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Opposition Day

Volume 422: debated on Tuesday 15 June 2004

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I inform the House that I have selected the amendment in the name of the Prime Minister.

12,59 pm

I beg to move,

That this House notes that the Government has failed to meet its target of reducing congestion on Britain's roads by 5 per cent., that congestion is set to rise by up to 20 per cent. by 2010 and that, according to the CBI, traffic congestion costs British industry £15 billion to £20 billion a year; recognises that the Government is failing to meet its targets for increased passenger and freight use of the railways and that rail freight declined by 0.3 billion net tonne kilometres in 2002; regrets the fact that one in five trains is still running late and that reliability on the railways has not even returned to the levels achieved before the Hatfield crash; condemns the Government's failure to decide the future of Crossrail, the East London Line Extension and Thameslink 2000 and the delay of improvements such as the upgrading of the East Coast Main Line; further notes that the Transport Committee stated that the Government has had 'years to address the problems of the railway but failed to take effective action'; calls on the Government to acknowledge that its Ten Year Transport Plan has failed in all its key objectives; deplores the Government's failure to develop a coherent planning strategy for Britain's ports; further condemns the Government for the confusion and blight caused by the Aviation White Paper to many communities near airports; and further calls, in the light of these failures, for a re-evaluation of transport policy which properly recognises the needs of both drivers and users of public transport.
I am delighted to have an opportunity to debate these important issues one day into my new job.

Pull the other one!

The right hon. Gentleman suggests that I am not enthusiastic about this. No one is more concerned than I, who have talked to many of my constituents in recent months about their transport problems, and no one is more enthusiastic about addressing the issues. I will, however, start on the rational and grown-up note that I intend to adopt in dealing with this issue during the next few months, by acknowledging that some of the problems of transport are, indeed, long term. The origins of some of today's difficulties lie far in the past.

In a moment. It is precisely because of that that many of the difficulties need to be addressed more urgently than they are being addressed by the Government.

Let me thank the Secretary of State and his predecessors, however, and most notably the Deputy Prime Minister, who predictably is absent from the House today, for creating a background in relation to transport that is so familiar to someone who has just spent seven and a half months shadowing health and education.

I shall give way in a moment. Health and education are two areas in which Labour has spent much of the past seven years setting targets in Whitehall, very few of which are ever achieved, establishing expensive new quangos that, after a few years of consuming huge sums of taxpayers' money, none of which reaches front line services, are then abolished, and making claims that waiting times are getting shorter. In fact, whether someone is waiting for a hospital bed, for a consultant's appointment or for a train to arrive, they know in many cases that waiting times are getting longer.

I know that the hon. Gentleman's Chief Whip is desperately trying to protect him from my intervention, but the hon. Gentleman said that many of the problems that our Government face go back a long way into the past. Surely the main problem on the railways is the botched privatisation of the previous Tory Government.

I wondered how many minutes it would be before a Labour Member tried to address today's problems by referring to issues that were decided many years ago in the past. If Labour Members are so concerned about privatisation, have they asked the Secretary of State why he has not renationalised the train operating comp lilies? What is the answer to that? Is the right hon. Gentleman suggesting that there should be a renationalisation programme, and how does he propose that that should be financed? Which taxes on his constituents does lie want to see raised to repurchase the train operating companies, many of which have done a successful job?

I do not think that the hon. Gentleman was listening to what I said, and to what many others on this side of the House have said. The problem was the particular way in which the privatisation was carried out. It could have been done sensibly, although I should not necessarily have supported it, but to set up all the different organisations—train operating companies, leasing companies and the predecessor of Network Rail, Railtrack— clearly created chaos and confusion. The hon. Gentleman and his colleagues are the architects of that chaos and confusion.

I note that the right hon. Gentleman does not suggest that he would raise the tax on whisky to pay for the renationalisation of the railway industry.

The similarities in the ways in which Labour has let people down on health, education and transport are depressing, with the same combination of over-hyped policies, endless centrally set bureaucratic targets, broken promises and frustrated consumers. Britain's transport system is used by almost every family in the country almost every day of the lives and, equally importantly, by almost every business. Families, businesses and the whole economy are damaged by the Government's failures on roads, railways and airports. That damage is not confined to the endless delays experienced by travellers in cars, trains and aircraft every day, but extends to businesses, whose competitive position is undermined at a time when competition from abroad is more intense than ever before.

I appreciate that the hon. Gentleman is new to the job, and he is setting out his concerns on transport policy. I think that he was today quoted as saying that Tory transport policies were at a fairly undeveloped stage. If that is so, when will he start to develop them? Will he be arguing with the shadow Chancellor that the Tories should increase transport spending by more than inflation?

I am glad that the hon. Gentleman has raised the question of Conservative transport policy. My colleagues have set out a 10-paint plan to deal with one aspect of policy, about half a which has already been adopted by the Government. We will gradually set out further policies, and the electors will have the choice of either persuading the Government to do the sensible thing and adopt them or, before too long, electing a Conservative Government who will implement them wholeheartedly. After the results of the elections last week, it seems that that day is not far off.

Does my hon. Friend agree that the main problem is a shortage of transport capacity of all kinds? We are short of rail capacity and road capacity. Will a Conservative Government start to produce the bind of infrastructure that we need, preferably using private finance?

My right hon. Friend goes to the heart of the matter, and I shall deal with our approach and the Government's shortcomings and failures to increase capacity in the way in which he has suggested in a moment. Looking at business, it is perfectly true that our competitive position worldwide is now threatened by capacity shortages, particularly in roads, railways and airports.

Only this week, the CBI has concluded that Labour's 10-year transport plan has failed. The director general, Digby Jones, pointed out that even after £50 billion of spending in four years, the lack of improvement in road congestion and train performance is "exhausting tolerance" among the public and employers. He went on:
"We have a first-class economy which deserves a first-rate transport system, not the substandard infrastructure that is letting down the country."
Earlier this year, the British Chambers of Commerce reported that only one company in 10 believed that the transport system met its business needs. Only one company in 50 believes that the Government's proposals will provide an effective solution to the transport problems that are holding its business back. The BCC estimates that the costs of meeting the problems caused by the transport infrastructure now amount to £15 billion. One business in three states that the resulting higher operating coats have a significant impact on its business.

Labour's failures on transport, therefore, not only let down millions of frustrated motorists, rail travellers and airport users every day, but are costing the country dear and undermining our international competitive position.

My hon. Friend is giving an insightful analysis into the failings of the policy. Does he also accept that much of the policy was a work of fiction? If we read the transport plan, we find that project after project that the Government committed themselves to having open by 2010—modernising the east coast main line, upgrading the Great Western main line—has now been scrapped. The document is not worth the paper that it is written on.

My hon. Friend anticipates some of the points that I intend to make. He is quite right to say that the Department has an almost unbeatable record for setting targets through a variety of documents, then failing to achieve them. I should mention that we support the idea of having a long-term transport plan. The nature of the issues and the industries involved requires long-term planning, and our criticism of Labour's approach is not the existence of the plan but the execution of it.

Let us consider the Government's record in relation to the motion. The 10-year transport plan promised to cut road congestion by 5 per cent. by 2010, with bigger reductions in major cities. Last year, however, the CBI reported that congestion on key parts of the road network was worse than it was before the plan. Perhaps that is not surprising because under Labour, Britain spends the lowest proportion of motoring taxes on transport of any advanced country. Throughout the period of the 10-year plan, Labour plans to spend less every single year on new roads than Baroness Thatcher's Government spent every single year for which she was in power. Under Labour, in 2001 not a single inch of new bypass was built anywhere in the United Kingdom.

The £6 billion road-building programme that was left behind by the outgoing Conservative Government in 1997, including a commitment to building 150 new roads, was scrapped. Only 37 of those roads were completed. I welcome the fact that belatedly, Labour has restarted the road-building programme. In just the past few days, I have heard that a small project, involving less than £1 million, is to go ahead in my constituency, and I am grateful to the Under-Secretary of State for Transport, the hon. Member for Plymouth, Devonport (Mr. Jamieson), for listening to the representations that I and my constituents made about the Old London road link road in Capel St. Mary. I hope that that is the harbinger of further roads to be built in Suffolk. They are certainly badly needed, most notably the Sudbury western bypass. I shall take that up with the Under-Secretary in due course.

Changes of mind in the Government's approach to the roads have not been confined to decisions about building. Road pricing has suffered a similar fate. In the 2002 Budget, the Government said that they would introduce a UK-wide, distance-based road user charge for lorries to ensure that all lorry operators, including those from continental Europe, pay their fair share towards the cost of using British roads and of financing further investment. Since that time, the Department says that it

"has been working closely with HM Customs and Excise to establish the framework for the lorry road-user charge."
It has produced no fewer than three progress reports on the proposed framework, the most recent being issued

this March. It announced that the implementation date has been moved back to 2007–08 to

"leave more time for trials of the final equipment and a phased introduction",
so that

"the Government is now in a position to begin the procurement process".
This is another example of the dithering for which the Department for Transport has become famous.

On the third anniversary of the Deputy Prime Minister's announcement of the 10-year plan, figures from Trafficmaster showed that average journey times had risen by 16 per cent. since 1998, and that motorway congestion was up by 40 per cent. The Freight Transport Association pointed out earlier this year that the condition of local roads is 6 per cent. worse than a decade ago.

It is not just the state of the roads;but the cost of driving that causes concern. Labour remains addicted to raising fuel duty, but we have long opposed the 2p increase planned for this autumn. I remind the House that the Chancellor of the Exchequer said in his 2003 Budget that high and volatile fuel prices provide no basis for raising duty, and that he was therefore deferring duty rises until this autumn. It is clear that if ever there has been a time of high and volatile fuel prices, it is now. All we get from the Chancellor is a commitment to review the decision, despite the fact that because of the fuel price increase, the revenue that he is raising from petroleum revenue tax already greatly exceeds the amount that would be produced by a 2p increase in duty.

Does my hon. Friend accept that the 2p extra per litre on petrol, which will be introduced later this year, will hit disproportionately those who live in rural areas? They do not have a choice between public transport or the car; they have only the car, which they rely on to do their daily business. It is therefore vital that the 2p increase is not imposed in September, so that rural people can at least buy their fuel—the most expensive anywhere in Europe—without that extra tax.

My hon. Friend is right: no group of people suffers more from the Government's war on the motorist than those living in rural communities. He knows from his constituency experience—as I know from mine, and from the visits that I pay to rural areas throughout the country—that the Government have systematically discriminated against people in rural communities. The 2p increase in fuel duty is yet another example of that. As long as the conditions of high and volatile fuel prices remain, the Conservative party will fight tooth and nail against this duty increase. The question now is whether the Secretary of State will join in that fight. We know how close he is to the Chancellor of the Exchequer; motorists will look to him to use his influence on their behalf.

On the railways, the picture is really no better. The 10-year plan promised a 50 per cent. increase in passenger use by 2010, but the Department for Transport's own annual report reveals a growth figure of only 6 per cent. so far. When Labour's own Commission for Integrated Transport advised that the 50 per cent. target be reconsidered, the Government were forced into a U-turn on this issue as well. One way to encourage greater use of the railways might be to make the comparative cost of rail travel more attractive. The 10-year plan promised real reductions in rail fares, but the Government subsequently removed the cap on rail fares, resulting in larger fare increases, with double-figure percentage rises becoming commonplace.

Regular users of the trains, such as me, are painfully aware of how out of date much of our rolling stock remains. The 10-year plan promised that by 2010, new and faster tilting trains would be travelling at speeds of up to 140 mph. There is no longer any possibility of that happening by 2010 on the west coast main line, and there is no definite date thereafter on which this pledge will be honoured. The Deputy Prime Minister's promise that the old mark 1 slam-door trains would be replaced by the end of 2004 has also been broken.

We were promised that under Labour trains would be more punctual, but more than one train in five continues to arrive late. Meanwhile, confusion reigns. The Office of the Rail Regulator, the Strategic Rail Authority and Network Rail—all creations of this Labour Government—are vying with each other to be the organisation that runs the railways. Re-franchising agreements struck 1D3 the SRA have resulted in station cuts and longer journey times for London commuters—who, incidentally, account for 70 per cent. of all rail journeys in the United Kingdom.

In the period after privatisation, services were increased in response to demand and passenger railway use grew. Now, as uncertainty prevails, the number of complaints from passengers is rising sharply. The Transport Committee, pointed out that

"overcrowding on public transport is bad and is likely to get worse … The current chronic overcrowding in all the major conurbations that gave evidence is unacceptable".

On commuters and London commuters in particular, does my hon. Friend agree that one of the Government's major failings is that they simply have not taken decisions on the railway infrastructure spending that is necessary—I am thinking, for example, of Thameslink 2000—if we are to have the capacity to which he has referred?

I shall deal with Thameslink in a moment. May I tell my hon. Friend how much I enjoyed the journey that he and I look by railway to his constituency only a few weeks ago—in only moderate discomfort—in rolling stock that dated from the 1950s and certainly no later than the 1960s?

Whether the taxpayer is now seeing value for money for rail subsidies running at £14 million a day is extremely doubtful. A s for future projects, as more than one of my hon. Friends has said, delay and dither continue to be the order of the day. Labour claims that it is committed to Crossrail, yet we still have no confirmation that this project is to go ahead. Such delay now means that it will not be built in time for the Olympic games, should they be held in this country in 2012.

In 2001, Labour's general election manifesto stated:

"We support plans to extend the East London line".

Despite that commitment and the fact that only three miles of new track are needed to join up the existing railways that form part of the project, the scheme has been delayed until 2010 at the earliest, and there is doubt as to whether it will ever be completed. Of course, this scheme is part of our Olympic bid, 'allure to complete it may well jeopardise London's chances of success. Indeed, if our bid fails it is extremely likely that transport failures will be one of the main reasons why.

We should not overlook the fact that our financial services industry—an industry in which Britain remains a world leader, and which is heavily dependent on London—itself requires an up-to-date infrastructure to maintain that position, to meet its needs, and to ensure that London remains a city in which people can move around easily, that is pleasant to live in and which can meet the demands of a 21st-century industry.

I wonder whether my hon. Friend intends to address the future of the Strategic Rail Authority. He is doubtless aware of the rumour that it will be abolished, which has come about because the prediction that we made during the legislative passage of the Transport Bill 2000— that the SRA would be a bottleneck for investment and would slow down decision making—has come true. Indeed, even the Government regret setting it up. Is he aware that more people in London are now employed by the SRA than were originally employed by British Rail? Is this not an area in which we could cut waste and improve transport?

My hon. Friend is absolutely right and I certainly look forward to the Government's announcing their decision on the future of the SRA. I am afraid that this is typical of Labour's approach in so many areas. They establish large new quangos arid employ large numbers of people, none of whom do anything to improve services to customers. What is true for the railways is also true for education and for health. Huge sums of taxpayers' money are then ;pent, and in the end, the Government see the folly of their ways and close down such organisations. The SRA was a creation entirely of this Labour Government, and my hon. Friend has raised a most important point.

On airport capacity, a similar method of ducking or delaying decisions has characterised the Government's approach. The Secretary of State lacks any coherent plan or vision to address the environmental concerns associated with the future of Heathrow. Given that it is very likely that extra airport capacity will be needed—and given that this problem will not only not go away, but will get harder to solve the longer decisions are put off—it is time that we had some answers. Many thousands of people are now suffering blight as a result of the Government's inability to reach decisions.

My own constituency of South Suffolk is affected by developments at Stansted. The expansion of activity there has already caused considerable disturbance in some of the most tranquil areas of East Anglia. There is widespread and justified dissatisfaction with the consultation process, whose shortcomings mean that the first thing that many people in rural communities know about changes in flight paths and increased aircraft movements is the sound of jet planes droning over their homes.

What would the hon. Gentleman say to people who are concerned about the dangers of pollution and night noise from the new Finningley airport?

I would say that they need a clear decision from the Government on how they will tackle those problems—a decision that the Government have wholly failed to take. A proposed further expansion of Stansted now seems to be being advanced without proper environmental or health impact studies or a convincing business case.

We have seen the same head-in-the-sand approach in relation to ports with the refusal of the container port at Dibden bay. There may have been very sound environmental reasons for refusing the application. That is all very well, but at the same time, no one disputes the fact that, within a few years, the UK will run out of container port capacity. Where is the Government's ports strategy? Where is the leadership on that vital issue, which is so crucial to Britain's trading future? We cannot escape the view that, as with airports, the Government are stoking up a bonfire that someone else will have to dampen down.

I am grateful to my hon. Friend for giving way. I wanted to intervene before he altogether leaves the question of airports. What would he say to constituents such as mine who are blighted by the possibility of having a second runway at Birmingham airport, with no idea whatever of what sort of compensation scheme will apply? So far, they have had no consultation either.

I am afraid that my hon. Friend's constituents have suffered not only from the Government's dither and delay, but from the failure of the consultation process. I sympathise greatly with his constituents, some of whom will be in a similar position to those in East Anglia who have similar anxieties. I can give my hon. Friend the assurance that, when the happy day dawns and a Conservative Government are elected, those issues will be addressed urgently and responsibly.

Before the hon. Gentleman concludes, does he agree that there is a role for smaller airports—I mean very small airports—to provide something of a regional link? The remote areas of Wales are an obvious example. That can be done without undue disturbance to local residents and there are considerable economic benefits to the communities that such airports serve.

I am happy for local communities, if they want to exercise that choice, to have the opportunity to be served with additional local airport capacity.

Transport is an area of policy whose impact is wider than almost any other. Decisions are in their nature very long term. Delay and uncertainty therefore have particularly harmful effects. A joined-up approach is needed to link planning decisions more logically to transport policy, which provides maximum choice to users and ensures that investment grows on a steady basis. That process should involve a greater element of private finance as a way of promoting that very steadiness.

The country is running out of patience with this Labour Government. After last week's excellent election results, the Conservative party looks forward to presenting its alternative prescription. Meanwhile, I commend the motion to the House.

1.23 pm

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"recognises that the problems with the transport system stem from decades of under-investment; welcomes the Government's commitment to long-term funding for transport through the Ten Year Plan; acknowledges that one of the main reasons for the continuing pressure on transport networks is that the United Kingdom is enjoying the longest period of sustained economic growth for more than 200 years; supports the Government's determination to face the tough decisions which will be required to meet these pressures and put UK transport on a sustainable footing, including runway capacity at UK airports, management of road space and re-organising Britain's railways following a failed privatisation; and welcomes the early signs of success, including the halt in the decline in bus use, the biggest replacement programme for railway rolling stock ever seen in this country, the major programme of investment in the West Coast Main Line and the 22 per cent. decline in the numbers of people killed or seriously injured on the roads since the mid-1990s."
Mr. Speaker, some of us must have seen a different set of election results last Thursday from the one that the hon. Member for South Suffolk (Mr. Yeo) saw.

I should first acknowledge the departure of the right hon. Member for Maidenhead (Mrs. May), who had the shadow transport job for what seems a comparatively short time. We did not see her very much the second time in that role, but I see from the Conservative website that her new job as shadow Secretary of State with responsibility for the family includes the task of having

"a campaigning role highlighting the success of Conservatives in delivering better local services at lower cost",
so I think that it will be some time before we see the right hon. Lady again.

I also noticed, as my hon. Friend the Member for Birmingham, Northfield (Richard Burden) said, that on the appointment of the hon. Member for South Suffolk yesterday, which we are told was a total surprise to him, he thought that the Tory transport policy was "fairly undeveloped". That seems a rather damning indictment of his predecessors, but I would say that he is absolutely right in that analysis. I have waited the last two years to see just a glimmer of Tory party transport policy. They have now had seven years to develop one, but we still have not seen it. There must come a point at which we debate some of the big transport issues that we face—the hon. Gentleman is right that there are some, on which the electorate are entitled to make choices between the two main parties likely to form a Government—and I hope that that day will come.

May I point out to the right hon. Gentleman that I introduced the policy of the Brit disc—charging foreign lorries for the use of British roads—to this House some time ago. The difference between a Labour Government and a Conservative Government is that we would have gone on and done it, while the right hon. Gentleman is dithering and wasting money.

I shall come on to the lorry road user charging point in just a moment, but I hardly think that a single suggestion or a quote in a newspaper amounts to a coherent transport policy. The Conservatives do not have one and, arguably, they did not have one when they were in government either.

Talking of coherent policies, did the right hon. Gentleman agree with the Minister of State, Department for Transport, the hon. Member for Pontypridd (Dr. Howells), when he said that he wanted to tax motorists out of their cars? Does he agree with that coherent policy?

He did not say that, and the hon. Gentleman would do well to read what my hon. Friend actually said.

Let me start by acknowledging that the hon. Member for Ashford (Mr. Green), who has managed to hold his place in the transport team, made an interesting speech in Portugal this year

The hon. Member for South Suffolk must find it interesting, because he used the same words at the tail end of his speech—perhaps the hon. Member for Ashford acts as his speech writer. He made three points, which were absolutely right. He said that there were three principles that were essential to transport. First, the Government should give people genuine choice about the mode of transport that they choose. That is absolutely right, and I have long said that. Secondly, he made the important point that long-term transport success will come from steady and predictable investment policies, sheltered from incessant political interference. Thirdly, he went on to say that investment would require substantial private sector money, which is also absolutely right.

In respect of the second point, the hon. Member for South Suffolk started off by referring to it—at that stage I thought that he might be offering a thoughtful tour around transport policy—when he said that many of the problems that we face now have grown up over many years and many decades. That is absolutely true. Successive Governments, Conservative and Labour, have failed to spend enough on a consistent and sustained basis. Whether we are talking about the railways or the roads, the problem is that, despite the fact that we are the fourth largest economy in the world and the fact that there have been times over the last 30 or 40 years when we should have been spending money to improve capacity, successive Governments did not do so. The right hon. Member for Wokingham (Mr. Redwood), who is no longer in his place, was absolutely right about that.

If we are to improve transport, several things need to be done in respect of management and policy, which I will develop in a moment, but the one thing that is absolutely essential is to continue with sustained and increased investment.

