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Commons Chamber

Volume 405: debated on Tuesday 13 May 2003

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House Of Commons

Tuesday 13 May 2003

The House met at half-past Eleven o'clock

Prayers

[MR. SPEAKER in the Chair]

Private Business

Mersey Tunnels Bill (By Order)

Order for consideration, as amended, read.

To be considered on Tuesday 20 May.

Oral Answers To Questions

Transport

The Secretary of State was asked

Crossrail

1.

If he will make a statement on plans for Crossrail. [112567]

13.

If he will make a statement on the future of Crossrail. [112579]

The Government continue to support the development of Crossrail. We are now evaluating proposals from the Strategic Rail Authority and Transport for London to see whether they are financeable and deliverable.

I thank the Secretary of State for that answer, but does he not recognise that that amounts to yet more delay and indecision? If the Government really cannot make a decision on this essential investment for London and the country, will the right hon. Gentleman use the intervening period profitably by asking the valuation office to assess the value of the property and land either side of the Crossrail corridor? Armed with that information, we could find new options for the future using American financing models, for example, and tax-incremental financing. Will the Secretary of State ask the valuation office to do that?

I agree with the hon. Gentleman that, sadly, Crossrail has a long history. Many hon. Members will recall that it was severely damaged when it could not get parliamentary approval in 1991, and that it was effectively killed off by rail privatisation a couple of years later. We need a proposition that is financeable and deliverable before we can consider how it should be funded. I have not the slightest doubt that it will need to be funded with a combination of support from the Government and the private sector, but the first thing is to get a proposition on which we can proceed. The time spent on getting that right now will be time well spent. Not nearly enough preparatory work was done in the early 1990s, with the result that the whole scheme was cut to bits under scrutiny in the House.

Does the Secretary of State recognise that there is increasing concern in a wide number of areas across London, including my constituency, that important regeneration and development plans such as "Progressive Ilford", which will involve a massive regeneration of our town centre, could be badly damaged by further delay to the Crossrail programme? Will he ensure that the economic benefits that will result from Crossrail will be taken into consideration, particularly the improvement in cross-London east-west journey times, which have been made worse for those driving into London by the impact of the congestion charge in the centre? Will he therefore improve the public transport links from east to west London—

I will stick to Crossrail, for the time being at least. As I have said on many occasions, I have not the slightest doubt that we need to improve capacity on the railways running between the east and west of London. Never mind any development that might happen in the future, the development that we know about now, and that is likely to take place over the next years, means that we must increase our rail capacity. That is why I believe that Crossrail is so important. What went wrong in the past was that not nearly enough attention was paid to the detail and specification of the project. One of the reasons why I asked the Strategic Rail Authority and Transport for London last autumn to come up with a workable proposition was that, until that time, Crossrail had been a very vague concept. As I have just said to the hon. Member for Kingston and Surbiton (Mr. Davey), we need to have a workable, deliverable, financeable proposition. We are working on that at the moment, and if we can get one, we shall have to see how we can finance it and press on with it. But let us be in no doubt that the east-west link is extremely important to the development not only of London but of the surrounding areas that will see substantial development in the years to come.

In Chesham and Amersham, two railway schemes affect us: Crossrail, which would be of great benefit to my constituents; and the Central Railway project, a poorly presented, poorly financed and ill-thought-through scheme that is causing great concern to my constituents who have houses near the railway. I urge the Secretary of State to support the former, which is urgently required, and to rule out the latter once and for all.

I have made my position, and that of the Government, clear in relation to Crossrail. In relation to Central Railway, there is a proposition there, and Central Railway has been speaking to my Department. Before we can do anything further, however, I would like to be sure that there is actually someone standing behind that proposition who has the money to develop it. Until I am satisfied about that, the question of any building of the Central Railway project remains theoretical.

My right hon. Friend will be aware of the immense support in my constituency for Crossrail, which would link Whitechapel to Heathrow. Will he, however, tell the House a bit more about the cost of the project? If it is to be approximately £10 billion, £5 billion of which would come from fares or the usual channels, where would the other £5 billion come from? Are there any proposals that he can rule in or out regarding business rates?

The final costing will depend on the final shape of the proposal, but we should all realise that the cost of building Crossrail will be substantial, probably in excess of £10 billion. As I have said in reply to other Members, we are now ensuring that the project is financeable and deliverable. The question that follows from that is how it should be funded, which will be a matter for discussion not just within Government but with the private sector. I am encouraged by the number of people in that sector who have expressed interest in joining the project, but the test is whether we can persuade them to sign up rather than merely sending a general message of support. In my experience it is easy to secure such messages, but securing cash is sometimes more troublesome.

May I press the Secretary of State on two matters? The first is cost. The Mayor says he thinks the project will cost about £10 billion, the chief executive of Crossrail says it will cost between £7 billion and £11 billion depending on routes, and the Secretary of State has been quoted as saying that he thinks it might cost £15 billion. Can the Secretary of State explain why his estimate is so much higher than the others?

The second matter is timing. We expected an announcement in February, and were then told that it would be delayed by a fortnight and would be made in March. It is now the middle of May. May we at least have an assurance that a final decision will be made before the House rises in July?

I am not sure where the hon. Gentleman got his timetable. I do not recall our expecting an announcement in February. What I said last time, I think, was that I had asked Transport for London and the Strategic Rail Authority to come up with proposals for me to receive in spring. The Department has indeed received them, and we are looking at them now.

The cost depends largely on the nature of Crossrail. The London Regional Metro scheme, for instance, is also called Crossrail, but is very different from the SRATFL scheme. I am very cautious about costs. My experience over the past 12 months has been that costs relating to railways, in particular, usually turn out to be rather more than was originally anticipated.

As I have told the House, I think that Crossrail is very important to London's future development, but it is also important for us to get it right, and we should be realistic about the costs. It would be foolish and misleading to suggest that a scheme of such magnitude could be done on the cheap.

I am glad that the Secretary of State supports Crossrail, which has received support throughout London and in other areas. This is not just a question of people in London wanting investment in London; the project is important to the business community, and to London's status as an international centre. As for the costing, has the Secretary of State had any discussions recently with the London business forum and others about private finance?

I have had a number of meetings, and, as I said earlier, there is no shortage of expressions of support for Crossrail and its funding. Nevertheless, we should all be cautious about saying "That is fine, let's go ahead". We need people to sign up to the proposition before we can proceed.

As I have said on a number of occasions, Crossrail is important not just to London but to areas around the city, especially in the east. It is also important, however, that we learn from mistakes made over the past 10 to 15 years. Once we have a project that is workable and financeable, we will see how we can deliver it. No one should underestimate the task we face: the project has a long history, and has fallen at a number of hurdles in the past because not enough preparatory work has been done. I understand people's frustration, but it is important that we get this right.

Air Travel Security

2.

If he will make a statement on plans to improve security (a) at airports and (b) on board aircraft. [112568]

The UK has a mature national aviation security programme. None the less, security measures both at airports and aboard aircraft are kept under review at all times, and are adjusted as necessary in the light of changing circumstances. Longer-term studies and research are also in hand. We do not, of course, discuss the specifics of security measures.

The Department is in regular contact with its overseas counterparts to share best practice in aviation security.

Does the Minister share the concern felt by a constituent of mine who, having arrived at Manchester airport on a late-night international flight the other week, discovered that no Customs or immigration officers were on duty? He was told by a member of the airport staff that they "did not bother after midnight." Does the Minister agree that it is a great shame when there is a difference between what is said at the Dispatch Box and the reality? Does this not constitute a major loophole in the security system operating on flights?

We will certainly look into the matter, but it would have been helpful if the hon. Gentleman had drawn it to my attention before, in which case I could have given a more detailed response. We undoubtedly have among the best aviation security policies and security practice in the world, but there are of course lapses. We follow them up to improve on that practice, and to ensure the safety of passengers and of those who work for the airlines.

My right hon. Friend will be aware that BAA has made a strong representation that the consultation report considerably overstates the cost of developing Glasgow airport, and has prejudiced the case re developing Edinburgh airport. Will he therefore give us an assurance that the cost of developing both Glasgow and Edinburgh will be fully reviewed in the light of the representations made, and that the findings will be published to enable a proper assessment of this matter to be made.

We are taking this consultation extremely seriously, and we welcome representations about general policy, and from those who believe that there are problems or difficulties with, or inaccuracies in, the underlying assumptions. So if such representations are being made by Glasgow—and by local authorities in, and parliamentary representatives from, the Glasgow area—we will certainly look into the matter. And of course, when we publish the aviation White Paper we will respond in detail to many of those issues.

Mindful of my interests in this field, does the right hon. Gentleman agree that what airline passengers want is not just a fair deal for everyone, but safe travel? Can he tell us about the progress that has been made since he made the following comment in the Standing Committee on the Railways and Transport Safety Bill? He said:

"We are considering proposals that would ensure that pass holders for restricted zones are required to have criminal records checks."—[Official Report, Standing Committee D, 11 March 2003; c. 567.]
Can he also clarify where responsibility for coordination and strategic direction lies outside of the Department for Transport—an issue identified by the Wheeler report?

The requirement for criminal records checks for working airside will come into effect in July. Obviously, the outcome of such checks should be proportionate and relevant to aviation safety, and such a requirement has existed for some time. As a result of discussions with work force representatives, the necessity for them has been agreed to in principle, and the details worked out to general satisfaction, although one or two final issues will need to be resolved. That indicates the seriousness with which we are taking this issue—a seriousness that is part of our incremental progress throughout aviation security. For unfortunate historical reasons, we have had to be well in advance of the rest of the world in this field, and we intend to maintain our position.

May I draw the Minister's attention to the fact that the safety of passengers at Heathrow airport is in great danger, given the length of time that they have to stand at security? I have made representations about that fact, and it is clear that many vacancies have yet to be filled; indeed, Heathrow security is more than 300 people short. This is a scandal of the first order and it requires the Minister's attention. What does he intend to do to improve the situation at BAA? I understand that it is a private company, but it is the public who are having the greatest difficulty in putting up with the current situation. I understand and appreciate that there are new security rules, but BAA is not addressing them as it should.

My hon. Friend is absolutely right, and it is particularly frustrating for passengers waiting in queues to see many scanning machines not in operation because of staff shortages. As my hon. Friend may imagine, the Secretary of State has already vigorously drawn this issue to the attention of BAA. He is awaiting a report from BAA on how it intends to remedy this situation in the short term, and in respect of the longer-term deficiencies, in order to ensure that passengers get the service that they require. Of course, this situation is also detrimental to the airline industry and to punctuality. It is a matter of concern to us, and we are pursuing it with considerable vigour.

Strategic Rail Authority

3.

If he will make a statement on the (a) objectives and (b) management of the communications strategy of the Strategic Rail Authority. [112569]

The Strategic Rail Authority is set up to provide strategic direction for the railways. Its communications strategy is a matter for the SRA.

Will the Secretary of State explain why the Strategic Rail Authority and the train operating companies have adopted a communications strategy that relies on the Jo Moore school of spinning—burying bad news—similar to the one that his Department previously pursued? Does his Department share the SRA media director's view of the noble Lord Berkeley as "a dilettante"? I cannot supply the full quote because the adjective began with an "F".

That is very tasteful of the hon. Gentleman. The chairman of the SRA, Richard Bowker, has already made it clear that he disapproves of what the director of communications said about Lord Berkeley. The director has apologised to Lord Berkeley and I have spoken to Lord Berkeley, who now regards the matter as closed. Rest assured that what was said was wrong and should not have been said. I hope that we shall not hear any more of it.

On more general matters, if there has been a policy of attempting to bury bad news on the railways, it has been singularly unsuccessful. I am more aware than anyone else in the Chamber of how much still has to be done to improve the railways. I hear it in the House, I hear it when I am travelling on the train, and I hear it at parties. On Saturday night I attended a wedding at which people appeared to speak of little else. If my strategy had been to bury bad news, it would have failed—but it is not our strategy. I believe that the hon. Gentleman, as well as Labour Members, has the good of the railways at heart. Despite the undeniable difficulties on the railways, performance is beginning to improve and the £73 million a week now invested in the railways will make a difference. It will result in improved performance, which is long overdue. The key is to sustain the investment and then let the facts speak for themselves.

Does my right hon. Friend accept that it is precisely because of the large sums of money that the Government are investing in the railways that we need clear and plain speaking from the Strategic Rail Authority? We must know the SRA's position with respect to companies that are not only failing but taking home large amounts of taxpayers' money. Over the next two years, the last thing that we want is a railway system in which it is too expensive for the ordinary traveller to buy a ticket. We are clearly not producing high-quality services, and taxpayers are still funding a failing system.

I agree with my hon. Friend that continued investment in the railways must be justified by results. Frankly, not enough attention was paid in the past to the two essential ingredients for improving the railways—money, which is now going in, and management. The Strategic Rail Authority, the Department and I are all giving a clear message to train companies: they must look to their faults and weaknesses, ensure that their trains run on time and achieve far better performance. It can be done. The latest performance figures demonstrate about 80 per cent. reliability overall, with some services in the 90s, but others down in the 60s, which is quite unacceptable. My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) is right that we are entitled to expect increased performance for the money that we are investing. There are some encouraging signs, but, frankly, some companies have a long way to go.

The Secretary of State has expressed delight at the failure to bury bad news about our railways, so does he agree that it would be right and proper for the media to attend the annual general meeting of Network Rail?

Yes, I do. Network Rail should ensure that its annual general meeting is open and I have made that clear to the chairman. Although I accept that, in the last analysis, it is up to the company to decide, I strongly hope that the meeting will be open because the company has nothing to hide and might have some positive things—perhaps some good news—to tell the world.

Without complicating my right hon. Friend's Saturday nights, may I draw his attention to a subject that he knows a great deal about—the ongoing problems of the Forth rail bridge? Will he give an assurance that his Department is inquisitive about the future funding of the bridge?

I would be happy to discuss that over a drink with my hon. Friend. The Forth rail bridge is having substantial sums spent on it, because it is an important part of the rail infrastructure. I see it regularly, for obvious reasons, so my hon. Friend may rest assured that it is never far from my thoughts.

Does the Secretary of State agree that safety should be the most important priority of any rail authority? As he is no doubt aware, last Saturday saw the first anniversary of the Potters Bar rail crash, but we are still waiting for a full report on how that accident came about. The families are still waiting for an acceptance of responsibility—on the same basis as in previous accidents—by any of the relevant bodies. Will he do all he can to ensure that the report is published as soon as possible?

There are two aspects to the report on the accident at Potters Bar. The first is in relation to the cause of the accident, and we are now clear that it was caused by the failure of the points. The Health and Safety Executive has published two reports and a final report is due at the end of May. The second aspect, about which the victims feel especially strongly, is who was responsible for the accident. That is the subject of a criminal investigation by the police and Ministers cannot properly interfere. However, I agree with the hon. Gentleman that we need to have those matters concluded as quickly as possible—for the sake of those who died and their relatives, and for all of us. We will have the Health and Safety Executive's report, but I cannot properly influence the criminal investigation. I hope, for obvious reasons, that it is concluded as soon as possible.

Mersey Tunnels

4.

If he will make a statement on the policing of Mersey Tunnels. [112570]

Responsibility—including the funding—for the policing of the Mersey tunnels rests with the Merseyside Passenger Transport Authority, Merseytravel, under provisions in the County of Merseyside Act 1980.

As Merseytravel is primarily responsible for the safe operation of the Mersey tunnels, it falls on it to ensure that the law enforcement officers it appoints are trained to a standard that protects both the officers involved and users of the tunnels and to provide such facilities necessary for the officers to carry out their duties in a safe and proper manner.

