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Commons Chamber

Volume 450: debated on Thursday 26 October 2006

House of Commons

Thursday 26 October 2006

The House met at half-past Ten o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

City of London

1. What his assessment is of the competitiveness of the City of London; and if he will make a statement. (97054)

In 1997, financial services earned £45 billion for the United Kingdom, and last year the figure was £94 billion—twice as much. Net exports have risen from £11 billion to £19 billion and financial services, once 6 per cent. of the economy, are now 8.5 per cent. of our economy. With the new City task force we will continue to found our policy for competitiveness on thinking globally, investing in skills, a competitive business and light-touch regulatory environment, and, most of all, doing nothing to put economic stability at risk.

The City is set for another bumper year of growth, due in no small measure to the stability and low-inflation environment of the wider economy. Will my right hon. Friend reject any unfunded tax cuts as putting that stability at risk, and what more can he do to enhance the role of the City in the world economy?

In 1997, 280 billion shares were traded in the City of London: last year, the figure was 900 billion. That shows that the City is responding to the global challenges in a way that we can be proud of. What we will not do is put stability at risk by irresponsible, unfunded and reckless tax cuts, as proposed by the Opposition. The policy we will not follow, as suggested in the new competitiveness economic policy group document published last night—it is interesting what one can read on the Conservatives’ website—is to abolish consumer protection for mortgages, pensions, insurance and credit cards. We will not return to the pension mis-selling that we have spent years getting away from.

Does the Chancellor agree that it will help to maintain the competitiveness of the City of London if the London stock exchange is not taken over by a foreign stock exchange company?

I hope that the hon. Gentleman will agree with the Government—we propose new legislation on the issue—that nothing should interfere with the right of the City to be regulated by the Financial Services Authority. Rather than Governments deciding who should own what, we must put in place the proper regulatory mechanisms that insist that whoever owns industries, services and, in this case, the stock exchange in London, it is regulated in London by the FSA. I hope that we will have all-party support for the Bill that my hon. Friend the Economic Secretary will introduce.

In terms of competitiveness, will my right hon. Friend indicate how the City of London compares with other financial centres in the European Union?

In the nine years since we took office, of the companies that have located either their national, regional or international headquarters, it is true to say that 398 have located in London and the United Kingdom, 63 in Paris, fewer in Germany and the Netherlands and 30 in Ireland. Opposition Members who wish to suggest that the success of Ireland is somehow comparable with the success of London should think again. London has doubled the amount of trading and financial services work. It will continue to thrive because we will think globally, but we will not put it at risk by an irresponsible funding of tax cuts that we cannot afford, and which would put at risk the very public services, infrastructure and skills on which the City and the rest of the British economy depend.

Is the Chancellor aware that the City’s big fear now is that big bang is being followed by big bureaucracy? On the very day that he had City leaders in last week for a bit of spin and one of his fake smiles, he forced through this House new legislation compelling companies to reveal their most sensitive commercial information. Is not the City right to judge him by his actions, rather than by his words?

The hon. Gentleman, who should know something about this, should look at the facts about the performance of the City and the British economy. Perhaps he might read the comments from the chairman of the New York stock exchange, who said that London is getting business for two reasons: one, it does not have the heavy touch regulatory environment of the United States of America; and, two, it has proved itself to be competitive in so many areas. I contend—and the hon. Gentleman should think about this—that the stability of our economy and the future of the City of London would be put at risk by getting the balance wrong between tax, spending and borrowing. That is why we will not accept the unfunded, irresponsible and reckless commitments being made by the Conservative party.

I declare an interest, as I chair the all-party group on private equity and venture capital. The City of London is the centre of the world when it comes to private equity, with 52 per cent. of the European market. That is principally due to the unprecedentedly supportive environment that this Chancellor and this Labour Government have created and put in place over the past 10 years. In the context of the Financial Services Authority’s—[Interruption.]

Order. I cannot hear the hon. Gentleman because of all the shouting from Conservative Members. Also, he knows that a supplementary should be brief, and should be a question. Perhaps the Chancellor would like to respond.