I will give way in a moment.

That is what the CBI called for the other day. The one policy that the Conservative party—though not, curiously, the hon. Member for South Suffolk—has is a commitment to freezing public spending. That is what the shadow Chancellor has set out. Doing that in transport terms would mean a cut of nearly £600 million. Whatever the problems with transport, it can never be the answer to cut from the budget an amount roughly equivalent to what the Highways Agency spends on motorways and trunk roads, or to the amount spent on concessionary bus travel.

When the hon. Member for South Suffolk was speaking and taking interventions, he gave a number of nods and winks that he would back. Crossrail, the East London line, Thameslink 2000—you name it, he would back it. Where is the money going to come from to pay for that?

In a moment. For six months, the hon. Member for South Suffolk dealt with health and education, and he was not afraid to make spending commitments. He attended the National Union of Teachers conference—and I suppose that he deserves a medal for that—and said that he was determined that the next Conservative Government would not only match Labour's spending commitments on schools but surpass them. Interestingly, he had the opportunity to say something on transport spending, but he did not. Perhaps he saw an interesting extract from Andrew Neil's BBC interview with the shadow Chancellor. Andrew Neil asked whether a Conservative Government would match Labour's spending on education, and the shadow Chancellor said, "No, we'll stick to our plan." When Mr. Neil noted that in his famous lecture—he was being funny—the shadow Chancellor had said that he would match whatever Labour spent on health and education, the right hon. Gentleman said, "No, I didn't. You can read my entire text. You will never read any words like that."

Whatever he turns his mind to over the next few weeks, the hon. Member for South Suffolk will find that he is stymied—if I can use that transport term—by the fact that his shadow Chancellor is not prepared to give him the money that he will need. Indeed, the shadow Chancellor actually proposes to cut the money that would go to transport.

Yes, in a moment. I cannot wait to give way to the hon. Gentleman. All the things that the hon.

Member for South Suffolk has said today, and all the hints that he has made, will come to nothing if the means to make them happen are not available.

The Government are increasing the amount of money going to transport by about 50 per cent. in real terms. The Conservatives want to cut that transport budget. It is therefore very difficult, if not impossible, to take seriously any protestations by the hon. Member for South Suffolk—or whoever the next Conservative spokesman happens to be, or the one after that, given that the average tenure under the new Opposition leadership seems to be rather shorter even than under the previous leadership.

At least two former Conservative Transport Secretaries are present today. They will know that transport needs consistent and sustained levels of spending beyond all else. All the grand plans for road building, for example, set out by the Conservatives at the beginning of the 1990s had collapsed by the time the former Government left office. The reason was that their boom-and-bust philosophy and the cuts that they had to make meant that they could not pay for those plans.

I am grateful to the Secretary of State for giving way. Given what he has just said, why do the figures on page 99 of the 10-year plan show that public investment in the railways in 2010–11 will be less than what it was 15 years previously, under the Conservatives?

We have just been listening to the Opposition belief that private finance must be brought into transport. I should have thought that the hon. Gentleman would agree with that. Over the period, £33 billion in public sector investment will be made, and that will bring in a similar amount from the private sector. I make no bones about that, and I thought that there was some agreement on it across the Chamber—although I know that the Liberals have changed their policy as well. However, it must be right to bring in money from both the public and the private sectors. I certainly do not apologise for that. It does not matter to the railways whether the money comes from the public sector or the private sector. What matters is that it gets there in the first place.

I shall move on to considering some of the elements in the motion before the House, but before that I shall give way to the hon. Gentleman.

I am grateful to the Secretary of State for giving way. From his answer to my hon. Friend the Member for Epsom and Ewell (Chris Grayling), it appears that the right hon. Gentleman is proud of the amount of private sector finance going into transport. When they go to the rest of the UK, my constituents can only use transport financed by the private sector. There is no public sector subsidy for services from my constituency to any other part of the UK. Does the right hon. Gentleman accept that private sector finance is more stable, when it comes to investment, than public sector finance?

No, I think that we need both, frankly. We shall discuss the railways shortly, but I cannot see how any railway system in the world would not need money from both the public and private sector. The Conservatives privatised the railways, and they believed that they could move rail transport substantially into the private sector, rather as happened with aviation. That is not going to happen. It is impossible, as the sums of money involved are just too large. That is why I think that both forms of investment are needed.

I want to deal with a number of matters, the first of which—the role of speed cameras in road safety—is topical today. However, it is curious that the Conservative spokesman did not mention it, as the matter has been raised at every Transport Question Time since January. Today, the Government have published an independent report showing that the number of people killed or seriously injured at camera sites has fallen by almost 40 per cent., and I have published data in connection with every speed camera in the country. Those data show why each camera position was selected, and what has happened since. It is therefore curious that the Opposition have said not a word on the matter.

The hon. Member for Ashford (Mr. Green) said at the beginning of the year that the Opposition wanted a national audit of all the camera sites. At the time, all the controversy—[Interruption.] Does the hon. Gentleman believe that the figures are wrong?

The hon. Gentleman says that the figures are old. He has spent most of the year giving the impression that all speed cameras are wrong and in the wrong place, but when confronted with the evidence, he has absolutely nothing to say.

The Secretary of State has completely traduced what I said. I never said that all speed cameras were in the wrong place, although I did say that some of them were. The roads Minister, the Under-Secretary of State for Transport, the hon. Member for Plymouth, Devonport (Mr. Jamieson), has said constantly that no speed camera was in the wrong place. On the radio this morning, however, the Secretary of State said that some speed cameras were in the wrong place. I am delighted that he agrees with me, and not with his own junior Minister.

We should not get into a slanging match. However, I remember that the hon. Gentleman left the House with a clear impression, after the first Transport Question Time of the year, that he was against speed cameras, and that he thought that most of them were in the wrong place.

In light of all the controversy at the beginning of the year, I asked my officials at the Department to produce data for each and every camera site. In that way, anyone who has a question about any particular camera—why it was situated where it was, and what difference it has made—can now find out, as the information has been collected. That information is backed up by an independent study produced by University college London, which shows that the cameras save lives.

The hon. Member for Ashford has said that some cameras need to be looked at more closely, and he is right—indeed, I think I said the same thing at the most recent Question Time. The vast majority of cameras appear to be having the right effect, and the number of accidents in which people are killed or injured has fallen. A small number of cameras—about 200-odd—were installed in the early 1990s. The hon. Member for Christchurch (Mr. Chope) introduced the policy, and so will know something about this matter. In those days, it was not necessary, as it is now, to show that cameras led to a significant reduction in the numbers of people killed or injured. Therefore we will have to consider whether those cameras are justified. I suspect that people will say that many of them are justified, but some may not be.

About 200 other cameras do not appear to be having the effect that was intended, and I have asked that the local partnerships and the police consider their placement. However, there are something like 5,000 camera sites in the country. Most people believe that the use of cameras should be considered rationally. We hear a lot from people who do not like speed cameras, but a lot of others are campaigning actively for more.

Moreover, we mug t never forget that today, and every day of the year, nearly 10 people will be killed or seriously injured on this country's roads. We owe it to them to do all we can to improve road safety. That goes beyond concentrating on speed cameras, which are just one element of an overall strategy. The information published by the Government today is a major step towards ensuring that the debate has a rational basis. People do not need to believe any of us: they can look at the figures, and decide for themselves.

No driver likes speed cameras, but that does not mean that we do not recognise that they are important. Last year, seven people died on the A631 in my constituency. This year, no one has died since speed cameras were introduced. My right hon. Friend said he was reviewing the siting of 200 cameras. Will he also look at roads such a; the A638? The number of people killed at one place on that road has not been sufficient to warrant a speed camera. but should not there be more flexible criteria in relation to siting cameras? The number of people killed on a longer stretch of that road than can be taken into account for the purpose of siting a camera shows that he road is a killer, and that it needs speed cameras.

My hon. Friend illustrates the problem that we face. All Members of Parliament and local councillors will know that for everybody who says that a camera should not be in a certain place, there is someone else who says that we should do something about that dangerous road. The decision on the siting of individual cameras is a matter for police and local authorities, and my hon. Friend should pursue the matter with them.

The Secretary of State will be aware that Durham and North Yorkshire do not have fixed camera sites, so his letter to me was silent on that point. The Under-Secretary with

responsibility for roads has admitted that the child pedestrian casualty figures are unacceptably high, but what do the Government propose to do about that?

Durham and North Yorkshire are not in the netting-off scheme, and that is why they were not included. If they are not in the scheme, they are not obliged to provide figures and that i why they were not mentioned. It is for those areas to decide whether they want to have speed cameras. Child casualty numbers are falling, but my hon. Friend the Under-Secretary was right to highlight our concern. We need to keep up the pressure to reduce casualties among children and motorcyclists, and the Department has a number of strategies to address that. No doubt we will return to the issue in future debates.

It is necessary to recognise that we have an inherited problem, built up over many years in which the country did not spend enough on road capacity. The solution has three strands. First, we need to increase capacity where necessary, and over the pa ;t few years I have announced plans to widen the major motorways and improve other roads and junctions Secondly, we need to ensure that we put money into public transport so that people can have the choice to which the hon. Member for South Suffolk referred. Thirdly, we need to improve the way in which our roads are managed, because they are not managed particularly well. That is why we set up the traffic area officers, starting in the west midlands, to assist in keeping traffic flowing after an incident or accident.

All three aspects of our approach require investment, and so I come back to the issue of Tory policy. We have just received a lecture on the shortcomings of our policy, and that is fine. The hon. Gentleman is entitled to criticise, because that is what Oppositions do. However, at some point, the Tories will need some sort of policy if they do not think that our policy is right.

Those three strategies are fair enough, but what would the Secretary of State say to rural motorists in constituencies such as mine, who have little public transport and are completely dependent on their cars but who face the highest fuel prices in Europe? What words of comfort does he have for them?

It is true that many people living in rural areas do no have the same access to public transport. That applies throughout the country, and transport policy has to recognise that cars are essential for many people. However, the real problem with fuel prices in the past few weeks has not been caused by tax, because my right hon. Friend the Chancellor deferred the increase in tax this year. The problem was caused by the dramatic rise in international oil prices over a very short period. The answer to that problem is to try to bring influence to bear on the OPEC countries to increase production, and that is precisely what the Government have done. Oil production has increased and we have seen a modest reduction in prices. However, the opportunism of the Conservatives in trying to suggest that international oil price changes would not have happened if they were in government beggars belief.

The hon. Member for North Essex (Mr. Jenkin), who used to be a transport spokesman, asked me about road user charging for lorries. Sadly, it seems that he could not wait for the answer, as he is no longer in his place. However, the Government remain determined on that issue. There has been some slippage in the timetable, but that is primarily because we want to ensure that the scheme works when it is introduced. Our experience of big IT projects and the experience of a similar scheme in Germany lead me to believe that we should take the time to get the scheme right, and not rush into something that then fails.

The Tories have also indicated that in the longer term they would consider whether road pricing for cars was a possibility, including distance-based charging. That will not happen in the near future, because it is a long way off technically, but the Government will shortly publish the feasibility study that we set up. It will be interesting to see whether the hon. Member for South Suffolk has the courage to look ahead 30 or 40 years instead of concentrating on the 30 to 40-minute time horizon that has appeared to occupy some of his predecessors.

My right hon. Friend mentioned road management. What, if any, work has his Department done on variable speeds on motorways?

There are two separate issues there. The first is whether we intend to change the motorway speed limit, and I can confirm that we do not have any plans to do that. The second is variable speed limits on, for example, the M25 and other motorways to manage traffic flow, and we intend to develop those because they work.

On the subject of our railways, the legacy of a lack of investment is clear. We are putting money into the railways. The hon. Member for South Suffolk was critical of how much money we are putting in, but we are putting more money in because we are getting more out of it. British Rail used to reckon on replacing 500 miles of track each year. In the lead up to privatisation, that fell to 300 miles. After privatisation, it dropped to 200. However, this year, Network Rail will replace some 850 miles of track. If we want a reliable railway, the track and the signalling must be maintained just like the rolling stock itself.

In what could prove to be an expensive speech when the great day of judgment comes, the hon. Gentleman hinted that he would provide 140-mile an hour running on the west coast main line. However, he knows that the Tories' friends in Railtrack—the right hon. Member for Maidenhead only had one policy, and that was to bring back Railtrack—hopelessly underestimated the cost of doing up the west coast main line. Under Railtrack the cost soared to more than £13 billion. Now it will cost some £7 billion, but when it is finished it will cut the London to Manchester—and indeed to Glasgow—journey times by half an hour; and when it is finished in four years' time, it will cut the journey to Glasgow by an hour.

The channel tunnel rail link is open, and it has already cut the journey time. Its reliability is good and it is due to be completed in 2007. To listen to the hon. Gentleman, one would think that no rolling stock was ever replaced. In fact, nearly 40 per cent. of rolling stock has been replaced over a five-year period, and nearly half of that has been done on London commuter routes.

We are also improving the power supply south of the Thames, something that Railtrack never got round to doing, because of its incompetence. Last year saw 1 billion passengers travel on the railways for the first time since the early 1960s. I do not deny that much remains to do, but on roads, railways and the tube—which now has £1 billion a year invested in it—we are putting money into the system, which successive Governments failed to do, and that will lead to improvements.

The Secretary of State will accept that the Government have made various promises over the years. He will remember the Strategic Rail Authority plan that specifically set out projects, with timetabled starting dates, for this decade, but most of them have now been abandoned. The Government have made commitments and promises that they have failed to keep.

Many of the things that we said we would do are being done. As I have said before, it is true that costs in the industry are far higher than they should be, primarily because Railtrack completely lost control of its spending. Bringing maintenance back in house has saved substantial sums. Last year, Network Rail spent £1 billion less than it thought it would, through efficiency savings, and that demonstrates the problems that were stored up by the policies that the hon. Gentleman supported.

I certainly acknowledge the investment that has been made. In my constituency, for instance, the Northfield relief road was on the stocks for about 30 years because there was no money, but work should start on the site at the end of this year or early next year, purely owing to the investment that is being put in.

In the west midlands, there is still a huge need for increased transport infrastructure investment over and above what is going in at present. The region not only needs to be able to move its manufactured goods around but, strategically, it is slap-bang in the middle of the route between the south-east and the north-west and beyond. My right hon. Friend will know that that is a real issue for businesses and others, as well as for commuters, in the west midlands, so although I acknowledge what has been done, will he revisit the need for extra investment in the west midlands?

I understand what my hon. Friend is saying. The west coast main line will help the west midlands, in particular, and the M6 toll, which is of course privately financed, has relieved much of the pressure on the existing M6 and freed up much capacity. Last year, I announced that quite substantial sums of investment were available to the Birmingham area and the west midlands to improve local transport. However, I fully understand my hon. Friend's point. Across the country, the argument about investing and capacity is powerful, but I come back to the point that if policy is to cut spending rather than to increase it, there is an inevitable consequence—we do not have to speculate about what it is because this country has been there before.

I want to say a few words about aviation. The hon. Member for South Suffolk has held his appointment only for a few hours so I forgive him for not having read the air transport White Paper that we published in December. For the first time in a long time, it set out a framework for policy for airport development for the next 20 to 30 years and has been widely welcomed outside. Of course, there is controversy at individual sites about runway development and so on, but as I listened to the hon. Gentleman, he gave me the clear impression that he was against development at Stansted, against development at Heathrow, against development at Birmingham and, I dare say, if a few other Members had stood up he would have been against development in their areas, too. Perhaps I should have asked him about his plans for Edinburgh airport, although he might want to check out local opinion before he gives his view.

The matter is duff cult. The number of people flying has increased dramatically over the past few years; nearly half the population flies at least once a year, so if we are to avoid the problems we currently experience on our roads and railways we need sensible capacity increases in aviation We have set out our stall. I used to ask the right hon. Member for Maidenhead what her policy was, but sadly. she never got around to telling me. Before the hon. Member for South Suffolk leaves his post, in six and a hall months' time, I hope that he at least will come up with a policy.

Does the Secretary of State accept that small, regional airports have an important role to play for a relatively small number of passengers who need to get from one place to another fast? As long as development is carried out sensitively, with attention to planning and noise considerations, such airports can be an important aid to economic development, especially in rural and outlying areas. The Government should think about making small investments that deliver big returns of that sort.

I understand the hon. Gentleman's point. With the Welsh Assembly, we are looking at the Welsh airport network. He is right to say that small airports have an important role. But we must be realistic; we cannot put small airports everywhere. There has to be a balance. He would no doubt find that opinion among his constituents was sharply divided as soon as they thought that a runway would be built nearby.

Before I turn to abusing the Liberals, as I said I would, I shall give way to the hon. Member for Rayleigh (Mr. Francois).

I am reluctant to delay any initiative that leads to abuse of the Liberal Democrats, so I thank the Secretary of State for giving way.

On Stansted, the right hon. Gentleman will be aware that current capacity for the existing runway is approximately 20 million passenger movements a year, and that, with full utilisation of that runway, it would be possible to increase the number to about 40 million. Given the tremendous environmental damage that would be created in the county of Essex by the large expansion of the footprint of Stansted that will be required for the second runway, is not the logical compromise to increase capacity on the existing runway to 40 million? That would give some of the expansion in capacity that the right hon. Gentleman wants without causing tremendous environmental damage in Essex.

We looked hard at that matter and I fully understand the hon. Gentleman's point. However, when considering Stansted and the south-east, we took the view that we needed additional capacity, although the hon. Gentleman should remember that it will not happen next year or the year after, given the length of time that it takes to do such things. We are talking about a second runway at Stansted in the first part of the next decade and the Heathrow development will take place even later than that. At present, capacity at Stansted is almost fully taken up at peak hours, so we need to plan ahead. Our starting point was that we should make maximum use of what we already had and we considered that, but as the hon. Gentleman knows, we came to the conclusion that a second runway was necessary.

The Liberals have been very quiet, so I shall not say too much about them. However, I am curious about two things. When I looked at their rebuttal of our paper about their spending commitments, one of which was almost £2 billion more for the railways, they responded that that was no longer a commitment, owing to changed circumstances. Have the circumstances changed again? Secondly, their plan was to double investment in local transport schemes, but their response was that that, too, was no longer a commitment, owing to changed circumstances. Have those circumstances changed? I make those points only because occasionally the Liberals suggest that many things could be done, without always mentioning that the money has to be provided, too.

I conclude on this point: there is a lot more to do on transport. We face huge problems that have built up over many years, but the central point and, I suspect, the dividing line between the parties over the next period of time, is that we are prepared to sustain the amount of money that we are spending on transport, where we have already seen a steady increase, but the Conservatives are committed to a dramatic cut. For as long as that remains the case, whatever they say about transport will lack credibility. For that reason, I suspect that the House will reject their motion.

1.57 pm

I begin by welcoming the hon. Member for South Suffolk (Mr. Yeo) to his new post It is nice to see him at the Dispatch Box, as his predecessor was rarely in the Chamber when we debated transport. I look forward to debating the subject with him on in my future occasions. He will probably find that transport is one of the most fertile policy areas for his party, as it is currently entirely policy-free.

No one can doubt that transport is central to our future prosperity and we must pay great attention to it. However, we need to address a paradox at the centre of transport policy; it is a key part of transport policy, but I have not heard much about it this afternoon. On the one hand, transport is critical to the economy. The ability to move freight and passengers efficiently is vital to productivity; it is both a driver of, and is driven by, the economy. Equally important, people need good transport links to give them access to facilities and services—shops, education, culture and many other things. Sometimes, especially in rural areas, the lack of transport is a major cause of social exclusion.

On the other hand, however, in our modern, highly fossil-fuel-consuming, mobile society, transport has major environmental costs that we ignore at our peril. In March, for example, the Department for Environment, Food and Rural Affairs published a report on air emission estimates, which revealed that carbon dioxide emissions from road traffic were 31.9 million tonnes in 2002—the highest since 1970—while nitrous oxide emissions had increased to 14,800 tonnes, a rise of 55 per cent. over five years.

Aviation produces an even gloomier picture. Consumption rose by 21 per cent. between 1997 and 2003. London's three busiest airports alone produce a staggering 2 million tonnes of carbon dioxide and 13,000 tonnes of nitrous oxide each year. The aviation industry's emissions are projected to double between 1990 and 2010.

Clearly, such emission levels are wholly unsustainable. We are long past the time when we can stick our heads in the sand and hope that global warming will go away. Climate change is clearly a reality. We simply cannot go on like this if we want to avoid what the film "The Day After Tomorrow" shows us.

I thank the hon. Gentleman for his courtesy in giving way. He mentioned one Select Committee report. He may be aware that the Environmental Audit Committee, on which I serve, has produced a number of reports on the environmental effects of aviation. Given the effect of so-called "radiative forcing", aircraft emissions can have four times the effect on the ozone layer when they are made at altitude—when aircraft are in flight—than they have when those chemicals are released into the atmosphere at ground level. That very important environmental point is not lost on people who live in north Essex.

I am grateful to the hon. Gentleman, who makes a valid point. It is extremely valid when one considers that projections suggest that aviation emissions will constitute 50 per cent. of emissions in this country by about 2020.

The objective of our transport policy, therefore, must be to reconcile the need for an efficient and effective transport system with the imperative of reducing emissions. Such an objective can be achieved only if the Government, providers and consumers change their attitudes considerably, but the Government must set out the vision—the long-term plan—and provide the leadership. Currently, plans are laid on a 10-year basis. I suggest that 10 years is far too short. It is obvious that we need to deal in a much longer time scale for all modes of transport—something like 25 to 30 years. Indeed, the Secretary of State has recognised that, and I pay tribute

to the Government for the aviation White Paper, which takes a much more long-term view. I may not agree with all its conclusions, but I absolutely agree that considering modes of transport in the long term is vital if we are to have sustainable policies and a clear vision that the public can sign up to. The same is needed for the railways.

Will the hon. Gentleman clarify whether imposing an additional environmental duty on aviation fuel is Liberal Democrat policy?

