited, and I understand that it will include a discussion about the training of psychiatrists in that field.
That is not all that the Royal College of Psychiatrists has done to increase its members' awareness of autism: it has already made it a requirement that all trainee psychiatrists do six months of developmental psychiatry in either learning disability or child adolescent psychiatry before they can go on to higher level specialisation. That will ensure that they have at least some exposure to people on the autistic spectrum before becoming consultants. No doubt the hon. Lady will want to see more intensive exposure to autistic spectrum disorders than is currently the case, and I hope that the report being produced will take us there.
Mrs. Browning: The Minister will know that the diagnosis of an adult, as opposed to a child, is complex. We have seen a lot of progress in child diagnosis, but many more complex cases require someone who has a specialism and whose working life is dedicated to working with autism. I appreciate what he is saying, but only such long-term expertise allows people to get an accurate diagnosis. That is why I like my idea of referrals—I hope that the Minister will listen carefully to it again. People who specialise in coronary heart disease obtain, in many complex cases, a second opinion from
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an expert who concentrates on that aspect of the spectrum. I hope that the Minister will take that on board.
Dr. Ladyman: That is a very helpful suggestion, and I shall ensure that my officials consider it and pass it on to the Royal College for inclusion in its report.
The hon. Lady and the hon. Member for Aylesbury (Mr. Lidington) spoke about expert witnesses, and I am delighted that Piers Bolduck is now receiving the treatment that he should have got some time ago, and to hear from his mother that he is now thriving. Long may that continue. We are aware of the expert witness problem, and I freely admit that we became aware of it because of the issues of child pathology and Munchhausen syndrome. However, the hon. Lady and the hon. Gentleman may remember that just before the recess, my right hon. Friend the Minister for Children and I issued a written statement saying that we had asked the chief medical officer to set up a review group into expert witnesses, which would consider their training, selection and preparation for giving evidence in court. Although our primary focus in setting that up were the sad issues relating to children, it is intended to be a general review of expert witnesses. I shall ensure that the comments made in today's debate are passed on to the chief medical officer so that they can be taken into account in that review.
Although the hon. Lady may say that we have not made any progress since she raised the issue last September, I hope she will acknowledge that there has been some, although perhaps not so obvious as she would have liked. There is still a heck of a long way to go before the work is completed.
We have also been doing other work. Work has been completed on a project called "Green Light: How Good Are Your Mental Health Services for People with Learning Disabilities?", which was commissioned by the National Institute for Mental Health in England and the Valuing People support team. It is a guide to developing good services to meet the mental health needs of people with learning disabilities. Although people with a diagnosis of Asperger's syndrome do not always have a learning disability—or, at least, not what is traditionally understood by a learning disability—we ensured that that work addressed the importance of seeking an expert opinion when a person with mental health problems has any form of autistic spectrum disorder. If the hon. Lady is interested in following that up, the information can be found on the Valuing People support team's website.
In addition, the Department of Health has started some work for those with responsibility for developing more specialised tertiary services for people with a learning disability and a mental disorder. That work is being led by Professor Louis Appleby, the national director for mental health. Points made in this debate and in the recent Adjournment debates on Asperger's syndrome will be fed into that work, and a report on Asperger's is expected early next year.
The hon. Lady mentioned a couple of pieces of legislation that concerned her. I am delighted to hear that she will be on the pre-legislative scrutiny committee for the Mental Health Bill. That joint scrutiny committee has just been established and has been asked to present its report by the end of March 2005.

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It provides an important opportunity for stakeholders to have an input into developing an effective and fair piece of legislation.
The revised Mental Health Bill represents the first major overhaul of the legislation since the 1950s and is an integral part of the Government's wider strategy to improve mental health services for all, along with substantially increased investment and the reform of service development. It will be an important piece of work although no doubt controversial, and many debates will be had before it finally starts to make its way through Parliament. However, the committee will have the benefit of the hon. Lady's expertise from her interest in Asperger's.