It is clear that the Opposition do not like hearing the good news about the achievements of the British economy. Six previous shadow Chancellors have dined out on the idea that the City of London and our whole economy were about to move into recession, so I shall give the House the benefit of the latest foreign direct investment figures. In 2005, inward investment into the UK amounted to £164 billion—twice the level in France, five times the level in Germany, eight times the level in Italy, and 50 per cent. more than in the US. The Opposition should congratulate the Government on their success, not try to claim failure.

What the Chancellor did not mention is that we are celebrating this week the 20th anniversary of the big bang, which he opposed at the time but now presumably welcomes. The City is not celebrating the damage that he has done to the pensions industry with his tax and regulatory regime. Labour’s first pensions Minister was the right hon. Member for Birkenhead (Mr. Field), who has said:

“when Labour came to office we had one of the strongest pension provisions in Europe and now we…have some of the weakest”.

I know that the Chancellor does not do humility, but does he accept any blame for what has gone wrong?

I notice that the hon. Gentleman is not defending his £4.7 billion tax cut proposal. After all the publicity that he sought last week, I should have thought that he would at least explain how that would be funded. As for pensions, let me read out the policy that we will not follow:

“In financial services we should allow people to buy and sell products that are not regulated if they have signed to do so”.

That is the new Conservative economic policy—[Interruption.]

Order. In the past I have allowed the Prime Minister and the Chancellor, and their Opposition shadows, some leeway, but the right hon. Gentleman cannot dwell on Conservative party policy. [Interruption.] The hon. Member for Wallasey (Angela Eagle) is looking at me, so I shall tell her why. The reason is that Ministers are responsible for the Government, not for the Opposition. She has been in the House long enough to know that.

Our policy is to ensure economic stability, and not to abolish consumer protection for pensions, mortgages, insurance and credit cards. Why do the Opposition propose that today?

No one believes what the Chancellor says about his own policies, let alone ours. [Interruption.] Excellent! The Chancellor has thrown his copy of our document at me. I thank him very much, as I am glad that he is reading such things. Nor, by the way, should anyone pay any attention to the ludicrous claims from the Economic Secretary to the Treasury, but I make one request to the Chancellor—please put him on television more often.

I return now to the matter of the City and pensions. The Chancellor may ignore Labour’s first pensions Minister, but he cannot ignore the facts. His pensions tax has reduced the value of people’s pensions by £100 billion, and his pensions regulations have forced 60,000 pensions schemes to close. Does he accept what his own party says—that he has made serious mistakes in the handling of pensions? If he cannot accept that, surely the current Secretary of State for Work and Pensions is right: the Chancellor will make an “effing awful” Prime Minister?

Order. Will the hon. Gentleman withdraw that remark? We must have temperate language in this House. I do not care what is said outside.

It is very interesting that the shadow Chancellor has made the question of whether pensions are properly regulated in this country the central issue. The difference between us is that we want proper regulation to protect individual pensioners, whereas the Opposition have proposed a plan that would deregulate and abolish consumer protection for pensioners. Until Conservative Members look at the plans that their own group is pursuing and find out what damage would be done to the regulation of pensions, they will be living in a dream world about what their policy proposals are going to be. We will insist on the proper regulation of pensions. We have introduced compensation for people who were deprived of their pensions. We have introduced a new Pension Protection Fund board to ensure that there is proper protection for pensions. We have a new pensions Green Paper to ensure that protection. Most importantly, we will not as unfortunately happened under the Conservative Government, or put the stability of the economy at risk, and that will be foremost in resisting irresponsible and unaffordable tax cuts.

Work Force Skills

2. What assessment he has made of the relationship between the level of skills in the work force and economic growth; and if he will make a statement. (97057)

7. What assessment he has made of the relationship between the level of skills in the work force and economic growth. (97062)

We have created the new deal for skills, which we will expand. We have the new train to gain programme, which we will also expand after the Leitch report is published. We have increased education spending from 4.7 per cent. to 5.5 per cent. of GDP—investment which we will not cut in future years, but will increase.