Our current policy is to seek to ensure that the external costs of aviation are properly reflected. There have been suggestions that that should be done by means of an aviation fuel tax, which I believe has considerable merit. The problem is that aviation fuel tax would be extremely difficult to put it in place without treaties at the very least in Europe. if not throughout the world. So I rather prefer—this is what I am arguing for within my party, and I hope that it may become our policy—a tax based on the aircraft that take off from this country, rather than air passenger duty, which has absolutely no green benefit whatever and was introduced by a Conservative Government simply to balance the books. I would get rid of air passenger duty and tax aeroplanes instead. That would not only encourage the aviation industry to start to produce more fuel-efficient aeroplanes and airlines to ensure that they operate more effectively, but direct the taxation at the bad. It would be a much better way to externalise the taxation. I sincerely hope that, when that policy has been adopted through our party channels, I shall be able to present it.

I am grateful to the hon. Gentleman for diverting for a moment to clarify that interesting point. He is talking about scrapping air passenger duty and replacing it with a levy on planes. Presumably, the airlines would pass on the cost to passengers. How would that change anything?

The hon. Gentleman misses an obvious point: air passenger duty is levied on each passenger, so it is easy to put on each ticket whatever the cost is. A duty levied on the aeroplane could not be passed on to passengers by adding it to the ticket price for the simple reason that the airline never knows how many people will fly on it. If the aeroplane itself were taxed, the amount would have to be included in the airline industry's costs. It would be passed on in the total cost of the tickets for all passengers, which is precisely what we seek to achieve, so the true costs would be externalised. The airlines would not be able to show £9 to fly somewhere in Europe and then add on tax and all the other bits in brackets.

May I tell the hon. Gentleman that I very much hope that that becomes Liberal Democrat policy?

I am confident that it will.

We must also consider managing demand, and we have already started to talk about doing so. It is important that we consider the true cost of each mode of travel as well as managing demand, which is a vital tool in resolving the paradox. We can no longer accept that everyone has a free and unfettered right to travel wherever they wish. whenever they wish, by whatever mode of travel they wish. Transport is a limited resource, so it must be managed wisely. It is for the Government to influence how people and goods are transported by the policies that favour those modes with the least environmental cost. Our citizens have a right to efficient transport, but not by every mode, everywhere. Our resources must be managed. Against that background and given the resources available, it is clear that we have not begun to maximise our potential.

Take freight, for example, which is vital to commerce and industry. More than 90 per cent. of freight arrives at and departs from our shores by sea, but it is largely transported by road thereafter. Yet, all along our coasts, many medium and small ports are underused. Surely, transporting some of our freight onwards by coastal shipping would be an important addition to our armoury. After all sea travel is one of the most environmentally friendly ways to move freight. The infrastructure exists. so why do the Government do nothing to promote that form of transport?

The railways offer a considerable opportunity for further freight movement, but freight trains need access to the rail network to maximise it. We also need to promote the concept of freight villages and the related logistics. That, too, will require Government support. Getting our railways right is the keystone for transport in the future. The industry needs sound structures for the future, and the outcome of the current rail review must settle the questions about the current arrangements.

The objective of rail policy should be. first, to provide a safe, reliable and affordable system of public transport and, secondly, to invest in the network's future to provide a modern and efficient railway for the 21st century. If we are to have a successful rail network, three functions need to be undertaken in considering the structure, which is the objective of the rail review: first, strategic direction; secondly, service delivery; and, thirdly, regulation.

On strategic direction, the Department for Transport should provide a long-term, strategic vision for our railways. The Government, in partnership with the private sector, provide much of the funding, and it is their responsibility to ensure that an inefficient transport infrastructure exists to support the economy. The Government must therefore provide the leadership and vision, which, as I have said, should be over 25 to 30 years, in the Department for Transport. That would effectively remove the need for the Strategic Rail Authority.

The management of service delivery should remain with Network Rail for the infrastructure and with the train operating companies for the franchises. The Department for Transport should be responsible both for funding arrangements and for defining the strategy for Network Rail, working in a new, simplified regulatory framework. Network Rail is best placed to be responsible for the day-to-day management and running of the network, together with the day-to-day co-ordination of services. I saw a leak in the weekend press that suggested that Ministers would be responsible

for some of the day-to-day management of the railways. I sincerely hope that we never arr lye at that unhappy state of affairs.

On regulation, it is essential that there is an independent regulator. The current arrangements are clearly over-bureaucratic and complicated, particularly with regard to safety. The regulation model best suited to the railways must follow that of the Civil Aviation Authority for air transport, whereby economic, environmental and safety regulation come under one body. The new regulator would include the new rail accident investigation branch as well as consumer representation. That would mean removing all safety functions from the Health and Safety Executive and giving them to the new body, which should also take responsibility for organising the franchising process. It might also be worth looking at the duties of the Office of Fair Trading relating to the railways and considering whether they might more suitably be placed under the auspices of the new regulator.

There is, however, one leftover from the awful privatisation that is a complete waste of time, wholly unnecessary and adds un-needed cost. I refer to the monopolistic rolling stock companies, which add very little. If anyone wants proof that they are simply a cash cow, the fact that they are all owned by banks does it for me.

If franchises were longer, it would be possible to envisage a system whereby the train operating companies could become owners of rolling stock and therefore be able to have control over their assets and costs in much the same way as happens in other areas, such as lifeline ferry links, where expensive assets are passed on from one franchisee to another, having been amortised for their life over the balance sheet of the first company. Examining the rolling stock companies is a critical part of taking forward the seduction of costs on our railways.

I am amazed by what the hon. Gentleman is saying. He is describing a wish to move from one leasing arrangement to another. Leasing companies, regardless of who they are and what they do, will make a margin. Surely he agrees that the rolling stock side is the one demonstrable and tangible success of privatisation: the substantial new investments in rolling stock are visible and can be found on the rail network all the time. Does he want to go back to a situation in which the companies buy their own stock, or is he talking simply about moving from one kind of leasing company to another?

The hon. Gentleman's comment that the ROSCOs are the one successful part of privatisation is very revealing. That is at the heart of Conservative thinking. Those companies are the one part that makes a great deal of money for the City, which is the only thing that they seem to add to the equation. It would be perfectly possible for the train operating companies to have access to capital, and their capital cost is considerably smaller than the lease cost that they currently pay. I believe that their average cost of capital is around 7 or 8 per cent., so if they are paying 7 or 8 per cent. using capital from the equity market or from the borrowing to which they have access, they will be very able to acquire stock. What is needed is a mechanism by which the stock can be transferred at the end of the franchise. Above all, in the longer term, we need to commit to expanding the network to permit more capacity, particularly for fast trains and freight.

The Secretary of State asked me to say a word about our spending plans, and I am happy to confirm that our current policies for the next Parliament envisage nothing that involves an increase in transport spending. We are quite happy to live within the sums that are currently available. I agree with him that there has been considerable waste in the rail system, and Network Rail, through the policy that I agreed with of bringing maintenance back in-house, has been able to make savings. In the shorter term, all that is required to be done can be achieved within the existing budget.

I do not seek the same expenditure on each area. I would certainly seek a shift in policies that might lead to more being spent on public transport than on other things, but I am happy to confirm that the global figure for the Department would remain the same. However, before the Secretary of State announces on a website that a new commitment has been made—it is not a new commitment—I hasten to add that I believe that whoever is in government has a duty to look 25 to 30 years into the long term and decide about the infrastructure that needs to be put in place over that time to meet our goals. There is a serious and mature debate to be had about that, and I would be happy to enter into it.

I believe that there should be an assumption against expanding the road network. There will certainly be areas in which new schemes present the best cost-benefit overall and sometimes the best environmental option. We should certainly invest in those cases. However, I do not believe that simply building more roads provides an answer to the problems that we face. It is well documented that new roads create traffic.

We also need to consider how roads are charged for. The Secretary of State mentioned road charging, and it is worth mentioning in parenthesis that the actual cost of motoring in 2001 was lower in real terms than it was in 1974. An answer that one of my hon. Friends received from the Secretary of State's Department helpfully used a base of 100 for the cost of motoring in 1974. In 2001, the figure had reduced to 98.7. Interestingly, on the same time scale the costs of rail travel had increased from 100 to 185.3 and of bus travel from 100 to 166.1. Since 1997, the cost of rail travel has gone up by 8 per cent. and that of bus travel by 5 per cent., but despite what the Conservatives say, motoring costs have gone down by 1 per cent.

Will the hon. Gentleman enlighten the House on Liberal Democrat policy on this issue? Is it to get the cost of motoring up to 100 or perhaps a bit beyond, and the cost of rail travel to below its current figure?

We would like the true cost of motoring to be apparent. I note from the table that the previous Conservative Government had the highest figure, having got it up to 104 in 1979. Our policy, as I shall show in a moment, is to make sure that the real costs of motoring are seen. That is best done by removing vehicle excise duty and fuel duty and replacing them with road user charging. As the Secretary of State said, the technology for that is by no means proven, although there is one scheme that believes that it could be implemented immediately. It will take time to develop and implement the technology but, over a five to 10-year period, I see no reason why road charging should not prove the best way forward. If I heard him right, he invited us to discuss that matter, and I an certainly happy to do so.

I shall not go into detail on aviation. We had a very good debate on it last week, but my points about emissions make it clear that restraining the uncontrolled growth of aviation must be part of the longer-term strategy. In part, that can be done by providing real and competitive alternatives. It is mad that, in an island as small as ours, the most effective way of getting from London to Edinburgh is by air. There should be a rail alternative. A rail alternative was timetabled some years ago that would have done the journey in four hours, which is almost exactly the same as the time of a door-to-door journey by air. If we could promote that alternative, we might be able to remove some of the short-haul requirements for domestic aviation. I recently had the pleasure of visiting Korea and, on the day that I was there, a headline in the International Herald Tribune highlighted the collapse of domestic aviation demand there because of the opening of a new high-speed rail link from the south of the country to Seoul. It achieved the exact objective of reducing demand, so we should consider such schemes.

My colleagues and I will support the Conservative motion, albeit with some reluctance. It is pretty high on complaint yet, as the speech made by the hon. Member for South Suffolk showed, low on alternatives. When the Conservatives were in government, they did little for roads—the facts do not back up their rhetoric. They completely rodgered the railways and hid from just about everything else. The answer to the problem that Conservative Members have given in recent Westminster Hall debates and other debates in which I have participated has seemed to be. "Just build more roads." We had a long discussion about port capacity during one debate, and the Conservative spokesman's answer to the problem was, "Build more roads everywhere." Up until today, their answer seemed to be, "Build more roads and speed. You can go as fast as you like."

Although the Conservatives have little to offer, their criticism of the Government is justified. There are alternatives. In the longer term, we need a clear strategy and, above all, a commitment to an integrated transport policy that uses all available modes of transport. It is up to the Government to provide and deliver that vision.

2.21 pm

I feel the same way that I felt on Sunday night when we got to the 90th minute. I thought that the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) was going to support the Government amendment, so I feel very disappointed. I regret that because I have a considerable amount of time for the hon. Gentleman. His constituency is similar to mine, although it is on the other side of the border. I applaud his attempts to talk and listen to people from the transport industry. I hope that he will reconfigure his approach on the amendment during the debate. It is sad that the hon. Member for South Suffolk (Mr. Yeo) has left the Chamber because I thought that the official Opposition might be making a visionary attempt to hold a timely and appropriate debate on this day—I shall come to that in a moment.

I had especially hoped that the right hon. Member for Maidenhead (Mrs. May) would be in the Chamber so that I could take up an outstanding matter that arose during her recent visit to my constituency during the election campaign. It was a whistlestop visit with quick photographs by the quayside before she left, but that is not easy to do in a constituency such as Scarborough and Whitby. The right hon. Lady failed to listen or respond to any of the many questions asked by my constituents—albeit local journalists—about Conservative party transport policy. Indeed, the only reference made to transport policy as a result of her brief visit to the quayside in Whitby was a photograph in the local paper of her famous shoes—I do not think that that had anything to do with pedestrian strategy. The visit showed how the right hon. Lady, who is in charge of an official Opposition policy, failed to recognise a key priority in my constituency and many others throughout the country, despite the fact that her party wishes to become the Government.

As I said earlier, the debate is timely because today is the day on which the Institution of Civil Engineers publishes its report "The State of the Nation"—I declare an interest because I am a chartered civil engineer. The report is an independent assessment of the nation's logistics, key elements of the economy and everyday life, that is written by people such as me who are involved in the delivery of renewal and maintenance for our infrastructure. I pay tribute to the institution for commissioning the work. Many right hon. and hon. Members will have received invitations from fellow civil engineers to the Institution of Civil Engineers parliamentary reception this evening. I hope that the hon. Member for South Suffolk will go along and listen to practitioners who are trying to maintain this country's transport network because they do not feel that Conservative prescriptions thus far match their assessment on the country's transport policy.

During my 19 years in the transport industry, I reckon that about 60 per cent. of my design and assessment work behind my prognosis of what needed to happen to our transport infrastructure, and especially the rail infrastructure, was done to no effect. It was consigned to drawers and the archives—I guess that some might have ended up in the national railway museum by now. The Conservative Government of the time failed to deliver a transport policy. They failed to deliver on railways and certainly on this country's road network. The hon. Member for South Suffolk said that when the Conservative party left government in 1997, it left a wish list of road schemes at the Department for Transport. However, the wish list could not be delivered, so many of my constituents were disappointed that the much-needed revitalisation of the A64 corridor did not happen, despite the fact that my predecessor in my constituency, the Conservative Member John Sykes, had long promised it. Such a situation was a consequence of the boom-bust economy and the stop-go approach on policy delivery during the 18 sad and

backward-looking years when the Conservatives failed to listen to the many communities that wanted investment in transport.

The Institution of Civil Engineers has rightly framed a national debate in much the same way that the hon. Member for Caithness, Sutherland and Easter Ross suggested. We need a debate from which politics is removed and a long-term strategic approach. As we try to reach conclusions on what needs to be put right, we need not only to assess what must be put in place, but to ensure that appropriate finance is available. I hope that as many Conservative Members as possible will go to listen to my colleagues in Great George street.

I pay tribute to the current president of the Institution of Civil Engineers, Douglas Oakervee, who has a worldwide reputation for producing transport schemes. He was one of the people behind the provision and delivery of the Hong Kong mass rapid transit system and Hong Kong airport. He is a world-class engineer. The possibility of earning real revenue for the country through exporting his and my colleagues' skills and their ability to deliver such major projects must be based on a coherent and strategic domestic approach. We need a flow of work so that we may not only renew, build and maintain this country's infrastructure—especially our transport infrastructure—but ensue that we introduce new technologies and techniques.

The hon. Member for Caithness, Sutherland and Easter Ross talked about his experiences in Korea. I remind him that one of the results of the Channel tunnel rail link was a modal switch affecting journeys from London to Paris and Brussels. The switch occurred because the high-speed railway was delivered on time and on budget. Many civil engineers thought that that deserved much celebration, but sadly, as ever, the national press failed to recognise the tremendous achievement of the team that put the project together. Such achievements can be delivered if there is continuity of approach.

I agree with Douglas Oakervee, who says in "The State of the Nation", the report that was published today:
"It is up to government, in partnership with other stakeholders, to educate public opinion and thereby gain support to take the important but unpalatable decisions that will protect our standard of living and keep this nation prosperous.
Our report this year does not therefore simply challenge government to take action. It challenges everyone to become part of the solution, not part of the problem."
I expressed a similar sentiment to great effect, I believe, when I stood for election in 1997. As an engineer who is also a Member of Parliament, I believe that if Members focused on listening to practitioners our debates would be better informed and there would be an opportunity, well received by our constituents, to achieve the right transport solutions for the nation.

As well as making an assessment of the nation's transport infrastructure, ICE looked at regional questions this year. Many Members will have received correspondence from it during the past few days indicating the nature of progress in their own region. I pay tribute to Mr. Colin Clinton, who chaired ICE's work on transport in "The State of the Nation" and examined the Government's performance in Yorkshire and the Humber, a region that I represent. Like any school report, it assesses performance with an A, B or C. I was pleased that ICE, an unbiased, independent body, believed that there was an improvement in the delivery of transport policy in Yorkshire and the Humber, and gave it a B/C grade. I do not know whether that is a B-minus or a C-plus, but it is a distinct improvement on the position in my region and many other parts of the country in 1997.

We obviously face challenges in rail, the area of transport that I know most about. The east coast main line gives cause for concern as it has almost reached capacity. The frustrations of business people and other passengers are sometimes recorded in the regional press. Urgent progress should be made on tackling delays in upgrades on the route because there is a strong indication that that is starting to have an effect on the growth of the economy in the region. The TransPennine service is vital to my Scarborough constituency, and the new franchise has produced some of the best improvements in the country in recent years. I pay tribute to the TransPennine team for the delivery of the new service. New rolling stock is promised and rapid services link the Pennines to the north-west and connect my constituency to the east coast main line and thence to the capital.

Some improvements on the TransPennine route could be translated into developments on the east coast main line, including longer passenger trains and the provision of passing loops. Above all, more capacity should be built into the system to allow for freight services, which are vital to the manufacturers on the Yorkshire coast and in the rest of the region. I welcome the fact that the franchises are being renegotiated. The northern franchise is important to communities in the Whitby area, which is serviced by the Esk Valley line, and I urge the Minister to do all that he can to encourage speedy announcements on that route.

I pay tribute to the Strategic Rail Authority for its work with the community rail partnerships to revitalise and reinvigorate the crucial relationship between local communities, particularly rural communities, and the railways. I urge the Minister to consider the outputs of the Esk Valley line, which has been identified as a suitable pilot by the SRA, as we need to make sure that the public get value for money on rural railways and that we achieve efficiency and effectiveness in our transport network.

Since 1997, the Yorkshire box, which consists of the M1, the M62, the A1 and the M18, has improved and reinvigorated local transport systems in the heart of the region. Promised improvements to upgrade the A1 corridor to motorway standard are in stark contrast to the state of affairs under the right hon. Member for Maidenhead. The Under-Secretary of State for Transport, my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson), took considerable time and effort to meet my constituents, including members of the business community, and learn about the importance of the upgrade of the A64 corridor to the area. I pay tribute to the work that has been done to redefine strategic priorities in Yorkshire. The Government's regional transport policy has enabled us to have a dialogue and consider appropriate improvements and upgrades to the A64 corridor.

Scarborough and Whitby are important tourism destinations in the summer and early autumn—in fact, almost all year round now—and local transport plans have been introduced in partnership with local authorities, North Yorkshire county council and Scarborough borough council. Park and ride schemes are about to come on stream and there is better handling and management of traffic systems in the area. Those vital schemes would not have been introduced by a Conservative Government. My constituents know that if such a Government were elected before those plans are fully delivered they would go into the wish list bin that was clearly utilised in the mid-1990s.

I am listening carefully to the hon. Gentleman and his comments about Conservative policy. He talked about the Yorkshire box and the work that began in 1997. Will he not pay tribute to the last Conservative Government for making it possible to create that box?

I pay tribute to any Government who respond to the agenda of the region. That is why I have made great play of all political parties listening to practitioners. Regrettably, for a vital scheme of regional and national significance, there were many schemes that were not delivered by the Administration that the hon. Gentleman supported. Many schemes were consigned to the dustbin of history the—wish list of transport policy, as I would call it.

It behoves all Members to make a proper assessment of the requirements of transport policy. We must not just propose schemes—we must ensure that the resources are available to support them. The central failure of the economic policy of the previous Administration prevented transport policy from moving forward. If the hon. Member for South Suffolk had been allowed to develop his argument further, he would also have come to the conclusion that the main problems for the development of transport policy, as I experienced during my professional career, arose from the boom-bust, stop-go approach. We need a national settlement, a strategic view and a long-term agenda, as proposed by members of my institution over at Great George street. I hope to see the hon. Member for Bosworth (Mr. Tredinnick) there and I will gladly introduce him to his constituents there, who support the proposition that I am advancing. The ideas proposed by the shadow Chancellor of the Exchequer do not come close to responding to a national agenda, which is extremely important.

I shall deal briefly with airport strategy in the region of Yorkshire and the Humber. Earlier in the debate reference was made to Finningley. Regrettably, the spokesperson for the Conservative party did not seem to know much about Finningley or what it was. Air journey possibilities from outside the region need to be developed. Partly because of the excellent TransPennine railway connection from Scarborough to Manchester airport, 85 per cent. of air journeys undertaken by my constituents probably start from Manchester airport, rather than from an airport in the Yorkshire region that is a shorter trip away. Finningley offers great possibilities not only for business and leisure travellers, but for air freight services. I look forward to a rail link into that airport near Doncaster.

Finally, I was pleased to hear the comments about coastal traffic, coming as I do from an area with a long maritime tradition. I say that with no humility, because my constituents would never forgive me if I did, given the art of navigation, the legacy of Captain Cook and the legacy of maritime skills that originated and developed in Whitby, which has a long naval heritage. The potential for that small port to make an effective contribution in the way suggested by the hon. Member for Caithness, Sutherland and Easter Ross is tremendous, but to bring that about investment would be needed in the land links into the port.

I should be delighted to speak to my hon. Friend the Minister, probably at some length, about the possibility of supplying an eight-mile missing link between Pickering and Rillington junction near Malton, which would afford access par excellence from the port of Whitby to the east coast main line and avoid the long journey around. That would be particularly useful for freight traffic and would revitalise the port of Whitby and make a major contribution to the strategy mentioned by the hon. Member for Caithness, Sutherland and Easter Ross to reinvigorate coastal traffic. That would be a worthwhile project and my colleagues from the Institution of Civil Engineers would undoubtedly support it.

On road and transport safety, it is well known to the House that one of the challenges of representing a part of the country containing a national park is that there is a higher than average number of accidents caused by motorcyclists. The so-called boy racer has moved on, and people of my age or even older who have a large disposable income power through the North Yorkshire countryside on a Harley-Davidson or whatever. Regrettably, there is a higher proportion of accidents in my constituency than elsewhere in the countryside.