My hon. Friend reflects the situation as it is, not as it should be. Does he recall that the Liverpool coroner recently said that Mersey Tunnels police were not operating in a way that the general public would recognise as the behaviour of a normal police force? While I welcome the review that the Department and the Home Office are undertaking in relation to the role of the Mersey Tunnels police, a review of the separate police fiefdoms more generally is long overdue. Many of them are in the transport sector and all of them are of dubious accountability. Will he consider the situation with a view to bringing those forces into mainstream policing arrangements, with all that that implies for accountability, funding, standards, benchmarks and practices?

Addressing the issue of the capability of the Mersey Tunnels police is, in the first instance, the responsibility of the Merseyside passenger transport authority and the democratically elected bodies that make up its constituent parts. My hon. Friend referred to the dreadful and tragic accident in March last year, and we all regret the circumstances in which two young teenagers lost their lives. I cannot comment on what the coroner said, because it is open to legal challenge. At the moment, the Police Complaints Authority has no remit for the Mersey Tunnels police, but under section 78 of the Police Act 1996 the Home Secretary can direct that such a relationship be affirmed. Perhaps my hon. Friend should take that point up with the Home Secretary. I appreciate the concerns that have arisen from that particular incident and we and the Home Office will consider carefully the reports of the investigations and decide what further action needs to be taken.

Airports

5.

If he will make a statement on the progress of the consultation on airport provision for south-east England. [112571]

The national consultation ends on 30 June. We have already received tens of thousands of responses from across the UK, and we expect to receive many more. All responses will be considered carefully before decisions are set out in the White Paper, which we intend to publish later this year.

Does my hon. Friend sense that there is a growing irritation among hon. Members at BAA's disproportionate clout and influence on aviation policy and airport capacity? My hon. Friend was in the House when I said in prophetic terms, in relation to terminal 5, that BAA would perform its usual stunt and say, once it had got a runway, that it now needed a terminal. I was wrong in one sense, however: now that BAA has got terminal 5, it wants not one more runway, but three. Is it not time to blow the whistle on BAA, and say that enough is enough? We want all the regional airports that can serve London to be expanded, and there must be a more sensible policy to decide how we meet our aviation capacity shortfall—in the interests of the UK, not of BAA.

I thank my hon. Friend for those views, which were expressed, as ever, in an understated way. Of course, BAA is a big player in the provision of air services; that it should make a contribution to the consultation is totally to be expected, but its contribution to the consultation is no more than that. Other views will be expressed, in both agreement and disagreement, and it will be up to the Government to weigh those matters very carefully at the end of the consultation period. It is probably fortuitous that BAA should have published its views now, as it allows people the opportunity to form possibly contrary views during the consultation process.

I welcome the downgrading of the proposals for expansion of Luton airport from an assumption to an option, but will the Minister confirm that he is not now considering different options, such as the building of taxiways? Such options have not been included in the consultation document, and my constituents have not been asked to give their views on them.

I can tell the right hon. Gentleman that no decisions have been made, and that none will be made until the end of the consultation period. He will appreciate that it is not only the options put forward by the Government in the consultation document that have been commented on, and that many contributors to the consultation produced ideas that did not appear in the consultation document. Those ideas will have to be considered very carefully, and weighed against each other. There are very wide-ranging views on all these matters, and we must consider them all very carefully after the end of June.

I want to say, in support of BAA, that its rejection of a proposed airport at Cliffe is absolutely correct. That proposal should be ruled out, on both commercial and environmental grounds. Will my hon. Friend take this opportunity to support BAA in this instance, and announce that Cliffe will not be an option in the White Paper?

Tempting though it may be to preempt the consultation, I am unfortunately unable to give my hon. Friend that undertaking today. The Cliffe option is still very much part of the consultation. Some very strong views have been expressed against it, not least by my hon. Friend's constituents, and by people in neighbouring constituencies. However, other views very much in favour of the Cliffe option have also been expressed. We have to weigh those up very carefully at the end of the month. I am sure that the comments that my hon. Friend has made, very robustly, on behalf of his constituents will be taken into consideration at that time.

Roads (North-West)

6.

If he will make a statement on investment in the trunk road infrastructure in the north-west of England. [112572]

The Highways Agency is planning to spend around £135 million this year on maintaining the motorway and trunk road infrastructure in the north-west. A further £30 million will be spent on small schemes aimed at tackling safety and congestion. In addition to that, the Highways Agency's programme includes seven major capital schemes to the value of around £400 million, which will be delivered over the next 5 years.

I thank the Secretary of State for that detailed response. Does he accept that adequate roads are vital to a successful transport infrastructure? I am concerned that the proposals of the south-east Manchester multi-modal study are totally inadequate in respect of the roads going from Macclesfield to the north. We have a wonderful silk road that sweeps out of the centre of Macclesfield to the north, but it turns into a very inadequate single-carriageway road. Will the Secretary of State look at the provision of a dual carriageway road from the end of the silk road to connect with the Poynton bypass? We need a dual-carriageway road so that large companies such as Astra Zeneca, which employs more than 7,000 people, can adequately connect to the motorway network and Manchester international airport?

I agree that a transport policy must be balanced and that we need adequate road and rail infrastructure. I am aware of the problem that the hon. Gentleman raises, particularly as regards the connection with the A523, which was the subject of the multi-modal study on which my predecessor announced his conclusions in March 2002. As I understand it, the consultants recommended, and the study concluded, that there ought to be a single-carriageway road. That proposal is being worked up by Cheshire county council, in consultation with Macclesfield borough council.

I know the hon. Gentleman's views on the matter. I had a brief opportunity this morning to look into its history, and I can see that there are differences of opinion at various levels. It is for Cheshire county council to decide what is appropriate for the road, and its view at the moment, as I understand it, is that a single carriageway, perhaps realigned, would be the right thing. The hon. Gentleman's representations ought, in the first instance, to be made to Cheshire county council.

My right hon. Friend will recognise that investment in motorways and trunk roads is essential for securing jobs and investment in Burnley and east Lancashire. He will know that the M65 going east ends in Colne, in the Pendle constituency. I have always wanted it to go east into Yorkshire, but since that is not going to happen, will he ensure that the necessary bypasses are built on A and trunk roads from Pendle into Yorkshire to ensure that communications are better on that side of the country? The M62 is too far south and makes a long diversion for much of our industrial traffic.

I understand the problem. We shall spend something like £13 billion over 10 years on new construction that is necessary to improve access and help industry, as my hon. Friend said, in various parts of the country. Choices must be made, however, and it is not possible to do all the things that everybody wants. I am aware of the general problem because my honourable friend has talked to me about it before. I cannot give any particular undertaking, but if he wants to come to me with specific proposals, I shall be happy to speak to him.

Given that the Secretary of State has performed a welcome U-turn in dropping the Government's original presumption against new road building, will he review, and if necessary reverse, the decision to de-trunk many roads in the north-west, including the A595 in Cumbria, the A570 in Lancashire and the A500 in Cheshire?

On the hon. Gentleman's first point, the 10-yeas plan envisaged substantial new construction, where necessary, to tackle congestion, involving widening roads and so on. My announcement before Christmas simply implemented what the Government had said we would do. However, I am grateful for his welcome, such as it was.

De-trunking has taken place in the north-west and other areas with the agreement of local authorities. It makes sense for the Government to be responsible, through the Highways Agency, for the strategic road network, but where roads are an integral part of local transport, it makes sense for local authorities to be responsible for them. That policy is right, and I am not aware of any great clamour to reverse it.

National Rail Academy

7.

What progress is being made towards the establishment of a National Rail Academy. [112573]

I am pleased to report that the National Rail Academy was formally established on 1 April. Its aim is to provide a cost-effective means of ensuring that the rail industry has the right people with the right skills at the right time.

I am grateful to my right hon. Friend for the announcement, having pushed for the National Rail Academy for more than five years. My worry is that it will be a virtual academy and that virtually no training will take place. We need a chief executive, and we need a headquarters. What progress has been made?

As my hon. Friend probably expects, the Strategic Rail Authority has, since the announcement, been approached by a large number of organisations about where the academy should be located and what it should do. The SRA will consider those views to establish what the industry needs and is prepared to support before it chooses the route forward. The idea is that the academy will be not a single, bricks-and-mortar establishment, but a strategic co-ordinating facility that is able to develop new and existing training facilities around the country as it works with the industry. I take the point, which my hon. Friend has made to me personally, that when it is decided where to locate the core centre, we should seriously consider the claims of Carlisle, which he and others have advanced, given its long record of service to the railway industry.

Given that it is now 14 months since the then Secretary of State for Transport, Local Government and the Regions, the right hon. Member for Tyneside, North (Mr. Byers), talked about the allocation of funds to the academy, can the Minister at least tell the House what he expects the public expenditure cost of the academy to be in this financial year?

That is a matter for the Strategic Rail Authority, which will be working with the industry—the train operating companies, Network Rail—and the contracting companies that work with the industry. As I said, the key role of the rail academy is to act as a coordinating organisation. That role may develop, especially in identifying skills shortages in the industry. The concept of the academy is to work with the industry, co-ordinating training that is already being undertaken, and also to look at the skills shortages. I remind the hon. Gentleman that, as a result of his party's privatisation programme and the way in which it was implemented by the train operators, we had substantial redundancies among a number of skills, not least in signalling and train driving, which led to the shortage that has created considerable problems for the industry. The rail academy will be addressing that.

Road Litter

8.

If he will review the arrangements for the removal of litter from the side of trunk roads; and if he will make a statement. [112574]

Since the Environmental Protection Act 1990 code of practice came into force, responsibility for clearing litter on all-purpose trunk roads, with the exception of design, build, finance and operate managed roads, has rested with local authorities. Responsibility for clearing litter on motorways lies with the Highways Agency.

Has my hon. Friend noticed the shocking state of the verges along many of our motorways and trunk roads, and that the same plastic bags often appear to be hanging from the same shrubs week in and week out? Is it not obvious that the existing arrangements are not satisfactory? What can he do to help the Highways Agency and those to whom it subcontracts to take the issue more seriously?

I share my hon. Friend's concern about litter on some of our major roads. At best it is unsightly, and at worst it is dangerous to people and to wildlife, and of course it puts off visitors to areas where there might be a considerable number of tourists. The picture across the country is variable: some local authorities take their responsibilities seriously, but others do not. The Highways Agency inspects trunk roads on a basis of between seven and 28 days, and where appropriate will bring things to the attention of the local authority or, in the case of the A19, which leads to my hon. Friend's constituency and is operated by a contractor, to the attention of the contractor who is contractually obliged to keep the road clear. I can assure my hon. Friend that another Department, the Department for Environment, Food and Rural Affairs, is currently reviewing the code of practice and holding consultations to see how it can be tightened.

The Minister will be aware that land adjoining roads and railways can be an important refuge for wildlife. He will also be aware of the slash and burn clearances undertaken by transport authorities in many parts of the country. Does he share my concern about that approach, and what representations will he be making about it, especially to Network Rail?

The Highways Agency and Network Rail have to take appropriate action because, as the hon. Gentleman will know, trees blow on to railway lines or roads. However, I accept his general concern about the state of the verges although, as I said to my hon. Friend the Member for Sunderland, South (Mr. Mullin), it is variable. In extreme cases, if people have a complaint, they can go to the magistrates court and obtain a litter abatement order to oblige the authority to act.

M6

9.

What the estimated value was of the time lost due to congestion on the M6 in 2002. [112575]

The Highways Agency does not currently collect sufficient information on traffic speeds to answer that question. However, the installation of new technology and the opening of the traffic control centre next year should enable such data to be provided in the future.

If ever an answer illustrated complacency about the real need to get something moving on the M6 to convert it from its current car park status, that was it. The Minister knows that thousands of hours are wasted by businesses and individuals stuck in congestion on the M6. We welcome the publication of the multi-modal study and we look forward to the opening of the Birmingham relief road, but will he tell us when there will be some concerted action to speed up the labyrinthine processes that must be gone through to determine what is self-evident—that the M6 capacity needs expanding now? When will that happen?

In no way did I suggest that we were not aware of the considerable problems of congestion on the M6 and on a number of Britain's highways. That is precisely why we, like the right hon. Gentleman, welcome the opening shortly of the M6 toll road and why, fairly shortly, improvement work will be undertaken on the A500 south of Stoke. That is also why, as he drives up the M6, he will see the considerable number of message boards going up that will enable real-time running and management of the network. Those are real pluses. The point that he ought to address is why, during the Conservatives' considerable period in government, including two years during which he was Financial Secretary, no action was taken.

My right hon. Friend just mentioned the south of Stoke, which, of course, is consistent with the name of my constituency. Will he agree, however, that any consideration of measures to relieve congestion on the M6, particularly in relation to the MidMan study, would be conditional, in an important way, on the Strategic Rail Authority having the funds to ensure that any rail developments as a result of that study are undertaken? In relation to extending the M6 to four lanes, it is essential that road pricing is also considered because of its effect on traffic movements, as part of those important projects.

Probably the biggest expenditure in the railway sector is taking place in precisely that corridor in relation to the west coast main line. A huge amount of work is being undertaken, and a lot of work is being done by the Strategic Rail Authority to compress the time scales for improving the service on that line and to bring about the refurbishment of the line and substantial improvements in times and reliability.

If the Government are really so concerned about congestion, why did they sign up to the extension of the working time directive to heavy goods vehicle drivers and to the ludicrous restrictions in that directive, which will result in lorry drivers having to work during the day rather than at night, with lorries being transferred from travelling overnight to using the motorways during the day? Why have the Government not produced a regulatory impact assessment on this ludicrous measure? When that assessment is conducted, will it include the impact on congestion on the M6?

I am not sure whether the hon. Gentleman is speaking in favour of lorry drivers working excessive hours, given the impact that that can have on their safety and the safety of others. Beyond the rhetoric, if he looks at the details of both the working time directive, and of course the amending directive, what he must consider is the real impact on the road haulage industry, particularly with regard to times of availability or non-driving hours. He will find that that impact is much less than he claims, as a number of people in the industry are now saying. He must say whether he wants people working excessive hours driving heavy goods vehicles on our roads.

Railways (Skipton)

10.

What recent assessment he has made of the viability and desirability of reopening the (a) Skipton to Colne and (b) Skipton to Grassington railways. [112576]

The Strategic Rail Authority has set out its current plans for the development of the rail network in its strategic plan, which was published in January. Those do not include reopening the Skipton to Colne line or opening the Skipton to Grassington line for passenger services.

That is very disappointing. Why does calling for the reopening of an old railway line appear eccentric, while calling for a new road, as my misguided hon. Friend the Member for Burnley (Mr. Pike) has done, is okay? Will the Minister accept that now that the Countryside Agency is calling for the reopening of those two lines we ought to press ahead and get trains running on them? The Yorkshire Dales national park is out of bounds to thousands of people without access to a car. If these railways were reopened, that would introduce the countryside to the thousands of my constituents who have never been there.

I recognise my hon. Friend's concern, and the Government recognise that there is great value in reopening railway lines when that is appropriate. However, he will appreciate that for both these lines—in particular, the Skipton to Colne line that is currently not in use—it is a matter for those locally, and for the local authority in particular, to formulate a plan and make it known to the SRA, so that we can implement it. As he knows, the SRA is currently holding discussions to gauge interest in reopening the line in the longer term, but it has no plans at present to do so. If local authorities come up with a plan for the Skipton to Grassington line, it can be looked at carefully to meet the ambitions of my hon. Friend and his constituents.

The House will note that I have only managed to get to question 10 on the Order Paper. That was because questions and answers were far too long. We have an obligation to get through the Order Paper, as that is only fair to those who have taken the bother to table questions. I look forward to shorter questions, and of course shorter answers, at the next Transport questions.

Cabinet Office

The Minister of State was asked

Online Services

21.

If he will make a statement on progress made towards the Government's target of getting all services online by 2005. [112587]

We are committed to ensuring that central Government services are made available electronically by 2005 and that key services achieve high levels of use. The latest figures obtained during quarter four of 2002 show that 63 per cent. of services were e-enabled. Departments continue to work to meet the 2005 target.

