The debate on Chechnya is timely. Coming down the Mall this morning I saw what I took to be Russian flags flying, presumably in honour of the visit of President Putin next week. It will be the subject of media comment and attention, much of which will focus on what is reputedly the good working relationship between the Prime Minister and the Russian President. The Prime Minister has worked hard to establish and develop that relationship since Mr. Putin first appeared on the scene, and we salute his foresight and energy in doing so. A good working relationship with the Russian Government is a key goal of British foreign policy. It may be 14 years since the fall of the Berlin wall but we are still living in the shadow of the cold war; Russia is not a normal state. The western world, especially Europe, has an interest in encouraging a stable, co-operative and friendly Russia.

It is therefore in the wider international interest for the Prime Minister to have forged a relationship with President Putin and when we discuss matters such as the sensitive issue of Chechnya, we must bear in mind the importance of encouraging and sustaining the stability of the Russian Federation. However, there comes a point when pursuing that objective can conflict with the difficult and unpleasant reality of what is happening in Chechnya. There is a fine line between observing diplomatic restraint for reasons of realpolitik, and becoming uncomfortably complicit in some seriously brutal and misguided policies that are being pursued by the Russian Government.

I am not saying that we have crossed the line from diplomatic constraint to moral complicity, but we sometimes get too close to it. The Prime Minister's reported comments during his visit to St. Petersburg brought us closer still. We need to back away from that fine line, remind ourselves that a friendly relationship can still be robust and make it crystal clear to the Russian Government that the behaviour of the federal authorities in Chechnya has been, and continues to be, unacceptable.

I want to ask the Minister some questions and the best starting point is the briefing paper produced by the Moscow office of Human Rights Watch, based on some 50 interviews in Chechnya earlier this year. It was submitted to the United Nations Commission on Human Rights in April, when the question of whether to pass a resolution on Chechnya was discussed. I pay tribute to the work of Human Rights Watch in monitoring the situation in Chechnya and feeding back information to us, despite great difficulties and the lack of any co-operation from the Russian Government. It is particularly useful that Human Rights Watch has established an office in Britain, because we can obtain reports and input as quickly and fully as possible.

The report that was submitted to the UN commission concluded that, depressingly, violations of human rights by federal authorities in Chechnya have been increasing in recent months. Human Rights Watch found that Russian troops were abducting and "disappearing" people at a rate of roughly three per week. In fact, that is an understatement of the number, because Human Rights Watch cannot monitor the total number of people who are being disappeared. As I said, it makes the point that the rate has increased while it has been observing the conflict; the rate is now the highest that it has documented since the beginning of the conflict.

In its report, Human Rights Watch quoted two unpublished but official-looking reports obtained from within the pro-Moscow Chechen Administration, which give an indication of the number of abductions and disappearances. The first report recorded the killing of 1,132 civilians last year, and the second said that in the first two months there were 70 murders, 126 abductions and 25 cases in which human remains were found without explanation. The rate of disappearances and abductions compares to that for the conflict in Algeria at its height. That is truly alarming.

The pattern of human rights abuses also seems to be changing. In the early part of the war, from 1999 onwards, most civilian deaths occurred during large-scale military operations, with the military using excessive force against their Chechen opponents.The bombardment of Grozny was the starkest instance. In the past year, however, the abuses seem to have occurred not so much in military operations, but more often during night raids on Chechen homes. People are taken away and in most cases never seen again. Even the pro-Moscow head of the Chechen Administration has recently accepted that in most such cases of abduction and disappearance, Russian forces are responsible.

A recent report in Le Monde—the Minister is an avid reader of that newspaper—also cited what are claimed to be official reports from within the Chechen Administration. Again, those reports said that more than 1,000 civilians were killed in Chechnya last year. It is important to emphasise that that number of deaths does not include civilians who died through being caught up in what one might call normal fighting between Russian forces and rebels. The Le Monde report also said that the authorities discovered more than 3,000 bodies in mass graves last year.

On 14 May, the Council of Europe published a report on the situation in Chechnya from the secretary-general. He said that the issues identified as the most problematic in safeguarding human rights are

"human rights violations committed by members of the federal forces during special operations and when 'targeting measures' are implemented … the disappearance of persons, especially at night",

and

"the prevailing climate of impunity, resulting from the fact that the responsible persons are not brought to justice".

There is little doubt that there has been systematic abuse of human rights since the start of the current conflict in September 1999, with many civilians being killed, tortured or displaced. Moreover, there are indications that, instead of getting better, the situation has deteriorated during the past few months. It was in response to the crisis that the United Nations Commission on Human Rights examined the situation in Chechnya in 2000 and 2001. It passed resolutions to express its concerns and to call on the Russian Government to take a number of specific steps, including establishing an independent commission of inquiry in Russia to investigate human rights violations by both federal authorities and other forces. That has not been done. The resolutions also asked the Russian Government to co-operate with visits to Chechnya by five specific UN rapporteurs, including special rapporteurs on torture and on extra-judicial and arbitrary executions, and to co-operate with representatives on violence against women, internally displaced persons and children caught up in armed conflict.

The commission asked the Russian Government to accept those five experts and to co-operate with its inquiries, but they have responded by trying to block the visits. Towards the end of last year, the Russian Government issued invitations to two of the rapporteurs—those on violence against women, and on children—but they were withdrawn because of what the Russian Government described as an unacceptable security situation in Chechnya. Furthermore, the Russian Government have consistently refused to arrange the requested visits by those who could be considered the two main rapporteurs—those on torture and on executions.

On top of that, at the end of last year the Russian Government took a further step to limit outside monitoring of the situation in Chechnya. They refused to renew the mandate of the existing mission by the Organisation for Security and Co-operation in Europe in Chechnya, and also denied repeated requests by Human Rights Watch for access to the region. In fact, the only international observers on the ground are three Council of Europe experts, who have to work under the partial supervision of the Russian President's office to produce the report from which I quoted earlier.

Unfortunately, the UN Commission on Human Rights did not repeat its previous resolutions on Chechnya last April, but my understanding is that the resolutions passed in 2000 and 2001 are still in effect and that the requests made to the Russian Government still stand. Getting authoritative international observers into Chechnya is probably the single most important move that the international community, including the British Government, should press for.

My hon. Friend is making a compelling case. Does he accept that the Russian Government's action took place in the context of considerable suppression? I recently did some work on closed cities such as Sarov, and it seems that some of the good work that Yeltsin began in opening up Russian society is being completely reversed under Putin; indeed, things are being screwed down. I do not have my hon. Friend's knowledge of Chechnya, but I believe that the Russian Government are going backwards by not opening up to democratic freedom. That is why the way that we are dealing with the situation is problematic.

My hon. Friend is absolutely right. At the beginning of the conflict, there might have been a case for giving some latitude to the Russian Government, in the hope that stability would be restored in Chechnya without an impact of the sort that he describes on other aspects of Russian politics and the Russian state. Some years into the conflict, that has not happened, and as I have said the pattern of human rights violations seems to be getting worse. That is corrosive to stability and to progress in the Russian political system.

I want to ask my hon. Friend the Minister some specific questions about the UN rapporteurs. Will the resolutions passed in 2000–01 still stand? And if they will, what steps are the Foreign and Commonwealth Office taking to try to persuade the Russians to accept, and to co-operate with, the UN rapporteurs that the resolutions call for?

Discussions are continuing between the OSCE and the Russian Government about renewing the monitoring mission in Chechnya—at least, there is an ongoing discussion about a monitoring mission in the Caucasus. Will the Minister also confirm that the Prime Minister will raise these issues with President Putin when he meets him next week? In particular, will he raise the issues of co-operating with the UN on rapporteurs in Chechnya, and of renewing the OSCE mission in Chechnya? It is tremendously important that the Prime Minister himself raise these issues.

When the Prime Minister met President Putin recently in St. Petersburg, he surprised many people with his comments about the recent referendum in Chechnya, on 23 March. In the 1 June edition of The Observer, the Prime Minister was quoted as saying:

"The referendum is a good step forward."

That was surprising, as we know that the Council of Europe's special representative on Chechnya, Lord Judd, resigned because he believed that the referendum was undemocratic. It could not be proper and democratic because of the conditions in which it was held.

In the 1997 referendum, the majority of Chechens supported the idea of independence, yet only six years later the Russian Government tell us that 95 per cent. of Chechens, from a turnout of 90 per cent., supported remaining part of the Russian Federation. A 90 per cent. turnout does not square with the independent reports from Chechnya. Le Monde, for example, reported that Grozny was practically deserted on the day of the referendum; and at a polling station at which the chief electoral officer declared that around 3,000 people had voted, the Le Monde correspondent counted fewer than 100 people.

Given that background, could the Minister clarify the Prime Minister's comment in St. Petersburg on the referendum? Do the Government believe that the referendum was conducted fairly and was a fair reflection of public opinion, or do they accept the more widely held international view that a referendum conducted under the conditions obtaining in Chechnya on 23 March has no credibility whatever?

The final aspect of the situation on which I would like the Minister to comment is the view—frequently expressed by Russian Government spokesmen, especially since 11 September—that the Russian Government are engaged in a conflict with Islamic fundamentalists and terrorists who have strong political and logistical links with the al-Qaeda network. The Russian Government advanced that argument to exonerate their activities, but few academics or experts on the region accept it.

For example, Anatol Lieven of the Carnegie Endowment for International Peace is quoted, in the most recent House of Commons Library briefing note on the matter, as having said the following in October of last year:

"The reality is that while links between Al Queda and the Chechnya conflicts do exist, they are not nearly as central to that struggle as Kremlin propaganda maintains."

Is not the reality that the Chechen war has much deeper historical, nationalist and tribal roots, and that it cannot simply be linked to the so-called war against terrorism? As a consequence of that, is not the correct approach to ending the conflict a political one—through negotiation and compromise—rather than through an anti-terrorist campaign? Again, it would be useful to hear the Minister's comments on whether the British Government accept the Russian Government's analysis.

The Chechen war is one of the saddest and most tragic episodes to affect a European country in the past decade. For many, it is striking how the behaviour of Russian forces in Chechnya and the attitudes of the Russian Government do not seem to attract as much international condemnation or pressure as, for example, the situation in Zimbabwe. Of course, it is invidious to compare two such situations. Nevertheless, there is a widespread sense that we are letting the Russian Government off rather lightly, and that sense grows stronger as the years go by and the death toll mounts, with still no sign of political progress. Indeed, the very opposite appears to be true. The human rights abuses seem to be more widespread, and the damage to and casualties of the Russian military continue to mount. Last month, The Times reported Russian military officials as saying that more than 4,500 Russian soldiers have been killed since the current phase of the war began in 1999. That is equivalent to the number of Russian deaths per year in Afghanistan during the 1980s.

There can be robust arguments and disagreements, even between good friends such as President Putin and the Prime Minister. President Putin certainly did not let his friendship with the Prime Minister get in the way of strongly condemning our role in the conflict in Iraq. It is time for the Prime Minister to start some serious arguments with the Russian Government. The longer we use reasons of realpolitik to turn a half-closed eye to what is happening in Chechnya, the more our rhetoric about policies elsewhere is undermined.

I warmly congratulate the hon. Member for Western Isles (Mr. MacDonald) not only on having secured the debate, but on having made such a comprehensive case in such a measured way. I recall some years before I became a Member of Parliament being particularly impressed by an article that he wrote for The Daily Telegraph, unusually for a Labour MP at that time, on the double standards that were sometimes applied by some people on the left to the misbehaviour of the Soviet bloc countries and the abuse of human rights there. Therefore, his stance today is entirely consistent with his honourable and long record on such subjects.

In view of the temperate spirit in which the hon. Gentleman made his case, I preface my remarks, which will focus on the narrow aspect of the activities, or possible activities, of the Russian intelligence service, the FSB, by saying that leaders of countries do not always know exactly what their intelligence services have been up to. [Interruption.] I note a few gentle laughs at that point.

And vice versa.

I cannot imagine what my hon. Friend is referring to.

President Putin will shortly arrive for a visit, but President Musharraf of Pakistan is in the country. He is a good example of the point that I have just made, because, although he has been at the forefront of the fight against al-Qaeda, it is also well known that the Pakistani intelligence service. Inter-Services Intelligence, has played a large part in generating, sustaining and supporting al-Qaeda over many years. That support is not necessarily known to have come to an end immediately after the events of September 2001.

I am concerned that all is not as clear as it might be in the case of Chechnya and the Russian intelligence service. Ever since Churchill famously described Russia as

"a riddle wrapped in a mystery inside an enigma"

one has known that everything should not be taken at face value. It must be said that if the Chechens are entirely responsible for some terrorist activities to which Russia has been subjected, at least since 1999, they have been extraordinarily bad tacticians. I have in mind the terrible explosions of September 1999, which occurred in apartment blocks in Moscow. The explosions were laid at the door of Chechen extremists and happened, conveniently, to provide the perfect casus belli for the second Russian invasion of Chechnya, which took place on 30 September that year.

There have been persistent suggestions—not just from the usual suspects—that the explosions might have been organised as a provocation and a pretext, rather than as a curiously counter-productive activity by Chechen extremists that could serve only to give the Russians the reasons that they might want to renew hostilities, which they did with surprising rapidity as soon as the event occurred.

I am particularly concerned about the events that took place during the siege of the Moscow theatre, which began on 23 October 2002. Something never quite added up. A theatre was taken over by a large number of people, many of whom had explosives strapped to their bodies, yet when that theatre was stormed not one of them exploded the devices that they had brought in. Even more sinister is the fact that not one of the quite large number of hostage-takers was taken alive, even though the point of the attack on the theatre was to immobilise them to such an extent that they would be unable to explode the devices strapped to their bodies.

One cannot have it both ways. On the one hand, the situation could have been so dangerous that, as in the case of the SAS handling of the Iranian embassy siege, there was no question of taking prisoners, because death and destruction might follow unless every hostage-taker was eliminated immediately. If that was the case, however, it is inconceivable that not one of those people could explode their devices.

On the other hand, if those people were so incapacitated, as they evidently were, that they could not explode their devices, why did the Russian authorities not act, if not from any sense of simple humanity, from the common-sense desire for the intelligence that might be gained from interrogating captives who had mounted such a damaging, dangerous and destructive operation in the heart of the Russian capital city? Why were those considerations put aside and the people executed on the spot while unconscious? Make no mistake about it, that is precisely what happened. Those people were out for the count and they were executed in cold blood.

One might say that those who live by hostage-taking deserve what they get, and I have some sympathy with that view, but it does not add up as a rational policy for an intelligence service apparently fighting a war against terrorism unnecessarily to kill every terrorist who comes in its power, when they might be kept alive and pumped for useful information on the terrorist organisation that they represent.

In that connection, I turn to an article sent to me by someone who has learned the hard way a great deal about Russian methods of operation, although, admittedly, Russian methods during the cold war—the famous and heroic Soviet dissident, Vladimir Bukovsky. Members will know that he survived 12 years of incarceration under the Soviet regime, many of them in the notorious Serbski institute, the psychiatric institute for the torture of sane people.

Vladimir sent me a French AFP—L'Agence France-Presse—report dated 28 April this year, which begins:

"Russian media on Monday accused the security services of placing a 'mole' among radical Chechen rebels who seized a Moscow theatre last October in a siege that ended with 129 deaths.

In a report backed by a Chechen rebel spokesman and a Russian former security officer, the newspaper Novaya Gazeta said former Chechen journalist Khanpach Terkipayev had infiltrated and helped to guide the 41-strong Chechen team that burst into the theatre.

The former officer claimed Moscow needed the hostage-taking because Western capitals were talking up prospects of negotiations with the separatist leadership in the breakaway southern Russian republic of Chechnya."

—[Interruption.] Of course, I now see warning lights flashing, as everyone says, "Oh, typical. The hon. Member for New Forest, East—a typical conspiracy theorist." All I would say is that that is not my conspiracy theory, and it is not something that should be seen in isolation.

There was a remarkable convenience about the apartment bomb explosions that took place so soon before the second Russian invasion of Chechnya. Here, one again sees a possible, credible and, I would say, quite convincing explanation, which would account for two things. First, it might be seen to be in the perceived interests of the FSB, if not the Russian leadership themselves, that such a siege should take place. Secondly, it would explain why it was not considered necessary, or even desirable, for any of those terrorists—I make no bones about calling them terrorists, and they were undoubtedly Chechens—who took the hostages to be taken alive and interrogated. What they might have had to say on the subject might have been more revealing than the FSB would have liked.

I shall not detain the House for much longer, but I should conclude by illustrating the fact that there is a long and dishonourable tradition of pretexts being found for invasions. If one goes back to August 1968, which I am old enough to remember, one recalls that the line given out by the Soviet propaganda machine was that there was no such thing as the Soviet invasion of Prague, but that the Soviet forces were invited in by the Czechs. I see the hon. Member for Colchester (Bob Russell), who is a Liberal Democrat, nodding his assent; he also remembers that. I remember a typical east European black humour joke of the time: "What are tanks and 30,000 Soviet troops doing in Czechoslovakia?" The answer was, "Looking for the people who invited them there."

However, the tradition goes back a lot further. For example, had Germany won the war, it would have been said not that the Germans invaded Poland on 1 September 1939, but that the Poles attacked the German radio station at Gleiwitz, just on the German side of the German-Polish border. An SS thug called Naujocks mounted an operation in which a victim from a concentration camp was selected, dressed up in Polish army uniform, executed and left at the site of the radio station as the pretext. Even Adolf Hitler sometimes felt it necessary to have an excuse for his aggressions. I am sure that better historians than me could cite many more examples from further back in history.

My theory is not as far-fetched as it seems, and those who wonder whether I am seeing phantoms where there are none must come up with a simple explanation. There was something fishy, strange and orchestrated about the way that that large number of people were able to take over the theatre, and the fact that once they had been rendered unconscious and unable to set off any of the many explosive devices, they were killed in their sleep rather than kept for interrogation. If someone can explain that to me, I will abandon my conspiracy theory. Until then, however, I shall remain cautious, sceptical and cynical about some of the dirty games being played in the terrible war that Russia is waging in Chechnya.

I congratulate the hon. Member for Western Isles (Mr. MacDonald) on securing the debate and on drawing attention to this dirty conflict in Europe's backyard.

If, under this Government, we still have an ethical foreign policy, I hope that the Prime Minister and others who meet President Putin draw attention to the United Kingdom's displeasure at what is going on in Chechnya. I endorse the points made by the hon. Members for Western Isles and for New Forest, East (Dr. Lewis).

I ask the Minister to examine the question of the deportation of Chechen nationals from the UK to the Russian Federation and, in a spirit of joined-up government, to discuss that serious matter with his Home Office colleagues. I raised it in the Home Affairs Committee, during sessions with the Home Secretary, and with a Home Office Minister. I have also tabled parliamentary questions on the subject. There is, however, confusion, or at least a lack of consistency, in the oral statements and written answers that I have received. The Government do not seem to be sure what is happening, although I am sure that the Russian Government know very well what is going on.

In response to a question that I tabled on how many people of Chechen origin were deported from the UK to the Russian Federation, the answer was:

"Information on the number of people deported from the United Kingdom to the Russian Federation, including those of Chechen origin, and on the destinations to which they were deported, is not available."—[Official Report, 3 June 2003; Vol. 406, c. 144W.]