The hon. Lady also mentioned the Mental Capacity Bill, which was introduced to Parliament on 17 June. It will help to bring about a cultural shift in the way in which we treat people who lack capacity, and will include provision for those with autistic spectrum disorders. The Bill sets out the key principles to be taken into consideration in making decisions for people who lack capacity. It starts from the presumption of capacity—everyone is assumed to have the capacity to make decisions—and places an obligation on the decision maker to take all practicable steps to help the person make a decision. It sets out a functional test of capacity—capacity must be assessed in relation to the decision to be taken. All decisions taken must be in the best interests of the person concerned, and the Bill sets out a checklist of factors to be considered in determining those best interests. It stipulates that the decision should involve the least restrictive action.
The Mental Capacity Bill will increase the expectation that decision makers such as clinicians should take into account the wishes, feelings and values of people who lack capacity. The Bill provides a new safeguard—the independent consultee—for people who are particularly vulnerable because they have no friends or relatives. The decision maker must consult the independent consultee about serious medical treatments and decisions about long-term care. However, I entirely accept the point made by the hon. Lady that experts who are involved in that process must be genuine experts. We must ensure that they have the training necessary to give proper advice to the courts and to the individuals concerned.
Mr. Deputy Speaker: Order. We were due to commence the final time-allocated topic for today's consideration at this point. However, as the Division bell is ringing, I propose to suspend the sitting for 15 minutes.
4 pm
Sitting suspended for a Division in the House.

Red Squirrels (North-East England)
4.12 pm
On resuming—
Joyce Quin: I very much welcome the opportunity to speak on a subject about which I have been concerned for a long time. It is one that I have raised previously in early-day motions and written and oral questions. It is the importance of ensuring the survival of the red squirrel, particularly in one of its few remaining bastions—the north-east of England.
For a number of reasons, I am glad that the Minister for the Environment and Agri-environment is to respond to the debate. I had the pleasure of working with him as a colleague in the former Ministry of Agriculture, Fisheries and Food. His commitment to the environment and conservation is widely known and hugely respected, and he has a deep knowledge of our countryside and its flora and fauna. He is also determined to honour our international obligations on environmental matters and biodiversity.
The north-east has the largest remaining populations of red squirrel in England. It is estimated that between 20,000 and 30,000 red squirrels remain in the country, three-quarters of which are to be found in Northumberland. The red squirrel is something of a regional icon; it is regarded with deep affection, and attempts to ensure its survival are hugely supported by the people of the area. I saw that at first hand this summer when I visited the National Trust property at Wallington Hall and saw how many people were observing them from the hides in the wildlife sanctuary—and how delighted people were to see them. Whenever I or other hon. Members raise the subject, we receive letters of support from many people in the region. I am grateful for that support.
The red squirrel is under considerable threat from grey squirrels, which are approaching the region from both directions—from further south in England and from further north. Squirrels from Edinburgh and the firth of Forth have now reached the borders of Scotland, and the situation is now becoming serious.
I should say from the outset that I am not calling for a solution along the lines of the dramatic policy launched by my hon. Friend the Minister for the Environment and Agri-environment when he announced the cull of the entire ruddy duck population in our country. I recognise that grey squirrels have their friends and, along with London residents, I enjoy the sight of them in St. James's park and elsewhere. However, it is the remorseless spread of the greys and their role in eradicating our native red squirrel that is the problem.
An article in Natural World this spring gave figures for the decline of the red squirrel over the past 50 years. Whereas in 1953, the grey squirrel occurred only in Kensington gardens and other parks in the London district, the red squirrel at that time was distributed throughout Britain. Today, however, the red squirrel is outnumbered 66:1 by 2 million grey squirrels.