I thank my hon. Friend for that reply, but is he confident that the general public will have sufficient access to the internet by 2005 to ensure that online services are available to those who need them most?

I am grateful to my hon. Friend for raising the important challenge of the digital divide. We now have 6,000 UK Online centres that operate right across the country. They provide exactly the kind of internet access of which he spoke. We have identified one of the principal barriers as being skills and confidence among the population, and the campaign that the Government announced only yesterday is a significant initiative in helping to bridge that divide.

In a recent written answer, the Government were unable to tell me how much they had spent on websites in the past four years, yet the National Audit Office estimates the figure to be something like £1 billion. Does the Minister agree that the Government appear to be the last organisation still living in the dotcom boom?

I simply do not recognise that description. To take a single example, about 500,000 visits to NHS Direct Online took place last month. That is a perfect of example of how the Government are modernising public services and using new technology to find challenging new solutions to the needs of the British public. We are serious about investing in schools and hospitals, and one has only to look towards the initiatives for broadband to see how we are taking forward that work.

Does my hon. Friend agree that effective online services must be simple to use, uncluttered and written in plain language? Does he share my concern that, in our excellent haste to get services online, we are not taking advantage of the opportunity to simplify some of the services at the same time?

My hon. Friend raises an important point. One of the key challenges in getting services online is that we do not simply automate the past. That is why it is important both to develop new services and for the Government to enhance their 2005 target. That means not only demanding that services go online but driving up levels of use in the key services that serve the public.

Will the Minister confirm that, as part of the fallout from the loss of financial control and the budget overspends in the Cabinet Office, the office of e-envoy is being shrunk by a quarter? Can he tell the House how that will affect progress towards the target of getting all services online by 2005? If it does not affect those targets, what does a 25 per cent. cut with no impact on output tell us about the waste, inefficiency and bureaucracy in the Cabinet Office?

I am rather intrigued by the hon. Gentleman's line of questioning. If we manage public resources prudently, the Opposition criticise us by saying that the services were vital, but if we are not prudent, they suggest that there is waste and excess. We have undertaken an effective budgetary exercise in the Cabinet Office during recent months that has not only secured resources for new online work—a new campaign is being launched only this week—but allowed us to continue to pursue our target of ensuring that Government services are online by 2005. The e-envoy's office has a central role in that endeavour.

Does the Minister agree that online services are only of use to citizens if they can easily find them? In that context, will he tell us when we can expect a replacement for the poor UK Online Government portal that is currently available? Will he look at the excellent Canadian Government site, canada.gc.ca, to see an example of how we should do things?

I assure the House that I have already looked at the Canadian example and that I am undertaking such work here. I also commend to the House the Massachusetts government's site, which is similar to that of the Canadian Government. We can learn important lessons from those two transatlantic examples.

Will my hon. Friend congratulate UK Online and ITV companies, especially Granada, on their work to promote the "IT's for Life" campaign and surrounding work? The fact that the storyline of "Coronation Street" included the need to expand access to information technology is of great benefit to the public. Such programmes must be expanded and I seek a commitment that that will happen.

I am delighted that a national institution such as "Coronation Street" has carried a storyline that exemplifies the kind of outreach work that we want throughout the country to ensure that every community gets online. Perhaps in the future we will move from the Rover's Return to the Surfer's Return.

Civil Contingencies

22.

What representations he has received on the proposed civil contingencies Bill. [112588]

I regularly receive representations on the proposed civil contingencies Bill. The Bill has been developed through a consultative process, beginning with the emergency planning review in 2001 during which we received many replies on proposed legislation. Since then, the Government have engaged closely with the emergency planning community and key external groups, which have made written and oral representations that have informed our work.

How do the Government intend that local councils should pay for their emergency planning provisions in the event that the Government proceed with their plans to stop the ring-fencing of that budget under the Bill?

The hon. Lady raises an important point. It will help the House if I make it clear that in addition to the Government's direct contribution of £90 million, local authorities contribute extra money from their general funds. The Local Government Association estimated in 2001 that the local authority contribution for England to that work amounted to an additional £9.9 million. Consultation on the specifics of the Bill will, of course, continue in the weeks and months to come.

Will the Minister give some reassurance to local authorities that are worried about the long-term imposition of any powers that might come from a civil contingencies Bill? If it becomes necessary to use such powers not only in the short term but for a prolonged period, what additional resources might be made available?

The Government spend hundreds of millions of pounds on emergency planning and civil protection in the UK. There is central Government funding for organisations that are involved in the provision of responses to emergencies, which of course include local authorities. Additionally, the Government have increased the direct grant aid paid to local authorities for such work. We shall continue to discuss with local authorities their responsibilities under the proposals that we aim to introduce this summer.

Central Office Of Information

23.

What recent discussions his office has had with other Departments about statistics published by the Central Office of Information. [112589]

None. Part of the Central Office of Information's remit is to arrange for the publication of some departmental information and statistics, for which individual Departments are responsible.

May I can encourage the Minister to talk to his colleagues in the Office for National Statistics and, especially, the Home Office, so that when the COI or the Government Information and Communication Service produce publications, we have clear statistical information? The last crime statistics consisted of three sets of statistics, which left everyone confused, and the general view is that we must do much better if we are to have credible statistics that the public believe and that thus serve their intended purpose.

We are keen not only for crime levels to fall but for confidence in the police service and law enforcement agencies to continue to rise. In that regard, I am happy to pass on the hon. Gentleman's comments to Home Office Ministers.

Digital Services

24.

What steps the Government have taken towards improving access to public digital services. [112590]

The Government are committed to providing internet access for all who want it by 2005. Yesterday we launched a national campaign called "Get Started" to increase awareness of the benefits of the internet. During the campaign, people will be encouraged to visit one of those 6,000 UK Online centres, which I mentioned earlier, offering 7 million hours of free internet access.

I thank my hon. Friend for that answer, but why do the Government not just provide every household with a computer if they do not have access to one?

As I said, one of the principal challenges that we face in getting people online is a lack of confidence and skills. That is why we believe that the UK Online centres are uniquely equipped to meet that challenge. People in higher education institutions should have access to mentoring and support. We need to ensure that that is available at every income level and in every community across the country.

Ministerial Conduct

25.

When the code of practice on ministerial conduct was last reviewed. [112591]

A revised ministerial code was published in July 2001. Since then, the Government have agreed to two amendments to the code.

I thank the Minister for that answer, but in view of what the right hon. Member for Birmingham, Ladywood (Clare Short) said, is it not time for another review? She said that "errors" flow

"from the style and organisation of our Government";
that there is
"centralisation of power into the hands of the Prime Minister";
that there are "diktats" and
"policy initiatives being rammed through Parliament".—[Official Report, 12 May 2003; Vol. 405, c. 38.]
If we do not need a change in the code of conduct, do we need a bigger change in the Ministers?

There is little that I can usefully add to the comments of the right hon. Member for Birmingham, Ladywood yesterday. I fail to see that they have a direct bearing on the ministerial code, as the hon. Gentleman suggests.

Points Of Order

12.31 pm

On a point of order, Mr. Speaker. You will know that in the past two or three weeks a deadline has been set for posting letters to our constituents. If they are not posted by 6 o'clock, they will not be delivered the following day. I was involved in last night's debate and signed letters at about 9.30 pm. It used to be the case that the service would deliver letters that were sent at 8 or 9 pm to all parts of the United Kingdom. I see no reason why the new ruling has been introduced.

I make no criticism of the Post Office authorities here. Like all Members, I have always found them to be supportive in every possible way. The national organisation set the deadline, which should be unacceptable to the House. I wonder whether you, Mr. Speaker, and the Leader of the House can use whatever influence possible to reverse that decision.

I have sympathy with the hon. Gentleman. For that reason, I have decided that the Administration Committee will look into the matter. I am awaiting advice from it.

Further to that point of order, Mr. Speaker. That information is most helpful to the House, but should not the Administration Committee also bear it in mind that when we changed to the new supposedly modern hours, the Leader of the House assured us that the facilities available to Members would remain available? As the hon. Member for Walsall, North (David Winnick) said, one of the facilities that is most valued is that of being able to communicate with our constituents.

I will not be drawn into that argument. I am sure that the Chairman of the Administration Committee, the hon. Member for Broxbourne (Mrs. Roe), will note the hon. Gentleman's comments.

Street Furniture (Graffiti)

12.34 pm

I beg to move,

That leave be given to bring in a Bill to make provision for local authorities to remove graffiti from street furniture owned by statutory undertakers; to enable local authorities to recover costs from the statutory undertakers; and for connected purposes.
I have come to the House on numerous occasions to talk about graffiti. Yesterday, I searched the parliamentary intranet and found that 272 parliamentary documents listed under my name contained the word "graffiti". I am beginning to feel a bit like an anorak or obsessive or, to put it more elegantly, the parliamentary queen of graffiti. There is a reason for that—however much I detest graffiti, my constituents detest it far more. I have lost count of the number of surgery visits, letters, telephone calls and e-mails that I have received from people whose homes, streets and local surroundings are persistently blighted by graffiti vandals. Not only does graffiti visibly drag a community down and corrode the morale of local people, it increases tangibly the fear of crime in a community.

My constituents want tougher measures against the people who commit antisocial crimes. They will welcome the new Anti-Social Behaviour Bill, which will introduce fixed penalties for people who spray graffiti, but they also want more done to clear up the mess left behind. It is vital to punish the perpetrators of these antisocial crimes and to be seen to being doing so. However, my Bill is designed to tackle the second part of the dual approach to graffiti—removing the eyesore from the streets.

Local authorities are working fantastically hard to remove graffiti. In my borough of Merton, dealing with incidents of graffiti has become increasingly challenging over the past few years. According to a report last year by the Greater London Assembly's graffiti investigative committee, local authorities in London spend about £7 million a year removing graffiti. Despite all that expenditure, paid for by council tax payers, survey after survey shows that people are still not satisfied. According to the Association of London Government, more than three quarters of Londoners list graffiti as a quality of life concern. Indeed, it is among the top three concerns of the residents of St. Helier and Cricket Green, two wards in my constituency that are part of a nationwide pilot on police reassurance.

Last year, the Department for Environment, Food and Rural Affairs undertook a consultation on measures that could help to improve the environment called "Living Places—Powers, Rights, Responsibilities". Launching it, the Minister for Rural Affairs and Urban Quality of Life said:
"we want to ensure that those who are responsible for ensuring that our public spaces are clean and safe have the powers that they need … We need everyone from businesses to community groups and individuals to share a common sense of pride and respect for our shared spaces."
That is precisely what I am attempting to do in the Bill. Indeed, one of the proposals in "Living Places" is the creation of a new duty on the owners of street furniture to keep their property clear of graffiti, and extend the powers of local authorities to intervene and deal with graffiti. At present, some of the biggest eyesores appear on street furniture, including cable TV boxes, phone boxes, railway bridges and electricity substations belonging to telecommunications companies, the utilities, or other large multi-million pound companies—the so-called statutory undertakers. However, local councils often find that they cannot remove such graffiti without the agreement of those companies or recover the cost of removing it.

My Bill is designed to overcome those difficulties and ensure that the proposals in "Living Places" are realised. It is relatively simple, but I shall briefly run through it. Clause 1 deals with removal notices for graffiti. Local authorities will be able to serve notice on statutory undertakers and telecoms companies to remove graffiti from street furniture within 14 days. If they fail to do so, the Bill gives local authorities the right to remove the graffiti themselves and claim "expenses reasonably incurred" from the owners. Clause 2 is concerned with an owner's right to appeal against the notice. I am not sure about the extent of that right, but I do not want to appear unreasonable. I do not want to penalise firms that are already victims of crime, but the multi-million pound businesses referred to in the Bill, like most people, do not want graffiti on their property. It undermines their image and makes them look unattractive to their customers, which is why clause 3 gives statutory undertakers the opportunity to have graffiti removed by local authorities as long as they cover the expenses involved.

For many companies, their standing within the community is a key aspect of their corporate social responsibility or CSR, which has now become a massive industry, with major corporations using it to demonstrate their commitment to the world that they live in. Companies understand the public relations value of contributing to the world around them, as it improves their reputation. It is therefore surprising that some companies with big PR budgets for lobbying are still unwilling to do something that would have a massive positive impact on local communities—removing graffiti from street furniture.

Telewest, for instance, is only too happy to invite people like me to receptions at party conferences, but when Merton council wanted to remove some graffiti from Telewest's cable boxes, the company threatened to sue. Indeed, so bad has Telewest been at tackling the issue that the 11 London boroughs that make up South West London against Graffiti have agreed a joint campaign to demand attendance from Telewest at their next meeting to explain their policies. I hope that I get an invitation.

Railtrack, whose PR budget extended to advertising in The House Magazine, which is aimed at people like us, was recently named and shamed by Merton council for not removing graffiti from its property, even though graffiti is so dispiriting for people who live in the area or use the train. I understand that, as a result of that pressure Railtrack, or Network Rail as it is now, has improved its approach. However, those two massive companies are not alone. The Bill will ensure that they will no longer be able to get away with turning a blind eye to their obligations to the communities in which they operate. They will have to clean up their property or pay for local authorities to do it for them, without hard-pressed council tax payers having to foot the bill.

I do not want people to think that all is doom and gloom. There are many examples of progress being made in tackling graffiti. Many local councils have made a major impact. In my area, for instance, Merton council is making great strides. The innovative FLAG project, which covers fly tipping, abandoned cars and graffiti, and has involved publicity campaigns about these issues, has led to reductions in the incidence of graffiti and improvements in its removal. The Anti-Social Behaviour Bill will introduce fixed penalties for people who vandalise their communities with their graffiti.

That Bill will also make it an offence to sell spray paint to under-18s, which is an extremely positive step. With much fanfare, 26 shops in Merton recently launched a voluntary scheme, promising not to sell spray paint to under-18s. However, when council officers went back to the shops a few weeks later, they found that nine of the shops were still selling cans of spray paint to people as young as 13, so it is clear that. even when the intentions are good, the law needs toughening to prevent access to the materials used for tagging or other graffiti, and to punish the perpetrators.

My Bill will tackle the other side of the equation: removing the culprits' handiwork from our streets. It will make it easier for good businesses to seek the help of councils to remove graffiti from their property, and make it easier for local people to have graffiti removed from furniture that is owned by companies that do not really care about their corporate social responsibilities. For the sake of my constituents in Mitcham, Morden and Colliers Wood who want something done about antisocial crimes such as graffiti, which blight the streets and open spaces around their homes, I commend the Bill to the House.

Question put and agreed to.

Bill ordered to be brought in by Siobhain McDonagh, Laura Moffatt, Barbara Follett, Mr. Barry Gardiner, Jeff Ennis, Mr. Bob Blizzard, Mr. Tom Watson, Jonathan Shaw, John Mann, Geraint Davies, Mr. Gareth Thomas and Shona Mclsaac.

Street Furniture (Graffiti)

Siobhain McDonagh accordingly presented a Bill to make provision for local authorities to remove graffiti from street furniture owned by statutory undertakers; to enable local authorities to recover costs from the statutory undertakers; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 11 July, and to be printed [Bill 106].

Finance Bill (Programme) (No 3)

12.44 pm

I beg to move,

That in accordance with the Resolution of the Programming Committee of 12th May and pursuant to the Programme Order of 6th May relating to the Finance Bill (proceedings in Committee), as amended by the Order of 8th May.