I would have thought that the Government knew how many people they were deporting and the destination, but I will give them the benefit of the doubt. They may not be too sure whether those people are Chechens, but I would have thought that that is a material factor. Such people are here, particularly the young men, precisely because they wish to get away from the horror in their homeland.

If the Government send those young men back to the Russian Federation, Moscow or St. Petersburg are the most likely destinations. We have heard what has happened in Chechnya to young Chechen males, and the hon. Member for New Forest, East described what has happened to Chechens who are caught up in incidents in Moscow. Just imagine what happens to one or two lone Chechen males who are deported and fly in to Moscow or St. Petersburg. Are they really put on the inter-city to Grozny? I think not. The Government have a responsibility to find out where those young Chechen males are being sent and what happens to them after they are dumped in Moscow or St. Petersburg.

Back in October, I was assured that the Home Office, in conjunction with the Foreign and Commonwealth Office, closely monitors the situation in the Russian Federation and the conflict in Chechnya in particular. I urged the Government not to deport any Chechens, particularly young males, while the problems in Chechnya continued. I have to say to the Minister that there is a sporting chance that not all those young Chechen males make it back to Chechnya. There are stories that those young males are taken out; they do not arrive back in their homeland. It is perhaps going too far to say that the Government have blood on their hands, but would it not be best to allow those who seek sanctuary from Chechnya to remain here until it is safe to return or to ensure that they are returned directly to Chechnya via a safe route rather than via Moscow or St. Petersburg?

I hope that the Prime Minister, the Foreign Secretary and others who will meet President Putin shortly tell him that they have doubts about whether the Chechens who are returned to the Russian Federation have a safe passage back to Chechnya. If the President cannot give that guarantee—the anecdotal evidence is that he cannot—I urge the Minister to have words with his Home Office colleagues so that no more young Chechen males are sent back to the Russian Federation, possibly to their death and certainly to treatment that he would not wish to have visited on them in this country. It is not good enough to wash our hands of the matter by sending them over to Moscow or St. Petersburg in the hope that the Russian authorities give them safe passage back to their homeland.

Two young Chechen males live in my constituency. They have work permits, they are very hard working, they pay taxes, they are net contributors to the economy of this country, they wish to remain here and their employer wishes them to remain here. The only problem is that the Government want to send them back to the Russian Federation. Those men are in fear of their lives.

I apologise for arriving late and missing the opening speech. I congratulate the hon. Member for Western Isles (Mr. MacDonald) on securing this debate. I tried to secure a debate on Chechnya, too. I did not link it to President Putin's visit but that link is important. The United Kingdom, as a candid friend of Russia, and the Prime Minister, as a candid friend of the Russian President, have an opportunity to get some unmistakable messages across about the Chechen conflict. That is plainly in all our interests.

My first point relates to the quotation, cited in the Library brief, attributed to President Putin. On the day that he became president, new year's day 2000, he visited the Russian army, then engaged in operations in Chechnya, and said:

"I want you to know that Russia values highly what you are doing, and what you are doing is very necessary for the country, very necessary. We are not talking simply about restoring the honour and dignity of the country. No, we are talking about more serious matters. We are talking about putting an end to the disintegration of Russia."

That touches on what drives President Putin, and many Russians, to continue this appalling conflict in the terrible way that they are. Obviously, there is huge concern that, if Chechnya were allowed to exercise its right to self-determination, for which Chechens would undoubtedly vote if they were not presented with the sort of referendum process that they have just been presented with, it would choose to be an independent republic.

If one looks at the history of Russia's involvement in Chechnya from the 19th century onwards and under the Soviet system, which determined whether it was to be autonomous or a region of the Soviet Union on the same basis as the 15 countries that are now independent republics, one can see that it ended up in its current state by a completely arbitrary process.

There is definitely a case for the Prime Minister to put to President Putin privately the simple point that the awful casualties being suffered by the Russian armed forces and the appalling stain on their reputation left by the way in which they are conducting the campaign, quite apart from the terrible consequences for the Chechens of the dreadful way that the Russian armed forces have behaved, could be dealt with by allowing the Chechens a proper route to self-determination.

The price that the Russians think that they might pay—the disintegration of the Russian Federation—simply does not stand up to analysis. To any outside observer, the cost of trying to hang on to Chechnya as part of the Russian Federation is way beyond any conceivable benefit that the Russians would get from forcing Chechnya to remain part of that federation.

We have had to face up to that in Northern Ireland. Part of the settlement in Northern Ireland is to accept that it is for the people of Northern Ireland to determine their future constitutional status. We have got over the psychological hump of being determined to impose on the people of Northern Ireland a union with Great Britain whether they wanted it or not. The Russians need to make that jump as far as Chechnya is concerned.

The other element of President Putin's remarks concerned restoring the honour and dignity of the country. The tragedy is that the Chechen conflict is doing the reverse. It is besmirching the honour of Russia and the Russian armed forces, through the way in which they carry out their campaign. The appalling treatment that is being meted out to the Chechen people is utterly undignified.

If the hon. Member for Western Isles has not done so already—I apologise if he has—I pay tribute to Lord Judd for the splendid work that he has done in keeping the issue at the forefront of the work of the Council of Europe. He is trying to keep it in the purview of European policy makers, so that it is constantly focused on. That is another reason for it to be high on the Prime Minister's agenda when he meets President Putin during his visit.

The issue that must concern us all, which is a threat to the security of us all, is the potential Islamisation of the conflict. It is a national conflict, as is the Palestinian conflict, and they have in common an attraction for an utterly dangerous element: the religious fanatic. Islamic fanatics are exploiting those conflicts for wider religious purposes. Those causes have a significant degree of legitimacy and justification because of the treatment received by the Palestinian and Chechen peoples.

If we think that the situation in Palestine is bad in terms of the number of people who have been killed, it is many times worse in Chechnya, but the nature of the conflict and the way in which it has been handled has made it difficult for reporters and aid agencies to work safely in Chechnya. It is not at the forefront of the public's mind because it is not reported every day in the United Kingdom and elsewhere. We must attend to that, but it is no reason for Chechnya not appearing high on the list of the Prime Minister's priorities when he speaks to the President of Russia.

The conflict in Chechnya not only dishonours and disgraces the Russians, but is a dreadful tragedy. Parliamentarians who are interested in international affairs and simple human decency should promote and concentrate on our duty, and that falls primarily to the Prime Minister in his talks with the President of Russia. I hope that the Prime Minister will be a candid friend and make it clear to President Putin that, although the course of action on which he embarked and the way in which he presented that to the Russian people may have been responsible for getting him elected, he must find a way to end the dreadful conflict as soon as possible and in the widest interests of Russia and the world. He must allow the people of Chechnya the right of self-determination and give Russia and the Chechen people an escape route from what is an appalling tragedy.

In the interests of equity, it may be appropriate for the three Front Benchers to take no more than one third of the time available.

Thank you for your guidance, Mr. Deputy Speaker. I doubt that I will want to prevail on you for even that long. It is important that the Minister is given as much time as possible to answer the serious points that have been raised.

I congratulate the hon. Member for Western Isles (Mr. MacDonald) on raising an important matter at an important time. He was right in his opening speech to place the matter in the context of the importance of the relationship with Russia overall. We must not lose sight of that, nor should we be quiet about some of the worries about Chechnya to which others have also referred during the debate.

Chechnya, sadly, occupies a desperate place in our thoughts about the world's trouble spots. The bloody history of the past 12 years has regularly shocked us, and the atrocities and tragedies, such as last October's theatre siege, have never been far from our minds. Hon. Members who have spoken detailed much of the history and listed many of the abuses committed by Russians and Chechens alike. I shall not repeat those, but we cannot escape the fact that the situation is horrific.

The Russian position has been clearly stated in many different ways. One of the key clauses in the constitution handed down by the Federation to Chechnya earlier this year says:

"The territory of the Chechen republic is indivisible and is an integral part of the territory of the Russian federation".

The presence of 80,000 troops in the republic sends a very clear signal, as does the completely dismissive attitude taken by the Russian Government towards outside opinion, in the many ways in which it is expressed. That is most evident in their failure to allow the continuation of the assistance group of the Organisation for Security and Co-operation in Europe, which was doing such good work in Chechnya until the end of last year, and their failure, which has been remarked on, to allow United Nations special rapporteurs to have access to the country.

All the Russian Government's arguments tend to be put in the context of the war on international terrorism. No one would deny the potential links between those who fight in Chechnya and the wider international war, but only the most myopic of observers could fail to see the wider desire for political change that exists in the Chechen Republic and the legitimate concerns of thousands who live there. Nor could anyone fail to see the scale of the human rights abuses that have been committed by both sides in the conflict, which are detailed in many sources.

Torture, illegal detentions, hostage taking, the destruction of property and the targeting of civilians have been carried out. Perhaps we are slightly inured to that being done by terrorist groups; we do not condone it, but there is a history of it. The shock here is that many of those abuses are carried out by the Russian Federation, not least the disappearance of so many Chechens, in Chechnya itself and elsewhere in the Federation. What most people find particularly galling and an international disgrace is the degree of impunity that appears to exist in the Federation, and the failure of the Russian authorities to bring to justice anyone in the Russian army who may have been guilty of atrocities. All that has led to a climate of fear and loathing.

Amnesty International's newly published 2003 report sets that out very clearly, saying:

"Russian security forces committed serious human rights violations and breached international humanitarian law in the continuing conflict in the Chechen Republic, with almost total impunity … law enforcement agencies cracked down on Chechen civilians throughout the Russian Federation … An estimated 110,000 internally displaced Chechens lived in harsh conditions in neighbouring Ingushetia. They reportedly faced forcible return to Chechnya, in conditions where their security and dignity could not be assured."

Amnesty widened the scope of its report to highlight abuses by Chechen armed groups. The hon. Member for Western Isles rightly mentioned Human Rights Watch, detailing many of the issues that it has highlighted in Chechnya. I shall not repeat those, but I hope that the Minister will find time to comment on the abuses that have been documented.

No one would deny that the Russian Government have the right, and indeed the duty, to maintain law and order and to tackle international terrorism, but that must surely be done in the context of international law, and that Government should have the confidence to allow international monitors the freedom and protection to carry out their work. Of course, they would argue that some political steps have been taken. The new constitution sets that our reasonably clearly, and there is an expectation of presidential and parliamentary elections later this year.

However, there are serious questions even there. There are real doubts about the legitimacy of the constitutional referendum held earlier this year, although our Prime Minister is reported as saying that that was "a good step forward". The Council of Europe has been dismissive. Few credit the turnout claimed at the time, or still less the 96 per cent. in favour of the new constitution. As the hon. Member for New Forest, East (Dr. Lewis) highlighted, that was at odds with the referendum six years previously, which sought independence. Washington think-tanks have also publicised a confidential OSCE briefing, which was highly critical of election irregularities. If the referendum was an attempt to win hearts and minds and provide legitimacy, it has singularly failed.

The question for us today is the position that our Government will take, not least when the President makes his state visit to the country next week. The clearest statement of Government policy was made by Baroness Amos in another place when, in her previous role, she spoke on the Government's position last December. She spoke of their requirement to recognise the territorial integrity of the Russian Federation. That may be right, but surely the self-determination of the people of Chechnya must count for something as well. She also emphasised the right and the obligation of the Russian authorities to defend their citizens from terrorism. No one would dispute that, but a responsibility surely exists to adhere to the rule of law and respect human rights. The Government have said as much in answers to parliamentary questions and in occasional quotations in the press.

The key question is how vigorously the Government are making their concerns known to Russia. The hon. Member for Western Isles talked about how a friendly relationship should also be a robust relationship. We must hope that the Minister will characterise the relationship in that way when he replies. We all acknowledge the importance of Russia's role in the world, and its importance to the UK. We understand that there are sensitive areas to discuss next week, not least the road map for peace in the middle east and Russia's plan to provide nuclear fuel to the Iranians in the absence of the latter's full compliance with the requests of the International Atomic Energy Agency. Sensitivity to those issues should not mean that we ignore the serious problems in Chechnya.

We ought to be insisting on full co-operation with the United Nations special rapporteurs on torture and extra-judicial executions, and on the renewal of the mandate for the OSCE's assistance group to Chechnya. We should also make the case for allowing organisations such as Human Rights Watch to have access to the republic. In March 2003, it was denied access for the 10th time. As the hon. Member for Reigate (Mr. Blunt) said, a proper and legitimate route to self-determination in Chechnya should be provided. Sadly, that is lacking at present.

The hon. Member for Western Isles highlighted the fact that in the dispute over the Iraq war, Russia did not hesitate to set out a position very different from that of the UK Government. In this country, we should not hold back in our criticism of Russia. The matter is not a minor blot on our relations with Russia; it is not something that we can just cast aside as unimportant. We must hope that next week, when President Putin visits this country, we do not tiptoe round the problem, but confront matters head on.

I, too, warmly congratulate the hon. Member for Western Isles (Mr. MacDonald) on securing the debate and putting forward his case in an extraordinarily comprehensive and moderate way, which won the attention of us all. I warmly congratulate also my hon. Friends the Members for Reigate (Mr. Blunt) and for New Forest, East (Dr. Lewis), my reasonably near neighbour, the hon. Member for Colchester (Bob Russell), and everyone else who has contributed to the debate this morning and shown a considerable knowledge of the subject and concern for the situation in Chechnya.

Russia is a country that straddles a number of worlds, in every sense of the word. It is a country of massive economic potential with enormous natural resources, and key strategic influence, counter-balanced by an old-fashioned bureaucratic structure, considerable environmental problems, and the difficult ongoing conflict in Chechnya, which has soured international relationships and brought the spotlight on Russia in a negative way. I will obey your injunctions, Mr. Deputy Speaker, because I know how anxious the Minister is to give a comprehensive reply.

We certainly heard from the hon. Member for Western Isles about the need to resolve the Chechnya situation. I will go into that in detail later, but I hope that I will be given a little licence to make a few comments about Russia in the context of the important visit of President Putin to the United Kingdom, and to encourage the positive things that are happening in Russia in the hope that that may lead to a political resolution to the problem in Chechnya. There is no solution other than fresh political development.

President Putin has demonstrated on the international stage that he is a pragmatist. He has committed the country to economic influence and prosperity. In his state of the nation address on 19 May, he talked about taking the next step. I want to cite some of the things involved, because the contrast between what he was talking about in that context and some of the problems in Chechnya is a comparison that needs to be made.

President Putin has talked about the need to reform the economy and the political system in Russia. There are pretty encouraging signs in terms of economic development and investment in fixed assets. Importantly, Russia has ceased to be an importer of grain and has become an exporter. The IT industry in the country is growing. However, the state apparatus remains inefficient, and President Putin has promised to try to deal with the issue. Unfortunately, a quarter of Russian citizens still have incomes below the living minimum. President Putin has also committed himself to a functioning competitive market economy with property rights that are properly secured. It is a positive sign that the EU has granted Russia the status of a market economy. Russia still has much more to do in terms of protecting contracts and investor rights, and upholding the rule of law in that context.

President Putin has also talked about—this chimes in with the debate—the establishment of a civil society and sustainable democracy in which human rights and civil and political rights will be fully ensured. He is well aware of the problems, and he recently described them as follows:

"The institution of democracy has not developed properly in our country yet … Our laws are correct but they either don't work or just disappear".

That is an interesting insight as it applies to Chechnya. Will the Minister respond to that point? It is an important one in the context. I hope that the Prime Minister will remind the President of that important observation during his conversations.

Another priority is improved living conditions. President Putin recognises the need for a substantially higher standard of living for the Russian people. Although there has been much progress on that front, there is still much to do.

Finally, President Putin has talked about the need to improve Russia's international relationships. The spotlight inevitably shines on Russia in terms of human and civil rights because of that issue. I hope that that will be brought into play in the discussions between the two leaders.

On 13 March, my noble Friend Lord Howell sought assurances in another place about the recent referendum on the constitution that cements Chechnya's status as part of Russia, while promising limited autonomy. What form that autonomy will take has yet to be decided. I would be interested to hear from the Minister what his preferences are. Does he agree with the EU that the referendum has had a positive impact in achieving the Government's objectives by promoting human rights in Chechnya? What of the amnesty attached to that deal? The matter is important and echoes the sentiments expressed by my hon. Friend the Member for New Forest, East. Critics have said that it is meaningless to talk in such terms because clemency is denied to anyone who has tried to kill federal police and servicemen. That issue needs to be addressed.

There is an economic aspect to the conflict in Chechnya. The Russian media have branded the region a black hole. Much of the money earmarked for restoration winds up in the pockets of business men—that might be one way of putting it—and corrupt authorities. Russian auditors examining Chechnya's restoration finances have documented the theft or misuse of more than $33 million in the past two years.

The territorial integrity of the Russian Federation and the right of the Russian Government to defend their citizens against terrorism are, of course, vital and understood. Historically, Russia has always been extremely sensitive about its territorial integrity, but ultimately the conflict in Chechnya cannot be resolved by military means alone.

We have seen on the international stage that President Putin, whom I describe as a pragmatist, is capable of new and original thinking. Examples are the way in which he reacted after 11 September and the offer in respect of US military bases in central Asia. Agreements about that have been reached by the US and Russia. President Putin signed a friendship treaty with China. He has also entered the NATO-Russia Council, which was set up last year. These are good examples of how Russia has adapted. In many respects, President Putin has moved the country forward into a much more modern context. Nevertheless, the problem of Chechnya remains. I hope that, in the conversations that take place between the two leaders, some of the matters that have been raised this morning will be alluded to in a spirit of friendship and candour.

Much of Russian society is still trying to find its bearings. The situation in Chechnya remains an enduring problem and obviously causes the Russian people great anxiety because of the alleged threat of terrorism and the impact on attitudes in the outside world. A political settlement is desperately needed if the violence, waste and corruption that bedevil relations between Moscow and Grozny, while at the same time sapping the Russian economy of resources that it can ill afford, are to be resolved.

We see many hopeful signs in Russia, such as economic reform and greater democratic development, but the picture is still very mixed. The institutions of civil society are taking shape, but the roots sometimes seem to be shallow, and the habits and practices of decades of communism still lie too close to the surface. A resolution of the Chechnya problem for Russia, both externally and internally, will greatly assist the forces of progress that we want to move Russia on and to win the argument within Russia.

I join other Members in congratulating my hon. Friend the Member for Western Isles (Mr. MacDonald) on obtaining the debate, and I commend the measured way in which all speakers have contributed. I hope that the Russian authorities read the record of the debate; I am sure that it will be transmitted to them by the first-rate Russian ambassador to London. The strength of the House of Commons is that it allows serious matters to be raised and tough questions to be put in the public domain in a way that conveys the concerns of many Members.

The reason for the debate is President Putin's visit—the first visit by a Russian Head of State since the 1840s. Also, there is the excellent report by Human Rights Watch. I join my hon. Friend the Member for Western Isles in paying tribute to that fine organisation, and we are pleased that it is opening an office in London. That reflects the sense that London has historically been one of the world capitals in which, when state-to-state relations between Governments have not always been conducted on the basis of candour—I am looking back over more than a century—there has been a functioning civil society and discussion of human rights. Human Rights Watch is part of that tradition.

It is 550 years since the first British mission went to Russia. It was sent by King Edward VI to Ivan the Terrible, who returned the compliment by sending an ambassador to London in the 1550s and hinting in correspondence at the possibility of marriage to Queen Elizabeth I. That might have been a remarkable English-Russian union—who knows what the history of both countries might have been?

