House Of Commons
Monday 24 February 2003
The House met at half-past Two o'clock
Prayers
[MR. SPEAKER in the Chair]
Oral Answers To Questions
Home Department
The Secretary of State was asked—
Police Pensions
1.
If he will make a statement on the cost of police pensions. [98756]
Forces in England and Wales estimate that their police pension bill for 2002–03 will be around £1.2 billion. That has been matched by the £1.26 billion allocated for pensions in the total funding formula. However, the Government are aware that pension costs cause police authorities concern, and we are reviewing the way in which pensions are financed and whether the scheme could be modernised for future entrants.
I thank the Minister for that response. I acknowledge that Northamptonshire's settlement this year is less ungenerous than some recent settlements. Does he accept, therefore, that it is disturbing that the police authority has had to put up its precept by more than 25 per cent. for the second successive year? The chief constable has said that a major contributory factor has been the cost of police pensions. Will the Minister assure the House of some future relief from this treadmill for hard-pressed council tax payers?
We recognise that pension costs are a concern, but they represent the lifetime service of police officers in previous years, and we must honour that commitment. We should not reward forces—Northamptonshire is not one of them—that have been slack in their handling of early medical retirements in years past.
The hon. Gentleman referred to precepts. Northamptonshire has chosen to employ additional police officers and community support officers over and above the increase in officer numbers funded centrally. It is for the police authority to decide what should be done to meet the needs of its local community. I hope that the hon. Gentleman will support his authority in doing that.The Government's pensions Green Paper makes many constructive statements about funded pension schemes. Why should there not be a fully funded police pension fund over time?
If we were overnight to replace the existing pay-as-you-go pension scheme with a funded scheme, the Government would have to find about £25 billion to establish that. I suspect that Members would feel that there were more immediate policing priorities to which such money should be devoted.
Further to the question put by the hon. Member for Daventry (Mr. Boswell), is it not correct that between 50 and 60 per cent. of any annual allocation to police authorities goes straight into pensions and salary increases that have been centrally agreed? Is not it time to review the whole position? There is a huge burden on council tax payers, and it is disingenuous of the Government to talk about percentage increases when most of the money goes overnight.
I remind the hon. Gentleman that the Government have put more money into the system through the funding formula for police pensions than the total cost that we estimate was paid out on police pensions or will be paid out this year. There are two problems. The first is how individual forces could be better protected from short-term fluctuations in pensions if, for example, a large number of officers were all to retire in the same financial year. The second is to ensure that forces continue to bear down on unwarranted early ill-health retirement, which adds significantly to pensions bills and to the costs on local people.
Obviously, my right hon. Friend will be aware that council tax payers in Lancashire and in many of the northern police forces are subsidising police forces in the south because of the ceilings and floors on increases. Money is trapped, that is the problem. Will he hold discussions with other Departments to ensure that we get the funding that we should be allocated, instead of having to subsidise the south.
In introducing the new funding formula, we have tried to be fair to all forces. That is why there is a ceiling on increases of 4.9 per cent. and a floor that ensures that no one gets less than 3 per cent., which is above inflation. We should not forget the background to this issue, which is that the police service received a 10 per cent. increase in funding in 2001–02 and a 7 per cent. increase for 2002–03, and had an overall rise of 6.2 per cent. in the coming year, and a 16 per cent. increase in the current spending review settlement. Whatever the detail of the formula, no one can claim that the Government are not putting significant extra resources into the police service. That is why we have record numbers of police officers, and those numbers will continue to rise.
Asylum System
2.
What discussions he has had with his counterparts in other EU countries regarding the asylum system. [98757]
The UK continues to play a leading role in developing the asylum measures proposed by the treaty of Amsterdam. That represents an important step towards achieving a common European asylum system with our partners.
We are also working bilaterally with the French, and in conjunction with other countries including Belgium and Holland, to continue to strengthen our borders and tackle abuse.Can the Minister confirm that although the Sangatte asylum centre was closed and bulldozed in December, the French Red Cross is now building another camp in Sangatte for 1,000 asylum seekers? Does that not make a mockery of the agreement reached by the Secretary of State with his French counterparts? Does it not also highlight the need for asylum seekers to be detained in secure accommodation until their applications have been processed?
I know that a number of newspapers have spread that story about an alternative camp. I have been contacted by a journalist who has been at Sangatte, as well as by our own officials, and I can tell the hon. Gentleman that the story is absolutely untrue.
What the hon. Gentleman says about detention is rather outdated. It refers to an earlier variant of asylum policy than the one we have heard more about lately, in relation to quotas. There is certainly a place for detention—we apply it when appropriate, particularly to effect removals and to keep people where they are while we fast-track the processes—that has been very successful at Oakington—but the wholesale detention of every person would require a building programme that would not only be horrendously expensive, but would take five years to deliver. In the meantime, we have more effective measures to enable us to get to grips with the system.Will my hon. Friend draw attention to other inaccurate reports in the newspapers about the number of people coming into the country? We are constantly told that the United Kingdom takes more than its fair share of asylum seekers, but the figures show that we are about sixth or seventh in the European Union league per head of population.
My hon. Friend is right: the UK is in the middle of the EU range, per head of population. However, the picture has fluctuated over recent years in terms of the number of people we take relative to the number taken by other EU countries. That is why it is important for us to work towards a common European asylum system and to strengthen our borders with France, Belgium and Holland. It is also why we recently introduced robust legislative measures to deter people whose applications are unfounded.
My office in Bolton has now dealt with about 75 single male asylum seekers from northern Iraq. They are, of course, Kurds. Most have become destitute; they are now sleeping rough in Queen's park in Bolton or overcrowding existing national asylum support scheme accommodation. That cannot be allowed to continue. What pressure are we putting on the Turkish Government to stop the trafficking of such people through Turkey, on Turkish lorries, to Dover? They are paying between £7,000 and £8,000 for the transit.
We are working closely with France, which is interested in working with us on the Turkish issue—not only in relation to the trafficking of people through Turkey, but, in particular, the negotiation of an agreement on readmission to Iraq via that route. My hon. Friend is right to draw attention to the growing problem in some of our communities caused by people from northern Iraq who have been refused asylum, who are therefore not entitled to support, and whom we need to return as soon as we can. We shall do that as soon as the route is available.
We are pleased that the Minister is discussing asylum with her European colleagues, and we welcome her undertaking to consult local people who are concerned about residence accommodation centres. We look forward to those meetings, which have not been possible so far.
Will the Minister assure us that when the meetings do take place they will not be sanitised meetings in London involving tea and biscuits with civil servants, but will be genuine consultations initiated by the Minister? I invite her to walk up and down Lee high street and meet local residents. She will then quickly learn how strong and universal is the hostility to her proposal for a local accommodation centre in Daedalus.There will be proper consultation. On the point about the two accommodation centres that are in the planning inquiry process, I visited those areas, had a meeting arranged by the local councils there and talked directly to local people. If we go ahead with the proposal, both I and officials in the Home Office will take it on ourselves to repeat that process in exactly the same way.
I raise a more general point with the hon. Gentleman and other hon. Members. All hon. Members and the general public at large rightly expect us to get to grips with the asylum system, to reduce the intake, to return people when their claim is refused, and to do that more efficiently. That is what the Government are trying to do. Some of those measures depend fundamentally on having the facilities available—induction centres, accommodation centres and detention centres. We cannot locate those on clouds in the sky. They have to be somewhere in this country. Therefore, we have to have a mature approach that recognises that, if we are to be able to address the problem successfully, in some parts of the country we have to build those facilities.The Minister will know the figures for the last three quarters show that the largest national group seeking asylum in this country is the Iraqis. Given the Prime Minister has now said that the case for war against Saddam Hussein is a moral one, do the Home Office and the Government accept that we also have a moral responsibility to grant asylum to those fleeing from Saddam Hussein? If that is the case, does the Minister accept that the best way of dealing with public concern is for Britain to lead the case for a genuine European integrated asylum system in which responsibility is shared but not shirked?
The hon. Gentleman raised a number of points. On Iraq, most of the people claiming from Iraq are from the autonomous northern zone. There is no reason why those people should not be returned. As I said earlier, if we can negotiate a route through with Turkey, that is what we propose to do.
I have discussed the hon. Gentleman's proposals for a common system with him. He knows that I do not think the detail of some of his ideas would work in practice, but on two points I do agree with him. First, if one added up the contribution of all the asylum systems of the European Union countries, that would not make any significant contribution to the vast majority of refugees world wide. We certainly need to do more about that. Secondly, there is a need for international co-operation to be accelerated, to go further and to address some of the big questions about what we can do to protect people closer to source countries.If, as my hon. Friend rightly says, we are not taking more than our fair share of asylum seekers, why is it taking the immigration and nationality directorate so long to process applications for appeals and for indefinite leave to remain and also to issue status letters? The Home Secretary has said that he wishes to see a step change in the IND and has devoted additional resources, both financial and human, to that process, but I am sorry to have to tell my hon. Friend that, certainly as far as my constituents are concerned, far from speeding up the steps they are becoming slower and slower and leaving many of my constituents in serious situations.
While I accept that there is a very long way to go until we make the IND into the effective and efficient public service that it should be, I cannot agree with my hon. Friend that things are getting slower and slower and worse and worse. Although there is a long way to go, things are improving substantially. Well over our target of 65 per cent. of new applications—in fact, over 75 per cent.—are being decided within the two-month target deadline. The process of appeals, which is the responsibility not of the IND but of the appellate authority, is reducing too, and we are coming close to the six-month target overall. There is still a problem with backlog cases, although that backlog has been reduced from an all-time high of 120,000 to fewer than 40,000, so we are working through the backlog. She is right to say that some of those cases are of long standing, but we are getting through them.
In the course of discussions with their EU counterparts, did the Minister and the Home Secretary offer any views on the achievability of the Prime Minister's target of halving the number of asylum seekers by September? In particular, did they guarantee to their EU counterparts, and will they now guarantee to the House, that they will not seek to achieve this target by statistical manipulation, through the issuing of work permits to people who would otherwise claim asylum?
That represents our firm commitment to our approach to the need to reduce the intake in this country—it is not something that we have discussed with European partners. It represents what we want to achieve here, and it reflects the overriding priority of reducing the intake in order to achieve our other aspirations of increasing removals, reducing support costs and getting order into the system. That is our fundamental objective.
I am not entirely clear whether the answer to my question was yes or no, but perhaps we can get a clearer answer to this question. In talking to their EU counterparts, did the Home Secretary and the Minister discuss the Conservative proposal to scrap the current asylum system and replace it with a system of rational quotas for genuine refugees? Moreover, did they discuss the need to revise, or to withdraw from, the Dublin convention and the New York protocol in order to achieve that desirable result?
For the record, I did answer the right hon. Gentleman's previous question, and the answer was no. On his further question, I am pleased to note that he now supports the work that the Government have already done, and the discussions that we have already had, with the UNHCR and others on resettlement and safe havens. We have not discussed the right hon. Gentleman's fourth variant of Tory asylum policy on quotas—the fourth version that we have heard in as many weeks. A quota system is a fiction, in the sense of his suggestion that it will solve the current problem. First, it would do nothing to address the bigger problem of the total number of asylum seekers across Europe, which he talks of simply carving up in some way. Secondly, it would not of itself prevent or deter illegal immigration. There remains a need for all the measures that this Government are implementing to strengthen border controls, to deter illegal immigration, to negotiate readmission arrangements and to manage migration. So far, we have heard nothing from the Tories on those issues.
3.
What estimate he has made of how many people will be seeking asylum in the UK in September 2003. [98759]
In the light of the proposals in the White Paper, which was published this time last year, and the Nationality, Immigration and Asylum Act 2002, which received Royal Assent in November, we are very confident indeed that we can achieve a dramatic reduction in the number of claims, compared with the number made before Royal Assent in November.
I am disappointed in the Home Secretary's reply. My question asked what his estimate was of the number of people who will be seeking asylum in September of this year. He said that he hoped for a dramatic fall, but in the light of demonstrations against his reception centre policy, and of the courts' taking against his approach to finance and asylum seekers, can he spell out in much clearer terms why anybody should have any confidence in the Prime Minister's target of a 50 per cent. reduction? Also, what does the Home Secretary mean by "dramatic"?
The answer to the last question—there were many questions in one—is that, as I said in my initial answer, we have a firm commitment to reducing the number of asylum claims to 50 per cent. of their level immediately before the 2002 Act received Royal Assent. Secondly, we believe that the measures that we have taken—including the closure of Sangatte, the new border controls moved to France, the new technological equipment at Calais, the securing of Frethun and Coquelles, and the way in which we now deal with those who, having come into this country, claim late—will assist us in dramatically reducing the numbers claiming asylum.
Does my right hon. Friend accept that not all his hon. Friends accept his statement last week in which he condemned the High Court judgment on section 55? Instead of appealing against that judgment, will he instruct immigration officials to interpret section 55 in terms of a reasonable period after entry into the United Kingdom, rather than on immediate entry?
Anybody who immediately claims asylum at a port or airport will be entitled, under the rules we laid down in the legislation, to receive the support—housing, equipment and financial—that they require. I do not accept that I should withdraw the appeal, but I accept entirely that it is right for judges to be able to use judicial review to facilitate challenges to Government when it is thought that they have acted in an administratively inadequate fashion. I do not accept, however, that judges have the right to override the will of this House, our democracy, or the role of Members of Parliament in deciding the rules.
Does the Home Secretary realise that a high proportion of asylum seekers enter the UK from EU countries that are, as my right hon. Friend the Member for West Dorset (Mr. Letwin) said, signatories to the Dublin convention? Why should we accept, prima facie, such individuals? Why does not the Home Secretary take to the European Court the EU nations that flagrantly abuse the convention? Is it because he has no confidence in that body to safeguard British interests?
The European Court has nothing to do with the first, or second and recently approved, Dublin convention. In obtaining agreement with other countries, I must bear in mind the fact that it was his Government who abandoned the so-called gentlemen's agreement by saying that it would fall when Dublin 1 was introduced. If I am to obtain agreement across Europe, as I was being pressed to do a moment ago by the shadow Chancellor—[Interruption.] I am sorry, I nearly did a reshuffle for the Leader of the Opposition. No doubt that will happen shortly. The shadow Home Secretary suggested that we should be collaborating with our European partners, not taking them to court.
Identity Cards
4.
What representations his Department has received on the consultation on compulsory identity cards. [98760]
The consultation paper on entitlement cards and identity fraud was published on 31 July 2002 and the deadline for submitting responses was 31 January 2003. However, we are keen to see the debate continue.