  • (1) proceedings in Committee of the whole House shall be taken on each of the two days allowed by the Order as shown in the second column of the following Table, and shall be taken in the order so shown;
  • (2) proceedings on the first day shall be brought to a conclusion six and a half hours after the commencement of proceedings on the motion for this Order or, if earlier, at the conclusion of the proceedings set down for that day; and
  • (3) proceedings on the second day shall (so far as not previously concluded) be brought to a conclusion six and a half hours after the commencement of proceedings on the Bill.
  • TABLE
    DayProceedings
    First dayClauses 1, 4, 5, 9, 14, 22, 42 and 56, Schedule 5, Clause 57, Schedule 6, Clause 124, Schedule 19
    Second dayClauses 130 to 135, 138, 139 and 148, Schedule 25, Clause 184, new Clauses tabled by Friday 9th May 2003 relating to excise duty on spirits or R&D tax credits for oil exploration
    The programme motion sets out the clauses and schedules to be considered in the Committee of the whole House, the days to be spent on consideration, and the day on which the Bill will be reported from Standing Committee. Two days have been allocated for debate. All the measures tabled for consideration in the Committee of the whole House have been selected by the Opposition parties. Six debates have been selected by the minority parties and 14 by Her Majesty's Opposition, the Conservative party. The Government have not added any new topics for discussion. As you will see, Mr. Deputy Speaker, the proceedings also include two new clauses specifically requested by one of the minority parties; unfortunately, none of its representatives is yet present in the Chamber.

    To ensure that the time for debate is not curtailed by other business of the House in the two days allocated, the motion guarantees six and a half hours of business each day even if the start of the debate is delayed. Without such provision, the debate would usually finish at 7 pm each day. That facilitates the discussion of topics requested by all the Opposition parties in the days agreed through the usual channels for the Committee of the whole House.

    12.45 pm

    It has been my privilege over the past three years to participate in the consideration of Finance Bills. While the Opposition did not agree with a number of the measures previously introduced, they were properly considered and proper opportunity and sufficient time were given for the Opposition to express the views and criticisms raised by various outside professional bodies. Furthermore, on more than one occasion, I have complimented the Paymaster General as having been, during the time in which I have been interested in politics, more on top of the Revenue and tax law than any of her predecessors.

    I am therefore extremely disappointed about what seems to have happened this year. The Bill seems poorly drafted and a number of crucial changes have been made without proper consultation and by an unacceptable and authoritarian railroading through Parliament. The major tax changes self-evidently relate to the stamp duty land tax, employee securities and options, approved share schemes and a considerable number of VAT and other anti-avoidance measures.

    This is the fourth longest Finance Bill on record. It has 447 pages and there are 659 pages of explanatory notes, at least one of which was so badly drafted that it contained the wrong figure for the basic rate of income tax. Seven days and 14 sittings in Standing Committee are wholly inadequate to consider a Bill of such complexity and volume. As to the Floor of the House, the Conservative Opposition requested that we discuss a number of key introductory clauses in order to debate the principles that they involve, and not the accompanying schedules, after checking with the Public Bill Office that that was constitutionally appropriate. The Government agreed to withdraw schedules 21 and 22—some 80 pages of legislation—and I understand that they now realise that they will have to rewrite part of schedule 21, but we are left with schedules 5, 6 and 25. Together with the other items to be taken on the Floor of the House, they are too much to allow a proper debate and a full airing of the issues raised.

    The Government's growing disregard—nay, contempt—for Parliament is widely recognised. Many people will have heard the comments made on the radio this morning by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who criticised the Government's abuse of Parliament and expressed alarm about the state of Parliament.

    The Government's decision to cut short debate on the Finance Bill means that there is a danger that shortcomings in the Bill as it stands will pass into law. The Bill includes 180 pages of provisions rewriting and completely changing the nature of stamp duty land tax, including the new tax on leases, without any proper calculation or estimate of the additional tax that is likely to be raised. The extent of the changes was not made clear in the Budget speech. Clauses 1, 3, 8 and 9, with their accompanying schedules, introduce, again without warning, badly drafted rewrites of tax law relating to employee securities and options and approved share schemes, that, as the comments submitted by the professionals show, are full of mistakes and unintended consequences and will leave many genuine share schemes in a complete mess. Such a total overhaul of complex legislation that has not been subject to thorough consultation merits detailed debate and consideration in Parliament.

    Is my hon. Friend aware that the Government are already amending the Bill just days after its Second Reading? That amply illustrates his point.

    I thank my hon. Friend for his comments. I referred to just one aspect of the Government amendments of which I am aware, but I expect many more.

    The legal and accounting professions contribute to the proper scrutiny of such legislation by considering the detailed drafting and passing on their proposals for improvements and the correction of mistakes, and those representations are considered in Committee. If that process is curtailed, the chance of mistakes increases, and they will surface only when it is too late and the Bill has passed into law. Of crucial importance, of course, is the fact that a Finance Bill does not receive the secondary scrutiny of the other place. In our view, a quite insufficient and unacceptable amount of time is being given to the Committee stage, which will result in bad law, damage to business and damage to jobs.

    There has been widespread professional criticism both of the Bill and of the lack of adequate consultation. The Law Society produced comment running to 130 pages, with 90 pages of draft amendments. The Chartered Institute of Taxation provided 44 pages of detailed problem issues that the Bill raises. The tax faculty of the Institute of Chartered Accountants produced 31 closely printed pages of critical issues. If I may, Mr. Deputy Speaker, I shall quote a few of the comments that were made by those professional bodies. The Law Society notes: "In 2002 we welcomed the fact that much of the Finance Bill had been circulated in draft prior to publication. This year a very significant proportion of the bill consists of complex legislation which had not been previously published. This might not have been a concern, had agreed policy intentions been translated into clearly worded statutory drafting. Regrettably, this appears not to be the case in many areas. These failings are compounded by the extremely limited time available for consideration, both by professionals and by Parliament and the poor quality of many of the Explanatory Notes."

    The institute—

    Order. I am sorry to interrupt the hon. Gentleman. I have been generous in allowing him the general remarks that he has made until now, but I have to remind him that the motion relates only to the content of the two days' debate in Committee of the whole House.

    Thank you, Mr. Deputy Speaker.

    We have of course selected clauses from the whole Bill for the two days' debate on the Floor of the House. The key point that I made at the beginning is that we will end up with three key schedules being debated on the Floor of the House. If I may crave your indulgence, Mr. Deputy Speaker, the programme motion gives rise to a grave problem in that the most important item that we will discuss on the Floor of the House is our amendment to schedule 19, which proposes a further year for full consultation and consideration of the changes to stamp duty and the new stamp duty land tax. There is a risk that we may not reach that important amendment today, and if we do not, we will have little chance to debate it later on in the course of our very limited timetable. That issue arises again in the context of the first tranche of Standing Committee proceedings, where the two most important amendments, Nos. 21 and 22, are to be debated at the end, so we will face a major problem if there is insufficient time.

    In short, we see no good reason why the Bill has been given insufficient time overall. We selected clauses for debate on the Floor of the House with the intent that there would be sufficient time to do so, but the adding of the schedules renders that impossible. If there is a means of doing so, we ask the Government seriously to consider giving schedules 5, 6 and 25 sufficient time for debate, if not on the Floor of the House, in Standing Committee.

    My main point is that the process of debate on the Floor of the House and in Committee affords consideration of the comments, criticisms and proposed changes of the professionals and of those who act for the businesses who will have to work with the new legislation. If that process is not given sufficient time, we will end up with bad legislation that is bad for individuals, bad for business and bad for jobs.

    12.56 pm

    I wish to follow my hon. Friend's comments with a couple of short points.

    Yesterday, we heard an important announcement—that is the only way to describe it—from the Secretary of State for Northern Ireland, who told us that one reason why the House of Commons could have only one day to debate a Bill was that the House of Lords needed two days to debate it, and the elected Chamber had to take second place in preference to the other place. The Finance Bill does not face that hurdle because it does not have to be reviewed in another place. That is why it is so essential that it receive proper and adequate scrutiny in the House of Commons.

    As my hon. Friend the Member for Arundel and South Downs (Mr. Flight) said, we are embarked upon debating over a very short period one of the largest Finance Bills to have passed through the House. I know, Mr. Deputy Speaker, that you said that we must only refer to the debates that will take place today and tomorrow, but in so doing, we will consider only the parts of the Bill that have been selected for debate on the Floor of the House, and we have been able to select for consideration only a very small proportion of a hugely complicated and complex Bill. It is unacceptable that we should not get adequate time to scrutinise the Bill in its entirety.

    One has only to look at the programme motion, which says that on the second day we will debate

    "new Clauses tabled by Friday 9th May".
    How is it possible to get the right kind of consultation when the Government table amendments so late in the day? Such matters naturally have to be considered by many people outside who have to add detail to the facts of those late amendments. It is unacceptable for the Government to table amendments as late as Friday 9 May for consideration some four days later. It is yet another example of the sheer and utter contempt—

    If the hon. Gentleman would cast his mind back—I know that it is a long way—to the time when his party was in government, he may recall how many Government amendments they tabled to the Finance Bill.

    I seem to remember that the 1997 election slogan was, "Things can only get better". Perhaps we should add, "apart from in the House of Commons," where they get more contemptible. The Paymaster General referred to Conservative Finance Bills, which were not subject to the rigorous guillotining that happens nowadays. I cannot remember another Finance Bill that had 14 sittings in Committee. That is ridiculous, as is the programme motion, which clearly shows the absolute contempt for this place of which we heard yesterday in the resignation speech of the former Secretary of State for International Development.

    Several hon. Membersrose

    Order. For the assistance of hon. Members who seek to catch my eye, I must clarify that we are discussing the motion on the Order Paper. I do not wish to hear comments that go beyond that.

    1 pm

    I shall confine myself to the motion because I believe that it is wrong. When discussions take place between the usual channels about the number of days for discussion on the Floor of the House, an agreement is reached that is usually inadequate for the Opposition and excessive for the Government. The Opposition parties are asked to submit what they want to tackle on the Floor of the House. That process was followed on this occasion. Business was proposed to and accepted by the Government. I am content with that; indeed. I am grateful to them because I was involved in the process.

    The trouble started immediately afterwards because the Order Paper contained not only the items for which we asked but additional items. The Government argued that if we requested clause x, whatever they believed appropriate should be tagged on, but that is technically unnecessary. I shall say thank you again to the Government because when we protested, a couple of items were removed for consideration in Standing Committee. However, the trouble centres on some items that were not removed.

    We had an understanding that there would be two days on the Floor of the House. We presented our proposals and the Government added to them. Today and tomorrow, we shall therefore consider more business than we requested, more than can be justified and more than we can tackle in the time. That is the nub of the problem. I have a simple question for the Paymaster General. If we do not have time to deal with the extra items that the Government have included and refused to remove, will she give hon. Members an absolute undertaking that a motion will be tabled to enable us to deal with the business Upstairs in Standing Committee? It would be helpful if the Paymaster General listened rather than holding a conversation.

    Will the right hon. Lady give us a simple, clear undertaking now that any business that is not concluded today and tomorrow, especially business that the Government tabled and for which we did not ask, will go Upstairs to allow scrutiny? That is essential, especially given that the other place has no opportunity to consider the measure. If she agrees to the request, I shall say thank you for a third time. If not, it is a disgraceful abuse of a Government's power to try to railroad through this place unconsidered legislation that could have dire consequences for the country's economy.

    The question is simple. Will the Paymaster General ensure that, whatever happens today and tomorrow, scrutiny takes place?

    1.4 pm

    I do not wish to detain the House for too long. I draw hon. Members' attention to my entry in the Register of Members' Interests. In perusing the motion, I wonder whether the Paymaster General, who has a good reputation for listening both inside and outside the House, can be proud of it. I served on Committees that considered Finance Bills from 1988 to 1992, and I remember no precedent for behaving in such a cavalier way. Nor do I remember the Government whom I supported tabling such motions.

    How many days were allocated for a Committee of the whole House to consider the Finance Bills to which the hon. Gentleman refers? Does he recollect that the answer is two days?

    With great respect to the Paymaster General, she is missing the point. In those four years when I served on Finance Bill Committees, there was agreement between both sides. There is no such agreement today. The right hon. Lady should pay greater heed to tradition, whereby such motions were tabled with agreement and did not cause debates. If she looks back at the record, she will find that no debate such as today's took place in those years. I am worried by the operation of the motion and the way in which it will facilitate railroading an enormous Bill through in a short time.

    The Paymaster General will be acutely conscious that serious professionals outside the House, who are engaged in the City or the financial service industry, have reservations about the way in which we conduct our scrutiny of the Finance Bill. She will be familiar with the tax rewrite committee and the work of Lord Howe's committee on more effective scrutiny of such legislation, of which the hon. and learned Member for Dudley, North (Ross Cranston) and I are members. I hope that the Paymaster General accepts that serious professionals outside this place are worried about the quality and extent of our scrutiny. The motion will not assuage their doubts about the proper scrutiny by the House of Commons. The Paymaster General fully understands that some of the subjects that are tabled for debate today may not set pulses racing, but they are vital to industry, business and commerce and they deserve proper scrutiny.

    It will not have escaped the right hon. Lady's notice that, apart from the Front-Bench spokesman, the two other Conservative Members who have spoken are the deputy Chief Whip and the Whip responsible for the Finance Bill. Both made cogent points about why the motion allows too short a time and is excessively hard on the House of Commons. I hope the right hon. Lady will take cognisance of that.

    The Paymaster General should bear in mind the important point that there is no scrutiny in the Lords. She will have witnessed the great anxiety, which was expressed recently in another place, about timetabling the Communications Bill. She knows about the trouble that the Government are experiencing. If they had listened to representations from Conservative Members about making more time available, they would not have got into such difficulties with the Communications Bill.

    Parliamentary scrutiny and the effectiveness with which we discharge such duties are under intense outside observation. Such oppressive timetabling will have the opposite effect from what the Government hope. It will not mean that their measures receive greater acceptance or go through more quickly. We need a legislators' revolt against the Executive—a modern-day peasants' revolt. I hope that one of its first victories will be the prevention of unfair timetabling such as we have today.

    1.9 pm

    It is a pleasure to speak in my first Finance Bill Committee and I declare my entry in the Register of Members' Interests.

    On a point of order, Mr. Deputy Speaker. It is my understanding from the guidance that has been issued to Members of Parliament that it is not sufficient for a Member simply to say, "I declare my interest as registered."

    That is not a matter for a Chair. It is for the hon. Member to be sure that he or she satisfies the requirements of the House.

    Thank you, Mr. Deputy Speaker.

    When I first had sight of this draft legislation, I was shocked at the two days that had been allocated for the discussion of this stage of the Bill. I know that I am not allowed to talk about the other 14 measly days, but even in these two days, we are being asked to review some 20 clauses that deal with an enormous raft of legislation and, indeed, a whole new tax—and an extremely complicated one, at that. I fully support my hon. Friends in saying that we have not been given enough time to debate these issues. As my hon. Friend the Member for Arundel and South Downs (Mr. Flight) mentioned, we are not the only people saying that. In the last few days, my hon. Friends and I have received a host of letters from professionals, business people, retailers and property business people, complaining about the lack of consultation and their inability to get their heads round what is going on here, in terms of the time being allowed for discussion of these matters.

    To my mind, less consultation means that more time is required at this stage, rather than less. The worst example of that relates to the stamp duty land tax, which will be discussed over the next two days. I have received an enormous number of complaints about the clause dealing with that provision, and a flood of articles has appeared in the press over recent days. I shall mention one that came in this morning—it was probably written last night—from the tax law committee of the Law Society, which states:
    "significant amounts of the draft legislation included in the Finance Bill have not been reviewed as part of that process".
    The committee goes on to say:
    "Whatever date is chosen, we recommend that detailed guidance is made available"
    and that

    "A new tax should not be introduced in such an incomplete form".
    There are very serious issues involved here. This stamp duty involves some £8 billion of revenue. Surely that deserves more time for discussion.

    1.12 pm

    It has been the practice to allocate two days for the discussion of Finance Bills by the Committee of the whole House for a very long time. I have checked the record as far back as I could while in the Chamber, and two days has been the allocated period for at least the last eight Finance Bills, if not more. The Committee of the whole House sits on a Finance Bill for two days. That was agreed through the usual channels. The next procedure is that the Opposition parties are invited to propose the issues that they wish to debate in those two days. The Government have no control over that. As the House will see, the Opposition parties have picked a rather large range of issues, but that is entirely up to them. The internal record shows that the sitting of the Committee that discussed this programme motion for the Committee of the whole House lasted for only two minutes, and that there was no Division on the matter.