We will welcome President Putin next week, and I have been asked to be a candid friend to him. That relates to a point—it was repeated by the Opposition spokesman on Europe, the hon. Member for West Suffolk (Mr. Spring)—made by the hon. Member for Reigate (Mr. Blunt) in his important speech. I recall the words of a distinguished former Foreign Secretary, Lord Canning:

"But of all the plagues, good Heaven, thy wrath can send, Save me, oh, save me, from the candid friend."

There comes a time in inter-state relations when candour can be counter-productive, and I shall develop that point in replying to the individual questions.

Let there be no doubt that the issue of Chechnya is important not only in London, but in many other capitals around the world. It is discussed at the UN Commission on Human Rights and the Council of Europe, and President Putin is well aware that it is on the international agenda.

I am concerned by the Minister's words, which imply that the Prime Minister might choose not to raise Chechnya with the President. Members who have participated in the debate would find it regrettable if that were the case. Will the Minister make it clear that he is not making that point and confirm that Chechnya will appear on the agenda?

I shall come to that point, which is perfectly fair, after developing my remarks in the generous time left to me.

The problems of all the different conflicts remain as Russia continues to develop and to escape from the evil legacy of its Leninist-Stalinist-Brezhnevite past. It is developing as a modern market economy under the rule of law to escape not only its Soviet past, but the long decades, if not centuries, of autocracy before 1917. We should be careful not to demand tomorrow that Russia live by standards that have existed in, for example, Switzerland and Sweden for 100 years or in Britain for a long time.

We should judge Russia by its own standards. The Russian constitution is clear, and President Putin's insistence that Russia's destiny is European is also clear. Russia should be judged by the standards that we expect all European states that are signatories to UN and Council of Europe conventions to abide by.

We welcome President Putin's commitment to the reform process in the economic, administrative and judicial fields and to tackling the challenges that remain. Significant progress has been made over the past two years. The Russian Government have established macro-economic stability, and they have also passed important legislation to create a market in land for the first time since the Russian revolution and to start work on the reform of their monopolies. An impressive judicial reform package is transforming criminal, civil and commercial law to bring Russia in line with western standards.

The Russian Government are committed to maintaining the momentum of reform. They recognise that they must tackle some of Russia's most difficult and deep-seated problems, including restructuring, reconstruction and poor implementation. Ensuring that the reform process supports the administrative and judicial functions is a major challenge on which the United Kingdom has been working closely with Russia. Our support has included assistance with not only economic targets such as Russia's progress towards joining the World Trade Organisation, but the reform of the judiciary and civil service in promoting civil society and the protection of human rights.

The Government welcome the successful development of our relations with Russia and the progress being made by the internal reform programme. We recognise that there are many issues still to address, including Chechnya, which is the principal focus of the debate, but all those concerns, whether they are about human rights, economic reform or the development of civil society, can best be addressed by dialogue. Maintaining our dialogue at a high level will allow us to continue to support Russia's development into a country that is a genuine partner with shared values.

The debate has focused on Chechnya, and I share all the concerns that Members have expressed. Many tens, if not hundreds, of thousands of people have been killed or injured in the fighting over the past 10 years, and nearly two thirds of Chechnya's population have been displaced. Many people remain in temporary shelters that were constructed when the conflict began; many more depend on humanitarian aid. No one, including the Russian Government, has disputed the human cost of this conflict.

Equally, however, it cannot it be disputed that Russia faced a serious security threat in the region before the current conflict began. Chechnya had descended into near anarchy soon after Russian forces withdrew in January 1997. Kidnapping gangs were operating in the republic with impunity. There was no rule of law or state authority. I need hardly remind Members of the kidnapping and brutal murder of four telecommunications engineers, including three Britons, in December 1998.

The influence of Islamic extremists has also been growing in Chechnya. In summer 1999, about 1,000 heavily armed militants, backed by Arab mujaheddin, attacked the neighbouring Russian republic of Dagestan. Clearly, the Russian Government needed to act to prevent those acts of aggression from happening again.

Russia has consistently presented the war in Chechnya as a counter-terrorist operation, and we recognise the serious threat posed by terrorism in the region. In recent years, the general rule in Europe has been that no state will see its territorial integrity broken under the threat of violent terrorism aimed at killing innocent people to secure political ends. That was wholly unacceptable to the British Government in Northern Ireland, and it is unacceptable to other Governments in Europe.

In the light of the serious matters that the Minister has raised, does he agree that the last thing that this country should be doing is returning Chechen nationals to the Russian Federation? It is clear that the Russian Government believe that any Chechen outside Chechnya must be placed under suspicion. The consequences for those under suspicion in the Russian Federation are not good.

The hon. Gentleman raised issues that properly are questions for the Home Office. I am not seeking to duck them, and we all have difficult asylum cases to deal with. People come to our surgeries after their demands to stay in this country have been turned down. Every Member must wrestle with many such cases; I must have some trust in the authorities. Each case is considered on its merits. The hon. Gentleman asked me, as a Foreign Office Minister, to answer several questions that he tabled to the Home Office. I am happy to write to him, but I suspect that he needs to take up those issues with the Home Office and perhaps secure a debate, if he is so moved.

Will the Minister give way?

May I continue? I must answer the questions asked by the hon. Member for Colchester (Bob Russell).

We remember the horror of last October's theatre siege in Moscow in which a terrorist group, linked to the Chechen extremist Shamil Basayev, took more than 800 innocent people hostage and threatened to kill them if Russian troops did not withdraw immediately from Chechnya. I have no doubt that it would have carried out its threat had the Russian authorities not launched a rescue operation. Basayev has also claimed responsibility for organising a series of suicide bombings in Chechnya and elsewhere in Russia. Nearly 200 people, mostly civilians, have been killed in those terrorist atrocities in the past six months and many more have been injured. We might have some regard for the families of the victims of the terrorist activities.

I am interested in the elaboration on what the hon. Member for New Forest, East (Dr. Lewis) referred to as conspiracy theories. If terrorists with political aims had taken hostages in a London theatre, it is hard to believe that we would have invented a conspiracy theory to explain that it had all been got up by the security forces. Does he really maintain that the people who threatened to kill hundreds in the Moscow theatre were manipulated by the Russian security forces?

I thank the Minister for finally giving way, as what he said is a perversion of what I said, as he well knows. There is no doubt that the people who mounted the attack were terrorists, but the question is why the unconscious terrorists were eliminated. If that had happened in a similar attack in this country, there would have been a furore over it. Will he answer the question asked by my hon. Friend the Member for Reigate: will the Prime Minister put Chechnya on the agenda for discussion with President Putin? Yes or no, please.

I take exception to the nature of these interventions in what has been a well-tempered and moderate debate. Terrorists have been killed during action taken by our security forces to free hostages. I do not remember members of the Conservative party, inside or outside Parliament, raising the matter. The Znamenskoye bombings in May killed 100, and only two weeks ago terrorist bombings in Mozdok, in North Ossetia near the Chechen border, killed 80. That aspect of the issue has not been raised in the debate, and it is important to put those terrorist atrocities on the record.

Basayev and other militant groupings in Chechnya do not operate in isolation; they receive logistical and financial support from Arab mujaheddin operating in Chechnya and further afield. That is why the United Kingdom and other United Nations Security Council members took action against those groups under resolution 1267.

Will the Minister give way?

I have no time, as I must put my points on the record. It is important to name the groups, which are the Riyadh as-Salikhin reconnaissance and sabotage battalion of Chechen martyrs, the special purpose Islamic regiment and the Islamic international brigade.

We, and our European Union partners, have been consistent in stressing that any operations in Chechnya must respect human rights and the rule of law. That is the Government's position in discussions with the Russian authorities.

rose—

rose—

I am not giving way. I am glad to confirm that my right hon. Friend the Foreign Secretary will indeed raise the situation in Chechnya again when he meets the Russian Minister next week. The conflict cannot be resolved by military means alone, which is why we called for a political solution and why the Prime Minister welcomed the recent constitutional referendum in Chechnya, in line with other EU partners.

The constitutional process is part of a political process, which is the right way forward. We tried to raise the issue at the UN Commission on Human Rights in Geneva, but were unsuccessful. Although we have friends in Europe and the United States, the resolution was opposed by Brazil, China, India, South Africa, Sri Lanka, Ukraine, Venezuela and, of course, Zimbabwe. However, we will continue to put the issue on the international agenda. I have had some good conversations about it with my noble Friend Lord Judd, and it is a concern for the Council of Europe and throughout the EU. President Putin is aware of that, and when he and his delegation visit London next week, the question will be raised with the Russian Foreign Minister. That is the correct way for a foreign policy issue to be discussed.

I thank all Members for their contributions and for bringing this important issue to the attention of the British people through this morning's debate.

I apologise for almost being late. I must now catch my breath after rushing to be here.

Does my hon. Friend agree that it is entirely appropriate for him to be almost late for a debate on the services between London and Holyhead, because of the appalling punctuality that we often encounter as regular commuters between north Wales and London?

I thank my hon. Friend for that intervention and for giving me time to catch my breath—I was out of puff like the trains.

I secured this debate on behalf of a the north Wales group of Labour MPs. We represent eight of the nine parliamentary seats in north Wales, and the group was established a year ago to campaign on three main priorities: rail services, crime and quality jobs.

This debate is part of a series of actions that we have undertaken to improve rail services in north Wales. I have questioned the Prime Minister on the Floor of the House, the group has met the Minister for Transport, and we have convened meetings with the Strategic Rail Authority, Network Rail, Virgin Trains, north Wales councils and members of the rail passenger committee for Wales. We have also asked for a meeting with the Secretary of State for Wales to alert him to our concerns.

The north Wales rail line is on the trans-European network system and is of strategic importance to not only the UK, but the whole of Europe, connecting Europe's westerly extremities—Wales and Ireland—to its centre. To that end, our group has contacted the Irish embassy and consulate in Cardiff to try to arrange a meeting with the Irish Transport Minister to alert him to our concerns and to ask whether the Irish Government could help to improve transport connections to Holyhead and through to London.

Our group's main aim is to secure fair funding for the north Wales rail line and to ensure that we have a 21st-century service to serve our economy and people. It is interesting to see that there are no Conservative or Liberal Democrat Members present, and most Members would agree that the previous Conservative Government have a lot to answer for given the current state of the rail service, not only in north Wales but throughout the United Kingdom. For 18 years, they starved our railway system of the necessary investment. They knew that Labour would win the 1997 general election and embarked on one of the biggest, botched privatisations in history.

Rail users and British taxpayers are paying the price for those mistakes, and credit should be given to the Labour Government for a massive £180 billion investment in UK transport in the next 10 years. Some £30 billion of that has, I believe, been earmarked for rail transport improvements. As a constituency MP and a member of the north Wales group of Labour MPs, I see it as my job to ensure that north Wales gets its fair slice of the cake.

Does my hon. Friend acknowledge that, although a lot of money is available in the 10-year plan, none of it is for rail infrastructure? We have rolling stock capable of 120-plus mph, but on parts of the north Wales rail line it cannot exceed 75 mph. Investment in the infrastructure and line speeds should be the priority.

That was a pertinent intervention, and I shall deal with that question shortly. My hon. Friend is right that north Wales has not had its fair share thus far, if one considers the investments that have been made. The east coast main line is one of the best services in the UK. It has been upgraded, and there is even talk of establishing a second dedicated east coast main line from Edinburgh to London at a cost of £6 billion. I know of MPs who are pushing for that. The west coast main line investment is £9 billion. It is two years behind schedule, which is a disappointment.

With his customary eloquence and subtlety, the hon. Gentleman has ignored the six years since the end of the previous Conservative Government. Does he hold his Government at all responsible for the woeful state of the north Wales line, as well as others?

I thank the hon. Gentleman for that intervention. I hold my Government to account for their £180 billion investment in transport and their £30 billion investment in the rail network. I see my job as a north Wales constituency MP to ensure that my constituents get their fair share and to fight their corner. That is why I am here today, why I have questioned the Prime Minister on the Floor of the House, why we had the meeting with the Minister for Transport and why we campaign on the issue.

As my hon. Friend the Member for Ynys Môn (Albert Owen) said, we need investment in the infrastructure. Chris Green, the chief executive of Virgin Trains, told me that the new trains that will be in place by 2004 would travel at 90 mph from Holyhead to Crewe and at 125 mph after Crewe. That is a second-rate service for Wales, and I am not prepared to tolerate it. I shall fight for better.

I congratulate the hon. Gentleman on securing this important debate. My colleague and I also have meetings arranged with the Strategic Rail Authority, so this is not a party political matter. We are all working hard on behalf of the travelling public in Wales. The hon. Gentleman says that north Wales is at present hard done by financially, and that is quite possible—it is why we are all campaigning. On reflection, does he not think that he should have joined us in calling for a separate SRA for Wales?

No, I do not think that. We are fighting our corner well and pertinently in the House of Commons. It should be borne in mind that the vast majority of the London to Holyhead rail journey takes place in England. I am fighting for improvement not just across the north Wales stretch, but from Holyhead all the way to Euston. The co-operation of our colleagues in England will be required to achieve that. In fact, we have the support of English Members such as my hon. Friends the Members for City of Chester (Ms Russell) and for Crewe and Nantwich (Mrs. Dunwoody).

Bearing in mind the investment of £9 billion for the west coast main line and the £6 billion for a new east coast main line, I am informed—again, by Chris Green—that the cost of the upgrade of the north Wales section from Holyhead to Crewe will be some £10 million to £20 million. Compared with £6 billion or £9 billion, £20 million or even £30 million is a drop in the ocean. I shall repeat my points in my summary, but I ask the Minister to consider the request for a track upgrade on the north Wales rail line as a matter of priority.

I also wish to discuss investment in train stock. First North Western has made good progress in improving its stock. Six years ago, when I first became a Member of this House and a regular rail user along the north Wales coast, the rolling stock was absolutely filthy. There was no running water, the toilets did not flush and there was grease on the back of the seats. First North Western has allocated £100 million to new rolling stock such as the Coradia 175s. I welcome that investment.

There were massive teething problems at the beginning. The trains were very unreliable, but Vernon Baker, the managing director of First North Western, has told me that the problems have now been ironed out and that the company achieves 86 per cent. reliability compared with a national average of 80 per cent., although my hon. Friend the Member for City of Chester questions the figures.

My hon. Friend has mentioned my hon. Friend the Member for City of Chester (Ms Russell) several times in his remarks. Is he aware that, on one of her journeys on Virgin Trains, part of the seat on which she was sitting fell off? He may also be aware that some of us have asked the Secretary of State to travel with us on the London to Holyhead route, to sample the terrible rolling stock that we have to endure several times a week as we travel from our constituencies to Westminster. Will he pursue that request to the Secretary of State to join us on one of our journeys?

Don't hold your breath.

My hon. Friend the Member for Conwy (Mrs. Williams) makes an excellent suggestion. I shall take it up with the Secretary of State when I meet him.

There has been some improvement by First North Western, and I hope that it has put its teething troubles behind it. Virgin Trains has also promised to improve its stock. We have waited a long time for that—the original promise made by Virgin Trains was that seven more four-carriage trains would be introduced by 2004. However, when we met Virgin six months ago in a Committee Room in the House, we were told that that figure had been revised downward from seven trains per day to three or four per day. We were very disappointed at that. I spoke to Chris Green on Monday, and he assured me that five new trains—not three—will be introduced, including three nine-carriage Pendolinos, the state-of-the-art trains that are the best in the Virgin fleet. I am pleased about that, but I am still disappointed that we are two trains a day short. I hope that the Minister will put pressure on Virgin Trains and on the SRA to ensure that we get those seven trains—even if that is a long-term objective.

Is my hon. Friend aware that when a group of MPs visited Derby, where those trains are built, they discovered that Virgin Trains had not ordered enough trains to meet the demands that it had set out in its timetable? As the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) said, "Don't hold your breath." We will believe it when we see it, because Virgin Trains has broken far too many of its promises to us. We should hold the company to account and ensure that it keeps the promises that it made this week, so that passengers in north Wales receive better services.

On the issue of improved services, I shall make two specific requests on behalf of two stations in north Wales. One request is from my hon. Friend the Member for Delyn (Mr. Hanson), who is concerned that the promise made to him that the trains will stop once or twice a day at Flint will be fulfilled. Will the Minister ensure that Flint, which is probably the third or fourth biggest town in north Wales, becomes a regular stop on the trip down to Euston?

The second request relates to the town of Prestatyn, in my constituency. Its station is currently served once a day from the three trains that go down to London. I would like to see at least two or three stops made when the improved service is introduced in 2004. I would also like the Minister to ensure that there is no slippage in the time scale, and that the promised five trains are delivered on time or ahead of schedule, and that seven trains per day is maintained as a long-term goal.

I shall now focus on the current service that Virgin Trains offers from north Wales. That issue is of great concern to me, to my fellow MPs, and to my fellow passengers who use the service regularly. We have been left with the dross—the leftovers from the Virgin Trains stock. The chief executive admits that we have the worst trains on the Virgin network. Those cast-offs are not good enough for north Wales: there is no hot food available on the trains and, on some of them, the toilets, hot water, heating and air-conditioning systems do not work.

The timetabling of those trains, the delays and punctuality are also of great concern to me, my colleagues, my constituents, visitors to the area and especially to inward investors. I retell the tale of the trip made by the president of Tokai Rika Brothers, the first Japanese company inwardly to invest in my constituency, with that investment being its first inward investment in the whole of Europe. He flew over from Tokyo to London, came up to north Wales on the train and was stopped for two hours in a delay. A car had to go and fetch him and bring him to the ground-breaking turf-cutting ceremony in St. Asaph. That delay could have cost my constituency a multi-million pound investment. That is the effect of the current service that Virgin offers. I give credit to the chief executive Chris Green, who has been very responsive and co-operative in my dealings with him, but I make a plea to him and to the Minister to use their influence to ensure that we get the service to which we are entitled in north Wales.

I shall now focus on my third key issue—station improvements. The rail passenger users group made our group aware of a £400 million Government investment for station improvements in the UK. I believe that 10 applications have been made in Wales, nine of them outside north Wales. I have spoken to Chris Green on the matter, and he thinks that we have the worst stations in the whole network. They have not had the investment that they should have had.

Does not my hon. Friend find it extraordinary, as I do, that Wrexham, the premier town in north Wales, does not have a functioning passenger information service? Passengers using the station not only cannot see whether trains will be delayed, they cannot hear that from the station master. One is left in splendid isolation on the platform.

I have good news for my hon. Friend. Objections to the new customer information system to be installed by Wales and Borders Trains as part of Project Inform, which has been delayed because of the need to obtain listed building consent, have been resolved. Work should commence shortly. It pays to do a bit of research.

First North Western has made a £5 million fund allocation to improve stations in its area: the north of England, Cumbria and north Wales. Some £2.3 million has been spent so far, but only £250,000 has been spent on stations in north Wales over a six-year period. That concerns me. There is still £2.7 million in the pot, and I ask the Minister to ensure that that money is spent by the company—or by any company that takes over from First North Western—and that north Wales gets its fair share. As much as I like the Treasury and the Chancellor, I should not like to see that money go back to them when so much work needs to he done.