With 20 million students graduating in China every year and 2 million in India, can my right hon. Friend reassure me that the Government will seek to resource fully the recommendations from the Leitch review so that the United Kingdom can continue to compete in the global knowledge economy? Will he reject any tax proposals that come before him that would undermine our education service and take us back to where we were 20 years ago?

I can assure my hon. Friend that when the Leitch report is published the national debate on skills for the future will be led by this Government. We want to see more people who are in work at the moment acquiring the skills for the future so that British workers can get jobs that are available because they have the skills to do so. We wish to see more students able to study at university and college and more students staying on at school to get the necessary qualifications. We have already increased education spending from 4.7 per cent. to 5.5 per cent. of national income. We will continue to increase that figure in future years. What we will not do, in the interests of both stability and public investment, is go for irresponsible tax cuts in preference to investment in education. What we will not do—as I now find is another policy of the Conservative party from their economic policy review—is to introduce vouchers to pay for our public services. I hope that Conservative Members are aware that that is now their new policy.

Is my right hon. Friend aware that all the evidence that comes to my Committee—the Education and Skills Committee—suggests that the massive investment in education and skills over the years of the Labour Government has resulted in a direct improvement not only in millions of people’s lives but in the dynamism of our economy? [Interruption.] Yes, in our report that was published yesterday we called for more expenditure, greater investment and a speedy material increase in the amount of money going to individual pupils.

Will my right hon. Friend respond to my question—[Interruption.]

When we took office, expenditure per pupil was £2,500 in our state schools. Today, the expenditure is £4,500. It is rising—

The shadow Chancellor says from a sedentary position that to increase expenditure from £2,500 to £4,500 is meaningless. That is an illustration of just how the Conservatives treat the very big issue of how we fund education in our state schools. We have increased spending from £2,500 to £4,500; we will increase it to £5,500 by 2007-08. As for capital investment per pupil, I have to tell the House that it was £100 when we came into power and it is now £650 on average per year. That is expenditure on IT, computers, buildings and equipment. That will rise to £1,100 in the next spending round. It will be above the level that is spent in private schools, as we move to our aspiration that state school pupils get the same teacher-pupil ratios and advantages in education as are available in private schools. I thought at one point that there was all-party support for that, but unfortunately the Conservatives have gone for irresponsible tax cuts.

Does the Chancellor accept the economic analysis published earlier this week that a liberal and flexible approach to the work force, reflected in substantial skilled and unskilled immigration, has boosted growth, reduced inflation and boosted the Government’s revenue? If he agrees, what estimate has he made of the possible cost to the British economy of the Home Secretary’s U-turn on that policy this week?

We have always said, we continue to say, and I hope the hon. Gentleman agrees, that migration to this country must be managed. We must get the balance right between the number of people we need to fill the skilled jobs that are available and a policy for managed migration to this country. I hope that that is still the policy of the Liberal party. We have benefited enormously from immigration in this country and we continue to do so, but there will always be—as there should be—managed migration to this country.

Why are the Government cutting adult education grant funding to Essex county council, which is resulting in the closure of Grey Friars adult community college in Colchester? Does not that make the Government’s commitment to skills in the work force rather hollow?

I would have thought that the hon. Gentleman supported what we are doing; in other words, what we are doing is—[Hon. Members: “Cuts!”] Well, we are putting the money through the employer, through the train to gain scheme. The employer and the individual will buy their courses from colleges where that is appropriate. If the college is providing the right service to the employer and the employee, it will get the business; if the college is not providing the right service, it will have to do so in future. I would have thought that was the policy of the Conservative party, but if that, too, has changed between tonight and today, perhaps the hon. Gentleman will tell me.

Funding for higher national certificate work-based learning programmes for engineers is very important. Will my right hon. Friend clarify what the Government are doing to improve the skills of our engineers?