I was interested to note that the Yorkshire Post today highlights the fact that the roads of the Yorkshire region are a blackspot for motorcycle accidents. That is based on a new report from the AA Motoring Trust, which found that four roads in the region are blackspots for motorcycle accidents. I raised the issue earlier this month with the Minister of State, Department of Health, my right hon. Friend the Member for Barrow and Furness (Mr. Hutton).

It is incumbent on my hon. Friend the Minister to tell us about the work that is going on between the Department for Transport and health bodies to improve rider behaviour on our roads. That has a great impact on accident and emergency services and on transport and leads to loss of life. I urge him to tell the House what work is in progress to improve the behaviour of motorcyclists not only in my constituency, but throughout the country. A better information service is needed, because prevention is better than cure. The fatalities that unfortunately occur on our roads are a price too high to pay.

In conclusion, I commend the Government on what has been achieved so far to provide continuity in transport policy and a long-term approach, not a short-term fix. It is part of the Government's overall approach to use the benefits of a stronger economy to deliver. I know that my constituents and the people who work in the construction industry, some of whom hon. Members might have the opportunity to speak to later today, will tell them that bridge builders believe in building bridges and setting foundations for the future. I believe that the Government's policy does that, and that is the way forward for transport in this country.

2.48 pm

The Institution of Civil Engineers is an historic, estimable and professional organisation, and it is fortunate to have the hon. Member for Scarborough and Whitby (Lawrie Quinn) as its Member. The ICE will be well pleased with his contribution to the debate, although given the rosy picture that he painted on its behalf, it may be confused by the fact that he represents 50 per cent. of the total Labour Back-Bench force. Two Labour Members came to defend and commend the Government. If, on the other hand, he had claimed to represent one of the best purveyors of fish and chips in the country, he would have carried both sides of the House.

If one looks across the range of Government policy, transport is the best example of where old Labour and new Labour collide. The Government have lost the plot on transport, but they did so primarily in their first Parliament. I well remember the days when it was my privilege to stand at the Government Dispatch Box and the right hon. Member for Hull, East (Mr. Prescott), who is now Deputy Prime Minister, frothed at me from the Opposition Dispatch Box, shouting that privatisation of the railways was wrong. When I told him that I believed that, after 40 years of annual decreases in the number of people using the railways, privatisation would mean significant increases in passenger numbers and more investment that would lead to new trains, he frothed and fumed and vehemently denied it; but of course that is exactly what happened. He made the big mistake of being so emotionally antagonistic to the developing railway system that he could not form objective judgments, so he focused the debate on punctuality, which, although important to passengers, is not as important if it is the exclusive focus, as it was in his case. As a result, issues relating to safety and maintenance got set to one side.

The right hon. Gentleman also fulminated against roads. The hon. Member for Scarborough and Whitby was right to say that it is traditional for Governments—not just the last Conservative Government, for his information—to have a long list or roads that it would be good to build. I can lay claim to being the first Secretary of State to decide to inject a degree of rationality into that list, which was so long under both Governments that some people would have had to wait 30 or 40 years to see their particular road. That did not seem sensible, and I tried to reduce the list to a size that would be deliverable within a reasonable time frame. In describing it as a wish list, the hon. Gentleman condemns his own Ministers. We initiated a change of policy that said, "It would be good to build all these roads, but let's at least have a list that is likely to be deliverable in the foreseeable future."

As the Government's first Transport Secretary, the right hon. Member for Hull, East brought to Government the antagonism to roads that he had honed on me and my right hon. Friends and, as it says in the eighth report of the Select Committee on Transport, Local Government and the Regions, slashed all the road building programmes. On 6 June 1997, he said:
"I will have failed if in five years' time there are not many more people using public transport and far fewer journeys by car. It's a tall order, but I urge you to hold me to it."
That is like everything else that Ministers say: it is all spin. He did not mean it, he did not deliver it, he never could deliver it, he was not capable of forming a coherent policy that might be the basis for delivering it and he still rides around in his two Jaguars having failed by his own account, but not in the least embarrassed by it.

Although it is never a good career move for an Opposition Back Bencher to be mildly supportive of and sorry for the current incumbent of any Cabinet job, the blame for the fact that the Government's transport policy is a mess lies primarily not with the current Secretary of State, but with his two predecessors. I commend him—again, not a good career move—for having talked about reinstating a road-building programme. That takes him back, as the hon. Member for Scarborough and Whitby will note, precisely to where we left off in 1997: we have lost seven years in the process. I am pleased to see the Secretary of State in his place. His two predecessors—I shall come to the other one in a moment—did their best to screw up transport policy because they were not comfortable with trying to bring it into the 21st century and he now has to make decisions that are driven less by their political ideology, and in some cases emotional distaste, than by the need to realign Government policy with the realities of today.

One problem that the Secretary of State faces—I hope that his successor, whom I believe will be my hon. Friend the Member for South Suffolk (Mr. Yeo), will address it—is the need radically to speed up the roads programme. I was the Secretary of State who made the decision to widen the M25 between the M4 and the M3 as part of the Government's submission to the fifth terminal inquiry. That work is only just starting. I was the Secretary of State who made the decision, in the context of speeding the cross-Channel rail link, to put the terminal at St. Pancras. That work is only just starting.

I say to the Secretary of State that if we are to modernise the roads programme—he has said that he wants to do so, as would any sensible person, particularly a former Transport Minister—we need to have a radical look at the public inquiry arrangements and decision-making processes that relate to road building because they are so antiquated that nobody could even put a date on them. I have some ideas of my own about how that might be achieved while still defending the democratic process and I am happy to share them with anybody who is interested, though not in today's debate.

I want to say a few words about rail. The right hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) characteristically made his early comment and dashed for the door. In this case, it was: "Wasn't the rail privatisation process awful?" or words to that effect. I was not the Secretary of State who devised that policy or carried it through the House, but I moved it forward to completion and the increased passenger numbers and investment that we see today. It tends to be forgotten that other countries looked at how we privatised our railways and followed our example.

I find it sad that these days we spend too much time talking about the process instead of the passengers whom the process was designed to benefit. I chide the Secretary of State ever so slightly for his recent decision on fares. One of my most cherished memories of government is the Cabinet sub-committee meeting in which the then Chancellor of the Exchequer and I debated my proposal to move to a retail prices index minus 1 regime for 70 per cent. of fares. Hon. Members who know the previous Chancellor will understand when I say that it was a robust conversation. However, we agreed the policy. We did that because, as I said at the time, it ought to be made clear that passengers should get and be seen to get some benefit from privatisation. It was a signal that we were in favour of the railways. It was also, given that we had an RPI plus policy on roads, an indication of how we wished people to behave. I regret that that signal has been removed and that fares will increase, perhaps sharply, when the Government's rhetoric is about trying to get more people to use the railways.

When the right hon. Gentleman talks about the architecture of and preparation for rail privatisation, were not the previous Government trying to manage a decline in expectation of the railways, especially for freight, rather than cater for the expansion that subsequently occurred as a result of an economy that has done well? The previous Government sought to establish a system to manage a decline rather than to provide for expansion.

On the contrary. For once, I do not have to bore the hon. Gentleman with many facts and figures. Indeed, I condemn him to a worse fate: he should read all the speeches that I made when I was Secretary of State for Transport. He will then know precisely what we were doing.

On reflection, we made one mistake in the privatisation process. The train operators were all new business men, who were keen to run businesses that would benefit passengers and customers but also their shareholders. It is possible to do that simultaneously. Our mistake was to allow old British Rail management to become the management of Railtrack. The consequences were not good and change had to be introduced.

At that point, let us consider the contribution of the Secretary of State's other predecessor, the right hon. Member for Tyneside, North (Mr. Byers). In a statement to the House, he announced that he intended to put Railtrack into a special vehicle. In response to that, the former Chancellor of the Exchequer and I got to our feet and warned the Government that it was one of the most damaging decisions that they had ever made in the context of the public sector. We said that it would seriously undermine confidence in the private finance initiative and make public-private partnerships much more expensive. All that happened.

I remind Labour Members that the private holders of Railtrack shares will take the Government to court later in the year. We will then see precisely the effect of the former Secretary of State's judgment. If there is evidence that Her Majesty's Treasury leaned on the Secretary of State about the decision—as a former Secretary of State, I would be amazed if the Treasury had not leaned on him—the consequences for the Government's transport policy will be catastrophic.

We gave operating companies 15-year leases because we understood that they needed certainty to invest. The Government give them two-year leases and the companies will not invest. In one sense, that is not a party political point but a reflection of the marketplace. If companies do not believe that they have time to recoup their investment, they will not invest. The Government must make up their mind quickly about whether they wish to sustain and develop the investment and the passenger attraction of the railways through the contracts that they are willing to give the operators.

It has become clear beyond peradventure that the Strategic Rail Authority and Network Rail do not have money to invest in stations. The operating companies are the only ones that have money to improve our stations. They will not invest if they are given only two-year contracts. They need long contracts if they are to have the confidence to invest not only in developing services but in stations.

Let me make a constituency point. I am greatly privileged to be in r ty 26th year of representing some part of the city of Peterborough. For years, we have been promised badly needed redevelopment of our railway station. Pete) borough is the first stop on the east coast main line but he promise of redevelopment was made circa 1975 or 1980. Railtrack promised that we would have it and die SRA said that it would happen. Now the SRA will not even promise.

Indeed, in Peterborough, we do not know whether we shall have a new station and, if we do, whether it will face in the same direction as the current station or whether the plan will be reversed and the buildings constructed on the ether side of the track. We have a plan to develop our station 25 years after the end of the development corporation and we do not even know the direction that it is likely to face and what will be built in its environs, despite its position at the heart of the master plan to redevelop the city. Ministers will understand that such long-standing constituency problems cause hon Members from all parties to get agitated when we consider transport policy.

My last point concerns aviation. Again, I believe that I have the privilege of being the last Secretary of State to review airport policy At that time, I made it possible to have a second parallel runway at Gatwick, although legal constraints meant that that could not happen before the middle of the next decade. My hon. Friend the Member for South Suffolk was right to say that, because aviation policy is so sensitive, decision making must be exceptionally sharp. Our difficulty is not in acknowledging the need for greater capacity—I agree with the Government that greater capacity is required. However, decision making to reduce blight, uncertainty and unhappiness not commensurate with that understanding.

The Government have a wonderful opportunity to site the third major hub in the United Kingdom not in the south-east but in the midlands or the north-east, where an increasing number of people go for their

transport needs. I pay special tribute to those who run Manchester airport because, from my days as Transport Secretary, I was impressed with the service that they provided.

This Government made a decision that they will live to regret when they decided, after we had robustly resisted the proposal, to pass responsibility for landing rights from our control to Europe. We all know how difficult it is to put in place new treaties. I hope that I will not bore the House when I say that I was the last Secretary of State to conclude an agreement on this issue with the Americans. We have not had one for eight years, or even longer. Now the future of Heathrow, Gatwick and the third hub, wherever that is, will be determined in Brussels and not in this country. Hon. Members must ask themselves why Brussels should look after our interests when Charles de Gaulle, Schiphol and Frankfurt airports are there. I worry about the longterm health of our aviation industry. That issue would be a good one to repatriate to the competence of the British Government and I shall corn mend that proposal to my right hon. Friends when we return to power.

I started by saying that this Government had lost the plot, but we made some mistakes in our transport policy as well. I want to admit to one today, to try to head off the present Secretary of State from making things worse. He said that he was considering extending variable speed technology after the M25 experiment. I have to tell the House that, on one of the few occasions in my ministerial career when I was conned by civil servants, I agreed to that variable speed limit being put in place. It is a waste of public money. I drive down the M25, crawling at 10 mph while looking at a sign telling me that I am allowed to drive at 40. Or sometimes I crawl at 20 mph past a sign saying that I can actually go to 50. The reality of the road controls the speed, not a number on a gantry. I put my hands up in this regard. With hindsight, which is always 20:20, I realise that I wasted some taxpayers' money. and I urge the present Secretary of State to learn from my example and not do the same.

The Government's transport policy is a mess, but it is not primarily a mess of this Secretary of State's making. Like a duck, he is serene on the surface but paddling like crazy underneath to reposition the policy in an attempt to make it palatable to the public at next year's general election. The best indicator of the fact that the policy is a mess is that Labour Members insist on making speeches about things that happened pre-1997 rather than post-1997. At the next election, the public will want to talk about the future, and the future will not include a Labour Government.

3.13 pm

I am pleased to be able to take part in this debate. I am going to focus not on things that happened pre-1997 but on the many things that have happened subsequently, and on policies for which the Government deserve praise. I have certain constituency concerns, however, that I also want to raise.

The Conservatives seem to suggest that nothing has been done since 1997, but that is a caricature of the Government's transport policy, particularly in regard to roads. The Opposition give the imp Session that virtually no road schemes have been completed since 1997, but that is simply not the case. Many major and minor road schemes and road safety schemes have been completed since then. In my area, the Newark to Lincoln dual carriageway was completed last year, which has added to the speeding up of traffic in that area and got rid of a notorious bottleneck on one of the major link roads to the Al from places such as Grimsby and Cleethorpes.

The Conservatives have caricatured the Government's transport policy as a failed one, which is simply not the case. That is not to say, however, that everything is perfect, because it is not. The Secretary of State admitted that there were great difficulties involved in dealing with the major infrastructure projects. I am sorry that the right hon. Member for Maidenhead (Mrs. May) is not present today. My hon. Friend the Member for Scarborough and Whitby (Lawrie Quinn) alluded to her whistlestop tour of the Yorkshire and Humber region, during which she also visited Immingham in my constituency to drum up support for her party. The Conservatives topped the polls in Immingham a year ago, but the effect of her recent visit was that they came last in that electoral ward, with their vote collapsing by about a third. She is therefore more than welcome to visit my constituency any time she likes, if that is the effect that she is going to have on the Conservative vote there.

The words of the motion on the Order Paper, and the comments of Conservative Members today, are simply whinge, whinge, whinge. There does not seem to be any policy behind them for us to get our teeth into, so that we can see what the Conservatives are offering. It is not sufficient simply to criticise; they must offer credible alternatives. From what I have heard today, however, they did not seem to have any credible policies. The only certainty was that, according to the shadow Chancellor, there would be cuts in their transport budget. That would be particularly worrying to my constituents, because one of the major projects to be affected by such cuts would be the Government's commitment in the 10-year transport plan to resurface all concrete trunk roads with low-noise material.

The A180 in northern Lincolnshire is a concrete trunk road and a major link between the ports of Grimsby and Immingham. Immingham is a rapidly expanding port that deals with most of the freight coming into Britain from the Netherlands. That road is therefore heavily used; it also has many residents living alongside it. When the Government's resurfacing policy was announced in July 2000, my constituents were therefore very pleased. However, projects such as that would be put in jeopardy if the Conservatives' proposals for cuts—or a freeze; let them call it what they will—went ahead. Such a freeze would mean that my constituents would have no chance of getting that low-noise material on a road that carries a lot of freight traffic.

That is not to say that freight does not also go by rail. I want to point out to the Under-Secretary of State for Transport, my hon. Friend the Member for Harrow, East (Mr. McNulty), that much of the freight that comes into Immingham goes on from there by rail—it is one of Britain's major rail freight depots—but there are capacity issues in regard to the track leading from Immingham that feeds into the east coast main line. Much of that track is also in poor condition, and those issues need to be looked at. Today, when we have talked about rail, we have mainly referred to passenger transport. In my constituency, freight transport is the big issue. Most of the rail jobs are related to that, and it generates economic growth in the area. We must consider the freight infrastructure as much as we do other aspects of the transport infrastructure.

I referred to the A 180 resurfacing programme, and my hon. Friend the Minister knows that subject well, as I have raised it in the Adjournment debate and with other Transport Ministers. I hope that Ministers can get to grips with the Highways Agency, because its timetabling of some of these projects seems at times to get a little woolly, to put it politely. It commits to one day, then to another. Last year, I received a letter from the agency telling me that the project was due to go ahead in 2001, and my constituents were certainly a little confused that a project that was going to go ahead two years earlier had not yet started. Let us get to grips with the Highways Agency, make sure that it spells towns' names correctly— every time that I write to it about the Habrough to Stallingborough section, I get a response connected to Harborough. I have not yet taken over the Harborough constituency, but I am sure that that leads to some of the woolly thought in this area.

The other subject on which I wanted to touch briefly—not many other people have alluded to it—is the place of bridges within our transport network. I will refer particularly to the Humber bridge connecting my constituency with Hull on the north bank of the river. Ever since the bridge was built, there has been concern about the level of debt, and the money that must be paid to the Treasury to finance it. I praise the Government, who in 1998 wrote off £62 million of that debt, and rescheduled the remaining debt to make the interest repayments more manageable. However, those tolls can still be a barrier. Because of the reorganisation of health care in the area, many more people must travel over to the north bank of the river for treatment, and must therefore incur tolls. Responsibility for giving concessions lies with the strategic health authority and other partners.

As I have also raised this issue in Adjournment debates, could the Government re-examine the remaining debt on the bridge? They have written off debt previously, rescheduled the remaining debt and reduced the interest rates, and for us to remove the barrier to further economic growth in what is one of Britain's major industrial manufacturing heartlands, we need to consider that. If my hon. Friend the Minister could assist the bridge board with removing that barrier to economic growth, we would appreciate it. If he will not do that, may I suggest that some of the £15 million that toll payers in my area pay into the Treasury each year could go towards finishing off the A180 resurfacing project?

3.23 pm

I know that other Members want to speak in the debate, so I shall speak for only four minutes.

Clearly, transport policy is one of those areas in which people feel let down by Labour. First, we have seen petrol taxation go up again and again. Deferring the tax on fuel and pretending that it is okay as long as it is announced in a Budget and introduced in December or October is simply not acceptable. It is a stealth tax. Sneaking it in a few months after a Budget does not make it any easier for people living in rural areas or hauliers, who rely on their cars or vehicles either to pursue their social life or to make a living. All that I have been able to detect from the debate so far is that the Liberal Democrats want to push up the cost of motoring—that is the only thing that I have been able to glean about their policy. Will the Minister please ensure that he influences the Chancellor of the Exchequer to make a speedy announcement that he will not introduce that stealth tax in September?

People also feel cheated by speed cameras, which they also feel are a way of taxing by stealth. The money goes partly to some of the police forces but also to the Exchequer. According to one figure that I have heard, the Chancellor received £20 million from speed cameras. We should use that money to introduce other imaginative traffic calming measures. In my constituency, we have asked for a roundabout to be built where the A59 leads down from Sabden into Clitheroe. All sorts of reasons have been given for why that could not happen. The main reason, I believe, is cost. Therefore a cheaper version was suggested, whereby people cannot turn right off the A59 towards Clitheroe but must E o further along the road to another roundabout that already exists. Let us use the money so that that part of the A59 can be made safer. There have been so many accidents around that area, and if we use the money that has been raised legitimately by cameras in the right places to introduce other traffic calming measures, that would be welcome.

Three cheers for the 71-year-old Hampshire man, whose name escapes me, who held up a sign saying that there was a speed trap around a corner. I assume that the mobile speed camera was in an area that was a black spot, so he was doing a public service by warning motorists that a speed camera was there, that it was a black spot, and that they should slow down. That is what motorists did, but he ended up losing his licence for it, which is an utter shame.

Finally, on regional airports, as my right hon. Friend the Member for North-West Cambridgeshire (Sir Brian Mawhinney) said, Manchester airport is superb. It has 90 airlines flying to 1 i0 destinations. Let us ensure that a lot more support is given to those regional airports. One clear example might he to allow fifth rights—I believe that that is what they are called—whereby a plane originating from one area, landing at, say, Manchester, could be allowed to fly on to another airport in another country. Let us consider boosting the number of airlines that could come into a regional airport such as Manchester by giving them those extra, special rights.

3.27 pm

As time is so short, I will just cover some local issues affecting my Bosworth constituency.

In particular, we are concerned about the proposed discontinuation of the Nottingham-Hinckley-Coventry line. Will the Minister consider Railfuture's proposal to reinstate a tunnel at Nuneaton, with what is called a dive-under tunnel or the main track? That would be a cost-effective way of preserving this important link, which concerns many of my constituents.

Secondly, will the Minister consider that Hinckley station still has many features of the 1920s, not of the 1990s or 2000 and beyond? It is important that we get passenger screens there telling passengers about the arrival of trains.

I am also worried about the 254 bus route; it is to be discontinued, which will cause great hardship to residents in Botcheston, particularly at the Kirby Grange retirement village, and for that I see no justification. My hauliers, such as Crowfoots, are deeply concerned about the Government's failure to tackle fuel price increases, as trucks flood into the continent with cheap diesel, threatening their business.

Let me deal with one or two national issues, as I find that I have time to do so. My hon. Friend the Member for Orpington (Mr. Horam) spoke of the importance of Thameslink 2000 in London, and the problems caused by failure to widen the Borough Market junction. I remind the Minister that it was under a Conservative Government that the Snowhill tunnel was finally reopened, and that that made the Thames link possible. I remember arguing the case in the House in the late 1980s. It was a Conservative policy, and it was implemented.

My right hon. Friend the Member for North-West Cambridgeshire (Sir Brian Mawhinney), a former Secretary of State for Transport, referred to privatisation. Privatisation was of course hugely successful in several respects. It increased passenger use of trains, increased the quality of services—certainly on the midland main line—and increased frequency. To rubbish privatisation is to try and rewrite history.

3.29 pm

Many eloquent contributions have been made over the past few hours, but perhaps the most eloquence is represented by the fact that, despite having at least 419 MPs, including hundreds of Back Benchers, the governing party could persuade only two of them to come and defend it.

Look behind you.

I was about to say—if the Minister could contain himself for the first few seconds of my speech—that regrettably some of my hon. Fr ends who wanted to speak could not do so, because of the length and eloquence of other contributions. That tells its own story about attitudes to the Government's transport policy.