I could give some graphic accounts of the impact of lack of investment on stations in north Wales. I shall not name the towns concerned, for fear of embarrassment, but there are stations that, when one steps off the train and goes over the connecting bridges, smell of urine. There is one where urine drips down into offices below, and the staff have had to move out. There has been arson and vandalism, and there is a lack of CCTV and secure parking. Bearing in mind that the coastal towns concerned are some of the largest towns in north Wales —Flint, Colwyn Bay, Bangor, Rhyl and Prestatyn—they deserve better.

I pay tribute to the work of the British Transport police, based in Bangor in the constituency of my hon. Friend the Member for Conwy. They are doing sterling work in improving safety in north Wales. If we seriously want an integrated transport system, we must provide secure parking so that people in my valley, the Vale of Clwyd, can travel from as far as 25 miles away in Ruthin, down to Rhyl, and leave their car safely protected by CCTV and high fences, knowing that it will not be damaged or vandalised in the two or three days for which they are away. That is key. All stations should be equipped with CCTV. I know that several of the nine grants to which I referred earlier have been used for that, especially in towns in south-west Wales. We should demand the same.

Another concern is the lift facilities in my town, Rhyl. I can relate the story of a young paraplegic woman in a wheelchair who stopped in Rhyl at 11 o'clock at night. The lift was not working, so she had to go 20 miles down the track to Llandudno and get on the train there to come 20 miles back. That is disgraceful. The lifts should be working and staff should be there, especially to facilitate disabled people alighting at their stops.

In summary, I ask my hon. Friend the Minister to take up the issues that I have mentioned in the debate and perhaps get back in writing to me, the north Wales group of Labour MPs and the Opposition Members who have attended.

I congratulate my hon. Friend the Member for Vale of Clwyd (Chris Ruane) on securing this debate. It is an important subject, which goes beyond passenger services to matters such as inward investment and the crucial link to the western extremity of the European Union—the Republic of Ireland. I congratulate my hon. Friend and the north Wales group of Labour Members on their work. I fear that 10 minutes is not enough time to respond to such an expansive contribution, but I am more than happy to meet that group to pursue each of those matters in much more detail than I can possibly do here. Moreover, many other members of the group could not be here today and I know that the issue is as important for them as for anyone else.

My hon. Friend will know that the Strategic Rail Authority published its final west coast main line strategy this week. It is an important document in terms of quality of service. The strategy includes an enhancement of services to Holyhead, reduced journey times and the use of Voyager and Pendolino trains on the route.

Will the Minister give way?

I will briefly, but I have only 10 minutes.

I appreciate that. When my hon. Friend talks about reducing journey times, will he take up the point that I made in an intervention that line speeds, particularly across Anglesey, remain at 75 mph? Journey times need to be reduced across the coast.

As I said, enhancement and improvement are at the core of the west coast main line strategy. There is a strong case for electrification or significant investment in the entire line north of Crewe, but that is a matter for another day and another strategy. I would be happy to discuss that when I meet the group.

Now that the strategy is out for consultation, the SRA has turned its attention to the allocation of capacity on the line. It has recognised that demand would outstrip availability and is keen to ensure a solution that meets the needs of all the different users of the route so far as possible. I obviously do not need to exhort the north Wales group to ensure that it contributes fully to the consultation.

In producing the draft strategy, the SRA sought input from the entire railway industry. It was important that everyone had their say. The draft strategy envisaged providing capacity for a two-hourly service between Holyhead and London from 2004, equivalent to seven services per day. That was always intended as an initial scenario to be developed, not as a commitment of what was to be delivered. It is also wrong to make the simple assumption that more trains equal a better service.

As the SRA worked on the strategy in greater detail, it became apparent that a service of seven trains a day would be problematic to deliver. The turnaround time of trains—that is, the length of time a train spends at the terminal before embarking on the return journey—would be extremely tight, leaving minimal time for cleaning and maintenance. Clearly, my hon. Friends do not want the totem of seven journeys, but in filthy trains that are badly maintained.

Furthermore, due to the availability of rolling stock, those trains would be made up of four carriages only. That may be sufficient in off-peak hours, but it would not provide adequate capacity in the peak periods. It would mean short trains using the network at peak periods, wasting overall capacity on the route to the detriment of other services.

The SRA took all those issues on board in determining the final strategy. As my hon. Friend the member for Vale of Clwyd pointed out, the strategy for Holyhead is to provide five services daily, compared with the three provided at present, with adequate capacity and timetabling to match demand, for example, by connecting with ferry services to Ireland and providing nine-car trains at the busiest periods. Some of those services will be provided by the Pendolino trains hauled by diesel locomotives from Crewe over track that is not electrified. Others will be worked by the Voyager trains, as was originally envisaged.

The new trains will provide a more comfortable and faster journey with more modern onboard facilities than the rolling stock currently in use. If they do not, I am sure that my hon. Friends will let me know as quickly as possible. All those changes are due to be made in the winter 2004 timetable. That is subject to, as I understand it, the timetabling planning process within the industry. I hope that those changes can be implemented as planned by the winter and I will be happy to discuss that in more detail with my hon. Friends when we meet.

Will my hon. Friend give way?

I shall not give way because I have only five minutes.

Under the revised strategy, overall capacity to north Wales will be greater than would have been delivered through the original seven-train plan because the facility of longer trains will be used more effectively at times when it is needed: during peak hours. The length of journey for the service is also planned to be reduced, from around four-and-half hours at present—no tittering, please—to three hours, fifty minutes. The Strategic Rail Authority has stated that that mix of train type and service will offer the best balance between adequate capacity and frequency, and requires only two Voyager trains to be released from the busy cross-country network, instead of four as originally planned, compensated by the commitment to use Pendolino trains on the route.

Another key aim of the strategy, to which my hon. Friend the Member for Vale of Clwyd alluded, is to improve performance on the line. The target is that, from 2008, 90 per cent. of long-distance trains should arrive at their destination within 10 minutes of the scheduled time. The target applies from 2008 because prior to that there will still be renewal and enhancement work on the route. However, interim targets have also been set and 87 per cent. of services should arrive on time from 2004, 88 per cent. from 2006, and 89 per cent. from 2007. Improvements to the punctuality and reliability of local services will also be delivered.

The improved performance will be possible because of the increased capacity on the line, the more reliable infrastructure and trains, and the more resilient timetable pattern. Safety on the line will also be improved through the application of train protection and warning systems, which will reduce the possibility of trains passing signals at danger. New line-side fencing and the removal of level crossings will reduce accidents involving trespassers, pedestrians and road users.

I assure my hon. Friend that I shall pursue the points that he and others have made about stations such as Flint, Holyhead and, if there are outstanding matters, Wrexham, although I am sure that everyone welcomes the good news that he announced about information for local passengers. I accept his wider point about CCTV, proper car parking and other facilities to make the entire journey a fulfilling and comprehensive experience for users of the line.

I understand that Isle of Anglesey county council and Stena Line have set up a Holyhead transport interchange group to consider how better provision can be achieved. The SRA attended the first meeting in April and advised the group that, although its rail passenger partnership fund is suspended, it hopes to relaunch it and that it could provide funds if the suggested works were affordable and represented value for money. I trust that the SRA will maintain a close dialogue with the group and continue to offer advice. That is another matter that we can examine in detail when I meet my hon. Friends.

All in all, rail travel on the west coast main line will eventually be transformed. Now that the strategy has been determined, the focus is on implementation of the plan. Much of the engineering work is already in hand or due to start shortly and is on time and to schedule. Key benefits will be delivered from 2004, and by 2006 almost all the renewal and enhancement work will have been completed.

A dedicated communications steering group has been established, including the SRA, Network Rail, and the train and freight operating companies. They will work together as one body to ensure that passengers are aware of future engineering works and so that information is available about alternative services.

I thank my hon. Friend and his colleagues again for raising this important matter. Now that the improvements to the west coast main line are finally coming on stream, we must ensure that each and every aspect of the travel experience is what everyone in north Wales and those who travel between London and Holyhead deserve. I greatly appreciate the chance to discuss those matters today and look forward to meeting my hon. Friend and his colleagues. I hope that on that occasion my hon. Friend will arrive on time and not out of breath. I am sure that he is as grateful as I am to my hon. Friend the Member for Wrexham (Ian Lucas) for allowing him to draw breath before starting his heroic contribution to this important debate.

I am very pleased to have secured this debate on an issue that is of vital concern to millions of public sector workers in Wales and Scotland and throughout the United Kingdom. The Government have made a few fairly oblique references to the idea of regional pay since it was initially floated during last year's comprehensive spending review. The Chancellor gave a vacillating performance when he was grilled recently by the Treasury Committee. I hope that today's debate will be an opportunity for the Economic Secretary to clarify the Government's intentions with regard to regional pay.

Confusion is the hallmark of Government policy and actions at the moment. We have been told by a former Minister at the Department of Trade and Industry that it is not a question of regional pay, but of localised settlements and city-specific weightings. However, the inflation indices that the Government are to produce will be composed on a regional basis, which would seem to suggest otherwise. The Chancellor said in his Budget statement that he would introduce measures to ensure that public service pay systems were more responsive to regional labour market conditions.

From the outset, I must say that the policy is ill conceived, short-sighted and based on false premises, and will have some fairly far-reaching negative consequences if implemented. Those Labour Members who are not here may be forgiven for feeling bewildered as to why the Chancellor wants to go down such a road. After all, it was his predecessor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), who talked about the end of the going rate for a job, and national pay bargaining, a policy that was roundly condemned by Labour in opposition.

Last Monday, in the Chancellor's statement on the euro, we were told that as part of the Government's approach to euro entry the UK economy needed to be made more flexible, and that one of the ways of achieving that was to introduce regional pay differentials in the public sector.

Does the hon. Gentleman share my concern, which perhaps goes beyond the immediate issue of regional pay? Buried amidst the 1,700 pages that the Treasury released last Monday was a policy prescription for people in what it called "contracting regions" to either move away or accept lower pay. Will those policies not result in a disaster for areas like Scotland and Wales? In Scotland there is a projected decline of 500,000 people over the next 40 years. Will such a policy not exacerbate that situation?

The hon. Gentleman makes a valid point. The issue is wider than that of regional pay in the public sector. It also relates to the Government's embrace of neo-liberal attitudes to labour mobility. I will come to that in one second.

The Treasury's paper on economic and monetary union and labour market flexibility refers to the role of regional pay differentials as an element of labour market flexibility, but it is not the only element. Geographical mobility is a factor, but so are employment flexibility and functional flexibility which is the ability of the labour force to acquire and apply different skills. Chart 2.4 of the Treasury's paper on labour market flexibility shows that the UK already has a high level of real-wage flexibility—significantly higher than that of Germany, Italy, France or Spain.

The imposition of regional pay differentials in the public sector simply is not required, and is certainly not a priority if the goal is to increase labour market flexibility. That was reiterated by Michael Porter in the recent DTI report on United Kingdom competitiveness, which stated that labour mobility and wage flexibility in the UK are effective. I suggest to the Economic Secretary that if the Government want to increase labour market flexibility they should focus on improving functional flexibility with heavier investment in education, training and lifelong learning.

The hon. Gentleman referred to the interesting paper by Professor Porter on competitiveness. However, that paper reflected differentials not so much in the public sector as in the private sector, where there are greater pay differentials. If I am lucky enough to catch your eye, Mr. Benton, I shall give a different perspective, from the viewpoint of London and the south-east. There is a great distinction between markets in the public and private sectors.

I accept the hon. Gentleman's point. Professor Porter pointed to the failings of regional economic policy in the UK and stated:

"In the US there is a convergence of prosperity across regions. In the UK there is divergence. The rich are getting richer and the poor are getting poorer."

The key point is that according to the Treasury's paper on wage flexibility in the UK, there is no problem. That is a false premise and is not the only piece of sloppy thinking behind the Government's regional pay proposals. Incomes Data Services said—

What does the hon. Gentleman think about London weighting?

London weighting is a long-established convention in public pay setting and goes back many decades. It differs from job to job and the proportion of salary depends on the age and seniority of individuals. It is not that dissimilar to the weighting systems used in other administrative capitals in Europe. The Government are suggesting an expansion to a regional weighting system and a significant increase in the level of enhancement. I shall return to that shortly.

Another false premise behind the Government's policy is the assumption that pay in the private sector is set by local decision making driven by market conditions. Most large companies have UK-wide pay structures with allowances for high living costs in some areas. Barclays bank has central London weighting, but a cashier in Cumbria receives the same pay as a cashier in Kent. The Government are keen to adopt private sector practices, so why do they not adopt the principle of pay parity? It is not true to maintain, as the Treasury attempts to, that the public sector is monolithic in its approach to pay determination. We probably have one of the most fragmented public sector pay structures in Europe apart from Sweden. There is a great deal of flexibility in the public sector, not just with London weighting, to deal with difficulties associated with the high cost of living in different areas. What there is not is an appetite to return to the failed policies of local level pay setting—for example, as in national health service trusts under the previous Government and grant-maintained schools. The NHS in Wales and Scotland is still obliged to cope with the problems created by mistrust and poor morale through equal pay disputes because some workers are contracted to the local trust and others work for the NHS centrally. We need only look at the chaos created by 36 different rates of pay for drivers throughout the railway industry to see the negative effects of local pay setting.

It is no wonder that the main civil service union, the Public and Commercial Services Union, is trying to recreate a national pay framework because of the anomalies that have resulted from bargaining on a departmental basis. We see similar trends elsewhere. For example, the university sector has brought together 10 different bargaining groups into one integrated pay structure. As for further education in England, a new national forum on pay modernisation has been agreed as a way forward, after years of chaos because of the local pay arrangements.

It is not only the DTI that is opposed to the regional pay proposals, but the trade unions. Unison, the Association of Teachers and Lecturers, the National Association of Schoolmasters Union of Women Teachers and the Communication Workers Union have all voiced their opposition to the plans. Recently, Angharad Davies of the Royal College of Nursing in Wales said:

"We already experienced local pay under the Tories when nurses pay went down. We are therefore totally against regional pay. It would not be an advantage to the people of Wales. It would only serve to be an advantage to people in London."

I should point out in the interests of clarity that Angharad is, to the best of my knowledge, an active and prominent member of the Labour party.

The National Health Service Confederation is against regional pay, as is the local government employers' organisation. Moreover, on local pay differentiation for teachers, which the Treasury is pushing for adoption as early as next year, the Department for Education and Skills told the School Teachers Review Body that

"national pay scales have value in promoting the profession to potential entrants. How would the advantages of a local element to pay be set against the loss of clarity in every school having slightly different rates of pay. How could (it be ensured that) variations occur for genuine reasons and do not simply drive wage inflation because of poaching and bidding wars between schools?"

I come now to another false premise.

We shall work on the first rather than any subsequent false premise if we may at this juncture. Why does the hon. Gentleman believe that it is the trade unions that are so vehemently against the proposal? Does he not believe, as I do, that it would undermine the power of trade unions at a national level to have local pay bargaining that took account of local factors?

As I said, the NHS Confederation and the employers' organisation have voiced their concern about moves towards regional pay setting, too. For example, Sweden is the only major European country that has gone down the route of decentralised pay setting at local level. There is a large increase in wage inequality in the public sector in different parts of the country. That is a legitimate worry for employee representatives, but I listened with interest to what the hon. Gentleman said.

Is there not a dichotomy at the heart of what the Chancellor is proposing? He introduced the concept of regional pay on the basis of regional indices and said that there would still be national pay bargaining, but that the actual amount paid would be based on regional indices. That is different from what the hon. Member for Cities of London and Westminster (Mr. Field) is proposing in respect of local pay bargaining.

It is fair to say that regional pay is much cloaked in confusion, which is why we are all so keen to hear what the Economic Secretary has to say. The Treasury's own figures show that in some cases, intra-regional differences are as great in terms of wages as are inter-regional differences. It is difficult to see how regional indices in respect of cost of living data will help to address the more localised problems.

I refer to another problem with the Treasury's position. Recruitment and retention difficulties and the lack of affordable housing are not confined to London and the south-east of England. According to the Government's commissioned study from the university of Newcastle, there are no significant regional differences, for example, in the degree of job satisfaction reported by graduates working in the public sector. That does not confirm the hypothesis of a south-east-specific problem.

According to another piece of recent research by the Joseph Rowntree Foundation, in a league table of the least affordable areas of England for housing, 15 were located in the south-west, just four in the south-east and three in the eastern region. The research showed that there are no fewer than 33 local authority districts in England in which a small home costs over five times the average annual income of a local working household with earners in their 20s or 30s. That confirms evidence from the Council of Mortgage Lenders that young first-time buyers are currently having more difficulties buying property in the south-west of England than in the south-east.

The situation in respect of vacancies in the public sector, which is another key element of the Treasury's argument, is much more mixed than the Government's rationale for regional pay would suggest. Their figures show that the highest level of vacancies for key public sector workers in London is not, as the hypothesis would lead one to expect, in the areas of highest cost, but in those of lowest cost—the most deprived areas. That suggests that the drivers are not merely finance-related.

On a point of information, the reality is that London is made up of a series of villages—relatively small areas, a short distance apart. People commute to places such as my constituency—a relatively wealthy authority by any standards—often from outside Greater London. Therefore it is fair to say that the hot spots of unemployment in places such as Newham and Hackney will attract few staff, but people who live five or six miles away will be happy to commute 10 or 15 miles beyond that side into other parts of London. It is for that reason, above all, that some of the poorest areas in London are most denuded of public sector staff.

I am grateful to the hon. Gentleman for his elucidation of London's geography, which I am still grappling with, two years after moving here to live during the week.

The hon. Gentleman makes a fair point, as there is a complex relationship between vacancy rates that are measured locally and travel-to-work areas, which are much more loosely defined. It is fair to say that there is a concentration of vacancy problems in the deprived areas of London, which mirrors the data that we have on vacancy rates, for example, for hospital doctors, radiographers, pharmacists, dentists and, in some areas, GPs. For some categories, such as hospital doctors, radiographers and pharmacists, the vacancy rate in London is well below the United Kingdom average. The rate is very high in places such as Wales and the north of England. It is probably the deprivation and the disamenity of living in those areas that is the problem for some of those key workers, rather than affordability.

The Government's cross-cutting review of the public sector labour market concluded:

"While cost may be a factor in explaining some vacancies in the public sector there is a complex web of other factors, including the unattractiveness of working in deprived areas. Put another way, if there were a direct relationship between cost and pay, in high cost areas one might expect the highest vacancy rates to be among the lowest paid occupations, but that is not the NHS experience."

We could argue, therefore, that if the Government were considering enhancements to public sector pay, perhaps they should start by concentrating on pay premiums for those working in deprived areas, whether they be in London—where there are pockets of deprivation—or in south Wales, the north-east or the central belt in Scotland. That approach is used for the regional pay premium, where not only the cost of living but the amount of amenity or disamenity of living in a particular area is calculated.

There is a more generalised problem of vacancies in the public sector, which is related to the fact that over many years there has been erosion of pay in the public sector in relation to that in the private sector. According to an Organisation for Economic Co-operation and Development study carried out in the year 2000, the United Kingdom had the worst ratio of gross average earnings in the public sector to gross average earnings in the private sector of any of the countries studied, apart from Hungary.

To be fair, the Government have of late closed the gap to some extent, by means of higher baseline settlements and a rash of recruitment and retention allowances. However, as the hon. Gentleman pointed out, in London the wage gap between the public and private sectors has deepened substantially over many years. In the rest of the UK, private sector pay has not taken off to the same degree. That in large part reflects the realities of the north-south divide that the Government denied until recently.