We have received more than 2,000 letters and e-mails from individuals and organisations on the consultation paper. Many of those arrived very close to the deadline for responses and are very detailed, and we will study them thoroughly over the coming weeks.I thank the Minister for that reply, but I would urge her to go further than the preferred option and consider introducing a compulsory identity card scheme, with a requirement to register and an expectation that cards should be carried. That would be necessary to unlock the full benefits of identity cards in fighting crime and, in these uncertain times, might help to give people a greater sense of security. Who knows, it might even be helpful to the Tory party, which seems to be going through another identity crisis.
My hon. Friend knows that the consultation paper ruled out introducing a card that it would be compulsory to carry at all times. I can reassure him that I do not believe that a compulsory scheme is necessary in order to reap the benefits. There is no point in having a card unless it is universal and, therefore, it will be compulsory to register and obtain a card if Parliament decides to introduce a scheme. I agree with my hon. Friend about the benefits of a scheme, because if we are really serious about tackling some of the problems that have been raised today, such as illegal immigration, illegal working and identity fraud, we need a very secure method of establishing identity.
Does the Minister think that there is any reliable way to stop a supposedly voluntary card being required for an increasing number of purposes? How do Ministers intend, if they pursue this idea, to prevent the system failing to deliver the correct identity card to an individual? Do they have the Child Support Agency or the Criminal Records Bureau in mind as models?
We are still considering the responses to the consultation. The right hon. Gentleman raised the issue of how we can make sure that certain organisations do not start requiring a card. That would be a matter for the terms of the legislation. He is also right to imply that it is a long-term commitment; it would be a big enterprise—a big project. In determining our response—I mean the response of every Member, not just that of the Government—we need to think about how to address the issues and make the project a success, rather than using them as an argument for not entertaining its possibility. We need to think about where we need to be as a country, not now but in 10 years time, because it will take that long to set up the issuing equipment and to get every member of the population registered. We should not necessarily be thinking about whether we need the system now but about the future: where do we want to be in 10 years time?
Many responsible licensees and retailers with off-licences on their premises would welcome the speedy introduction of such an identity card. It would also assist communities that are plagued by young hoodlums on drink-related offences. I urge her to address the matter more seriously.
One potential use of such a card for young people would be as a proof of age. It is interesting that in many of the discussions that I held during the consultation process and in some of the qualitative research that we have carried out with different groups, including young people, many young people themselves have told us, "This would be really good and would enable us to prove how old we are". They would thus not get into difficult situations with retailers and others.
Any system of identity cards, whether voluntary or compulsory, would work only if the information source on which they were based was accurate and up to date. The Minister for Policing, Crime Reduction and Community Safety recently conceded to me that, although there is a target of only three days from a court hearing for inputting data to the police national computer, in fact no police force achieves that in less than 11 days, more than four fifths of them take more than 20 days and some of them take more than a year. Given that for months the right hon. Gentleman denied that the statistics even existed, can the hon. Lady tell the House whether and when she will publish, in full, the Carter report into the Criminal Records Bureau so that we can then all judge—
Order. That is not about identity cards.
Is it not the position that there has been a marked lack of enthusiasm for any form of identity card on the part of other Departments—namely, the Department for Work and Pensions and the Treasury? Why does not my right hon. Friend the Home Secretary understand that there is little evidence that any such card would deal with the abuses that have been mentioned or with terrorism? The idea is wrong and it should be dropped.
We have had an extensive consultation exercise in order to get the views of ordinary people and of organisations which, rightly, want to express a view about the way forward. Among the 2,000 responses from individuals and organisations to which I referred, there is—on a cursory glance—support in favour in the ratio of about 2:1. As I said, we shall look at all the responses in great detail and the decision on whether to bring forward proposals will be a Government decision— not simply a Home Office one—and will be endorsed by the Cabinet.
What security measures will be in place in any Government ID card scheme to prevent unauthorised access to the vast array of personal and confidential information that will be stored on such cards?
I do not know whether the hon. Gentleman has actually read the consultation paper. If he has done so, he will realise that he has just mistakenly implied that the card itself will contain a whole range of data. The card itself would simply contain identifying data, possibly including a biometric. Those data would be a gateway offering access to other databases, thus enabling the card to be used to access other information. The card itself would not hold a great deal of information about any individual.
Nationality, Immigration And Asylum Act
5.
When he expects to bring into force section 4 of the Nationality, Immigration and Asylum Act 2002; and if he will make a statement. [98761]
We hope to commence section 4 within a matter of weeks. Revised appeal procedures have to be put in place first. The Lord Chancellor's Department is currently consulting on a revised set of Special Immigration Appeals Commission procedure rules, which will be subject to Parliamentary approval.
May I remind my hon. Friend that section 4 empowers the Home Secretary to deprive a person of citizenship if he has done something seriously prejudicial to the vital interests of the United Kingdom? Abu Hamza continues to spread his message of hate against Jews, Hindus, the United States and Britain. He has seditiously abused the sanctity of Finsbury Park mosque to incite violence and race hatred. He has actively recruited among British Muslims for terrorism abroad and has fundraised for terrorist groups. He is wanted overseas for serious terrorism offences. Is there any reason why section 4 should not be used to deprive Abu Hamza of his citizenship of our country, which he so obviously despises? That should be followed swiftly by the deportation that the British people think is long overdue and richly deserved.
A month ago, my right hon. Friend the Home Secretary said that this matter was under close investigation. The activities of the person referred to, and of other people, are being closely monitored. The Government will initiate deprivation action if we consider that the facts of an individual case meet the tests that are set out in section 4. My hon. Friend will understand that the previous legislation—the British Nationality Act 1981—was weak. It is right that we should wait for the implementation of the new legislation to ensure that we have effective measures to deal with this issue properly.
Is it not now clear that we have to go much further than the implementation of section 4 of the new Act? Is it not time to restore to the Home Secretary the ability to deport people who may threaten this country? Case law under article 3 of the European convention on human rights makes it impossible to do that, so is it not time that the Government saw sense, opted out of the ECHR, went back in with reservations, and gave the Home Secretary the power to protect this country from people who threaten it?
The Conservative party is perpetuating a myth about the mechanics of the ECHR. The hon. Gentleman's suggestion would require the country to withdraw from the ECHR. We would then have to legislate in a way that was incompatible with article 3 and ask the Council of Europe if it would allow us to re-enter with a reservation. That would be a tortuous and difficult process. We have not ruled it out but it is fraught with uncertainty. No other country has done it. There is no certainty that the Council of Europe would allow us to re-enter with a reservation. Reservations have to be very specific and that has not been tested. We are not going down that route at the moment. However, the Prime Minister has made it clear that, if our measures to tackle such problems are not as effective as we want them to be, we will consider whether we need to revise our obligations under various treaties.
Active Community Unit
6.
If he will make a statement on the work of his Department's active community unit. [98762]
We appointed a new director of the active community unit—Helen Edwards—at the beginning of last year. With Ministers, she has now undertaken a full review of our relationship with the voluntary and community sector and has identified four key principles—capacity and development at local level; community involvement; partnerships between Government and the voluntary and community sector; and a modern legal framework for the sector. Those matters are now being put in place.
I commend my right hon. Friend the Home Secretary for his commitment to building and enhancing the capacity of communities—especially deprived or ethnic minority communities. However, notions such as "active community" can seem a bit highfalutin' unless they mean something on the ground. What will this particular programme mean to people in, for example, my constituency?
First, the programme will mean an extra £93 million over the next three years, investing directly in those organisations that are engaged in volunteering. In my hon. Friend's constituency, that currently involves a Sikh project, gaining support in the community for work with young people to the tune of just under £50,000, and £133,000 from a major youth project in the west midlands is going into his constituency. That is the answer to the sedentary comment made by a Liberal Democrat who shouted, "And that is just in his constituency."
With regard to the compact and codes of practice relating to bringing together the voluntary and community sectors, has the Home Secretary implemented the recommendation of the Treasury report last year that a senior official should be appointed in each Department to encourage their effective implementation?
Yes, as part of a cross-cutting review agreed between the Treasury and ourselves and as part of the spending review, it was agreed, as the hon. Gentleman rightly says, that such individuals would be designated. That has now been achieved, and we are intent on ensuring that that collaborative venture across Departments, including funding identified by Departments, should work effectively.
Asylum Seekers
7.
What target he has set for the removal of failed asylum seekers. [98763]
Within weeks of taking over as Home Secretary, I made it clear to the House that the original intention, the technical commitment that had been made in relation to the number of people who could be removed from the country was not feasible. I indicated then that it would be more sensible to have commitment related to a proportion of the intake and that we should switch our energies into preventing entry by strengthening our borders. That is precisely what I have done in the past 20 months.
Is the Home Secretary aware that that answer is both evasive and pathetic? Will he please tell us why the much-trumpeted target of 30,000 removals a year was, in his own words, not feasible? Was it simply because his Department failed? Was it because he did not resource the immigration service properly? Or was it because the figure was never realistic, but a sham and grab for a headline? The Select Committee on Home Affairs was distinctly told that there never has been, and there is no immediate prospect of there being, sufficient detention space to support such a target. Was it not nonsense from the start?
The answer to the first part of the question is no. The answer to the rest of the question is that I cannot match the right hon. Lady's breathtaking audacity. I cannot match the idea that someone who was in the Home Office who saw the number of staff cut and a failure to put in place the removal centre facilities, who had no programme for accommodation centres, who did not have induction centres, who failed to reach an accommodation with France in terms of moving border controls and who achieved less than half the number of removals that we are now achieving can actually stand up in the Chamber and suggest that we are failing compared with her pathetic efforts.
I endorse everything that the Home Secretary said in relation to that previous answer, but may I caution him to avoid becoming impaled on any more unrealistic targets in relation to asylum and put it to him that, bearing in mind all the complexities that surround the subject, what is needed is clear and consistent progress, not a big bang, which will inevitably end in tears?
I know that I am in favour of tougher sentences, but I have never been in favour of impaling, so I am okay on the first part of the question. [Interruption.] But I have one or two people in my sights, in a manner of speaking. I take my hon. Friend's advice to heart and believe that his is a very wise counsel.
Does the Home Secretary accept that if the process of deportation is put off until people have put down roots in this country, had children and become part of the community, deportation becomes inhumane? Should we not therefore resile from an agreement that gives every inhabitant of the globe who can find ways to this shore the right to claim asylum, appeal against being refused that claim, take out a judicial review and subsequently claim under human rights legislation—securing benefits all that time—until they have been here so many years that it is inhumane to deport them? Should we not resile from that agreement, as my right hon. Friend the Member for West Dorset (Mr. Letwin) suggests, if we cannot renegotiate it?
On the first part of the hon. Gentleman's question, I have every sympathy. The longer that people are here, the more difficult it is to remove and uproot them. We should therefore seek to avoid that at all costs. On the second part of the question, a large number of the layers to which the right hon. Gentleman referred have been or will shortly be removed under the Nationality, Immigration and Asylum Act 2002. I am seeking, week by week, to implement an Act that we had to struggle to get through both this House and the other place because Conservative Members opposed us at every end and turn.
Will my right hon. Friend consider what can be done to improve the coordination between the various parts of the Home Office? Does he accept that it is very unsatisfactory when a decision is made and apparently nothing happens on enforcement? In fact, what happens is that the National Asylum Support Service will tell a provider to cut off someone's support. The provider therefore has the problem of dealing with that individual rather than the Home Office, which took the decision that the asylum claim should be rejected.
Bearing in mind that there is a 28-day period in which support continues, I accept the thrust of my hon. Friend's question entirely. There must be a more efficient, more effective and seamless removals policy in which, when support is removed, advice, support and, when appropriate, removal takes place immediately. That is fair for the individuals and fair for the country.
Question 8.
I am not sure that the question was that good anyway. We might have done better without it. Does the Home Secretary believe—I would be grateful for a frank answer—that the Government will ever remove those 250,000 or more failed asylum seekers, who, since Labour came to power five years ago, should have been removed but have not been?
I am glad that the hon. Gentleman thought of a question, as we might have been waiting all afternoon otherwise. The truth, as he knows well, is that the figures that are plucked out of the air are hypothetical, and we know perfectly well, as per the earlier question, that there are real difficulties when people have remained in the country for a lengthy period. That is why preventing people from clandestinely entering our shores is the top priority. Ensuring that we turn them round and remove them when they are clandestine is the key. That is the answer to the question of how long is a piece of string—as long as the hon. Gentleman wishes to cut it.
Illegal Land Occupation
8.
If he will make a statement on the powers of the police to move on people who illegally occupy land and open spaces. [98764]
Section 61 of the Criminal Justice and Public Order Act 1994 gives the police, subject to certain conditions, the power to remove people who are trespassing with intent to take up residence, and who have been asked to leave by a landowner. We intend to legislate to strengthen further these powers. We will do so as soon as parliamentary time allows.
I thank the Minister for that answer and assure him that my constituents living in the Cranham road and Little Waltham part of Chelmsford will warmly welcome that. Will he accept that there are individuals who are prepared to defy court injunctions, abuse the appeal procedures, string out defiance of planning law, and build on and occupy greenfield sites against the law? The quicker that something is done to empower local residents to be able to reclaim their land and their communities from those people, the better.
I completely agree that unauthorised camping, and the antisocial and criminal behaviour that is often linked with it, is a problem, and we intend to tackle it. The police need effective eviction powers to take prompt action against unauthorised sites, particularly those that create a nuisance such as the hon. Gentleman describes, and we intend to introduce such powers.
My hon. Friend is correct in suggesting that new legislation will strengthen the powers of the police, but there is another side to the equation. My constituents complain about the rubbish and mess left on sites after travellers have occupied them for a few days, but there are no powers of redress, so any cost falls on the local authority and becomes, in turn, a charge on council tax payers. Has my hon. Friend any suggestions or ideas as to how people can be held responsible for the expense of clearing sites once they have left?
I am sure that my hon. Friend will agree that there are members of the travelling community who behave reasonably and appropriately, but nuisances such as those that he mentions are a great problem. We should expect the same standards from the travelling community that we expect from other people. As well as the power to evict, we need the ability to tackle antisocial behaviour by the travelling community, and we are considering that. It is possible to impose antisocial behaviour orders on travellers as well as other members of the community.
We welcome the Minister's announcement that he proposes to toughen up the powers still further. He is aware that when we were in government, we sought, in the Criminal Justice and Public Order Act 1994, to toughen the law. Does he accept, however, that unscrupulous travellers and gypsies have found loopholes in the legislation introduced by Governments of both parties, and that if they are to be closed it is necessary for Ministers such as himself to agree to meet Members from both sides of the House, leaders of local authorities and leading local authority officers to ensure that the new law, which we hope to help draft, will be effective? Does he recognise that in constituencies such as that of my hon. Friend the Member for West Chelmsford (Mr. Burns) and my own some travellers are trying to get round the law by buying land and then breaching planning laws?
