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Westminster Hall

Volume 405: debated on Tuesday 20 May 2003

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Westminster Hall

Tuesday 20 May 2003

[MRS. MARION ROE in the Chair]

Mining Communities

Motion made, and Question proposed, That the sitting be now adjourned— [Mr. Derek Twigg.]

9.30 am

Thank you for calling me, Mrs. Roe. I am not sure whether to call you that or Madam Deputy Speaker.

Thank you, Mrs. Roe.

It is good to have the opportunity to raise one of the most important economic issues facing my constituency, and it is a great delight to be able to say that unemployment in Rhondda is only 4.2 per cent. When I ask friends about it, they guess that the figure is 30, 40 or even 50 per cent.

Rhondda's unemployment figure is marginally ahead of the Welsh average, and I am delighted to say that, for the first time in living memory, that is lower than the national average. Many loyal Welshmen will be gratified that the policies of the Welsh Assembly and of Westminster seem to be working in that they have produced something of an economic boom, especially in the M4 corridor and south Wales.

The truth, however, is that the figure of 4.2 per cent. in Rhondda masks an enormous amount of hidden unemployment. Earlier this year the Work and Pensions Committee produced a rather splendid interim report entitled "Employment for All". Table 3 of the report shows that more than 10 of the top 20 districts for male sickness in August 2001 are former mining constituencies. Top of the list was Merthyr Tydfil, with 26.9 per cent. of 16 to 64-year-old men claiming some form of sickness benefit. In Rhondda Cynon Taff, the figure is 18.2 per cent.

It is worth noting that Merthyr Tydfil is a small local authority—the figures for the constituency are not available, which is a problem—and Rhondda Cynon Taff covers some of the wealthiest wards in Wales, as well as many of the poorest. I suspect that if figures were available for Rhondda, Merthyr's 26.9 per cent. would be far exceeded. In other words, more than one in four working age men in Rhondda is on some form of sickness benefit.

I have noted that unemployment is worst in mining areas, but it is a national problem—2.7 million people in the United Kingdom are claiming incapacity benefit. Indeed, that is a phenomenon not only in the UK but throughout Europe. In many parts of the industrialised west, unemployment figures are going down, as, with only a few exceptions, they have done in Europe over the past few years. None the less, that masks a true unemployment figure that is much higher.

Mining areas have faced special problems, most notably the sudden implosion of the local economy when the mines closed, as they did throughout Rhondda. Moreover, whenever a mine closed, the local community lost its work focus. Whether at Pentre, Maerdy or Blaenclydach, when the local economy collapsed, the businesses that depended on the mines lost their chance of survival.

Because of the implosion of local economies over the past 30 years, people's understanding of work has had to change dramatically. In Rhondda, most people's expectation was that work would be manual—it would not involve personal computers or answering the telephone. If anyone was going to answer the telephone, it would be the secretary, and that would be a woman's job. Otherwise, most work was for men, and most was for life. People would stay in one job until they could no longer work, and many would stay in it even if they developed medical problems; they would simply be moved from the coalface to another part of the mine. In essence, the mine provided its own system for rehabilitating people with health problems, although they would still work. The most extraordinary thing about the mining world was that work was on the doorstep, or certainly within a mile of it. The many terraced houses that line the streets of my constituency were built to provide housing close to work. The corollary, of course, was that work was close to home.

None of those things now applies. For the most part, the work available to people in Rhondda is not manual, and it requires keyboard skills or the ability to answer a telephone. Furthermore, it is for men and women; indeed, an increasing number of the new jobs arriving in south Wales are specifically for women. Finally, work is not on the doorstep. We have specific geographical problems. Many communities were built specifically because there was coal there, not because people would otherwise have chosen to live there to gain access to work in the wider economy. That creates special problems. Someone in an area with excellent transport links may think that a journey to work of 2 or 3 miles is nothing. However, it is almost impossible for people to see themselves getting to work if that means taking one bus down one valley and another bus up another valley, particularly if the connections are poor. That problem is multiplied thousands of times over in my constituency.

Someone living in Blaen-cwm who has to get to Newport by 7.30 or 8 o'clock in the morning does not stand an earthly chance. Even someone who has to go from Maerdy to Treorchy will have difficulties because the buses do not start early enough in the morning. Someone whose shift pattern goes into the weekend may find it impossible to get down into Cardiff, even on some of the major routes. Therefore, when someone says that the people of Rhondda are work-shy and not interested in work at all, I want to say, "No, it is about something far more complex." We must make it physically possible for people to get to work. Those on very low incomes will not be able to afford a car, so we need to improve public transport and transport links to ensure that people can get to work.

In tight valleys, such as Rhondda Fach and Rhondda Fawr, there is little flat land on which to create large new businesses. There will never again be a business in Rhondda that employs 65,000 men, so we must find ways of regenerating our local economy and of providing jobs close to home. We also have poor infrastructure. People in Rhondda Fach have been crying out for a relief road for years, and there is now the prospect of work starting on it in a year's time. I hope that the Welsh Assembly will find in itself the largesse to create not only the first half of the Rhondda Fach relief road but the whole road, up to Maerdy, so that people feel that they are not as isolated as they might have been.

We also have a terrible problem with health inequality. The gap between the healthiest and those with the worst health in Wales mirrors that between the wealthiest and those with the least disposable income. Some of the most startling facts and statistics from my constituency relate to poor health; for example, the statistics for coronary heart disease and diabetes. Even if we take just one figure—the number of people who are blind or sight-impaired—it is clear that our health problems will not be fixed in the twinkling of an eye. Many of them are residual problems that relate to people having worked in the pits. Many others, however, are new problems that we create and recreate every day and every month because of the poor nutrition of people in Rhondda.

There is a poor match between people's skills and the needs of employers in Rhondda and many other mining constituencies. I cannot count the number of times that local employers have told me that they would love to employ more people and would be delighted if they could find anyone to answer the phone without sounding grumpy and surly. Head teachers tell me that one of their most difficult tasks is to give young people the confidence to get out there and say, "I am as good as anyone else in this country. I am worth that job, I can get it, and I shall go for it." I sometimes feel that the spirit of "We cannot do it, someone else will do it better" is imbibed too deeply in Rhondda. We need to improve aspiration and ambition.

The world, however, is not all bleak. Much has improved since the mines closed under the Tories in the 60s, 70s and 80s. Rhondda is now a stunningly beautiful place, and many people choose to live there because of that. Many south Wales valleys share that beauty—they are green again.

We have had some great entrepreneurial successes. I particularly delight in telling the story of a young man, Jamie Rowland, who runs the Bicycle Doctor in Porth. He set up the company himself with a grant of, I believe, only £300 and a £500 loan—both from the Prince's Trust—and now employs other people. He is extremely successful and is looking for larger premises. He is not only running a bicycle shop, but setting up bicycling courses for young people at the weekends and giving young people a sense of hope and engagement in their local community. Such successes often build on the great entrepreneurial sense that mining constituencies have always had, which was invested in setting up miners' libraries and mining unions and in building a sense of community. We need to use that entrepreneurialism in our drive for economic success.

Other businesses have done well. Beatus Cartons, which is also based in Porth, has done extraordinarily well and is seeking to make new investments and create more jobs. However, it sometimes has difficulty managing the system of regional selective assistance, which often seems to benefit only those companies that are not doing well and may close, rather than building on the success of those that have proved their mettle.

Over the past few years the Government's ideas have made a significant difference to many of these issues in Rhondda and in mining constituencies throughout the country. I am especially delighted that every ward in Rhondda is covered by an enterprise area, which means that stamp duty exemption and community investment tax relief will apply throughout the area.

There is still more for us to do to try to build a local economy that can match the success of the best of other constituencies throughout the country. In Rhondda, so far as I can tell, there are only some 1,500 local businesses, while the average for a constituency in the country is more than 4,000. Somehow or other, we need to build on the base of small companies that employ two, three or perhaps 10 or 15 people if we are to have a chance of getting more and more people into local jobs.

I mentioned the success of regional selective assistance, and I am particularly delighted that the Welsh Assembly is now operating in a much faster, simpler and more streamlined way. I hope that the process of getting money to ensure that jobs are created and protected will be far simpler and more transparent, and that it will not be seen as four members of some old school tie club down in Cardiff deciding, "Oh yes, he is one of ours. We will give him a little more money." The communities first programme is also a success. Money directed to the 100 poorest wards in Wales is making a difference, with local communities attempting to seize hold of their future, instead of creating a series of white elephants. Regeneration money is going towards the creation of long-term, viable job opportunities.

Objective 1 is making a difference, albeit very slowly. If one asked people in Rhondda whether they felt positive about Europe and what it has achieved for them, many of them would point to the blue and yellow signs on the roads which show that much of the money to build the road came from European structural funds. They might also point to the many courses that are teaching the skills that they need to enter the changed work environment. Taking such a course can mean that a computer is no longer a terrifying thing that only the child up in his bedroom knows how to use, but something that a 55 or 60-year-old knows how to use, perhaps as part of a job at B&Q, where one has to use a computer to work at a till. One course of which I am particularly supportive provides training for young mothers-to-be—particularly single mothers-to-be—in the skills that they will need to look after a child, and to enable them to get into work several months later.

There is still much to do. Above all, we need to create a more personal and effective benefits and employment service. I am wholly supportive of the Government's Jobcentre Plus plan, which brings together the Benefits Agency and the Employment Service. For far too long after the mines closed, miners were dumped into the benefits system and forgotten about for the rest of their lives. That situation has been inherited by their children and grandchildren. It is only by bringing together the Benefits Agency and the Employment Service that we have a chance of changing that culture. I say to the Minister that, particularly in mining constituencies, we need more financial and personnel resources for the access-to-work programmes in all their varieties. Rhondda and many other valleys communities have a growing drugs problem. The access-to-work programme, which is working to get people with a drug dependency problem into employment, needs more resources and more support.

I worry about the Department's plans for Rhondda Fach. Many people who live there refer to it as the forgotten valley or the hidden valley. Very often it seems to lose out on the resources that everywhere else gets. There are worrying signs that the Department for Work and Pensions is slowly retreating from provision in Ferndale, and I say to the Minister that that would be a retrograde step. Two of the most deprived wards in Wales are Maerdy and Tylorstown, both of which are served by Ferndale. If we are to crack the issues in Rhondda Fach, and get more people off benefits and into work, we have to ensure that there is substantial and increased provision for Ferndale.

We also need to do a better job of integrating Jobcentre Plus with the work of the NHS. It is health problems as much as anything which plague our attempts to get more people off benefits and into work. The interface is the GP, who both signs people off and works on behalf of the NHS. If we could find a way for the NHS to create a positive health plan for people on incapacity benefit, we might stand a chance of cracking the problem.

We also need to do more to help people to get to areas where jobs are available. The rail franchise needs looking at; more of the journeys that people need to make from the valleys to Cardiff must be subsidised. This has nothing to do with work, but I am struck by the fact that the Millennium centre in Cardiff will soon open. I wholly support that great new arts centre, but I am worried that the last train back to Rhondda leaves at 10.20, and I suspect that the Millennium centre will end up as a matinee centre for the people of Rhondda. We must ensure that the provision of decent, clean, effective, efficient and well co-ordinated public transport is at the heart of our economic and benefits policies. We must make it financially possible for people to go to work.

Many of the things that we have done to make work pay, such as introducing the national minimum wage and the working families tax credit, have completely transformed the possibilities for many people in mining constituencies. However, there is still some way to go. When people on incapacity benefit are thinking about whether to go into work, they do not think about whether there is a disincentive to do so. They do not add things up and say, "Oh, if I go to work I'll have an extra £42.67 or £37.83." What goes through their mind is the security guaranteed by being on benefits, as opposed to the worrying insecurity of going into a job that may not be there in a year, or, in many cases, may not provide them with a secure amount of income.

That is why I welcome the idea of the return-to-work credit, and I hope that the Minister can say how fast that will be rolled out. The Select Committee feels that a pilot period is not needed. Could the Minister respond to that?

I accept that there are cultural issues that we will have to transform. It is all too easy for the Government and other politicians to wag a finger and move on. The truth is that the concept of work in former mining constituencies has to change completely. It was once about men doing manual work that was on the doorstep, but that is; no longer the case. We must get schools more involved in local businesses; local businesses more involved in the work of the health service; and the health service more engaged in the work of the Welsh Development Agency.

All those organisations must work together to transform our culture if we are to stand a chance of being able to carry out what I believe is the next part of the Labour mission in former mining constituencies. The first part was to get unemployment down. Some politicians believed that unemployment was a price worth paying; I have never believed that. Sadly, our mining constituencies paid a heavier price than most. The most important thing now is for Labour to tackle the hidden unemployment problem. If we can do that, we can stand up with pride.

Order. I remind hon. Members that the winding-up speeches should begin at 10.30, and three Members are seeking to catch my eye, so I hope that they bear that in mind when determining the length of their speeches.

9.53 am

I am pleased to speak in this important debate, and I congratulate my hon. Friend the Member for Rhondda (Mr. Bryant) on securing it. The debate is timely, coming shortly after the publication of the "Ambitions for the Future" policy agenda for the south Wales valleys by the independent Bevan Foundation. It touched on this and many other issues to do with deprivation and the challenges ahead. It focused on what many valleys and MPs for former coal areas would like to see, which is a much better and more prosperous future and an end to people accepting second best. In entrepreneurialism, the standard of living and the quality of life, we want the communities that we represent to be every bit as good as those along the M4 corridor and throughout the rest of the United Kingdom.

Before I move to the main thrust of my speech—I will be mindful of your comments on the time, Mrs. Roe—I should like to echo one comment made by my hon. Friend in respect of transport. Throughout the south Wales valleys, access to jobs is a major factor in deterring people from securing long-term employment. To get to a place of work is a major challenge as people are unable to get from one valley to another. It is difficult even getting down one valley to the hub of transport, and then there are problems reconnecting to get to another town and from there to the place of work. I have raised the matter before with Ministers, and I have stressed the importance of involving the private sector as well as the public sector in initiatives to tackle the problem.

I want to focus on the theme of intensive intervention, because that is very much what is needed. The Government have done sterling work to tackle long-term unemployment with initiatives for the under-25s and over-50s, but we should look beyond the new deal and consider the core: of people who, often through no choice of their own, are committed in their own lifetime and that of their children and grandchildren to living on incapacity or sickness benefits. It is a culture that predisposes a hard core to settle into that frame of mind.

We must tackle the problem by intensive intervention through the targeting of resources on a macro scale with Department for Work and Pensions policies and on a micro scale in local authorities, the Assembly and local voluntary agencies. Much good work is being done by agencies nationally and locally, and the challenge is how to co-ordinate policies effectively to ensure that those agencies work together and that there is no duplication or waste of effort.

This is a timely debate as it recognises the special characteristics of former coal mining communities. Many communities throughout the land face special challenges, but former mining communities face geographical, social, economic and cultural challenges because of the change in their industrial structure. The people in those communities went through at least a generation of being told, in effect, "There is no future. Go and sign on. Go on to incapacity benefit and the dole and get out of the system." We have to persuade a small but important number of people that we shall get involved in the local economy of such areas.

I shall tackle these matters in two parts, considering first local issues and then DWP initiatives. Undoubtedly, the Government have transformed the fortunes of my constituency, which has done better than others compared with the national picture. More than 1 million more people are employed than in 1997; the employment rate of lone parents is 50 per cent. for the first time in 20 years, and the employment rate of people over 50, which had fallen for most of the previous 20 years, has risen faster in the past four years. In those categories and in every other indicator, Ogmore is out-performing the rest of the UK. But—it is the but that I started with—there are still more than 1 million people on unemployment benefit. Worse still, 4 million people are on other work and age benefits, and 2.9 million people are on sickness and disability benefits, more than 750,000 of whom, including 900,000 lone parents, say that they want to work. Those problems and challenges are concentrated in former coal mining and valleys communities.

I mentioned the good news that Ogmore is outperforming the rest of the UK in job creation, but its economic activity rates are among the lowest in the UK, which is true of many of the south Wales valleys. In the more remote upper valleys, a third generation of people are on benefits. We have six communities first areas, which is good because of the money that the programme draws into those communities, but bad because it recognises that those are some of the most deprived in Wales. We also have all the factors to which my hon. Friend referred: the lack of an entrepreneurial culture, poor access to jobs, which are to be found mainly near the M4, away from those small communities, poor housing, and long-term under-investment in education and skills, although that is slowly being addressed.

Although we are performing well overall with regard to unemployment rates, there is 12.7 per cent. unemployment in Caerau and 9.5 per cent. in Nantyffyllon, which are communities first areas, and those figures compare unfavourably with the borough as a whole. Some 58 per cent. of those people have been unemployed for 12 months or more. The true level of unemployment is distorted by the high rates of limiting long-term sickness among the working population— about 30 per cent. of people are economically inactive for that reason, I could illustrate the point further using the figures for lone parents who are dependent on state benefits, or by demonstrating how the problem gets worse further up the valleys, but I think that I have made the matter sufficiently clear.

The local authority has made great progress in dealing with the problem. Many economic partnership initiatives have been introduced to try to tackle the intermediate labour market. It is important to try to lever people back into work in a persuasive way, with full support, and great inroads have been made in that. However, I will quote the words of a community development worker in Caerau, one of the communities first areas:
"Without families getting support to satisfy their basic needs it is difficult for them to even contemplate work or training schemes to prepare for work. For valley families to engage with any staff it has to be through work that has immediate … benefits for them."
She adds that that would include work, for example,
"to improve housing … support the raising of their families … parenting support and access to services such as adolescent mental health services. Parents do not have easy access to support services for their children, the waiting list to see child and family counsellors"—
in Caerau—
"is usually in excess of 6 months, and many people have to wait over a year. We expect parents to be the main educators of our children but what do we do to support this?"
We often see that, despite the best intentions of national policies and area-wide strategies, what happens on the ground varies tremendously from area to area.

I mentioned co-ordination. The number of agencies targeting their work on Caerau is mind-blowing. They include the youth offending team, the action team for jobs, Developing Alternative Solutions to Housing, the probation service, the youth service, Groundwork, On Track, local schools, 25 community groups, sports groups, 10 faith organisations, the Welsh Development Agency, the economic development unit and many other Bridgend county borough council departments, Valleys to Coast, the early years partnership, sure start, the children and youth partnership, Youth Focus, detached youth work, Positive Transition, the Noddfa Chapel Community Project Ltd. and the intensive support service. The problem is not entirely one of resources being invested, but one of co-ordinating those resources. I stress to Ministers, both in the Assembly and in this Chamber, that I would welcome a review of how effective the co-ordination of all those agencies is in tackling entrenched, long-term unemployment and economic inactivity.

I started my remarks by mentioning intensive intervention; I would also like an evaluation of the progress made to date, to see how the policies are working in coalfield areas and former mining areas. How well, for example, is Jobcentre Plus working? It has been such a success in my area that my colleagues ask me why it has not yet been introduced in their areas. However, I draw the Minister's attention to the artificial and apparently arbitrary geographical cut-offs in that scheme. For example, a village such as Pontycymmer is well served by Jobcentre Plus, but Blaengarw, which is one mile up the road in a ribbon development in the same valley, and is even higher on the deprivation index, does not fall within its remit. Why do such things happen?

I am also concerned about how the priority of the roll-out is determined. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Havard) asked me to query why Ogmore is doing so well in terms of Jobcentre Plus and Merthyr has nothing. I have done my job in raising the matter; perhaps the Minister will now take it up. Merthyr suffers far more deprivation than does Ogmore.