Unfortunately, that policy on regional pay is precisely the wrong response to the problem of the north-south divide. It attempts to manage the problem, instead of dealing with its underlying cause. The problem is not that people in the public sector in Wales, the north of England or Scotland have paid too much, relatively, to public sector workers in London; it is that the public sector in those areas is paying too little compared with the private sector in the south-east. That merely demonstrates that the Government have not done enough to correct the wider imbalance between the south-east and the rest of the UK.

I strongly suggest that the solution to overcrowding, congestion, transport problems and high-cost issues in delivering health, education and policing in south-east England will not be solved by pay differentials in the public sector, because the problem and solution lie not in the labour market but in the housing market. The failure to regulate and develop the private rented sector, the collapse of social housing and the phasing out of employer-provided property in the NHS, the police force and the Prison Service have all had a negative effect.

The Government's starter home initiative, which provides £250 million, focused principally in the south-east, to help public sector workers deal with spiralling housing costs, is beginning to have some effect, according to the London Housing Federation. That initiative, and others backed by the Mayor of London, is beginning to improve the provision of affordable housing in the south-east of England. It is through such policies that we shall address that issue.

The problem with the policy on regional pay, from my perspective, is that it will be a serious blow to those who use and work in the public services in the rest of the country. In last year's spending review, the Government pointed at pay differentials of 50 per cent. in the private sector between different parts of the country, the implication being that those differentials should simply be replicated in the public sector. That was reinforced by the Chancellor recently, when he sent members of the Treasury Committee a copy of a polemic by Professor Andrew Oswald of Warwick university, simply and directly entitled, "London's Public Sector Workers need to be paid 50 per cent. more than those in the North".

I am not sure whether the Chancellor was simply being provocative. Perhaps the Economic Secretary could answer this simple question: is it the Government's policy that, in the long term, public sector workers in inner London will be paid 50 per cent. more than their counterparts in Wales or the north of England? It should be pointed out that the figure of 50 per cent. is at the extreme end of the spectrum, and compares the north-east and Wales with London.

The answer is no.

Well, I am sure that public sector workers will breathe a huge sigh of relief for now, but one wonders why the Chancellor spoke so approvingly of Professor Oswald's paper. It would be useful to quote a little more widely from it. The Professor went on to say—both in that paper and others:

"More public cash has to be allocated to areas that are in driving distance from Big Ben"

and

"National pay scales have to go. Forced on Britain long ago by trade unions and bureaucrats, and today held in place…by political pressure from the North and Wales, they are doing real damage to our nation."

That is what Professor Oswald, who has an imprimatur from the Chancellor, had to say. Severe damage would be done to the nation that I represent if we were to follow his suggestion.

Headline pay is obviously a powerful attraction, and there would be a natural tendency for the able and ambitious to move to where the highest salaries were paid if such a policy were introduced. There would be an inevitable drift of people to where those better-paid jobs were. That would put public services in places such as Wales, Scotland and the north of England under greater pressure than they are today.

There is another element: the effect on local and regional economies in the most disadvantaged parts of the UK. UK-wide levels of pay act as an economic stabiliser between the nations and regions of the UK. They redistribute wealth between more and less prosperous areas, and in the absence of effective regional policy that is an important factor in reducing the differentials in prosperity throughout the UK. We live in a country that has, by the Government's admission, the highest level of regional disparity of any EU state. If we moved to regional rates of pay in the public sector, the Government would remove one of the stabilisers that reduces regional differences. The Treasury cannot say that we need stronger regional economies, and then weaken the spending power of the biggest employers in those nations and regions.

Let us not forget that public sector employers are an important benchmark in their local economies for determining local pay in the private sector. Places such as Wales, the north-east and Northern Ireland, which will be most affected by this proposal for regional pay, are already languishing at the bottom of the UK wages league table. Perversely and bizarrely, if we adopted regional pay rates with a uniform tax rate across the UK, people from poorer parts of the country would subsidise public sector pay scales in wealthier regions. That would be completely unacceptable.

One is supposed to assume that the driving force behind this bizarre policy is an attempt to keep a lid on galloping wage inflation in the public sector. Clearly, the Government are worried about groups aping the firefighters and playing catch-up. One way the Treasury appears to think that it can insulate itself from that is to limit substantial real-terms increases to the most affluent regions. The Treasury's position is that it wants national pay awards to be more modest, to make possible what it sees as a more targeted approach to pay in hot spots where there are real recruitment and retention difficulties. However, the Government are clearly seeking to hold down pay demands from workers in the west and the north by claiming that the cost of living is cheaper. As Kevin Rowan, regional secretary of the northern TUC, said:

"This is a green light to employers to negotiate lower salaries in the North than in the South."

Who will be the hardest hit? It will be the lowest paid in the lowest paid regions; in particular it will be women, who have relied on centralised pay bargaining in the public sector to reduce the gender pay gap in recent years.

In the 1980s, Reagan tried to drive down public sector pay when he introduced a policy of locality-based pay bargaining for the public sector, which was based on comparability with the private sector. Now, a Labour Government in the United Kingdom are adopting the same Reaganomics. From Cornwall to Cardiff and Cowdenbeath, regional pay will mean that employers will pay less and local economies will suffer. It will mean a deterioration in the quality of local services as key workers leave to higher paying areas. That is an inappropriate response to the problems of the south-east of England, which are much more fundamental than the policy suggests. One can only assume that we are looking at merely a whimsy on the Chancellor's part—or perhaps it was a crafty little spanner that he wanted to throw in the works in relation to the UK's entry into the euro. I hope that the Economic Secretary can confirm that the Government have no intention of going down the absurd route of regional pay scales in the public sector.

I congratulate the hon. Member for East Carmarthen and Dinefwr (Adam Price) on introducing this wonderful, interesting and timely debate. It is certainly a live issue in London, as it is in the regions, which is evidenced by the fact that about 50 per cent. of the Welsh nationalists and 20 per cent. of the Scottish nationalists are in the Chamber today.

I want to touch on a number of the issues that have been raised by the hon. Gentleman, and I should be interested to get some clarification from the Economic Secretary as to the thinking of the Chancellor of the Exchequer on these matters, because the statement a couple of weeks ago did not make it clear precisely what was intended, and I suspect that quite a lot of water will have to flow under the bridge before we fully appreciate what regional pay bargaining may mean in the months and years ahead.

The hon. Member for East Carmarthen and Dinefwr made a lively speech. Last year, we went to America and saw how regional and federal government worked there. That was an eye-opener for me—and, I think, for the hon. Gentleman. There is a suggestion that we might take one step forward and try some kind of federalisation as far as the funding is concerned. This debate goes beyond the narrow aspects of pay differentials within different regions to the regional government that is being put in place by the current Labour Administration. We already have a Scottish Parliament, a Welsh Assembly and a level of devolution—although a narrow level—in London, and if we had regional government across the whole of England this sort of debate would be had almost daily.

I hope that you, Mr. Benton, and the hon. Member for East Carmarthen and Dinefwr will forgive me if I focus most of my comments on central London, because there are some distinct London factors. I was amused to hear the hon. Gentleman's suggestion that a change in the current regime would amount to a cross-subsidy from the poorer areas to the richer areas. I think that the hon. Member for Finchley and Golders Green (Dr. Vis) will agree that London Members feel that there is already a lot of cross-subsidy, but that it goes in the wrong direction: London contributes £20 billion a year to the regions as a whole, but it has an increasingly beleaguered public sector, and housing and many other things are unaffordable.

One need only look at a map of the United Kingdom, and at the far-flung rural constituencies that are in Wales and Scotland, to understand my next point. The whole of greater London—which has 74 constituencies—could probably fit within East Carmarthen and Dinefwr. For that reason, it is a much more localised market. Travelling is an everyday part of life for people who live and work in Greater London, but many who live in the poorer boroughs will work only five or six miles away, in much wealthier areas.

I turn to my own perspective. I suspect that the poor Economic Secretary will find himself beleaguered on all fronts. I am also critical of the Government although, I suspect, from the opposite side of the political divide from the hon. Member for East Carmarthen and Dinefwr. It seems to me that, in essence, there is an unholy alliance between a Government who are dominated by Scottish and northern English Members of Parliament and their trade union friends, which has resulted in a rapid diminution in the quality of life of many Londoners, who find that their hospitals, schools, police and other public services are increasingly denuded of staff because it is impossible for them to live in or even near central London.

The current system of national pay bargaining may suit the Labour party and its friends in the trade unions but it is something of a disaster for many of London's workers and residents, whom I represent. There is a very inadequate system of London weighting. Often, that amounts to as little as £3,000 a year, which utterly fails to take account of the big differences in the quality of life and cost of living between London and other cities. On graduating, a junior teacher will earn £2,000 or £3,000 more for working in a central London school—and therefore being expected to live in Greater London, or perhaps just outside it in the home counties—than a teacher in Sunderland or Liverpool. That takes no realistic account of the substantial differentials in the cost of living between those areas.

I was very interested to hear what seemed to many of my constituents to be warm words from the Chancellor on the differentials and the cost of living. My main concern was to know where and, more important, when the baseline would be drawn. As the hon. Member for East Carmarthen and Dinefwr said, there is a specific problem for London. Although I accept that the world does not start and end in London, as a representative of this constituency it might be understandable if I took a contrary view.

There is a problem that is specific to London that should not necessarily be thought of as extending into the south-east. Over the past 10 or 15 years the differentials to which the hon. Gentleman referred have, without a doubt, become ever greater between both private and public sector workers in the capital. Moreover, the problem of the cost of living faces both public and private sector workers.

Would the hon. Gentleman extend London weighting to pensions?

I am sure that if I attempted to go down that track you would rule me entirely out of order, Mr. Benton. Nevertheless, the hon. Member for Finchley and Golders Green has allowed me a few more seconds of thin king time. I am sure that we shall discuss that matter in the months and years ahead.

It strikes me that pay scales alone need to mirror to an extent the private sector, in which wages take account of regional variations in the cost of living and the quality of life—that is an integral part of living in London.

There are always unholy political alliances on this matter. I have some sympathy, on this narrow point alone, with the Mayor of London. Those are not words that I will utter too frequently. There is a sense that the Chancellor should be paying up. We have seen this year the gerrymandering of the funding formula for local government. Westminster city council is not a typical local authority; for example, its uniform business rate raises some £850 million a year—almost £1 billion—and yet only £72 million is returned to it from central Government. I appreciate that that is a slightly unfair comparison, because it is by no means typical, but many London authorities feel that they are paying an enormous amount of money into central coffers and seeing little in return.

Would the hon. Gentleman not accept that many of the problems that he mentioned surrounding public sector workers in London could be addressed through a more generous pay settlement overall? I know that he loves America very much. In that country public sector workers throughout the land get a premium of 15 per cent., on average, over private sector workers. Would not such an approach deal with the problem in London and the south-west, and in other areas?

I confess that I spent the first 18 years of my working life in the private sector, running my own business. Of course, having joined the public sector in the past two years, my perspective is somewhat different from the one that I might have had in the previous decade and a half. My instinct is that we need to give some sensible thought to how the public sector is rewarded. Some fundamental regional differences must be taken into account.

I am sure that the hon. Gentleman would agree, given his perspective on the lack of powers of the Welsh Assembly, that the fundamental issue is that the UK is a highly centralised country, not least in terms of financing. We were all well aware of things before the secret notes of that famous Granita restaurant meeting some nine or 10 years ago came to light. It is quite clear that centralisation has become ever more prevalent. I accept that such criticism could equally be planted against my own party, whose 18-year Administration came to an end in 1997. Ultimately, the real issue is the enormous power in the hands of the Chancellor of the Exchequer as far as the finance is concerned. We can debate the projects that are close to our hearts—be they infrastructure projects in Wales or London—until the cows come home, but it will make relatively little difference until a proper finance-raising power is in the hands of locally elected politicians.

I want to consider affordable housing, which the hon. Member for East Carmarthen and Dinefwr touched on, in more detail. Affordable housing has been a major issue in London over the past few years. Affordable housing schemes are insufficient. Indeed, by giving the impression of action on the differentials between the public and private sectors, and the differentials within the UK, they can be counter-productive.

The Mayor of London betrayed his almost total ignorance of economics with his plan to insist that 50 per cent. of all new development be affordable housing. The London economy has begun to slow down ahead of the game compared with many other parts of the UK, and developers are simply sitting on their hands. In the past year or two, there has been evidence that large scale development projects have gone on hold and that developers are taking the view that they will wait until the economy starts to pick up rather than run the risk of having to build 50 per cent. affordable housing on any land that they want to develop.

In my constituency, it is clear that the costs of even the most modest housing, such as former local authority housing, are astronomical. Even private sector workers in the City of London are unable to get a foothold on the property ladder and many of them must move into the suburbs or even beyond. London house prices are nothing new, and it is fair to say that any booming city requires a booming property market. When the property market begins to fall it is a clear indication that an economic downturn is on the way.

When it comes to affordable housing, key workers must include many of those in the private sector because the divide is not only between the private and public sectors. Shopkeepers and caretakers are part and parcel of the glue of a local community. Anyone who represents an urban constituency will realise that we must maintain those community values. Above all, key workers need a free market, which means comparable pay rates for London public sector workers.

I support the hon. Gentleman in securing the debate. He will appreciate from my comments that we agree on less than we might, but the issue is none the less important and will vex us during much of our political lives. I look forward to hearing the Economic Secretary give us an indication of the Chancellor's thinking. I can appreciate why the notion of local pay bargaining has caused such concern, but we must have some more meat on the bones to determine precisely how the policy will operate. From a London perspective, I should be interested to know whether regional pay would be backdated to ensure a baseline, which would mean a significant cash injection for those London public sector workers who currently find themselves in such difficult straits.

I congratulate the hon. Member for East Carmarthen and Dinefwr (Adam Price) on bringing forward this important debate.

The question of regional pay was first mooted by the Chancellor in the pre-Budget report. At that time, the policy went down like a lead balloon. It is curious that the issue resurfaced last Monday in the debate on the euro. Perhaps the Chancellor has introduced a poison pill into the euro debate, because regional pay will be a huge issue in Scotland, Wales and north-east England. Arguing for slashing public sector pay in Scotland, Wales and the regions will sabotage much of the euro debate. The slogan, "Vote for the euro and get lower pay" will not go down well in many areas. The issue is serious because it will affect almost 7 million public sector workers throughout the UK, 653,000 of whom live in Scotland. Although we have heard much about London, it is worth remembering that the Office for National Statistics labour force survey found that in the UK as a whole, 23 per cent. of workers are public sector workers. In London, the figure is 21.6 per cent., but in Wales, Scotland, Northern Ireland and the north of England it is much higher. Regional pay for public sector workers will hit those areas most seriously. Those economies rely much more on public sector workers than do the economies of London and the south-east.

The hon. Member for Cities of London and Westminster (Mr. Field) introduced the question of pay in the private sector. The Government are fond of saying that unemployment has gone down in all regions. To an extent that is true, but it does not show that pay in many regions is much lower than in others. For example, in my area, Angus, unemployment has gone down but we are struggling with a low-wage economy. We are not seeing growth in the economy because the money is not there. Public sector workers in Angus, other parts of Scotland and many other areas are important because the fact that their pay is national means that they can inject a great deal of money into local economies that would not otherwise be there. This is a huge issue in Scotland, and I am surprised to see that not one Scottish Labour Member is present to debate it.

As I mentioned in an intervention, the issue goes much further than pay. Close examination of the Treasury's 1,700 published pages shows that it is part of an even more insidious policy prescription for the economies of Scotland, Wales and the regions. Buried in one of Monday's 18 publications is a proposal that if the economy is performing poorly in one region, the answer is for people to move to another region. That has extremely serious implications for Scotland. It is projected that there will be a decline in the population of 500,000 people during the next 40 years. From the highland clearances, we are now coming to the lowland clearances. That is serious for the continuation of the economy and for the whole nation of Scotland.

That policy prescription goes far beyond Norman Tebbit's "Get on your bike" prescription and threatens yet more people. It is worth noting the exact terms of what is said in the EU labour market flexibility document:

"Adjustment in the labour market primarily consists of ensuring a smooth transfer of labour out of contracting regions, industries or sectors and into expanding ones. If the unemployment rate in one market segment is high then there are two key mechanisms through which adjustment can take place: either relative wages across these segments can adjust or labour can move."

That is, wages can decrease in areas such as Scotland or the people can move to the overheated economy of south-east England.

I have to say to the hon. Member for Cities of London and Westminster that in that scenario, the housing market in London and elsewhere would be even worse. One reason for that housing market is that people in the past have gravitated towards areas such as London where there has been employment, from areas such as Scotland, Wales and northern England, where there has been large-scale unemployment. That has contributed to the problem. If we reach a situation in which higher wages are paid in London, that may exacerbate the problem. In any expanding economy where there is more money coming in through wages, house price inflation is inevitable.

The Minister really must consider that. As I pointed out in an intervention, we are not talking about local pay bargaining. When questioned on regional pay in debate, the Chancellor said:

"I referred to the maintenance of the national bargaining framework, not to its abolition, but I said that, within the national bargaining framework, we now have to recognise, for example, conditions in London and the south-east, where, because of high inflation or high house prices, the cost of living for workers must be recognised in the wage bargaining formulae that are agreed."—[Official Report, 9 June 2003; Vol. 406, c. 429.]

That seems to mean that we will still have national pay bargaining. For example, the firemen may have bargained for 7 per cent. in the first year, but their pay will be based on regional indices. As a result, it will be worth more in London than in Scotland. We will have a differential in the actual pay, if not in pay bargaining. That seems to go against what the hon. Gentleman was saying. It would have serious implications, and it certainly will not help the economy of Scotland.

It may interest the hon. Gentleman to know that that very point was made in the submission made by the Department for Education and Skills to the School Teachers Review Body. It said that far from introducing local flexibility, local or regional pay could create a more rigid system as it would be based on regional cost-of-living indices and other data.

That is true, but the issue goes further than that. The suggestion is that regional pay will somehow help recruitment in London. I am sorry to keep referring to the comments of the hon. Member for Cities of London and Westminster—they were of great interest—about the NHS being denuded of staff, but it does not happen only in London. Scotland's health service has serious problems because of a shortage of nurses. During the Scottish elections, which took place in May, the question was raised of whether nurses in Scotland should be paid more so that we were sure of there always being enough. However, if we have regional pay, nurses in Scotland—or policemen and firefighters—will be paid less than those in the booming areas like London, and that will exacerbate the problem.

Even if we have regional indices, the way in which they are drawn will be important. Regions have hot spots, so how can we decide where a boundary should run? I have to say that the hon. Member for East Carmarthen and Dinefwr went much further north than Cowdenbeath. There will be serious problems. For instance, Edinburgh will be a hot spot because of the establishment of the Scottish Parliament, which has resulted in a booming economy, particularly in the housing market.

Although unemployment in Scotland has fallen, we are struggling with a low-wage economy. Under the present Chancellor, the Scottish economy has grown at half the rate of the UK as a whole, which is the worst record since the early days of the unlamented Thatcher Government. According to the Office for National Statistics, Scotland has the highest unemployment rate among the nations of the UK, and the second highest claimant count and the highest unemployment rate among the UK regions.

We are told that the economy in the UK as a whole is growing, but Scotland is teetering on the brink of recession. Although its economy is not booming, like London's, it suffers many of the same problems. The answer is not to cut the wages of workers in Scotland by introducing regional pay. Many of the economic policies followed by the Chancellor have been based on the fact that London and the south-east are overheating, but we should not forget that other regions are not overheating but are facing hard times—in some instances, very hard times.