The hon. Gentleman is right, and we must consider planning issues as well as police powers of eviction. He will know that the Office of the Deputy Prime Minister is looking at planning law. He is as entitled as anybody else to have an input into that process. I have always been prepared to consider his proposals on this matter as on any other, and if he has suggestions that relate to Home Office responsibilities in these matters, I will be happy to listen to him. I am sure that he is capable of making his own representations on the planning side of this question.
May I take the Minister back to his initial reply? He said that the police can evict travellers at the request of a landowner. Part of the problem is that sometimes the landowner will not make such a request because he wants planning permission, and he spitefully hopes that local authorities will give up and grant it in exasperation. Will my hon. Friend consider, as part of the review, introducing a power for local authorities to ask the police to evict people, in appropriate circumstances and in the absence of a reasonable request by the landowner?
I am sure my hon. Friend agrees that, in the first instance, we need adequate sites for the travelling public. I hope that that is not controversial. However, unauthorised camping is a problem and we need to ensure that the new powers bring not only swift relief, but effective relief. We are aware that people will find various ways around them. Trying to plug all the loopholes will not be easy, but the new proposed powers will seek to deal with that problem.
Polish Citizens (Deportation)
9.
How many Polish citizens are due to be deported prior to the planned date for Poland's accession to membership of the European Union. [98765]
The number of Polish citizens we remove will be determined principally by the number who are refused entry or are found to be here in breach of our immigration laws.
From that answer, I suggest that the number will be very small. With Poland about to join the European Union, may I point out that it is a waste of time and money to uproot people who could legally return to this country in a year or two's time? In particular, why pick on a 63-year-old Polish-born widow, Mrs. Maria Puchrowicz, who lives in my constituency? Have we really got to the stage of deporting 63-year-old widows?
I am not aware of the case that the hon. Gentleman raises, although I will gladly look into it. The answer to his substantive point is that we need to maintain the integrity of the asylum system. He is not correct to assume that the number removed has been very small. Since April 2002, 848 failed Polish asylum seekers have been removed on scheduled flights. On 14 January, 34 were removed using a charter flight. About the same number again of non-asylum removals have occurred as a result of enforcement action. In addition, 8,700 Polish nationals were refused entry to the country in 2001 and subsequently removed.
The Minister will know that our Government's position is much more honourable than that of the German Government as far as Polish citizenship is concerned once Poland joins the European Union. Given the pressure on the immigration and nationality directorate, which is obvious from questions asked by hon. Members on both sides of the House, surely it would be sensible, in view of the fact that Poland will join on 1 May next year, to hold back on the removals until it is a full member. Is that not the most sensible and cost-effective means of dealing with the problem?
I disagree with my hon. Friend for the simple reason that maintaining the integrity of the asylum system is the right approach for the reasons that I outlined, notwithstanding the fact that Poland will join the European Union on 1 May 2004.
Antisocial Behaviour
10.
What steps he is taking to tackle antisocial behaviour. [98766]
We will shortly be publishing a White Paper on antisocial behaviour which will be followed by an antisocial behaviour Bill. That will build on existing measures to ensure that we have legislation in place to tackle antisocial behaviour We have also established an antisocial behaviour unit in the Home Office to take the lead in ensuring that new and existing legislation is used to good effect.
I thank my right hon. Friend for that reply. He will be aware of the success achieved by Blackpool police in reducing the antisocial behaviour of young people by working closely with other agencies. When the individual support orders that are proposed in the Criminal Justice Bill are introduced, will he ensure that they lead to genuine collaborative work between the police and social services so that those young people do not reoffend?
I congratulate the police in Blackpool for their use of the interim antisocial behaviour orders. They have obtained seven since the new powers came into effect at the beginning of December. It is certainly true that we have not always had the support that we would have liked from social services departments up and down the country for antisocial behaviour orders. The new individual support order is designed to address the causes of a young person's offending behaviour and, for that reason, social services departments should become more active and more supportive of the measure.
Why did the Government take away from police the power to remove unopened cans and bottles of alcohol from young people and children in public places? When will they reverse that decision?
It is important that the police have the power to remove such alcohol from young people. The Licensing Bill, which is before Parliament, will give them that right.
Unsolved Murders
12.
If he will make a statement on police procedure for investigating unsolved murders in cases where the original conviction has been overturned. [98768]
The police will review the evidence available and any comments or findings made by the court in cases where convictions are overturned. As with other unsolved crimes, it is for the police to decide in individual cases whether the evidence justifies reopening the investigation.
I thank my hon. Friend for his answer. He will be aware of the case of one of my constituents, Robert Brown, who spent more than 25 years in jail for a murder he did not commit. He was finally released in November. He will also be aware of the case of Stefan Kiszko, who was released from prison in 1992 on the basis of an unsafe conviction. He had served 16 years in prison. It has recently been announced that in that case the original murder is being reinvestigated due to new DNA evidence.
Will my hon. Friend tell me why it is that in cases such as the Birmingham Six and the Guildford Four, and the case involving one of my constituents, the police failed to find the real perpetrators and were all too ready to see convicted the people who were charged?We must take every miscarriage of justice extremely seriously. I think that in every instance that my hon. Friend has mentioned, the cases were brought to court originally before the protections that now exist in the Police and Criminal Evidence Act 1984. Those protections have been important. If there is a case, however old, where a conviction is overturned and it becomes possible for the police to reinvestigate, and the evidence is there to enable a reinvestigation, I would hope that the police would take that course. That must he a matter for the police to decide in the light of the evidence that is available to them.
Business Of The House
3.31 pm
Mr. Speaker, with permission, I should like to make a short business statement. The business for Wednesday 26 February 2003 will now be:
Debate on Iraq on a Government motion. The business for Thursday 27 February will be consideration of a motion to approve the Third Report of the Committee on Standards and Privileges followed by consideration of motions relating to the Draft Social Security Benefits Up-rating Order 2003 and the draft guaranteed Minimum Pensions Increase Order 2003. The debate on Welsh Affairs is provisionally planned for the week commencing 10 March and I hope to make an announcement on an alternative date for the debate on flood and coastal defence policy in due course. I will of course make my usual business statement on Thursday.I am grateful for that statement. When will the text of the motion for Wednesday be available to the House?
The motion will be available during the course of the evening, when it will be tabled. It will, of course, be available to all hon. Members in the Order Paper for tomorrow. Given that we have just returned from a recess, there is no quicker way of getting it on the Order Paper. I understand the interest of the House in this matter. Perhaps I can help the House by saying that Wednesday's motion will confirm the commitment of the Government and the House to our strategy of handling the Iraq crisis through the United Nations. It will repeat our support for resolution 1441, which the House overwhelmingly endorsed on 25 November.
The motion will not be a trap. No Member need fear that support for it will be interpreted as support for any specific action. The House will have other opportunities in future to debate Iraq, and if necessary another specific opportunity to vote on military action.We warmly welcome this timely motion. We welcome also the assurance that the Leader of the House has just given us that the text of the motion will be available shortly. Further, we welcome the fact that this will be an opportunity not only for the House to debate in clear terms a substantive motion, but to vote in clear terms on that motion. We hope that there will be no fudge—no parliamentary subterfuge—so that we can see clearly that the House is representing considerable concern among the public at large at what is happening and what is being done in our name. We look to you, Mr. Speaker, to ensure that the division of opinion in the country can be fully reflected in the way in which the House votes on Wednesday night.
I have already given an assurance that the motion will not be a trap. Nor will it be a fudge. It is not an attempt to secure by subterfuge any approval for, military action.
I think that it is right that the House should debate Iraq. It plainly is a matter of considerable political interest outside the House, and our constituents would be perplexed if this week went by without our setting aside a date to explore the matter. That is why I think that it was right for the Government to come forward and volunteer this time.My right hon. Friend always tries to be candid with the House. The House will welcome his assurance that the motion will not be a trap and that there will be a further opportunity to debate and, if necessary, to vote. Will he make it clear that it is his intention that there will be the opportunity for a substantive vote after any resolution goes to the United Nations and before this country goes to war? Can he advise the House now whether the motion to be debated on Wednesday will be amendable?
Any motion that goes on the Order Paper will be open to amendment. Whether an amendment is chosen is, I am grateful and thankful to say, not a matter for me. However, the motion will certainly be amendable. On the question of bringing a second resolution to the House, the House will recall that that is precisely what we did with the first resolution, 1441, and there would be obvious sense in our bringing to the House any further resolution and seeking the endorsement of the House for that resolution, in the same way as the House endorsed 1441.
It is right and proper that the traditional Welsh day debate should give way on this occasion to the important debate on Iraq. We hope that the motion to be tabled tonight will enable those of us who oppose war in the current circumstances to make our views clearly known. On the re-tabled Welsh day debate, events may require the House to debate Iraq another time and may not allow for an Adjournment debate on Welsh matters. As an alternative, will the Leader of the House consider allowing Welsh Members who wish to raise constituency matters to raise them on the Floor of the House or in a meeting of the Welsh Grand Committee before very long?
I am grateful to the hon. Gentleman for being understanding of the need to postpone the debate on Welsh affairs in the present circumstances. If I can carry him with me on that point, I am sure I will carry the rest of the House with me on it. Yes, we will consider whether any further action is required to make sure that the interests of Welsh electors are protected, and we will make sure that the debate on Welsh affairs proceeds.
I note what the hon. Gentleman said about wishing to oppose any military action. Let us be clear. At the present time, we are pursuing a strategy through the United Nations. We wish to see the matter resolved through that United Nations process. For it to be resolved will require the co-operation of Saddam Hussein, and require him to accept his obligation to disarm under the resolution that has already been passed by the United Nations and endorsed by the House.Naturally, I accept the good faith of my right hon. Friend, but he will recall that concern was expressed after the vote on 25 November—a vote that effectively only endorsed resolution 1441—that the Government were seeking to put too much weight on that general expression of opinion. Since he has properly said that this is only an interim stage and that there will be an opportunity for a substantive vote later, is there any reason at all to have a vote after the important debate on Wednesday?
Whenever I have proposed a debate on Iraq on a motion for the Adjournment, I have tended to he criticised in the House for not providing a substantive motion. I will take it rather ill if I am now criticised for bringing a substantive motion before the House. It is absolutely right that the House should debate the matter. People outside would find it rather strange if we debated it for a full day, with no product at the end. Therefore to assert the support of the House for the present strategy through the United Nations seems to me entirely appropriate in the present circumstances. Should it be necessary for that strategy to develop as a result of the failure of Saddam Hussein to co-operate, there will be another opportunity for the House to debate the matter and to express a view on it.
Can the Leader of the House make it clear whether, if the Government decide that our troops should be committed to war, the House will be able to vote on that specific subject prior to their going to war?
When the Foreign Secretary spoke in the House on the matter, he said that he hoped it would be possible for us to have such a motion before there was any military action. That would certainly be our intention and our preference. Of course, as Ministers have repeatedly said, in any specific circumstances we have to weigh how we conduct the proceedings of the House against the safety of our troops who may be committed to action. That must be a proper consideration, and I do not think that any hon. Member would argue against it, but that should not be taken as some kind of underhand plan in order to proceed with action without the authority of the House. That would not be our wish and it is not my expectation of what will happen.
Forgive my curiosity, but when the Leader of the House mentioned that there could be a trap—that was spontaneous—what trap did he have in mind?
I am happy to assure my hon. Friend that I said that there was no trap.
Given that the debate on Wednesday might be our last opportunity to discuss this matter before hostilities begin, and given the fact that many constituency MPs have had huge mailbags about this important subject and will want to question the Government as well as explain their own position, would it be possible to get rid of the 7 o'clock rule for the debate and to allow it to run on?
There will be a full day's debate, and it will commence earlier than it would have done before the change in the hours. I hope that it will therefore attract even more support from the Gallery above us. I can assure the hon. Gentleman that there will be as much time to debate this matter as there would have been under the previous hours. I also fully understand that Members will wish to question the Government—to use the hon. Gentleman's own phrase—as well as expressing their own views, and it is for that reason that the Prime Minister will be making a statement to the House tomorrow, in addition to the debate on Wednesday.
But will a future substantive motion be on the issue of whether—not when, or if—British troops will be deployed? My right hon. Friend referred to the remarks of the Foreign Secretary, but if I remember correctly, the Foreign Secretary warned the House against such a substantive motion on the ground that it could put British troops in danger by taking away the element of surprise. I reiterate: is it now the Government's policy that decisions on whether to deploy British troops are taken by our Government, our House of Commons and our people? Two Cabinet Ministers have revoked the words of the Prime Minister on that issue.
I re-read the Foreign Secretary's speech only this morning, so it is quite fresh in my mind precisely what he said to the House. He has always been quite open with the House—and, if I recall rightly, with the Select Committee on Foreign Affairs—that it was the Government's wish that there should be a substantive vote in the House. I have often said, both in the House and outside it, that it is inconceivable that British troops could be committed into action without support from within the House of Commons. That would plainly not be politically acceptable, and it would not be something that this Government would contemplate.
On the question of timing, I have already said that the Foreign Secretary has said that his hope is that such a motion would take place before action, and that would certainly be our intention. As I said earlier to the House, however, we have to bear in mind the safety of our troops and not take any action in specific circumstances that would compromise that safety. I would hope that no hon. Member would disagree with that.I welcome the statement by the Leader of the House, and I look forward to the Prime Minister's statement tomorrow and to the debate on Wednesday on an important subject on which we need as much public, parliamentary, governmental and national unity as possible if we are going to war. The Leader of the House will no doubt be aware that the Prime Minister's chief of staff has been in Ulster over the last week, informing people that the deadline for putting together a Belfast deal between the Provisional IRA, the British Government and other parties is the beginning of next week. Will the Leader of the House give the House a commitment that there will be a statement by the Prime Minister and a full day's debate if the deadline in Northern Ireland is indeed planned for the beginning of next week?
I am well aware of the interest in all quarters of the House—not simply from those who represent Northern Ireland—in the peace process and in the efforts to restore it to sufficient health to re-establish the Northern Ireland Assembly. I can assure hon. Members that, if there are developments, we will ensure that the House is kept fully informed and has a full opportunity to ask Ministers questions and to pursue the matter.
The subject of Wednesday's debate is clearly a matter of critical importance both for the House and for the nation. Will the Leader of the House give us an assurance that the debate will be led by the Prime Minister, and that the Prime Minister will spend the full period of time in the Chamber, so that he can hear the views of hon. Members?