I warmly applaud the step-up programme. It will tackle many of the things that concern me, such as basic skills, confidence and ambition—or the lack of them— and drug and alcohol dependency. It will also help people to accept the discipline of work, which is a major change for those who have been out of work for a long time or never expected to get work. It will help people who have been on the new deal and have come off it. The advisory discretion fund will be an extra financial prop to help people into jobs by giving them financial assistance for the first few months. I should like employers to be encouraged to contribute towards the step-up scheme, perhaps by giving money towards initial training, access to transportation and so on. Why should that always be done by the public sector? Can employers not participate as well?

I shall speed through my final points. I mentioned the private sector in relation to step-up. I should like it to be involved in more initiatives and more research into problems with transportation, research, training, recruitment and promotion. Why, when we have major new investment in an area, can we not encourage employers not merely to target geographic areas but to focus on the economically inactive within those areas? That is not impossible.

I should like to claim one of the six pilot areas for welfare to work and incapacity benefit which have been promised for the autumn. If my constituency cannot have a pilot scheme, there should be one in a former coal mining area. The proposals to increase the personal support that will take people off incapacity and sickness benefits and into work are exciting. Let us see the schemes introduced in some of our communities and then rolled out rapidly.

How can we better combine the work-focused approach, in which we have excelled, with health-focused support? That is what the incapacity benefit pilots will try to do. How do we do that in areas in which the primary care sector is already stretched, or where— particularly in remote communities—there are shortages of such things as GPs? The measures, which tie together medical and personal work-focused schemes, are great on paper, but how are they to work where there are deficiencies in primary care on the ground? I strongly applaud the new return-to-work credit, and I should like it to be rolled out in my constituency and those of my hon. Friends as soon as possible.

I conclude by stressing the need in my communities for a strongly interventionist role. I applaud what the Government have done so far, but I urge the Minister not to be shy in coming forward with new initiatives that are better co-ordinated with the work that is going on. We also need to help those with whom we have not yet had success—those who need more assistance for longer. They are economically inactive, and they are not contributing to the local economy or to that of Wales or the United Kingdom

10.8 am

I feel a little like an intruder on Welsh colleagues, particularly as I still have two pits working. However, I look at the list of the collieries that were closed overnight—Steetley, Bevercotes, Shireoaks, Whitwell, Warsop Main and Manton. Entire communities were torn apart, having been reliant on one employer. One day, all the men and many of the women had jobs in the colliery; the next day they had none. The effect on the young people is even more important. For generations, for better or for worse, whether they liked it or not, all the young men knew that the Monday after they left school there would be a job for them in the pit. They would earn good money in a stable social environment within a community that looked after itself. The Tory Government in the 1980s tore that away. Even worse, having failed to learn the lessons of deprivation that came from those policies, in the early 1990s that Government offered people incapacity benefit as a way of keeping them out of employment, massaging the unemployment figures and creating a benefit culture. In this country, benefit culture came precisely and specifically from that massaging of unemployment figures. We now see the consequences of that. There are families in which the father or the grandfather has not worked for 10 to 15 years; yet he is the role model to the son at home. As the son goes into secondary school at the age of 11 and 12, what are his prospects and what is his ambition and aspiration? That is part of the legacy of the brutal butchering of the industry.

However, the communities are resilient. I looked at my diary before coming here, and noticed that in an eight-day period I shall be attending several events. I shall be judging the floats and welcoming the parade to the Warsop carnival, at which there will be 30,000 people. The day before that I shall open the Shireoaks carnival, which was recreated in the last three years and is now a major annual event. The Manton gala has been resurrected by the community and will be held on 12 July for the first time in a generation. Again, that will be a major event for the community, which is repairing and rebuilding itself. However, there remain underlying problems, which I shall itemise as frankly as I can.

The first problem is the industrial structure. In my constituency, one finds large amounts of land—as much as anyone could use for industry. Having been reliant on a single, large employer, we remain reliant on large employers. There are new companies that are major employers, such as Hazelwoods, which has supplied 1,800 jobs, and Wilkinson, which increased employment by 1,700 jobs. However, we remain vulnerable to the decision of any employer to relocate. When Ericsson relocated to Mexico and Poland in the run-up to my election, 1,200 jobs went overnight. Within a year—six months before and six months after my election—4,500 jobs went in Bassetlaw. However, in this debate it is important to bear in mind one thing when it comes to job creation, and that is the importance of a stable economy. According to the figures for the last year, which constituency has had the greatest fall in unemployment—5 per cent. more than anywhere in Britain? The answer is my constituency. The employment level is high because the economy is strong. Only the long-term unemployed are still out of a job.

However, the point that my hon. Friend the Member for Rhondda (Mr. Bryant) made about the older generation of people who have retired and taken incapacity benefit and the problems that that creates should not be overlooked. That generation has been lost. This country should never again see things like that. However, the job creation situation is in fact rosier than I am making out. Not only have more jobs been created in my constituency than anywhere else but in the last few weeks a decision has been made on the splitting up of the Manton colliery site. Some seven major new employers may go there, which will create at least 1,000 jobs. We are developing the area around the airport—6,000 jobs are to be created directly by the end of next year and far more will come from that, because the right economic decisions are being made.

However, there is still a lack of innovation and creativity among the population. People do not translate their skills into the world of work as they do elsewhere. That problem is part of the benefit dependency culture and if the prosperity of the area is to be increased, that has to be cracked. We do not want large numbers of lower paid jobs. We do not want to be merely the distribution centre of Britain. We want skilled jobs. We want small businesses. We want people with a range of ideas and, crucially, we want those who are developing skills to perceive that they can grow their own businesses. We want them to invest their time and money in our area and not feel that they have to migrate to cities. If those who have risen through the intellectual ranks through training and education are to become wealth creators we want them to do so in our communities.

So what do we want? First, we want the Government to put the infrastructure in place. I am pleased to say that Bassetlaw is receiving £125 million for new secondary schools, which will have a fundamental impact in the long term. However, I want the Government to ensure that the design of those new schools is not purely left to the local education authority. We have left things to the local education authority before. The term "pit fodder" comes to mind. Kids' aspirations have been held down by the education system. This is a fantastic one-off opportunity and I want the top experts in building design to create community schools rather than just the usual 9 am to 3 pm, term-time only schools which do not involve parents or the rest of the community. They should be learning centres for everyone. I hope that the Minister will take that back to his colleagues.

Secondly, we are tiptoeing around our reforms of planning law. Let us go further. There is a large area of industrial land in my constituency sandwiched between Harworth colliery and the A1. I do not give a damn about the normal planning constraints and neither does anyone else in my constituency. People can build what they want there, as long as it creates jobs. I do not want to go through the rigmarole of long-winded planning. The Government should set local authorities such as mine a turn-round time for planning applications for new business. The so-called job creators of the public sector should not be job hinderers through the slow turn-round of planning applications. If people have good ideas, let them put them into practice to create jobs.

Thirdly, there is the Small Business Service. Only 6 per cent. of the small business work in Nottinghamshire is carried out in my constituency; 35 per cent. of the work is done in Nottingham. Why? It is because when Government targets are set and boxes have to be ticked, any box can be ticked in Nottingham. It is a booming city on the back of the strong economy. We need that kind of micro-intervention in mining communities. Sky TV claims that it has no subscribers in Harworth and Bircotes, yet when there is a major football match on Sky every single household seems to be able to watch it. They can also watch a few other channels that I would never dream of thinking about. They do that through the ingenuity of young people who have managed to master the technology. We need to transfer the creativity of the informal sector into the formal sector. We have to make those people understand that they could make significantly more money working within the tax paying system. As they understand business plans and mark-ups, they could employ other people and become thriving entrepreneurs. If the Small Business Service has any role in this country, it is in such communities. That is not happening at the moment.

We need broadband. We should be at the front of the queue to encourage the new high-technology businesses that enable people to work from home. We are not prepared to be at the back of the queue. I will be one of the first MPs on broadband. I shall link up all my offices. I should like Parliament to pay for the connection between all the offices and my home. That would help us reach the broadband targets. If I can have three connections in three separate locations, I am happy to have more if it will help reach those targets. Everyone should have access to broadband. We should stop shilly-shallying around and make broadband accessible to everyone. Let the Government make the companies accountable for ensuring that we can have it now, not in two, three or five years' time.

The Learning And Skills Council appears to have more money than any other public body. It should be held to account for how it spends that money. People talk about skills and training. I have worked in skills and training across the country for many years and I know that a training programme is often regarded as a panacea for all the ills of an area. What we want is the conversion of people's aptitudes and abilities into vocational and entrepreneurial skills, not just another course at a college. The Learning and Skills Council needs to be held more to account for how it delivers on its targets. We do not want to have 1,000 hairdressers trained a year in my community because there is no demand for that. We want people from my community to become world leaders in that profession.

The Government have not yet cracked the problem of the long-term unemployed. People may remain unemployed in my community for longer than the national average, and half of them have a drug dependency. I propose to the Minister that we take my community as an example and consider precisely what is required to help the long-term unemployed who are dependent on drugs to re-enter the labour market. We cannot simply turn on a switch, throw money at people and make that happen. We cannot get such people into jobs because employers will not take them, no matter how much medical assistance and training we provide.

New and specific interventions are needed. I would like pilot projects to be conducted throughout the country, and I propose my community for one so that we can crack the problem. The Rhondda would like one, as would Barnsley and Ogmore. Let us have pilots, but let them be real and come with investment so that we can crack the problem of long-term unemployment among the drug-dependent.

10.20 am

Economic inactivity is the single largest social and economic issue facing Wales today. On the list of areas in the United Kingdom in which large numbers of people are claiming incapacity benefit, five out of the eight areas with the highest number of claimants are in south Wales: Blaenau Gwent, Rhondda Cynon Taff, Neath and Port Talbot, Caerphilly and, top of the list, Merthyr Tydfil and Rhymney. If we break down the figures in those local authority areas, we find a concentration in a relatively small area at the heads of the south Wales valleys.

In some wards, as many as one in four people of working age are claiming incapacity benefit. That situation has no parallel in any other part of the United Kingdom, being, unfortunately, unique to the heads of the south Wales valleys. As hon. Members have said, there is an indication of an inter-generational dependency, which is becoming ingrained. That is particularly worrying, as the role models for young people are often the fathers and mothers who have been unemployed and claiming benefits for long periods. Young people see that as the natural thing to do, and they follow that model.

Why does south Wales have that problem? I should make it clear that the large numbers of people claiming incapacity benefit are not scroungers. If we want to talk about fat cats, I suggest that we consider company directors who have been paying themselves huge bonuses for their company's failure—those are the real scroungers in our society. Nor do many of those claiming incapacity benefit lack enterprise or entrepreneurship. Many of these communities have been among the most enterprising and entrepreneurial societies in Britain. The idea of a national health service was born in such communities, which also produced some of the greatest leaders of the Labour movement: Aneurin Bevan, Arthur Horner, A. J. Cook and many others.

The fact that so many people in those communities are on incapacity benefit is a tragic legacy of the coal industry, which led not only to social fragmentation and the breakdown of communities, but to appalling health problems in large sections of the population. Many people suffer from cardiac conditions, muscular-skeletal problems and, unfortunately, mental illness.

As my colleagues have pointed out, we have seen dramatic falls in unemployment over the past few years, especially in south Wales, but economic inactivity is still a huge problem leading not only to social fragmentation but to a low wealth-creating base. That is one reason why the south Wales valleys has objective 1 status. Economic inactivity is also bad for the individuals concerned. We should not kid ourselves that people on incapacity benefit are wealthy; they are not. They would all be far better off if they were in sustainable long-term employment.

What should be done? It is not enough simply to provide jobs or traditional training opportunities because, for one reason or another, people do not avail themselves of them. In this post-devolution era in south Wales, we must ensure the greatest possible coordination between the policies of the Government and of the National Assembly for Wales. This is a complex issue, and we need to ensure that the policies complement each other and dovetail effectively.

I shall speak first about the Government's policies and then about those of the Welsh Assembly. The Government must continue to put great emphasis on making work pay. That is the only effective way to encourage people off benefit and into work. I recognise the great advances that have been made: the increase in the minimum wage, which is most useful in that respect; the introduction of a working tax credit, which is another positive feature; and recent changes in housing benefit. Those changes are all extremely helpful in getting people off welfare and into employment.

The new deal has been successful throughout the country, and it is now being extended. We have new deals for disabled people and for the 50-plus. Employment zones, which were innovative and successful, have been reintroduced. In Caerphilly, Merthyr Tydfil and Blaenau Gwent, the public-private partnership of working links is engaging in innovative ways to encourage the long-term unemployed and the economically inactive into work. As the recent report from the Bevan Foundation outlined, that is proving successful. We also have a Green Paper from the Department for Work and Pensions.

Although I welcome the many job incentives outlined by my hon. Friend, all the incentives in the world are no use if there are no jobs—one is no use without the other. In Blaenau Gwent, we have lost three major companies: Faurecia, Bosal and Corus. The jobs that have replaced them in the community are almost invariably part-time, low-paid, non-union and soul-destroying. The real problem is that there are no worthwhile jobs; it is not that there is a dependency culture or that children are following their parents.

Of course, there is much in what my hon. Friend says. To ensure that work is seen to be attractive, we must ensure that there are quality jobs paying reasonable wages, and, as far as possible, that those jobs are located in the community. However, I think that my hon. Friend would agree that the days when we could attract footloose capital into the valleys are behind us. We have to ensure the development of small and medium-sized enterprises. As my hon. Friend the Member for Rhondda (Mr. Bryant) said, that requires adequate transport, so that people can seek work not only within their communities but outside. That, too, is important.

I cannot see why there should be a problem in attracting capital into the valleys. My hon. Friend rightly said that that is the role not only of the Government but of the National Assembly for Wales. Indeed, the Assembly's ability to attract capital to Cardiff bay is something to behold. About £3 billion of public and private investment has gone to Cardiff bay over the past decade. If the Assembly has the money, there is no reason why it should not go to Blaenau Gwent, Merthyr or Maesteg. There is a shortage not of money but of will. We demand that the sort of money that went to Cardiff bay go to some of the poorest communities in Wales.

If only the world were that simple. Unfortunately, it is not, and we cannot turn the clock back to the regional policies of the 1960s. We must recognise that the economies of south Wales hang together. What has happened along the M4 corridor and in Cardiff bay has been successful, but we must ensure that there is a knock-on effect in the valleys. I do not want us to criticise or seek to undermine the great success that has been achieved in Cardiff, but let us ensure that that success extends to other parts of south Wales.

Let me return to what I was saying about the Green Paper, because that is central to the agenda. I recognise the arguments advanced in that paper and I believe that the pilot areas—I understand that there will be one in Bridgend in south Wales and one in Cynon Taff—will be successful. There will be work-focused interviews for claimants, individual support and extra financial incentives to help people to look for work. A special fund will be established to facilitate that process. All that points to the way forward.

My other point about the central Government agenda concerns the need to develop what is known in the jargon as intermediate labour markets. The Rowntree Trust, for example, has shown that tremendous benefit can be obtained from having temporary waged jobs leading to permanent employment. We can usefully address that nationally and at a Welsh Assembly level.

That takes me on to the Welsh Assembly's agenda. During the recent Assembly elections, one commitment from the Labour party was to introduce free prescriptions for everyone, the main rationale being that it would remove a disincentive for people to take on work when they have been claiming benefit. That is an important argument and it will be a step forward, but the Assembly must do much more. It has a role in developing intermediate labour markets, and the objective 1 programme should reflect that agenda far more. The Assembly is responsible for health, and much more could be done to ensure that doctors advise people effectively and that we have healthy living and eating programmes. Much could be done on disability, and I recommend that people read the agenda set out by the national charity, Scope. Education and training also have a vital role to play.

The Welsh Assembly's policies and those pursued at Westminster must be co-ordinated. We need an umbrella organisation to ensure that there is the maximum possible impact in our valley communities. If we do that, we will not only have low unemployment, but get rid of the scourge of economic inactivity once and for all.

10.32 am

I congratulate the hon. Member for Rhondda (Mr. Bryant) on securing this debate on an issue that is very important to the 5 million people who live in the former coalfield communities. In considering economic inactivity, we cannot ignore a range of interrelated issues: housing, environmental degradation, education, the communications infrastructure and social issues. Taking those as read for the purposes of this debate. I shall concentrate on economic inactivity.

In 1981, there were 211 collieries in the UK, employing just under 300,000 people; in 2003, there are fewer than 20, employing about 5,000. However, those coalfield areas are home to 5 million people—8 per cent. of the total UK population. Chesterfield, which is in the north Derbyshire and north Nottinghamshire coalfield area, has an official unemployment rate of about 3.5 per cent. That is high compared with a national average of 2.2 per cent., but low compared with the levels of 10 or 20 years ago.

In terms of economic inactivity, we need to consider a wider range of factors, including hidden unemployment. Research at Sheffield Hallam university that was undertaken in 2002 and published recently estimates that the hidden or real unemployment level in Chesterfield is 14.2 per cent. not the headline figure of 3.5 per cent. That research estimates that, in other parts of the north Derbyshire and north Nottinghamshire coalfield, hidden unemployment ranges from 10.6 to 15.7 percent.

We also need to consider the number of people in employment as a proportion of the population of working age. In Chesterfield, the figure is 70 per cent. compared with a national average of 75 per cent. In parts of the south-east midlands—in the east midlands regional development area, which covers Chesterfield— it can be as high as 87 per cent. There are huge regional and national variations.

The male employment rate in Chesterfield is 69 per cent.—the second lowest in the east midlands. In south Northamptonshire, which forms the affluent southern end of the east midlands, the figure is 94 per cent. Between 1991 and 2001, 20,000 jobs were lost in the north Derbyshire and north Nottinghamshire coalfield area, compared with a gain of 49,000 jobs in Northamptonshire, in the southern sub-region of the east midlands. In 1981, there were 51,000 jobs in Chesterfield; in 2000, there were 47,000. In 1981, manufacturing and mining provided 20,000 jobs, or 40 per cent. of employment, in Chesterfield; in 2000, the figure was down to 8,500 jobs, or just 8 per cent. of the total. Of the 47,000 jobs in Chesterfield today, 29 per cent. are part-time, predominantly for women, and low paid. That puts Chesterfield in the worst 10 per cent. of districts nationally, with the worst figures in Derbyshire.

Of course, Chesterfield's situation is replicated in coalfield areas across the UK. Single traditional industries dominated elsewhere before they were closed down virtually overnight in the 1980s and early 1990s. One example is my home city of Sheffield, which saw the rapid demise of the steel industry.

Remedying all of that requires public intervention in all the areas that I outlined—education, communications, housing, the environment, the social fabric and, of course, jobs. The Government deserve credit for their efforts in those areas, which is not to say that they cannot do more and do it better. Intervention can work, but it cannot take place at the macroeconomic level or be left to chance in the free market—it must be tailored to local needs. The regional development agencies are too large for the purpose.

As has been said, economies such as that of Chesterfield, in the north Derbyshire and north Nottinghamshire coalfield, have little in common with the economies of other parts of the east midlands, such as Northamptonshire or, for that matter, the nearby Derbyshire dales and the Peak district. In 2000, in the sub-region that covers the coalfield, the figure for new business registrations per 10,000 adult inhabitants was 29, compared with 36 regionally and 39 nationally. Traditional manufacturing is very vulnerable to globalisation pressures and to the effects of Britain remaining outside the euro. Yet the sector still provides 22 per cent. of employment in the north Derbyshire coalfield area, compared with 21 per cent. in the east midlands and 14 per cent. nationally.