In many ways, Scottish workers should be paid more to ensure that we keep them in Scotland. We should inject money into the public sector to give us flexibility. The private sector already has some flexibility because of the economic conditions of previous years. However, as the hon. Member for East Carmarthen and Dinefwr said, the fact that regions are side by side can cause problems. For instance, a rail company in north-east England was paying its drivers much more than those working in Scotland. As a result, the Scottish drivers were being lured away, which led to a serious loss of workers on the Scottish railway, a near breakdown in services and a problem with workers' pay.

I was delighted to hear that the hon. Member for Cities of London and Westminster had been converted to the idea that the Scottish Parliament and the Welsh Assembly should have tax-raising powers. I entirely agree. The way forward is not to look at regional pay, but to look at what we might call a third way. Rather than asking valuable public service workers to be paid less or asking people to move away, the Government should give Scotland the powers to compete so that it can grow its economy and give people more opportunity. Growth is the key. If we can grow the Scottish economy and ensure that workers in both the public and private sectors are paid greater rates, the economy will benefit.

The hon. Gentleman is absolutely right when he says that the issue is about growth. However, tax-raising powers already exist in the Scottish Parliament settlement. Taxes can be raised by as much as 3 per cent. If it were not for the effects of the much discredited and outdated Barnett formula, we could have a level playing field. All 74 London MPs—55 of whom are Labour—would entirely agree with that. We should like to see a level playing field for the moneys that are raised here in the capital and with which we cross-subsidise the rest of the United Kingdom.

The hon. Gentleman is following a completely different argument. The regions subsidise London in many ways because most Government Departments and spending are based in London. That is an argument that I will happily have with the hon. Gentleman on another day. As for the tax-raising power of the Scottish Parliament, it is a power to vary taxes. The hon. Gentleman may not know this, but if the Scottish Parliament raises taxes it impacts on the block grant, which means that the increases would have no effect at all.

The Scottish Parliament needs its own tax-raising powers so that money raised in Scotland can go towards dealing with the structural problems of the Scottish economy. Instead of looking at regional pay, we should perhaps be looking at regional taxation and differential business taxation in Scotland that would allow Scottish businesses to grow. Scottish businesses pay the same rate as businesses in central London, but they have nothing like the same economic activity.

As has been mentioned, the Government have provided little detail about the question of regional pay. This seems to have been a political hand-grenade, lobbed into the euro debate for the Chancellor's own reasons. Will the Economic Secretary tell us a little more about exactly what is being proposed and about the time scale for regional pay? We are told that it is part of the preparation for the euro. The Chancellor, or perhaps the Prime Minister, has insisted that it not be ruled out in the current Parliament. Will regional pay indices be introduced within the next two years? How will these regions be set up? Will regional pay be based on Scotland, Wales and the English regions, or does the Chancellor have something else in mind? Has he thought through the hot-spot problems that will occur in each region?

How many of Scotland's 653,000 public sector workers would be affected by the Chancellor's plan? How, when Scotland's economy has grown at only half the rate of the UK under this Labour Parliament, would paying people less in rural communities such as mine in Angus, the highlands and islands and the rest of Tayside help to turn the Scottish economy around? When Scotland relies much more, like Wales and the north of England, on public sector employment to provide economic stability, how will cutting wages and taking the money out of these economies help the economy to grow and make Scotland the place it should be? The answer, of course, is to give the power to the Scottish Parliament. I cannot see the Economic Secretary agreeing to that today, but we will keep at him.

I am delighted to take part in the debate. I genuinely thank the hon. Member for East Carmarthen and Dinefwr (Adam Price) for raising the issue and giving us the opportunity to discuss Government policy on it. It is an extremely important matter, with implications for large parts of the United Kingdom, and this is one of the first opportunities that we have had to debate it in detail.

Having commended the hon. Gentleman, I shall, unfortunately, disagree with virtually every point that he made, other than his comments about the need for us all to deal with the structural issues that explain pay differentials across the country. On that matter, there is much common ground. I also wish to raise questions about the Government's policy and to try to flush out a little more detail than we have been provided with of late.

The hon. Member for Angus (Mr. Weir) said that the Chancellor threw a political hand-grenade into the debate when he announced in the Budget that

"remits for pay review bodies and for public sector workers, including the civil service, will include a stronger local and regional dimension".—[Official Report, 9 April 2003: Vol. 403, c. 283.]

There was perhaps a certain amount of briefing to newspapers to hype up the significance of that statement, in order to attract attention to what the Government perceived as a free market initiative in the Budget, which did not have much good news for the business sector or for much of the rest of the country.

It seemed a relatively short time after 9 April that various questions were posed about the Government's policy, not least because the Chancellor was trying to explain that he would hold on to national bargaining while at the same time bringing in a regional element. It will be interesting to see how he manages to do that.

The conflict between those two objectives was highlighted very well only days after the Budget in an article in the Financial Times on 22 April by the reporter Jean Eaglesham:

"Gordon Brown's Budget call for regional pay awards for public sector workers is unlikely to be realised in practice, Alan Johnson, the employment relations minister, has admitted. Any geographical variations in pay are likely to be very localised, such as specific city weightings."

The then Minister for Employment Relations, Industry and the Regions is quoted as saying:

"I'm pretty sure this won't develop into a regional pay argument, with the government insisting on different pay rates in Yorkshire and Humber to North Lincolnshire, not least because staff will then migrate across the Humber Bridge".

I am not sure that I agree with him or his grasp of economics, but he seemed to have a different conception of the Chancellor's intentions than everyone else did. He went on to say that significant regional pay variations would create serious problems and then stated:

"I don't see the need for anybody falling to the floor sobbing over a discussion document … The issue has been misrepresented."

It sounds almost as though there is division between the Chancellor and other Ministers. Such division was highlighted further by a speech by the Secretary of State for Scotland on 16 April. She stated:

"The part of the Chancellor's speech that set the heather alight in Scotland was the reference to a stronger local and regional dimension for pay review bodies and for public sector workers … The Budget was not about ending national pay bargaining. Absolutely not. What it was about was ensuring that we have more local pay focus"—

whatever that means—

"to take account of local economic circumstances."

By securing the debate, the hon. Member for East Carmarthen and Dinefwr has provided an opportunity for the Economic Secretary to flush out the Government's policy and to explain what appear to be differences between Ministers on the issue. There may even be uncertainty in the Treasury about the matter. When the Chief Secretary to the Treasury was asked in a written parliamentary question on 1 May to explain the policy on regional pay and regional price indices and how it would be implemented in practice, he repeated the statement that the Chancellor had already made and added simply that further details would be announced in the coming months. The Government have a great deal of fleshing out to do in that area.

Does the hon. Gentleman think that the new policy on the posts of Secretary of State for Scotland and Secretary of State for Wales shows the shape of the Government's thinking on regional pay—two jobs for the price of one?

I certainly agree that that shows that there is incoherence in the Government. I can agree on that, if the hon. Gentleman will allow me that common ground.

I shall say why the Government are right to head in the direction of more flexibility in pay, even if we are not quite sure what the direction is. To the extent that the Government's policy reflects a desire for more flexibility on pay, whether on a regional or local basis, it is sensible. I favour that for three reasons, with which I would have thought that hon. Members from nationalist parties had some sympathy.

First, the Liberal Democrats favour decentralisation and devolution of decision making. We do not see why there needs to be a rigid national pay system throughout the United Kingdom. We want the regions, nations and local communities to be given more ability to set their own pay rates. We should like that to be based on a system of raising finance locally. That would give the regions, nations and local areas genuine powers to raise their own revenue, so that they were in a position to take those decisions.

The second argument in favour of the Government's move towards greater flexibility is the flipside of the argument advanced by the hon. Member for East Carmarthen and Dinefwr. Such a move is fairer in many cases. It does not seem to have registered with him, if I can put this reasonably and not provocatively, that the unfairness that he thinks the system will introduce exists at present. If very poorly paid workers in London have to pay extremely high housing and other costs, their disposable income may be much lower than that of someone living in another part of the country where the cost pressures are much less. Flexibility will deal with that unfairness in the existing system.

The third reason is that my party favours better public services, and in some parts of the country we cannot have better public services unless we have the staff to man them. It is obvious that in some parts of the country there are quite serious public sector staff shortages. The hon. Member for Cities of London and Westminster (Mr. Field) referred to that. Let us consider the vacancy rates, the data on the proportion of expenditure that goes on agency staff in London compared with the rest of the country, and the economic statistics that explain private sector wage differentials, to which the hon. Member for East Carmarthen and Dinefwr referred. The differences in costs and private sector pay are significant and the shortages of public sector workers that are created in some areas as a consequence are very serious.

How does the hon. Gentleman explain the shortages of public sector workers in areas where those pressures do not exist? As I have said, there is a serious shortage of nurses in many areas of Scotland, but not because of the problem that he describes. How does he explain that? It is not purely a London or southern problem.

The hon. Gentleman is right to say that it is a problem across regions. Part of that will be due to local labour market conditions, which are tight in many areas of the country because we have a fairly fully employed economy in many areas. The hon. Member for East Carmarthen and Dinefwr referred to some of the other reasons why there might be pay pressures and shortages of key staff in particular areas. I am certainly not arguing that we should not deal with those issues. That is important, but pay is fundamental, too.

I am conscious that I have a limited time to speak, but I want to make a few more points before concluding. We are talking about a number of specific regions. Introducing greater regional flexibility is not likely in practice to mean big differentials between all regions. The hon. Gentleman referred to the paper by Andrew Oswald that compares private sector wage differentials across different parts of the country. It shows that there are particular problems in central London, inner London, outer London and the rest of the south-east, although, as we have discussed, there will be localised problems within regions, which may require action on pay differentials.

I urge the Government to flesh out how the Chancellor's policy will be implemented in practice. They should tell us more about how the regional inflation figures will be produced and whether the data that currently come out of the Office for National Statistics will be changed, owing to the work that is being done on pay. We should also like the Government to say whether they will at some stage give more powers to local areas and to regions to raise revenue, so that they are in a position to fund any pay differentials and to deal with the issues of fairness and scarcity of key employees in public services.

A range of fundamental issues needs to be dealt with if we are to tackle the shortage of public sector employees in certain parts of the country. The length of this debate does not allow us to discuss those issues, but the Government are right to examine flexibility at local and regional levels, in order to deal with the problems in public services in some parts of the country. The Government also need to deal with the issue of fairness for many workers.

I congratulate the hon. Member for East Carmarthen and Dinefwr (Adam Price) on securing the debate. It is on important territory, so I am surprised that there are apparently no Labour Members here other than the Economic Secretary.

At the heart of the matter is the question of what the Government's agenda is. In his Budget speech, the Chancellor announced that he was planning to introduce regional price indices that would demonstrate differences in regional inflation rates. He said that the economy was

"better placed to recognise local and regional conditions in pay, such as the extra costs for retention and recruitment that arise in London and the south-east, especially for the low-paid."

He added that the

"remits for pay review bodies and for public sector workers, including the civil service, will include a stronger local and regional dimension".—[Official Report, 9 April 2003; Vol. 403, c. 283.]

If he did not intend to go beyond such things as regional and London weightings, why say that? It is not at all clear what the Government are looking to change. Major differences have been pointed out between local and regional pay arrangements. The public sector unions registered pretty considerable opposition at first, at least to what they thought they heard.

As a matter of principle, it is entirely correct that part of the programme of improving delivery of public services involves greater employment flexibility of terms of employment and pay. However, that did not seem to be the Chancellor's agenda. The spending review last year stated that

"pay must also be allowed to vary at the local level, according to local pressures. In the private sector pay differentials of up to 50 per cent. exist between different parts of the country. Unless public sector organisations take these differentials into account, service quality will be at risk and both employees and service users in large parts of the country will suffer.'

Is that the basis on which the Government seek to move forward?

If one looks at the current state of play in public sector pay, it becomes clear that the Government's initiatives to move away from national pay structures—if that is in fact their objective—will be fought tooth and nail by public sector unions. How does the national health "Agenda for Change" reflect the Chancellor's announcement? What progress is being made in the light of the announcement that foundation hospitals cannot vary their pay if that leads to poaching from the rest of the health service? The proposed pay reform for the national health service agenda is still to be agreed and implemented, but it is firmly based on the new national grading structure, which took several years to draw up.

The pay commission on local government will no doubt listen to what the Treasury says. There is a single national pay scale that resulted from the 1997 agreement, with the possibility of setting pay flexibility in relation the national structure. Does the Chancellor want to change that arrangement for local government?

Does the hon. Gentleman agree that there is a contradiction in the Government's policy on foundation hospitals? Surely the only purpose of giving foundation hospital trusts autonomy on local pay is to attract key staff from other areas.

That is precisely the point. Indeed, the debate that is warming up has strong parallels with the debate on foundation hospitals, in that one is either on one side or the other. We all heard the Chancellor make comments in which he took one side, but then he tried to back-pedal. As the hon. Member for East Carmarthen and Dinefwr says, the situation with foundation hospitals illustrates the point.

It goes on, however. Last autumn, the then Secretary of State for Education wrote to the School Teachers Review Body asking it to consider the implications of more pay differentiation by location and subject. What was the reply? What is the Government's intention as regards local pay differentials for teachers? The catastrophe of the grant arrangements certainly made the situation in my constituency worse, and there is a shortage of teachers. Now many redundancies are having to be made because people have got the pay issue wrong.

Against the Government's vague commitment stand the public sector unions. A national pay framework remains their strong policy. They have certainly indicated that, as the Labour party's paymasters, they will fight on the issue. The Minister for Lifelong Learning, Further and Higher Education, who formerly had ministerial responsibility for employment relations, is a perennial friend of the unions and was on hand to placate the Government's paymasters. He was quoted as saying:

"I'm pretty sure this won't develop into a regional pay argument, with the government insisting on different pay rates in Yorkshire and Humber to North Lincolnshire, not least because staff will then migrate across the Humber Bridge".

In the post-Budget-debate spinning, the Chancellor appeared to backtrack to reassure the unions that he was not attacking national pay bargaining, which is one of their most potent weapons. Are the Government deceiving the unions or the public about their intentions? Indeed, I repeat: what are their intentions? The debate gives them the opportunity unequivocally to put their plans and proposals on the record.

In his Budget speech and in the euro debates, the Chancellor told us that he wanted to move towards a more flexible form of pay bargaining; but his calls for local and regional pay review bodies were quickly undermined in briefings by junior colleagues after the backlash from the unions. Was the Government's intention on local and regional pay misreported or has there been an enforced backtrack? When will further details of the Government's proposals be made available? How do the Government think that things should work out in practice?

Very speedily, I shall go through some specific points. Can the Government ensure that local pay rates stay local and do not degenerate into rigid regional or, in the case of schools, LEA-determined pay scales? Is the Government's approach local or regional? Have they considered the fact that the spread of more and less affluent areas is often as diverse within regions as it is nationally?

To conclude, local pay bargaining is the norm in the private sector, and there are obvious arguments for having parallel market flexibility. However, there is a great gap between the Chancellor's rhetoric and the reality. The hon. Member for East Carmarthen and Dinefwr might have put his finger on it when he said that the Chancellor's real objective might simply be to restrain the dangerous and accelerating rate of inflation in the public sector, which is up from 1.5 per cent. per annum in 1997 to well over 5 per cent. now. On the other hand, was the Chancellor popping in a poison pill as part of the euro debate, as the hon. Member for Angus (Mr. Weir) suggested? Please could the Economic Secretary enlighten us as to precisely what the Government's objectives are?

I congratulate the hon. Member for East Carmarthen and Dinefwr (Adam Price) on securing the debate, and thank him for giving us the opportunity to discuss what all contributors have agreed is an important matter. I also congratulate the hon. Gentleman on approaching a serious subject in a largely—if not entirely—measured way. He said that Government policy was ill conceived, short-sighted and based on false premises. I will demonstrate that the contrary is true.

However, before I do so, I should say that I find it curious—I put it no more strongly—that a Welsh separatist should argue a centralist UK principle. A pro-public sector MP who has called for something distinctive to offer nurses and other professions in the NHS in Wales to tackle recruitment and retention problems is condemning a policy and an approach that will deliver just that. It is also curious that a pro-euro party should oppose the greater market flexibility that is necessary if the UK is to prosper within the European monetary union, as well as being the right thing for Britain, in or out of the euro.

Briefly, I am in favour of any policy that leads to public sector workers in Wales being paid more. I am opposed to any policy that leads to their being paid less.

May I say to the hon. Member for Cities of London and Westminster (Mr. Field)—[Laughter.] Well, if the hon. Member for East Carmarthen and Dinefwr bears with me, he will see that many of the fears that he has are ill conceived and based on false premises, and will not be fulfilled.

I say to the hon. Member for Cities of London and Westminster that I do not feel beleaguered on all sides in this debate, but if I did, it would not be the first time. I was interested to note that he described himself as a part of an unholy alliance on this issue.

In the midst of the other comments that were made by the hon. Member for East Carmarthen and Dinefwr in introducing the debate, there was one phrase that the Minister decided to ignore. That was the accusation that Labour's policy was the product of sloppy thinking.

I hope that the hon. Member for East Carmarthen and Dinefwr will suspend that judgment for at least another eight minutes so that I have a chance to say some of what I should like to say.

The hon. Member for Yeovil (Mr. Laws) invited me to flush out the policy. I will try to do just that. The hon. Member for Arundel and South Downs (Mr. Flight) asked me to do something similar. He asked what the Government's agenda was on this matter. I welcome the fact that the hon. Member for Yeovil sees the direction of the policy as sensible and that the hon. Member for Arundel and South Downs sees that it is, at least in principle, entirely correct.

Hon. Members are aware of the context of the Chancellor's announcement that, by next year, almost all pay remits for public sector workers will include a local pay element. As part of the last year's spending review, we undertook and published a cross-cutting review of the public sector labour market. That is hardly, as the hon. Member for East Carmarthen and Dinefwr described it, an oblique reference in the spending review, and it should not have been a hand-grenade surprise to the hon. Member for Yeovil nine months later, in the Chancellor's Budget speech this year.

That review identified the need to increase the flexibility and responsiveness of pay and conditions in the public sector. In particular, the review emphasised that labour market conditions vary significantly within regions, as well as between them. As I said to hon. Members in the House this afternoon, if we are to pursue full employment, stronger growth and improved productivity in every region and nation across the UK, our policies need to take account of those labour market variations at a local level.

The purpose of reform is twofold. First and foremost, it is about improving public services. Last year's spending review set tough targets for public services to ensure that our programme of unprecedented investment is matched by reform and modernisation of working practices, so that we see the benefit of that investment reaching service users—patients, pupils and citizens. No matter what investment and organisational reforms we put into the system, we must be clear in our mind that, in the end, the public sector workers are central to delivering those services, so we need to ensure that we are in a position to recruit, retain and motivate the staff necessary to deliver those services in every area to meet our commitment.

Secondly, a responsive and flexible public sector labour market is necessary for the wider economy. The public sector accounts for around a fifth of the economy, and for the sake of flexibility, we cannot allow it to lag behind the private sector. Barriers that obstruct staff and their skills and prevent them from moving to where they are most needed impose rigidities and adversely affect the economy by restricting the potential for growth and employment.