    As some hon. Members have said in this short debate, it has always been my practice to ensure that there is ample time and thorough debate within the proceedings of the House for the discussion of the Finance Bill. Indeed, the Opposition approached me as a Minister and explained that there were two particular schedules to which they wished to table a large number of amendments. Those schedules were then moved back into Committee. I am therefore rather at a loss. When in government, the Conservatives allowed two days for the debates involving the Committee of the whole House. This Government also allow two days, as is the practice of the House. The Opposition parties were fully aware that two days were to be allocated, and they are fully aware of the decision of the House on programme motions. None the less, they advanced a very large number of subjects for debate during these two days. It seems to me that they are actually complaining about their own judgment at having proposed so many subjects for discussion, or perhaps they were trying to use up time so as to give their Members time to get from their luncheon clubs for the vote.

    No, I will not.

    The fact of the matter is that this was done with agreement, in discussion—

    No, I will not give way to the hon. Gentleman.

    The programme motion is before the House. The record is clear. The discussions have been held, and the two days—

    On a point of order, Mr. Deputy Speaker. Is it in order to say that something was done with agreement when it patently was not done with agreement?

    I said, with regard to the internal record, that there was no Division on this matter. The agreement was that there would be two days, and that was my understanding in all the discussions that I have had with the Opposition parties.

    No, I will not give way.

    The programme motion has been discussed, and the two days have been allocated. The Opposition parties themselves—not the Government—chose the debates. Of course, they are absolutely right to say that it is the Government's responsibility—and my responsibility as a Minister on this Bill—to ensure that, within the procedures of the House, there is proper time to discuss the Finance Bill. I intend to ensure that that happens, and I therefore move the programme motion only for the two days' debate on the Floor of the House. The programme motion for other business will be discussed elsewhere at the appropriate time.

    Question put:

    The House divided: Ayes 244, Noes 137.

    Division No. 188]

    [1:17 pm

    AYES

    Abbott, Ms DianeCoffey, Ms Ann
    Ainsworth, Bob (Cov'try NE)Coleman, lain
    Alexander, DouglasColman, Tony
    Allen, GrahamCook, Frank (Stockton N)
    Armstrong, rh Ms HilaryCooper, Yvette
    Atkins, CharlotteCorbyn, Jeremy
    Austin, JohnCorston, Jean
    Bailey, AdrianCousins, Jim
    Barnes, HarryCox, Tom (Tooting)
    Battle, JohnCranston, Ross
    Bayley, HughCrausby, David
    Beard, NigelCruddas, Jon
    Benn, HilaryCryer, Ann (Keighley)
    Benton, Joe (Bootle)Cryer, John (Hornchurch)
    Blackman, LizCunningham, Jim (Coventry S)
    Blears, Ms HazelCunningham, Tony (Workington)
    Blizzard, BobDalyell, Tarn
    Bradley, rh Keith (Withington)Darling, rh Alistair
    Bradshaw, BenDavey, Valerie (Bristol W)
    Brennan, KevinDavid, Wayne
    Brown, Russell (Dumfries)Davidson, Ian
    Browne, DesmondDavies, rh Denzil (Llanelli)
    Bryant, ChrisDavis, rh Terry (B'ham Hodge H)
    Burden, RichardDawson, Hilton
    Burgon, ColinDean, Mrs Janet
    Burnham, AndyDhanda, Parmjit
    Cairns, DavidDobbin, Jim (Heywood)
    Campbell, Alan (Tynemouth)Donohoe, Brian H.
    Campbell, Mrs Anne (C'bridge)Dowd, Jim (Lewisham W)
    Caplin, IvorDrew, David (Stroud)
    Casale, RogerDrown, Ms Julia
    Caton, MartinEagle, Angela (Wallasey)
    Chapman, Ben (Wirral S)Edwards, Huw
    Clark, Dr. Lynda (Edinburgh Pentlands)Efford, Clive
    Ellman, Mrs Louise
    Clark, Paul (Gillingham)Farrelly, Paul
    Clarke, rh Tom (Coatbridge & Chryston)Field, rh Frank (Birkenhead)
    Fitzpatrick, Jim
    Clarke, Tony (Northampton S)Foster, Michael (Worcester)
    Clelland, DavidFoster, Michael Jabez (Hastings & Rye)
    Clwyd, Ann (Cynon V)

    Foulkes, rh GeorgeMann, John (Bassetlaw)
    Francis, Dr. HywelMarris, Rob (Wolverh'ton SW)
    Gapes, Mike (Ilford S)Marshall-Andrews, Robert
    Gardiner, BarryMartlew, Eric
    George, rh Bruce (Walsall S)Milburn, rh Alan
    Goggins, PaulMiliband, David
    Griffiths, Nigel (Edinburgh S)Miller, Andrew
    Griffiths, Win (Bridgend)Moffatt, Laura
    Hall, Mike (Weaver Vale)Morgan, Julie
    Hall, Patrick (Bedford)Morley, Elliot
    Hanson, DavidMorris, rh Estelle
    Harman, rh Ms HarrietMountford, Kali
    Harris, Tom (Glasgow Cathcart)Mudie, George
    Havard, Dai (Merthyr Tydfil & Rhymney)Mullin, Chris
    Munn, Ms Meg
    Healey, JohnMurphy, Denis (Wansbeck)
    Hendrick, MarkMurphy, Jim (Eastwood)
    Hepburn, StephenNaysmith, Dr. Doug
    Hewitt, rh Ms PatriciaNorrls Dan (Wansdyke)
    Heyes, DavidO'Brien, Bill (Normanton)
    Hill, Keith (Streatham)Olner, Bill
    Hinchliffe, DavidO'Neill, Martin
    Hoey, Kate (Vauxhall)Organ, Diana
    Hoon, rh GeoffreyOwen Albert
    Hopkins KelvinPalmer, Dr. Nick
    Howarth, George (Knowsley N & Sefton E)perham Linda
    Picking, Anne
    Howells, Dr. KimPickthall, Colin
    Hughes, Kevin (Doncaster N)Pike, Peter(Burnley)
    Hutton, rh JohnPlaskitt, James
    Iddon, Dr. Brian
    Irranca-Davies, HuwPond, Chris (Gravesnam)
    Jackson, Glenda (Hampstead & Highgate)Pound, Stephen
    Prentice, Ms Bridget (Lewisham E)
    Jamieson, David
    Jenkins, BrianPrentlce, Gordon (Pendle)
    Jones, Helen (Warrington N)Primarolo, rh Dawn
    Jones, Jon Owen (Cardiff C)Prosser, Gwyn
    Jones, Lynne (Selly Oak)Purchase, Ken
    Joyce, Eric (Falkirk W)Quinn, Lawrie
    Kaufman, rh GeraldRapson, Syd(Portsmouth N)
    Keen, Alan (Feltham)Reed, Andy (Loughborough)
    Kemp, FraserRooney, Terry
    Khabra, Piara S.Ross- Ernie (Dundee W)
    Kidney, DavidRoy, Frank (Motherwell)
    Kilfoyle, PeterRuane, Chris
    King, Ms Oona (Bethnal Green & Bow)Ruddock, Joan
    Ryan, Joan (Enfield N)
    Knight, Jim (S Dorset)Salter, Martin
    Kumar, Dr. AshokSarwar, Mohammad
    Ladyman, Dr. StephenSavidge, Malcolm
    Lammy, DavidSawford, Phil
    Laxton, Bob (Derby N)Snaw, Jonathan
    Lazarowicz, MarkSheerman, Barry
    Lepper, DavidSheridan, Jim
    Levitt, Tom (High Peak)Shipley, Ms Debra
    Lewis, Ivan (Bury S)Singh, Marsha
    Lewis, Terry (Worsley)Smith, Angela (Basildon)
    Linton, MartinSmith, Jacqui (Redditch)
    Love, AndrewSmith, Llew (Blaenau Gwent)
    Lucas, Ian (Wrexham)Soley, Clive
    Luke, lain (Dundee E)Southworth, Helen
    McAvoy, ThomasSquire, Rachel
    McCabe, StephenStarkey, Dr. Phyllis
    McDonagh, SiobhainSteinberg, Gerry
    MacDonald, CalumStevenson, George
    MacDougall, JohnStinchcombe, Paul
    McFall, JohnStuart, Ms Gisela
    McGuire, Mrs AnneTami, Mark (Alyn)
    Mclsaac, ShonaTaylor, Dari (Stockton S)
    McKechin, AnnTaylor, David (NW Leics)
    McKenna, RosemaryThomas, Gareth (Clwyd W)
    McNamara, KevinThomas, Gareth (Harrow W)
    Mahon, Mrs AliceTrickett, Jon
    Mallaber, JudyTruswell, Paul
    Mandelson, rh PeterTurner, Dennis (Wolverh'ton SE)

    Turner, Dr. Desmond (Brighton Kemptown)Winnick, David
    Winterton, Ms Rosie (Doncaster C)
    Turner, Neil (Wigan)
    Twigg, Derek (Halton)Wood, Mike (Batley)
    Tynan, Bill (Hamilton S)Woodward, Shaun
    Vis Dr RudiWorthington, Tony
    Wright, David (Telford)
    Waremg, Robert N.Wright,Tony (Cannock)
    Watts, DavidWyatt Derek
    White, Brian
    Whitehead, Dr. Alan

    Tellers for the Ayes:

    Williams, rh Alan (Swansea W)

    Gillian Merron and

    Williams, Betty (Conwy)

    Mr. Phil Woolas

    NOES

    Allan, RichardHeath, David
    Amess, DavidHendry, Charles
    Ancram, rh MichaelHermon, Lady
    Atkinson, Peter (Hexham)Hogg, rh Douglas
    Bacon, RichardHoram, John (Orpington)
    Baron, John (Billericay)Hughes, Simon (Southwark N)
    Barrett, JohnJack, rh Michael
    Bellingham, HenryKey, Robert (Salisbury)
    Bercow, JohnKirkbride, Miss Julie
    Blunt, CrispinLait, Mrs Jacqui
    Brady, GrahamLamb, Norman
    Brake, Tom (Carshalton)Lansley, Andrew
    Brazier, JulianLaws, David (Yeovil)
    Breed, ColinLewis, Dr. Julian (New Forest E)
    Browning, Mrs AngelaLiddell-Grainger, Ian
    Burns, SimonLidington, David
    Burstow, PaulLlwyd, Elfyn
    Butterfill, JohnLoughton, Tim
    Cable, Dr. VincentLuff, Peter (M-Worcs)
    Calton, Mrs PatsyMackay, rh Andrew
    Cameron, DavidMaclean, rh David
    Campbell, Gregory (E Lond'y)McLoughlin, Patrick
    Campbell, rh Menzies (NEFife)Malins, Humfrey
    Cash, WilliamMercer, Patrick
    Chapman, Sir Sydney (Chipping Barnet)Mitchell, Andrew(Sutton Coldfield)
    Chope, ChristopherMoore, Michael
    Clapham, MichaelMoss, Malcolm
    Cormack, Sir PatrickMurrison, Dr. Andrew
    Curry, rh DavidOaten, Mark (Winchester)
    Davey, Edward (Kingston)O'Brien, Stephen (Eddisbury)
    Davis, rh David (Haltemprice & Howden)Osborne, George (Tatton)
    Paice, James
    Djanogly, JonathanPaterson, Owen
    Dodds, NigelPickles, Eric
    Donaldson, Jeffrey M.Portillo, rh Michael
    Duncan, Peter (Galloway)Price, Adam (E Carmarthen & Dinefwr)
    Fallon, Michael
    Field, Mark (Cities of London & Westminster)Prisk, Mark (Hertford)
    Randall, John
    Flight, HowardRedwood, rh John
    Flook, AdrianRobathan, Andrew
    Forth, rh EricRobertson, Angus (Moray)
    Foster, Don (Bath)Robertson, Hugh (Faversham & M-Kent)
    Francois, Mark
    George, Andrew (St. Ives)Robertson, Laurence (Tewk'b'ry)
    Gibb, Nick (Bognor Regis)Rosindell, Andrew
    Gidley, SandraRussell, Bob (Colchester)
    Gillan, Mrs CherylSanders, Adrian
    Gray, James (N Wilts)Sayeed, Jonathan
    Grayling, ChrisSelous, Andrew
    Green, Matthew (Ludlow)Shephard, rh Mrs Gillian
    Grieve, DominicShepherd, Richard
    Gummer, rh JohnSimpson, Keith (M-Norfolk)
    Hague, rh WilliamSmith, Sir Robert (W Ab'd'ns & Kincardine)
    Hammond, Philip
    Harris, Dr. Evan (Oxford W & Abingdon)Smyth, Rev. Martin (Belfast S)
    Spelman, Mrs Caroline
    Harvey, NickSpink, Bob (Castle Point)
    Hawkins, NickSpring, Richard
    Heald, OliverSteen, Anthony

    Stunell, AndrewWhittingdale, John
    Swayne, DesmondWiddecombe, rh Miss Ann
    Swire, Hugo (E Devon)Wiggin, Bill
    Taylor, John (Solihull)Williams, Roger (Brecon)
    Taylor, Matthew (Truro)Willis, Phil
    Taylor, Sir TeddyWilshire, David
    Winterton, Ann (Conaleton)
    Thomas, Simon (Ceredigion)wishart, Pete
    Thurso, JohnYeo, Tim (S Suffolk)
    Turner, Andrew (Isle of Wight)Young, rh Sir George
    Tyler, Paul (N Cornwall)
    Viggers, Peter

    Tellers for the Noes:

    Watkinson, Angela

    Mr. Robert Syms and

    Weir, Michael

    Mr. Mark Hoban

    Question accordingly agreed to.

    Orders Of The Day

    Finance Bill

    (Clauses Nos. 1, 4, 5, 9, 14, 22, 42, 56, 57, 124, 130 to 135, 138, 139, 148 and 184 and Schedules Nos. 5, 6, 19 and 25, and any new Clauses and Schedules tabled by Friday 9th May 2003 relating to excise duty on spirits or R&D tax credits for oil exploration)

    Considered in Committee [first day].

    [SIR ALAN HASELHURST in the Chair]

    Clause 1

    Rates Of Tobacco Products Duty

    1.30 pm

    With this it will be convenient to consider the following amendments: Nos. 61, 2 and 3.

    As we commence the Committee of the whole House on the Finance Bill, may I welcome you to the Chair, Sir Alan, and draw attention to my entry in the Register of Members' Interests? We will deal with amendments Nos. 1, 2 and 3, standing in my name and those of my right hon. and hon. Friends, with the rates applying to tobacco and their implications, and with why the amendments have been proposed.

    In considering these amendments, it is important to recognise the competing interests of the freedom of choice of consumers—people's freedom to be un-oppressed by the Government in the choices that they make in their own lives—and of the health background that has become an increasingly important consideration in recent years in relation to tobacco products. The plan has been to increase rates of excise duty on all tobacco products in line with inflation. The Budget stated that it would increase the rate by 2.8 per cent. with effect from 6 pm on 9 April 2003—the day the Chancellor made his Budget statement to the House. In the four Budgets between 1997 and 2000, the increases were inflation plus 5 per cent., and in Budgets since then the increases were inflation only, so the Government's current proposal is in line with the past three Budgets.

    Although my colleagues and other Members will immediately have spotted that the amendments relate to tobacco products, they will also have noted that they relate not to the rate of duty on cigarettes—to which we do not propose an amendment—but that relating to the other categories of products: cigars, pipe tobacco, hand-rolling tobacco and other smoking and chewing tobacco. I hope that the reason for tabling these amendments will become clear, and that the Government will be persuaded to consider them favourably.