As ever, we have been given a varied diet. I thought it noteworthy that both Labour speakers—the hon. Members for Cleethorpes (Shona Mclsaac) and for Scarborough and Whitby (Lawrie Quinn)—not only said the loyal things that are expected on such occasions, but managed to slip in some cogent comments on the effect of transport problems in their constituencies.

I am sorry that the Secretary of State is not present yet, but I am delighted to learn that he is spending his time reading my speeches. I command that to him as a helpful and constructive activity, and hope he will continue to engage in it. I know that the Under-Secretary of State, the hon. Member for Harrow, East (Mr. McNulty), does the same. During last week's aviation debate he complained that he had been reading my speeches on the subject, and that what I had said last week was consistent with what I had said the previous month. I make no apologies for that: if I thought something last month I am quite likely to think it this month, particularly when it comes to the Government's failures in regard to transport policy. The Under-Secretary of State, however, seemed to find that surprising.

What the Secretary of State said—not just that he had been spending his time usefully in reading my speeches, but that he agreed with the three principles I had mentioned in them and with points made by my hon. Friend the Member for South Suffolk (Mr. Yeo)—was genuinely constructive. I believe that those three principles—consistency, the use of private finance and the provision of real choice between different modes of transport—constitute the basis on which a sensible policy should be introduced. The question that the Government need to consider today is whether the longterm problems and failures identified by the Secretary of State and by my right hon. Friend the Member for North-West Cambridgeshire (Sir Brian Mawhinney), who spoke from his experience as a former Secretary of State, have been addressed. That is the key question: have the Government, with their 10-year plan, provided steady, consistent investment and the planning structures that allow for it?

Like other Labour Members, the Secretary of State made great play of spending. That is simple to address, and we will address it directly by means of two policies. The first is to try and ensure, much better than the Government, that money is spent in the most effective way and in a way that is most sensitive to the needs of local people. In an early intervention on the Secretary of State, the hon. Member for Birmingham, Northfield (Richard Burden) referred to spending in the west midlands. I am sure the Minister knows that a serious and crucial debate is under way in the west midlands about whether the extra money will be spent in the right way, because of restrictions that the Government are imposing on the way in which it can be spent. For instance, it cannot be spent on the motorway network; and yet many people to whom I talk in the west midlands, particularly those involved professionally in the road haulage industry, say that relieving congestion on the network is by far the most important step that could be taken to improve transport in and around Birmingham and the rest of the area. Another important aspect of efficient spending—as I think the Secretary of State, whom I now welcome to the Chamber, would agree—is the use of private as well as public finance, which we would wish to extend. The Government are setting up an Aunt Sally when they talk simply about spending levels.

While I am on spending, it is important to note the contribution of the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), who spoke for the Liberal Democrats. As I understood the thrust of his economic analysis, he said that he wanted to stick to the Government's spending plans, so there would be no spending increase, but that despite that, he wanted a number of tax rises. He suggested that he would tax drivers and air travellers more. That was a great burst of clarity from the Liberal Democrats. They are not going down the Labour route of taxing and spending; they are not going to spend any more, they are just going to tax for the fun of it. They like taxing, even if they do not want to spend the money after they have raised it.

I am terribly sorry to prick the hon. Gentleman's balloon. I did not say that the taxes would be increased, but explained at some length that the method of raising them would be changed. In road user charging, the overall burden on the taxpayer would remain the same, but the method by which it would be collected would be different. Air passenger duty would be abolished and replaced by an aeroplane tax. The actual quantum of tax would remain the same.

The hon. Gentleman spent a significant time explaining to the House that the cost of motoring was too low, particular when compared with other modes of transport. It seems to me not unreasonable for the House therefore to divine that what he wants to do is to make the cost of motoring higher. He can do that only by putting up costs for tens of millions of drivers in this country. I think that he is nodding his head, so we now have that confirmed. Everyone who drives a car in this country will know that the Liberal Democrats would like to tax them even more.

The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) is trying to dig himself out of a hole. We all remember hearing him say that the freedom to fly had to be constrained, which reminded me of those good old communist days, and that he would introduce a new tax on aeroplanes to constrain that freedom. For him now to say that there would be no increase in the total cost simply will not wash. Will my hon. Friend reinforce that message for the benefit of the House?

I cannot reinforce that message any more strongly than my right hon. Friend has just done. He is absolutely right, and I am sure that the House has taken on board the Liberal Democrats' desire to tax for taxation's sake. I can pledge to my right hon. Friend and to the House that I will certainly take that message around the country between now and the next general election.

My right hon. Friend the Member for North-West Cambridgeshire was exactly right in his contribution about the problems bequeathed to current Ministers by the Deputy Prime Minister. He expressed a sensible degree of sympathy with the current Secretary of State, much of whose work involves undoing the bad work of the Deputy Prime Minister. Inasmuch as he can do that, my party wishes him well. I just hope that other Ministers will be able to reverse the Deputy Prime Minister's other disastrous policies in such fields as planning and regionalism.

My hon. Friend the Member for Ribble Valley (Mr. Evans) made a particularly cogent point about petrol taxes, especially for the road haulage industry, for which there is no sense in which petrol is a luxury. It is vital for the industry itself and, of course, for everyone in this country who depends on an efficient road haulage industry to deliver the essential goods that we use every day. My hon. Friend the Member for Bosworth (Mr. Tredinnick) made a key point about hauliers in his constituency.

Let me turn to the substance of what the Secretary of State said, particularly on speed cameras. It was a fascinating juggling act that, although he and others on the Government Bench complained that they would prefer to discuss our transport policy rather than the subject of the debate—the Government's transport policy—they had to admit at the same time that we do in fact have a 10-point plan for safer driving, published in April. The Government are now up to about point three and a half in terms of stealing those ideas. I welcome that theft. which is extremely sensible. The more Conservative transport policies are introduced, the better it will be for this country. The quickest way in which people can achieve that is to elect a Conservative Government, which they will no doubt do next year. Inasmuch as the Government want to use these ideas between now and then, I am happy to provide them. I was glad to discover that in today's document, the Government talk about moving to variable penalty points—an idea that is number four in our list. I welcome the fact that they are keen to extend driver education programmes to those caught speeding—idea number five in our list—and that they want to encourage lower speed limits near schools.

Of course everyone in this House wants safer roads, but there is one point on which I take issue with the Secretary of State. He talked about striking the proper balance and said that cameras cannot provide the full solution. I completely agree, but that is not what the Government are doing. In the past three or four years in particular, we have witnessed the introduction of thousands of new cameras and a reduction of several thousand in the number of traffic police. So we are relying increasingly on static technology, and less and less on active policing. The Secretary of State knows as well as I do that the most dangerous drivers in this country are often those who drive without insurance or tax. Such people are far more likely to drive while drunk or to drive unroadworthy vehicles. Cameras do not catch them, which why the policy is so severely out of balance.

The Secretary of State talked about private sector finance coming into the railways and I completely agree with him. I am happy to support him against many of his own Back Benchers who do not believe that there should be private finance in the railways, and who think that they would be better off under complete state control. He will be aware that there are two things that will deter private investment, the first of which is constantly changing the regulatory system, so that none of the private sector operators knows what the regime will be from year to year. I am aware that his predecessor left him a complete dog's breakfast—the Strategic Rail Authority, the current rail regulator set-up and so on—and that he will be undoing that in the coming weeks. So I have sympathy in i hat regard, but he must recognise that that is a deterrent to private investment.

The second big deterrent to private sector investment is the constant rumbling of calls from Labour Members for complete re-nationalisation. The Secretary of State has so far been robust in fighting off those calls, and I very much hope that he remains robust in opposing what is clearly the spirit of the age in his own party. As

panic increases on the Government Benches, it is clear that demands for old Labour policies are likely to increase. They provide some amusement for the Opposition, but the extremely sad fact is that they are doing real damage to the future of our rail industry.

Several Members from all parts of the House raised the subject of aviation, on which we had a very good debate last week. All that remains for me to do is to point out that in the intervening few days, we have witnessed a successful High Court application for action to be taken against the Government. I am afraid that the Secretary of State brought a slight degree of complacency to this debate when he said that everything is wonderful and that the Government have produced a White Paper on the issue. We said when the White Paper was published that because of the failure of the consultation exercise, court action was very likely. Since last week's debate, such court action has indeed arrived.

Most people who use Britain's transport networks ask themselves two basic questions: are the roads less congested under this Government, and is the railway more reliable? To both questions they answer no, and as the Government limp into their eighth year in office, their attempts to blame anyone and everyone else become less convincing by the day. Their attitude to roads and drivers has switched. They have gone from hostility on first taking office, when they cancelled dozens of road schemes, to neutrality, when they restored some of those schemes. Now, it seems that they have reverted to hostility. In a now notorious interview, the hon. Member for Pontypridd (Dr. Howells) equated driving a car with smoking.

I remind Ministers that driving is a necessity for millions of people. I know that the Government are a little ambivalent about smoking at the moment, but even the Secretary of State for Health does not regard it as a necessity, whereas driving is a necessity. It is time that the Government ended their war on drivers. Forcing people out of their cars by making driving miserable is a rotten policy, but it comes perilously close to the Government's current policy.

On rail, the Secretary of State has set up a review to dismantle the system set up by the Deputy Prime Minister. Good for him. However, I warn him that, if he goes down the route of having more day-to-day interference by Ministers, he could yet make things even worse.

If Ministers ever look back at the 10-year plan, they will be deeply embarrassed to read the Deputy Prime Minister's foreword, in which he says that

"the Plan will bring greater certainty and coherence in decision-making. It will provide a stable framework against which planning and investment decisions can be made."
That is what the Government hoped for. Instead, they have provided uncertainty, incoherence and instability. The travelling public have been badly let down by the Government. I commend our motion to the House.

3.45 pm

We have had a useful enough debate, I suppose. We have heard useful contributions from my hon. Friends the Members for Scarborough and Whitby (Lawrie Quinn) and for

Cleethorpes (Shona McIsaac). The local issues that they raised can be pursued outside the context of this particular debate.

We had a nice journey down memory lane from the right hon. Member for North-West Cambridgeshire (Sir Brian Mawhinney). As I understand it, his speech consisted of saying that everything good that has happened since his departure from being Secretary of State for Transport was down to his tenure of that office at some stage or other, and that everything bad was down to successive Labour Ministers since 1997.

I suppose that the hon. Members for Ribble Valley (Mr. Evans) and for Bosworth (Mr. Tredinnick) made some reasonable comments, as did the Liberal Democrat spokesman, but we have not had a serious exposition or analysis of where we are and where we want to get to. The right hon. Member for North-West Cambridgeshire said that we needed to talk much more about where we go from 2004 towards the future, rather than hark back on what prevailed before 1997 or between 1997 and 2004. That is absolutely right, but any honest assessment of the two Conservative Front Benchers' contributions would suggest that they are not listening to, or are ignoring, his advice.

I welcome the hon. Member for South Suffolk (Mr. Yeo) to his new position. However, with the best will in the world, what we heard from him and his Front-Bench colleague offered nothing to the British travelling public for the future and no vision of any alternative to the Government's position. Happily, the hon. Member for Ashford (Mr. Green) has made only one speech—he presented the same speech twice—on aviation, which is preferable to having more.

Underneath all the hot air and rhetoric, dated though much of it was, is a kernel of where the debate should be. We should be debating how best to utilise our capacity. As the right hon. Member for Wokingham (Mr. Redwood) said, we should be debating whether we need more capacity across the piece. We should be debating road pricing and the balance between public and private funding. Just about the only thing that the hon. Member for Ashford got right was his point about presenting people with real choices. A real public policy debate is needed, but it is not one to which Conservative Front Benchers have made any able contribution.

I can, in part, understand the embarrassment of Conservative Front Benchers. A shadow Cabinet member apparently said, regarding the appointment of the hon. Member for South Suffolk:
"Yeo has been told to get a grip on transport policy. We haven't really got one at the moment."
That was made more than clear by the Conservative Front Benchers' contributions. Apparently, according to another newspaper today:
"A new package of policies put together under Mr. Yeo's direction has been approved by Mr. Howard, who let it be known that he was 'delighted' with the work carried out"
by the hon. Member for South Suffolk in the area of health and education. Indeed, his leader was so delighted that he

"wanted Mr. Yeo to apply his skills to transport and the environment."
It is reported that one MP said:

"We've neglected transport yet it affects every family in the country. It's a vital are, for us. Tim is a problem-solver and a salesman, which is what Michael Howard needs in that brief."

I am afraid that, given the paucity of substantial policy offerings today by the hon. Member for South Suffolk, he is clearly more of a salesman of second-hand cars or snake oil than one of any repute. After six years in opposition, it is bad enough that the Conservatives have offered almost no substantive transport policy, but it is completely irresponsible of them to fill the policy vacuum with opportunism, as they have done over the past two or three years.

I come now to some of the substantive issues in the motion. It states that the Government have failed to meet their target of reducing congestion on Britain's roads by 5 per cent. There was no such target in the 10-year plan. The motion states that the decline of 0.3 billion net tonne kilometres in rail freight in 2002 is a matter of serious concern, but it says nothing about the increase of more than 25 per cent. in rail freight since 1997, nor about the fact that rail passenger journeys have grown by more than 25 per cent. since 1997.

The Minister is going on about percentages and targets. Will he confirm that he stands by the target in the 10-year plan for an increase in passenger kilometres on the railways, and the 80 per cent. target for rail freight?

I had the great pleasure, around the time of Christmas, of frightening the hell out of a passenger down at Liverpool Street station. I presented that person with a bouquet for being the billionth passenger on the rail system, and that had not happened since the 1940s.

The right hon. Member for Wokingham was right in what he said about capacity, but mirror images of another party's policy are no substitute for proper policy. It is not sufficient for a party to suggest that it knows where people are coming from, even though it neither opposes nor supports a particular approach.

Some gentle green shoots of policy were evident among Opposition Front-Bench contributions, however, and that has been clear even before today. For example, there was an understanding of the debate that we have to hold in respect of transport. That was outlined for the Liberal Democrats by the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso).

Another example can be found in the speeches of the predecessor but two—I think that that is right—of the hon. Member for South Suffolk. The hon. Member for Westmorland and Lonsdale (Mr. Collins) said last year that the Conservatives supported the difficult decision to suspend some rail services for long periods in order to accelerate the completion of engineering work.

"It is a difficult decision…but, in some circumstances, it is the only means by which engineering work can be completed in a reasonable time."—[Official Report, 2 July 2003; Vol. 408, c. 388.]

That is evidence of a real understanding of what is required in transport. In another speech, the hon. Gentleman said that he was happy to agree with the Secretary of State that we needed

"to consider, on a non-partisan basis, why it took so long for any major transport project to be brought to fruition in this country."—[Official Report, 23 June 2003; Vol. 407, c. 793.]

The right hon. Member for North-West Cambridgeshire made the same point today.

We agree that that should be looked at actively. Such an examination should cover the Department's processes, the wider planning process and the TWA process. Sadly, however, any recognition of the substantive elements needed for the mature debate that the country deserves on transport was missing from Conservative Front-Bench contributions today. We are back to the snake oil salesman.

We heard much about the CBI report, whose conclusion stated:

"Government policy will need to promote a coherent package of measures, but at the heart of its approach must be a programme of sustained public and private investment."

That programme is at the heart of our policy. Whatever the protestations of the Tory Front-Bench transport team, they need only to travel to the office of the shadow Chancellor to see that nothing that he has said will give the CBI what it requires—

"a programme of sustained public and private investment"—

in respect of transport. Such a programme cannot be achieved through a freeze on public spending on transport, or the severe real-terms cut in transport spending proposed by the right hon. Member for West Dorset (Mr. Letwin). Nowhere does the CBI report say that there are difficulties and problems but that everything will be OK if public spending on transport is frozen—or, indeed, cut, as the shadow Chancellor has suggested.

The Opposition have given us smoke and mirrors all over again. They agree with the CBI report but are not allowed by the shadow Cabinet to promise to put in the money and funding necessary for the task. That is typical.

The motion goes into detail on the delay to Crossrail, the East London line extension and other projects, with the clear implication that if only the Conservatives were in government, they would all be achieved overnight. That is not what the shadow Chancellor says. He will not let the hon. Member for South Suffolk, in his new capacity, anywhere near the necessary pot of money. However, that did not stop the hon. Member for Cities of London and Westminster (Mr. Field) and his colleagues bobbing up and down like Bill and Ben in a recent Adjournment debate on London's transport needs in Westminster Hall. By the time they had finished, they had spent the best part of £15 billion to £20 billion on transport in London alone. That is more smoke and mirrors, because none of it would happen if they ever got near power. But they say that it would anyway.

The same is true on aviation. However eloquent the little speech by the hon. Member for Ashford—and it was not so good that we needed to hear it twice—there would be no more money. It appears that the Conservatives are not against flights, but against airports. They are back to a nod and wink and more smoke and mirrors. The hon. Member for South Suffolk, in his first day as shadow Secretary of State for Transport, came out against Birmingham, Stansted and Heathrow. He is also against noise levels at Doncaster Finningley, which is not even open yet. What is the Tories' substantive aviation policy? Well. they have not got one.

The Tories have shown naked opportunism on the issue of safety cameras. We have scotched that today, given the publication of the report of t their use, although the hon. Member for Ribble Valley tried his best—as usual, he was not up to it—as did the hon. Member for Ashford. They say that they are not against safety cameras. They say that they are not in favour of vandalising or destroying safety cameras, but they say to the protestors, "We know where you are coming from and we broadly support you." The Tories cannot be against Chope cameras, because they were introduced by the hon. Member for Christchurch (Mr. Chope). They dice with road safety considerations, taking their lead from the Leader of the Opposition, who is not against illegal fuel protests.

There was one glaring omission from the contributions from Tory Front Benchers in this debate. Some 70 per cent. of passenger journeys in this country are by bus. The hon. Member for South Suffolk, in his new position, and the hon. Member for Ashford said not one word about buses, which serve—among others— our most deprived communities. Pei haps that is because they take the same view as Baroness Thatcher, who once said:

"A man who, beyond the age of 26, fin is himself on a bus can count himself as a failure."

As for their second-hand car salesman, who was reduced to a feeble second place in the campaign to be Mayor of London, he likes the healthy smell of exhaust and kebabs and he could care less about buses. However, buses are an essential and vital part of our transport policy and they must feature in it. They did not feature at all in the contributions from the Conservatives.

This country needs the Opposition to understand fully the difficulties with transport. It does not need them to offer the techniques of the snake oil salesman or smoke and mirrors. It needs them to work with us and to commit to match—at least—our investment plans for Europe. The Opposition should confirm to the CBI that they understand the points it has made about sustained investment and that they will match our spending plans. The Opposition cannot say that because the shadow Chancellor has locked them in a box and thrown away the key. If the Conservatives ever get close to power, there will be substantive cuts in transport.

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 177, Noes 281.