Manufacturing in more diversified areas than traditional heavy industry is improving in the north Derbyshire and north Nottinghamshire coalfield area. Stock increased by 4 per cent. between 1996 and 2001, compared with a national decline of 8 per cent. In Chesterfield, there are two new technology innovation centres, which are full to capacity. However, their cost has fallen disproportionately on a small local borough council, which has had to divert large amounts of scarce financial resources towards match funding for such projects, even though economic development is not one of its statutory duties.

Expansion of the key employment sectors that drive growth nationally is relatively weak in my area. Growth in producer services—the higher value service-based sectors—is 9.7 per cent. in the Chesterfield coalfield area, compared with 14 per cent. in the east midlands and 20 per cent. nationally.

In summary, there are not enough jobs in coalfield areas, and hidden unemployment dramatically masks the real figures. The current structure and characteristics of coalfield economies must change if they are to deliver the employment opportunities of the future. That will require significant intervention. For example, the infrastructure of the coalfields was traditionally said to be underground, but it must now be put in place above ground. That includes not only roads to new industrial parks but, as the hon. Member for Bassetlaw (John Mann) said, giving priority to making broadband available in coalfield areas, rather than relegating such areas to the end of the queue.

Remote and unaccountable bodies such as the regional development agencies and the Learning and Skills Council must be more accountable to and work with local communities. The Learning and Skills Council is the biggest quango in Britain, spending £9.5 million of public money each year. As a member of the Education and Skills Select Committee, its accountability seems to me to be confined to one appearance per year in front of that Committee. The bewildering alphabet soup of bodies providing funding must be streamlined into a one-stop regeneration grant system. Quality support in the provision of jobs and training is welcome, but I ask the Minister how the closure of outlying job centres in Derbyshire, for example—requiring jobseekers to use a poor and expensive bus service to travel to a centre such as Chesterfield—helps to provide quality support in the communities where it is most needed.

Finally, I ask the million dollar question. Where does the money for such intervention and regeneration come from? In calling for more money, I remind the Minister of the £5 billion that the Treasury is clawing back from miners' pension fund surpluses. Will he press the Treasury to make more of this money available to the mining communities to which it belongs?

10.40 am

I congratulate the hon. Member for Rhondda (Mr. Bryant) on securing the debate. I wish to declare my interests, which are noted in the Register of Members' Interests. I will be brief because people are here to hear the Minister, not Opposition Front-Bench spokespersons. I am sure that the Minister would like at least 15 minutes to wind up the debate.

The hon. Member for Rhondda gave a fascinating and colourful verbal tour of the Rhondda valleys. Madam Deputy Speaker—I will call you that, Mrs. Roe, because you look like a Deputy Speaker—the alarming figures on hidden unemployment and the levels of sickness benefit were very striking. That was one of the most important points to emerge from the debate, and I hope that the Minister will comment on it. The interface between Jobcentre Plus and the NHS is surely the way of solving the problem. The hon. Member for Ogmore (Huw Irranca-Davies) pointed out some practical problems, not least the extent to which primary care trusts and local GP practices are already very stretched.

One of the most important areas on which many hon. Members agree is the role of small businesses. Unless there is more small business activity and a growth in entrepreneurial spirit in former mining areas, there is not going to be a secure and bright future. The hon. Member for Rhondda pointed out that the number of small businesses in his constituency is only a quarter of the national average. I am sure that if similar studies were done in other areas, the results would be similar. A number of Members, including the hon. Members for Rhondda and for Ogmore, pointed out cultural problems. I have made various visits to those areas, and I completed a university project on a mining community. In my experience, there is a huge pool of drive, initiative and determination in those areas. That can be harnessed in a way that will create many new businesses. The hon. Member for Rhondda pointed out a couple of examples in his constituency.

Success will depend not only on the undoubted inherent determination and drive in those communities but on harnessing that determination and pointing it in the right direction. Some of the points that have been mentioned are very important. Transport infrastructure is vital because often if one does not have a car, one cannot get to a job, but without a job, one cannot afford a car. It is vital that more emphasis is placed on rural transport infrastructure, particularly on buses.

By far the most effective Government scheme for helping small businesses is the small firms loan guarantee scheme. Much of the Small Business Service budget goes into that scheme. It has been extended in the recent Budget, and, as an Opposition, we give credit for that. However, there should be a further extension to the scheme. It is the one scheme that is available to help the smallest of businesses, medium-sized businesses, people who employ only one person, and the self-employed. It is an easy scheme to access; it is very straightforward, and offers extremely good value for money. I urge the Minister to speak to his colleagues in the Treasury and the Department of Trade and Industry to see whether the scheme can be extended still further. I also hope that he will speak to his colleagues in the Treasury to make sure that the tax status of the self-employed is improved. The tax status of limited companies is significantly more advantageous than that of the self-employed, and the self-employed are missing out as a result.

The Opposition are consulting business groups in various parts of the country, and time and again we are told about the unnecessary obstacles of the planning regime. That point was well made by a number of hon. Members, including by the hon. Member for Bassetlaw (John Mann). Broadband, too, is important.

When the Government come to analyse and assess the way forward, they must remember that mining communities are not urban communities; they are predominantly rural communities, but with a swathe of additional problems. We must avoid the law of unintended consequences.

We have heard much about what the Government can do, but we should also bear in mind what they should not do. For instance, the Government should not be driving rural post offices out of business through the automated credit transfer process. They should not bear down on rural community pharmacies by adopting the Office of Fair Trading report.

The Government should consider their wider policy for rural areas because, unless it encompasses the mining communities, they will miss an important policy potential. A lot of effort is being put into rural areas elsewhere in the country by the Countryside Agency and the Department for Environment, Food and Rural Affairs, but there must be proper co-ordination between the agencies and DEFRA and other Departments. I look forward to hearing what the Minister has to say.

10.46 am

I thank you, Mrs. Roe, for chairing this important debate. My hon. Friend the Member for Rhondda (Mr. Bryant) has done Parliament a service by bringing the matter to the attention of the House. He put the case accurately and eloquently, but honestly—and we need some honesty when debating such a complex subject.

It was 61 years ago that William Beveridge presented his famous wartime report on social insurance. In that report, the great Liberal—there were such in those days—outlined the five giant evils that stood in the way of post-war reconstruction: idleness, want, disease, squalor and ignorance. In what was not a bad soundbite for the 1940s he said that the largest and the fiercest of those five giants was idleness, by which he meant unemployment. However, it was left to the post-war Labour Government of Clement Attlee, which included such important figures as Welshmen Jim Griffiths and Aneurin Bevan, to tackle the giant evil of unemployment, which they did with much success.

In 1997, a new Labour Government found that idleness was still a major problem, and one of our great achievements has been to mount a serious attack on that giant. Employment has risen by nearly 1.5 million since the spring of 1997. Long-term unemployment is down, notwithstanding what has been said. It has fallen by 77 percent, since 1997, but my hon. Friend the Member for Bassetlaw (John Mann) was right to say that it remains a serious problem. Almost 75 per cent. of those of working age are in work.

I am not sure whether I heard him properly, but the hon. Member for Chesterfield (Paul Holmes) seemed to suggest that part-time employment was somehow second class. It is not. About 25 per cent, of jobs are part-time, and such employment is a major way of promoting work that is more family friendly and of great value to young parents. We need to establish the idea that part-time work is first class.

We have made a major impact on unemployment, as has been acknowledged. The new deals have helped more than 750,000 people to move into work. I come here not to recall our record in tackling unemployment, although we are proud of it, but to acknowledge that there are absolutely no grounds for complacency. Sadly, as we have heard today, Beveridge's giant evil of idleness still stalks the land and menaces the valleys. Idleness— what economists now quaintly call economic inactivity—affects many people. It is a more complex and cleverer beast than the one that stalked the land in the 20s, 30s and 40s. We need to understand the different causes of economic inactivity and why so many people are on incapacity benefit. We also need to strike the right balance between macro and micro policies. Given the problem's complexity, and the way in which different groups, individuals and communities are affected, we need to take a multi-faceted approach, although I have some sympathy with my hon. Friend the Member for Ogmore (Huw Irranca-Davies), who talked about the need for effective local co-ordination between the multiplicity of agencies.

Some 2.3 million people in Britain draw incapacity benefit. Although the benefits have changed slightly, that is three or three and a half times as many as in 1980. The question in the air during the debate was why so many more people now claim such benefits. It stretches credulity to suggest that people in Britain have become three or four times more incapacitated than they were just over 20 years ago. The situation is more complex than that. My figures suggest that, in Rhondda alone, 6,700 people draw incapacity benefit. Of course, there is also a regional and national dimension. Across Britain, 4.3 per cent. of people of working age draw incapacity benefit. In London, the figure is 2.5 per cent. in southeast England, it is 2.3 percent.; in the north-east, it is 7.3 per cent.; and in Wales, it is 7.9 per cent.

Of course, we must recognise that many people on incapacity benefit will probably never be able to work because of the nature of their physical or mental incapacity. Nevertheless, many people who draw benefit could work; many want to work; and many who are depressed could be encouraged to work. That is the crucial point. Let us be honest, however, and admit that for many people, incapacity benefit has become something of a pre-retirement pension. Given that retirement will last 20 or 30 years in future, it is depressing to think that some people may add 10 or 15 years to theirs. It cannot be right that some people proudly marched out of the pits the day before they closed and immediately signed on for incapacity benefit—often with the encouragement of the then Administration.

What the Government are doing has been acknowledged. People who move on to incapacity benefit should be regarded not as being at the end of their working lives but as having working futures. It is clear from the evidence that most people who start claiming incapacity benefit expect to get back into work. Returning to work is a real possibility for most of them—if the right help is offered early enough. However, my experience as a constituency MP is that, understandably, people get depressed after a year or two on benefit. They get sucked into what one colleague described as a dependency culture.

Our Green Paper "Pathways to work: Helping people into employment", published last November, sets out our strategy for enabling people with health problems and disabilities to move into work and to become and remain independent. It outlines our plans to introduce a new approach to helping people on incapacity benefit to move into work. People will be given early, frequent support by skilled personal advisers, direct access to a range of comprehensive specialist programmes that mitigate the impact of their health on their return to work, and clear financial incentives to work.

This is not about forcing sick people into jobs. As I acknowledged, those with the most severe conditions may never be able to work, and we will ensure that incapacity benefit continues to provide vital support for them. However, we must make sure that everyone is given the opportunity to gain independence by moving into work. We are carrying out pilot studies of the proposal, one of which is in Bridgend, and it is a key to the future.

This has been a good debate; constituency experiences mentioned by hon. Members show that there is no single solution to the problem of modern-day idleness or economic inactivity. As I said, the matter is multi-faceted, so we need a comprehensive strategy. Given the Welsh flavour of the debate, I must say that many aspects of the regeneration of former mining areas lie with the Welsh Assembly and the Scottish Executive. However, many of the problems faced are shared, and solutions are needed throughout Great Britain, as shown by the contributions of my hon. Friend the Member for Bassetlaw and the hon. Member for Chesterfield. The hon. Member for North-West Norfolk (Mr. Bellingham) also gave us his analysis of the situation.

As the original taskforce report said, the coalfields
"have a unique combination of concentrated joblessness, physical isolation, poor infrastructure and severe health problems."
Hon. Members testified to that assessment in the debate. Pit towns and villages need solutions that meet their specific requirements. Many communities existed for coal and were not developed to have easy access to places further afield, which limited the opportunity for alternative employment. In many instances they have also been bequeathed a lethal cocktail of contaminants in the land and a terrible legacy of personal illness.

The comprehensive strategy is therefore about economic regeneration, and employment and social security policies, hence my presence in the debate. Hon. Members, especially my hon. Friend the Member for Ogmore, have spoken about the importance of employment policies. There will be a roll-out of Jobcentre Plus over a four-year period, and to avoid jealousy I can tell hon. Members that whichever constituency gets it first has nothing to do with the personal qualities of the Member of Parliament; otherwise—I say this bitterly as an Employment Minister—my constituency in Croydon might have had it sooner.

Employment policies and making work pay are crucial. We have made huge progress in enabling advisers, MPs and job centres to tell people that it now pays to take what can be the difficult step back into work, especially if they have been out of work in idleness for many years. There are few exceptions to that rule because of the minimum wage and the tax credit regime. However, some people still do not understand that and we all have a role to play in telling them the news.

As a former Minister for Lifelong Learning with responsibility for England I listened carefully to the remarks about making work skilled, especially those from my hon. Friend the Member for Bassetlaw about the Learning and Skills Council. The learning and skills councils in England listen to local voices, look at the demand in the economy for skills and training and ensure that training providers and colleges respond to those needs rather than running a plethora of the same courses year after year. I will not repeat my hon. Friend's example in case I get into trouble for doing so, but I am happy to talk to him and to pass his concerns to the Department for Education and Skills. Making work skilled in Wales, Scotland and England is the key to many of these matters.

Is the Minister aware that last year the Coalfields Regeneration Trust conducted a survey of what children at schools in coalfield communities thought was the ideal job? By far the most popular choice was going into the armed forces. Do we not need to do a lot to change that culture?

The armed forces is a very fine career, but we need to raise people's aspirations, to recognise the talents and skills of children and young people and those in their 40s and 50s, and to talk about the options that are available to them.

I acknowledge in the dying seconds of the debate that it is also important to consider drug and alcohol abuse. We have specific proposals to tackle those new evils, which terrify and terrorise many of our communities. Transport is vital—the infrastructure has to be in place to get those who want to work to employers with vacancies for people with skills.

Nhs Dentistry

11 am

Good morning, Mrs. Roe. The Minister knows of my concerns about access to NHS dentistry in Stafford from my correspondence with his Department and the parliamentary questions that I have asked. The problem is not new; it existed when I was elected in 1997. However, given that it has continued for over six years, it is time to grasp the urgency of the situation and do something about it.

The Government have tried to do something by providing the investing in dentistry fund, and Stafford tried to take advantage of it. Several dental practices were identified which might have benefited from investment so that they could provide services to NHS patients. Sadly, many of them dropped out, and only one went forward. It took the public money, set up the NHS dentistry service and provided it for the minimum number of years required under the contract. It then announced that NHS patients were no longer welcome and went private. That exacerbated the pressure in Stafford.

We also took advantage of the dental access centres initiative. Stafford is now the proud owner of a walk-in centre, to which people can go for urgent treatment. An obvious limitation of the service is that it is for urgent treatment only, not for the crucial health care that everybody should be encouraged to undertake. However, because there is no NHS dentist in town, many people go to the centre because it offers the only access to free dental treatment for miles around. That puts the service under great stress; the union representative for the work force at the centre has told me of the pressure that the public put on the staff.

So we have reached the situation in Stafford in which young adults cannot find dentists to take them for NHS work. Staffordshire university students union, which has sites in Stoke-on-Trent and Stafford, contacted me last year to say that many students are unable to find NHS dentists. The student advice centre has received a number of complaints about the fact that facilities in the Stafford area are inadequate.

At the other end of the age range, pensioners cannot find NHS dentists. A well known campaigner in my constituency, Dennis Anslow, found himself put off his dentist's NHS patient list against his wishes. He had such difficulty finding a replacement NHS dentist in Stafford that he is now registered with a practice 20 miles away in Lichfield. He says:

"There must be hundreds of retired people in Stafford in the same situation, judging by the flow of letters in the local press."
I am constantly being contacted by individuals from those two groups, and I shall give three examples from among many cases. Mr. McGrath came to a recent advice surgery to say that he could not find an NHS dentist anywhere that would take him, and Maria Hillman was put off her dentist's list when the dentist went private. She contacted NHS Direct, which is now the way in which people are advised to find a new dentist, and she could not find another in the town of Stafford, population 55,000. The nearest practice was 10 miles away and it quoted a wait of over eight weeks to see a dentist who would require a registration fee up front to take her as an NHS patient. In the end, she felt forced to go back to her original dentist and pay for the private treatment. She is very aggrieved about that.

The same thing happened to Jenny Austin, from the village of Wheaton Aston outside Stafford, whose dentist put her off the list as an NHS patient and said that she would have to pay privately. She contacted me and NHS Direct. As a result of our lengthy correspondence, she says in her last letter to me:
"I have been trying since March to find an NHS dentist from the information you supplied however to no avail, so the information I would like from yourself now is how do I go about getting a reduction on my N.I. contribution to fund private treatment."
That neatly encapsulates the anger and frustration that people feel when they cannot get to an NHS dentist.

I am not alone as a constituency Member of Parliament complaining about these difficulties. Even in the few days after this debate was announced, many hon. Members contacted me to ask what I was going to talk about, in case they wanted to talk about the difficulties in their constituencies. I think that I put them off by explaining that we would focus on dental work force issues, not individual constituency problems. I have described the Stafford experience to show that the problem is serious and urgently needs to be resolved.

To respond to the problem in my constituency, I convened a dental summit in March 2001, at which there was a wide range of participants, including members of the public and the health authority, work force practitioners and individual dentists. We had an exceptionally helpful discussion, in which we considered the obstacles. First, the dentists concentrated on the remuneration differences between NHS dental work and private practice. They explained that too little recognition is given to the rest of the dental team and, as a result, they have immense recruitment problems. They cannot find new dentists coming out of training school or the therapists, hygienists and nurses to go with them. We all identified that as a crucial issue of work force management.

Let me explain what came out of that summit later in the year, locally and nationally. Incidentally, I wrote to the Minister afterwards. We established an ongoing local work force review for dental practices, to try to find ways to attract back into the profession retired dentists and others who have left and to try to identify local places for people from training school. At a national level, Lord Hunt, who was then a Minister, announced in 2001 a dental work force review for the country. That is not yet complete, so it would be helpful if the Minister could say whether it will be finished soon. With my local review, people would like next to establish a dental work force strategy, but clearly there is no point in their finalising that until they know what the national initiative will be.

I hope that, by obtaining this debate, I have clearly shown that whatever can be done for Stafford will be done and that this is also a national issue. Let us consider the state that we are in nationally. The number of dentists doing NHS work has risen. Since 1997, the number of dentists who say that they provide NHS dentistry has increased by about 1,700, but the total amount of NHS dental work has decreased. Indeed, about 5 million fewer adults are registered for NHS dental services now than were registered during the peak of 1993–94.

We await the Government's dental work force review, but in the meantime the "Options for Change" working group produced its report last August and has since announced 26 field sites pilots for its work. The review's conclusions were that primary care trusts should commission NHS dental services; we should have a variety of forms of payment, testing them on a pilot basis; we should focus on prevention; a wider range of professionals should be involved in the service; and there should be national standards. Those are all excellent ideas to begin with.

The Audit Commission report, published in September 2002, said that "Options for Change" was a welcome start, but pointed out some of the serious problems that still exist in NHS dentistry. Forty per cent. of dental practices do not accept NHS patients. In some places, no dentists accept NHS patients. Those dentists who do NHS work say that they feel that they are on a treadmill. Piecework pay has in effect remained unchanged for 40 years. The Audit Commission warns, therefore, that the quality of NHS work is at risk. It says that we should move to a new way of working for NHS dental services, emphasise prevention and replace piecework pay.

The latest review of the current situation in dental services is contained in the Laing and Buisson report "UK Dental Care", published in January 2003. The report states that over half of dentists' income comes from private patients, that over a quarter of UK dental patients pay privately and that spending on NHS dental care is still below the peak of 1991–92.