We must, however, be equally clear about what the policy is not designed to do. It is not about cutting public sector pay, but about ensuring that the public sector has the flexibility to respond to the circumstances in every area in which it operates. The Chancellor has already made it clear, and I reaffirm, that national pay bargaining will continue. We remain firmly committed to a system that is fair. It is also important to be clear that the policy is not only about pay. As the hon. Member for East Carmarthen and Dinefwr rightly said, there are many other significant elements to labour market flexibility.

A recent report by the Audit Commission emphasised the other factors that need to be addressed. Neither is the policy about a principle that is without precedent: the approach is already established, negotiated, agreed and operated by trade unions and public sector workers. The hon. Member for Angus (Mr. Weir) asked me for details of that approach. I ask him to consider the areas in which we are already putting it into practice: the NHS "Agenda for Change"; the local government agreements, including single status; and four pay zones in the Prison Service, which cover the United Kingdom. Those are all tailored to service needs. They all provide for local flexibility within a national framework, and all target recruitment and retention problems, not just pay. They are all negotiated and agreed by public service unions or the existing pay review bodies.

The hon. Member for Arundel and South Downs specifically asked about the NHS "Agenda for Change". The agenda covers more than 1 million NHS workers, from non-clinical staff and nurses to other health professionals. All the relevant unions have negotiated and signed up to the agreement in the past three weeks. It is based on a national grading system, with role evaluation and pay protection arrangements for staff whose roles fare less well in job evaluation. Its pay progression is linked to skills and to taking on new roles.

Harmonised high cost supplements will be available in London and, for the first time, staff in the fringe zone of London will be entitled to an extra 5 per cent. supplement. I must tell the hon. Member for Cities of London and Westminster that the new arrangements are significantly more generous than the old system and will ensure that the NHS can be full staffed in the capital. There will, however, be flexibility to introduce recruitment and retention premiums in the short term and long term for any location or specialism experiencing particular recruitment and retention difficulties anywhere in England or Wales, or in Scotland, depending on the Scottish Executive. London is the most obvious and pressing problem. The policy is not confined to London and the south-east: it is not designed to meet the problems only of London and the south-east.

Let me restate the Chancellor's central point. We are determined that fairness will not be undermined in the new system. The national minimum wage and the national tax credit provide a national guarantee. Beyond this framework and in national arrangements, it makes sense to recognise that a more considered approach to local and regional conditions in pay and to other labour market issues offers the best modern route to full employment. Therefore, from this year, the remits for pay review bodies will be amended to ensure that proper consideration is given to regional and local dimensions. For next year, we shall also increase the weight given to the regional and local dimensions in the arrangements for settling civil service pay.

As we take matters forward, we need to think carefully and pragmatically about how the public sector can evolve in a way that best enables us to deliver improved public services and to ensure that the system treats public service employees fairly and gives greater flexibility to the whole economy. I stress that pay is not the only component in tackling the obstacles to recruitment and retention in the public sector, but it is an undeniably important factor. We will continue to work with all stakeholders and that work will not be rushed. We will analyse the current flexibilities in public sector pay and ways of developing them further to meet the needs of the public services, the wider economy and our central objective as a Labour Government of pursuing full employment in every region and every nation of the United Kingdom.

I thank the Minister for being here to reply to the debate. I begin by paying tribute to the dedication and effectiveness of the director of education at Suffolk county council, Mr David Peachey, who is about to step down from his role and will be greatly missed. It is rare for a local education authority to have such an exemplary relationship with governors, head teachers and other teaching staff. The LEA has tried to minimise the bureaucratic nightmares that affect our schools, and which have such debilitating consequences.

Non-core schools funding is central to schools' budgetary viability, and there is a huge price to pay. On Friday, a head teacher in my constituency received a cheque for e-learning credits. He had no idea when it was going to arrive and how much it would be for; such uncertainty is frequently replicated. He told me that he had had to release his school's special needs co-ordinator to spend two weeks away from the classroom, just to deal with the paperwork for securing funding. Micro-management of schools has reached grotesque proportions.

I also pay tribute to Tom Sherb, who is the area education manager for the western part of Suffolk that covers my constituency; he deserves recognition for his hard work and commitment. This debate will involve no criticism of the LEA's officers—quite the reverse. They have to deal with a schools funding crisis that was described to me by a head teacher of long standing as being of "unique severity" in her teaching career. A schools budget briefing for 2003–04, provided by the LEA, states:

"There has … been a fundamental redistribution of education funding nationally. We have been told that the funding released by the ending of a number of significant specific government grants has been channelled into the general local authority settlement. However, the formula for the Education element of the new Formula Spending Share (FSS) distribution has not favoured Suffolk as we have not regained our share of the grants that have ended. The result is that Suffolk schools' shares of specific grants have reduced in real terms".

The briefing continues:

"Put simply, money through the Suffolk formula has increased broadly in line with cost increases, but other elements of school funding (e.g. Standards Funds grants) have not".

In a letter to Catherine Roberts, of the Department for Education and Skills, Mr Peachey concludes:

"What has caused the problem in Suffolk is the poor share we have received under the new Education Formula Spending which has meant that resources previously targeted via Standards Fund have not been recycled pro rata in our favour. Furthermore, at a 3.2 per cent. overall increase, this falls significantly short of the increase schools needed to stand still to cover pay cost increases and general inflation."

There have been enormous increases in council tax in Suffolk in the past few years. The county hall administration has passed tax rises that are a massive 40 per cent. higher than the national average. In 1997, the council tax bill for an average band D property was about £612. The latest bill is a shocking £1,164, yet there has been no remotely proportionate improvement in support services. Suffolk has received a £28.3 million increase in its formula spending share, which has been passed on in full to support spending on pupil-related services. Despite the apparent increase in revenue, parents, governors and teachers have expressed enormous anxiety because of the impact on schools of budgetary crises.

Unusually, Suffolk operates a three-tier system of primary, middle, and upper schools. In the past few weeks I have visited, or been in contact with, primary schools in Stanton, Kedington, Wickhambrook, Exning, and Gazeley; with Scaltback, St. Louis, Ixworth and Riverside middle schools; and with Newmarket upper school. After some frank discussions with head teachers and governors, it became clear that none of them was optimistic about the future; they face acute and challenging budgetary problems. Teachers' and teaching assistants' places are under threat, and several teaching assistants have already had their hours reduced. Many schools are able to continue to employ certain staff only because of reserves that they built up in previous years. Those reserves will certainly not be in place next year. One of the most distinguished middle school head teachers in my constituency informed me that she is retiring early specifically because she cannot face further budgetary crises.

I have nothing but the greatest admiration for head teachers. It is well known that a school's success depends on their ability and judgment, but the strain and anxiety that many of them experience is intolerable; they have to face redundancies, budgetary deficits and larger class sizes. I want to read a passage from a letter to the LEA from Mr. Terry Forrester, chairman of governors at Kedington primary school, in my constituency. By my doing so, I hope that the Minister will realise the seriousness of the situation. Mr. Forrester wrote:

"Our teachers and non teaching staff are constantly working very hard in areas such as drama, local issues, educational visits, music tuition, swimming instruction, and numerous other activities which they do for no other reward than the satisfaction of seeing our children develop as responsible and informed people. Their reward for all that dedication, loyalty and effort? The Governors now have to tell them that because of the budget we will have to reduce their hours and consider redundancies."

Others tell me that they will be reducing the scope of their schools' curricula.

Why has this happened? Put simply, Suffolk has been short-changed—an appallingly familiar theme that is not confined to education. Since 1997, there has been average increase in LEA funding of 47 per cent. throughout England and Wales. Suffolk received a 41 per cent. increase, which was lower than that for the neighbouring counties of Cambridgeshire, Essex and Norfolk. That increase ranked it 136th out of a list of 150. Had Suffolk been funded at the national average level, it would have received an extra £14 million this year and an extra £45 million over six years.

This year, Suffolk has received the equal lowest cash increase per pupil nationally, reaching the national minimum of 3.2 per cent. only after an £108,000 emergency handout from the Government, out of a total of £28 million. That may appear to be a modest real-terms increase, but it is nothing of the kind when seen in the context of the various increased costs that schools will have to bear this year. Those additional costs include a 1 per cent. increase in national insurance contributions, a 2.9 per cent. pay award for teachers, and increased expenditure arising from the transfer from the Treasury of responsibility for teachers' employer pensions contributions. Those costs clearly exceed the 3.2 per cent. increase that Suffolk has received.

There has also been a change in the way that funding is organised. Several specialist grants that were given to Suffolk schools have been stopped, and the formula for the education element of the new formula spending share distribution has not favoured Suffolk; it has not regained the money lost through the ending of those grants. My constituents will feel aggrieved when they compare Suffolk's situation with the substantially greater increases in parts of the north of England, with which the Minister will doubtless be familiar. There is a limit to the size of the national cake, but I am asking only for the fair treatment that simply is not happening.

I am sick to death of Suffolk's being short-changed. We have record council tax increases, low levels of NHS investment—Suffolk West primary care trust has the lowest per capita funding in the eastern region—and now a schools crisis. I am left in total exasperation that Suffolk continues to be discriminated against. Complementing the impact of central Government, Suffolk is burdened with a county council that seems incapable of speaking up on the issues that it faces. I am dismayed that county hall continues to let the people of Suffolk down by failing to fight for adequate resources for our county. Such lack of action by Suffolk county council is the reason why I secured today's debate. In early April, I wrote to the leader of the council, councillor Jane Hore—she has just retired—asking her what she had done to argue Suffolk's case directly with the Government. Characteristically, her reply did not answer that question.

The crisis in our schools has been predicted for some time. Sir Jeremy Beecham, chairman of the Local Government Association, wrote to the Secretary of State for Education and Skills as long ago as 9 January, expressing strong concerns about school spending plans that could lead to councils having to make cuts.

I should like to quote from a letter from the head of Ixworth middle school which sets out the situation in her school, and is entirely symptomatic of the situation. She states:

"I am writing to you with my concerns about this year's school budget and its potential impact on standards here at Ixworth Middle School.

Our delegated budget for 2002–03 was just over £1,078,000. This was based on pupil numbers of 470. This year we have just under £1,091,000, an increase of only 1.7 per cent., based on 473 pupils. With a reduction in standards funding from the LEA, the increase in the standards grant has effectively disappeared completely.

We have not been able to finally set this year's budget, although I am now in discussion with the LEA about a licensed deficit. We have had to announce redundancies and have discussed this with the personnel department and the unions.

Following this discussion, we will be having one voluntary redundancy, and are not replacing another teacher who is leaving … In order to reduce the need for staff cuts, we have reduced planned spending on repairs, educational supplies and services and extra hours for support staff. We have reduced staff training and the allocation of funding for supply. One key member of staff is to lose a temporary management allowance which has been given in recognition of the valuable work he has done on ICT and in particular training staff.

All these cuts have direct implications on our ability to uphold the agreement on teacher workload, which I support. It also makes it very difficult to provide training for staff in the new KS3 strategy, and means that our plans to improve ICT facilities in school will be severely curtailed. The school building is old and expensive to heat and to maintain, and I am not sure that our planned expenditure on repairs is sustainable.

The uncertainty about redundancies and cuts in support staff hours has led to anxiety amongst the staff, and I now have one full-time teacher off ill with stress as a direct result of the discussions about redundancy. It also means that our school development plan, which aims to raise standards in all aspects of school life including curriculum, is not funded. Much of it will rely on the goodwill of staff."

And she concludes:

"We are currently working on our plan for recovery from this position. For the next two years our pupil numbers are predicted to rise, and cutting staff now is likely to create problems in the future. With so much unknown about funding for schools in the future, including the funding of teacher pay above the threshold, I cannot see how we can plan effectively.

I would like to think we can maintain academic standards despite these problems, but with the added workload for teachers and larger class sizes, it will be difficult. I know that my teachers work hard already. I am concerned about next year and the pressures that are likely to be put on the staff."

That situation is typical. The National Union of Teachers made a comprehensive analysis of section 188 proposals at the school. It concluded that

"a comparison … shows that the disappearance of the Schools Standards Grant heading … has not been replaced by alternative forms of funding. As a result, the overall delegated budget total this year is only 1.2 per cent. higher than last. This is clearly totally inadequate, in view of the county's admission that an increase of 6.9 per cent. is required for a standstill budget."

In reality, the problem is caused by the 3.2 per cent. increase, which falls significantly short of what schools need to stand still, if they are to cover pay increases and general inflation. We have heard a lot about commitments to education. To repeat in Suffolk any slogan involving the word "education" would now be a cruel joke to many parents, teachers and governors, who are terribly disappointed about this year's arrangement. They face extremely hard and unpalatable choices, and unless the arrangements are quickly changed for next year, the consequences will be truly catastrophic. I hope that the Minister will be honest enough to admit that the shortfall in schools funding is due to the Government's miscalculating the real costs faced by schools this year, and not to local authorities' squandering the extra investment.

I reserve my most specific criticism for the county council, which, for reasons that escape me, will not stand up for the people of Suffolk. It repeatedly spurns or ignores the attempts of my colleagues and I to get it to speak out and work assertively with us to get fairness for our constituents. There has been a shameful silence in the county over council tax and the bed-blocking crisis, and now there is a shameful silence over education. There has been meek acquiescence in wholly unfair central Government settlements. The county council—not I—should be hammering on the Government's door to defend and promote the interests of the people of Suffolk in any area for which it has statutory responsibility. It is beyond my understanding—and that of the many head teachers, governors and parents who have spoken to me—that the county council does not do so. It is through it and the Government that this wholly unacceptable situation has come about.

I hope that the Minister can offer some comfort to my constituents and to the people of Suffolk as a whole, and that he will confirm that this is a temporary situation that he will seek to address in the next two years.

I hope that I can start my response to the hon. Member for West Sussex on a consensual—

West Suffolk, actually.

I hope that I can start my response to the hon. Member for West Suffolk (Mr. Spring) on a note of consensus. First, I congratulate the hon. Gentleman on the debate. Secondly, I am happy to second his strong words of support for Mr. Peachey, the departing chief executive of the council.

The hon. Gentleman did not find time in his remarks to highlight the improved achievement of school pupils in Suffolk. There has been a steady rise in the number of children achieving good A to C grades at GCSE, and a strong improvement in primary school performance in the area. I am sure that, at a time when many people are too ready to disparage the teaching profession, he would happily join me in paying tribute to the excellent work that teachers have done and to the hard work of pupils.

I fear that our mutual agreement may begin to erode there. Part of the hon. Gentleman's speech sounded as if he wanted to have someone else answering the debate: local politicians who could speak up for the county. I will give him a national perspective.

Does the Minister agree that a good example of what has been achieved by the county council in Suffolk is last December's acknowledgement by the Ofsted report that the Suffolk local education authority is one of the top six in the country?

I am sure that it was my hon. Friend's modesty that prevented him from referring to his record as a leader of the council for nine or 10 years. Ofsted gave a very positive report on the work of the LEA, and I am happy to pay tribute to that.

Let me address funding, as well as cost pressures and the distribution of resources to schools—issues that the hon. Gentleman raised. He will know that the Department shares joint responsibility with local authorities for the distribution of money to schools. We distribute money to local authorities—the hon. Gentleman raised a number of questions about how that is done—and it is for local authorities to distribute money to schools according to their own formulae. He also raised issues about that.

I will not rehearse for the hon. Gentleman the overall rises in education spending this year but, when he talks about the despair that he feels at the funding position in Suffolk, he does not do justice to the significant improvement in the funding position of Suffolk schools over the past six years. My statistics suggest that there has been a £74 million increase in funding in Suffolk. That is significant, but does not include the money paid as school standards grant direct to schools. A 250-pupil primary school might receive £10,000 more this year than last year, a rise from £40,000 to £50,000. A typical secondary school of 1,000 pupils might receive an extra £50,000.

The hon. Gentleman touched briefly on capital spending and I am honour bound to point out that, in 1998–99, capital funding in Suffolk was £8.7 million and is now £35 million, so there has been significant investment. I am interested to hear that he believes that there is a long way to go, but I am happy to confirm that the Government's plans include rising funding for capital expenditure throughout the country.

The hon. Gentleman raised his concern about the way in which the funding system distributes money to different parts of the country and I want to address that point directly. This has been a unique year of change in the Government funding system. Partly in response to demands from local education authorities and schools, we have introduced a number of changes to the system. He will know that the old system was based on the 1991 census and was out of date, unfair and did not deliver a good deal for significant parts of the country.

The principles of the new system should commend themselves to the hon. Gentleman. They are based on three simple indices. First, an amount is paid per pupil: £2,000 per pupil in primary education and £2,500 per pupil in secondary education. That is clearly established. In making our decision about that, we listened to many responses, including those from the education funding strategy group on which LEAs were represented. However, there were other factors and he would agree that they are important.

Secondly, there should be recognition of the different costs in different parts of the country. Thirdly, there should be recognition of additional education needs. The changes to the area cost adjustment mean that 99 authorities rather than 50 benefit from that adjustment. The fact that Suffolk does not is a matter of regret to the hon. Gentleman, but I assure him that the area cost adjustment is calculated on an independent and scientific basis. It reflects local labour market costs, which are lower in Suffolk than in other parts of the country.

I want to address additional education needs. The new system, which contributes significantly to the amount of money that Suffolk receives, places particular emphasis on two items: The first is the number of children from families on income support. The figure in Suffolk is around 11 per cent. compared with a national average of 17 per cent. That is a significant contributor to Suffolk's funding position. The second change is also significant. For the first time, the system recognises the number of pupils who come from families with low-paid work and the number of families in which parents receive the working families tax credit. That benefits Suffolk.

I was pleased that the county council lobbied me on the distribution of local government finance last year and I was able to meet the Minister for Local Government, Regional Governance and Fire, my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford). I was also pleased that that point was acknowledged by the Government and taken on board. That allowed an increase of those elements in which there is a multiplier. However, it was disappointing that the changes to the resource equalisation factor led to a significant reduction in overall finance.

I am grateful to my hon. Friend for making that point.

The hon. Member for West Suffolk did not mention the sparsity element that now exists in the formula. That reflects the cost of home-to-school transport in rural areas such as Suffolk and is specifically designed to recognise some of the special needs that exist there. I know that a number of sparse authorities, one of them is Suffolk, wanted us to introduce a sparsity factor for secondary schools. We examined the issue in detail but found no evidence of a connection between secondary school size and sparsity.

I want to speak about this year in particular because, as well as raising questions about the general distribution of funding around the country, the hon. Gentleman referred specifically to the difficulties that some schools are facing this year. I cannot respond on a school-by-school basis but, if he would like to write to me with details of any school in his constituency, I shall endeavour to address the points that he raises.

This has been a unique year for the school funding system, not just because of changes in the local government finance system, but because of at least two other significant changes. First, the hon. Gentleman knows that for a long time there has been pressure from local government and schools to reduce the amount of money that is spent centrally by the Department to reduce the amount of ring-fencing in the system. Reductions in the proportion of funding for LEAs and schools provided through specific grant funding have occurred in the spending review, which has resulted in a significant change in the distribution of the standards fund and a reduction in the amount of Government money that is spent centrally.

The second change that the hon. Gentleman referred to, which is important, is that additional costs will arise this year not just from the national insurance change, but more significantly from the additional costs arising from the changes to teachers' pensions. I am sure that he would agree that it is important that, when the Government Actuary makes recommendations in relation to the teachers' pensions scheme, the Government respond in a responsible way. I am pleased that we have been able to put extra money into the system to recognise the extra costs that have arisen as a result. That has been of equal benefit to schools in Suffolk and those elsewhere.