Division No. 197]

[3:59 pm


Ainsworth, Peter (E Surrey)Baker, Norman
Allan, RichardBaldry, Tony
Amess, DavidBaron, John (Billericay)
Ancram, rh MichaelBarrett, John
Arbuthnot, rh JamesBeith, rh A. J.
Bellingham, Henry
Atkinson, David (Bour'mth E)Bercow, John
Atkinson, Peter (Hexham)Beresford, Sir Paul
Bacon, RichardBlunt, Crispin

Boswell, TimKirkwood, Sir Archy
Brady, GrahamKnight, rh Greg (E Yorkshire)
Brake, Tom (Carshalton)Laing, Mrs Eleanor
Brazier, JulianLansley, Andrew
Breed, ColinLaws, David (Yeovil)
Brooke, Mrs Annette L.Letwin, rh Oliver
Browning, Mrs AngelaLewis, Dr. Julian (New Forest E)
Bruce, MalcolmLiddell-Grainger, Ian
Burns, SimonLilley, rh Peter
Burnside, DavidLoughton, Tim
Burstow, PaulLuff, Peter (M-Worcs)
Burt, AlistairMcIntosh, Miss Anne
Butterfill, Sir JohnMaclean, rh David
Cable, Dr. VincentMcLoughlin, Patrick
Cameron, DavidMalins, Humfrey
Campbell, rh Sir Menzies (NE Fife)Marsden, Paul (Shrewsbury & Atcham)
Carmichael, AlistairMates, Michael
Chapman, Sir Sydney (ChippingMaude, rh Francis


Mawhinney, rh Sir Brian
Chope, ChristopherMay, Mrs Theresa
Clappison, JamesMercer, Patrick
Clifton-Brown, GeoffreyMoore, Michael
Collins, TimMoss, Malcolm
Cormack, Sir PatrickMurrison, Dr. Andrew
Cotter, BrianNorman, Archie
Curry, rh DavidOaten, Mark (Winchester)
Davey, Edward (Kingston)O'Brien, Stephen (Eddisbury)
Davis, rh David (Haltemprice & Howden)Öpik, Lembit
Osborne, George (Tatton)
Djanogly, JonathanOttaway, Richard
Dorrell, rh StephenPage, Richard
Duncan, Alan (Rutland)Paterson, Owen
Duncan, Peter (Galloway)Pickles, Eric
Duncan Smith, rh lainPrice, Adam (E Carmarthen & Dinefwr)
Evans, Nigel
Field, Mark (Cities of London & Westminster)Prisk, Mark (Hertford)
Pugh, Dr. John
Flight, HowardRandall, John
Forth, rh EricRedwood, rh John
Foster, Don (Bath)Rendel, David
Francois, MarkRobathan, Andrew
George, Andrew (St. Ives)Robertson, Hugh (Faversham & M-Kent)
Gibb, Nick (Bognor Regis)
Gillan, Mrs CherylRobertson, Laurence (Tewk'b'ry)
Gray, James (N Wilts)Russell, Bob (Colchester)
Grayling, ChrisSanders, Adrian
Green, Damian (Ashford)Sayeed, Jonathan
Green, Matthew (Ludlow)Selous, Andrew
Greenway, JohnShephard, rh Mrs Gillian
Grieve, DominicShepherd, Richard
Gummer, rh JohnSimmonds, Mark
Hague, rh WilliamSimpson, Keith (M-Norfolk)
Hammond, PhilipSmith, Sir Robert (W Ab'd'ns & Kincardine)
Hancock, Mike
Harris, Dr. Evan (Oxford W & Abingdon)Smyth, Rev. Martin (Belfast S)
Soames, Nicholas
Harvey, NickSpelman, Mrs Caroline
Heald, OliverSpicer, Sir Michael
Heath, DavidSpink, Bob (Castle Point)
Heathcoat-Amory, rh DavidSpring, Richard
Hendry, CharlesSteen, Anthony
Hermon, LadyStreeter, Gary
Hoban, Mark (Fareham)Stunell, Andrew
Hogg, rh DouglasSyms, Robert
Holmes, PaulTapsell, Sir Peter
Horam, John (Orpington)Taylor, John (Solihull)
Howard, rh MichaelTaylor, Matthew (Truro)
Howarth, Gerald (Aldershot)Taylor, Dr. Richard (Wyre F)
Jack, rh MichaelTeather, Sarah
Jackson, Robert (Wantage)Thomas, Simon (Ceredigion)
Jenkin, BernardThurso, John
Johnson, Boris (Henley)Tonge, Dr. Jenny
Jones, Nigel (Cheltenham)Tredinnick, David
Key, Robert (Salisbury)Trend, Michael
Kirkbride, Miss JulieTurner, Andrew (Isle of Wight)

Tyler, Paul (N Cornwall)Willis, Phil
Tyrie, AndrewWinterton, Ann (Congleton)
Viggers, PeterWinterton, Sir Nicholas
Waterson, Nigel


Watkinson, AngelaYeo, Tim (S Suffolk)
Webb, Steve (Northavon)Young, rh Sir George
Weir, MichaelYounger-Ross, Richard
Whittingdale, John
Wiggin, Bill

Tellers for the Ayes:

Wilkinson, John

Mr. David Ruffley and

Williams, Hywel (Caernarfon)

Mr. David Wilshire


Abbott, Ms DianeCox, Tom (Tooting)
Adams, Irene (Paisley N)Cranston, Ross
Ainger, NickCryer, Ann (Keighley)
Ainsworth, Bob (Cov'try NE)Cummings, John
Alexander, DouglasCunningham, Tony (Workington)
Anderson, Janet (Rossendale & Darwen)Curtis-Thomas, Mrs Claire
Dalyell, Tam
Atherton, Ms CandyDarling, rh Alistair
Atkins, CharlotteDavey. Valerie (Bristol W)
Austin, JohnDavid, Wayne
Baird, VeraDavies, rh Denzil (Llanelli)
Banks, TonyDavies, Geraint (Croydon C)
Barnes, HarryDismore, Andrew
Barron, rh KevinDobbin, Jim (Heywood)
Battle, JohnDobson, rh Frank
Begg, Miss AnneDoran, Frank
Bell, Sir StuartDowd, Jim (Lewisham W)
Bennett, AndrewDrew, David (Stroud)
Benton, Joe (Bootle)Dunwoody, Mrs Gwyneth
Best, HaroldEagle, Angela (Wallasey)
Betts, CliveEfford, Clive
Blackman, LizEllman. Mrs Louise
Blizzard, BobEtherington, Bill
Borrow, DavidFarrelly, Paul
Bradley, rh Keith (Withington)Field, rh Frank (Birkenhead)
Bradley, Peter (The Wrekin)Fisher, Mark
Bradshaw, BenFitzpatrick, Jim
Brown, rh Nicholas (Newcastle E Wallsend)Flint, Caroline
Flynn, Paul (Newport W)
Brown, Russell (Dumfries)Follett, Barbara
Browne, DesmondFoster, Michael (Worcester)
Buck, Ms KarenFoster, Michael Jabez (Hastings & Rye)
Burden, Richard
Burgon, ColinFoulkes, rh George
Byers, rh StephenFrancis, Dr. Hywel
Cairns, DavidGapes, Mike (Ilford S)
Campbell, Alan (Tynemouth)Gerrard, Neil
Campbell, Mrs Anne (C'bridge)Gibson, Dr. Ian
Campbell, Ronnie (Blyth V)Gilroy, Linda
Caplin, IvorGodsiff, Roger
Casale, RogerGoggins, Paul
Caton, MartinGriffiths, Jane (Reading E)
Cawsey, Ian (Brigg)Griffiths, Nigel (Edinburgh S)
Challen, ColinGrogan, John
Chapman, Ben (Wirral S)Hain, rh Peter
Chaytor, DavidHall, Mike (Weaver Vale)
Clapham, MichaelHall, Patrick (Bedford)
Clark, Mrs Helen (Peterborough)Hamilton, David (Midlothian)
Clark, Dr. Lynda (Edinburgh Pentlands)Hanson, David
Harris, Tom (Glasgow Cathcart)
Clark, Paul (Gillingham)Healey, John
Clarke, rh Tom (Coatbridge & Chryston)Hendrick, Mark
Heppell, John
Clelland, DavidHeyes, David
Clwyd, Ann (Cynon V)Hinchliffe, David
Coaker, VernonHoey, Kate (Vauxhall)
Coffey, Ms AnnHoon, rh Geoffrey
Cohen, HarryHope, Phil (Corby)
Coleman, lainHopkins, Kelvin
Cook, Frank (Stockton N)Howarth, rh Alan (Newport E)
Cook, rh Robin (Livingston)Howarth, George (Knowsley N & Sefton E)
Corbyn, Jeremy
Corston, JeanHowells, Dr. Kim

Hoyle, LindsayMunn, Ms Meg
Hughes, Beverley (Stretford & Urmston)Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Hughes, Kevin (Doncaster N)Naysmith, Dr. Doug
Humble, Mrs JoanNorris, Dan (Wansdyke)
Hurst, Alan (Braintree)O'Brien, Bill (Normanton)
Iddon, Dr. BrianO'Hara, Edward
Ingram, rh AdamOsborne, Sandra (Ayr)
Irranca-Davies, HuwOwen, Albert
Jackson, Glenda (Hampstead & Highgate)Palmer, Dr. Nick
Perham, Linda
Jamieson, DavidPicking, Anne
Jones, Helen (Warrington N)Pickthall, Colin
Jones, Jon Owen (Cardiff C)Pike, Peter (Burnley)
Jones, Kevan (N Durham)Pond, Chris (Gravesham)
Jones, Lynne (Selly Oak)Pound, Stephen
Jones, Martyn (Clwyd S)Prentice, Gordon (Pendle)
Joyce, Eric (Falkirk W)Primarolo, rh Dawn
Keeble, Ms SallyProsser, Gwyn
Keen, Ann (Brentford)Purchase, Ken
Kelly, Ruth (Bolton W)Purnell, James
Kennedy, Jane (Wavertree)Quin, rh Joyce
Khabra, Piara S.Quinn, Lawrie
Kidney, DavidRapson, Syd (Portsmouth N)
King, Andy (Rugby)Reed, Andy (Loughborough)
King, Ms Oona (Bethnal Green & Bow)Robertson, John (Glasgow Anniesland)
Knight, Jim (S Dorset)Robinson, Geoffrey (Coventry NW)
Kumar, Dr. Ashok
Lammy, DavidRoche, Mrs Barbara
Lazarowicz, MarkRooney, Terry
Lepper, DavidRuddock, Joan
Leslie, ChristopherRussell, Ms Christine (City of Chester)
Levitt, Tom (High Peak)
Lewis, Ivan (Bury S)Ryan, Joan (Enfield N)
Lewis, Terry (Worsley)Salter, Martin
Linton, MartinSarwar, Mohammad
Lloyd, Tony (Manchester C)Savidge, Malcolm
Love, AndrewSawford, Phil
Lucas, Ian (Wrexham)Sedgemore, Brian
Lyons, John (Strathkelvin)Shaw, Jonathan
McAvoy, ThomasSheerman, Barry
McCafferty, ChrisSheridan, Jim
McDonagh, SiobhainShort, rh Clare
MacDonald, CalumSimpson, Alan (Nottingham S)
MacDougall, JohnSingh, Marsha
McGuire, Mrs AnneSkinner, Dennis
McIsaac, ShonaSmith, Jacqui (Redditch)
McKechin, AnnSmith, Llew (Blaenau Gwent)
McKenna, RosemarySoley, Clive
McNulty, TonySouthworth, Helen
MacShane, DenisSquire, Rachel
Mactaggart, FionaSteinberg, Gerry
McWalter, TonyStewart, David (Inverness E & Lochaber)
McWilliam, John
Mahmood, KhalidStewart, Ian (Eccles)
Mallaber, JudyStinchcombe, Paul
Mandelson, rh PeterStoate, Dr. Howard
Mann, John (Bassetlaw)Strang, rh Dr. Gavin
Marris, Rob (Wolverh'ton SW)Sutcliffe, Gerry
Marsden, Gordon (Blackpool S)Tami, Mark (Alyn)
Marshall, David (Glasgow Shettleston)Taylor, rh Ann (Dewsbury)
Taylor, Dari (Stockton S)
Marshall-Andrews, RobertTimms, Stephen
Martlew, EricTipping, Paddy
Meale, Alan (Mansfield)Todd, Mark (S Derbyshire)
Merron, GillianTouhig, Don (Islwyn)
Michael, rh AlunTrickett, Jon
Miller, AndrewTruswell, Paul
Mitchell, Austin (Gt Grimsby)Turner, Dennis (Wolverh'ton SE)
Mole, ChrisTurner, Dr. Desmond (Brighton Kemptown)
Moonie, Dr. Lewis
Morgan, JulieTurner, Neil (Wigan)
Morley, ElliotTwigg, Derek (Halton)
Mountford, KaliTwigg, Stephen (Enfield)
Mullin, ChrisTynan, Bill (Hamilton S)

Vis, Dr. RudiWoodward, Shaun
Walley, Ms JoanWoolas, Phil
Ward, ClaireWorthington, Tony
Wareing, Robert N.Wright, Anthony D. (Gt Yarmouth)
White, BrianWright, David (Telford)
Whitehead, Dr. AlanWright, Tony (Cannock)
Williams, rh Alan (Swansea W)Wyatt, Derek
Williams, Betty (Conwy)
Wilson, Brian

Tellers fir the Noes:

Winnick, David

Mr. Fraser Kemp and

Wood, Mike (Batley)

Margaret Moran

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.

Mr. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.


That this House recognises that the problems with the transport system stem from decades of under-investment; welcomes the Government's commitment to long-term funding for transport through the Ten Year Plan; acknowledges that one of the main reasons for the continuing pressure on transport networks is that the United Kingdom is enjoying the longest period of sustained economic growth for more than 200 years; supports the Government's determination to face the tough decisions which will be required to meet these pressures and put UK transport on a sustainable footing, including runway capacity at UK airports, management of road space and re-organising Britain's railways following a failed privatisation; and welcomes the early signs of success, including the halt in the decline in bus use, the biggest replacement programme for railway rolling stock ever seen in this country, the major programme of investment in the West Coast Main Line and the 22 per cent. decline in the numbers of people killed or seriously injured on the roads since the mid-1990s.

Eu Finance

[Relevant documents: Fifteenth Report from the European Scrutiny Committee, Session 2003–04, HC 42- xv, The EU's Financial Perspective for 2007–13 and Reform of the Structural and Cohesion Funds; 21st Report from the European Scrutiny Committee, Session 2003–04, HC 42-xxi, paragraph 2, on regional and cohesion policy; 22nd Report from the European Scrutiny Committee, Session 2003–04, HC 42-ii, paragraph 1, on the Financial Perspective 2007–13; Minutes of Evidence taken before the European Scrutiny Committee from the Chancellor of the Exchequer on 20th April, Session 2003–04, HC 528-i; and the Minutes of Evidence taken before the European Scrutiny Committee from the Secretary of State for Trade and Industry on 4th May, Session 2003–04, HC 574-i.]

Mr. Speaker has selected the amendment in the name of the Leader of the Opposition.

4.16 pm

I beg to move,

That this House takes note of European Union documents No. 6232/04, Commission Communication: Building our common future: Policy challenges and Budgetary means of the Enlarged Union 2007–2013, and No. COM (04) 107, Commission Communication: "Third report on economic and social cohesion"; supports the Government's efforts to refocus allocations within a budget of 1 per cent. of EU Gross National Income in support of the European Union's goals, with structural funding focused on the poorest member states; and in particular, supports the Government's view that the Commission's overall proposals are unrealistic and unacceptable, that its structural funds proposals are inconsistent with the United Kingdom's objectives for reform, and that the future European Union Budget should be reprioritised and refocused in line with the principles of subsidiarity and spending that adds value at the European Union level.
The Government welcome the opportunity to debate the European Commission's communication on its framework proposals for the next financial perspective and its third report on economic and social cohesion. It is of course right that the debate is taking place on the Floor of the House so that all hon. Members with an interest may contribute.

As part of the scrutiny process, the European Scrutiny Committee has asked further questions about the Government's position on the Commission's future financing communication. The Government have given full answers to those questions and I am glad to learn that the Committee shares our attitude that the EC budget should be subject to a rigorous assessment of its value for money and supports the need to appraise existing activities.

On 10 February 2004, the Commission published "Building our common future: Policy challenges and Budgetary means of the Enlarged Union 2007–2013", which set out its proposals on the political priorities of the enlarged European Union, the framework, instruments and levels of EC budget expenditure, and how that expenditure should be financed between 2007 and 2013. That was followed on 18 February by the publication of the Commission's third report on economic and social cohesion, which set out progress made towards achieving economic and social cohesion

in the Union and the Commission's proposals on the future of the structural and cohesion funds over the same period.

As the European Scrutiny Committee noted, the Commission's communication is an important document, so it is right for the House to have the opportunity to debate its contents. In the communication, the Commission defines its three priorities for the next financial perspective: first, the completion of the internal market so that it can play its full part in achieving the broader objective of sustainable development; secondly, establishing the political concept of European citizenship that is based on the completion of an area of freedom, justice and security, and access to basic goods; and, thirdly, having a Europe that plays a coherent role as a global partner.

Will the Minister remind the House what the auditors found regarding the high proportion of waste and fraud in the current disposition of the budget? What action can Her Majesty's Government take to force the Commission to undertake better and wiser expenditure of moneys so that our taxpayers may get a rebate instead of being asked for more?

The right hon. Gentleman, who follows these debates closely, raises an important issue. We shall debate this afternoon how to ensure that the Commission has an appropriate budget that is clearly based on subsidiarity, and is also based on added value and understandings about appropriate expenditure that is properly monitored and accounted for. I urge him to bear with me as I outline the Commission's view before moving on to the Government's key principles and our objectives in the negotiations. In doing so, I will deal with his points, as well as many others.

The Commission communication sets out its budgetary proposals to support the achievement of its objectives. As for the overall level of spending, it proposes commitment appropriations of more than €1 trillion over the period 2007 to 2013, representing an average of 1.26 per cent. of the EU gross national income, compared with 1.08 per cent. in 2004. The corresponding proposed payments ceiling is about €930 million, averaging 1.14 per cent. of EU GNI, compared with 0.97 per cent. in 2004. Hon. Members will note the wide scope of the communication proposals, which include increases in spending on research, education, training and EU networks intended to boost competitiveness and employment covering: fresh action in the area of citizenship, freedom, security and justice; the integration of the European development fund in the budget; measures to improve the quality and effectiveness of expenditure; a road map designed to bring together goals, objectives, instruments and indicators; proposals on the duration of the financial perspective; and the classification of expenditure.

I should first like to make one final point. I stress to the hon. Gentleman that I am setting out the Commission's proposals, which include flexible procedures for adjusting expenditure ceilings.

The document that the right hon. Lady is outlining seems to be one of huge and genuine significance. Is it primarily a matter for the Treasury or the Foreign Office? I understand that the Minister for Europe will respond to our debate.

I remind the hon. Gentleman that the House is discussing two sets of communications this afternoon—the financial perspectives, on which the Treasury leads, and the cohesion report, on which the Department of Trade and Industry leads. However, it works closely with he Treasury, both on the financial perspectives and on cohesion.

It may help the House if I give the Government's view of the Commission s proposals, which are politically unrealistic and unacceptable. It has failed to grasp the opportunity offered by the negotiation of a new financial perspective to increase the effectiveness and transparency of European Union expenditure and to consider how allocations within a limited EU budget can best be focused on adding value at the EU level, including underpinning the Lisbon strategy for European economic reform. The issues of effectiveness and transparency go to the heart of the questions asked by the right hon. Member for Wokingham (Mr. Redwood).

Does my right hon. Friend share my view that the fact that the UK is a net contributor to the EU budget is a crunch issue? Increasing the budget effectively means that the UK taxpayer is paying twice.

:In his uncompromising message to Finance Ministers in European-level discussions, the Chancellor of the Exchequer made it clear that, when each member state has to take tough decisions on spending and show fiscal discipline, it is unacceptable and unrealistic for the Commission to propose a 25 per cent. increase in its spending. He also told Finance Ministers that it would be wasteful and inefficient to increase spending on current Commission programmes that do not match the European Union's economic reform priorities and in some cases, such as the common agricultural policy, work against them. The Government's view clear about the negotiation that is necessary on the financial perspectives and where we are starting from.

Indeed, as the Prime Minister set out to the House in December last year, the Government view a budget of 1 per cent. of EU gross national income, with growth and reprioritisation, as adequate to meet the needs of an enlarged Union. That view is shared by the heads of five other member states—Germany, France, Sweden, Austria and the Netherlands—who have also written to Commission President Prodi, arguing for a budget stabilisation around 1 per cent. of EU gross national income.

With that in mind the Government believe that EC budget spending should be objectives-focused, with the emphasis on policy outcomes rather than budgetary inputs; that it should he evidence-based, with a proper evaluation of budget, try policy; that it should be based on a proper assessment—again, I think this is what the right hon. Member for Wokingham was driving at—for existing and new arras of spending, of whether the Union budget is the best instrument for adding value at the EU level; and that it should ensure sound financial management, budgetary discipline and an equitable distribution of spending across the EU, consistent with value-added principles and objectives. It is the Government's view that the Commission has failed to respond adequately to the challenge posed for the next financial perspective.

As my right hon. Friend may have expected, I have received a communication from our colleague the Member of the European Parliament for the North West, Arlene McCarthy, who asked me to stress that she fully supports the Commission's proposals. For my own part, I am concerned about the effect on objective 1 status on Merseyside, particularly on many of the ongoing projects and schemes across Merseyside and in my constituency that are addressing problems that need to be addressed. Will my right hon. Friend agree to meet local authority leaders, myself and parliamentary colleagues to discuss our concerns so that we can hopefully reach an equitable solution?

I am always happy to facilitate meetings between Members of the House and Treasury Ministers, including myself, as my hon. Friend requests, so that I will be able to explain clearly to Members of Parliament and the colleagues whom my hon. Friend wishes to bring to such a meeting the Government's intentions with regard to reform of the structural funds and the benefits that that will bring. If he will forgive me, I shall return to that matter later in my speech when I discuss the cohesion report.

On the common agricultural policy, the Government are a leading advocate of CAP reform, pressing for a more liberalised and market-focused agricultural sector. Last year, we succeeded in a significant reform of the CAP, for the first time largely breaking the link between tax-funded subsidies and production. This year, we secured yet more reform, including an end to the specific subsidies for tobacco from 2010 and a significant reduction in trade-distorting support for cotton, which is a key product for some of the world's poorest countries. The Government will continue to press for CAP reform, with the next stage likely to be the reform of the sugar regime.

For external actions, the Government would like the next financial perspective to refocus development assistance on poverty reduction and achieving the millennium development goals, to enhance the EU's capacity for crisis management an i conflict prevention and to improve flexibility across the budget to respond to unexpected spending needs.

For present internal policies, the Government will seek to focus spending on a smaller number of initiatives that demonstrate added value, especially in supporting the Lisbon agenda objectives and n pursuing freedom, security and justice objectives.

I turn now to the Commission's communication on the third cohesion report. Again, that is a wide-ranging document that examines changes it economic and social differences between member states, regions and social groups and how member states and EU policy may be affected by these changes. In terms of the link with the wider Commission proposals for EC budget expenditure, it sets out the Commission's proposal for the reform of the structural and cohesion funds for the period 2007 to 2013. The Commission's proposals in that regard focus on the three objectives of convergence, regional competitiveness and employment, and European territorial co-operation. To meet those objectives, the Commission proposes increasing spending by 30 per cent. from €260 billion over the current financial perspective—2000 to 2006—to €336 billion, or 0.41 per cent., of EU gross domestic product, over the period 2007 to 2013. Including, as now, expenditure on the proposed single rural development and fisheries instruments, spending would rise by around 40 per cent. to €370 billion, or 0.46 per cent. of EU GDP.

Despite the fact that with enlargement the richest parts of the Union would become more than 10 times richer than the poorest, the Commission proposes that less than half of the structural and cohesion funds should go to the new member states where they add most value.

The Government do not share that view of the future of the structural funds. Following a UK-wide consultation on the future of the funds last year, the Government proposed an EU framework for devolved regional policy. Under that approach, all EU member states would agree to pursue common objectives in support of regional development, but delivery would be substantially devolved and decentralised to give member states and regions the freedom and flexibility that they need to pursue their own strategies.

As my right hon. Friend will know, the north-west has received multi-billion-pound investment through the objective 1 funding programme. I welcome her comments on devolving budgets, but given the region's concerns about the future of funding, will she, as my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth) requested, agree to meet local chief executive officers and Members of Parliament so that we can talk further about the investment that is needed to underpin our economy and our robust employment situation?

I see the potential for a long queue outside my office. I understand that the Minister for Industry and the Regions has met my hon. Friend and her colleagues for discussions. I would not wish to deny Members access to Ministers to discuss such important issues but I emphasise that preventing the costly recycling of funds is at the heart of reform. Let us consider the instruments that are already in place in the United Kingdom and the further commitments that have been made, for example, through regional development funds, the role of local authorities and the funding streams for employment, enterprise and competitiveness. We must ensure the continuation of the Government's commitment to economic growth in all regions and nations of the United Kingdom and of our support for those regions in that development.