    I began by mentioning the caveat of health issues because the focus tends to be on cigarettes. Because so much importance is attached to the behaviour that the rates of duty applying to tobacco products seek to influence, the message tends to be somewhat more emotively concerned with cigarettes. In order to ensure that the argument is as transparent and compelling as possible, those who think as I do on these matters have thought it important not to cloud the issue by dealing directly with cigarette tobacco products at this point, but I hope that the Government can learn some lessons if we are able to pursue the route proposed through the amendments.

    Although the amendments do not deal with cigarette tobacco products, the problem that they identify and deal with is equally valid in terms of cigarette smoking and related tobacco products, and of other tobacco products. The outline of the problem that has informed me, my colleagues and a wide variety of outside bodies can be found in the Government's own document, entitled "Tackling Tobacco Smuggling"—it has become known as "TTS"—which was published by Her Majesty's Customs and Excise and the Treasury in March 2000. Paragraph 1 states:
    "The increased availability of cheap smuggled cigarettes is undermining the Government's health objectives."
    That sentiment is well understood. The amendments would change the rates because a balance must be struck—I believe that the Government also recognise this—between influencing behaviour on health grounds, necessary revenue collection and seeking to ameliorate the situation regarding revenue lost through smuggling and cross-border shopping. These revised rates would have a direct effect on all those factors.

    Smuggling currently accounts for 21 per cent. of cigarette consumption and 52 per cent. of hand-rolling tobacco consumption, and the Treasury has lost a staggering £12 billion in revenue since 1997. The level of cross-border shopping, which must be distinguished from smuggling, continues to rise; it now accounts for 7 per cent. of cigarette consumption and 17 per cent. of hand-rolling tobacco consumption. That constitutes a further revenue loss since 1997 of £3 billion. No UK duty is paid on 28 per cent. of cigarettes, or on 69 per cent. of hand-rolling tobacco. Some 28 per cent. of UK cigarettes sell at £2 to £2.50 for a packet of 20, the remainder selling at full price.

    In looking at the competing factors affecting the judgment that the Treasury must be required to make annually in considering these rates, it is interesting to note that the long-term downward trend in cigarette consumption has been broken. Tax increases since 1997 have resulted in a broadly flat overall level of tobacco consumption, including cigarettes and hand-rolling tobacco. I was naturally somewhat sceptical about this, thinking that those who have an interest in tobacco—be they smokers or producers—might be spinning me a line. So I turned to the Office for National Statistics, which in fact bears out these figures. For instance, in 1979—to pluck a year at random—cigarette and hand-rolling tobacco smokers accounted for 39 per cent. of the UK adult population. Between 1979 and 1992, the rate of consumption declined dramatically through the tremendous work of the previous Conservative Administration. In 1992, the rate was approximately 29 per cent.—a full 10 per cent. decrease. In 1997, the rate was about the same, and today it remains in the region of 27 to 28 per cent.

    In terms of a percentage of the UK adult population, the graph for the consumption of cigarette and hand-rolling tobacco has therefore flattened, and has remained flat since 1992. So the attempt to focus on the behavioural drivers through the Treasury's annual setting of rates, the function of which is to have regard to the health of our citizens, worked dramatically between 1979 and 1992; however, the graph has remained broadly flat ever since, with the percentage remaining at just over a quarter of the adult population.

    It would be fair to say that, on health grounds, much progress has been made, but it has stalled and steadied. However, the amount of cigarettes, hand-rolling tobacco and other tobacco products either smuggled into the country or bought through cross-border shopping has shot up dramatically. The statistics are far more difficult to establish, not least because smuggling is unsurprisingly not officially recorded. The revenue loss through smuggling and cross-border shopping has risen dramatically from between £0.5 billion and £0.75 billion in 1996–97 to about £4.5 billion in 2002, the last year for which records are available.

    Rather than taking the rates as read and viewing them as the natural order of a Chancellor's Budget—the result of people wondering what price he is going to put on a packet of fags—it is better to focus on behavioural success and behavioural opportunities. That applies to health, to revenue and to shopkeepers—particularly the owners of corner shops, examples of which can be found in every constituency and which carry considerable overheads—who are suffering significant losses through smuggling and cross-border shopping. Constituencies are more affected the closer they are to the south coast of England, but they are not alone because smuggling goes on equally on the east coast and the problem is also prevalent in my own constituency—as I know from talking to owners of what are colloquially known as corner shops—even though Eddisbury has no coastline. A large black market has developed, and at times it has become, frankly, a legitimate industry.

    I recently debated with the Minister secondary legislation through which the Government sought to allow an increased quota of certain products for personal use to be brought into the country. The concern remained that some cross-border shopping had resulted in on-sales, so the Government attempted to deal with the problem through that secondary legislation.

    I have consulted people from a wide range of interests, as well as people in my own party who are focused on these matters, to establish what the solution should be for this year.

    My hon. Friend is making an excellent speech. Before he moves on, he might like to reflect on the fact that the black market encourages organised crime and has created serious law and order problems, as well as costing the Exchequer, small businesses and others in terms of revenue.

    My hon. Friend represents a neighbouring constituency. He recognises that, despite the fact that neither of us has a coastline in our constituencies, smuggling and the black market deeply concern many people who run legitimate, well stocked and provisioned businesses.

    The Government have repeatedly recognised—it is not a matter of contention and would be agreed by all parties—that applying a rate to tobacco products is not simply a revenue-raising matter. It carries revenue-raising opportunities, as well established over many decades by Governments of both colours, but over the past 20 years it has become more widely understood—and I have sought to put it on the record with the information that I provided—that the rates provide behavioural opportunities in respect of health and revenue raising. The rates also affect the opportunities to acquire these products—whether brought from across the English channel, from other countries, or smuggled.

    I have viewed health considerations particularly highly, as they are well aired and understood, though people sometimes have different points of emphasis or completely different points of view on the dangers of tobacco. As I say, we have to look at behaviour. I concluded that we should focus on non-cigarette products in order not to be distracted by more emotive health arguments attached to cigarettes, not least because evidence shows that cigarettes are the tobacco products of choice for under-age children and have peer group attractiveness for teenagers. We should therefore reflect on what it would mean behaviourally if we froze tax rates this year on certain products.

    1.45 pm

    I am trying to follow the logic of the hon. Gentleman's argument and I understand where he is going. However, is it logical to include rolling tobacco, but not to include cigarettes? After all, rolling tobacco is one of the commonest ways through which young people on low incomes get into smoking.

    I take the hon. Gentleman's point seriously and I have given considerable thought to it. Percentage sales of hand-rolling tobacco are small compared with cigarettes. If the hon. Gentleman will bear with me as I move through my argument, he may see that another balance has to be struck between the merits of what I am proposing now and the position in a couple of years' time when we can make a genuine comparison between the sales of cigarettes and of another set of tobacco products. We will all be better informed about any difference in the behavioural circumstances with respect to cigarettes and other tobacco products. We will be able to study where the graphs on health and revenue cross with respect to smuggling and cross-border sales and full UK duty-paid sales. 'We will also be able to assess the behaviour of young people. I hope that the hon. Gentleman will accept that children are primarily focused on ready-made cigarettes. Some may be interested in hand-rolling tobacco, but I am told—I do not have established evidence to give chapter and verse—that the bulk of such tobacco is sold to adults, defined as 25 years old and over. That is an adult lifestyle choice.

    The hon. Gentleman talks about comparative figures and says that, if his amendment were accepted, we could assess them in a couple of years' time. Is he aware of the position in Canada, where I recollect that the provinces of Ontario and Quebec lowered the rate of excise duty on cigarettes because of smuggling from America? The consumption of cigarettes went up, so they are now raising the excise duties again because the earlier policy did not have the desired effect in terms of the behavioural changes that the hon. Gentleman is talking about.

    That is helpful. It reminds me that I did encounter data of that sort, though I cannot remember it as clearly as the hon. Gentleman does. I recall that it was one of the reasons why I felt that it would be helpful to leave out cigarettes for that purpose. It should also provide a comparative control group to assess the risks and the behavioural differences, partly because purchasing of cigarettes is more widespread and obtaining them is easier than other tobacco products.

    Is it not the case, in Canada as in this country, that one simply does not know how many illegal cigarettes are being consumed? The statistics are effectively meaningless because, without knowledge of how many illegal cigarettes are in circulation, we cannot know whether smoking is increasing or decreasing.

    My hon. Friend makes a helpful point. It prevents us from getting hijacked by a sense of unreality in a debate that the amendments are designed to promote. We are dealing with cross-border and, more importantly, smuggling issues, and my hon. Friend the Member for Tatton (Mr. Osborne) mentioned black market operations in the UK. All the figures have to be regarded as estimates, but the Treasury, Customs and Excise, and many other interested groups—health groups and the Tobacco Manufacturers Association—are doing their best to get hold of reliable figures.

    Over a period of years, estimates and approximations have been made. Although there has been some difficulty in ensuring confidence in the numbers, for the reason that my hon. Friend the Member for Tatton outlined, those numbers have become internally consistent. The information that we have makes it look as though that internal consistency has produced comparative data, year on year. The Government and health groups are thus able to refer to them.

    The Government's actions are driven as much by health considerations as by revenue considerations. That was true of the previous Government, whom I supported: they, too, were keen to look at the balance between health, the raising of revenue, and the jobs involved in the very important industry that depends on tobacco manufacturing and the distribution and retailing of tobacco products. Over a long period of years, the figures have achieved at least an internal consistency. The challenge is to produce comparable figures on which the House can rely. That challenge would not be made worse by the amendments. However, some hon. Members may declare that no numbers exist that can be relied on, and that we will never know whether health issues are improving.

    I want to clarify the central tenet of the hon. Gentleman's argument. Is he suggesting that we reduce the proposed rate of duty on these tobacco products in an attempt to beat smuggling and organised crime? If so, that appears a very blunt instrument.

    I shall try to make sure that my argument comes to a form of conclusion, so that the hon. Gentleman gets a sense of where the proposal might lead. The amendment has not been tabled simply for the sake of it—far from it. There will inevitably he scepticism among hon. Members from time to time about such matters, but I am seeking to make a genuine argument, as the amount of effort that has gone into it proves.

    My proposed solution would at least allow us to make a proper judgment. The primary argument for freezing tax rates on the specified tobacco product items—that is, excluding cigarettes—is that it would reduce, although not eliminate, the incentive to smuggle and to go cross-border shopping. Even tax rises by the level of inflation increase already very large price differentials. A packet of 20 cigarettes costs roughly £4.29 in the UK, compared with an official price of £2.69 in France, and street prices of between £2 and £2.50. Increases in tax since 1997 have also accompanied a rise in smuggling from just 3 per cent. to 21 per cent. We therefore have to determine what rates of duty have to do with that phenomenon, which is clearly of concern to the Revenue. That is the main business of the Committee as it considers the Finance Bill. However, it is also a concern for all hon. Members, as constituents regularly raise matters to do with health, both here and in other forums.

    I remind the House of the Customs and Excise document published in March 2000. Known as the TTS document, it states that smuggling

    "undermines progress on government health objectives by making cheaper cigarettes available through unregulated sources".
    We can assume that the same applies to other tobacco products. The document adds that

    "there are other undesirable effects. These include the law and order and social problems"—
    noted by my hon. Friend the Member for Tatton—
    "arising from the concentration of large groups of criminals in certain areas … And it has resulted in a decreasing respect for the law, as the numbers of people involved in the buying and selling of smuggled goods has risen to many thousands, possibly millions. In addition, large scale tobacco smuggling has the potential to create building blocks for organised crime networks run along business lines in a way rarely seen before in the UK, and to finance other serious criminal activity."
    Moreover, it is also argued that, because smuggled cigarettes are sold through unregulated sources, children can buy them easily. The amendment deals with the non-cigarette side, in an attempt to test whether a better result might not be achieved if the price of tobacco were not raised continually, as that creates the enormous differential that has been described. As has been noted, tobacco can be especially attractive to children. However, the amendment is not susceptible to such arguments, as it would not promote tobacco use among children.

    Does the hon. Gentleman accept that the vast majority of tobacco products smuggled into the UK come from countries in the eurozone? The euro has risen 10 per cent. in value in this calendar year. That will undercut any comparative figures that the hon. Gentleman is trying to use, and also what he is seeking to achieve with the amendment, because the price of cigarettes in France in sterling terms has effectively gone up 10 per cent.

    The hon. Gentleman makes an interesting point. At the grave risk of sounding as though I would much prefer to be at the Government Dispatch Box, rather than the Opposition one—although of course I would—I have not seen figures to support the contention that smuggling is primarily from the eurozone countries. I believe that the original source may be the eurozone countries, but the rise in criminal activity means that there are increasing numbers of intermediaries outside the eurozone. There is a fair argument to be had as to whether that exchange rate will make a huge difference. I think that the real concern is the current price differential.

    Perhaps I can help my hon. Friend, as a huge number of smuggled products are manufactured in the UK, and then exported abroad to countries such as Latvia, Moldova and Afghanistan. They are also exported to Kaliningrad. The products are then smuggled back into this country. They do not come from France, so the matter has nothing to do with the euro exchange rate.

    I am grateful to my hon. Friend, who puts the balance of the argument. Some smuggled goods clearly do come from France. I have seen various figures, although I am reluctant to place enormous reliance on them all. The nature of the activities involved makes it difficult for us to be sure about such figures.

    One option that is open to the Government is to alter, in the Finance Bill, the rates on these tobacco products. It is therefore right for us to take a cool, calm look at whether the House is doing the right thing in terms of influencing matters—smuggling, cross-border shopping, and health issues—about which we are so rightly worried.

    The hon. Gentleman is developing an argument about an experiment. Has he assessed what such an experiment would cost the Exchequer?

    I have looked at that. I have not had the Treasury model to play with, but I have been fairly persuaded by the evidence that I have seen. I am sure that the hon. Gentleman would want me to refrain from going through the body of that evidence—much of it is flagged among my notes—but I am convinced that concerns on these matters are shared by all hon. Members. They may approach the matter from a variety of angles, but there is a broad health concern. If the Government had the vision and courage to go down the sort of route proposed by the amendment, I think that there could be a net gain for the Revenue.

    So much hand-rolling tobacco that is non-UK duty paid now comes into the country that reducing the price differential would have a beneficial effect. I do not propose that the Government should be braver, and reduce the differential still further. That would not necessarily be a responsible action, but the amendment offers us the opportunity to find out whether the approach would have some effect.

    It is possible that those with whom what I propose might not necessarily find favour will say that it would increase UK tobacco consumption. I suspect that overall tobacco consumption is, in fact, set by other factors. It has to do with the price at which one acquires tobacco, but also the ease with which one acquires it and the incentive of a massive differential. There is becoming almost a culture of cross-border shopping, and there is something quite attractive to young people in acquiring cigarettes and tobacco products in marketplaces in which they are non-UK duty paid. There has been some interesting talk in the pub from time to time about that.

    2 pm

    Following the line of my argument, I am sure that the hon. Gentleman would not want to leave the House in the dark on why he feels there might be a net gain. Approximately how much gain does he think the Revenue and the Exchequer would receive from his experiment?

    I am tempted to try to satisfy the hon. Gentleman's request, but I do not think that that would be responsible since I would be taking a stab at it. The effect is more likely to be neutral than to be a small net gain, but one need only examine the data to see where the graph lines cross. I cannot be sure; there might be a small net loss. What we should really focus on is the influence that the rates will have on those behaviours that we think are in the best interests of our constituents, as as regards access to products that some people believe have health considerations attached to them.

    There might be some challenge to Treasury receipts; I cannot be 100 per cent. sure about that. The bigger issue is the direction in which we are going. Is it right automatically to assume that there should be an escalator each and every year, or should we reflect on underlying factors such as the massive rise in smuggling? We know that the Government are concerned about that. They have brought forward measures—somewhat late in the day in our view—to try to address it. They know about cross-border shopping, and it seems that nothing will persuade them to see that as something that they would necessarily want to stop.