The threat from the grey squirrel to the red is twofold. First, the greys tend to win hands down in any competition with the reds and therefore invade their

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habitats and take their food. Secondly, they also pose an undoubted health threat to the reds in exposing them to the parapox virus. Grey squirrels do not appear to be affected by the virus, but current thinking suggests that they carry and transmit it to reds. The way that transmission occurs is not well understood: it may be by direct contact between squirrels or by indirect contact via scent markings or saliva. However, what is certain is that red squirrels die within 15 days of contracting the virus, and there is no known cure or vaccination.
I know that the importance of finding effective strategies to ensure the survival of the red squirrel population in the north-east and elsewhere is accepted by my hon. Friend the Minister. I welcome the fact that there has been increasing Government recognition of the problem. In turn, that has led to increasing awareness of it in the minds of the general public and, importantly, in the minds of farmers, landowners, foresters and the people that we tend to describe as the "key stakeholders" in rural areas.
I pay particular tribute to the Northumberland Wildlife Trust, of which I have been a member for many years. Its campaigns in association with local businesses and environmental bodies, such as the "Red Alert" campaign begun in 1992, have been well received and have led to much more systematic recording of sightings of both red and grey squirrels, information that is vital in devising effective red squirrel conversation strategies and measures to control grey squirrels.
The Northumberland wildlife trust has a full-time red squirrel conservation officer, Louise Bessant, who is energetic and committed to her role. In co-operation with other bodies, the trust has a strategy of creating red squirrel reserves with adequate buffer zones around them as a way of limiting the spread of greys. At the same time, it has a strategy of creating and expanding habitats that seem more suited to the reds than the greys and that therefore give the reds the opportunity of winning ground in the intense competition with greys.
The trust's strategies are assisted in several ways by the efforts of the Forestry Commission, whose chairman Lord Clark of Windermere is very supportive both personally and professionally of the case for ensuring the survival of the red squirrel in both the north-east and Cumbria. Of course, we remember him well as a former Member of this House for a north-eastern constituency and as someone who took environmental issues with the utmost seriousness.
Modest amounts of money are available under the Forestry Commission's woodland grant scheme, which can assist in the purchase of grey squirrel traps and the planting of certain trees, such as birch and rowan, whose seeds do not provide enough energy to support grey squirrel populations but sustain the less voracious reds. I note that the hon. Member for Hexham (Mr. Atkinson) is in the Chamber. When he raised the issue of the red squirrel in an Adjournment debate a few years ago—I think in 1996—he mentioned that it would be desirable to have Forestry Commission grants. I am sure that he is pleased that those grants are at least having some impact, and are being applied for.
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Despite such valuable work, some of which is still in its early stages, the remorseless decline of the red squirrel continues. Looking at maps of red and grey squirrel distribution in the north-east over the past few years, one can see that the greys have now colonised large areas of County Durham, where they were not previously present, and have also appeared in areas north of the River Tyne. The remaining red squirrel areas are looking increasingly and alarmingly vulnerable.
I contend that more resources will need to be devoted if we are to have any opportunity to reverse the trend. Such resources could increase the success rate of controlling the greys in various ways and of enhancing the number of habitats that would be favourable to the reds.
I want specifically to consider the issue of public funding. In a written answer to me last year, my hon. Friend the Minister said that the Department, through English Nature, had spent about £125,000 over the past five years on red squirrel conservation. I am not sure how much of that was spent in the north-east, but only one of the main four projects was specifically targeted at what were described as priority woodlands in northern England.
On the other hand, it is my understanding from information supplied to me by the House of Commons Library that the estimated cost of the ruddy duck cull over five years is in the order of £5 million. However, I understand that the Department for Environment, Food and Rural Affairs hopes that £2 million of that money will be obtainable from European sources. That prompts me to ask two questions of my hon. Friend. First, is it not possible for at least as much money to be spent on a strategy to ensure the survival of the red squirrel as is envisaged for the ruddy duck programme? Secondly, is it possible to obtain European funding for a red squirrel strategy?