There is, therefore, a need for action, and it is pleasing to see that in the Health and Social Care (Community Health and Standards) Bill provision is made for changing dental services. The debate on that Bill has been overshadowed by the issue of foundation hospitals, but part 4 contains proposals for improving NHS dentistry. It is proposed that primary care trusts should commission services in future and that new kinds of contracts for the service will be possible. The Bill also contains proposals for new ways of remunerating dentists and a clearer system of dental charges, and there is a welcome emphasis on dental public health. Those are all welcome initiatives from the Government. However, the Bill must, of course, pass through both Houses and then be implemented through regulations and commencement orders, so there is still some way to go.

I am grateful to the British Dental Association for its help in preparing for the debate, and I will outline its attitude to the current situation. The BDA complains of chronic under-investment in NHS dental services and says that positive action is needed on work force issues. It says that pay levels and conditions must be attractive enough to recruit and retain dentists working in the NHS, and points out that there is a dearth of training places available for dentists and for professions complementary to dentistry—nurses, therapists and hygienists. Crucially, the BDA welcomes the changes that the Bill presages, but it points out that in the transition from the current situation to that after the Bill's enactment, it is important that fair arrangements are put in place to halt the continued drift of dentists away from the NHS. I agree with that.

I will raise several points, and I hope that the Minister will respond. My first point concerns the new contracts for NHS dental work. Will he assure me that there will be no more piecework pay for NHS dentists? I seek his assurance also that the Government will attempt to stem the shift towards private work by improving the pay and work-life balance of dentists and their teams, and, by establishing better conditions, help them to improve their service to patients. Will the Minister allow dentists access to NHS capital investment, and thereby tempt them to stay in the NHS or to join it? When the Bill has been enacted, will the new contract for NHS dental work focus on NHS list sizes, the quality of the work and health protection—the preventive work that is so important?

I want to see a modern dental team. Will the Minister ensure that there is a wider range of service provision, so that there are salaried dentists as well as those who are privately paid, and that more use is made of the other members of the dental team? With reference to the issues raised at the summit that I held in Stafford in 2001, I know that dentists would also ask the Minister to keep regulation and red tape to a reasonable level in any new scheme that is introduced. Many of my constituents tell me that the complaints procedure, whether for NHS or private work, is unclear, inadequate and ineffective. People would like to see a robust system that they can understand.

To ensure that we have the work force of the future, it is vital that there are adequate numbers of training places in the present. The NHS Modernisation Board, in its most recent report in March 2003, says that capacity is the key factor that holds back modernisation. I wholeheartedly agree—that certainly applies to dentistry. Positive action is needed now to get the right number of training places, and those places must be available to the whole dental team—dentists, therapists, hygienists and nurses.

With regard to dentists, the BDA estimates that a 25 per cent. increase in the number of new dental students is needed. The Department is funding 40 training places for therapists this year, but it has a target of 150 places within two years, so—my goodness—it must get its skates on to meet its own target. Such a step change in the number of training places is exactly what I am calling for in this debate.

At present, there are only 13 training centres in the whole of the United Kingdom. As part of the 2001 summit, we volunteered staff for a new training school if the Government were interested. Nothing came of volunteering ourselves then, but if the Minister were interested in expanding the number of training places, Stafford would step forward and offer its services.

We need urgent action now. The work force review is a very serious issue. There is uncertainty about the transition from the present system to the PCT commissioning of the future, and people are worried that that uncertainty may hasten the shift from NHS to private dentistry. We need to give reassurances about funding and clarity. I hope that the Government will issue template contracts for use by PCTs and dentists, so that they can see clearly what is being discussed. I hope that the Government will announce an adequate floor funding level for PCTs when they take over the commissioning of the service. I ask the Minister to show the Government's good intentions with announcements on training places and funding now.

So it comes to this. We are rebuilding the NHS as a whole, with vision and determination. There have been recent signs of success. Let us do the same with NHS dentistry and create a service in which we, the staff and our constituents can take pride.

11.16 am

I begin by congratulating my hon. Friend the Member for Stafford (Mr. Kidney) on securing this debate and on the persistent way in which he continues to take up the cause of NHS dentistry in his constituency. I stress at the outset that we are committed to ensuring that NHS dentistry is available for all who need and seek it. The future of NHS dentistry is as a service that better addresses health inequalities, the prevention work about which my hon. Friend talked and the different needs of different communities by securing a better balance between prevention and treatment. I counted seven questions in my hon. Friend's speech, and I can say yes to all of them. I hope that my response will illustrate what we are doing on this important aspect of policy.

Although we should be proud of the major improvements in the oral health of the population over the last 20 years, due in the main to the fluoridation of toothpaste in the 1970s and 1980s and, in some areas, to the fluoridation of water, there remain some areas in which tooth decay, especially among children, is too high.

The Minister touched on fluoridation, a subject in which I have an interest. In countries such as New Zealand—that might suggest the reason for my interest—70 per cent. or even 80 per cent. of the water supplies have been fluoridated. That has been a success: none of the difficulties that the anti-fluoridationists suggested have ever manifested themselves and the All Blacks still win most of the time. Therefore, will the Government create the opportunity for fluoridation to take place nationwide?

On a point of order, Mrs. Roe. My point is not that the hon. Gentleman has not asked my permission to take part in this debate—that it is naughty of him, but I shall overlook it because of his great experience—but I am worried that we shall be diverted down the road of debating the fluoridation of drinking water. That is a controversial issue, but it is not related to the dental work force.

That point has no doubt been taken by the Minister, but he gave way to the hon. Member for Mole Valley (Sir Paul Beresford), so it was incumbent on me to call the hon. Gentleman.

I shall move swiftly on, but I remind the hon. Gentleman that we have asked the chief medical officer and the chief dental officer to commission further work on the subject. It is important that local people take these decisions—we do not believe in universal fluoridation—but they should do so on the basis of proper evidence and without fear. That is especially so of the water companies, given their fear of being sued.

I will now answer my hon. Friend's points. We were successful in meeting the Prime Minister's pledge that everyone should have access to an NHS dentist. People have difficulty registering in some areas, but my hon. Friend will know the history up to the late 1990s after the contract was introduced in 1990. He will be aware of the lack of funds to support it and realise that the lack of piloting brought us to a frightful place. It was important, through the Prime Minister's pledge, to give people access to an NHS dentist.

I am aware that my hon. Friend's constituents face difficulties with access and problems that relate to oral health and to the prevention of oral problems. There are significant variations in the levels of tooth decay throughout the country. Residents in the south-east enjoy a lower incidence of tooth decay, thanks to the fluoridation of the water supply, but residents in other parts of the country have nearly average or above average levels of tooth decay.

There are also problems in obtaining registration with NHS dentists. The south Staffordshire area relies on dental access centres in Stafford, Burton, Cannock and Tamworth to provide a safety net for people who do not have access to an NHS dentist. That is why we are undertaking one of the most radical programmes of reform of NHS dentistry since its inception. My hon. Friend is right: NHS dentistry has more or less remained the same since 1948. Only the programme of action— the legislation currently before Parliament—will change that paradigm once and for all and begin to address the serious needs of his constituents.

The programme will involve considerable changes to the current dental service. The problem with the current system is that the distribution of NHS dentistry is determined by the dental practitioners choosing to deliver it, not by the NHS choosing to commission it. There is little patient choice, which is why we are legislating for far-reaching reform of NHS dental services. It is proposed that the primary care trusts will be given a duty to commission dental services within their boundaries to meet reasonable needs. In doing so, the different oral health needs of different communities can be met, and dentists who sign a contract with a PCT will have a secure income in return for making a longer-term commitment to the NHS. I cannot emphasise too strongly what a transformation that will be: the local community will commission its dental services and will be able to plan for local people and to prevent oral decay in a way in which it has never done before.

As my hon. Friend says, it is also proposed that the way in which dentists are paid is changed once and for all so that we move away from the current "item of service" system. We hope that that will reduce the treadmill effect about which some dentists complain and that it will make NHS dentistry a more attractive option. My hon. Friend is right: the old system was appropriate after the war when oral health was pretty bad, and it was important to get people through the door, do the drillings, sort out the decay and get them out of the door and back in again in a few months to continue the job. We are no longer at that stage because of toothpaste and other things. The picture throughout the country is patchy: patients have different expectations of dentists, and we should incentivise dentists by paying them to treat people in a way that is appropriate for the 21st century. The proposed system will not, of course, automatically improve delivery, but it will lay the foundation for long-term change and will create the framework for proper contracting and a degree of certainty between the NHS and dentists that currently does not exist.

To meet the new responsibilities for dental services proposed in the forthcoming legislation, PCTs will need to assess local oral health needs, including health inequalities. Moreover, for the first time since the foundation of the NHS, primary care dentists will have the opportunity to undertake what is essentially a public health role.

However, that is only half the story. Although we need to modernise the NHS dental service, we also need, as my hon. Friend suggests, a twin-track approach to recruit and retain dentists. We must also make the best use of the trained staff who are already part of the dental team. We are taking action on all these fronts.

I apologise for not being here earlier. Although I tried to arrive in time, my scurrying was not enough. One of the key questions is the removal of the piecework system. Assuming that that is one of the seven questions that the Minister mentioned, his answer was yes and he has hinted at that now. The legislation is short and difficult to assess. Will the PCTs have an enormous choice in how they pay dentists because, if they cannot attract dentists, there will be no service?

Yes, they will. The primary legislation lays the framework and we must continue to work with the BDA, dentists and others to put that into context and to meet the differing needs of local areas.

I want to make progress.

There has been a significant increase in the number of dentists on the UK dental register. Numbers working in NHS general dental services are up since 1997, with 18,400 dentists working in England at the end of September 2002 as against 16,728 dentists in 1997. However, as I have said, in some areas access to NHS dentistry remains a problem. When my hon. Friend talks about private dentistry, he illustrates part of that problem. He will know about the recent Office of Fair Trading report into private dentistry. The Government have a 90-day period in which to respond. I must not pre-empt that response, but I suspect that I will be dealing with some of the issues that he illustrates. In a sense, the report has a bearing on the whole dentistry family, both NHS and private. It also raises some important issues about transparency and understanding of what private and NHS treatment provide.

As I was reminded last Thursday, when giving evidence to the Health Select Committee, the Government undertook to carry out the first dental work force review since 1987 in our response to the Health Select Committee's report on access to dentistry published in July 2001. We are undertaking the review in consultation with the dental profession, professional bodies, dental academics, as well as the BDA. Again, I cannot pre-empt the report, but I can confirm that matters under consideration include the age structure of the dental profession; the increasing number of women dentists; and our commitment to develop team-working in dentistry and a skill mix generally. I recognise that the review is taking longer than the timetable originally envisaged because the relationship between access to dental care and the number of dentists in practice is not straightforward. I hope that we can publish that work force review later in the year.

Access depends on the numbers of dentists. Dentists will be attracted by pay. The Minister has carefully not said what form of payment is proposed to replace piecework.

In short, I see a future in which there is local commissioning. We have learned a considerable amount from our access centres, from the personal dental services—salaried dentists, in short—and the ability of dentists to drill down, if that is not an inappropriate phrase, on oral health problems locally. I see a future in which PCTs can do that. We must continue to look at the work force issues to ensure that we have dentists in the right place. At the core of that are health inequalities. I suspect that we will shortly come forward with plans on that issue.

11.30 am

Sitting suspended until Two o 'clock.

Common Agricultural Policy

2 pm

The need for reform of the common agricultural policy is one argument that would probably attract universal approval in the House. However, I would defy anyone in the House to expand on that argument and retain such a degree of unanimity. It is an enormous subject, which must increasingly be seen as having a degree of urgency and extensive implications for the enlargement of the European Union, and even relations between the European Union and other world trade blocs beyond the EU's boundaries.

The CAP is one of the most complex and jargon-infested areas that one can come across. In the past I have spoken to local branches of the National Farmers Union in my constituency. Even with an interested and motivated audience, once one starts talking about degression, modulation and cross-compliance, one can feel the will to live ebbing away.

With apologies to some hon. Members present, I hope to be fairly focused in my remarks today. I want to cut through some of the jargon and focus on the impact on those who are at the sharpest end of the CAP—the farmers. I know that others, such as the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz), will concentrate on some of the wider issues.

Two of the aims of the mid-term review set out last July were particularly important to farmers in my constituency and indeed throughout Scotland. They were the use of intervention as a safety net for EU agricultural policy and the shift away from payments for market support—the so-called first pillar—towards environmentally friendly practices and rural development—the so-called second pillar. As is so often the case with many things relating to the EU, there is a conflict between the general aims and the specific proposals that followed in January this year.

It seems that the two legs are particularly important for us and for my constituents. I make no apology for being island-centric. Agriculture is of huge significance to both the island groups that I represent, especially to Orkney, where we have a tradition of high-quality beef production, and to Shetland where the primary industry has hitherto been fishing, which as the Minister will know has not had the easiest of times recently. There is also a large crofting community, which produces principally high-quality Shetland lamb. I suggest to the Minister that if we remove agriculture as a significant contributing industry to either of those communities, we will engage in a downward spiral that will impact on every other aspect of island life.

My particular concern about reform of the CAP is that it will impact not specifically on mainland Orkney and Shetland but on our large number of smaller islands beyond the shores of the mainland. The impact will be particularly acute on the north isles of Orkney and the outer isles of Shetland. The anticipated reduction in production levels poses a threat because it brings with it a knock-on effect for people such as hauliers and agricultural contractors. Taking that sort of job out of the community has a knock-on effect on shops, post offices and other businesses, which then affects the availability of local schooling—and so the downward spiral goes on. It the smallest and most vulnerable communities that stand to suffer most.

I suggest that the crux of the matter is the way that reform is approached. Speaking as one who still bears the scars of the battle to reform the common fisheries policy, I know that the greatest danger is that the wrong approach will be taken. An approach based on micro-management and inflexibility from Brussels will inevitably be bad for the communities that I represent. If we get nothing else, a degree of flexibility is a must. Without it, the agriculture that underpins so much will suffer.

I totally agree with the hon. Gentleman, but does not a rider need to be put in place? In a sense, we need to renationalise agriculture—it needs some national direction. Part of the problem with the common agricultural policy is that it would impose the belief that, even with 25 members, it can be made to work for fundamentally different agricultural systems. We need a return to a localised basis.

Yes. I have no problem with that. The hon. Gentleman alarmed me slightly when he started to speak about renationalising agriculture. It was news to me, a farmer's son, that it had ever been nationalised; and nationalisation brings with it a sense of centralised control, which runs contrary to what he went on to suggest. The approach that he outlines would be wholly consistent with the Maastricht treaty, which enshrines the concept of subsidiarity. He is right to say that a one-size-fits-all policy will always be immensely damaging and will suit no one—not even the officials who delight in its production.

Farming practices in my constituency may be larger in scale, but I suggest that they are still environmentally friendly. That is why Orkney and Shetland is home to a large number of rare and protected species that have been eradicated from other parts of the country. Those larger units are a result also of the geography with which we have to contend. Because of the distances involved, with resulting higher transport costs and tighter margins, in order to be economically viable, we have to operate in larger units. The sort of fatwa that comes from Brussels against larger-scale units is highly unhelpful.

I contrast the reaction to the January 2003 proposals that emanated from the Department for Environment, Food and Rural Affairs with that of the Scottish Executive Environment and Rural Affairs Minister in Edinburgh. The Secretary of State for Environment, Food and Rural Affairs said that the changes outlined are "on the right lines" but that they do not go far enough. She also said:
"they do nothing to control the burgeoning growth in the budget because they simply recycle money in the agriculture budget. We need year on year savings in the cost of the CAP."
My concern is that that statement seems to treat reform of the policy merely as an exercise in cost-cutting. I would rather that the Department took a more holistic approach, treating the maintenance of agriculture and communities reliant on agriculture as a priority.

One worries when the Secretary of State says that the proposals are on the right lines. I contrast her remarks with the response of the Minister for the Environment and Rural Development in Edinburgh, Mr. Ross Finnie, who said:

"My initial view is that they are unacceptable from a Scottish perspective. In their current form, they do not appear to advance our objectives in A Forward Strategy for Scottish Agriculture. The proposals on decoupling do not appear to include the necessary safeguards, in terms of cross-compliance or other measures, to address the potential adverse effects in rural areas and in certain sectors—notably suckler beef. The degression proposals are also more heavily weighted against large-scale Scottish producers than was initially proposed. Coupled with this, the arrangements for transferring money from Pillar I (market support) to Pillar II (rural development) do not make more money available to Scotland to advance rural development activity."

The hon. Gentleman was contrasting a quotation from the Secretary of State with the remarks made by Ross Finnie about the impact of the Fischler proposals on Scotland. It is a mischaracterisation of the Secretary of State's position to suggest that she is interested only in financial cuts. In the context of enlargement, there is a real sense of urgency in dealing with the issue. Supporting rural economies and assisting farmers to become closer to their markets, and therefore to have a long-term sustainable future, is at the heart of what the Secretary of State has said. The recommendations of the policy commission on the future of farming and food bear that out.

I thank the Minister for that intervention. It is a helpful elaboration of the Secretary of State's press release. I hope that the Minister, when he replies to the debate, will indicate whether he is in total agreement with Ross Finnie's analysis, and if so how he will be advancing those arguments.

I am glad that the hon. Gentleman mentioned Ross Finnie. Does the hon. Gentleman share my frustration that CAP review will be discussed and formulated without any direct Scottish voice? As a Scottish Member, is he not concerned that the same fate awaits Scottish farmers as befell Scottish fishermen last year?

We shall see what fate will befall Scottish farmers. I most certainly do not share the gloomy analysis of the hon. Gentleman. Whoever the new Scottish Agriculture Minister is—I certainly did not know who it was when I came here today—he or she will have a direct input. I hope that the Scottish National party's contribution to the debate will be more positive than it was to the debate on the common fisheries policy. Merely carping about who sits where does not add a great deal to the debate. Of course we have a voice; we have it through the Minister. I hope that the Minister will recognise that there are specific Scottish concerns on this matter and that those can be articulated. I hope that the approach in relation to CAP reform will be one of partnership with the Scottish Executive.

I was speaking about decoupling and degression. In January, Ross Finnie said in relation to the 2004 decoupling proposals:

"The proposals on decoupling do not appear to include the necessary safeguards, in terms of cross-compliance or other measures, to address the potential adverse effects in rural areas and in certain sectors—notably suckler beef."
That is a concise statement of the position. It is a matter of significant concern to farmers, particularly within Orkney. Degression will potentially operate against farmers throughout Scotland and, in particular, in Orkney. On that matter, Ross Finnie said:

"The degression proposals are also more heavily weighted against large-scale Scottish producers than was initially proposed. Coupled with this, the arrangements for transferring money from Pillar I (market support) to Pillar II (rural development) do not make more money available to Scotland to advance rural development activity."

Does my hon. Friend accept that it is important to move away from production support as quickly as possible? One of the biggest difficulties that besets farmers is that any payments, however they are made, that are received as a form of production support are inevitably siphoned out of farming and result in lower farm-gate prices. It is the supermarkets that do well out of that system.

I thank my hon. Friend for his intervention. He makes a pertinent point that I have no difficultly in agreeing with. Decoupling as currently envisaged is an exceptionally blunt tool. Safeguards must come along with it. That goes back to my earlier point about flexibility. There must be recognition of the fact that decoupling will have different effects in different parts of the EU and that mechanisms to compensate for that must be put in place.