I am quite confident that my right hon. Friend the Prime Minister would welcome the opportunity to spend six hours in the Chamber or, indeed, on any other single activity, but it is in the nature of government at the best of times—and especially now—that the luxury of time is not available to him. I think that most mature Members would recognise that he may have more important things to do over six hours than simply to sit in this place.
Energy White Paper
3.44 pm
With permission, Mr. Speaker, I should like to make a statement about the energy White Paper which I and my right hon. Friends the Secretary of State for Environment, Food, and Rural Affairs and the Secretary of State for Transport are publishing today. Copies are available in the Vote Office. At the same time, my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs is publishing the Government's response to the 22nd report of the royal commission on environmental pollution, "Energy—the Changing Climate". I should also like to draw the attention of the House to the written statement on British Energy that I made this morning.
Madam Deputy Speaker, I regret as much as I am sure that you do that drafts of the White Paper have been leaked to the press in the past few days. Such action is a discourtesy to the House and I deplore it wholeheartedly. The White Paper sets out a new energy policy that is designed to deal with the three major challenges that confront our energy system. First, we face the challenge of climate change. CO2 levels, which have already risen by more than a third since the industrial revolution, are now rising faster than ever before. The scientific evidence makes it clear that the consequences of rising global temperatures could be devastating—not only in Britain, where floods and storms could cause billions of pounds worth of damage, but even more so in developing countries where millions of people could be exposed to disease, hunger and flooding. Secondly, we face the challenge of our declining indigenous energy supplies. We already import nearly half the coal we use; by 2006 we will be a net importer of gas and, by 2010, of oil; and by 2020, we could be dependent on imported fuel for three quarters of our total primary energy needs. As we move from being an exporter to an importer of energy, we need new approaches to reduce the risk of price fluctuations and political instability or conflicts in other parts of the world. Thirdly, we face the challenge of keeping our energy infrastructure up to date with changing technologies and needs. Much of our infrastructure will need to be updated over the next two decades, particularly to adapt to far higher levels of renewable electricity and to accommodate rising gas imports. Our four new goals for energy policy are: first, to cut greenhouse gas emissions; secondly, to secure reliable energy supplies; thirdly, to maintain competitive energy markets in the UK and beyond; and fourthly, to ensure that every home is adequately and affordably heated. The United Kingdom is already on course to achieve our Kyoto commitment to reduce greenhouse gas emissions by 12.5 per cent. below 1990 levels by 2008–12. Today, we are making a further commitment to cut UK CO2 emissions by 60 per cent. by about 2050, with real progress by 2020. That is the recommendation that was made by the royal commission on environmental pollution, and we have accepted it. Of course, our actions in the United Kingdom will affect climate change globally only if they are part of a concerted international effort, so a key objective of British foreign policy in future will be to secure ambitious international commitments to cutting CO2 emissions world wide. At the heart of our new framework for energy policy will be a carbon trading system. A new Europe-wide system planned for 2005 will create a powerful incentive to producers and consumers to use less energy and to switch to lower or zero-carbon forms of electricity. The cheapest way to tackle all our energy goals is simply to use less energy, but we will need to achieve far more on energy efficiency in the next 20 years than we have achieved in the past 20 years. Building on the climate change programme, we have therefore decided to consult on an expansion of the energy efficiency commitment to run from 2005 until at least 2008, at possibly twice its current level of activity, and to work with energy suppliers and Ofgem to create an effective market in energy services; to bring forward to 2005 the revision of building regulations, with higher standards for efficiency both in new buildings and in refurbishments; to work with our European partners to agree higher standards for consumer and industrial appliances; and to set an example within Government by improving energy efficiency in our own buildings and procurement. Last year, we introduced a renewables obligation to help to deliver our target of generating 10 per cent. of electricity from renewables by 2010. By then, the renewables obligation and the exemption from the climate change levy will be worth some £1 billion a year to the renewables industry. We believe that renewable sources of energy will increasingly demonstrate that they can achieve our goals at an acceptable cost. Our further aspiration is therefore to double renewables' share of electricity from our 2010 target by 2020. The White Paper sets out policies to achieve that by investing £60 million in new money for renewable energy projects, bringing Government investment in renewable energy up to £348 million over four years; simplifying and streamlining the planning system; taking steps with Ofgem and others to improve access by renewable generators to the electricity network; and setting out a new strategic framework for offshore wind. Nuclear power is an important source of carbon-free electricity, but its current economics make it an unattractive option, and important nuclear waste problems need to be resolved. The White Paper does not include proposals for new nuclear power stations. However, it does not rule out the possibility that, at some point in the future, new nuclear build might be needed to fulfil our carbon targets. Any further decision to proceed with building new nuclear power stations would be made only after full public consultation and publication of a further White Paper. Transport accounts for approximately a third of final energy use and will also play its part. We shall continue to improve vehicles' fuel efficiency and cut carbon emissions through the successful European voluntary agreements with car makers. Vehicle taxation also now encourages and rewards consumers for choosing clean, low-carbon vehicles. We shall start to make substantial use of low-carbon biofuels. That builds on the strategy that we set out in "Powering Future Vehicles", and we welcome the engagement of industry and other partners through the new low-carbon vehicle partnership. The White Paper sets out a package of measures to support new energy technologies, including a new industry network on fuel cells and further work on the transition to a hydrogen economy. I also welcome the Research Councils' proposal for a new energy research centre. Becoming an energy importer does not necessarily make it harder to provide energy reliability. Most other leading industrial nations have achieved economic growth as energy importers. We can do the same. Securing reliable energy supplies will be an increasingly important part of our European and foreign policy. Last year, we secured a commitment to European energy liberalisation for industrial customers by 2004, and overall by 2007. That will improve our access to different sources of supply and allow United Kingdom companies to compete in wider markets. As well as keeping prices affordable, competitive markets create the right environment for infrastructure investment that will increase our capacity to import gas through the existing interconnector. Renewables and smaller-scale distributed generation will also help to promote greater diversity and energy security. Coal generation provides approximately a third of our electricity, increases flexibility and contributes to diversity of supplies. The future for coal electricity generation lies in cleaner coal technologies or carbon capture and storage. We already have a programme of support for cleaner technologies, and the White Paper includes proposals on capture and storage. We propose to introduce separately an investment aid scheme to help existing pits to develop new coal reserves, when they are economically viable, and to safeguard jobs. We have already negotiated the required flexibility at European level to enable us to achieve that. Tackling fuel poverty remains a key priority. In 1996, 5.5 million households were in fuel poverty. Today, the figure is around 3 million. Of those, 2 million are vulnerable households, comprising older people, families with children or people who are disabled or have a long-term illness. In 2001, our fuel poverty strategy set out policies to end fuel poverty in vulnerable households by 2010. Our aim is that, as far as is practical, nobody in Britain will live in fuel poverty by 2016–18. However, eradicating fuel poverty requires action in people's homes through better insulation and heating systems. We are tackling that through programmes such as warm front and the energy efficiency commitment. We shall publish our first annual report on the fuel poverty strategy shortly. It will give hon. Members more detail on our progress. The White Paper establishes an energy policy for the long term. For the first time, such policy puts the environment at its heart. It will give energy producers and industry the long-term market framework that they need to invest and plan with confidence. It will ensure that consumers can continue to rely on safe, affordable energy for all their needs. It will help us to play a leading role in meeting the challenge of global climate change. I commend it to the House.
I am grateful to the Secretary of State for providing a timely copy of her statement and the White Paper this morning. I share her concern about leaks. As she wholeheartedly deplores these leaks, will she confirm that they came not from the Department of Trade and Industry, but from No. 10 Downing street, which made a late draft of the White Paper available to a certainFinancial Times lobby journalist last Friday? The same day, her Department seemed unaware that the White Paper was to be published today. The timing was presumably chosen to suit the Prime Minister's presentational timetable.
Seldom has a document that was so widely trailed and so eagerly anticipated been so disappointing. The White Paper is long on aspiration and short on conclusions. It ducks all the hard decisions, and leaves Britain without a coherent energy strategy just when clarity and decisiveness are most needed. It is not as though the Government have not had time to think about the issues. It is a year since the performance and innovation unit's report was published, and two and a half years since the royal commission published its report, but all we get from Ministers is a series of targets watered down into aspirations, and bland statements that would scarcely rate a pass mark in a GCSE economics exam and which bear all the hallmarks of the cut-and-paste techniques now favoured by 10 Downing street. The White Paper has had the gestation period of an elephant, and at the end of a lengthy labour the Secretary of State has delivered a mouse. It is a typical new Labour exercise, full of overblown prime ministerial rhetoric and claims, and its content is wholly inadequate to meet the challenges that Britain faces. Governments have two responsibilities in relation to energy policy: first, to ensure security of supply, and secondly, to meet our environmental commitments. The White Paper fails abysmally on both counts at a time when Britain is moving from self-sufficiency in energy supply to being a net importer, and when the Government's failure to achieve reductions in carbon dioxide emissions is serious. Incidentally, the Secretary of State's claim in her statement that theis contradicted in her own White Paper. On page 25, footnote 6 states that carbon dioxide emissions in Britain increased in 2000 and 2001. Will the Secretary of State confirm that the Department for Environment, Food and Rural Affairs has just announced that carbon dioxide emissions have risen for the third year running? That is a fresh example of the Government's increasingly favoured technique: if they are missing the immediate targets by a big enough margin, their answer is to set much more demanding targets to be met at a much later date. The Prime Minister, in his foreword, calls the White Paper"United Kingdom is already on course to achieve our Kyoto commitment to reduce greenhouse gas emissions"
but the truth is that it is a millstone around the necks of the industry and the customers, who include every man, woman and child and every business in Britain. The price of ministerial dithering and incompetence will be paid by people and businesses for years to come. We welcome the references in the White Paper to the importance of improving energy efficiency. Nevertheless, experience shows that relying on greater energy efficiency to achieve half the carbon dioxide savings required is wishful thinking. Although the White Paper admits past failures, for example on condensing boilers, it does not provide any policies to deliver micro combined heat and power in the future, which could be an important contributor to greater energy efficiency and generating capacity. The Conservative party fully supports Britain playing its part in meeting internationally agreed targets to tackle climate change. That process originated under the Conservative Government. Will the Secretary of State tell us whether she believes that other countries will now commit to a 60 per cent. target cut in carbon dioxide emissions by 2050? Will she confirm that it would be economically damaging for Britain to impose such a target unilaterally? What discussions have taken place recently with the world's largest emitter, the United States, about its commitment to reducing carbon dioxide emissions? Why are the Government persisting with the climate change levy as one of their primary instruments for achieving a reduction? Does not the Secretary of State recognise that the climate change levy is unfair, arbitrary and ineffective in its impact? Does she understand that a comprehensive emissions trading system would provide a fairer and more efficient way of cutting carbon dioxide emissions? Why does the White Paper not admit the failure of the climate change levy, and announce its immediate replacement? Will the Secretary of State confirm that the Government's existing emissions trading system is incompatible with the European Union scheme, and that the EU scheme itself is not comprehensive? I welcome the overdue signs of realism in Ministers' minds in relation to renewable energy. Will the Secretary of State admit that when the White Paper describes the target of 10 per cent. of Britain's energy being supplied from renewable sources by 2010 as "very challenging", what it really means is that the chances of meeting it are remote? Will she confirm that that target can be met only at huge cost to both consumers and taxpayers, giving the lie to the Government's claim that they are concerned about affordable energy and fuel poverty? Does the Secretary of State recognise that onshore and offshore wind, the two sources identified in the White Paper as the largest contributors of renewable energy in 2010, are not reliable sources, in the sense that there is no guarantee that the wind will blow when electricity demand peaks? Yet another example of the White Paper's failure is the lack of any new policy on combined heat and power. The Government are failing to meet their existing CHP targets, no new CHP arrangement is being constructed, and all the White Paper offers is"a milestone in energy policy",
—anything, in other words, except tangible action to promote CHP. Will the Secretary of State explain why the Government have ducked any decision on nuclear power? Does that mean they believe that existing nuclear power stations, which provide more than a fifth of current energy supplies, do not need to be replaced? What more do the Government need to know about nuclear technology or public attitudes before making up their mind? Given that the lead time for planning, approving and building nuclear power stations is very long indeed, does the Secretary of State agree that by requiring both the fullest public consultation and the publication of yet another White Paper before any decision can be made, the Government are effectively trying to kill off Britain's nuclear industry? Does she agree that in doing so she has made Britain even more dependent on imported gas? Are the Government content to make Britain's electricity depend on gas supplies from countries such as Russia and Algeria? Does the Secretary of State believe that in the event of a future energy crisis, Britain—at the western end of a gas pipeline that passes alongside Russia's biggest gas customer, Germany—could rely on that source of supply? Does she agree that, at the very least, the situation would require the construction of huge new gas storage facilities? Where will those be, and who will pay for them? We waited a long time for this White Paper, but judging by its content I think it would have been better for us to wait a bit longer so that the gaps in the policy could be filled in and the uncertainties that it perpetuates could be resolved. The long lead times in the energy industry, and the fact that Britain faces the most acute energy challenges for a generation, mean that the Government's actions and, more particularly, inactions now will have effects in years to come which consumers will still be suffering, and paying for, long after the Secretary of State has begun to draw her pension. This White Paper represents a missed opportunity that could have disastrous results. Dodging the difficult decisions today may mean that the lights will go off tomorrow, and will certainly mean that the bills will be higher the day after that."review existing guidance … continue to emphasise the benefits of CHP … work with Ofgem to keep these developments under review"
That was a bit rich, coming from the spokesman for a party that was responsible, in government, for the discredited pool system that gave us artificially high electricity prices for years, which encouraged massive over-investment in electricity generating capacity—over-investment that is still unwinding itself. That Government's only energy policy was to have no policy whatsoever.