I know that the European Union as a whole is keen to promote the goals of the biodiversity convention. Red squirrels are not only under threat in Britain; for example, grey squirrels are in the north of Italy and there are worries about how far they may spread, although it is certainly true that the situation here is particularly dramatic.
Overall, it seems to me that we are talking about relatively modest current levels of spending on red and grey squirrels. About £100,000 a year is spent on research dealing with the control of grey squirrels, and about £200,000 a year on targeted control of grey squirrels on land managed by Forest Enterprise, together with a proportion of the annual management grant spent in England. I am not quite sure what level that proportion is at, and if my hon. Friend has any figures, I would certainly be interested to hear them.
Apart from fairly modest levels of spending, we are otherwise relying on the overstretched resources of admittedly committed volunteers and some welcome private sector support, which I know has been obtained in recent years. Furthermore, in mentioning some of the useful initiatives supported by the Forestry Commission money, I am aware that the money is disbursed on a first come, first served basis and that the grants are speedily exhausted. Indeed, I understand that no more may be available under those

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programmes in this financial year. Will my hon. Friend the Minister tell me whether that is the case, and, if so, what is his Department's estimate of the unfulfilled demand for squirrel-related grants?
I understand that the annual management grant is a discretionary amount based on the size of the woodland, and that the woodland improvement grant can pay up to half the costs of purchasing grey squirrel traps. However, I am also told that many landowners with small wood lots on their land do not apply for the grants as the annual payment for which they would be eligible will not cover the full costs of employing a contractor. Does my hon. Friend accept that there may be a problem? If there is, how can such a disincentive to some landowners be overcome? I should be grateful for his consideration of that issue. What the Department is spending now is better than it was in the past. As I said, I welcome its interest in and support for the red squirrel, but more resources are necessary and would be welcome. I worry that if the resources are too modest, they may fail to achieve the goals.
I want to question the Minister about another aspect of the Department's strategy. In reply to my oral question to the Department for Environment, Food and Rural Affairs, my right hon. Friend the Secretary of State said that
"the Government's emphasis has been to seek to protect the red squirrel by protecting the habitat where it is most likely to survive rather than to interfere in the habitat of the grey squirrel. There is no doubt, sadly, that grey squirrels have a considerable advantage in, for example, broadleaf woodland."—[Official Report, 3 April 2003; Vol. 402, c. 1062.]
That is true; the Northumberland Wildlife Trust and others believe that the most defendable territory for red squirrels is the conifer plantations. However, I would be unhappy if red squirrels in the north-east were confined to conifer habitats rather than to the more attractive broadleaved woodlands, especially beech and hazel woods, which are their traditional habitat and much more easily enjoyed by human beings. If public money is going to help to ensure the survival of the red squirrel, people should at least be able to see them easily in attractive surroundings.
Although conifers are planted much more sensibly now, the plantations are still large, monochrome, unvarying, geometric slabs of territory, sometimes constituting blots on the landscape of the Cheviots and other parts of the north-east. I am tempted to exempt Kielder forest from that statement, because recently the area has been successful in promoting public access, and its new plantings are greatly preferable to the traditional conifer plantations. Generally, conifer forests can have a displeasing visual effect. Some areas were planted primarily for commercial purposes and may be cut down for commercial reasons, which may disrupt the red squirrel population.
I hope that my hon. Friend will examine not just the minimalist approach of confining red squirrels to conifer plantations, but that he will also seek to prevent grey squirrels extending into those broadleaved areas that are currently occupied by the reds. That is the least we should expect. However, it would also be good to ensure that within the broader, wider areas of conifer-
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dominated zones, which are designated as red-squirrel priority areas, there are some broadleaved places for red squirrels and humans to enjoy.
Mr. Peter Atkinson: I thank the right hon. Lady for raising the matter and doing a valuable service to the red squirrel. I strongly agree with her that we do not want red squirrels to be isolated in pockets of conifers because many people in her constituency and in suburban parts of Newcastle appreciate seeing red squirrels in the woodlands around their houses. It would be a pity if they were to be lost.