It would be helpful if the hon. Gentleman could say what sort of mechanisms he is talking about. As he mentioned right at the beginning, one of the problems with reform is that even though we all believe that it is necessary, agreement is more difficult to get as one goes into the details more. I am not sure which mechanisms the hon. Gentleman is arguing for, which is distinct from raising the general concern.

First, I am seeking to raise the general concern. The great rider that people get in every debate about the CAP is that the devil will be in the detail. I am thinking of, for example, cross-compliance measures or moves to compensate environmentally friendly farming methods, which are traditional in the parts of the country that I represent. Such methods have always been at the heart of farming practices in Orkney and in Shetland. I defy the Minister to find any farming practice that is more environmentally friendly than Shetland crofting, for example. There should surely be some recognition of that, perhaps through the cross-compliance measures. The Scottish Executive were eventually able to structure the less-favoured-area support scheme in a way that recognises the problems caused by the LFA programmes as they were previously structured, in relation to island and peripheral areas.

Let me illustrate my point about the relatively large size of farms in Scotland. Some 9 per cent. of Scottish farmers receive less than €5,000 per annum in agricultural support, as opposed to the European average of 61 per cent. Most farms in my constituency fall in the middle band of those between €5,000 and €50,000. The National Farmers Union in Orkney estimates that as things stand some £1.5 million will be removed from agriculture in Orkney between the introduction of the measures and 2012. I suggest to the Minister that that situation is nonsensical and untenable. It arises from the application of an exceptionally blunt instrument that will result in the need for some form of support for the community from another source. Such money cannot be removed from agriculture in a county such as Orkney without other consequential expenditure being made.

I am keen to allow other hon. Members to contribute, so I make my final point, which is a plea on cross-compliance. Farming is probably one of the most over-regulated industries in the country. A degree in business management seems to be more necessary than any skill in crop-raising or animal husbandry. My sneaking concern is that cross-compliance will lead to further regulation that will become gold-plated once our civil servants get their hands on it. Will the Minister please bear that in mind, and may I have his assurance that we will move away from the byzantine system of paperwork that benights our farming industry towards something that is more integrated and user friendly?

Order. I intend to call Front-Bench speakers, as is traditional, after 3 o'clock. Three Members have indicated that they want to speak, so I ask hon. Members to confine their remarks to the 40-minute slot. That gives them approximately 13 minutes each.

2.20 pm

I congratulate the hon. Member for Orkney and Shetland (Mr. Carmichael) on securing this debate on the mid-term review of the common agricultural policy. As a Member representing an entirely urban constituency without a single farm in it, I am glad to contribute to a debate that is seen all too often as the preserve of those with special and important interests in the agricultural sector. My constituents, like those of every other hon. Member, eat the products of the common agricultural policy, and, like many others in urban and rural areas, they pay out the money that the recipients of CAP support enjoy.

The hon. Member for Orkney and Shetland rightly pointed out how easy it is to sink into jargon whenever this subject is discussed. When it comes to questions about the Department for Environment, Food and Rural Affairs, it is not only the eyes of members of the public that glaze over but those of Members of the House who do not participate regularly in debates about modulation, degressivity and the rest. If I were to be cynical, I might even suggest that some people are quite happy for jargon to be used, as it allows some of the real issues underlying the debate about agricultural support to be obscured.

The underlying fact behind the CAP now, in the past and perhaps also in the future is that it is a gigantic, multi-billion pound, multi-billion euro scam. It takes money from consumers to subsidise a particular producer sector in the economy in a way in which no other groups of producers are subsidised anywhere else in Europe. Its burden falls most heavily on the poorest sections of society, which spend a much higher proportion of their income on food. The interests of hill farmers and other more marginal agricultural producers are promoted too often to act as a fig leaf to hide the fact that the main beneficiaries of the policy are big businesses in agribusiness and other sectors.

The policy undermines poor farmers in developing countries. Moreover, the policy is a scam that the current European Commission proposals do very little to change. All that the proposals mean in essence is that the booty is moved around a little between the bags from which it is taken. Some of the money may be taken out of a bag called market support to go into a bag called direct payments, but ultimately roughly the same amount of money will go to broadly the same farmers. The figure is staggering: since 1992, expenditure on direct subsidies for the agricultural sector in the European Union has increased from about €2.5 billion to more than €30 billion.

I shall leave aside proper considerations about the stewardship of the countryside, the maintenance of the rural landscape, the environment and wildlife habitats—all those things—to ask the hon. Gentleman a simple question. The smaller proportion of their income that people now spend on food does not go largely to farmers. The great bulk of the food price is absorbed by other elements of the food chain, as he surely knows. Is he defending that? Is he the ally of the so-called greedy corporate bosses that other members of his party so condemn?

I am grateful to the hon. Gentleman for that point, as I shall talk later about how we support rural development, which is a very important issue. As I said, large agribusinesses are not the only ones to benefit from the current policies: other sectors also benefit. With regard to taxation and higher prices, however, for an average family of four, the cost of the CAP is about£16 a week and the current annual cost to UK taxpayers is around £5 billion. That is equivalent to 2p on the standard rate of income tax, which even with the Government's low-tax policies could usefully be added to the Chancellor's resources were it to become available. I do not suggest that every amount could be released in that way, but it is worth emphasising the background to the realities of support for agriculture in this country.

Will my hon. Friend accept that one of the worst examples over many years is the milk quota? Until recently, people who no longer produced milk or had any relationship to the land could make great sums of money by owning the quota and flogging it off to someone else. That is the very opposite of what agriculture should be about.

My hon. Friend is absolutely right. He will be aware that one proposal that arose from the discussions would give other farmers an entitlement to subsidy even if they no longer had any connection with farming.

We should not be surprised that the consumers' interest has not taken pride of place in the current discussions in the European institutions. The European Commission's explanatory memorandum on its revised proposals discusses consumers' interests largely in terms of the possible marketing opportunities that they present for producers. There seems to be no recognition of the high prices currently paid by consumers and, indeed, the price impact on consumers of the proposals for reform is not even discussed. As much of the future price direction of European agriculture will depend upon the World Trade Organisation negotiations, that seems a reasonable conclusion but, even when those negotiations finally come to an end, the European Union will continue to subsidise its farmers more than any other part of the world, including the USA.

Those subsidies will be at the expense of taxpayers and consumers because basic food prices in the EU will continue to be consistently higher than prices in most other countries. Indeed, expenditure forecasts show that, for the 15 present members of the EU, spending on the CAP will increase in the next 10 years from €41 billion to €43.5 billion.

The proposals from the Commission will do little for European consumers, including those in the UK. It is true that they break the link between support for production and support for farmers, but it is entirely wrong that the proposals should give farmers the permanent right to a public subsidy just because they are, or, worse, once were farmers. It is a reflection of how much the terms of the debate on agricultural support have been distorted that it can be deemed acceptable for producers in one sector to get a subsidy that bears no relation to production or to other public policy objectives.

I am interested in the hon. Gentleman's urban-centric views on this matter, which are not too far away from the general nature of those of the Labour party. Can he explain where all the money is going? Is it going to the farmers in my constituency who are surviving on about £7,000 a year? What would he say to those farmers, whose pockets are supposed to be lined with masses of gold?

The money is certainly going somewhere and I will say something in a moment that will find favour with the hon. Gentleman.

To show how the terms of the debate have been distorted, we should contrast the situation in the agriculture sector of the economy with what would happen if it were proposed that people should be given a permanent payment just because they were once coal miners, or that shopkeepers should be given a subsidy to keep their shops open. In essence, that is what is being proposed for the agriculture sector. The proposals for direct payments are income support for farmers—that is the Commission's own term—with a green tinge and a few references to food safety designed to make them more acceptable to public opinion, which is rightly sceptical.

We need a much more radical approach to agricultural policy in the UK and in the EU. We should get rid of price support, direct and indirect agricultural production subsidies, quotas for set-aside and the whole edifice of agricultural subsidy. Subsidy should be directly and clearly linked to the promotion of environmentally friendly agricultural policies and to non-agricultural policies designed to maintain rural communities and promote tourism. We should ensure that more funds go to benefit the poorest in our rural society, many of whom face acute deprivation because of their isolation—and I accept that that can be worse than in urban areas—but do not benefit from the money that is spent in the rural economy in the name of economic development.

Agriculture policy at European level must also move—as we have been trying to move it in the UK— towards becoming part of a wider food policy in which the overriding priority is to provide high-quality, nutritious, safe food for consumers, rather than protecting vested interests. At the same time, we must end the practices in EU agriculture that harm some of the world's poorest people at the expense of the EU's taxpayers and consumers. Last year, the EU paid out an estimated €3.8 billion in export refunds—subsidies paid for by our taxpayers that undermine the ability of farmers in poorer countries to get an economic price for their products.

The British Government have been at the forefront of seeking reform in European agricultural policy. Sometimes they face a difficult task in trying to persuade other Governments to follow suit. One of my reasons for making these comments is to make it clear that there is widespread support in the House and around the country for a move away from the current system of agricultural subsidy and to urge the Government to continue to make reform of the CAP one of their top negotiating priorities in Europe. Recognising that one of the difficulties that they will face in promoting radical reform of agricultural policy is the power and influence of EU producers, the Government must push for major changes in the way in which EU institutions operate, so as to ensure that the consumer, the environment and food safety interests take priority over producer interests. Responsibility for policy should be transferred to the relevant directorate general in the Commission and the directorate general for agriculture should be wound up, as should the EU Agriculture Council. We all know that to pick out a particular sector in that way is one of the best ways to ensure that that sector increases its influence within government instead of the Government being able to take an integrated approach to that sector.

One good thing about the current proposals is that they would establish an integrated system that, for the first time, would make it possible for the public to be properly informed about individual farm payments Europe-wide. That would satisfy the hon. Member for North Tayside (Pete Wishart). The publication of the information would do wonders to heighten awareness across Europe of who gains and who loses from the current system of agricultural subsidy and it would provide a considerable boost to consumers across Europe, encouraging them to put pressure on their Governments to seek the type of change that many in the House would like to see. I hope that my right hon. Friend the Minister will be able to make a commitment to seek such transparency about farm payments. The public will shortly—and rightly—be able to know about the payments that we as MPs receive, so it is not unreasonable for the same to apply to payments received under the CAP.

2.33 pm

It is nice to see you in the Chair this afternoon, Mr.Taylor. There can be few people who do not broadly support the overarching aim of more market-oriented, profitable and sustainable agriculture. It is a vital objective. However, the midterm review proposals do not address that aim, but will allow the detrimental effect that the CAP has had on UK farmers to continue. We must all bear it in mind that the proposals are only mid term. If we are only at the halfway point, there must be many more reforms to come. As my colleague, the shadow Secretary of State for Agriculture, said:

"The CAP is in need of reform. It is right to move to a world where farmers are free to respond to the demands of their customers rather than of Governments."
I wholly agree with him, but fear that the current proposals will not remedy the situation.

With regard to the enlargement of the EU, does the mid-term review go far enough in preparing for the accession of the new member states next year? Reform of the CAP is vital to ensure that the EU budget is not overstretched and that the new entrants' economies are not distorted by the effects of subsidies. I am also concerned about the dairy sector, and particularly the plight of UK dairy farmers, who receive so little at the farm gate compared with the retail price. In a country that produces about 12 per cent. of the EU's annual milk production, the situation continues to be pretty dire for all dairy farmers.

I am sceptical about whether the decoupling measures will have the desired effect. There is a need for greater clarification of what the transfer of funds from pillar 1 to pillar 2 initiatives would achieve in reaching their environmental, rural and other objectives. Although we all want what is best for the wider rural economy and landscape, and acknowledge the worth of many of the pillar 2 objectives, we must not lose sight of the fact that farmers are the natural guardians of the countryside, and that without profitable and sustainable farming, the countryside will inevitably suffer.

I am also concerned that the measures implicit in the mid-term review proposals will inevitably discriminate against the UK. It is notable that bigger, more efficient farms will take the biggest reduction in payment, which will result in UK farmers being disproportionately affected. We must also be realistic in asking whether the new European states will be capable of implementing pillar 2 policies—rural and environmental management—completely, efficiently and to the desired standard.

I have some questions that I hope the Minister will answer in his summing up. Under the proposal, five farmers living in the same parish may receive vastly different payments for the same area, but will be subject to the same cross-compliance demands and will be permitted to grow any crop for any market.

Before my hon. Friend continues his exciting peroration, will he invite the Minister to speculate on the potential effect that that will have on land values? An extraordinary situation could be created, in which there were widely divergent land values in the same area, irrespective of size of farm or soil type.

My hon. Friend is way ahead of me on that issue—I will come to that point later. He is right, and has put his finger on one of the difficulties that will result from the mid-term review. Later in my remarks I will mention the Blackcurrant Growers Association's comments—whose members are growers of unsupported crops, and should therefore be helped by the mid-term review—and will ask the Minister to address its concerns, one of which is the discrepancy in land value that will ensue.

Chapter 5 of the regional implementation article 58(4) states:
"Moreover, in duly justified cases such as, for example, to avoid distortions of competition, the Member State may…apply the regional solution."
Amendment 68, title III of the same chapter states:
"A Member State may decide, by 1 March 2005, to apply the single multifunctional payment scheme…at regional or local level for the benefit of homogeneous production areas and substantial ecologically sustainable areas under the conditions laid down in this Chapter."
Would the Government consider a regional solution even if there was no overall agreement between agriculture and horticulture? How much would it cost to administer the negative list and positive re-entry scheme by the regional payments agency?

I shall read out a statement sent to me by the Blackcurrant Growers Association:
"Clearly the mid-term review is an ideology developed to decouple products from payments to create a more market based environment. Whilst the philosophy might be sound enough, especially if used to present a more just face to the world market when the next round of WTO talks take place in Cancun in September, we believe it is unworkable and unfair. This proposal has been presented to the agricultural community with little time for assessment and reaction but clearly many farmers will have cause for concern and we must react quickly to present a better solution."

Order. May I remind the hon. Gentleman that quoted extracts should be relatively brief?

If you will forgive me, Mr. Taylor, this is more than a quoted extract. The points I am coming to are fundamental to my argument.

The blackcurrant industry in the UK will suffer badly if the mid-term review proposal is allowed to go through. It is perverse that the very principle that the EU is trying to encourage in terms of market orientation is undermined. The blackcurrant industry in the UK is worth more than £10 million. It involves an expert grower base who have invested large sums in a high-risk crop. There is a significant amount of employment required to produce the nation's third most popular soft drink, which uses up to 100 per cent. of UK-produced blackcurrants. Consumers, like retailers, require a higher degree of specialisation than was the case 20 years ago.

It is not acceptable to argue that blackcurrant growers made the choice to exit the subsidy market and therefore should take the pain with the gain. They acted with enterprise and initiative to find a product for which they had a customer, and they should not be penalised for that. Significant areas of land were in blackcurrant plantations during the reference period, If the blackcurrant market collapsed, they would have no support or entitlement to grow any other crop.

Each blackcurrant plantation has a lifespan of about 10 years and needs to be rested for at least two years before being replanted. The growers will be severely penalised by growing combinable crops without the decoupled aid. The assured produce generic protocol specifies crop rotation and the use of land that is suited to the crop among its standards, and so does the Soil Association. Some growers have rented land from neighbours, and those neighbours would have no entitlement on the land when it was returned to them.

Growing blackcurrants requires particular land types and also space between plantations. Obviously growers would only use land that was appropriate and would rent out land that was not. That would encourage biodiversity, but they would be penalised as a result. It would also weaken their negotiating position as land values would significantly decrease. Moreover, entitled growers, who would have been receiving some sort of subsidy because they were in combinable crops when the decision was made, would have more money than those who were growing blackcurrants.

Growers will therefore face unfair competition from the UK as well as from growers abroad who could still be receiving subsidies. Poland is an example of that. New environmental legislation will force un-entitled growers to comply with improved environmental standards, but they will receive nothing for it. It is unfair to expect growers to pay for this when they will not receive the same public money as others will receive.

Decreasing land values will also have an impact on borrowing arrangements. Indeed, some banks are already looking with great concern at the high levels of borrowing of some of their customers. As a multi-annual crop, the blackcurrant industry needs flexibility to cope with problems such as lack of profitability due to climate change and new diseases. Growers need to be able to market blackcurrants and other products sensibly and without obstructions from the EU.

There is also an element of rough justice for any farmers who bought land during the reference period, as they will have no entitlement to any subsidy on the land purchased. Even those who do not receive a subsidy at the moment are deeply unhappy about the Government's proposals. I have put the case of one of my constituents who grows blackcurrants. I hope that the Minister will give the matter his most serious consideration.

2.44 pm

I congratulate the hon. Member for Orkney and Shetland (Mr. Carmichael) on securing this timely debate. It raises an important issue, so I am surprised that so few hon. Members are here to take part.

The Scottish National party recognises the immense importance of agriculture to the Scottish economy— indeed, it is much more important to the Scottish economy than it is to the UK economy in general. Official figures show that, even after some dark years of decline, agriculture still employs 70,000 people in Scotland, although it is important to note that less than half of them now work full-time, such has been the impact of those dark years. None the less, agriculture is still worth £1.8 billion to the Scottish economy, and it employs 160,000 people indirectly, so it is still an important industry in Scotland. The SNP believes that Scottish agricultural produce is high quality. It also has a good reputation, although that has been undermined and demeaned by the Department for Environment, Food and Rural Affairs and by further London control.

We are aware that farming is changing and that it is likely to change significantly over the next few years. We believe that CAP reform is absolutely necessary, and no one—certainly not today—has suggested otherwise. The European Union is to have 10 new members, all of which have significant agricultural sectors, and the countries queueing up to join after them also have quite significant agricultural economies. That will have an impact on existing members and will influence what happens in future.

Our major concern is that we in Scotland have no direct voice in the process of CAP reform. As a result, the position of Scottish farmers could worsen. Commissioner Fischler's proposals have the Government's support, and it is worth quoting the remarks of the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Scunthorpe (Mr. Morley). He said:
"The European Commission's proposals on Common Agricultural Policy reform, published on 22nd January, give us a real opportunity to set down a sustainable basis for European agricultural policy…the Government strongly supports the direction of these proposals."
The proposals will have a massive direct effect on Scottish agriculture, but Scotland will have no say in formulating them: DEFRA in London has already decided the UK view. That is the nub of the problem—we were not involved.

As hon. Members have said, the decoupling of payments from production and the issue of modulation are at heart of the proposals. The problem with permanently decoupling direct payments to farmers is that it could lead to reduced production in some areas and to proliferation and intensification in others. The baseline years will also be extremely important. Using years in which incomes were low owing to BSE and foot and mouth could have a serious impact on Scottish farmers.

The second main issue raised by the proposals is modulation. We see several serious potential problems. As hon. Members have said, the original proposals suggested shifting money from the first pillar to the second pillar—from direct aid to rural development—in an apparent attempt to green the CAP. That is welcome, and those involved are to be congratulated. However, as is usual with EU reform, there has been a great deal of backroom trading. As a result, very little money will be shifted to rural development. Given the way in which development areas are defined, what little money is shifted to them is very likely to go to the new entrants, not to small nations such as Scotland and Ireland. Modulation could therefore hurt many Scottish farmers.

The lower level for modulation is €5,000, or £3,000. As a result, more than 60 per cent. of southern European farmers will be exempt from modulation, but only 9 per cent. of Scottish farmers will be. The impact is therefore likely to be much greater in Scotland than in France, Italy, Spain and Portugal, for example. Indeed, the net effect of modulation could be a ludicrous transfer of funding from Scottish agriculture to southern European agriculture, which is much more successful. The SNP will therefore not support modulation, unless the money received from it returns to Scotland for rural development schemes and to encourage positive rural stewardship.