The hon. Gentleman began by referring to carbon dioxide reductions and our Kyoto targets. I can confirm that we are indeed on course to meet not just those targets but, we believe, the more challenging domestic target that we set of a 20 per cent. reduction by 2010. It is true that for the last two years there has been a small increase in carbon dioxide emissions, but we expect to see a fall again this year when we have the new figures. We also expect a continuing downward trend that will not only meet the Kyoto commitments, but go beyond that. As for the commitments of other countries, today, my right hon. Friend the Prime Minister announced that he and the Swedish Prime Minister have written to the Greek Prime Minister as President of the European Union to urge all our European partners to sign up to the target of 60 per cent. reductions by 2050. The hon. Gentleman complained about the climate change levy, but that levy and the climate change agreements made under it, which deliver an 80 per cent. discount on the levy, are proving to be an extremely effective incentive for much greater energy efficiency and cleaner electricity within our industry, just as we thought that they would be. Britain pioneered voluntary emissions trading and it is already using that trading scheme to enable a number of companies to meet the commitments that they have entered into under the climate change agreements. As we say in the White Paper, as we move towards the new carbon trading system in 2005, we will look at how people move from the existing emissions trading scheme to the new trading scheme, and how the climate change levy fits in with that. The hon. Gentleman complained about progress on renewables. Yes, it is a challenging target for 2010, and I mean precisely that. We put in place the renewables obligation only last year, so it is not surprising that it has not had much effect recently. We know very well, and we say in the White Paper, that we need to do far more year on year to ensure that we get the renewables electricity that we need, but the renewables obligation will build up to an enormous level of support for the renewables industry. It will be backed by the capital grants programme that I have just announced over the next four years and it will be reinforced from 2005 by the emissions trading scheme. Let us recognise that, in Britain, we have one third of the entire wind resources of the European Union. Just as we used the coal reserves of our country to build our industrial wealth, so we can use our wind and wave resources to build the energy systems that we need for the future. As for combined heat and power, we are already halfway towards the 2010 target and we have set out in the White Paper sensible, practical steps that will enable us to go the rest of the way. The hon. Gentleman complained about the announcement that I have made today on nuclear energy. Let me make it plain that, although nuclear energy is a carbon-free source of energy, as I said, its economics are not attractive at the moment. The problem of radioactive waste rightly causes great concern to the public. The Secretary of State for Environment, Food and Rural Affairs is working on that issue at the moment. It would have been foolish to announce, as the hon. Gentleman apparently wanted us to do, that we would embark on a new generation of nuclear power stations because that would have guaranteed that we would not make the necessary investment and effort in both energy efficiency and in renewables. That is why we are not going to build a new generation of nuclear power stations now. We are going to put all the priority on energy efficiency and on renewables, but we have not ruled out the possibility of needing some further nuclear capacity to meet our carbon targets. On the issue of energy security, I disagree with every assertion that the hon. Gentleman made. We have access, potentially and already, to the extensive gas fields of Norway, with which we are working on a new treaty. Not only Britain but western Europe as a whole have been buying gas from Russia for the past 30 years without interruption. Already the industry is investing in liquefied natural gas facilities and in storage that, in a new world of much greater dependence on imported gas, will enable us to ensure that we continue to meet our energy security targets as well as our environmental targets.I am not sure whether to thank the Secretary of State or the Prime Minister for the advance leaked copy that I received but perhaps she will pass on my appreciation to whoever it was. Having had a chance to read the report, I believe that it contains a great deal that is very welcome, in particular its emphasis on putting the environment at the centre of energy policy. However, there are some specific issues and questions that I want to deal with.
First, I welcome the emphasis on energy efficiency and conservation, but how can we take seriously the Government's commitment to energy conservation and fuel poverty, given that the Chancellor of the Exchequer is going to cut the warm front budget—the main practical instrument through which funding for energy conservation is delivered—by 15 per cent. from April? Why have the Government not come forward with proposals to replace those in the excellent private Member's Bill that was tabled by the hon. Member for Brighton, Kemptown (Dr. Turner) but sabotaged in the previous parliamentary Session? Secondly, I welcome the emphasis on renewables, but can the Secretary of State confirm that—as I believe is correct—of the £1 billion of funding that she is discussing, not one penny is additional money? All of it constitutes funding already committed to support for renewable power, and the only funding outside that budget that will be made available is an additional £60 million. That contrasts with the hundreds of millions of pounds that her Department is throwing at the failed energy company British Energy. Thirdly, on CHP, I welcome the Prime Minister's lending his authority to the White Paper this morning, but I wonder whether the Secretary of State remembers that four years ago, the Prime Minister launched the Whitehall CHP project—a project that now runs for only four hours a day. In the light of the Conservative spokesman's comments, what concrete action is the Secretary of State taking to deal with the immediate problems associated with CHP, given that output has fallen by 17 per cent. in the past year, and that three quarters of all capacity is currently under-utilised? I congratulate the Secretary of State on standing up to the pressure that she was undoubtedly under to commit herself to new nuclear power in the White Paper. That is to be commended, but given that, in addition to the well-known security and environmental difficulties, the economics of new nuclear power are hopelessly unattractive, why do the Government feel that waiting another few years before producing the definitive view on this issue will add any new information whatever? Does she not accept that further procrastination both blights investment by the nuclear power industry, and makes it much more difficult for new investment to take place in renewables and other sources? Finally, I also welcome the very sane and balanced way in which the White Paper deals with energy imports, particularly gas. However, does the Secretary of State acknowledge that the main threat to this country comes not from dastardly foreigners such as the Norwegians, but from the serious problem that is building up in the industry of large-scale underinvestment in infrastructure such as storage, terminals for liquefied natural gas, and pipelines? When are the Government going to address this very serious and imminent problem?I am grateful to the hon. Gentleman for his overall welcome for the White Paper, and for his especial welcome for its emphasis on the environment. As for energy efficiency, I must warn him—leaks or no leaks—not to believe everything that he reads in the press. The warm homes programme has already been a considerable success. No decision has yet been made on the next stage of its funding, but I stress again—as I did in my statement—the importance of the energy efficiency commitment, and our intention to extend and increase it. Indeed, we shall also consult on its possible extension to the business sector, to ensure that the benefits already brought to the domestic sector are extended to business.
The hon. Gentleman mentioned investment in renewables, and he began by saying that there is no new money at all. I can confirm that there is indeed new funding of £60 million, which comes from the non-fossil fuel obligation, and a further allocation of £38 million that was part of last year's spending review settlement. That was allocated generally for energy, but I have now allocated it specifically to capital grants for the renewables programme. I stress to the hon. Gentleman that support for renewables does not, of course, come only from the taxpayer. It will come, in even more sizeable form, from the renewables obligation and from the carbon trading system. The hon. Gentleman also mentioned CHP. We all know that it is difficult at the moment to make the economics of CHP work, with gas prices high and electricity prices low. That price situation will not exist for ever and, indeed, we spell out in the White Paper how we see electricity and other energy prices rising in the future, especially under the impact of the carbon emissions trading scheme. We are also taking action with the regulator, Ofgem, to ensure that the regulatory framework is properly suited to the needs of CHP and more generally distributed small-scale renewable sources. We are also proposing to put a statutory duty on the regulator to assess all regulatory proposals on their environmental impact. That will help to ensure that we get the regulatory climate right and obtain the investment that is needed in new distribution and storage infrastructure. I know that the Liberal Democrats would like to rule out nuclear power forever, and preferably close it all down today—although that may not be the hon. Gentleman's personal view. The Tories would like us to commit to an entire new fleet of nuclear power stations today. Both are wrong. We have taken the responsible course that will meet this country's energy security needs and deliver our environmental targets.rose—
Order. I ask hon. Members to be concise in their remarks to the Secretary of State, so that more may be fortunate enough to catch my eye.
I welcome my right hon. Friend's statement and the White Paper. In particular, I welcome the incorporation of the timetable of the royal commission on environmental protection, which is more realistic than those we have had in the past. The royal commission placed some emphasis on a nuclear contribution, but—like my right hon. Friend—I think that it is unrealistic to discuss that at the moment, given the financial problems faced by the industry.
My right hon. Friend mentioned the importance of the co-ordination of the research contribution. Can she assure us that the Department will be more aware of the special pleadings that can come from research scientists? In the past, the old Central Electricity Generating Board researchers bedevilled the progress of investment in generation schemes by wanting a few dollars more, and more bells and whistles. We ended up being years behind with most of our major programmes. That meant that prices rose, although no one will be under any illusion that prices will not rise in future as a consequence of the programme of measures that my right hon. Friend has laid out. Will my right hon. Friend bear in mind that there are still 2.5 million people, by her figures, in fuel poverty, most of whom live in hard-to-heat homes and are not necessarily helped by social security changes? It will be essential that she and her team fight and defend the budgets, which some see as inadequate now but which are under threat as a consequence of the costs of the foot and mouth epidemic and their effect on the budgets of the Department for Environment, Food and Rural Affairs.My hon. Friend is right to offer those warnings about the temptation to try to develop a uniquely British solution to technological problems. That was a trap into which the British nuclear industry fell in the past. I am sure that he will welcome the announcement today by the Engineering and Physical Sciences Research Council that it will invest more than £11 million in new research into renewable power generation, drawing upon some of the outstanding science that has been done in that area in the UK.
My hon. Friend is also right to draw attention to the need to ensure that vulnerable households, and people living in inadequately heated houses, are able to meet their energy needs. The White Paper has the balance right between ensuring that we do not price those people out of being able to heat their homes, and ensuring that we obtain private sector investment, and retain public sector investment, in energy efficiency.May I thank the Secretary of State for publishing alongside her White Paper the Government's response to the Environmental Audit Committee's report on sustainable energy? I welcome the remarks made in the White Paper about renewables and the emphasis on the environment. However, now that the right hon. Lady has got her White Paper out of the way, will she inject some urgency and decisiveness into this snail-like policy-making process? It is especially disappointing that a White Paper published now includes a plan for an implementation document in 12 months' time. Are we not in danger of paralysis by analysis?
I think that it was worth spending some months looking at, in particular, the recommendations of last year's report from the strategy unit, and conducting the largest-ever public consultation on energy policy and doing very extensive and detailed economic modelling to ensure that we have a soundly based policy. Of course, I agree with the hon. Gentleman that we now need to ensure that we implement it. By bringing together all the Departments with an interest in and a responsibility for energy policy under the direction of a new ministerial Committee, which my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and I will chair together, we shall have the right framework not only to make policy but, above all, to implement it.
I welcome my right hon. Friend's White Paper and hope that its important aspirations for renewable energy can be achieved. I also applaud the clear commitment to retain the option of using nuclear power in the future.
Is it not clear that carbon trading, unlike the climate change levy, will enhance the economic position and thus the potential contribution from nuclear power in future? I am in no doubt that we shall need that contribution. While my right hon. Friend places much emphasis on energy efficiency and energy conservation, does she recognise that experience tells us that all those millions of disaggregated decisions, taken 24 hours a day, seven days a week, will never be changed simply by exhortation? Does she recognise that she will have to legislate to regulate and that, in doing so, she will also have to ensure that fuel poverty issues are carefully taken into account?I think that I am right in saying that my right hon. Friend was the first ever Minister for energy conservation. He is right: exhortation simply does not work. It certainly does not work in my family when it comes to persuading teenagers to turn the lights off and not to leave the television on standby. We need to build energy efficiency into our homes, offices, factories and appliances. We shall do that through the building regulations, through stricter product regulations in Europe and through voluntary agreements with industry. We shall also do it through this much stronger energy efficiency commitment and through the development of an energy services market. My right hon. Friend is right to say that the new carbon trading system that will apply in 2005 will apply to all sources of electricity.
Can the Secretary of State tell the House what proportion of electricity production is met by renewables at present? If, as I think, the figure is about 3 per cent., will it not be very difficult to increase it by 1 per cent. year on year? As she has already said that she hopes that the whole programme will gather momentum, is that not even more reason for a detailed strategy setting out the contribution that each part of renewables—whether wind and wave or solar—can make. To get the support of the British people to achieve the policy, we need to capture their imagination.
As we say in the White Paper, renewables account for less than 3 per cent. of Britain's electricity. That is certainly less than a number of other European countries have achieved. It is not for the Government to say that so much must come from onshore wind, so much from offshore wind, so much from waves and so on. That is for investors to decide. We stand ready, with the increased capital grants programme that I announced today, to ensure that there is backing from the taxpayer for renewable energy projects. By working with the regulator, we are also ensuring that we get the distribution infrastructure right so that those renewable generators can get their electricity to market. In the White Paper, we are setting exactly the investment and market framework that the energy companies and their investors are seeking and I am confident that they will respond.
I want to discuss the poor position of the UK in regard to solar energy. What discussions has my right hon. Friend had with her right hon. Friend the Deputy Prime Minister on improvements to planning regulations and grants towards social housing? We have to promote the use of solar energy in social housing and public buildings.
My hon. Friend raises an important point. I have talked to my right hon. Friend the Deputy Prime Minister about how we can use the early review of building regulations to ensure that, in setting much higher energy efficiency standards for new build and such things as the refurbishment of roofs, we can massively increase investment in solar energy and similarly energy efficient systems. That will require changes to the planning system and, as is said in the White Paper, we will make changes to the planning system for energy. I am glad that, in the new communities programme that my right hon. Friend announced recently, he made it clear that we will set high standards of energy efficiency in new homes.
It is disappointing that the White Paper contains just six sentences on future research needs. There are no announcements that the Chancellor of the Exchequer intends to put any new money into research. Does the Secretary of State agree that, if we are to get optimum performance from existing nuclear plant, we will need more research into nuclear fission and we will certainly need more research into nuclear fusion? At Culham and elsewhere we should ensure that we at least match the investment in research of the rest of the European Union. If we are to take advantage of the hydrogen revolution, we will need a great deal more research across the board. I hope that the Government will address that issue.
In the White Paper, we set out clearly our support for the energy research group's research priorities. I refer the hon. Gentleman to paragraph 7.32, in which we set out that the research priorities include energy efficiency, nuclear power, hydrogen production and storage, carbon dioxide sequestration, solar photovoltaic energy, and wave and tidal power. The funding for those priorities is available from the enormous increase in the research council's budget that we announced last year as a direct result of the spending review. I hope that the hon. Gentleman will welcome not only that commitment but the fact that the EPSRC is already calling for bids for its new programme of renewable energy research.
I welcome the White Paper, with its emphasis on renewables and its focus on reducing greenhouse gases. I listened with interest to what my right hon. Friend said about investment in clean coal technology. Will she review the investment into that technology with a view to considering how clean coal technology—such as that of the integrated gasification combine cycle unit—could boost British manufacturing and help in the transfer of technology to tackle pollution worldwide?
As my hon. Friend will be aware, we are already working on that. We are talking to the industry about how we can help to develop that particular clean coal technology. I know that he will welcome the fact that we are investing some £25 million over three years in the cleaner coal technology programme
In her statement, the Secretary of State made a commitment to cut UK carbon dioxide emissions by 60 per cent. by about 2050, with real progress by 2020. How does she define "real progress"? Would it not be better to have a specific target for 2020?
As I said in my statement, we have set out very clearly that, by 2020, we hope to double the contribution that we have set from renewable energy sources, compared with the target of 10 per cent. by 2010. That is one of the ways in which we will measure the progress that we need to reach the overall 2050 target. As I said earlier, we are on course to meet our 2010 Kyoto targets and, we believe, our more challenging domestic targets. However, in about 2005, we will enter the discussions for Kyoto 2, which will expire in about 2012. At that point, we will be able to see what further commitments we need to make internationally for the period ahead. That, too, will be part of the benchmark that we use to assess whether we are staying on track for the commitment that we are making today of 60 per cent. by 2050.