Joyce Quin: I very much agree with the hon. Gentleman. I know of his long-standing interest in the issue.
It is important to continue research into the most effective ways of controlling the greys and in promoting the well-being and life chances of the reds. Perhaps my hon. Friend can refer to the research that is being done. The culling of grey squirrels to prevent their entering buffer zones is important, although it is resource-intensive and not cheap. None the less, I was interested to read how greys were eliminated from the Newborough forest in Anglesey; it is something that could be considered in some areas in the north-east that greys have begun to penetrate and to control. Work on ways of controlling the parapox virus and preventing it from killing yet more reds is also vital.
I hope that my hon. Friend can assure me that the Government are also working in co-operation with the Scottish Executive on the issue. Because the remaining bastions of the red squirrel in Cumbria and the north-east are adjacent to Scotland, effective joint working across national and local government boundaries is vital. All authorities, whether local, regional, national or UK-wide, need to be able to work together.
I could make other comments, but I am conscious of the time and the need to give the Minister time to respond. Despite the efforts of Government and the wildlife trusts, I believe that more needs to be done to respond to the public desire to save the red squirrel and to do enough to honour our commitments under international agreements such as the biodiversity convention. Certainly we can be in no position to preach to other countries where wildlife is under threat if we are not adequately protecting biodiversity within our own shores by ensuring the survival of a much-loved native species.
4.31 pm
The Minister for the Environment and Agri-environment: I congratulate my right hon. Friend the Member for Gateshead, East and Washington, West (Joyce Quin) on the detailed case that she put forward for an animal that is very important nationally, and particularly in the north-east and Kielder, which is, as she described, one of its strongholds in this country.
I know that hon. Members who are present, including my hon. Friend the Member for Workington (Tony Cunningham), have a great interest in the red squirrel in Cumbria. The hon. Member for Hexham (Mr. Atkinson) has also raised the issue in

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Adjournment debates. Although my hon. Friend always manages to produce an osprey for me when I go to Cumbria he does not always produce a red squirrel, but he does his best.
The issue that my right hon. Friend raised is a serious one: a native species is under severe threat. She raised detailed questions about the action that can be taken not only to protect our remnant populations but, we hope, to help them to recolonise. I take her point about conifer woods and she was right to give Anglesey as an example. It is a good instance of how, through the control of grey squirrels and through recolonisation projects, the red squirrel has recovered and has spread out of the conifer woods and back to broadleaved woods. I do not underestimate the difficulty of that, but it shows that action can be taken to achieve the objective—one that I share with my right hon. Friend.
As a personal aside, I wonder whether one approach would be to use forestry management grants. They have been used to remove some broadleaved areas to provide red squirrels with protection, as they survive better in conifer woods than in broadleaved woods where they compete with grey squirrels. However, I wonder whether it would be possible to create buffer zones of conifers for broadleaved woods with red squirrel populations. Those issues are worth exploring and I know that the Forestry Commission takes them seriously.
My right hon. Friend talked about the eradication of the grey squirrel. There is certainly a need to control grey squirrels, not least because of the damage that they do to forestry, but also because of the threat that they pose to our indigenous red squirrel. I must be honest with my right hon. Friend and say that the large-scale eradication of grey squirrels is probably not the answer. It would be costly, would not be likely to succeed and would divert large sums of money away from other activities and projects that might be more useful for red squirrel protection.
The comparison that my right hon. Friend drew with the ruddy duck is still etched on my memory, but the Government are not spending £5 million on ruddy duck eradication. The present project costs considerably less, but it is true that an application has been made to the European Union for a considerable sum of money. The issue in that case is that the ruddy duck is an introduced exotic in this country, but is spreading into Spain, where it is threatening the endangered white-headed ducks. It is therefore perfectly reasonable that there should be a European contribution to what is a European conservation issue. That is what we are taking up with the European Union.