In recent weeks I have met many people who raised with me the question of how China and India are funding vast expansions of engineering training. Here in Britain we need more engineers and we have to persuade more people to study engineering: partly through the reputation of science and engineering, which we must enhance; partly through encouragement to young people through vocational training in their schools, which we are expanding at present; and partly through the train to gain scheme, which is now in companies, where nearly 100,000 people are benefiting and gaining qualifications that they can add to. Some of those people will go on to become engineers. In those three ways, we will pursue a strategy to get more engineers in the economy and to value more the work that our great engineers do for this country.

Does the Chancellor agree that there is something seriously cock-eyed in the relationship between skills in the work force and economic growth and performance, when people such as those at my local university in Chelmsford, who have trained for between two and three years to become highly skilled nurses, could not find a job when they completed their training because the local NHS trust had to make 250 nurses redundant last week?

The fact of the matter is that nearly 80,000 new nurses are being employed by the national health service. The fact of the matter is also that the NHS budget is rising by between—[Interruption.]

Order. I have to say to the hon. Member for West Chelmsford (Mr. Burns) that he asked the Chancellor a question, so he should let him reply, and not shout at him—[Interruption.] I am not responsible for the Chancellor’s answer—that is one thing I am not responsible for.

There are 80,000 new nurses in the national health service and more than 20,000 new doctors. The health service budget will expand next year. I believe that nurses now in training will get jobs in the future, but the one policy that would prevent them from doing so, and prevent us from expanding the NHS, is to go for irresponsible tax cuts in preference to investment in public services.

Local black country business leaders assure me that skills and training are essential for the future economic well-being of my locality. Can my right hon. Friend assure me that in the spending review they will be given high priority in future spending plans?

I accept what my hon. Friend says. As he knows, the Leitch report is considering all aspects of skills for the future of our economy, and is looking into how we can persuade both those in the workplace, and those who will join the workplace later, to get the skills necessary for the future. I agree with him that that must be a priority for the nation as it faces the global challenges ahead, but let us be honest: that will require us to spend a higher share of national income on education and training, and it will require employers, as well as Governments, to spend more on education and training. We cannot do that if we have irresponsible policies, promising reckless tax cuts that would put our country’s public services, and the stability of the economy, at risk.


3. What pump-priming he plans to provide to research and development in creating biofuels from agricultural products. (97058)

We strongly support greater use of biofuels in Britain. The Chancellor’s announcements in the Budget of a new road transport fuels obligation and the extension of the duty discount on biofuels were welcomed by the industry and by this House. Those measures are helping to create the climate for new investment and expansion, and the latest figures show that sales of biofuels in Britain are about double last year’s levels.

I welcome that answer, but could the Minister give the House an indication of how long allowances other than those to which he referred—how long the Treasury’s whole regime for supporting biofuels—will last? My understanding is that the allowances are time-barred for three years, and that they will not run for a fourth year until that first three-year period is finished. However, to defray costs, people investing in bioethanol plants, particularly sugar beet, which is a key crop in north Yorkshire, are looking to write off the costs over 10 years, so we need to boost confidence in such investment over a longer period.

The guarantee on the duty discounts lasts for three years, and we deal with that on a rolling basis. The obligation is set at 5 per cent. until 2010-11, but we have made it clear that we want to extend it beyond that date. Another important element is the research and development tax credit, which is available to biofuels firms, just as it is to firms in other sectors. Some £1.8 billion has been claimed in R and D tax credits since we introduced them. That support is absolutely vital, as Britain’s capacity to compete internationally will in future depend ever more on our R and D, and on commercialising science and innovation. I can tell the hon. Lady that the prospects for the economy, the certainty that people want about biofuels, and the prospects for manufacturing, including in her constituency, would only be harmed by her party’s commitment to abolish the R and D tax credit.

In East Anglia a new bioethanol plant will shortly come on-stream, and of course we have many acres of sugar beet that can be processed into bioethanol. However, not many vehicles can use bioethanol. What discussions is my hon. Friend the Financial Secretary having with motor manufacturers to make sure that full-flex vehicles, such as those in Brazil that can run off both traditional petrol and bioethanol, are available in this country?