I, too, warmly welcome the White Paper, particularly its accelerated focus on renewables, but does my right hon. Friend accept that many people in the energy industry think that 25 per cent., or even 30 per cent., of our energy needs is perfectly achievable from renewable sources by 2020? Does she also recognise that, given the way that Ofgem has introduced the new electricity trading arrangements, it is possible that there might be concern about whether it has understood the White Paper and, indeed, is capable of delivering in a helpful way the objectives for Ofgem that are contained in it?
My hon. Friend is right to say that some people, particularly in the green movement, believe that a 25 to 30 per cent. share of electricity from renewable sources is perfectly achievable. We considered whether that should be our policy aim, but, on present information, the costs of achieving that would be very substantial indeed, and if we go above 20 per cent., the costs to the consumer increase much faster. I believe that it is important to get on the right course with the practical policies that I have outlined, including the renewables obligation.
My hon. Friend refers to Ofgem. Let me stress again that we will put Ofgem under a duty to conduct and publish an environmental impact assessment of all its regulatory proposals. We will also revise and strengthen the environmental guidance that we give to Ofgem under the Utilities Act 2000, in the light of the White Paper, but Ofgem is already consulting on the proposals for the British electricity trading system—the Electricity (Trading and Transmission) Bill—and that will give it a further chance to ensure that the regulatory framework meets the emphasis on renewables that we have set out in the White Paper.I welcome the Secretary of State's environmental aspirations, even though I share other hon. Members' scepticism about whether they are achievable. She has made it clear today that there is a future for coal-fired generation, provided that it uses clean coal technology. Given that coal-fired generation, without clean coal technology, is uneconomic and power stations are closing down, how does she propose that clean coal technology should be financed? I refer not to her research programme, but to how the investment in clean coal technology will be paid for at present market levels.
The hon. Gentleman raises an extremely important and interesting issue. The important feature of the White Paper, as I have tried to stress, is that we are giving long-term signals to the market. We have set out very clearly our own assessment, on current information, of what we think will happen to electricity prices. That assessment and the policies that we have announced today set the climate and the framework in which investors will make their decisions on investing in coal and, indeed, other generating plants, but we also know—I reflected on this in my statement—that coal-fired electricity generation has a very important contribution to make because it is so flexible. Of course, that is an important factor, and investors and energy companies will take it into account when they make those decisions.
I welcome the White Paper proposals for improved energy efficiency, the growth in renewables and, of course, clean coal technology and sequestration, but taken together, even if we achieve that more environmentally sensitive energy policy, does the Secretary of State accept her own Department's figures showing that, by 2020 at the outside, 80 per cent. of our energy needs could be met from gas, 90 per cent. of which will be imported? Is that really a secure, reliable and sustainable energy policy? If that is the case, will she keep that matter under review?
I have already outlined to the House why I believe that we can achieve our energy security goals, as well as our other energy goals, with much greater dependence on imported energy, particularly gas, than we have at the moment, but of course we will keep that under review. As the White Paper says, we will strengthen the arrangements for jointly monitoring, particularly with Ofgem, security of supply considerations, and we will ensure that Ofgem regularly reports on the security of supply and on the implications of its decisions for future security.
A number of farmers in my constituency are excited by the potential—I put it no more strongly than that—of biofuels. What discussions has the Secretary of State had with the Chancellor about the duty cut necessary to kick-start the industry, and what part does she think biofuels could play in meeting our future energy needs?
Like the hon. Gentleman, I think that bio-energy has a contribution to make to our future energy needs, particularly in light of the need for our agricultural communities to diversify and the need to reform the common agricultural policy, and this is a thoroughly timely opportunity. My right hon. Friend the Chancellor, who has led the way in ensuring that we have an environmentally sensitive tax system, said in the pre-Budget report that he wants to consult further on fiscal incentives and I am sure that that will take into account the need further to encourage the development of biofuels.
Is the Secretary of State aware that it is not a good idea to rely on so much imported energy in future? The situation is bad enough now. At the last count, the trade deficit was about £34 billion, which is the highest figure that we have experienced. In that context, would it not be a good idea to concentrate on renewables? I accept that they will make little inroad into the problem, but we must concentrate on industries that supply energy. If it is possible for a few hundred miners in south Wales to take over Tower colliery as a co-operative and to keep it going against the odds for seven or eight years, yet the giant UK Coal can close down Selby, would not it make more sense for the Government to take over Selby, as they took over Railtrack, to offset the trade deficit and to ensure that those massive supplies of coal, from a field that we did not start using until 1988, keep coming?
I hate to disappoint my hon. Friend, but I do not propose to renationalise Selby. My hon. Friend the Minister for Energy and Construction and I have been working on an investment aid scheme that will bring hope to hundreds of our miners. It will also help to ensure that the extensive coal reserves that this country still enjoys are properly used for the future.
The Secretary of State must be aware that even if we achieved 20 per cent. generation from renewables by 2020, if at the same time the nuclear plant, which is carbon free and provides 20 per cent. of our requirements, closed down, our ability to meet our carbon emissions targets would be severely compromised. In that respect the right hon. Member for Copeland (Dr. Cunningham) is right to say that the carbon emissions trading scheme is integral to the economics of future nuclear generation and to our meeting our carbon emissions targets. Will the Secretary of State say that in January 2005, when a carbon emissions trading scheme that includes electricity generation is to be introduced, the climate change levy will be disapplied from the electricity generating industry?
As the hon. Gentleman knows, decisions on taxation, and therefore on the climate change levy, are a matter for the Chancellor. However, as the White Paper says, the climate change levy will of course be reviewed in light of the introduction of the carbon emissions trading system.
Although I welcome the announcement of an investment aid scheme for the coal industry, it has to be said that the White Paper goes out of its way to ram home the message that the indigenous coal industry has only a short-term future, despite the fact that this island is built on coal. We know that coal is a reliable fuel and, with modern IGCC technology, not only can we generate electricity with virtually zero toxic emissions, we can capture nitrates, carbon and hydrogen. Instead of seizing an opportunity to plan for our energy needs, however, the Government have left it to be decided by market forces. It beggars belief that they are planning to be a net importer of energy.
As my hon. Friend knows, over the past three years we have put £160 million of coal aid into the British coal mining industry. Indeed, my hon. Friend the Minister for Energy and Construction has done everything possible to help to ensure that the Hatfield colliery in my hon. Friend's constituency has a viable future. My hon. Friend knows the industry well. I am sure he understands and accepts that in a mature coal industry, geology is against us. That, I am afraid, was clear from the near-tragic flooding and closure of Longannet just a year or so ago. We are doing what we can, but we should not delude ourselves that British coal will have the same role in our energy system that it had over the past 100 years.
What is the Secretary of State's estimate of the additional costs of electricity generation as a result of meeting her new 20 per cent. renewables target?
We spell out in the White Paper the best estimates that we can offer of the increase in electricity and gas prices for domestic consumers and industry over the next 15 to 20 years. Let me stress that because electricity prices are at such a low point, prices for most consumers will still be below what they have been paying for the past 20 years or so even if they rise to the highest anticipated level of the estimates. I believe that we have the balance right between setting incentives for energy efficiency and cleaner electricity, and ensuring that our businesses stay competitive and our vulnerable consumers are protected.
I welcome my right hon. Friend's statement, in particular her reference to the contribution that energy conservation and the reduction of energy use can make. May I make a modest suggestion about the warm front scheme? It is my constituents' experience that warm front grants for central heating boilers are only available to replace on a like-for-like basis. I am sure she will agree that it would make more sense for the best available technology to be used in the warm front scheme because new boilers for domestic use are cleaner, cheaper and greener in every respect, both to install and to run, than the old-fashioned systems. Will she support a review of the warm front grant in that respect?
My hon. Friend raises an important point. The review of building regulations will consider the need to move towards condensing boilers so that they become the standard for replacements and new installations. I was not aware of that problem with the warm front grant and shall draw it to the attention of my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs.
Is it the case that we are not being offered the radical alternatives that were promised? We seem to be maintaining the existing policy of following whatever the market dictates on traditional fuels while superimposing an unproven wish list on renewable energy with no analysis of the structural changes that will be required to put it in place.
The hon. Gentleman is quite wrong. We have set out a clear strategy for ensuring that we have the right market framework, with the right set of incentives, backed up, where necessary, by regulation and public sector investment to meet the overall targets for CO2 reductions by 2020 and 2050 in a way that preserves security of supply and competitive markets.
Is my right hon. Friend aware that the measures on renewables and energy efficiency which lie at the heart of her policy should be welcomed by hon. Members on both sides of the House? She should not be criticised for the ambitiousness of her targets providing that if they are not reached—she states in the White Paper that they are highly uncertain by their very nature—she has an alternative plan, be it coal or, indeed, nuclear energy. In the latter respect, will my right hon. Friend ensure that, as a minimum, we retain a skills base that will enable us to use this technology should it prove necessary?
My hon. Friend raises an important point. We say in the White Paper that we need to ensure that we have nuclear engineers and scientists available for the future, not only for possible new nuclear build but to manage the ongoing waste issue. I am glad to say that the trade unions that represent the work force in this area have said today that they welcome the White Paper and believe that it offers the right way forward on skills.
I welcome the emphasis that the White Paper places on wind energy, and especially offshore wind energy. My right hon. Friend knows that I represent the most easterly part of the country. I believe that it is the windiest part of the country as well. Is my right hon. Friend aware that we are keen to see something that used to be seen as a negative turned into an asset for the country?
We are also keen to grasp the economic opportunities of developing a wind energy industry. I am talking about manufacturing the machinery that will generate the wind power. Will my right hon. Friend support that and ensure that the Regional Development Agency and other bodies that her Department funds fully recognise that this is a commercial opportunity and that they will need to act quickly if we are to gain jobs from it?I am grateful to my appropriately named hon. Friend for his support. I entirely agree with him about the huge potential of the wind energy industry. That is why we are backing Renewables UK in ensuring that we build a United Kingdom supply chain, to make sure, for instance, that the sort of skills, expertise and jobs that we developed for the offshore oil industry are now developed in the wind industry, to generate more jobs and more prosperity not only for my hon. Friend's constituents but for many others.
I am pleased to follow on from my hon. Friend the Member for Waveney (Mr. Blizzard). My right hon. Friend will know that there are plans for not just one wind farm but three new farms off the shores of my constituency. Will she bear in mind the time scale that is involved in giving the planning consents that are necessary for such development? Although there has been a lot of consultation with the fishing industry in Fleetwood, there are concerns about how long people will have to wait until decisions are made. Clearly they need to plan for the future, depending on what the decision will be.
My hon. Friend is absolutely right. Current planning time scales are much too long. That is why I have said in the White Paper that we will apply to energy infrastructure projects, including wind farms, the same planning reforms that my right hon. Friend the Prime Minister is introducing generally. I hope that without in any way compromising the need to engage local people in these decisions, we can ensure that we make such decisions much more quickly and thus reduce the uncertainty and costs to industry.
Should we be giving more attention to the virtually untapped indigenous source of power, which is tidal power? We know that one scheme can provide 5 per cent. of our electricity needs. Many small schemes, such as tidal islands, could be built at low cost and provide renewable electricity which is not seasonal, not intermittent, but continuous. It could provide a base load of electricity with the tides sweeping round our coasts at different times. Is it not right that we should invest in that form of electricity, which is non-polluting, benign, British and inexhaustible?
My hon. Friend is absolutely right. The potential for tidal power is extremely great. He will be aware that we have already contributed about £1.6 million to a scheme in the Severn, which my hon. Friend the Minister for Energy and Construction assures me operates on the inverted windmill principle. It is not the only tidal wave power scheme that we are supporting. Like my hon. Friend the Member for Newport, West (Paul Flynn), I feel that there is great potential there to be fulfilled.
Will my right hon. Friend state clearly that she sees a long-term future for coal that has been mined in this country rather than imported? If so, will she finally get a grip on a company whose corporate strategy seems to involve the closure of mines, thereby sterilising proven stocks and at the same time making my constituents and others redundant?
I am clear about the fact that there is a long-term future for coal generation. As regards British coal, we are in a constructive dialogue with UK Coal. My hon. Friend the Minister for Energy and Construction is in talks with UK Coal to ensure that, with the help of the investment aid scheme on which we are working, there will indeed be a long-term future for a number of British coal mines.
rose—
Order. We must now move on to the main business.
Points Of Order
4.50 pm
On a point of order, Madam Deputy Speaker. Since we last debated Iraq, we have been presented with a risible, plagiarised dossier on weapons of mass destruction. We have also seen huge demonstrations in London and Glasgow and elsewhere round the world. We have had the Archbishop of Canterbury, the Cardinal Archbishop and His Holiness the Pope repudiating the assertion of some kind of moral justification for war on Iraq. We are now told that there will be a debate on Wednesday, and we are given every indication that it will be a broad motion, to which we can all sign up. Many of us believe that this is make-your-mind-up time on a critical issue of our times. May I seek your advice as to the circumstances in which a Back-Bench amendment to the Government motion might be acceptable?
If I recall correctly, the Leader of the House said earlier that the Government motion would be tabled today. Perhaps when the hon. Gentleman and his colleagues see that, they may decide whether they wish to table an amendment, which will enable the Speaker to make a decision whether to select it.
Further to that point of order, Madam Deputy Speaker. The Leader of the House said that the selection of an amendment is a matter for the Speaker, which the House recognises, of course. Some would say that the country was not divided, with only a small measure of support for the Government. Could you impress on the Speaker the view from the Back Benches that any amendment that is selected should accurately reflect the simple argument that the Government have not yet made their case for war? It is important that the House and the country should know that Parliament is debating these matters in a way that most accurately reflects national sentiments.
I understand the gravity of the situation, but we must first see the motion as tabled, and hon. Members can then decide the most appropriate amendment. As I said earlier, it will be for the Speaker to make his decision.
On a point of order, Madam Deputy Speaker. During the recess, the Deputy Prime Minister wrote to me notifying me that a statement was being made in the House of Lords about funding to local authorities for the first year's supporting people programme. He wrote:
He provides no explanation for that. The programme affects the housing of a million elderly people and has a £50 million effect on local government funding. At the same time, £400 million is being taken off that funding through the abolition of social housing grant, about which local authorities have not been notified. This Friday, the local authorities must, by law, set their budgets. This is a shambolic and incompetent way to run local government finance. Have you had any indication of a statement from the Deputy Prime Minister this week, so that the matter can be sorted out as soon as possible?"I regret it has not proven possible to make this announcement while the House of Commons was sitting."