That is not likely under the proposals, and without a strong Scottish voice arguing that case, those proposals, already accepted by Westminster, are likely to go through. That is one consequence of having a Scottish agriculture Department and, indeed, a Scottish Agriculture Minister that cannot deal directly with Europe. If people want to know how the current system treats Scottish interests, they should ask Scottish fishermen, because the lessons are there for everyone to see.

The SNP accepts that Europe plays and will continue to play a very important role in agriculture, but at times it seems that the UK Government and the Scottish Executive are determined to impose each and every control more quickly than the other European nations. We would work to protect the industry's competitiveness and maintain a level playing field by ensuring that regulations are introduced in Scotland only after implementation by a majority of EU nations. We have seen how the UK has failed Scottish fishermen. Scottish farmers are about to witness the same failed UK strategy in respect of CAP reform.

I am interested to know what the hon. Gentleman and his party want from fundamental reform of the CAP. He says that he is against decoupling and modulation and I bet my bottom dollar that he would not be in favour of any reduction in subsidy, so what elements of fundamental reform does he want? I ask him not to say that he is not in power, so he need not have a policy. I just want an idea of what he might do.

The hon. Gentleman has misunderstood and grossly misrepresented what I said. I have no problem with the principles of decoupling and modulation, but we must ensure that the money involved in modulation is returned to Scotland so that we can have the rural stewardship and look after the environmental projects that are important to Scottish farmers. We very much support that measure.

We definitely want a Scottish voice to be at the discussions to ensure that the Scottish interest is represented. Under the current arrangements, that will not happen and Scotland will be sold short again. Until we have our own voice on such important issues, the interests of Scotland's farmers and fishermen will be subsumed into a general and unsatisfactory UK approach. That has not worked for the fishermen and there is no reason to suggest that it will work for Scottish farmers. We in Scotland have our own agricultural requirements and agricultural agenda. We just need a voice to address our—

I was about to say my last two words, but I will give way to the hon. Gentleman, given that this is his debate.

The hon. Gentleman appears to confuse structures with policies. What is necessary is that what is said in Brussels is right, but what is said in Brussels will not necessarily be right because it is said by an independent Scottish voice. It can be just as right if it is said by the Minister present here today. The hon. Gentleman sells himself short if he says that no Scottish voice is arguing the case, because I thought that that was part of what we were engaged in here today.

Having a Scottish voice at the discussions, dealing directly with other European nations as other small nations do could only benefit Scottish interests. I am sure that the hon. Gentleman is keenly aware of the example of the Scottish fishermen. Their situation has been so unsatisfactory that Scottish farmers will not accept the suggestion that we go through the same process again with a UK Minister leading the delegation.

I am about to conclude my remarks to allow plenty of time for the summing up by those on the Front Benches. We in Scotland have our own agenda and agricultural requirements. What we need to do now is find a voice to address those issues and requirements and to ensure that the Scottish voice is heard loud, proud and clear as CAP reform goes through.

2.53 pm

I congratulate my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) not only on securing the debate, but on the fact that it is so timely. A crucial Council of Ministers meeting in Corfu is due to commence, I believe, on 11 June, and a great many negotiations are already going on between officials and Ministers on these important and weighty matters. Those discussions will have a significant impact on the future of farming not only in this country, but throughout Europe, including in the accession countries. The debate is therefore not only important but timely.

An important message to convey to the Minister, which I hope he will convey to the Secretary of State, is that the Council of Ministers should be prepared to give way if they have to on the timetable for the negotiations rather than give way on the substance or their resolve to achieve significant reform of the CAP. We have been in this territory before with the McSharry proposals, when Ministers backed off at the last moment. We have a major opportunity now for significant reform, which will be helpful to restructuring properly and appropriately. Those are perhaps not the terms that the Government have in mind when they say restructuring. They mean getting rid of small farmers, whereas I mean restructuring British agriculture for the good. I hope that the Minister and other Ministers will be able to grasp the opportunity in both hands and to take full advantage of it.

Like my hon. Friend the Member for Orkney and Shetland my constituency has islands within it, although it is not wholly an island. He made a point about the strong environmental quality within his constituency and the fact that farming has continued relatively intensively there, as it has within mine. I take mine as an example to demonstrate that over the centuries farming makes a significant, but often overlooked, contribution to the landscape and wildlife.

I have a few questions to put to the Minister that I would rather put sooner than later. There are five in total. The first is about modulated funds. The hon. Member for North Tayside (Pete Wishart) hit the nail on the head when he said that there were deep concerns in the country—whether Scotland or the UK as a whole—that the modulated funds will be taken to Brussels and UK rural areas will not obtain the benefits from them.

A strong argument is developing in this country for a national envelope for the modulated funds. We should look more closely at the proportions of the amount of money spent within each of the nation states; those resources should be modulated rather than having prescriptive sizes across all farm sectors. Many hon. Members have touched on the problem of the prescriptive approach across all nation states, irrespective of the structure and size of farms in each of those nation states. It is important that that is properly reflected in the modulated farm proposals, but that can happen only if there is a national envelope for the funds and the modulated funds are then disbursed within each of the nation states.

The second point is about decoupled payments. The hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz) gave a rather urban view of how the decoupled payments will be seen, in effect, to pay farmers simply to be farmers. There is concern within the farming sector that that may happen, which is why it is important that we follow the process that my hon. Friend the Member for Orkney and Shetland described, particularly in response to the intervention from the Minister. The decoupled payments to farmers should be seen entirely as payments to farmers for delivering public goods. Those public goods can easily be described.

The alternative to going down that route is to say that British farming will be opened up to the cold winds of world trade. If that happens, we will inevitably end up with prairies and ranches, or simply wilderness. What do we want from farmers? We are paying them for maintaining our landscape, for the amenity of the area and for the maintenance of access to the countryside on the footpaths that run across their land. That does not happen on the prairies of the United States: the prairies are the factory floor, and people spend their recreational time elsewhere.

My hon. Friend the Member for Orkney and Shetland knows full well that many historical artefacts and much archaeology are to be found in the countryside. Over the years, farmers have protected that heritage—indeed, some of the field boundaries in my constituency are thousands of years old. To achieve the sort of economy and efficiency necessary to compete in the world market, those boundaries would have to be bulldozed. We need to pay farmers to respect and protect rural traditions and historic landscape features. That is why decoupled payments need to be attached to the delivery of public goods.

I hope that the Minister is fighting hard for that. The present Government—and the previous Government, who brought in the environmentally sensitive area system—have delivered a good policy, but it needs to be developed.

I have some sympathy with the hon. Gentleman's approach. Does he agree that one consequence would be a requirement for rigorous rules on cross-compliance? That would be entirely at variance with what the hon. Member for Orkney and Shetland (Mr. Carmichael) seemed to suggest. Indeed, if I am correct, the hon. Member for St. Ives seemed to shake his head and look a little quizzical at his hon. Friend's suggestion about not being too rigorous about cross-compliance. The hon. Gentleman is trying to have it both ways.

The hon. Gentleman either misheard my hon. Friend or misunderstood my non-verbal expressions. I shall move on because time is pressing.

In an intervention, the hon. Member for South Holland and The Deepings (Mr. Hayes) spoke about the need to ensure that payments made to farmers do not simply add to input costs through higher land values. I hope that the hon. Gentleman will expand on that later. If that is indeed the result, we shall have wasted our time and a great deal of public money. On that, I support the hon. Member for Edinburgh, North and Leith. The Minister needs to make it clear that the payments should be made to the producer and not attached to the land. It is all very well for landowners to argue that the payments should be attached to the land, but I believe that that would be detrimental to the future of agriculture. It is important that the Minister and the Secretary of State make that clear in the negotiations; it is certainly the subject of debate in the agricultural sector.

I am reluctant to spend long on the subject, but there seem to be two problems. One is the diverging values of land. The other is the danger that making the payment entitlement flexible will compromise investment in long-term environmental schemes. The issue is complex, which is why we need the Minister to make it clear where the Government stand on those conflicting imperatives.

That was a helpful intervention, and I hope that the Minister has taken it on board. I shall try not to detain the House longer than necessary in order to give the Minister time to answer.

In an intervention on my hon. Friend the Member for Orkney and Shetland, I said that because of the way in which the market operates and the way in which farm-gate prices are settled, payments made to farmers for land or production will ultimately be siphoned indirectly into the pockets of the processors and supermarkets. That is clearly undesirable.

Fourthly, I want the Government to indicate where they stand on the options being debated regarding the future of the dairy industry. The hon. Member for Leominster (Mr. Wiggin) raised that point. It is an important matter, and the Minister must give a clear message to the dairy sector, which has just been hit by Lidl's suggestion that it would reduce farm-gate milk prices by 3p a litre. A campaign against that measure resulted in Lidl's backing down only yesterday. Dairy farmers are not making any money at the current price.

Fifthly, I would like the Minister to comment on the continuing calls for farmers to have an even playing field. Farmers do not believe that the rules, regulations and payments are being applied equally and honestly in other countries. The Minister is aware that I have always argued that—in fishing as in farming—bilateral arrangements are needed between this country and others to allow us to spot-check regulatory arrangements in other countries to ensure that other EU nations meet the same standards on regulation and payments as we do.

This is an important and timely debate. The Government must be aware that we have lost many thousands of farmers, particularly in the past couple of years. Listening to Lord Haskins, one wonders whether it was Government policy to put farmers out of business. We have always struggled with the problem: over the last 250 years, farmers have been leaving the industry and we have bemoaned the fact that that has happened. Back-to-the-land movements and others have tried to reverse the trend, but the industry will not survive and we will end up with prairie, ranch and wilderness if we do not recognise that there is a need for appropriate intervention to protect rural traditions, ways of life, landscape and heritage.

3.7 pm

CAP reform is essential; that is a universally recognised fact, which was pointed out at the beginning of the contribution of the hon. Member for Orkney and Shetland (Mr. Carmichael), who I congratulate on securing this important debate. It is true that CAP reform is vital, but, as the hon. Member for St. Ives (Andrew George) said, we have been around this track before. The British people and British agriculture are beginning to tire of both the CAP and the constant promises of its reform, which are never ultimately realised. In that sense alone, the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz) made a valid point. I shall turn to his remarks later.

The debate about CAP reform must be seen against a background of farming in crisis. That crisis should not be underestimated. I will leave aside for the moment the issue of farm-gate prices, although it is certainly true that there needs to be a rebalancing of the food chain between those who produce the food and what they get for their work, and those who sell the product and what they get for their work. It is a nonsense that someone is paid 14p to produce a cauliflower that is sold to the consumer at £1.25, as is the case with some of the large retailers. That is not to do with the price that people pay; it is to do with where the money they pay goes. Providing those who grow the products with a fair return for their investment is not unreasonable; indeed, it is essential if we are to build a sensible and viable food chain. I will leave that matter aside for the moment, as well as the matter of bank borrowing, although we must understand that a large proportion of bank borrowing by farmers is secured on land, and the uncertainties about future land values undermine a good deal of the apparent—albeit superficial—security that is provided by that.

I also leave aside the issue of farm incomes and profits. Many farmers are barely making a profit. I leave those matters aside despite the decline in farm incomes, which is leading to under-investment. Such under-investment in the industry means that it is very difficult for farmers to plan in the medium and long term. It is having a real impact on their ability to respond to the changing pressures and it will create difficulties in their ability to respond to the new imperatives established by CAP reform. I put all those important matters to one side simply to measure the extent of the crisis by the number of people leaving the industry and the number of people joining it.

We all know that farming is dying on its feet. The average age of farmers is increasing, and the number of young people entering the industry is in sharp decline. That is a new phenomenon, of which there are many examples in my constituency. Generations of families have been involved in farming, but now the sons and daughters are not even considering entering agriculture because they cannot see a long-term future in building their livelihood and that of their family around the industry. When we detach rural communities from the land, I believe that we are doing something that is highly significant and deeply disturbing.

Let us not underestimate the scale of the crisis, or the significance of farming. It is very fashionable to talk about farming employing only a very small number of people, having only a marginal impact on the economy, or contributing only a small amount to the gross domestic product. It is true that only about 2.7 per cent. of people who live in rural areas are employed directly in fishing and farming, but that figure is misleading because farming and fishing employment is highly concentrated in particular areas. It also has a massive effect on the wider economy. It affects not only businesses directly affected by farming, such as food processing and handling, haulage and packing, which are major sources of employment in my constituency in south Lincolnshire and in many other constituencies, but businesses from the wider economy, such as the retail sector, which is very dependent in many parts of the country on the life and energy in agriculture and in agriculture-related businesses. We should not underestimate that nor the cultural and social impact of farming on communities. The hon. Member for Orkney and Shetland made that point well in relation to particularly isolated and sparsely populated communities where it is a significant factor.

Nor should we underestimate the environmental responsibilities of farmers. The landscape that we enjoy has been manufactured by generations of farmers. My hon. Friend the Member for Leominster (Mr. Wiggin) described farmers as the natural custodians of that landscape—a memorable phrase in a memorable speech. It is important that we do not understate that. The Countryside Agency talks about strong links

"between the quality of the rural environment and methods of food production. Generations of farmers have created much of the countryside that we enjoy, which is a reflection of their changing responses to economic signals, technological change and their own individual enterprise."
We should not ignore the impact that all that has on the availability of safe, good quality food, the best guarantee of which is shortening the food chain. It is about local produce consumed locally, and about community ownership of the business of producing food. Community consumption binds people in local communities to the places where their food is made. That is the best form of traceability that we can have.

It is pointless to put in place complex schemes for traceability when food is transported all over the world and to expect them to work as well as those that are founded, in essence, on the principle that people know where the goods are made, who made them, and how they are made. The best form of traceability is about people consuming the goods soon after they are produced. It is about farming policy on a human scale, which is what we should be aiming for if we want to achieve the best kind of traceability.

The mid-term review is relevant to all this, as the fine contributions from many hon. Members have illustrated. I sum up my thoughts about this by posing the following questions to the Minister. I do so without any partisan intent, but simply in the interests of good food production, our countryside and a viable future for British farming. Will the Minister acknowledge that 10 per cent. compulsory set-aside is unacceptable, even by his measure, particularly if it is non-rotational? I understand that that might change, but I shall let him speak for himself. Creating such an environment is not to look at the future creatively. We should aim for a smaller proportion of set-aside, with the remaining land used for things such as biocrops. I was speaking to agribusiness this morning about real, commercial-scale pilot schemes for biocrops. Those would allow our farmers to investigate the way in which they can make a positive contribution to renewable energy in the way that farmers in other European countries already do.

I turn to the scale and extent of modulation. The Curry proposals require some 10 per cent. of CAP to be modulated. Unless we achieve that target, how will the Minister fund the entry-level scheme and the other proposals that Donald Curry has made? What effect does the Minister believe that unsupported crops, and the matter of entitlement to payment, will have on land values, and how will he solve the issue of the discussions—one could describe them as debate—between landlords and tenants? Particularly, how will he deal with people's uncertainty about their payments with regard to the contract farming of land that they have previously farmed for generations? What proposals will the Minister argue for within CAP to allow farmers to add value to their product by gaining processing capacity, for example in the dairy sector, in which that is by far the best means of creating a long-term business opportunity?

The hon. Member for Edinburgh, North and Leith was right: CAP has failed farmers and taxpayers; it has failed Britain. A one-size-fits-all policy is less likely to work than a policy that is sensitive to national needs, that is involved with local demands and that is implemented by Ministers accountable to this House and this nation. We need people-sized policies and politics on a human scale, so that we can look forward to a viable agriculture—without it there can be no viable countryside.

Finally, I seek an assurance from the Minister that no bizarre and futile European grand design will take the place of a real interest in the future of British agriculture and a real commitment to building the kind of future for British food, farming and countryside for which all hon. Members should campaign.

3.17 pm

I congratulate the hon. Member for Orkney and Shetland (Mr. Carmichael) on securing this debate and on the way in which he introduced a particularly interesting subject. I shall focus on his remarks and outline our position on CAP reform, while responding, as far as I can, to the issues that have been raised. I congratulate all who have spoken, particularly the hon. Member for South Holland and The Deepings (Mr. Hayes), on the number of questions that they managed to pack into their contributions. I have not a cat in hell's chance of answering all of them but, if I fail to do so, I shall write to the hon. Members who have taken part in the debate.

The hon. Member for Orkney and Shetland was right to say that there is unanimity on the need for reform, but less agreement on the specifics. That has been illustrated during the course of the debate. He is also right to refer to the urgency of the matter. Farmers need change, but they need certainty. I would say to the hon. Member for St. Ives (Andrew George), who suggested that we might tolerate a more relaxed time scale, that we need to push so as not to extend the time scales and that we should beware the capacity to let things drift and not to reach a conclusion.

The hon. Member for Orkney and Shetland was also right to talk about the jargon-ridden nature of the debate about the future of agricultural policy. I wage a personal war on initials, but I suspect that even that is referred to in the depths of the Department as the "WOI initiative".

I fully understand why the hon. Gentleman focused on the contribution of Orkney beef and Shetland lamb to his constituency's economy. It is important to make that link. I understand fully his plea for flexibility. However, although that may be a reasonable aspiration, it is always more difficult to achieve in action.

My hon. Friend the Member for Stroud (Mr. Drew) talked about renationalising agriculture, by which I think he meant in terms of national decisions rather than ownership. As has been illustrated in the debate, we have difficulty in reconciling the different forms of farming across the English regions, let alone within the United Kingdom as a whole. Getting the principles right at the EU level and getting things right at the local level is a major challenge, especially in the context of expansion. We need to aim at fairness and consistency but that, like reform itself, is easier said than done.

The hon. Member for Orkney and Shetland referred to what he described as the pressure towards larger units. However, they are not the only option. Diversification, value-added approaches and niche markets are important in ensuring a sustainable future for farming. If the point needs clarification, I echo my right hon. Friend the Secretary of State's view that the Commission's approach is generally right.

One of the strengths of our approach to CAP reform is our partnership with the Scottish Executive and the Welsh Assembly, to which the hon. Member for Orkney and Shetland referred. Those who represent the devolved Administrations raise strong voices in those discussions. I have experienced that over a number of years as Secretary of State for Wales and as First Minister. I have seen a growing maturity between DEFRA Ministers and Ministers in the devolved Administrations.

The strength of our approach cannot be reflected by those who stand and squawk on the sidelines. I was disappointed as ever by the negative voice of the lone nationalist here today. It would be more sensible to get involved. We hear, as we have heard today, engaged voices from the Labour party, the Liberal Democrats and, although not a Scottish voice in this context, the Conservative party. The best that the hon. Member for North Tayside (Pete Wishart) could do was to refer to the small number here, which is a cheek as he is the only nationalist. We have frequent debates on agriculture that are answered by DEFRA Ministers without the benefit—if that is what it is—of the nationalist presence. The negative approach to change, modernisation and modulation is disappointing.

The best that the hon. Member for North Tayside could do was to criticise decisions by DEFRA in London. However, DEFRA does not exist only in London: it is spread right across the country. We work with our colleagues in the devolved Administrations because we all have an interest in getting things right. The hon. Gentleman was also wrong to suggest that modulation would go to new members states, because the distribution is in the current EU 15. We are arguing for a fair share for UK farmers, which is quite a challenge to achieve.