However, we are not the only country to have a grey squirrel problem. Italy, too, has the same problem of the introduction of the species and its competition with the indigenous red squirrels. There is nothing in principle to prevent us from making an application to the European Union, perhaps for a joint project with the Italians. I will pass that idea on to my hon. Friend the Under-Secretary of State for Environment, Food and Rural Affairs, who has responsibility for fisheries and the countryside. He would have liked to be here today but he is in Committee. However, I welcome the opportunity to talk about red squirrels, in which I have had a long interest, shared with my right hon. Friend the Member for Gateshead, East and Washington, West, who is a good
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friend and colleague from the days of MAFF, as she rightly stated. She has a long-standing interest in squirrel conservation.
We believe that the best way of contributing to the success of the red squirrel population is large-scale habitat management of forests. I can confirm that the current round of applications for planting grants has closed, including some for habitat management, although applications are due to open again in January. A number of contracts for dealing with the problem are continuing. The Forestry Commission is working with landowners in a partnership approach to provide advice and support on red squirrel management.
Other aspects are the management of buffer zones and the surveillance of grey squirrel movements. The Government work in a consortium involving different agencies including English Nature, the wildlife trusts and private landlords. There is also a great deal of interest from the public. The Forestry Commission chairs a steering group that oversees a project that has identified 20 areas in northern England where action to maintain red squirrels is most likely to be effective. That includes Northumberland and the Kielder area. Management plans have been prepared for those areas, which will also form the basis of a partnership project bid for heritage lottery funding to carry out some of the management activities there. That is another potential funding stream for red squirrel management.
A considerable amount of money is going into squirrel management at present. My right hon. Friend mentioned the £100,000 going into scientific research and development, particularly into contraception. She might be interested to know that a lot of work is being done on grey squirrel contraception control in the United States, where they are a problem. In New Zealand work is being done on contraceptive control in possums. We are sharing information and collaborating on those research projects, which helps to spread the considerable costs of a detailed scientific programme.
The Forestry Commission spends somewhere in the region of £115,000 in England on red squirrel management. Forestry research provides an additional £10,000 on various projects and the Government spend somewhere in the region of £100,000 on research. There are also specifically targeted grants to establish new woodlands to link fragmented woodlands, which have been used particularly in the case of the Isle of Wight. That scheme involved £127,000.
Those schemes are not all directed at the north-east in particular, but a lot of money is going into the national programme. I am not sure whether that also includes such things as support for project officers in the Forestry Commission, or project officers in some of the wildlife trusts that are funded to take forward biodiversity action programmes for red squirrels. DEFRA itself is a partner in the local biodiversity action programme in Northumberland, through the Rural Development Service. Of course, there are costs there that are absorbed within DEFRA that are not accounted for. All in all, a considerable amount of money is being spent on red squirrel conservation, but I accept that there is always an argument for more. The bid for the Heritage Lottery Fund and the potential for European funding may bring additional resources in. I would certainly welcome that.

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Red squirrels are a priority for us in this country. I know how important they are in the north-east of England and in Cumbria. The red squirrels attract a great deal of attention, as my right hon. Friend says. I must make a correction. I said that the woodland grant scheme would be open in January. In fact, it will be April—the end of the year, in financial terms.
There have been a number of successes in relation to red squirrel conservation. The various projects around the country—not just in the north-east, but in places such as Anglesey and the Isle of Wight—add to the knowledge and experience of conservation management, which will be helpful in terms of translating that information.
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My right hon. Friend has raised a number of important and serious points and I hope that I have answered her questions. I will be happy to provide her with more information, if she requires it. With people such as her, and many others, and the interest that they have expressed, I believe that the long-term future of the red squirrel is secure. However, we cannot be complacent and we recognise that we have a responsibility and a role to play as central Government, and that along with that there must be a partnership approach with the many organisations and individuals who are committed to the conservation of this wonderful animal.
Question put and agreed to.
Adjourned accordingly at nineteen minutes to Five o'clock.