    It is important to the corner shops in all our constituencies to bear all these points in mind. I dare say that I am not the only Member of Parliament who has had representations from constituents who are doing their best to run those fine-margin businesses as a community service. They are not alone: community post offices and community pharmacies are also under threat, and we should do our best to help our constituents to retain those services.

    I think it wrong to argue that increased UK tobacco consumption or reduced Treasury receipts would result from the amendments. We must accept that tobacco consumption has not changed since roughly 1992, in spite of a 27 per cent. real terms increase in cigarette tax. Smuggling has reduced the average price of cigarettes sold in the UK, and what has changed is from where and how tobacco products are bought, and at what price. The impact on Treasury receipts is likely to be broadly neutral, in fact, as more consumption will be captured in the tax net, though that does not necessarily imply more consumption. Catching consumption in the tax net is what rightly concerns the Minister and the Government. That would also give us data containing the right information for health planning.

    To help us test the Government's primary arguments, publication in full of the Taylor report, which I request once more although I know that that the Government have consistently denied us publication, would have been helpful, even if all the arguments have been made in this place and the other place. The Government have always claimed that the report contains operational and sensitive information, but it is appropriate to ask for publication for no other reason than that it is apparently one of the best studies available, on which the Government have, presumably, relied, and which contains data that would allow us not to make experiments in the dark. The hon. Member for Scarborough and Whitby (Lawrie Quinn) said that we should not take a step in the dark, and the Taylor report would help shed some light on the subject. Once again, therefore, I formally request publication on the basis that the debate is ill served by continued Government secrecy.

    I propose a freeze on duty to encourage UK smokers to revert to UK duty paid products and maintain UK revenue, while not, I believe, increasing total consumption, which is what matters. UK duty paid product is sold at a price to deliver Government health objectives for adults and children. The reason I single out non-cigarette tobacco products for a freeze is that the House could, by accepting the amendments, establish evidence of the differential in consumption and revenue raising between cigarettes and other tobacco products. Placing them on a comparable basis would provide a control group test.

    While there has been legitimate concern about whether that would be a stab in the dark, I think that it would provide a glimmer of understanding about how the House can genuinely influence our constituents for the better by what we do. During the period of the present Government, there has been an enormous expansion in smuggling and the new phenomenon of cross-border shopping, which seems to be set fair, without let. Consumption has flat lined; we are not reducing consumption among the adult population, and it is increasing among children and, particularly, young women.

    What I propose would be appropriate, and I hope that the House will give the amendment a fair wind.

    Thank you for calling me, Sir Alan, and welcome to the Chair. When I last sat on a Finance Bill Committee, Labour was in opposition. I do not doubt that you, in your wisdom, will keep me well in order.

    I listened carefully to the lengthy exposition of the hon. Member for Eddisbury (Mr. O'Brien), but I was not convinced by it. His logic appeared to favour tax harmonisation across the European Union: wherever there was a cross-border differential in prices as a result of taxation, the country charging the higher rate of taxation should reduce it to the lower rate on the other side of the customs border. That implies tax harmonisation across Europe, so I was surprised to hear Conservatives, who usually pose as the Eurosceptic party, argue for a self-denying ordinance in the Treasury that would require a reduction in taxation wherever such a differential arose. I would not want that, and I am not sure that many of my colleagues would, but it was interesting to hear that case made.

    A contrary argument might have been made—that taxation on the continent should correlate more closely to ours, but the Tories always want to cut taxes, no matter what the implications are, and the tax harmonisation that they want would take us to the lower end of the spectrum.

    We should remind ourselves of why we tax tobacco products. Some 120,000 deaths a year are directly caused by tobacco consumption of one kind or another. There is no real evidence that cigarette smoking is substantially more lethal than other forms of tobacco consumption. The Treasury has increased taxation on tobacco products, under both main parties, not just to safeguard revenue, but to try to bring about a change in behaviour to reduce tobacco consumption. Every study undertaken throughout the world has demonstrated an inverse relationship between price and consumption: the more tobacco products cost, the lower is their consumption. There is also a correlation between consumption and the impact on health of tobacco, so the argument in favour of raising prices, reducing consumption and thus increasing the nation's health is extremely powerful.

    Does the hon. Gentleman accept that if taxes are increased to such an extent that smuggling becomes prevalent, thus swamping the domestic market with under-priced cigarettes, consumption could increase? That is Conservative Members' main concern. We believe that the link between tax increases and reducing consumption has finally been broken, and we are greatly concerned about that.

    I shall come to that point in a moment or two. I was trying to remind the Committee that we should go back to first principles and establish why the Treasury, for many years and under all Governments, has increased taxation on tobacco products.

    In the past, the Conservatives adopted an inflation-plus policy; each year, revenue would increase beyond inflation. The Labour Government decided to change the rules and, because of smuggling, to increase the amount only by inflation—the issue raised by the hon. Member for Billericay (Mr. Baron). Like the hon. Member for Tatton (Mr. Osborne), I am a member of the Public Accounts Committee, which looked into the issue and found that most smuggling is carried out not as a small private enterprise by people in white vans but on a massive scale. Imperial Tobacco was, apparently, systematically exporting tens of millions of cigarettes and other tobacco products each year, which were later smuggled back to the United Kingdom. After careful consideration by Customs and Excise and the PAC, measures are being taken and a memorandum of understanding is about to be signed. That will make a substantial difference.

    Rather than adjusting tax rates and, in effect, abandoning the consensus about taxing tobacco products for health reasons, we should be trying to tighten the activities of Customs and Excise and other enforcement authorities so as to reduce smuggling. That would secure our objectives for both health and revenue.

    With those few points, I conclude my remarks. I await the rest of the debate with interest.

    The debate is extremely important and I am grateful for the opportunity to make some comments on the level of duties on a variety of tobacco products.

    I share some of the concerns expressed by the hon. Member for Eddisbury (Mr. O'Brien), although I would not go as far as his proposal that the increase in indexation proposed by the Government should be reduced. The detail of the evidence given by the hon. Gentleman is not sufficient to allow us to make that move.

    The amendment is a probing measure that invites the Government to reflect on their strategy for the taxation of a variety of tobacco products, and to consider whether it is working in the context of both the huge increase since 1996–97 in the share of smuggled tobacco products sold in this country and the changes that the Economic Secretary was forced to make last year to legislation on the single market. The changes reflect the fact that we are in a single market, so we cannot use some of the measures previously adopted by the Government to constrain people from legally importing tobacco products.

    2.15 pm

    The reason why we are focusing particularly on hand-rolled tobacco is that the greatest proportion of smuggling occurs in that market—a point made by the hon. Member for Eddisbury. I promise that I shall not go back over all the figures cited by the hon. Gentleman, but we need to consider the amazing proportion of the hand-rolled tobacco market accounted for by smuggling. The latest figures suggest that about 52 per cent. of that market is smuggled tobacco, which is extraordinary. Throughout British history, one can think of few other products where there was such a high proportion of smuggling. When we add to that the 17 per cent. of tobacco legitimately purchased across borders, we find that no duty is paid on almost 70 per cent. of the hand-rolled tobacco consumed in the UK.

    When we consider changes in duty and the effect of the escalators introduced by the Conservative Government, which were escalated by the Labour Government for a period after 1997, we find that the consumption of hand-rolled tobacco has risen by about 47 per cent. since 1997. It currently accounts for 25 per cent. of UK cigarette consumption. The strategy does not, therefore, seem to have been especially successful.

    We would have thought that the Department responsible for such matters—the Treasury, which is stuffed full of economists—would be cautious about maintaining its present policy, which is based entirely on trying to police the trade, as opposed to trying to deal with some of the fundamental underlying problems: in essence, the vast duty differential between the UK and other countries, including those on the continent, which provides a massive incentive for individuals to engage in illegal activity as well as legally to bring across the channel huge amounts of goods on which duty is low or not paid at all.

    Our current policy on this matter reflects a change in the approach that we have taken for many years. I freely acknowledge that, some years ago, our party was in favour of increasing tobacco taxation and hypothecating it to the national health service, a policy picked up by Labour when it came into government. We acknowledge that the huge smuggling activity, across the channel and elsewhere, puts a cap on the extent to which we can increase tobacco duty in the interest not only of health objectives but also of revenue raising.

    I am grateful to the hon. Gentleman for being so candid about the mistakes made by the Liberal Democrats in formulating their previous policy. Does he agree that if tobacco revenue was hypothecated to the health service, it would be extremely difficult for him to move an amendment to lower duty because that would be to cut money for the NHS?

    I accept that it would not make sense to hypothecate all tobacco revenue, although it certainly could be done at the margin.

    I am most grateful to the hon. Gentleman for referring to alterations from previous policies, as I was about to invite Members from other parties to acknowledge that their policies have also changed over time. I hope that brief reference will encourage Members on both sides of the House to reflect that such debate is worth while and that we should all be honest about our history.

    The hon. Gentleman has been involved in politics long enough to know that the significant increases in tobacco taxation in recent times began in 1993, when the then Chancellor of the Exchequer, the right hon. and learned Member for Rushcliffe (Mr. Clarke), introduced his 3 per cent. escalator, over and above the rate of inflation and the indexation that we are discussing. In true style, the right hon. and learned Gentleman pugnaciously defended his approach in the Budget statement of November 1996, describing it as
    "necessary masochism in the wider public interest.—[Official Report, 26 November 1996; Vol. 286, c. 168.]
    That necessary masochism, as he termed it, was continued by the Labour Government in 1997, when they stepped up the escalator to 5 per cent., which they maintained for a number of years before deciding in 1999 that the automatic link should be broken, while implementing the 5 per cent. rise in the March 2000 Budget on the basis that it would encourage existing smokers to smoke less or quit and discourage young people from taking up the habit. All parties, at different times, have therefore supported the strategy of increasing tobacco duty. It has no doubt been a useful revenue raiser for parties in government, and a desire has also existed to increase the price of tobacco products to deter their use, which, as we all know, is extremely damaging to health.

    Other EU countries with high duty rates and prices compared with other countries have similar concerns to those that have been expressed in this country over the past couple of years. Canada and its experiences were mentioned in an intervention, but we should recall that Denmark voted recently to reduce tobacco duties and to bring that measure into effect later this year. I hope that the Treasury will follow the experiences of other countries in the EU closely. I hope that it will look at the evidence on which the decision in Denmark was based, and that it will also follow closely the experiences in Denmark after it reduces duties, to see whether the policy has the effects that the hon. Member for Eddisbury was suggesting.

    We prefer to ask the Government to take seriously the arguments being made now about the huge duty differential between ourselves and other countries. We also ask the Government to consider seriously whether it will ever be possible to reduce significantly the market in smuggled tobacco while we have such duty differentials. We have had similar debates over recent years about the level of duties in the UK, many of which considered the evidence, whereas the hon. Member for Eddisbury appears to want to conduct an experiment without amassing the appropriate amount of evidence. One good example of that evidence-based approach was the previous Government's decision to reduce the taxation of spirits, which has to some extent been followed under this Government.

    We therefore know why successive Governments have decided to maintain high duties on tobacco products. First, it has been as a consequence of medical concerns about the consumption of tobacco. Secondly, it has proved to be an extremely good way of raising money for Governments, which suggests some contradiction in relation to the first motivation. The increases since 1996–97 in the share of our market accounted for by smuggled tobacco and tobacco, on which no duty is paid, should give all of us in the UK reason to wonder whether the existing strategy is working and reasons to take the issue very seriously. I join the hon. Member for Eddisbury in regretting very much that when Martin Taylor considered this issue a few years ago, and produced what we believe was an extremely detailed report, which was rumoured to touch on the issue of duty differentials and whether they were too wide, the Government did not allow his report to be aired in public. They have been criticised for that a number of times in the House, including by the Treasury Committee.

    Can the hon. Gentleman help the House by naming any health professional body that agrees that the freezing or reduction of duty on cigarettes would be a good thing in terms of the health issues?

    I am grateful to the hon. Gentleman. That is precisely the type of issue that needs to be considered as part of a study into whether the existing duty differentials are working. Although I am sure that no o r very few individuals would suggest that a lower price for tobacco products in this country would have anything other than adverse effects on health, many individuals, even in the health field, would be extremely concerned about a system in which no duty is paid on 28 per cent. of cigarettes, and in which smuggled hand-rolled tobacco accounts for 70 per cent. They would also be extremely concerned that a large amount of the Government's health policy in respect of tobacco products was being undermined by the fact that a huge amount of consumption in this country is of products on which no duty was paid.

    That trend is being exacerbated, undoubtedly, by the Government's responsibilities in respect of the single market, as was demonstrated by the decision that the Economic Secretary had to take last October to dismantle some of the Government's draconian steps to stop tobacco and other dutiable goods being brought into this country. It is too early to say what will be the effects of the Government's policy reversal. When we look at the figures in the year ahead, we may find, as some tobacco manufacturers have suggested on the basis of the early data, that the proportion of tobacco consumed in this country that is smuggled or brought in legitimately with no duty paid increases markedly as a consequence of that policy reversal.

    May I point out to the hon. Gentleman that it was not a reversal of Government policy? The Government were turned over in the courts and followed the law.

    The hon. Gentleman is playing with words. What he is saying is that the Government's policy was overturned in the courts, so the Government had to change their original policy in a serious way. Some of the major measures suggested by Martin Taylor that the Government implemented were precisely the measures that have now had to be dismantled, whereas some of the proposals in respect of narrowing duty differentials appear to be precisely those that the Government have not been willing to discuss.

    The stage has been reached at which the Government and the Treasury ought to commission a serious and public piece of work that is seen to be independent from all interests, to consider three issues. First, it should consider the economic impact of current duty differentials, and what would be the effect of narrowing them. I know of few economists who at this moment think that a reduction in tobacco duty would be selffunding—that it would increase demand in this country in such a way that it would pay for itself. The Institute for Fiscal Studies certainly did not seem to reach that conclusion when it reviewed the issue a couple of years ago. The increase in smuggling, however, may have changed the dynamics of that calculation. As the hon. Member for Eddisbury also mentioned, we need to consider other costs, such as the effects on small businesses, the economic incentives that we are creating for people to travel backwards and forwards between the United Kingdom and the continent, and the farfrom-negligible policing costs for the Government of having to convert a strategy that could be based on narrowing duty differentials into one based entirely on policing.

    Secondly, clearly, we must understand better the health effects of any reduction of duty levels. As the hon. Member for Eddisbury said, it is notable that recently, when tobacco duty has been increasing rapidly, we seem to have been least successful in reducing consumption. Consumption seems to have levelled out precisely when duty has been increasing significantly. That may tell us that the strategy has not been working recently because it has created such incentives for people to bring in nonduty-paid goods that it has undermined the effect of the Government's attempts to increase tobacco prices.

    Thirdly, as the hon. Member for Eddisbury also mentioned, there is the issue of crime, and the fact that the huge illegal smuggling activity is fuelling a significant crime wave, not least in the south-east corner of the country. That and the associated crime, and the causes to which that profit is put, ought to be a great concern for the Government.

    I hope that the Government will not hide behind the concept that the present rate of duty is exactly right. I hope, too, that the Economic Secretary will acknowledge the huge increase in smuggling over recent years and the need to take that into account in Government policy. I also hope that he will acknowledge that the Government's U-turn on the tobacco escalator—the scrapping of the automatic escalator—reflects their understanding that there is a limit to the extent to which tobacco duties can be allowed to rise without introducing such large incentives to smuggling that the basis of the policy is undermined.