I have had no indication from any Minister that they wish to make a statement to the House, but I am sure that a note will have been made of the right hon. Gentleman's comments.
Orders Of The Day
Industrial Development (Financial Assistance) Bill
I inform the House that Mr. Speaker has selected for discussion the amendment in the name of the Leader of the Opposition.
4.54 pm
I beg to move, That the Bill be now read a Second time.
The purpose of the Bill is to increase the cumulative limit on financial assistance that may be provided under section 8 of the Industrial Development Act 1982. A useful starting point would be to explain what the section 8 power is and what it can be used for. Section 7 of the 1982 Act allows financial assistance to be offered in the assisted areas of the UK if it is likely to provide, maintain or safeguard employment. Section 8 has much broader scope and provides the legislative basis for financial assistance, both inside and outside the assisted areas. It gives wide discretion to provide financial assistance to industry if, in the opinion of the Secretary of State, it isThat can be a geographical area as well as a sector of the economy. Assistance can also be provided if it is "in the national interest" and if it cannot be provided in any other way. The precise purposes for which assistance may be offered are set out in section 7(2) of the 1982 Act. They include promoting the development, modernisation or efficiency of an industry; the creation, expansion or sustaining of productive capacity in an industry; promoting the reconstruction, reorganisation or conversion of an industry; encouraging the growth of an industry; and encouraging the arrangements for ensuring an orderly contraction of an industry. The legislation is drafted in such a way as to permit other Secretaries of State, as well as the Secretary of State for Trade and Industry, to use the section 8 power. Following devolution, Ministers in the devolved Administrations are also able to use the powers of section 8 to fund their own activities. If they do so, their expenditure counts towards the cumulative limit. Assistance using section 8 as the legislative basis has been subject to a statutory limit since the Industry Act 1972. In calculating the cumulative spend under section 8, it is necessary to take account of all expenditure since then. More than 60 measures of financial assistance to industry have been established using the section 8 power since 1972. Of those, 15 are currently open, which I will return to shortly. The 1972 Act contained a limit of £150 million on section 8 expenditure, but provided for that limit to be raised by a sum not exceeding £100 million on not more than four occasions, by order made with the consent of the Treasury. The Act stated that an order should be contained in a statutory instrument and that a draft order should be approved by a Commons resolution. The limit was reset by the Industry (Amendment) Act 1976 to £600 million, with provision for up to four increases, by order, of up to £250 million each. The Industry Act 1982, which the Industrial Development Act 1982 consolidated, raised the ceiling to £1.9 billion. The system of affirmative orders was retained and section 8(5) of the Industrial Development Act 1982 allows the limit to be increased four times by up to £200 million on each occasion. This provides for a maximum ceiling of £2.7 billion. The Government have sought parliamentary approval to increase the limit on three occasions to date, most recently in January 2002. The current limit is £2.5 billion. As this is likely to be reached by the end of the current financial year, a fourth and final order under existing legislation is needed before the Bill completes its passage through Parliament. A draft order raising the limit to £2.7 billion was laid in the House on 30 January and will be debated in Committee next week. At the end of March 2002, the cumulative expenditure for all section 8 schemes since 1972 was almost £2.35 billion. For the current financial year, the forecast is that a further £167 million will be spent, with a further £208 million for the financial year 2003–04. Based on current levels of spend, the maximum amount allowable under existing legislation—£2.7 billion—is expected to he reached early next year. It may be helpful if I explain what contributes to the cumulative limit. The 1982 Act states that the aggregate of sums paid, plus liabilities under any guarantees given, less any sum received by way of repayment of a loan or of sums paid to meet a guarantee, count towards the cumulative limit."likely to benefit the economy of the United Kingdom, or of any part or area of the United Kingdom".
Before the Minister moves on to the schemes that fall within section 8 expenditure, I am interested in the build-up of total commitments. I may have missed something, but I looked in vain in annual reports on the Industrial Development Act 1982 for a cumulative total, building up year on year, of section 8 expenditure. Can the Minister give some indication of the pace at which those commitments have built up over the past five years in comparison with the preceding years?
I shall come to that in due course when I explain how we have had to come back to the well, so to speak, to replenish stocks. I am surprised that that information has not been in the annual reports—it should have been.
This small Bill of just two clauses is essential to enable the section 8 power to continue to be used by the Department of Trade and Industry, other Departments and the devolved Administrations to give financial assistance to industry. Without an increase in the limit, the legislative basis for the various schemes set up using section 8 would be exceeded when the absolute limit of £2.7 billion is reached, rendering unlawful Ministers' further use of that power. The Bill raises the financial ceiling in section 8(5) of the Industrial Development Act 1982. It retains the structure of tranches in the existing legislation but replaces the numerical ceilings with new, higher ones. Clause 1 replaces section 8(5) of the 1982 Act by increasing the initial ceiling from £1.9 billion to £3.7 billion and the subsequent four tranches from up to £200 million to up to £600 million each. Clause 2 gives the short title of the Bill. The other provisions of section 8 remain unaltered.The Minister seems rather coy about what he is actually doing. Will he confirm the arithmetic? Is his position that he inherited a total ceiling of £2.1 billion when the Government took office because the cap had been increased once. and that he now proposes to increase the total ceiling available to £6.1 billion—in other words, trebling it?
For the sake of clarity, the financial ceiling that has existed since 1982 is £1.9 billion. I believe that we had been to the well twice for £200 million by the time we came into government in 1997. We went back to the well again last year, so we have been three times and there is one more time left. We have reached a situation whereby we have spent £2.5 billion and there is another £200 million left. We are now suggesting, 20 years after the 1982 Act, that we replenish the stocks. While maintaining the four tranches, we want to increase the ceiling on those tranches—as, indeed, did the previous Government in 1982—to £6.1 billion.
There are no plans to change the threshold at which individual offers of assistance under section 8 are subject to the approval of the House of Commons. That threshold, fixed by section 8(8), remains at £10 million. The aim of subsection (8) is to give Parliament the opportunity to consider larger cases of assistance to industry. As there have only been a couple of occasions in recent years on which that has been required, there seems to be no reason to raise the threshold at this time. The new limits in the Bill were chosen to provide more regular parliamentary consideration of the section 8 power. If we consider existing legislation, 14 years elapsed before the first order was needed, and there were subsequently only four years, two years and one year between orders. Based on the average spend forecast for the next four years of £185 million per annum, the new initial ceiling is expected to last for approximately six years before the first order is needed. Increases through affirmative order will be required every three years after that until the new ultimate limit of £6.1 billion is reached. On that basis, the proposed new limits are expected to provide legislative cover to enable assistance under section 8 to continue for almost 20 years. Section 8 is an enabling power. The Bill provides the statutory authority to continue expenditure on measures that have already been announced and enables the introduction of new measures as appropriate. However, I am not announcing new measures today. The Bill has no regulatory impact on business and a copy of the regulatory impact assessment was placed in the Library today. Section 8 is not the only legislative base on which to enable financial assistance to be offered to industry. Section 5 of the Science and Technology Act 1965 and other sections of the 1982 Act also provide for that. Section 7 of the 1982 Act provides for the regional selective assistance scheme, the main regional policy instrument. Some industrial sectors such as aerospace are covered by specific legislation.I appreciate that the Minister is not announcing any new schemes under section 8 today, but the explanatory notes to the Bill specifically refer to the urban post office network reinvention programme, which costs approximately £450 million. Am I correct that that money has not yet been spent and that, for three years, it creates a much higher rate of expenditure under section 8 than in the recent past?
The hon. Gentleman is right. The money, which Parliament authorised in November, has not yet been spent.
When assistance under section 8 is regarded as state aid, it must be compatible with European Community state aid rules. The European Commission will need to be notified of and approve any new scheme under section 8 that constitutes state aid before it can be introduced. However, if one of the block exemptions covers it, simpler notification procedures can be adopted and the aid can be granted immediately. The Commission has been informed of our intention to raise the limits. The Small Business Service, which was established in April 2000 to meet the needs of small businesses, administers eight of the current assistance schemes. The Government acknowledge that there were weaknesses in the market's provision of finance to small and medium-sized businesses. The SBS was established partly to ensure that Government support programmes for small firms dealt with their needs at all stages of their development and helped to bridge the funding gap that many companies face. One of the main SBS programmes is the enterprise fund that was announced in the competitiveness White Paper in 1998. It aims to stimulate more finance for small businesses and tackle marked weaknesses in the provision of the finance. Four elements of the enterprise fund use section 8 as their legislative basis. First, the small firms loan guarantee scheme, which was set up in 1981, is the oldest section 8 scheme. It offers guarantees on loans to small firms with viable business proposals that are unable to obtain conventional finance because they lack assets as security against the loan. By providing a guarantee against default, the scheme encourages lenders to lend when they would not otherwise do so. Secondly, regional venture capital funds were established to tackle the equity gap experienced by SMEs that seek investment of up to £500,000. Thirdly, the UK high technology fund was set up to encourage institutions to invest in early-stage. high-technology businesses and to increase the amount of finance available for investment in technology-based businesses. Fourthly, the early growth funding initiative seeks to stimulate small amounts of risk capital for start-ups and growing businesses that are usually too risky for the banks or too small for venture capital. The first of those, the London seed capital fund, was formally launched in December 2002. The Small Business Service also administers the enterprise grant scheme, which is a discretionary scheme for SMEs in areas of special need. Enterprise grants are given to businesses to finance capital investment projects. Another main SBS activity is the Phoenix fund to promote entrepreneurship among disadvantaged groups. Two elements of the Phoenix fund use section 8. The first is support for community development finance institutions, which are organisations that lend to enterprises that the banks consider too risky. The second is the Government's investment, in parallel with private sector investors, in the bridges fund, which is a community development venture capital fund that makes equity investments in growing businesses in disadvantaged communities that tend to be overlooked by established venture capital funds. There is also the business incubation fund, which helps to improve the chances of survival and growth of start-ups and early-stage SMEs through increasing availability and access to business incubation. Section 8 has also been used for schemes that address the needs of particular industrial sectors. The UK coal operating aid scheme, which was set up to help the coal industry through a period of transition, closed at the end of December. It was established to prevent the premature closure of viable mines owing to short-term market problems. The Government are in negotiation with the European Commission over our intention to use section 8 to support redundancy payments arising from the closure of UK Coal's Selby complex. Section 8 was also used last year to support supplementary redundancy payments to those who lost their jobs following the sudden and catastrophic flooding of Longannet colliery, which was the last deep coal mine in Scotland. Section 8 is also used to enable the Government to make payments to redundant steelworkers through the iron and steel employees readaptation benefits scheme. Most recently, section 8 has been used for the urban post office reinvention programme, which the hon. Member for South Cambridgeshire (Mr. Lansley) mentioned, to enable the Post Office to carry out its programme to restructure the urban post office network, and to ensure that sub-postmasters whose offices close are adequately compensated for the loss of value of their business, and that those who remain can benefit from investment grants. The House debated and approved that funding on 15 October 2002. Part of the assistance offered through the Rover taskforce programme uses the section 8 power. The funding is to enable the regional development agency, Advantage West Midlands, working with business link operators, to help businesses in the region to modernise and diversify. Section 8 is also used by the National Assembly for Wales to operate that country's regional innovation grants scheme and the Assembly's investment grant scheme. Those initiatives are funded by the Assembly, but the expenditure counts towards the cumulative section 8 limit. Those are the 15 current schemes under section 8.I note what the Minister said about funding from the National Assembly for Wales. Is it additional funding that is made available to devolved Administrations for these schemes or does it come out of their existing block grant, even though it counts towards the cumulative total under the Act?
No, it comes out of the settlement for the Welsh Assembly. Unlike English schemes, the schemes in Wales do not require Treasury approval and they count towards the cumulative total.
Having gone through the 15 schemes, I am aware that only three years ago, during the debate in Standing Committee on the second order, we estimated that replacement legislation would not be needed until 2010. In true confession mode, I shall try to pre-empt any comments from Opposition Members about the increase in the number of financial assistance to industry schemes set up using the section 8 power, and the acceleration in section 8 expenditure over the last three years. This issue should be considered against the DTI's total spend on business support, which has remained at around £1 billion per annum in recent years. A fundamental change is taking place in the DTI's business support activities. The Secretary of State unveiled a complete overhaul of the DTI's business support programmes in November, following a comprehensive review. The problem that we identified—initiative overload—was partly symptomatic of enthusiasm in the DTI for assisting business. The purpose of the review is to channel that energy in a more strategic direction. Businesses said that they were confused by the plethora of DTI schemes, and found them difficult to understand and access. The aim of the review is to sort out the muddle, cut out inefficiency and focus on our strategic priority, which is to drive up UK productivity.When the Secretary of State appeared before the Trade and Industry Committee on 29 October, she said that there were 183 schemes within the DTI's ambit, and that she proposed a major simplification of those schemes. As far as I am aware, the Select Committee has not been told the outcome, although the Secretary of State said that it would happen "certainly by Christmas". It did not happen by Christmas, and we have seen nothing since. Perhaps the Minister can enlighten us on when we will see something.
It did not happen by Christmas because it took longer than we had thought to do a thorough job. We are hoping to launch this stage of business support simplification in April, and I am sure that the Select Committee will be among the first to know about it.
To ensure that DTI business support is both strategically targeted and simple for business to access and use, all existing schemes are being closed. New business support offerings, some of which will incorporate the best elements of existing schemes, will be produced under a new mechanism approved by the business support review, and will focus on the drivers of improved productivity. We are not cutting the amount that we spend on business support, but we will greatly reduce the number of business support products that we offer. The new approach will ensure that funds are allocated to activities that offer the best value for money.I am grateful to the Minister for giving way yet again. I certainly support the streamlining that the Secretary of State announced, of which the Minister is now giving more details. I understand that an American business woman, Mrs. Fields Wicker-Miurin, will chair the new investment committee that will make all the decisions on the various support schemes. Will they include some of the schemes covered by section 8?
As the hon. Gentleman will understand, I am not yet in a position to announce the outcome of the review, but I am sure that many of the schemes governed by section 8—after "year zero", when the schemes have been closed and then incorporated in a much simpler structure—will be there, although perhaps under different titles and accessed in a different way. But this is not a debate about the DTI review of business support; it is a debate about section 8 of the Act.
Will the Minister give way?
I will give way to the hon. Gentleman one last time.
Is it not surprising that the Minister should present us, in late February, with legislation designed to increase substantially the amount to be spent on these schemes, while proposing to tell us in early April what the product will look like? Is he not asking the House to pay for the product when he will not tell us what we are buying until a few weeks down the line?