To offer some assurance to my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz), we are certainly not interested in moving the deckchairs around. We want to create a sustainable and profitable farming sector that is friendly to the environment, meets public need in a variety of ways and enables farmers to be more closely linked to their customers and to the market. I am pleased to be able to reassure my hon. Friend that decoupling will not give farmers money if there is no link with the industry. The decoupling payment will be made only if the farmer is managing land—either farming it or maintaining it in good agricultural condition. Decoupling is not a question of giving a subsidy to ex-farmers.

The hon. Member for Orkney and Shetland also talked about support for traditional farming methods and about rewarding them because of the environmental benefits that they provide. He is right to point to the condition that environmental benefits should be provided, and I could give examples of farms at which that approach has resulted in unexpected profitability—I visited one such farm recently. There is more than one benefit to come out of such methods.

I certainly endorse the hon. Gentleman's view that we should not seek gold-plating in what we deliver and his aspiration for us to move on from the byzantine paper chase. I have responsibility for the Rural Payments Agency, and I know just how hard it is working. There has been massive Government investment in computer systems and so on to simplify access. Organisations such as the NFU have acknowledged that much greater electronic access would bring considerable benefits. We want to simplify schemes but that is not easy for all the reasons that make change difficult.

The hon. Member for Leominster (Mr. Wiggin) mentioned the impact on land values. Indeed, the present scheme distorts land values. It is a fair point to bear in mind. He seemed to suggest that enlargement would make a reformed CAP unaffordable. The overall costs are limited, not least by the Berlin ceilings, to 2006. There is a ceiling on the bulk of CAP expenditure after that. Degressivity is partly designed to achieve the affordability that he sought. He read from a detailed brief that raised serious issues for blackcurrant growers, which can clearly be related to producers of other unsupported crops.

To the extent that the final agreement provides elements of national discretion, we will certainly consult stakeholders on how and whether to implement those in the UK. The decision about whether we should help fruit growers under article 58 should clearly be part of that process. The hon. Gentleman's closing point was about growers who have taken over farms recently. We agreed that the Commission's model for decoupling hits those who have changed their farm since the beginning of the reference period in 2000. We are working hard with the key stakeholders to persuade the Commission to adopt a fairer system.

The hon. Member for South Holland and The Deepings argued that a greater proportion of the retail shelf price should be returned to the primary producer, the farmer. That is a fair point. Fair trade issues arise on the international stage as well as in relation to our domestic production. A great deal is in the hands of farmers themselves. They can co-operate, seek added value to increase their return and identify and relate better to their market. Such matters are part of the route map in Sir Donald Curry's report on the sustainable future for farming and food that the Government are pursuing. The hon. Gentleman might have acknowledged how much the Government are doing to create the context for success for faming and to establish strong rural economies in which farming will continue to play an important part. Although farming is a small part in terms of numbers employed, that has already happened to a great extent.

The Commission's proposals give us a real opportunity to set down a sustainable basis for EU agriculture, and we strongly support their broad thrust. They will enable us to bring farmers closer to the market, remove perverse incentives to environmental damage and provide a more internationally acceptable basis for European agriculture support. We would have liked the proposals to go further. In particular, we should like to see the phasing out of milk quotas; a less distorting mechanism for funding reforms through degressivity and modulation; a bigger and earlier switch from production-directed support in the first pillar to more targeted agri-environment and rural development policies supported through the second pillar.

The negotiations have not been easy and reaching a conclusion will not be easy, but the mood in the Council now recognises that there must be serious negotiation. There is a real drive to reach agreement next month. Timing is important because an early agreement will enable the Community to engage positively in the important World Trade Organisation trade talks at Cancun. That is why, to respond to the hon. Member for St. Ives, a more relaxed approach to time scale might not favour the UK negotiating position or British farmers. The uncertainty about the proposals particularly in relation to decoupling is damaging the farming industry and the whole land markets throughout the EU. There is widespread recognition that it is in nobody's interests, least of all those of farmers, that the process should take any longer than it has to. Farmers need to plan what to grow after this summer's harvest.

I now turn to the parts of the proposals that we like. Decoupling support for production will be a massive advance. It will improve farm incomes, because farmers will not be forced into loss-making activities to get subsidy. There are many additional points that could be made about the strengths of the UK position in the negotiations. I have indicated that I will write to hon. Members who have taken part in the debate about some of those points; I am sure that they appreciate how short a time I have had in which to respond to such a wide-ranging debate.

Planning Law

3.30 pm

I wish today to draw the Minister's attention to a serious and growing problem in rural areas, which causes grave concern to decent, law-abiding citizens whose quality of life is adversely affected by abuses of planning law committed mainly, although not exclusively, by travellers.

I hope that the Minister will agree that the crisis that I am about to unveil concerning Cranham road in Little Waltham in my constituency highlights that problem, and illustrates the way in which a determined group of individuals can abuse the law and cock a snook at it. I urge the Minister to act to tighten up the law and to advise me what can be done to put an end to the disgraceful situation in Cranham road as soon as possible. My constituents have suffered unfairly for far too long.

The site in question is in a rural area, outside land allocated for housing. For many years, it was simply a green field. Sadly, that changed in 2001. The land was taken over by travellers, who sited mobile homes and established hard standings and roadways on the land. I am not sure whether the Minister can see them from where he is sitting, but I have two photographs with me that illustrate that the site is now covered with caravans, other vehicles, rubble and rubbish. I believe that, for a greenfield site that is adjacent to domestic dwellings, that is unacceptable.

Since 2001, further homes have been placed on the land. Moreover, there has been alleged tampering with electricity junction boxes, which has caused problems with the electricity supply to bona fide customers in the area. There have been problems with noise, including noise from lorries tipping hardcore, with overflowing rubbish, fly tipping, poor sanitation, and discharges of waste into the nearby ditch. The site has also been used for storing stolen goods, which were recovered only following a police raid. There have also been problems with children using quad bikes on the public highway, and dogs roaming the area, causing problems to motorists and others. In short, what was originally a quiet, green field, has now become a living hell for residents nearby. They are fearful for their own safety and that of their properties, because, whenever they have spoken to the people occupying the land, they have received nothing but aggressive abuse.

Chelmsford borough council has rightly sought to enforce the law and put an end to this blatant and illegal abuse. I make no criticism of its actions, which have been both helpful and proactive.

On 14 December 2001, two enforcement notices were issued under section 172 of the Town and Country Planning Act 1990. They required the then landowner, first, to break up the hard standings and roadways; secondly, to remove all debris from the site and reinstate the land; thirdly, to cease the use of the land as a caravan site; and fourthly, to remove the fence from the land.

No appeals were lodged against those notices. They were meant to be effective from 28 January 2002, but the site was eventually vacated by the then owner, and only by the then owner, in April 2002. However, prior to vacating the site, the landowner submitted a planning application to Chelmsford borough council for the use of the field as a site for three gypsy families. However, the council's planning department refused that on 1 March 2002. An appeal was to be heard in mid-October 2002, but in September the appeal was withdrawn, as the land had been sold.

On 16 September, it was discovered that a hard surface roadway was being built on that greenfield site. After an inspection, Chelmsford borough council was granted a without-notice temporary injunction on 19 September against 20 persons and any unknown persons then occupying the land. The temporary order was renewed on 3 October. That injunction was not complied with, and the defendants' solicitors notified the council that their clients had sold and moved off the land. However, the site had not been cleared and was still being used as a caravan site, even if the previous owner was not using it. The land had been divided in the form of 20 ownerships. The council was told that a planning application would be submitted for use of the land as a caravan site for 20 families.

On 4 December, the court granted Chelmsford borough council's application for an injunction to cover all new persons since the previous order was made on 3 October. On 12 December, seven persons made an application to the court for the order of 4 December to be set aside. On 4 February 2003, when the court heard that application, it ordered that the applicants were to be joined as defendants, and refused their application for the injunction to be set aside. The council gave the occupants until the end of March to vacate the site, but that did not happen. It is clear that, since the end of March, nothing has changed and the occupation of the land is in breach of that court injunction.

Ironically, Cranham Hall caravan park, a proper official Essex county council-controlled travellers' site, is only 150 m due east of the site in Cranham road. That is not the only official county council-controlled travellers' site in the borough of Chelmsford, so it would not be right to say that there are no alternative official sites for travellers to use in the Chelmsford local authority area. In fact, there are a number of sites.

It seems that the law and the court orders are being ignored with impunity and by clever abuse of legal procedures. I find it wrong and incomprehensible that court orders can be defied in that way, but it seems that, if one is clever, one can seek to abuse the law with impunity. That must be wrong. The borough council has sought at every stage to use the full weight of the law to stop the illegal activities at Cranham road and to protect my constituents. However, apart from running up costs through no fault of its own, the council is little further forward in putting an end to this crisis and abuse than it was 18 months ago, when it started enforcement proceedings, and, more recently, when it started county court action. My constituents, who have had to live with this hellish situation, cannot understand why that is the case, and nor can I. We cannot comprehend why, when court orders and injunctions have been granted to the borough council, the law is not allowed to proceed and put an end to an abuse and an illegal act. The law is clear on this issue, and the borough council has been granted injunctions by a series of courts to put an end to the abuse. So far, it has proved impossible to enforce the will of the courts as expressed in the injunctions. My constituents and I want to know why that is so. How can that happen when a court has ordered the land to be vacated and restored to its original condition? The travellers are making a mockery of the law, and that is wrong.

I want the Minister to say what effective action can be taken now; I do not mean in three, six or nine months' time as the process continues to drag on, with the ensuing misery and problems to decent, law-abiding citizens who have to live near the road. What can be done now to enforce the law and to seek a proper resolution of the problem?

If the answer is that the law is weak, which it probably is, what can and will the Government do to block up the legal loopholes and failings in the legislation and put an end to the nightmare of this travesty of justice, not only for my constituents but for many others throughout the country?

The Minister was extremely generous in writing to me on 28 March following my letter to him about the problem and a question to a junior Minister at the Home Office. The Minister said in his letter that
"last July the ODPM and the Home Office issued a joint press release outlining the Government's approach to tackling unauthorised Gypsy and Traveller encampments."
He also said that the approach was to seek
"new powers for the police to move on unauthorised Gypsy/Traveller camps…. The new police powers will be dependent on local authorities providing adequate site provision to move Gypsies and Travellers on to. If local authorities do not have sites in place, then the police cannot use these powers."
In Essex, and particularly in the Chelmsford local authority area, there are a number of official sites that could be used. The letter went on:
"Both the ODPM and the Home Office have made clear that the new power would not replace existing legislation currently in place under sections 61 to 62, and 77 to 79 of the Criminal Justice and Public Order Act 1994. The new power would simply work alongside it."
If, when the Government have finished their consultations and considerations, they give real powers to the police to achieve their aim, I would welcome those powers, provided that they are real and effective and ensure that people who behave like the individuals at Cranham road are removed.

One aspect of the problem is not raised in that letter. It is to be hoped that the police would have enough powers to remove people who illegally occupy land that they should not be on, but what happens to land that has been damaged, if, for example, roads have been built and buildings have been erected on it? Whose responsibility is it to remove the rubbish and litter that is left behind and to clear up the land and restore the site to its original condition?

I am concerned about the nature of the legal processes. There is a serious problem with the injunctive process because that action is attached to an individual or to some individuals on the relevant land. The occupiers of the site in Cranham road are highly transient in nature; the adult population changes regularly. As the Minister is aware, the process of enforcing a court injunction is through committal proceedings, but sadly the transient nature of the occupiers means that the process of committal cannot be achieved and the proceedings are useless. That cannot be right. The law has to offer more protection in such situations. My constituents and I might have an old-fashioned view, but we thought that court orders had to be obeyed or enforced. That has not happened in this case, and our patience with the process has run out. We want action now.

I sincerely hope that the Minister will be able to offer hope to my constituents by telling me how the injustice can be rectified now. My constituents and, to be fair, Chelmsford borough council, have waited too long. For more than 18 months, they have used every legal process available to them to achieve what they are asking of the court. Yet, whatever court orders and injunctions have been issued, they have not been enforceable, so the misery and suffering continues daily, while those who perpetrate the abuse are cocking a snook at the authorities and laughing that they are getting away with something that I cannot believe the Minister would want to continue.

3.46 pm

The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister
(Mr. Tony McNulty)

I thank the hon. Member for West Chelmsford (Mr. Burns) for raising a very important aspect of the planning system, and, in particular, the situation in Cranham road, Little Waltham. He will understand that I am not able to comment on specific cases. However, I fully appreciate that the issue is of concern locally—

Will the Minister explain to me and to my constituents why he cannot comment on this particular case?

I will explain very clearly. First, as the hon. Gentleman knows, it remains a matter of legal dispute and therefore before the courts. Secondly, any number of subsequent applications germane to the site might cross my desk or that of a colleague as the final arbiter in an appeal process. It is not, therefore, appropriate to talk specifically to the application. If the hon. Gentleman were frank, he would realise that that would be the case whoever stood in this position.

In general—this should underpin all that I say on the matter—everyone has an absolute right to live in peace and harmony. Nobody should have to endure antisocial behaviour of the form that has been described from any quarter, so my sympathy is with those who are suffering such behaviour on the part of the travelling community or anyone else. The Government recognise that gypsies and travellers have a right to pursue their own lifestyle, and we are committed to ensuring that the planning system treats members of that community as fairly as it treats everyone else.

Planning policy is concerned with the provision of suitable locations for gypsy and traveller sites, whether provided by the local authority or privately, as set out in Department of the Environment circular 1/94, "Gypsy Sites and Planning", which remains the mainstay of the interface between gypsies and the travelling communities and planners, even though it is some nine years old. The circular places gypsies and travellers on the same footing as others in relation to the planning system, while recognising their special accommodation needs and the desire of many gypsies to find their own sites to develop and manage. Such sites constitute development and therefore require planning permission.

As an aside, and without commenting on the specific case, I would say that dividing any land into 20 portions owned by different people does not obviate the need to comply in full with planning law and the local planning process. That is as applicable in this context as it is in the case—a slight tangent, but germane none the less—in which a number of speculators carve up land, whether it is green belt or anything else, in growth areas identified in the communities plan and sell it off to gullible people who think that they do not need planning permission because it is only a 20th of the original site. Breaking down the ownership of a site does not change the planning framework within which it sits. We recognise that for many local authorities, especially in rural areas, the identification of specific sites for gypsies and travellers is not easy. I am not going to say that Essex county council has been remiss in what it provides. I suspect that if I did a rough calculation in my head of county-based provision, that council would be in the middle or at the top of the league, so I am not impugning its performance in that regard.

Where local authorities have found it impossible to identify suitable locations, they should define clear and realistic criteria as a basis for extra provision in line with the advice given in the circular. As I said, however, the circular is now nine years old, and does not encourage the local authorities to discuss accommodation or offer advice and practical help with planning procedures for members of the gypsy and traveller communities.

That said, we are aware that some gypsies proceed to establish sites without first obtaining the necessary planning permission. In some cases, the locations that they choose are inappropriate for land use, such as greenbelt land or open countryside. Enforcement action by local authorities against such unauthorised development is therefore common. As I said, when the planning system gives everyone in the community equal status, it means precisely that.

The Minister is talking about how the planning system works. May I remind him that a planning application was submitted, but that Chelmsford borough council refused it on 1 March 2002? My constituents who live there and who are anxiously waiting to hear what the Minister has to say want to know more about what can be done about such problems. They do not want a history of how the planning system works in rural areas.

With the best will in the world, I am not giving a history but setting out the context of the comments that I am about to make, which will reflect the three key points to which the hon. Gentleman referred. I am talking not about the current planning system but about the legal consequences of a breach of the planning system. That is why I want to talk about enforcement.

To be candid, the answer to the hon. Gentleman's first question about what effective action the Government can take now—what I might call the press release question—is "not a lot", because the matter is in the courts' domain and it remains for the legal process to unfold. I am not about to give legal advice to Chelmsford borough council through the hon. Gentleman about where it should go next as part of that legal process, although it can now go in other directions.

We share the view that local planning authorities should take appropriate enforcement action if they consider that there has been an unacceptable breach of planning control, which they have done. However, enforcement, as the hon. Gentleman said, has proved to be difficult in this case and in many others because of some of the loopholes. That is why the 2001 planning Green Paper announced the Government's intentions to review the current arrangements for the entire enforcement system underpinning development control and planning. The Green Paper stressed the need to engender public trust in the development control system. Without effective enforcement, confidence in the system is undermined. To answer the hon. Gentleman's second point, that is where the Government can and will be doing something.

The first step in the review was to call a meeting of many of the key players in planning enforcement, including representatives from local authorities. The review concluded that the current enforcement regime was working reasonably well and that wholesale reform was unnecessary. However, it highlighted a range of potential improvements. The conclusions of this group and comments received in response to the Green Paper informed the drafting of the consultation paper, which was published last September.

In essence, the consultation paper is scooping in nature. It has two objectives. First, we intend to gather information. The hon. Gentleman is right to say that in many instances in the enforcement process, the most difficult part is information gathering and determining who should be served enforcement notices. We want to gain a better appreciation of what people really think about planning enforcement and its discretionary nature, the principles that underpin it, and the framework of powers and procedures that govern its operation.

We want to know whether planning enforcement is as effective as it could be, and if not, why not. Are there problems with the system or with the way in which local authorities operate it? Is the enforcement function hampered by a lack of resources such as money and the availability of suitably trained staff, or by a fear of the consequences of failure? That is the case in many authorities, which is not a comment on the specific case that the hon. Gentleman mentioned.

Secondly, we are seeking views on a range of possible changes to the current system that might improve its speed and effectiveness and help to engender greater confidence in enforcement as a key development control tool. These are simply suggestions, many of which flow from ideas proposed by the consultative group. The consultation paper does not contain any specific proposals for change. Some of the suggestions, if pursued, would require legislation, but others could be delivered through administrative action and could therefore be delivered much more quickly. The hon. Gentleman is right to say that we need an enforcement system that delivers and that is seen to do so by local people. I fully understand the frustrations felt in the case that he cited.

The consultation paper examines three fundamental principles that underpin the planning enforcement system.

3.55 pm

Sitting suspended for a Division in the House.

4.10 pm

On resuming—

As I was saying, the consultation paper examines the three fundamental principles that underpin the planning enforcement system—that the use of enforcement powers is discretionary, that developing without planning consent is not a criminal offence, and that planning permission may be sought retrospectively. It also looks at the range of powers available to local authorities and the rights of appeal.

Among the range of possible changes to the detailed powers and procedures are a power to require the submission of a retrospective planning application; to require a fee to be paid if permission is not sought for unauthorised development; the right for local authorities to decline to consider planning applications where an enforcement notice has already been issued in respect of the same development; and a requirement for developers to self-certify that an approved development accords with the permission granted.

The consultation paper also raises the possibility of abolishing in part the rule under which unauthorised development acquires lawfulness through the passage of time and thereby becomes immune from enforcement action. The paper suggests a number of good practice changes that might improve the speed and effectiveness of enforcement. They include the timing of enforcement notices where retrospective permission has been refused, skill sharing and joint working between local authorities, sharing legal representation, and grouping cases together to take to court.

The consultation period ended in January, and we are currently analysing some 500 responses. Our intention to review planning enforcement has been widely welcomed. There are gaps in the system and elements that need refining, to say the least. We expect to announce the results of the consultation later this year. Even though the consultation period has ended, the hon. Gentleman and Chelmsford borough council are invited to make their comments. They will be welcome.