The hon. Gentleman, in his description of the situation facing schools, mentioned the role of the county council. It is obviously a matter of pleasure for me that the county council passported in full the money that was allocated to it by central Government. There are issues for all local councils about the money that is passported to education and that is then devolved down to school level.

The hon. Gentleman will know that we have been in discussions with local authorities all over the country about the amount of money spent centrally on matters such as special needs and the provision of pupil referral units, and about the money that has been shifted from revenue accounts in some parts of the country—not in Suffolk—into capital. That discussion is ongoing with all councils and LEAs across the country.

In Suffolk, there are particular pressures on the special needs budget. There are also some significant contingencies for which Suffolk local education authority needs to plan. The hon. Gentleman will know that the impact of movement by armed forces personnel is a significant issue in the county. Therefore, it is prudent for the LEA to budget for those changes, and to be ready to represent them. My statistics show that forces children can represent up to 50 per cent. of the roll of a local school. I do not know if that tallies with his local view. That has a significant impact on schools when families move on.

I want to put a final issue on record. Around the country, local education authorities, and a significant number of schools, are struggling with the effects of declining numbers of primary school pupils. For the first time since the introduction of local management of schools in 1990, we are seeing significant reductions in the primary school population. There are 50,000 fewer primary school pupils this year than last year. Next year, there will be another 50,000 fewer, and an additional 50,000 fewer the year after. That means a fall in the primary school population of 150,000. That has significant effects around the country, and I would be interested to see whether some of the schools that the hon. Gentleman cited are suffering from the difficulties that are raised by declining primary school numbers. It is a significant issue.

I conclude by explaining how we want to move forward. The hon. Gentleman will know that, at the time of the Government's submission to the School Teachers Review Body last year, we were keen to ensure a three-year settlement for teachers' pay, which would give predictability and stability to schools in planning their budgets for future years. The STRB did not grant us that recommendation, but I can assure the hon. Gentleman that we seek the stability and predictability for which he was asking. A two-year budget would be extremely desirable for all schools.

I know that schools in Suffolk and elsewhere in the country are looking for reassurance for the next two years. I would like to highlight how we are approaching the problem. The Secretary of State has made it clear that he would like a reasonable per-pupil increase for every school in the country, which requires our Department to consider carefully some significant issues. For example, we need to examine not just the allocation of funding to LEAs, but the right balance between support from general grant and specific ring-fenced grants from the centre. We must strike the right balance between in-school provision and out-of-school provision. There must be fair and appropriate variations in the budget increases received by different schools within an LEA, which are dependent on the formula used, specifically the amount of damping that exists in a local formula to protect schools. Finally, we must ensure that the agenda for the devolution of responsibility to head teachers continues. From our point of view, a two-year settlement on pay and other issues would help that.

I hope that I have answered the points raised by the hon. Gentleman. I look forward to continuing the debate with him.

I welcome the opportunity to have this Adjournment debate and to discuss more fully the case of Mr. Sandy Mitchell from Kirkintilloch, one of my constituents.

I make it clear from the outset that this is not an anti-Saudi Arabia debate. If it is anything at all, it is a debate that is pro-Sandy Mitchell and the other prisoners. It is about Sandy Mitchell, James Cottle, Peter Brandon, Les Walker, James Patrick Lee and Bill Sampson. The others are all prisoners with Sandy Mitchell in Saudi Arabia at the present time.

It may be helpful if I sketch briefly some of the background to the case. Sandy Mitchell has been in prison since December 2000, when he was arrested and charged with being part of a bombing campaign in Saudi Arabia. The bombing had killed a British citizen, Christopher Rodway, in November 2000, so the arrests were made quite quickly after the bombing. The men have continually pleaded their innocence. Since the time of his imprisonment, Sandy Mitchell has spent about 18 months in solitary confinement. He has spent that 18 months and his time with joint cell facilities in an underground cell. Last week's temperatures in Saudi Arabia ranged from 53° F to 56° F, so one can imagine how intolerable that situation must be, just in terms of the heat alone.

Sandy Mitchell is held in a cell for 23 hours every day. He is allowed to leave his cell for one hour. That is withdrawn at weekends: on Saturday and Sunday he spends 24 hours in the underground cell. The cell being underground, it has no natural light at all. He receives one phone call every month, which is his main contact, although of course he has consular contact at the same time.

During his time in prison, Sandy Mitchell's health has deteriorated quite significantly. That is confirmed by his sister, Margaret Dunn. In a recent letter to me, she said:

As my hon. Friend knows, Les Walker's sister is one of my constituents. She passed very similar comments to me. Les had a heart condition before he was imprisoned, and the family are very frightened for his well-being because of the heat and the circumstances in which he is held. Does my hon. Friend agree that we should ask our colleagues in the Foreign Office on humanitarian grounds, if for no other reason, to plead with the Saudi authorities to consider the health of these men and to release them?

I am grateful for that intervention. I think that everyone will agree that vast humanitarian arguments are now developing about the situation that the men are in. A consistent story is being repeated about how they are held and the conditions in which they are held. Margaret Dunn feels that the

"situation needs to be brought to an end. Sandy is now well into his 3rd year and he is ill. The situation has taken a toll on ALL the family."

She goes on to make a number of points about his son, who was a newborn baby when his father was imprisoned in Saudi, and is now four years old. There is consistency not only in Margaret Dunn's story, but in Les Walker's family story.

The sister of Sandy Mitchell said that quite naturally he is depressed. He is appealing against a decision to behead him publicly in Saudi, which is what his appeal for clemency is trying to stop. I do not suppose any of us could ever really understand the pressure and anxiety of trying to appeal for clemency against a background of such a decision. Even if we could imagine it, it is horrific to have to he fighting against such a sentence. He is suffering from high and erratic blood pressure, and Margaret Dunn makes the point that both her parents died from heart conditions, so she is particularly concerned for her brother who has, in fact, been taken to hospital during the time that he has been imprisoned because of his heart condition.

Sandy and the other people whom I have mentioned were accused of a bombing in Saudi. The Saudis accused all of them of fighting a turf war on the issue of illegal alcohol and its sale and use in Saudi Arabia. At the outset, a number of important organisations suggested that the bombing had been carried out by a domestic terror organisation, but since that day that has continually been denied by the Saudi Arabian authorities. The central point is that, during the period that the men have been in jail, bombings in Saudi have not only continued but intensified. More recently, there have been massive suicide attacks on western housing compounds in Riyadh. If evidence were needed, that conclusively proves the case that there was and has been a domestic terror element in Saudi. It might be difficult for the Saudis to admit that, but the facts speak for themselves.

Sandy Mitchell originally appeared on Saudi television to confess his part in the bombing. Anyone who has seen a recording of that on the news or elsewhere will have seen a person who was frightened, who had a stilted delivery and who was obviously reading from a statement that had been produced for the television cameras. I think that we can discount any confession that people make on Saudi television in this case—whether it is Sandy Mitchell or anyone else.

One can only imagine the state of mind of not only Sandy Mitchell and the others, but the family. Given the confession by Sandy Mitchell on public television, is my hon. Friend aware of any professional assessment made of his mental health?

I welcome my hon. Friend's question. I do not know whether there has been a professional assessment, but anyone with an O-level or A-level in psychology would be able to determine that the confession on television was far from natural. Other evidence also points to torture and forced confessions from these people.

I said that these men confessed on television. Later, those confessions were withdrawn by all the people involved. Clearly, physical and psychological torture has taken place. It is not a one-off case, as ample evidence exists of other cases in which people have been physically and psychologically tortured in Saudi Arabia. The case of Ron Jones is a prime example. He went to the UK courts recently to prove that he was abused in Saudi. There is plenty more evidence. David Morin, a friend of Sandy Mitchell, who worked in Saudi at the same time as he did, claimed that he had been tortured in Saudi.

In February, the UN representative and special rapporteur, Param Cumaraswamy, visited the men in prison. He concluded that there had been "substantial procedural irregularities" in their case. He went on to describe the men's claims that they had been tortured into confessing as certainly consistent. As my hon. Friend said, an independent voice from the UN is substantiating the men's claims about their torture and forced confession.

The case has changed quite dramatically in the past few months. An appeal for clemency towards the men—including Sandy Mitchell, of course—has been presented by their lawyers and is now before King Fahd. The Foreign Office needs to lift its game and intensify the campaign on behalf of Sandy Mitchell and the others. We cannot allow the clemency appeal to be considered in isolation: there must be political pressure to accompany it. The Saudis need to know how the British Government feel about the case.

The hon. Gentleman will be aware that I triggered a debate on the topic some two or three weeks ago. Since then, I have received a letter from the Saudi ambassador in England, and I think that there might be mileage in asking the Foreign Office to facilitate sending a deputation of MPs to see the Saudi ambassador in private. Does the hon. Gentleman think that there is merit in that?

I do. That is a good suggestion, because it would give all of us representing a constituent's interests the chance to make representations collectively. If the hon. Gentleman's suggestion would help, I would be happy to do it. I am happy to exert as much pressure as I can, because it would be pointless for me to insist that the Foreign Office exerts pressure if I were unprepared to do so myself.

By the end of the debate, if we achieve nothing else, we need to make sure that the Minister will tell my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs that those of us involved in the debate, and in representing our constituents' interests, want him to put as much pressure as possible on the Saudis. He must tell them that the British Government fully support the appeal for clemency. As I have said, it is time to intensify the campaign. There must be personal intervention, if that is what is needed. It is certainly what the families demand. They want more activity; they want it 24 hours a day, seven days a week. It is all very well for people to criticise them and say that they are putting too much pressure on the Government, but any family would naturally want to do that if a relative were involved.

I congratulate my hon. Friend on securing the debate. On the issue of the families, I am a mother, a sister and a daughter, and I cannot imagine how horrific the situation must be for the family members of Mr. Mitchell and the other men. I wonder how desperate they are. I know that they will have made many representations to the Minister. What about their health and sleepless nights, and the hell that they are going through?

I welcome my hon. Friend's eloquent comments. She has properly put the matter into perspective. We have been talking throughout about the health cost to those who have been in prison. There is a cost—and I do not think that it can be measured—to the friends and relatives who are trying to do something about the situation, but who almost feel that it is a waste of time, and that they are not making any progress at all. I am conscious of that.

There is another issue that I must raise, because I have been asked to do so by Sandy Mitchell's sister. She has been told by the Foreign Office that even if Sandy Mitchell is successful in his clemency appeal, the Foreign Office will not pay the air fare to bring him and the other men back to the UK. I put on record that I am horrified that the Foreign Office should take that stand. It is crass and insensitive; it displays the sensitivity of a torturer. I cannot believe that it has made that decision. That should not be a consideration at this stage. The priorities should be the clemency appeal, the freedom of the men and getting them back to the UK. After that the question of the fares can be dealt with.

In my opinion, Sandy Mitchell and the others are innocent. They must have the full support of the Foreign Office in every possible way. The well-being of the prisoners and of their relatives and family is central—my hon. Friend the Member for East Lothian (Anne Picking) made that point.

At the beginning of the debate, I said that I did not want this to be an anti-Saudi discussion. I am quite prepared to accuse the Saudi Arabian authorities of physical and psychological torture, because I believe the men, and they say that that is what they faced. I also believe Ron Jones, who is another valid witness to all this. The legal process in Saudi Arabia that was used to sentence the men raises serious and fundamental judicial procedure questions. The plight of the men must become a priority, because the clemency appeal needs to be decided as quickly as possible, and I think that our pressure can achieve that.

I finish with a simple point. I have a photograph of Sandy Mitchell with a newborn baby. That baby is now four years old. He has never seen his father. I hope that the Minister and the Foreign Secretary can swiftly change that.

I rise to mention a couple of facts. The Council for the Advancement of Arab-British Understanding sponsored a trip by five parliamentarians between 17 and 19 May. I almost pulled out of it because, a few days before we left, the suicide bomb exploded in the foreigners' compound in Riyadh. The Foreign Office was opposed to our visit: it said that it was too dangerous. My family was opposed to me going, too. I only decided to go because my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Lyons) said that I could be useful in making representations on behalf of Sandy Mitchell. I felt that it was a risk worth taking.

I am pleased that I went. The five parliamentarians met 12 different groups and individuals, such as Prince Saud al-Faisal, the Saudi Foreign Minister, and a large group of members of the Shura council. We made a plea of clemency for Sandy Mitchell and the other prisoners in Riyadh at every one of those meetings. I am not sure that we made any impact, but if effort is what counts we should have had some success because we tried very hard. We explained that we were not criticising Saudi criminal law: we were simply asking for clemency for these prisoners, and particularly for Sandy Mitchell.

I begin by congratulating my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Lyons) on securing this debate. The Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Harlow (Mr. Rammell), set out our anxieties about the men detained in Saudi Arabia in a debate on 3 June, and I welcome the opportunity further to emphasise our deep concern about this case.

My hon. Friend the Member for Strathkelvin and Bearsden asked specifically about the case of Sandy Mitchell. We are concerned about all the men who are detained. Mr. Mitchell is one of the detained persons who are accused of involvement in a series of bombings. We have serious concerns about the case and have been working on behalf of the detained men. This is a very difficult time for Sandy Mitchell and his family, and for the families of all the men involved. We are trying to resolve the case on behalf of each of them, and I would not wish to say anything today that will make that more difficult.

Let me deal specifically with some aspects of Sandy Mitchell's case. We share the deep concern that is felt about it. We have raised Mr. Mitchell's case at the highest level with the Saudi authorities and will continue to do so until it is successfully resolved. I give a clear undertaking that that is the position of the Foreign Office.

My hon. Friend raised several issues, and I shall deal with some of them. He referred to the payment for airline tickets back to the United Kingdom when the men are released. In such cases, the Foreign Office can, if required, make funds available to British nationals and their families. We shall consider their ability to pay. The loan is usually made available, so that British nationals do not have to worry about funding tickets immediately and can return to the United Kingdom as quickly as possible. However, I take my hon. Friend's point and we may have the opportunity to talk about the matter later.

I want to put on the record my thanks to colleagues in the Home Office for the sympathetic way in which they have dealt with Mrs. Walker, who is a Filipino citizen. Their actions have shown that the Government take a common-sense approach, for which I am particularly grateful.

I take note of my hon. Friend's thanks. The Home Office, like the Foreign Office, takes a sensible approach.

There has been a request that a group of Members of Parliament meet the Saudi ambassador. It may be helpful to reinforce the public concern that is felt in this country about the case.

Will the Minister give way?

I want to make some progress, but I shall give way briefly.

Will the Minister confirm that the Foreign Office will do something to help a private deputation take place?

The Saudi ambassador will obviously have to consider whether he wishes to see a deputation. If my hon. Friend the Member for Strathkelvin and Bearsden wishes to lead such a delegation, as he introduced the debate, I will discuss with him whether we might satisfactorily approach the Saudi ambassador.

I am pleased that the Saudi authorities allowed Margaret Dunn to see her brother. It enabled her at least to see for herself how he was. Her concern about his health is a matter that the Foreign Office takes seriously and we have raised such matters with the Saudi authorities. Although the British Government are working tirelessly on behalf of Sandy Mitchell, we have taken the view that that is most effectively done by engaging with the Saudi authorities in private.

We have not sought publicity because we have made the judgment that until now that would be detrimental to Sandy Mitchell's interests. As he has made clear, at least to Foreign Office officials during visits, he does not wish the Foreign Office to discuss the detail of his case in public. He has legal representation and is in close contact with his lawyers. I understand that he can have private meetings with them. The lawyers talk to the Saudi authorities about the progress of the case. We have regular contact with Sandy Mitchell's family and keep them informed, in so far as we are able, about developments. It has been a long and difficult process for the family. We do not underestimate how upsetting it must be for them. We certainly extend our sympathy to them for the upset that they have experienced.

The background to the case is known. A series of small bomb explosions in Riyadh and Al Kobar between November 2000 and September 2002 resulted in the death and injury of British nationals and other westerners. When considering the case of the detained men, we must also remember that in Britain the families of those who were killed and injured want justice to be done. We will not forget the bombings, which caused a huge amount of pain, hardship and distress to the victims and their families.

Some people accuse the Foreign Office of putting our trading and defence relationships with Saudi Arabia before the welfare of the men detained. My hon. Friend the Member for Strathkelvin and Bearsden did not suggest that, and it is certainly not the case. However, it is worth putting it on the record that our trading relationship will not prevent us from actively taking up the case of those men with the Saudi Government. We can pursue the case because we have a relationship about a range of issues with Saudi Arabia. When it is merited, we are prepared to criticise that country. We cover a wide range of matters with the Saudi authorities, and we raise human rights issues, both generally and in the context of Sandy Mitchell's case.

In the Adjournment debate on 3 June, my hon. Friend the Under-Secretary described how we raised a wide range of human rights issues with the Saudi authorities, so I do not need to rehearse that fact. The UN special rapporteur for the independence of judges and lawyers visited Saudi Arabia last October. He examined the case of the British men detained and voiced his concerns about it.

More recently, Saudi Arabia has shown a greater willingness to engage with the international community on human rights issues. It has produced reports for unanswered questions from the UN treaty monitoring bodies. Saudi Arabia has submitted its first report to the UN Committee against Torture since it ratified the convention in 1997. In May 2002, the committee asked Saudi Arabia about its use of flogging and amputation by judicial and administrative authorities, the powers of the religious police and prolonged pre-trial incommunicado detention.

The fact that Saudi Arabian authorities also answered questions from the UN Committee on the Elimination of Racial Discrimination in March 2003 is another indication of Saudi Arabia's greater willingness to engage on human rights issues.In the report, the UN committee raised worries about the rights of foreign workers, among other issues.

The ratification of the convention on the elimination of all forms of discrimination against women is also a welcome sign. However, we are concerned about the wide-ranging reservations placed on that by Saudi Arabia. There is universal compulsory female education; women have had access to university education since 1962 and attendance is increasing; opportunities for women in commerce are improving; and many businesses are owned and run by women. However, their situation in Saudi Arabia still gives cause for public concern.

In May 2002, Saudi Arabia adopted new criminal justice procedures, which were aimed at modernising the criminal justice system. Among other things, those procedures provide for lawyers to represent defendants and for greater transparency in court proceedings. Saudi Arabia has announced its intention to establish two human rights bodies. We respect the Saudi wish for a legal system based on Sharia law, but we are worried about the system's willingness to comply with all international standards. We remain committed to encouraging the Saudi authorities to improve their human rights record. We are encouraged by the Saudi Government's ratification of some of the UN human rights treaties. We wish to see the Saudi Government more deeply reflected when dealing with some of those concerns.

Given that the appeal for clemency can take place at any time, can the Minister give us any assurance that the appeal and the decision will not be made until every representation by every interested party has been made?

I can certainly reassure my hon. Friend that we will continue to press at the highest level for an early resolution of the case. I cannot go further than that, but I can reassure him that we are serious about resolving the matter. The Saudi Arabian authorities know how deeply worried we are about it and it is being dealt with at the highest level. Our work on behalf of Sandy Mitchell has been consistent with our wider consular effort, helping British nationals in distress overseas. It is one of the most important elements of the Government's foreign policy.

On that basis, we can provide a level of reassurance to the families that those who are detained are not forgotten and that we will continue to do all that we reasonably can—

Order.