No, I am not. We are not talking about the DTI review; we are talking about 15 schemes funded under section 8. As the hon. Gentleman said, there are a good many more schemes—about 160. That is part of the problem for people who are confused by the process of gaining access to DTI support. Moreover, if the Bill is not passed now we shall not be in a position to finance some very important schemes—some introduced by the last Administration—later this year.
Will the Minister give way?
I will give way just once, because the hon. Gentleman is so utterly charming.
I thank the Minister, who is better able than most to make sound reasonable that which on closer inspection may prove not to be so.
The Bill's very title has a certain 1960s or 1970s ring. In what circumstances does the Minister think that it would be appropriate—in this century, or this decade—for the Government to expend resources to create"productive capacity in an industry"?
The Bill may look from its title as though it is wearing flares and tank tops. If we go back to the early 1970s, the legislation was used originally, to use the parlance of the time, to bolster lame-duck industries. That changed completely. I am not sure I am equipped to answer the hon. Gentleman's precise point, but I remember one scheme from, I believe, November 2001. Customers of Atlantic Telecom in Scotland were faced with losing their telecommunications systems overnight because the company went bust. The use of funding in co-operation with Scottish Enterprise enabled those business customers to continue to have a telephone system until they were able to find a new one. These days there are many varied reasons why the scheme is used. They might differ from the reasons in the 1970s but they are still valid.
As I said, we are not cutting the funding that we spend on business, to draw a line under the DTI review of business support. I provide this information as background. This short Bill is not about the quality of the business support offered by successive Governments. It is before the House today because, before the Government can incur any expenditure on such schemes, there has to be an appropriate statutory power. Section 8 of the Industrial Development Act 1982 provides that power. The Bill allows for the continued use of section 8 as the enabling power for financial assistance to be given to business inside and outside the assisted areas. On that basis, I commend the Bill to the House.5.21 pm
I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:
I declare my interests, which are in the Register of Members' Interests. I will come to the amendment in a moment, but first I thank the Minister for the full explanation that he has given. I make it clear that we support many of the principles behind the Bill. After all, it was a Conservative Government who introduced the original Act in 1982. We certainly strongly support some of the section 8 schemes. Some of our concerns relate to parliamentary scrutiny and accountability as well as the lack of detail in the Bill. On scrutiny, as the Minister explained clearly, the Bill amends the cumulative limit in section 8(5) of the 1982 Act and sets a new higher figure of £3.7 billion as the initial ceiling. It then sets a new figure for the four tranches, which go up from £200 million to a pretty hefty £600 million each. I understand from the Minister that the new limits were chosen by a 20-year roll-forward of the existing limit of £2.7 billion in real terms, using a 2.5 per cent. gross domestic product deflator. The Minister pointed out earlier that, based on current spending, and assuming that the rate remains constant, the new ceiling will last for six years before the first order is needed, with increases by order every four years after that. To my surprise, I see that the Department of Trade and Industry's briefing note says that the DTI believes that the new regime will lead to more parliamentary scrutiny. It bases that conclusion on the premise that it was 14 years before the first order was needed in 1996, but the 1982 Act was a new initiative setting a new ceiling of £1.9 billion. The previous Government would have had to spend at a furious rate to reach the ceiling before 1996. Three orders came hard on the heels of the one in 1996. There was one in 2000 and one in 2002. We were going to have a fourth one tomorrow but I gather that it has been postponed until next week. Since the first ceiling was reached, Parliament has had the chance to scrutinise the Act and the relevant section 8 schemes every 20 months. That compares favourably with the 4.5 years or 54 months anticipated by the new Bill's regime. We are talking about much bigger sums, as my hon. Friend the Member for Sevenoaks (Mr. Fallon) made clear. The urban post office network reinvention scheme alone will take up a very large amount of money. Furthermore, the Secretary of State has made it clear that she wants significant consolidation of the plethora of section 8 schemes, which is why we welcome and support her business support review. However, that is surely a very good reason for initial scrutiny to take place well before 2009. As my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) pointed out, it would surely have made much sense for the Secretary of State to complete her business support review before Second Reading. Either next week or the following week, the statutory instrument extending the original phase 1 will be introduced. That will give the Government considerable leeway, so Second Reading could easily have been postponed, thereby enabling the business support review to be launched at the same time. That surely would have constituted more joined-up, grown-up and sensible government. On scrutiny, we will look at some constructive suggestions in Committee, and we shall certainly consider including in the Bill a requirement for the Minister to come to the House every two years. That is not unreasonable, given that, on average, Ministers have come to the House every 20 months for the past seven years, and that debates on delegated legislation in Committee are short and hardly onerous. In 1996, when my former colleague Phillip Oppenheim was taking such legislation through, the debate lasted 14 minutes. The then Opposition did not provide much scrutiny, but in 2000, scrutiny increased to 18 minutes, in 2002 to 55 minutes, and perhaps next week we can crack the one-hour mark. It is to enhance the scrutiny available to this House that we intend to table constructive amendments in Committee. The different schemes can be found on the DTI website. Alternatively, one can refer to the annual reports relating to the Industrial Development Act 1982, the last of which was published on 27 June 2002—my hon. Friend the Member for South Cambridgeshire referred to it—and covers the year to the end of March 2002. It would have made good sense to advance this year's report to, say, 1 April—not a very difficult task—so that it could be combined with Second Reading. That way, at least we would have had more detail on what is happening with these different schemes. My hon. Friend and I have had a close look at last year's report. Much of it is already out of date, and new schemes are to be launched. We are being asked to vote for very significant extra resources for Her Majesty's Government without having up-to-date information before us. I do not propose to go through all the schemes in detail. The Minister has already covered many of them—I am grateful to him for that—and in his inimitable, lucid way he explained exactly what they do. In the main, we are happy with how they are operated on the ground. They are efficiently managed and run, and I pay particular tribute to the tireless work of the Small Business Service in running the bulk of them. We support the enterprise grant scheme and, in particular, the small firms loan guarantee scheme, to which I shall return. However, we are cautious about the business incubation fund, which was announced to a terrific fanfare in 2001. Is it true that no loans have so far been agreed under its terms? We are also concerned about a number of aspects of the Phoenix fund—the somewhat appropriately named initiative launched by the right hon. Member for Tyneside, North (Mr. Byers). We applaud attempts to encourage enterprise, small business and entrepreneurship in the most disadvantaged areas, and within disadvantaged groups. Such an initiative will undoubtedly appeal to my hon. Friend the Member for Buckingham (Mr. Bercow), and we must try to help these people. I am sceptical—as, I am sure, is he—about community loan funds or not-for-profit funds that focus on non-profit-making social enterprise. They may be laudable, but is it appropriate for the DTI to be involved? I want to see real evidence of success and achievement before we can support community development finance institutions."this House declines to give a Second Reading to the Industrial Development (Financial Assistance) Bill because it amends section 8(5) of the Industrial Development Act 1982 in a way that diminishes accountability to Parliament on the levels of future financial assistance to industry."
My hon. Friend correctly anticipates my mindset on the subject. Does he accept that, as a working premise for the Opposition, it is important to distinguish between funds that can legitimately be spent from time to time as a palliative or cushion in the event of the breakdown or destruction of a whole industry, and a generalised largesse on the part of a Government who mistakenly believe that they can run industry?
My hon. Friend is right, and I shall give an example that shows up some of the flaws of section 8. The mini-schemes may be laudable, but should such work be done by the DTI under that budget?
I am not very impressed by the UK high technology fund, which—according to the DTI's briefing paper—isThat is bizarre. Should the DTI be hunting round the country for high-tech success stories? Should the Department be in the business of trying to back technology sector winners, when we have one of the most sophisticated and vibrant venture capital sectors anywhere in the world? We submit that the DTI should not do that, and that the money would be better saved or reallocated to the small firms loan guarantee scheme. The Minister mentioned Atlantic Telecom. Hon. Members may recall that Atlantic Telecom was a stock market darling whose share price went up to about £13, but which went spectacularly bust in October 2001. Most of its operations were sold as going concerns by the administrators. However, they could not find a buyer for a fixed radio network, which led to a risk that some business customers, who had switched carriers from—in the main—BT, would have been without a telephone service temporarily. Atlantic Telecom's customers were given extra time to switch back, at a cost of £550,000, shared, as the Minister pointed out, between the DTI and the Scottish Executive. That was not a good use of money. I suggest that the Scottish Executive put pressure on the DTI and, to make the Department look good in Scotland, it agreed to go along with it."a 'fund of funds' providing finance for existing venture capital funds that specialise in financing early stage small and medium sized high-technology firms. The Funds have received investment from the UK High Technology Fund and also receive funding from many other … sources. As a result, businesses do not necessarily know that they have received funding from the Fund."
rose—
I shall give way to the hon. Gentleman, because he probably knows much more about the situation than I do.
There was a serious danger that many businesses, especially in the north-east of Scotland, would have been without a telephone service for some time. In Aberdeen and Dundee especially, many businesses had gone over to that private operator and found that when it went down the tubes, BT would not reconnect them for many weeks, if not months. I do not often support the Government, but it was a good use of money to ensure that business disruption did not occur. Otherwise, Atlantic Telecom's collapse could have been disastrous.
I am grateful to the hon. Gentleman, who obviously knows much about the subject. That fly-by-night operator conned a lot of businesses by offering them much lower rates than BT, and the Minister's time would have been better spent talking to BT and urging it to reconnect the businesses affected. Surely in this day and age it does not take more than a few days to reconnect a fixed line system.
The loan guarantee scheme has achieved significant success since its launch in 1981. To a large extent, it was the brainchild of my hon. Friend the Member for South-West Hertfordshire (Mr. Page). I am sorry that he is not in the Chamber this afternoon to hear my praise for him. As the Minister pointed out, from June 1981 until March 2002, 79,900 loans were guaranteed. The average loan is £37,000 and the total value of the loans is well over £3 billion. Since the scheme has been finessed and improved, it has been a significant success. I shall give the House some examples of companies that have benefited considerably from the scheme. During 1999, a biotech company had secured providers of new equity capital but was struggling to fund working capital. The projects undertaken by the business were not suitable for bank security, but the bank was able to offer £100,000 under the loan guarantee scheme. The injection of equity was dependent on that loan agreement, as were the jobs of 23 employees. Two years later the business was sold to a plc for £4 million and the loan was repaid. Another success story comes from a steel fabricating company that was struggling to finance working capital during turnover growth from £0 to £4 million over a three-year period. The banks agreed to an initial £100,000 and recently provided a second tranche of £150,000 under the small firms loan guarantee scheme. As a result of that growth, 20 new jobs have been created and the business is making a net profit of nearly £500,000 a year. There are many similar examples. I urge the Minister to reinforce that success. Will he remove some of the sector restrictions? For example, the scheme cannot apply to education, medical health services or motor vehicle repairs and servicing—something that many of our constituents would resent—and nor can it apply to retail or transport. Will the Minister also look into the turnover limits for manufacturing businesses? Currently, the limit is £5 million and it has not been raised for some years. It should be raised because it is too restrictive. We should try to make the scheme more flexible. As an example of its inflexibility, a business that needed funding to cope with increased orders was excluded from securing £250,000 because although it had been in existence for two years, its parent had gone into receivership. The management team bought the company from the receiver and continued to trade with the same staff, premises and customers as well as a continuing order book, yet the small firms loan guarantee scheme interpreted the change in ownership as a cessation of business. Surely that was a mistake. Let us try to make the scheme more versatile and reinforce success. Will the Minister tell the House how much the scheme costs every year? I have studied the report in vain. It gives the number and amount of loans and the global totals, but it does not actually give the write-off figures. Obviously, most of the money is paid back to the banks because the businesses are successful, so the Government's guarantee is not called in. However, will the Minister give us the annual figures for the last four years and the global figure for the bad debts that the Government have had to guarantee and which have been a cost under section 8 of the report? We have debated important concerns for our industrial and manufacturing base, but we need to set the Bill in the wider business and economic context. The Government are right to take credit for the recent falls in unemployment and inflation, but serious storm clouds are gathering. Manufacturing is already in severe recession; 600,000 jobs have been lost since 1997. The Confederation of British Industry predicts that 40,000 more jobs will be lost in the sector by April this year. Its recent monthly survey was very gloomy indeed. It suggested that the cloud of misery engulfing manufacturers showed no sign of lifting and that output was expected to continue to stagnate, with order books remaining below their normal level. The CBI's conclusion is not surprising, given that industrial output has fallen every month for the past two years. In terms of market capitalisation, Invensys was once Britain's seventh largest company. It changed its name from BTR Siebe, which probably cost a large amount of money. In spite of the gallant efforts of the new chief executive officer, Rick Haythornthwaite, the company has been in a downward spiral ever since. Four years ago, its shares were worth £4; a year ago, they were worth £1; and they closed on Friday at 15.5p, threatening many further job losses. That is just one example. It is little wonder that the outlook is grim. In 2002, 16,500 businesses went to the wall, which is a 10 per cent. increase on the previous year. Our trade balance in goods is worse than at any time for over 300 years. Britain's net foreign assets of £5.5 billion in 1992 have turned to net liabilities of £114 billion in 2002. Those figures are staggering. The Chancellor of the Exchequer has a real problem with public finances as a result of undershooting his growth targets and the fall in tax revenues. The Chancellor was rebuked last week by fellow European Finance Ministers. He was told that his optimistic assumptions on growth could lead to a breach of Brussels rules on public finances, and thatThat is not me speaking but the judgment of the Council of Ministers on the Chancellor's control of public finances. We cannot ignore the fall in the stock market and the crisis in pensions, which certainly do not help. Smaller pensions lead to less tax, lower share prices, less tax from the City and less stamp duty revenue. Quietly tucked away in one of the many volumes of the previous Budget was the Chancellor's assumption on the stock market. He assumed that it would go up in line with money gross domestic product—that is, by 4 per cent. In fact, it has fallen by 25 per cent. We all have a vested interest in that, and no one will take great pleasure from that fall. In conclusion, there are real problems in manufacturing, and many problems in other areas as well. At least the Secretary of State acknowledges those problems in manufacturing. At Labour's spring conference, she said:"The Council considers that the macro-economic forecasts now appear to be optimistic in the short term and that there are downside risks to growth."
If she knows that, why are the Government about to hit businesses large and small with a large national insurance tax increase? Why is she piling more and more red tape on business? A survey in today's report by the British Chambers of Commerce shows that the total extra burden—excluding the minimum wage is £22 billion. David Frost of the BCC has said:"We also all know our manufacturing is hurting and manufacturing workers are losing their jobs."
If the Government are serious about business—"Red tape is strangling British productivity and it is threatening to combine with other blocks on business to create critical mass that will destroy jobs through a dramatic loss of competitiveness."