Although I would be happy—another Treasury Minister may have to be happy—to discuss this important matter with my hon. Friend the Member for

Crosby (Mrs. Curtis-Thomas) and others, I stress to her that it is inappropriate for any member state to pay an increased contribution to get less back when arrangements could be secured in the negotiations to support the development of the regions.

I shall give way to the hon. Member for East Carmarthen and Dinefwr (Adam Price) shortly. A few Labour Members want to intervene and I have a feeling that I shall be in meetings until Christmas at this rate. However, I shall not forget the hon. Gentleman. First, I shall give way to my hon. Friend the Member for Falmouth and Camborne (Ms Atherton).

I do not wish to add to the length of the queue outside my right hon. Friend's door but I ask her to acknowledge that the Commission is calling for the poorest region in both the United Kingdom and the north of Europe—Cornwall— to receive the full tranche of 2007 objective 1 funds. Will she make a commitment that the Government will work with Cornwall to ensure that we enjoy the same employment and other opportunities as other parts of the European Union, north, west, central and south?

My hon. Friend is a fierce and convincing advocate for Cornwall and use of objective 1 funds. I have had the opportunity of discussing the matter with her previously. I emphasise to her and all hon. Members that the Government's policy on the economic development of all the regions and countries of the United Kingdom is clear. Our objective is to ensure employment growth, skills development, competitiveness and productivity in them all. We are discussing the most effective and efficient way, with added value and respecting subsidiarity, to continue to achieve those objectives.

If my hon. Friend will wait a moment—I have given way to him previously—I shall come back to him. First, I give way to the hon. Member for East Carmarthen and Dinefwr.

The Commission said that, under its proposals, regions such as west Wales and the valleys would have continued to qualify for objective 1 under the previous system with 15 member states but will not because of enlargement, and would therefore receive transitional relief of between 60 per cent. and 85 per cent. of the funding that is currently available. Will the Government guarantee that the same amount of transitional relief—between 60 per cent. and 85 per cent.—will be available to those regions under their proposals?

First, if the Commission is making promises, it is doing so on the basis of a budget that it does not yet have. Secondly, I refer the hon. Gentleman to the statement of he Secretary of State for Trade and Industry in which she clearly set out the methodology that the Government would follow to ensure the development of all t le regions and nations of the United Kingdom in pursuing our objective of raising all to the levels of growth and employment from which some currently benefit.

As all member slates will do, the Government are entering a negotiation process with the Commission about future funding. It is crucial that we judge that on added value, subsidiarity, the efficiency and effectiveness of the pending, and the opportunities for us to streamline and simplify the process and cut out the wasteful recycling of funds that often happens. I am sure that all hon. Members would wish to achieve the continued support for that development that will result from the Government's economic policy.

From the tone of my right hon. Friend's response to my hon. Friend the Member for Crosby (Mrs. Curtis-Thomas) and me, I think that she may have misunderstood the point that we were trying to make. We are not into special pleading for Merseyside and the north-west, although, since the occasion presents its elf, we might well engage in some. My concern is that, as matters develop and as the Government develop their own approach to those matters, we should deliver my right hon. Friend's objectives—many of which I share—to the areas where they are most needed, rather than spraying them about indiscriminately. There is probably not much difference between us on this, which is why I think that a meeting would be helpful.

My hon. Friend is a passionate advocate for the area that he represents, as I would expect all hon. Members to be. I hope that I did not misunderstand his pleadings, or give an incorrect indication to the House. What I said was that, following a UK-wide consultation on the future of the funds last year, the Government have proposed an EU framework for the devolved regional policy. Under that approach, all member states would agree to pursue common objectives in supporting regional development, but the delivery would b. substantially devolved and decentralised. That would give the member states and their regions and nations the opportunity to pursue their own strategies.

To ensure that funding is focused where it will add most value, the Government have proposed that those member states eligible for the cohesion fund—Greece, Portugal and the new member states—would continue to receive EC funding, while richer members would take primary responsibility for financing regional policy themselves, thus ending the current system of wasteful recycling of funds between net contributors. That is the issue from a financial perspective.

Hon. Members on both sides are rightly pressing me to ensure that the Government remain strongly committed to regional development and, to that extent, we have guaranteed that, if our proposals on reform of the structural funds are agreed, domestic spending on regional policy will be increased, so that the United Kingdom's nations and regions will receive a level of resources that will ensure that they do not lose out following the UK proposals. That has been the subject of discussion and consultation, involving a large number of meetings. The UK pays 1.6 euros for every 1 euro that it receives under the current financial perspective. Paying for UK regions means paying for other regions of equal wealth elsewhere, which could cost a great deal. That is why the Government are suggesting this way forward, so that we can direct our resources to our regions.

I come from a region where the use of European funds could hardly be better. Improvements can always be made, but we have been very successful in deploying such money as we have had.

I am listening carefully to what the Minister is saying, and the problem with the Government's position at the moment is that, while they may have support from five other member states for the reduction of the budget— she mentioned that in the first pan of her speech and I understand it—there does not seem to be any agreement between the six that are trying to get the budget constrained about what should follow. Her suggestion that there should be subsidiarity may well be sustainable, but how much support is there among those six colleagues for that? Obviously, if she gets regionally repatriated policy, she must make serious amendments to the state aid rules for that to be of any use whatever.

If I can start with the state aid rules, as the hon. Gentleman knows, those are also a matter for discussion under the proposals being put forward by the Commission with regard to slate aid and regional policy. I am sure that he finds this in his local communities as well, but there are issues with regard to the bureaucracy and complexity of the application for funds. I will put it simply: the Government have committed to increased funding on the basis of 1.6 euros for every 1 euro that we receive, whereas the current proposals in relation to distribution among all member states are for a 50:50 arrangement, so the richer states would also receive it. I am sure that he will agree that we should put forward the proposal passionately and enthusiastically.

The hon. Gentleman questions me with regard to a consensus on cohesion. As he knows, that is sometimes a difficult issue. At this point in the negotiations and discussions with other member states, the Government are strongly of the view that we can put forward our proposals and that they will receive support. I must say, however, that this is the beginning of a long negotiation. If we consider other long negotiations in which the United Kingdom has entered discussions with 14 against and only the UK in favour—the discussions on the savings tax directive spring to mind—he should take comfort from the Government's persistence and ability, in representing the House, to persuade other member states of the correctness of the proposal. On the financial perspectives, the process is about negotiation and putting forward a strong case. I am setting out for the House the principles that we will follow and the objectives that will guide us in negotiations, and we will pursue that process with considerable vigour.

I echo the comments of my hon. Friend the Member for Roxburgh and Berwickshire (Sir Archy Kirkwood). In our part of Scotland, which has a series of economic problems, whether in the agriculture sector or textiles, structural funds from Europe, coupled with regional selective assistance over the past few years, have been absolutely crucial to the restructuring of that economy. There is now a state of flux and uncertainty about the future in relation to both those issues. Can the Paymaster General explain to the House exactly what the guarantee from the Government will mean for our region?

I have covered that clearly in terms of the Government's commitment to the English regions and the nations that make up the United Kingdom. As I have suggested in response to previous interventions, the hon. Gentleman should consider the statement from the Secretary of State for Trade and Industry on the methodology that will be used. I would also say that this Government, since 1997, at times in the teeth of opposition from some Members, have created an active regional policy through the regional development agencies and investment in skills and employment. Over that period, we have clearly articulated our commitment to growth and prosperity in all the English regions and the nations that make up the United Kingdom. I see no reason for the hon. Gentleman to doubt that commitment, and I am a little surprised that he does not understand the importance, at the beginning of negotiation, of setting out—clearly as I have here today—the principles, the objectives and the process according to which we will negotiate the delivery of priorities.

Does my right hon. Friend agree that part of our current difficulty is caused by the fact that the European Commission, which is strongly opposed to the Government's proposals, is trying to promise UK regions larger sums which have not been agreed and will not decide where those sums will come from?

I entirely agree. My hon. Friend puts the case rather more succinctly than I did.

As I have said, the Government are strongly committed to regional development. We are guaranteeing that if our proposals for reform of the structural fund are agreed, domestic spending on regional policy will increase so that the UK nations and the English nations receive an amount that will ensure that they do not lose out. I do not think I could be any clearer at this stage.

May I ask my hon. Friend the Member for Preston (Mr. Hendrick) to wait for a moment? I shall return to him after giving way to my hon. Friend the Member for Hamilton, South.

Obviously there is concern about the structural and cohesion funds. The assurances about the Government's position and the protection that will be given to areas that are currently beneficiaries are important, but the real issue is this: if we are sticking to a budget of 1 per cent. of EU gross national income, the poorest nations will qualify under a 75 per cent. formula. Does my right hon. Friend support that?

I dealt with that earlier. According to the Commission's proposals, funds will be distributed among all 25 current member states. There will be a 50:50 weighting arrangement for the nations at the heart of the European Union, which are the richest. That too must be dealt with. Aid should be directed towards those in greatest need. If we arrange spending at the EU level we must do so on the basis of added value, in a way that is appropriate and supports subsidiarity. That will not prevent other member states from agreeing, with a common purpose, to pursue their own regional policies.

I must give way first to my hon. Friend the Member for Preston, who has been waiting patiently.

I am sure that no Member on either side of the House would object to the continuance of greater assistance for regions that need it, but can my right hon. Friend explain the logic of reducing the size of the EU budget to the extent that is proposed when 10 new states, mostly very poor, are entering the EU with worse economic situations than ours?

One per cent. growth in the budget is substantial. At a time when other member states are following a tight fiscal discipline, the Government think it reasonable to require the Commission to do the same, and to pursue the policy that we pursue domestically. That is why the Government are advocating, as I said, that there should be, at the beginning of the debate on financial perspectives, a thorough appraisal of where the Commission is spending its money, the efficiency and effectiveness of that, and whether that is the most appropriate way of spending.

When spending at a European level, it is right that we ensure that we are getting added value. We are talking about a substantial budget, and I am sure that my hon. Friend the Member for Preston will agree that it is right for the principles of budgeting to include: first, defining what sort of items merit public spending; secondly, determining the available resources; and thirdly, determining spending priorities based on evidence and political judgment. That is what the Government are advocating in pursuing this matter.

A budget of 1 per cent. of EU GNI is ample to meet the needs of the enlarged Union, but reprioritisation to ensure that EC fund spending adds value at EC level is key, and it is on that that the Government and other member states are pressing the Commission. It would be absolutely irresponsible to European Union taxpayers simply to lump new spending proposals on top of existing ones. We would expect neither our domestic Administrations nor the international community to do that, and the Commission should not do so either. So, as I have said, a thorough appraisal of spending and where it goes has to be part of the financial perspective in order for us to come to reasonable judgments on future financing.

I find myself in the somewhat unusual position of agreeing with much of what the Paymaster General says. Can she give us some idea of the Government's thoughts on state aid if she succeeds in repatriating regional development money? That is a key issue in the north-east of England. Who would adjudicate on the issue of state aid if it had been repatriated to the individual nation states, and who would decide whether that state aid was being given in a justifiable way or being used by another country in a backdoor way to subsidise a particular industry?

The hon. Gentleman raises an important point on regional state aid guidelines. In case he was not able to look at this, I must tell him that the Government explained yesterday in a written statement to Parliament how we plan to consult shortly on the Commission's proposals. The Commission has set quite a tight deadline for the UK Government to respond. The Minister for Industry and the Regions, my right hon. Friend the Member for Redditch (Jacqui Smith), will tell me if I get the date wrong, but I understand that the statement says the t the UK Government will consult on the matter and receive responses by September.

We agree with the Commission that state aid should be limited, and we agree on the need to create a level playing field for businesses across the European Union, but state aid can also distort competition—perhaps that is the point that the hon. Gentleman was touching on—and limit business performance, prosperity and quality for consumers. Through the consultation and discussions with the Commission, the Government are seeking to explore alternative approaches to address that point. It is absolutely right that consultation should be a part of that, and I commend to the hon. Member for Hexham (Mr. Atkinson) the written statement to Parliament that my right hon. Friend the Minister for Industry and the Regions made yesterday. He might well find, uncomfortably, that he agrees with even more of what the Government are currently saying.

I turn to the financing of the budget. The Government are against any proposal for an EU tax. We believe that taxation is a matter for member states to determine on a national basis. The United Kingdom's abatement remains justified and necessary to correct for its disproportionate budgetary imbalance.

It is clear that we at e just at the start of what is likely to be a long negotiation. It is the Government's strongly held view that the Commission's current proposals are not a basis for such a negotiation. The Government are working with other member states that share many of our principles and areas of common interest, in order to question and to challenge the Commission's ideas, and to develop an approach consistent with our objectives.

I have taken note of the Opposition's amendment—which requires the Government to lay out the principles underpinning our negotiations, the objectives that we will use in conducting them and the negotiation process—and I hope that they agree that these issues have been discussed thoroughly in the House. The Government have no difficulty at all with the Opposition's amendment; indeed, it might be slightly uncomfortable for them to discover how vigorously we are pursuing these issues. I commend these documents to the House.

5.1 pm

I beg to move, as an amendment to the motion at end add:

"and calls on the Government to set out its principles and plans for those objectives and how it will achieve them."
I thank the Paymaster Genera 1 for her generally patient and apparently helpful opening remarks. I shall, if I may, begin by commending the European Scrutiny Committee's recommendation that this debate be held. I suspect that, on looking at the title of the two documents involved—the "Third report on economic and social cohesion", and "Building our common future: Policy challenges and Budgetary means of the Enlarged Union"—some of us thought that this would be a rather technical and dull debate. In fact. the two documents consider how much taxpayers' money the Commission should spend and what it should spend it on. Indeed, the Commission's proposal ranges e yen further. As the Committee states,

"It will also largely determine the net contribution to the EU of each member state, and the future of the UK's budget rebates. It will, in practice, be binding on the panics to it for those seven years. It is, therefore, one of the most crucial forthcoming EU decisions, with important consequences for enlargement and the draft constitutional treaty."
For all those reasons, we believe that this debate provides an important opportunity, and we are grateful to the European Scrutiny Committee for recommending that this debate proceed.

The EU's recent enlargement provides the backdrop to these documents. We argued in favour of the accession of the 10 new member slates for many years, so we are delighted to see their arrival in the European Union. Obviously, the arrival of 10 more nations means that the EU will need to adapt if it is to cope with this fundamental change. It needs to tic far more flexible and to be able to accommodate wide diversity within its borders. Above all, it needs to become a Union for its people, not for its leaders.

On the financial perspective, the Commission is seeking a significant change in its expenditure, as the Paymaster General alluded to, with a proposed increase above 1 per cent. of the Union's gross national income. There have indeed been a number of proposed new spending totals from various member states, but as things stand the Commission has sought an increase to 1.24 per cent. of gross national income. In monetary terms, that equates to more than €336 billion over the seven-year period in question, compared with a figure of €257 billion in the past seven years. Yet, to date, that same Commission has failed to manage its existing budget properly.

On a point of order, Mr. Deputy Speaker. I apologise to my hon. Friend for intervening, but what I have to say is relevant to what he is talking about and I would appreciate your guidance and assistance. One of the most important papers that we are debating today is "Building our common Future', document 6232/04. The financial framework and requirement for an increase in resources claimed by the Commission is supposed to be set out in a table that should appear on page 30. On page 29 it states:

"The following table provides an illustration of the framework described above."
On page 30, however, there is a blank page with the words "Insert table" at the top. I do not know whether the table is available somewhere else in the documentation and I have been unable to find it, or whether it is simply missing. In that case, could you, Mr. Deputy Speaker, gently suggest to those on the Treasury Front Bench that the necessary information should be provided before the end of the debate?

The hon. Gentleman will appreciate that that is not a matter for which the Chair is directly responsible. I am sure, however, that everyone in the Chamber will have heard his points and that those responsible for providing the documents will seek to make the omission good as quickly as they possibly can.

Thank you, Mr. Deputy Speaker.

The problem that I was alluding to was the fact that the Commission, despite asking for all the additional money and a change in the budgetary requirements, has failed to manage its existing budget properly. The fact that the European Court of Auditors has not approved its most recent budget highlights a serious lack of basic financial management. Yet this is not the first time that that has happened. Indeed, the Commission's budget has not been approved by its auditors for nine years. Frankly, that is a shameful record, redolent of Enron's accounting standards—a mix of rampant fraud and inadequate financial management.

In response to this year's budgetary woes, the Financial Secretary said that the EU budget should—the Paymaster General rightly repeated these words—ensure "sound financial management" and "budgetary discipline". We agree. The problem, however, is that the Government have been saying that throughout their entire seven years in office. When are they going to do something about it? When will they try to make the Commission accept its financial responsibilities? After all, if the accounts cannot be trusted, the Commission's financial legitimacy is undermined. How can we know, for example, if the new financial perspective is being achieved? How can we be sure that the Commission's priorities are getting the money that they require? Most important of all, how can taxpayers have any confidence that their hard-earned money is not simply being lost in fraud and waste?

I ask the Minister for Industry and the Regions, the right hon. Member for Redditch (Jacqui Smith), to set out in her reply the representations that the Government have made on this issue. Will she also set out what the Government plan to do if the Commission fails to respond? As far as we are concerned, until confidence in the accounts has been restored, Conservative MEPs will refuse to sign off the Commission's accounts—and so will the future Conservative Government.

Turning to the total expenditure plan, we strongly oppose any increase in the Commission's budget beyond 1 per cent. The Government have correctly identified the need for restraint to act as a discipline to achieve value for money for the taxpayer. I only wish that the Treasury would do the same in Whitehall—though I know that it is trying. In Brussels, the Government's pleas for financial restraint have sadly fallen on deaf ears. Indeed, the Commission seems to hold a fundamentally different view.

The 15th report of the European Scrutiny Committee rightly highlights the problem in a series of rather worrying quotes from the Commission. Apparently, the Commission believes that budgetary discipline does not deliver any value for money. Financial management is simply "matching resources to needs". The Commission is also quoted as saying:

"To saddle the Union with a set of goals and then deny it the resources required would be to condemn it to the justified criticism of citizens denied their legitimate expectations."
How the Treasury must blanch at those words! That is the language of an unreformed spendthrift—the desperate cry of a shopaholic asked to hand over credit cards. It denies financial accountability and, worryingly, it shows the wide gulf that exists even between Whitehall and Brussels, let alone between Brussels and the poor, self-selected taxpayers who have to foot the bill. When the Minister for Industry and the Regions replies to the debate, will she say what plans the Government have to achieve any meaningful financial discipline in Brussels?

The Commission suggests three new financial priorities for the forthcoming period, as part of its regional and cohesion policy. They are: assistance for regions with per capita gross domestic product below 75 per cent. of the EU average; promotion of regional competitiveness and employment; and support for interregional, cross-border and transnational co-operation. I do not know what that last phrase means, but I love the language.

The Government have argued instead that the focus should be on the poorer member states, notably the new ones. The Opposition agree: equally, we feel that many of the proposed schemes are too remote from the practical assistance that those countries want. A European police college, a disaster recovery capacity and a new European border agency—none of those begins to address the basic wishes of the people of the new member states. What they want is to get their basic infrastructure sorted out. That is more important than a disaster recovery capacity.

The impact of the structural funds is important, and that is true for much of the UK, as we have heard in the debate. The funds are important for parts of Cornwall, the north-west, Scotland and Wales, among other areas. Last Thursday, in answer to a question from the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore), the Minister for Industry and the Regions spoke about the Government's plans. She said:

"If our recommendations are accepted, we will ensure that we increase the resources necessary in the regions and the devolved Administrations to continue the focus on productivity and skills and make the necessary investment to ensure that they are successful."—[Official Report, 10 June 2004; Vol. 422, c. 393.]
However, as questioners this afternoon have emphasised, the important point is what happens if the Government's recommendations are not accepted—an outcome that is quite likely. When she replies, will the Minister say whether she can still make that statement? The Paymaster General made a valiant effort to answer that, but hon. Members of all parties would appreciate a clear and unequivocal statement on that point.

The Dutch take over the EU presidency for the second half of this year. Is the hon. Gentleman aware that the Dutch Government indicated recently that they strongly support the British Government's proposals? Does he accept that that represents a gathering of momentum behind what the Government are arguing?

I am grateful to the hon. Gentleman for adding that information to the debate. My concern is the lack of clarity in the Government's position, which was illustrated by the questions from Labour Members earlier. I hope that the Minister will provide that clarity when she winds up the debate.

Earlier, the hon. Gentleman remarked on the effectiveness of EU spending. Does he accept that spending in UK objective 1 areas has a very good effect? In my area, in the highlands and islands, 90 per cent. of the projects have a high effectiveness rating in terms of the efficiency of the spending. That has led to the creation of 1,800 jobs.

I certainty accept that that can happen. My work in the Select Committee on Welsh Affairs has made that clear, but it has also shown that there can be problems. It is dangerous to tar the entire programme with one brush, one way or the other; the important point is that we muse ensure that taxpayers' money is well spent. That is what we want to hear from the Minister.

The hon. Gentleman is equivocating slightly. I echo the comments made by the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) about the effectiveness of money spent on programmes in Scotland. From Eyemouth and Hawick to Galashiels, Selkirk and Peebles, one will find very good projects that are both efficient and effective. What evidence does the hon. Gentleman haw that wipes that out and proves that spending that me ney is a bad thing?

The hon. Gentleman may have misunderstood. I do not claim that all objective 1 funds are good or bad: my concern is what the Government will do, because—as several hon. Members have pointed out—projects are anticipating that funding and may suddenly find that it w 11 not be forthcoming. I hope that the Minister will be able to help us on that point.

On regional spending, surely we should measure not only whether the money has been spent well and effectively, but the cost in terms of the original input. We should measure the cost in terms of budget spend and contributions from member states, as well as the effectiveness when the moneys have finally been spent.