The hon. Gentleman spoke about unauthorised encampments. Guidance on the provision of transit and temporary encampments, and greater police powers to evict, is currently under consultation. That consultation will end shortly, but it refers specifically to unauthorised encampments. It would not prevail if those transgressing—the term used by Chelmsford borough council—owned the land. It would not run if the ownership of the land was not an issue.

Ultimately, everyone will agree that gypsies and travellers must be able to live somewhere. I return to my earlier comment that local authorities must either provide appropriate authorised sites or work with gypsies to find suitable locations that they can purchase and develop. By doing so, authorities can avoid the sort of situation that has brought the hon. Gentleman here today.

That is not why I am here today. As the Minister said, there are a number of authorised sites in the Chelmsford local authority area—one is 150 m away—and in Essex.

I do not doubt that. I was referring to the fact that gypsy and travelling communities need to work together with local authorities when wanting to establish sites in their ownership. As I have said, I have no doubts about the site provision of Essex county council.

I congratulate the hon. Gentleman once again on raising this important issue. Some matters are under consultation; the enforcement procedures need particular consideration. I urge him and, through him, Chelmsford borough council, to partake in that consultation.

I end by saying what has underpinned much of my speech. Wherever possible, we should encourage gypsies and travellers to consult local authorities on planning matters before buying land on which they intend to camp, or for which planning permission will be required for any subsequent development. That is advice that I would give any prospective applicant in any regard in any county. If we are to draw a fair line, and have a level playing field for all communities, that must be respected in full by all communities.

Eu Structural Funds (Cornwall)

4.16 pm

I very much welcome the opportunity to debate an issue of very great importance to Cornwall: namely the future of objective 1 status in the county after 2006. I will provide a little of the history of the subject. Winning objective 1 status was historic for Cornwall, and was the result of a great campaign that involved all the MPs in the county. The county council played a pivotal role, and opinion formers and many others in the community became actively involved.

The critical moment that enabled us to achieve objective 1 status came when the Prime Minister intervened and instructed civil servants to work with the European Commission to see what could be done to decouple Cornwall from Devon. After that intervention, Cornwall and Devon were effectively divorced for statistical purposes, and we stood alone. Before that, Devon's relative prosperity had been pulling us above the 75 per cent. threshold set for gross domestic product. There is no doubt that the Government secured an excellent settlement for the UK regions at the European Council summit in Berlin in 1999. Cornwall certainly benefited from that, and I would like to thank the Prime Minister for his efforts at that summit. After that, the Chancellor agreed to match funding for the programme, and, despite the doom-mongers, that has happened.

Objective 1 status is worth £600 million over the life of the programme, and it opens doors to many other sources of money. To date, 300 or more projects have received objective 1 funding in Cornwall. Offers so far total about half the funding, and the spend is pretty good in most areas. It is perhaps only in the farming sector where we need to do more. Some £150 million has been spent. With match funding, that comes to £345 million, which has gone to projects on the ground. That is one contributor to the incredible feel-good factor in the county.

Some £38 million of objective 1 funding went to the combined universities project, which is the flagship project of this phase of objective 1. It will create 700 new jobs and 8,000 student places by 2010. The topping-out ceremony takes place in Penryn in my constituency this week. Those in the Chamber who have followed the progress of that project would no doubt accept that, if it had been suggested just two or three years ago that the topping-out ceremony would be happening so soon, few would have believed it.

I believe that the university is critical to our developing economy. I hope that it will end the flight of so many young people who, for generations, have fled the county, crossed the Tamar bridge and gone to university in other parts of the country. They often do not return to their home county until they retire, if at all. We need those young people to stay in Cornwall and to develop new companies and create new jobs. I hope that the university will play a critical role in that.

Good news stories abound in the county. Rick Stein, Padstow, Eden—which is an international statement and a fantastic success as one of the top tourist attractions in the country—the maritime museum at Falmouth, which has just recently opened, and the Tate gallery at St. Ives all raise the profile of our traditional tourist industry, and make it a year-round concern. In Newquay, a new surfing beach opens later this year. You may care to partake in that, Mr. Taylor. I even extend an invitation to my hon. Friend the Minister.

Unemployment has continued to fall across the county. There has been a staggering 59 per cent. drop in Falmouth and Camborne since 1997. Alongside that, we have seen the introduction of the national minimum wage, which has lifted wage levels for many of those in the greatest poverty. Objective 1 has helped to bring broadband internet access to 10 towns across the county, and another 17 exchanges are being enabled. Even Prince Charles started to sing the praises of the Cornish economy recently, and I welcome that. A CBI analysis of regional trends noted that output rose highest in the south-west at the end of 2002, although that includes Swindon and Bristol. This is a good point to pause and to say that there is still a great contrast between the GDPs of Swindon and Cornwall. Swindon's is approximately twice that of the county.

There are those good news stories, but we have suffered the decline of manufacturing. Just two or so weeks ago, Compair Holman in my constituency, a company that was the cornerstone of the town for more than 200 years, announced that it was closing later this year and effectively exporting production to Germany. Yesterday, despite announcing profits of more than £100 million, British Airways announced that it was closing the critical business service between Newquay, Plymouth and Gatwick.

I congratulate my hon. Friend on obtaining this important debate and on making a powerful case since she was elected in 1997 on behalf of Falmouth and Camborne and the wider interests of Cornwall. British Airways is causing understandable anxiety among the business communities in Cornwall and Plymouth. Does she agree that it is vital that we start the strongest possible campaign to re-establish an operator for those services as quickly as possible?

I agree entirely with my hon. Friend. The cross-party meeting held with the Under-Secretary of State for Transport, my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson), was critical. We must work with all parties to ensure that these critical business services continue.

I turn to another aspect of objective 1. The bureaucracy has done serious damage to many rain forests around the world. The form filling reaches almost Kafkaesque proportions and it is totally unreasonable. We in the county are still lagging behind our colleagues throughout the UK and, according to the Commission, we could be below the 75 per cent. threshold at the end of the programme—the only part of the United Kingdom that falls into that category.

With that in mind, last autumn I went to Brussels, where a debate is taking place on how the EU and European Commission will handle structural funds given that the 10 countries seeking to join the 15 suffer such disproportionately low GDP in comparison with the rest of the EU. This March, the Government published their proposals on "An EU Framework for Devolved Regional Policy" within the consultation "A Modern Regional Policy for the United Kingdom". That is quite a mouthful, but it is very important to the county of Cornwall. The consultation lasts until July, and most of my comments will relate to it. It has initiated an important debate regarding the future of European structural funds. My question to the Minister is: what impact will they have on Cornwall?

The Government understandably want to focus on the poorest countries and to have the greatest effect. Money going from the UK to France post-2006 will cease. But what will happen to Cornwall? Relative to the rest of the UK, we are still lagging behind. I recognise that, in the document, the Government have pledged that regions will not lose out, but what does that mean? Are we talking about the European region of Cornwall or the Government office for the region that extends from Bournemouth to Gloucester, the Isles of Scilly to Swindon and that has double the GDP of Cornwall?

What safeguards will there be for a sub-region such as Cornwall? Are we going to be married to Devon again, or even Swindon? The current pledge is to the region. I suspect that that means the UK Government region. I can find nothing in the document about protecting existing objective 1 regions. How will they not lose out despite what it says in the document? What is in comparison to what? Will this be what the EU would have agreed—the full Monty of objective 1, phase two, or will it be a much smaller amount of transitional funding when we might have qualified for the blockbuster?

The Government say that they want to devolve power to the regions, but we need to know what that means. Will it mean that Cornwall will control the money or will the Treasury tell the regions what it has decided? Will regions be directed to spend money in the poorest areas? What if the regional development agency directs funds to Swindon to solve the skills shortage at the expense of Cornwall?

I am grateful to my hon. Friend, who has been a champion of Cornwall and of objective 1 funds for many years. However, does she agree that it is important that the Government negotiate on two strategies? The first strategy is to negotiate the best deal for British regions if there is a European-based structural fund after 2006, and the second is at least to get some detail on what it will mean for regions such as Cornwall if nationalising the structural funds is advocated.

Absolutely. I could not agree more. That is basis of my questions for the Minister today. We need to know to know where we stand.

There are concerns that Cornwall may lose its special treatment as part of the south-west region. There must be a focus on the poorest regions in the RDA areas. There is one aspect in which taking control of the system might be beneficial. As I said earlier, the bureaucracy of objective 1 has to be seen to be believed. To have to satisfy only one set of masters as opposed to at least two would be widely welcomed.

I want to reassure the Minister that we do not want to remain dependent on support, but we need at least some transitional funding. The blood transfusion cannot be stopped before the patient has recovered. It is unrealistic to think that the poorest region can be turned round by one tranche of objective 1 funding. Our poverty was not created overnight, nor will it be solved overnight. People cannot wake up to find that projects have had funding streams cut away. Phase two of the university, which I have described to the Chamber, is critical in that context. If we are going to make the jump, all the rural areas of the county must be involved. That is the main thrust of phase two. We would need objective 1 funding or similar in order to make that critical move for the university.

In my constituency, an urban regeneration company has only just been established, which is one of only two in the wider south-west. Coincidentally, the other one is in Swindon. If we are to make a real impact on the largest industrialised part of Cornwall—the Camborne. Pool and Redruth area—we shall need long-term help.

I have to be honest and say that I think that the Government may face many problems in the plan for nationalisation of structural funds. The Commission would be loth to lose control of regional policy because, apart from the common agricultural policy, regional policy is the largest expenditure in its budget. Any changes will have to be agreed by all the states. That, I suspect, could be a tall order. At the forthcoming summits, there will be debates long into the night. In the negotiations that take place over the next few months and years, it is critical that the Government have a clear vision for Cornwall. Will the Minister say how our European colleagues greeted the British proposals? Have the Government already met resistance and if so is a revision of the plans on the agenda?

In conclusion, objective 1 has been the success story that it is in Cornwall today. The Government have been critical to achieving that and I am grateful, as are many other people in the county, for the work that they have done. However, I hope that the Minister can reassure my constituents that our fragile economy, which has been making strides, will not stall and that there will be long-term, sustained investment in the best county in the UK.

4.29 pm

I congratulate my hon. Friend the Member for Falmouth and Camborne (Ms Atherton) on securing this debate and on her strong representation of Cornish interests. As far as I am concerned, she is one of the reasons for the feel-good factor in Cornwall. As for the invitation to visit, I have been to Cornwall on many occasions, not least last year on a family holiday to the Roseland peninsula. I have seen at first hand what a beautiful county Cornwall is. Although the debate is specifically about Cornwall, I cannot dissociate it from our approach to the whole issue of European Union structural funds and cohesion policy post-2006. As my hon. Friend is aware, we are currently consulting on the proposals. The consultation document may not have the snappiest of titles, but it represents an effort to start thinking about an important issue.

The proposal, on which we are consulting internally before talking to colleagues in Europe—although there are informed discussions going on—offers the best way forward for Cornwall as well as for the UK and the rest of Europe. In 1999, when the structural and cohesion funds were last debated—in Berlin—we were successful in securing an objective 1 programme in recognition of Cornwall's development needs. At that time, we were taking the very early and tentative steps towards decentralisation in the UK, as well as to devolution in Scotland, Wales and Northern Ireland. We did not have a regional policy worth speaking of and had only just set up the regional development agencies. The London RDA did not come into being for another year.

Tackling regional and sub-regional disparities, dealing with social exclusion and urban deprivation and addressing the needs of rural communities are as much a priority for this Government as they are for Brussels. Those concerns have been mainstreamed domestically and are absolutely central to our objective of spreading prosperity and opportunity through all UK regions. There has been a policy change.

The next round of structural and cohesion funds will apply to a European Union of 25 member states. The historic enlargement of the EU is key to its future success. It will bring tangible benefits to both new and existing member states, locking in peace and stability, enhancing security and opening new markets. However, it also presents new challenges, of which this is one.

Disparities between member states will be starker than ever before. All the new entrants have a per capita GDP below the current EU average; they are all poorer than the poorest member state. The lowest four have a GDP of less than 40 per cent. of the average. The whole ball game has changed. Objective 1 funding is allocated to regions that have less than 75 per cent. average GDP. The change in the average has a statistical effect.

As I have said in answers to the hon. Member for St. Helens, North (Mr. Watts), we accept that the fact that there has been a statistical change does not remove the problems of people living in Cornwall, South Yorkshire, Merseyside or any other area that is or has been an objective 1 area. However, it does change the way in which Governments address such issues. In future, community resources need to be focused on the Union's poorest member states, particularly on our new partners. The case for the reform of the structural and cohesion funds is overwhelming. After the current round of funding ends in 2006, we will have a unique opportunity to adapt EU structural and cohesion policy to reflect the changed and disparate needs of an enlarged EU, while reinforcing our commitment to common European goals.

In my constituency, I am more than aware of the importance of EU funding in regeneration. It has been an essential part of the recovery in Hull after the collapse of the fishing industry. I agree that EU structural funds have provided a catalyst for new and innovative working practices and for new partnerships that did not exist previously. That is particularly relevant in Cornwall, where people have told me that the catalyst was objective 1 and that they have now found partnerships and co-operation that did not previously exist. As we know that EU resources act as a catalyst, helping to focus the domestic agenda on regional issues, we want to ensure that, in future, the resources of the EU will be available to those who need them the most.

We launched our discussion document, which was a joint document between the Treasury, the Office of the Deputy Prime Minister and the DTI, at the beginning of March. It is an important contribution to the debate on the future of the funds and it explains, albeit rather long-windedly, our proposals for reform.

We believe that future cohesion policy should be explicitly linked to the agenda set by European leaders at the Lisbon Council in 2000—the 10-year strategy to reform Europe's product, capital and labour markets. We propose that this link be established via an EU framework of objectives for cohesion policy supported by the regional development efforts of all member states. My hon. Friend said that the Commission would be loth to lose control of regional policy. We are not trying to do Commissioner Barnier out of a job and we are not seeking to change the basic fact that the European Union sets this policy. We set policy in many other areas such as industrial policy and competitiveness. It is not always linked to the funds. We are making an important differentiation.

When I have spoken to Commissioner Barnier, he has talked about three levels of funding and a change so that the current objective 1 regions would effectively get a special different type of objective 1 post-enlargement. Will my hon. Friend comment on that?

Commissioner Barnier plays an important part in this debate. We had an informal meeting in Greece on Friday and Saturday, at which not just the 15 member states but the 10 accession countries had a healthy discussion. I am unable to say yea or nay to proposals from Commissioner Barnier or anyone else. We simply say that we must start the debate now. We must look ahead. The crucial point in terms of what Commissioner Barnier says about objective 1 relates to a point that I will come to in a second.

We argue that net contributors to EU funds, such as the UK, should not need to recycle their money through Brussels. It is a simple argument. Much of the bureaucracy that my hon. Friend described could be cut away, given that we have a regional structure. We have decentralisation and we may have gone a bit further towards devolution in England, let alone Scotland, Wales and Northern Ireland by 2006. It would end the unnecessary and inefficient recycling of funds between richer member states such as the UK via Brussels, and it would concentrate EU activity where it can add the most value. Devolving the delivery of regional policy in support of common objectives to member states would also entail less red tape and bureaucracy. In the UK, our commitment to devolution and decentralisation would mean greater flexibility for regional policy.

The Minister said that regional policy was a long-term pursuit. What sort of programme do the Government plan to develop? Will it be a seven-year or a 10-year programme? Once those funds are allocated, will they be there for seven or 10 years?

That is a perfectly valid question. We tend to think that the seven-year programme is right. There is a debate about whether it should be longer or shorter.

I hope that the Minister understands that at present the regional development agency in the south-west has a say in how objective 1 funding is spent—a rather bureaucratic one from our point of view—but it cannot spend the money elsewhere. The Government appear to propose that money that would be allocated specifically to the objective 1 region would go to a regional office that would have the discretion to spend it elsewhere. Is that correct?

That is an important point. If the hon. Gentleman will forgive me, I shall come to it when I reach what might laughingly be called my peroration.

Devolving the delivery of regional policy in support of common objectives would cut red tape and simplify the procedure. Of course, we recognise that Cornwall is in a unique position. If we continued with the same system, and on the basis of current GDP data, Cornwall, unlike any other existing objective 1 area in the UK, might retain objective 1 status in an EU of 25 member states. Merseyside, South Yorkshire, West Wales and the Valleys would lose eligibility. However, given that Cornwall would be one of the richest objective 1 regions, in one of the more prosperous member states, its allocation would be much lower than currently. It is a simple fact that, throughout the UK, our receipts from structural funds will fall post-2006.

Some people suggest that the overall budget should be larger, which is a perfectly healthy part of the debate. Incidentally, I do not think that there are many takers for that, even from our informal soundings. However, as a major contributor to the EU budget, we say that increasing the EU cake to ensure that we can all still get a slice will only divert more domestic resources away from the people who need it in Cornwall and the rest of the UK. That is not the solution. It makes more sense for the UK to fund its own regional development in support of EU cohesion policy. That would give us the flexibility that we need to react effectively to problems as they arise.

We recognise that such a reform would mean forgoing some structural funds that would have found their way to the UK post-2006, even with enlargement. Therefore, the Government guarantee that, if the EU framework that we propose were agreed, domestic regional funding would be increased, so that the UK nations and regions did not lose out through that reform.

I come now to the question asked by the hon. Member for Truro and St. Austell (Matthew Taylor).

I am grateful to hear that reassurance from the Minister, but can he be specific and say who will make decisions relating to that money? Will they be made by the regional development agencies or at a lower level, and will the money be ring-fenced to the county, not the wider region?

It is the same question, and a crucial one. We are at the stage of saying that we need to change the basis of EU structural funds; we are not yet discussing the nuts and bolts of how we do that. However, I have said clearly in this debate that we are looking to put resources where they are most needed. In the EU, that will be in member states. Within member states and the richer member states, that will be the regions and areas that need resources the most. We think that areas of high unemployment and low GDP are in that category.

There are various mechanisms. We are not saying that we will go into this brave new world with the existing way in which we allocate RDA money. There is a proper debate to be had on that, and we are willing to listen to the arguments of hon. Members in Cornwall and elsewhere about how we might do that. Currently, 75 per cent. of all regeneration funding is from domestic funds; only 25 per cent. comes from the EU. We are already considering how we can deal with that in a much better way. If that is an argument about RDAs—the Swindon-Cornwall argument, to put it in crude terms—let me say that we are wedded to the principle of looking at areas of high unemployment and low GDP. We will consider the mechanisms necessary to do that.

In addition to what I said a moment ago, we would commit to ensuring that UK nations and regions had sufficient resources to continue to be able to promote regional prosperity, targeted on areas of high unemployment and low GDP. We cannot put a figure on that commitment now, because we are talking about decisions being made in 2006 on the basis of data that we do not yet have. However, it is hard to imagine a situation in which Cornwall loses most of its EU receipts without being considered a high priority by a UK Government.

The UK's proposals are aimed at creating a regional policy that is flexible enough to continue to meet Cornwall's needs. As I have said, the Government are consulting on the proposals. We very much welcome debates such as this, although we will not call the proposal our proposal for the rest of the EU until we have finished our domestic consultation, including, of course, with the devolved Administrations. This is a healthy debate, and I hope that I have reassured hon. Members that we are talking about a perfectly sensible proposal for change. There will be a once-and-for-all opportunity to achieve that in 2006.

Question put and agreed to.

Adjourned accordingly at sixteen minutes to Five o'clock.