    The hon. Member for Yeovil (Mr. Laws) said that we all had to be honest about our past. Saying that I used to smoke is my contribution to meeting that request. At times, I am in danger of having the zeal of the convert, because I see the damage that smoking does. By instinct, and like many people, I recognise the value of having high duties as a way of discouraging people from smoking. However, as the hon. Gentleman said and as my hon. Friend the Member for Eddisbury (Mr. O'Brien) pointed out in his good speech, the issue is much more complicated than that, and it is right for the Committee to explore how the rates of duty that the Government set impact on tobacco smuggling and consumption.

    2.30 pm

    As many people have said, smuggling is a massive problem. A fellow member of the Public Accounts Committee reminded us that it had recently carried out an investigation into tobacco smuggling. It broke with all precedent by summoning before it the representatives of a private company—the management of Imperial Tobacco—to explain to the Committee what the company's relationship was with the smuggling problem and Customs and Excise.

    I have several concerns that have already been elucidated by other hon. Members, but I will touch on them briefly. My hon. Friend the Member for Billericay (Mr. Baron) pointed out the health concern. The Government's legitimate objective of using fiscal measures to discourage consumption is clearly undermined if those same measures lead to a huge increase in smuggling. One of the features not yet touched on in the debate is the fact that between 2 billion and 3 billion of the cigarettes that are smuggled are counterfeit. They are not actually the cigarettes that they claim to be. That could have serious health implications. People might think that they are smoking low-tar cigarettes because that is the way that they are packaged when, in fact, they are smoking counterfeit cigarettes that are not low tar. There are serious health concerns which should be addressed.

    I touched on law and order when I intervened on my h on. 'Friend the Member for Eddisbury. Tobacco smuggling is a huge boon to organised crime in this country and it goes hand in hand with other activities such as drug smuggling and the trafficking of human beings for prostitution and immigration purposes. It is striking that many of the smuggled cigarettes that we consume come from places such as Latvia, Moldova, Afghanistan and Kaliningrad. Such places are associated with many of the other serious crime problems that we face.

    There is another aspect to my concern about law and order. Because one in five cigarettes are smuggled in, because one in five smokers use illegal products and because they are purchased off the back of a lorry by the owners of pubs, clubs and corner shops, many otherwise law-abiding people are brought into contact with the criminal fraternity. That can have a corrosive effect.

    As is legitimate in a debate on a Finance Bill, Members have touched on the revenue concern. In one year that the Public Accounts Committee considered, £3.5 billion was lost as a result of tobacco smuggling. That is the equivalent of 1p on the basic rate of income tax, so we are talking about a very large sum of money.

    My next remark is not intended as criticism of the present Government, because all Governments have pursued this policy. The underlying cause of the problem is the variable rates of duty available in this country and in other countries, particularly those near us in Europe. If the price of a packet of cigarettes were very low, there would be a limited incentive to smuggle them into this country. Therefore, it is legitimate to ask about the impact of those rates on smuggling and consumption.

    I have two questions for the Economic Secretary—one is general and the other more specific. First, what sort of work and modelling has been done in the Treasury on the effect on cigarette consumption, smuggling and revenue of freezing or reducing the duty? When Richard Broadbent, who is otherwise a very impressive individual, came before the Public Accounts Committee, he was questioned by its Chairman on this issue. Mr. Broadbent replied:
    "I do not know and I am not sure we are able to calculate with any degree of certainty—and we have not calculated—what the impact might be of such a step downward in rates in the UK".
    > That is very surprising because, when the Chancellor sets his Budget, I should have thought it perfectly reasonable to ask what the effect of reducing duty would be. What modelling has been done? Can the Economic Secretary tell us now or write to me later with detailed evidence of the modelling?

    I am grateful to my hon. Friend for making that important point. It is quite clear that the absence of any such modelling at official level in the Treasury must reinforce the argument for looking at the proposals in the amendments. There must be some form of ability to test whether the strategies for smuggling and cross-border shopping are having an effect in the way that most of us desire.

    I am grateful to my hon. Friend for making that point. It is, of course, normal practice in this place for the Opposition to do the Government's work for them by trying to work out what would actually work. As the debate has gone on, I have watched as the Government Whips and Treasury Ministers have spoken to each other. I am an optimist. Perhaps they will accept the amendment. That would be a good thing.

    It would be interesting to know what work has been done. As the hon. Member for Yeovil said, clearly some thought went into the issue when the Government stopped the escalator effect on cigarette duty. They must have known or guessed what impact that would have had. It would be interesting to hear from the Economic Secretary what the Laffer curve effects—if I can cite another economist—would be on reducing duty. Would that increase revenue?

    Is the hon. Gentleman seriously asking the Government to determine their fiscal policy on the basis of trying to deal with smuggling?

    I am asking the Government to tell me whether they would further their objectives for improving the health of the nation, for cracking down on problems of law and order and for raising revenue by reducing the duty. That suggestion may be counterintuitive, but we have shown in other areas of taxation how that can work.

    I am very grateful to my hon. Friend for giving way. I fear that his optimism about the Government's reaction to the amendments is positively Panglossian. However, at least his position is not obscurantist or neanderthal, something to which the stance of the Scottish nationalists bears a striking resemblance. Can he tell me what proportion of the cost of a packet of 20 cigarettes is now accounted for by tax and excise duty? When I introduced a ten-minute Bill covering the matter nearly three years ago, the figure was more than 79 per cent.

    I cannot give my hon. Friend a precise figure. but 80 per cent. is the figure that I have seen. That is extremely high and certainly higher than in any other country in the EU and I imagine anywhere else in the world.

    My specific question is about Imperial Tobacco, which was raised earlier in the debate by a fellow member of the Public Accounts Committee. It may astonish the Committee to learn that half of all the smuggled cigarettes in this country are Regals or Superkings. A huge proportion of the smuggled products are produced by Imperial Tobacco. When we examined the issue, we found that a third of its exports went to five places: Latvia, Kaliningrad, Afghanistan, Moldova and Andorra. Indeed, when the hon. Member for City of Durham (Mr. Steinberg), who is also a member of the Committee, asked the chief executive of Imperial Tobacco whether
    "you honestly believe that the 2 billion cigarettes that you exported"—
    to these five places—
    "were going to be smoked by the people of those countries",
    Mr. Davis, the chief executive of Imperial Tobacco replied, "Yes".

    For all those reasons, Customs and Excise was unable to conclude a memorandum of understanding with Imperial Tobacco even though it had concluded a memorandum with Gallaher and British American Tobacco. It has been reported in the press recently that Customs feels that [imperial Tobacco has made huge progress and is close to signing a memorandum. It would be interesting to hear the Economic Secretary say something about that.

    I welcome you to the Chair, Mrs. Heal. I want to focus on the adverse effects of tobacco smuggling in support of one or two previous contributions, most notably that made by my hon. Friend the Member for Tatton (Mr. Osborne). Smuggling will increase because of the measures in the Bill, and there are many dire effects of that.

    Clause 1 sets out the new rates of tobacco duty, which increased by 2.8 per cent. from 9 April, in line with inflation. Conservative Members share the Government's desire to reduce tobacco consumption in this country. No one disputes the harmful effects of smoking—it is the single largest cause of preventable illness and premature death in the United Kingdom. As we have heard, it kills approximately 120,000 people every year and causes 85 per cent. of deaths from lung cancer. The Government have confirmed that tobacco is the only legal product that kills one in two people who use it.

    I urge the Government to think carefully about how they intend to address one of the main drivers that affects tobacco consumption in Britain, especially among the more vulnerable groups in our society: tobacco smuggling. There is a flourishing trade in black-market tobacco products in the UK and one cannot escape the fact that that is caused, to a large extent, by the substantial price differential between cigarettes sold in the UK and in other European countries. A packet of 20 cigarettes is about £2 cheaper in France than here. It is little wonder that the National Audit Office has estimated that the number of cigarettes smuggled in 2001 rose from 14 billion to 17 billion and that more than one in five cigarettes consumed in the UK are smuggled. The propc rtion of consumed cigarettes that are smuggled has increased from 3 per cent. in 1997 to 21 per cent at present. That is a phenomenal increase.

    There are two profound consequences of that. First, there is a tremendous loss of revenue to the Exchequer. As my hon. Friend the Member for Eddisbury (Mr. O'Brien) said, the combined effect of a steep rise in smuggling and cross-border shopping means that about 28 per cent. of cigarettes and 69 per cent. of hand-rolling tobacco do rot attract UK duty. Estimates suggest that the total revenue lost since 1997 is something like £15 billion. Indeed, the NAO recently published a report claiming that Customs and Excise is losing up to £7 billion a year owing to fraud and lost taxes and that half that is lost owing to tobacco smuggling. That sum of money is enormous. How many hospitals could be built and how many extra doctors and nurses could be recruited with that money? That is certainly worth thinking about.

    Secondly, the increase in smuggling has been a major contributor to the fact that the long-term downward trend in cigarette consumption has been broken. Indeed, one could argue that consumption might be on the rise and that the problem is underestimated. For example, a survey published in the British Medical Association's journal "Tobacco Control" at the end of last year revealed that one in five childrer aged under 16 are regular smokers, which is twice the Department of Health's original estimate.

    There is little point increasing taxes and thus creating an ever-larger differential with prices across the channel if we do nothing to stop the smuggling that undoubtedly ensues from that. It is a silly policy that is costing this country many billions of pounds in lost revenue. The policy is contributing to the increase in cigarette consumption, especially among cur young, because cheaper smuggled tobacco products and cigarettes are now so prevalent in the UK. In other words, because smuggled cigarettes are so much cheaper, they are swamping the market and consumption is rising. That is the exact opposite of what we are trying to achieve.

    The Government should take the issue more seriously and re-examine their assumptions. Without a real clampdown on smuggling, the policy of ever-higher taxes will lead to a market that is increasingly supplied with cheaper smuggled cigarettes. That will encourage a long-term increase in consumption, although I believe that that has already started, and a consequential loss of life. I hope that the Government will re-examine their policy.

    2.45 pm

    Many of my hon. Friends have discussed in detail loss of revenue owing to smuggling and I shall not go over all those arguments again. They made sophisticated arguments, and none more so than my hon. Friend the Member for Eddisbury (Mr. O'Brien), and I thought that it would be more appropriate to make a more basic observation.

    The tax increases will hit the poorest members of our society disproportionately. Taxes that are paid on things always attack the poorer members of society but the tobacco tax is especially disproportionate. We must face the essential point that people who cannot afford to go on a booze cruise are likely to be the people who will be induced to buy smuggled goods off a barrel in the street. The impact of the measure is doubly disproportionate toward poorer people.

    The hon. Member for Hemsworth (Jon Trickett) said that he was surprised that our patty was talking about Europe, but this is not a question of what my colleagues or I say about other countries. The fact of the matter is that this country's policy is to dig its head in the sand. It is no wonder that hundreds of thousands of people go abroad to buy cigarettes from our European neighbours every year because they are less than half the price of those sold in this country. It is a straightforward and unsophisticated argument.

    The amount of revenue lost was mentioned earlier in the debate and I said that I was always dubious about the figures that are bandied around. I have seen a figure of £3.5 billion cited as the amount of lost revenue, although I heard my hon. Friend the Member for Billericay (Mr. Baron) cite a figure of £7 billion. I am not sure which figure is true, but that confirms my view that we do not know how much is being lost, although I am happy to accept the figures that my hon. Friend mentioned. Additionally, when we talk about lost revenue, we do not discuss the hundreds of millions of pounds that we also spend on extra customs officials, special equipment and operations to root out smugglers.

    The Government receive significant revenue from tobacco but by setting the tax rate so high that British people increasingly buy legally from the continent—that has nothing to do with smuggling—they will lose out on the potential tax take while doing nothing to improve public health in this country.

    May I welcome you to the Chair, Mrs. Heal, on my first opportunity to serve under your chairmanship in the Committee of the whole House? We heard a reflective and detailed exposition from the hon. Member for Eddisbury (Mr. O'Brien) that raised genuine concerns and questions about the current policy and although I respect that, I must tell him that his contribution might have been more appropriate in the Standing Committee. However, what is discussed on the Floor of the House is a matter for his and his colleagues' judgment and choice.

    The hon. Member for Yeovil (Mr. Laws) made a somewhat less detailed and reflective contribution, although it was nevertheless considered. He described amendment No. 61 as a probing amendment. It would make a negligible change to the Bill and it does not disguise his interest in tax harmonisation throughout the European Union, which lies behind many of his remarks.

    I am happy to confirm that my party believes in tax competition, not tax harmonisation, and that is precisely what the debate is about.

    The hon. Gentleman urged us to have a smaller, if not harmonised, differential on excise duties. We will follow closely what other European countries do. The hon. Gentleman is right that Denmark is reducing excise duty on tobacco, but in January France increased the duty and VAT on a packet of cigarettes by 34p and Germany recently increased it by 63p. So the UK is not alone or isolated in its policy of high taxation to reduce smoking.

    The hon. Members for Yeovil and for Eddisbury asked about the publication of the Taylor report. That call is not new and my reasons for refusing its publication have not changed. The Taylor report contains internal private advice that was supplied to the Chancellor and we will not publish it.

    It is difficult for Opposition Members to gainsay what a Treasury Minister says about an internal report that was commissioned to provide private information. It would be fair for the Economic Secretary to reflect on the idea that it would be better if internal reports were not publicly announced as great triumphs of consultation. There were high expectations about the report's probity and that encouraged many outside bodies to do a lot of work and make representations. If the report cannot be published, much of that good will has been wasted with only the Government benefiting, not the nation.

    The Taylor report was undertaken four years ago. Since then, the Government have published an unprecedented amount of data and analysis. They have made an unprecedented assessment of the amount of revenue lost and the problem posed by smuggling. They have also put in place unprecedented investment to tackle that.

    Is the Minister willing to supply a copy of the document to the Information Commissioner and ask whether, in the commissioner's judgment, it contains matters that for security reasons prevent it from going into the public domain? We would all feel happier if we had a proper assessment of the Treasury's need to keep the report to itself.

    The Government made their position clear several years ago and we have no intention of altering that now.

    On a point of order, Madam Deputy Speaker. Is it in order for a Minister to refer to a document in the House and not place a copy of it in the Library?

    The Minister is entirely in order.

    I have a great deal of time for the hon. Member for Buckingham (Mr. Bercow) but he only recently arrived in the Chamber, so I shall give way to the hon. Member for Yeovil.

    The Economic Secretary says that he will not publish Mr. Taylor's report. Will he confirm the press reports at the time which suggested that Mr. Taylor made recommendations in the report on the duty differentials between this country and the continent?

    The hon. Gentleman tempts me into the realm of speculation and I shall not respond.

    The hon. Gentleman is so persuasive that I shall give way just this once.

    I am grateful to the Economic Secretary for giving way and happy to reciprocate his good regard. However, it will not do to say, "This is our position. It is a clear position and therefore I am not going to consider changing it, notwithstanding powerful arguments in support of so doing." Aside from any commitments to his boss, what intellectually is his answer to my right hon. Friend the Member for Fylde (Mr. Jack) on the idea of putting the issue before the Information Commissioner? What is his intellectual response to that?

    The Government have determined their position. I am afraid to say that that has not changed and I do not entertain seriously the suggestion proposed by the right hon. Member for Fylde (Mr. Jack).

    The clause increases excise duty on all tobacco products in line with inflation. Its purpose is to maintain the real cost of smoking by ensuring that the level of duty on all tobacco products keeps pace with inflation in line with recent years, as the hon. Member for Eddisbury said. Our aim is to encourage people to smoke less or quit, and to discourage children and young people from taking up the habit. To that extent, the general approach reflects what this and previous Governments have done to use high prices as part of maintaining the pressure to reduce consumption. Some 35 per cent. of the population smoked 20 years ago. Five years ago that was down to 28 per cent. and there has been a slight fall since then to 27 per cent. in 2001, the latest year for which figures are available. I congratulate the hon. Member far Tatton (Mr. Osborne) on his personal contribution to that statistic.

    Amendments Nos. 1 to 3 would freeze excise duty on all tobacco products other than cigarettes. We cannot accept them as th