I agree. The danger is that those Government programmes that are not carefully thought through—whether funded by EU or UK money— simply transfer job creation from one area to another. We need to ensure that such programmes are fashioned in a way that takes into account the true spatial dynamics of both counties and regions. We need to ensure value for the taxpayer, whether money is spent directly through UK-funded programmes or through EU programmes.

The new financial perspective for the coming years, which the Commission has highlighted and which is contained in these documents, would. in our opinion, need to deliver radical reform of Europe's economies, if the EU nations are to compete globally. At the Lisbon European Council in 2000, member states committed themselves to a 10-year strategy for economic reform, in order to improve Europe's employment and productivity. We were told at the time that that would transform the EU into a dynamic, knowledge-based economy, achieving strong but sustainable growth and creating a thriving environment for enterprise in general, and entrepreneurs in particular.

Sadly, four years on, the reality is rather different. As the Centre for European Reform aid earlier this year:

"Even the most enthusiastic proponents of the Lisbon agenda can only describe the EU's performance over the last 12 months as mediocre."
Indeed, the Commission seems to agree. The Financial Times reported on 25 March:

"Instead of catching up with the US the EU has fallen even further behind. A report by the European Commission in January this year says that in the three most important categories—economic growth, productivity and employment—the EU is far from meeting its own goals.
With gross domestic product per heal stuck at 72 per cent. of the US level, Brussels concludes that `the Union cannot catch up on the US."'

In recent months, there have be en negotiations to try and revive the reform agenda. T le Government have been making the right noises, but to date there seems to have been little actual progress. I hope that the Minister will be able to tell us how far the reform agenda has got and what progress she expects to see over the next year.

Finally, there is the question of member state contributions. Alongside proposals to increase the overall spending above 1 per cent. of gross national income, the Commission has set cut a series of options for what it—to my pleasure—calls

"a relatively major and visible tax resource payable by EU citizens and/or economic operators".

Apparently, that would replace the existing system. I concur with the Paymaster General—we must not concur too often, or people will tart to wonder—that such an EU tax would be wrong in principle and in practice. We are happy to join the Government in opposing that aspect, although I look forward to the Liberal Democrats' comments when the moment comes.

The Commission has also proposed a system of budget rebates that would replace our existing UK rebates. As I understand it, that system would be available to any member state making what the Commission describes as "excessive budgetary contributions", but unlike the current system, it would be entirely conditional on the a application of what is called "the threshold" and all member states would be required to contribute. I have read carefully through the Government's responses and I see that throughout Ministers say that they will "defend" the current rebate. That is super—very encouraging—but what we really want to know is whether they will keep it—[Interruption.] The Paymaster General happily says that they will—

The Government will accept our amendment and now they are agreeing to my comments. I should probably retire gracefully while I am still ahead—[Interruption.] I shall do so in a moment, given that clamour from hon. Members.

I am sure that the hon. Gentleman will forgive me for saying this, but perhaps the Government can help the Conservatives to clarify their European policy if they are now declaring that they agree with us.

It was all going so well, but then the right hon. Lady had to spoil it. Without pressing the point too much further, can she confirm that the Government have no intention of allowing the rebate to go? Can she confirm that it will not go and that it will not be amended?

I am very grateful to the right hon. Lady for that confirmation; it will certainly put the minds of many Members at ease.

At the beginning of the debate, I said that the titles of the two documents underplay the significance of their contents.

The hon. Gentleman knows Cornwall well. What commitment will the Conservative party make on regional policy for the county of Cornwall? Will it match the Labour Government's commitment?

Indeed, I know Cornwall well; I am an émigré, although perhaps ex-pat would be a better word. The hon. Lady knows that it would be quite wrong of me to try to make policy on the hoof and I have no intention of falling into that trap. I may be a relatively new Member of the House, but I do not intend to make that mistake.

No, I am coming close to the peroration. As hon. Members were keen for me to conclude, I shall accede to the wishes of the House and not give way again.

The issues covered by the documents include some important questions: how much should the EU spend and on what, and how much should we contribute? That is why the Commission's proposals deserve thorough scrutiny. The Conservative party supports many of the stated aims of the motion, especially on limiting total spending and on the "unrealistic and unacceptable" proposals for future spending priorities.

We are, however, concerned that the Government have not been forthcoming or clear in explaining their aims and plans for fulfilling their objectives and those of the EU. Further to that, the scandal of nine years of unapproved Commission accounts reflects a huge gulf in attitudes towards public financial management between the UK and those who spend our money in the Commission. We have yet to be convinced that the Government have either the will or the plans truly to resolve that problem.

Again, I commend the work of the European Scrutiny Committee and its continuing consideration of matters European. I hope that in her reply the Minister for Industry and the Regions will be able to answer the questions that I have raised. If she can also indicate that the Government fully accept our amendment and will include it in the resolution, we shall be quite willing to consider withdrawing it at the appropriate stage. I hope she will be able to give us that information when she responds to the debate.

Before I call the next speaker, may I respond to the point of order raised earlier by the hon. Member for mid-Suffolk—

I am sorry. I must have been thinking of my own constituency—so close to my heart, as always. I meant the hon. Member for Mid-Worcestershire (Mr. Lull).

An expanded version of the table to which the hon. Gentleman referred is on page 11 of the original report of the Scrutiny Committee—House of Commons document 42-xv—but the table to which he referred and which should have been in the documents that we are discussing today is now available in the Vote Office. I hope that is helpful.

5.25 pm

This is an important debate because it is all too easy these days to allow the draft EU constitutional treaty to dominate debate on Europe, whereas the financial perspective for 2007 to 2013 is crucial as well. I understand that the perspective represents the EU's multi-annual budget for those years. We are also considering EU cohesion policy this afternoon. That, too, will have a profound impact on the EU in the next few years.

The European Commission has proposed a budget for the next financial perspective of 1.26 per cent. of Community gross national income. That represents an increase in the EU budget of some 25 per cent.—a significant increase by any stretch of the imagination. The European Commission argues that that increase is needed to finance the common agricultural policy, to support a wide range of policy initiatives, some of which are new, and to fund the structural and cohesion funds—in other words, the instruments of regional policy. Of course, the Commission argues very strongly that that significant increase in the EU budget is necessary because of the recent expansion in the EU from 15 to 25 states.

Today, I want to question whether such an increase is justified, especially when, as has been said, the EU is concerned about the budget deficits of several member states in the eurozone. There is something of a contradiction therefore: the EU is saying, on the one hand, that certain member states should tighten their belts, but on the other that they should contribute more to the EU's budget. In particular, I want to question whether that large increase in expenditure is justified in two respects. I want to question the expenditure that is projected under the heading "Citizenship, freedom, security and justice", and I then want to say a little about regional policy.

I should like to spend some time questioning whether it is sensible to increase the CAP budget, but we have to accept the current practicalities and the commitments that have been made on the CAP. The Government of the United Kingdom are to be commended for ensuring that at least a modest reform of the CAP has taken place.

I find it very strange that the European Commission proposes in its draft financial perspective expenditure a raft of new proposals, on some of which there has been no agreement. I cite, for example, the European border guard corps, which has been suggested without any political agreement. The British Government have not agreed to that suggestion, yet the European Commission nevertheless proposes funding for that new entity. The European Commission also proposes that resources should be allocated to reinforce the political concept of European citizenship. That proposal is very dubious to say the least, given the belief of many hon. Members, myself included, that the EU should be based on the principle of subsidiarity. The regions, small nations and the nation states are the EU's essential building blocks, and that should be part of the mosaic of European citizenship

I would question many other proposals, too, but I should like to focus in particular on the resource projection for what is called external representation. It is quite breathtaking to be perfectly honest, that the European Commission suggests that funding should be provided for single external representation at the World Bank, the International Monetary Fund and the United Nations economic agencies. We should place a very large question mark against that.

I also question the need for the proposed increase on regional policy. The European Commission proposes in its draft financial perspective a regional policy that is financed to the tune of €336.3 billion. It proposes that roughly half the structural funds and the cohesion fund should be focused on the new accession states, the countries of central Europe, and that the remaining half should be focused on the 15 states that were members before 1 May this year. It wants to spend the money under three headings. The first is convergence, the second is regional competitiveness and employment and the third is the promotion of territorial co-operation.

The first part of the Commission's proposal makes a great deal of sense. We should focus our attention on the accession countries of central Europe. They are very poor by our standards and they are struggling to come to terms with the single market. They certainly want to develop their economies up to the standards of ours. From an economic sense, and also from a moral and social sense, we should give the greatest possible support to the development of those new democracies.

I have problems, however, with other aspects of the Commission's proposals on regional policy. In purely monetary terms, it makes no sense at all for the United Kingdom to have to contribute €1.6 to get €1 back. That situation applies not just to the United Kingdom, but to other member states, and it is quite unsatisfactory and illogical.

Does my hon. Friend agree that the argument is about direction rather than speed and about finding the best organisation to add value? Is it the EU or the nation state?

The argument is partly about that, and I shall specifically address that point a little later. However, it is also about hard cash. It does not make sense for the United Kingdom Government to give large sums of money to other quite prosperous regions, but receive only a small amount of money to spend on our regions. It is far more sensible for the 15 member states to control finance themselves.

I remind my hon. Friend that every single region of the United Kingdom is still a net contributor to the European Union.

To be honest, I am not sure that that is absolutely the case, but I suspect that my hon. Friend's facts are probably right; he would not have made that point otherwise.

As Members will know from my accent at least, I come from a part of the United Kingdom, south Wales, where we have had large amounts of structural fund assistance—under the current financial perspective, the figure is £1.3 billion. That is because the south Wales valleys and west Wales are classified as objective 1 areas. It is true to say that the programme is very successful: large sums have been spent successfully. To be rather parochial for a moment, I refer to my constituency of Caerphilly and the Tredomen business park and the Ystrad Mynach college, which provides fantastic training opportunities, especially for young people. Widespread intermediate labour market measures have been introduced to help the long-term unemployed and many others.

It is important to recognise, however, that although much has been done, there is still much more to do. As we have heard this afternoon, a debate is going on among many of the regions that support the structural funds about whether they would be better off with an extension of the current arrangements with the European Commission or with the Government's proposals. There is a genuine worry that money from Europe might dry up, but it is difficult for us to debate specific sums at the moment because the budget has not been agreed. The European Commission is talking hypothetically, so we will know exactly where we are only when the European Union budget is agreed.

There is much to commend about the Government's firm commitment that the regions of the United Kingdom will not lose out—that genuine statement was reiterated this afternoon. However, if we leave finance aside, we must take account of other considerations, as my hon. Friend the Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) suggested. A few months ago, the British Government published a Green Paper entitled "A Modern Regional Policy for the United Kingdom". The document suggests a new way forward for the United Kingdom's regional policy and I commend much of what it contains, not only because of financial considerations, but because of administrative considerations.

I followed closely the way in which the European single programme document was drawn up because it has governed the expenditure of objective 1 moneys in south and west Wales. Much of the document should be commended, but it would have been much better if more local control had been exercised over it. One of the problems encountered when drawing up such documents is that they must comply with European Union agreements—in other words, they must fit in with what the European Commission says. I shall outline a case in point. The south Wales valleys face the specific problem of a lack of transport because of the area's topography. We desperately need more roads so that we may open up our valleys. That suggestion could not be written into the single programme document because the European Commission was against it. In other words, despite the fact that local people wanted the scheme, European money could not be spent on it because people in Brussels deemed that it was against the blueprint that they had established. That situation is unsatisfactory.

I hope that future policies will be determined according to the principle of subsidiarity. Local plans would thus be drawn up by local people who understand their areas, so in the case that I outlined, the National Assembly for Wales would do that. I want any funds that come via Brussels to match the strategy outlined in the Assembly's national economic development strategy, "A Winning Wales". At the moment, the European programme runs in parallel with that, but sometimes the complementarity is not perfect. The Government's proposal to streamline the system represents a far more logical and sensible approach on regional development.

The Green Paper deals with regional policy and structural funds, but it also places important emphasis on the future of European state aids, which is equally important. The key word must be "flexibility". We must have flexibility so that the regions of the United Kingdom may tackle market failure. The current situation is unsatisfactory. For example, when the Government wanted to introduce regional venture capital funds to benefit regions, they had to wait 12 months for the European Commission's permission. Why should that happen? Why on earth are such measures not determined nationally and regionally, which would be far more sensible and straightforward? Let us consider what happened with the Government's implementation of stamp duty reductions. Again, they had to wait for the European Commission to approve

the proposal. There is no logical reason why that should have happened, and I argue that it should not happen in the future.

Does my hon. Friend share my concerns about a possible double whammy for areas that lose objective 1 funding? First, they will lose the maximum amount of European funding, and secondly, they will lose the highest amount of dedicated state aid.

There must be a response to cases of need, and people must choose whether they want the British Government or the European Commission to make that response. I am a committed European, but I have more confidence in the ability of our Government than in that of the European Commission to recognise what is needed here. That was not always the case, however, with previous Governments.

Does my hon. Friend agree that objective 1 created a stand-alone pot of money that enabled communities such as mine to develop new projects that might have taken longer with Government structures? I hope that the Government will address that in their proposals after 2006.

My hon. Friend makes a fair point. There is much to be commended in various European programmes and we can all cite examples of good practice and innovation. However, that is balanced by the drawbacks. I have cited the lack of complementarity, but there is also an emphasis on convoluted forms of partnership. In my own area, for example, there has been partnership after partnership, and excessive red tape and bureaucracy. We could all think of ways in which we could streamline the system in our area to make it more effective and ensure that resources get through quickly to the projects and people who need them. I hope that such an initiative will be realised.

In conclusion, we have some way to go in discussions on the financial perspective and the future of EU regional policy, and I am sure that detailed negotiations will take place in the coming months. The Government are certainly correct to argue for a ceiling of 1 per cent. of gross national income in the EU budget, not 1.26 per cent. as proposed by the European Commission. I hope that they will not just be tough in the negotiations—it is all too easy to take such a stance—but persuasive.

It is no longer enough for us to stand in splendid isolation and be self-righteous about our proposals. We must engage effectively with our partners in Europe so that we win the argument and make sure that our interests, along with other interests, are to the fore. The European Union and the budget used to finance it should be responsive to its citizens and reflect concerns about their priorities. Europe should not centralise for the sake of it, and should genuinely serve the people, having recognised their needs. I therefore look forward to the Government arguing their case strongly, passionately and persuasively in the EU, and to their success.

5.43 pm

Last week, a vigorous national debate raged about Europe, but it seems to have passed us by this afternoon, as there is a substantial and, indeed, alarming consensus, to which I propose to add. I largely agree with the essential points in the Government motion, including the fact that the budget should not exceed 1 per cent. of gross national income, the fact that the Commission's proposals are unrealistic and unacceptable, and the need to refocus and reprioritise. If anything, the Conservative amendment strengthens the motion, so I support it as well.

Our debate this afternoon has not been about the EU at all but about British regional policy, and what exactly happens when we nationalise or repatriate—I am not sure whether my terminology is correct—the regional budget. There has been insistent questioning from Members representing the north-west, Cornwall, the borders, the Scottish highlands and Wales about the meaning of the Government's guarantee that the regional flow of funds will continue. The more subtle question is how areas whose needs are met by European budget allocations will be sustained under a national regime with different priorities. There is a series of questions there that have been only partially answered so far.

Returning to the essence of the budget, on the 1 per cent., a pertinent question was posed earlier by the hon. Member for Preston (Mr. Hendrick), who asked why only 1 per cent.—after all, there are more countries coming into the EU, so should not the budget be enlarged? The answer to that is partly a national interest point that the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart) made in an intervention—a larger budget would mean a larger net contribution from the UK. Apart from the national interest point, there is a wider point that is summarised in the letter from the six net contributors, of which we are one, that makes the case that until the European budget in general is tightened up and reformed, there is no case for its substantial enlargement. The formula must therefore remain at 1 per cent.

Some balance is needed, however. The right hon. Member for Wokingham (Mr. Redwood) spoke about waste and corruption, as did the Conservative spokesman, the hon. Member for Hertford and Stortford (Mr. Prisk). We know that there has been waste and corruption in the European Union budget. It is evidenced, the audit trail exists and there are many anecdotes illustrating the point, but not everything that the EU does through its budget is wasteful and corrupt. We have heard examples today of good European budget allocations, such as the descriptions from the highlands of Scotland.

I can quote an example from my constituency, which does not involve European regional funding but none the less shows that, when the EU gets things right, it can make a useful contribution at the margin. I have in my constituency the Twining centre, an institution that specialises in retraining the mentally ill—people who, for the most part, are permanently unemployed. The centre was established to retrain them for the labour force. There was no other source of funding. The council cannot afford to fund the centre. The Government do not regard Twickenham as a particularly high priority

area in urban deprivation, so there was no funding from the Government. The private sector is sympathetic and will use the graduates of the centre, but will not fund its running costs, so the European social fund did. Hundreds of local mentally ill people now owe their employability to that well-focused and well-managed centre, which has Spanish management drawing on best practice from the EU.

There are similar examples all around the country and we should not disregard them by painting a wholly negative picture of waste and corruption. Moreover, there is a paradox associated with the arguments about waste and corruption: the greater the concern, the greater the need for detailed documentation of application and monitoring. As a result, some European applications and monitoring are extraordinarily complex. Of course, that is not unique to Europe. Anyone who deals with local area-based initiatives or with the Department for Environment, Food and Rural Affairs will know that bureaucracy was not invented in Brussels.

One of our concerns is that, in the absence of properly audited accounts, we do not know how much is wasted or lost in fraud, so the accuracy of information is fundamental. Without that, all the funds and the priorities on which we may or may not agree are undermined by that lack of confidence. Does the hon. Gentleman agree?

Of course. The hon. Gentleman makes the point moderately and sensibly. Of course there must be audit. Much of the discussion over the past few weeks has been at a populist level, which is not the substantive point he makes, and much of the waste and corruption, as we well know, comes out of the agricultural budget. Because I regularly attend DEFRA questions, I know that many of the hon. Gentleman's colleagues are assiduous supporters of the common agricultural policy when it comes to their own constituencies.

That is my next point. One of the key problems associated with the European budget is a disastrous decision a few years ago, which was heavily discussed in this place and over which the Government appear to have had very little control: the so-called Berlin agreement between France and Germany, which has maintained the share of agricultural spending in the budget for the next decade, effectively paralysing any real innovation in budget initiatives. That utterly disastrous decision reminds us of the many iniquities of the CAP. It paralyses the budget, is enormously detrimental to the consumer, harms the environment and damages international trade and international trade policy.

Although this argument is about the budget, not agricultural policy in general, I hope that the Government will continue to reassert in Europe the fundamental belief that we should be aiming not only for reform at the edges, but for a world in which agricultural products are traded as freely as cars and televisions because there is no reason why they should not be. That is the open market destination to which we should all commit ourselves.

I have a specific question about agriculture in the budget. Given that the Paymaster General said that sugar is next on the agenda for reform, what does that mean for the sugar tariff? As sugar is one of the EU's own resources, the EU has an interest in increased tariff revenue and therefore in resisting the liberalisation of the sugar regime. What is the Government's view, and how do they see the future of the sugar tariff in relation to their reform proposals?

The hon. Member for Hertford and Stortford asked about the UK budget rebate. I joined the consensus on the rebate—I support it, as does my party. It was an achievement of the Conservative Government to have negotiated it and an achievement of this Government to have maintained it. Nevertheless, we could do better. Even after the rebate, we are still substantial net contributors. Over the past three years, we contributed an average of €4 billion a year, which, in comparison with France and Italy, would not be merited on any equitable basis. Although the rebate has secured enormous gains relative to what they could have been, the formula is still not entirely satisfactory.

Moreover, in every negotiation with the European Union, we are hamstrung by the fact that, if the British Government make major demands, the other European countries—particularly the French—will pop up and say, "In that case, let's reopen the whole question of the British rebate." Instead of a special dispensation for the British, it would be better to have an automatic compensation mechanism for all net contributors similar to the system of floors and ceilings that has been developed in local government finance. Of course, that cannot be achieved in the short term—there is no proposal on the table and no political will to achieve it—but we cannot argue for the next 20, 30 or 50 years that the funding of the European Union must be built around the British rebate. There must be a better mechanism and we should keep that as our long-term strategic objective.

My final point relates to the refocusing of priorities. It is a simple matter of logic that, if there is a limited budget pot of 1 per cent. of GDP, an expanded membership of predominantly poor countries and redistribution based on income, the existing recipients will lose revenue. The UK regions and regions of the other relatively high-income member states will have to accept that European regional aid will be phased out, albeit with transitional relief, because that is an inevitable consequence of the way in which the budget is evolving. There is a whole set of practical questions about how transitional relief is managed and how the Government's guarantee to honour regional payments will be met.

I am interested in the hon. Gentleman's argument, but does he think that his Cornish colleagues would agree?

All hon. Members who have spoken rightly advanced strong arguments for maintaining funding for their regions. The Government have guaranteed that that will be sustained under the new arrangements. Several of my hon. Friends say, as would my Cornish colleagues, that they want not only the quantity of money, but the quality of the programmes to be maintained. We have not yet received clear answers from the Government about how that will be maintained. I do not disagree with the hon. Lady or my Cornish colleagues on that matter.

There is a more fundamental question. The poorer areas and depressed regions of the European Union will have to cope without much help from European funding. Even if the European budget were expanded, the money would be a drop in the ocean compared with the economic needs of the depressed areas and poorer regions of Europe. They will have to adjust in other ways and that is why the overall economic framework must be right. There are two key elements to that.

Mr. Bolkestein, the Liberal Commissioner in Brussels, stressed the first element yesterday. It is the importance of the Lisbon approach, which essentially provides for a market mechanism to ensure a proper disciplined system for state aid, competition and the maintenance of the original principles of the Common Market.

Secondly, the poorer areas of Europe cannot be constrained in their application of tax policy. Taxation is not simply a British red line issue; it is about the future of Europe. The poorer countries in Euro