My hon. Friend, who follows the subject closely, will know that the obligation relates to blended fuel, which can be used in conventional engines and delivered through pumps on the forecourt. On the future generation of biofuels, he will have noticed that part of the Budget announcement on supporting biofuels concerned reducing vehicle excise duty for those with car engines that run on E85. Our ability to move further on the issue will depend partly on the European Union changing its fuel quality standards, and partly on the discussions that my right hon. and hon. Friends in the Department for Transport are leading with motor manufacturers, to ensure that there are improvements in engine technology that will allow greener future fuels to be used more widely in Britain, as elsewhere.

Environmental Taxation

4. What proportion of tax revenue was represented by environmental taxation (a) in 1997 and (b) in the latest year for which figures are available; and if he will make a statement. (97059)

Revenues from taxes introduced for a specifically environmental purpose amounted to 0.12 per cent. of overall tax revenues in 1997, and that rose to 0.4 per cent. in 2005. The climate change levy has proved particularly effective, delivering more than 28 million tonnes of emissions savings so far.

The Minister’s answer was carefully worded, but I remind him that the proportion of green taxes has fallen from 9.4 per cent. in 1997 to 6.2 per cent. this year. Is that what the Chancellor meant when he said, in this morning’s Financial Times, that he had got the balance about right in the economy? Is the Minister aware that CO2 emissions have gone up in six of the past eight years, and does he not agree that the only solution—

The problem with the hon. Gentleman’s metric is that it measures the wrong thing. That could increase with an increase in pollution, which is a bad thing, not a good thing. We need a balanced package of fiscal measures and trading, and that is what we have delivered. The hon. Gentleman should support the climate change levy, which is a big switch from taxation on employment to taxation on pollution, and delivers 6 million tonnes of carbon savings a year. I hope that he welcomes that.

My right hon. Friend will be aware that green taxation on company cars has resulted in a hugely positive change in behaviour, but will he assure me that he will resist the temptation to make revenue from green taxes central to Government funding, as that would lead to a huge black hole in Government finances if and when behaviour changed?

My hon. Friend is right. The company car tax changes are very important, as they save about a quarter of a million tonnes of carbon a year, which will probably increase to half a million tonnes by the end of the decade and more beyond that date. It is important not to create huge holes in the public finances. For example, abolishing inheritance tax would require an 18p increase in petrol duty. If that is the Opposition’s policy, we should know about it.

According to a poll published this week, only 4 per cent. of the population believe that Labour has made effective progress on climate change; presumably the Chancellor is one of them. Does not the fact that he suddenly mentioned the issue 15 times in his Budget speech, compared with a previous average of one speech reference—

Order. The hon. Gentleman must ask a question. This is a supplementary question; he must not make a long speech.

The question is—because the Chancellor mentioned climate change 15 times this year, but only once the year before—is it not true that he is much more interested in political change than climate change?

The hon. Gentleman had the opportunity to support the climate change levy, which delivers 6 million tonnes of carbon savings a year. Almost uniquely in the world, we will deliver on our Kyoto objectives, and that is the result of the Government’s policies.


Employment levels are the highest on record, and have grown year on year every month since 1997, contributing both to the strengthening of economic growth and an 800,000 reduction in child poverty under this Government since 1997.

Part of our success in areas such as Denton and Reddish stems from a combination of the new deal, the national minimum wage and tax credits, all of which help to make work pay. Does my hon. Friend agree that in future we need to do even more to invest in skills and training so as further to enhance employment opportunities in areas such as mine, and that that should be our economic priority, not unfunded tax cuts?

I do agree, and I wish only that the shadow Chancellor agreed, too. We have increased employment since 1997 by 2.5 million jobs. In my hon. Friend’s own constituency, unemployment has gone down by 42 per cent., youth unemployment by 62 per cent., and long-term unemployment by 84 per cent. since 1997. [Interruption.] That is not good enough, however, as we still have too many people out of work on incapacity benefit, and we still have too many lone parents who want to work but cannot. The way to address that is to expand the new deal, not to abolish it.

What assessment have the Government made of the impact on employment of the tax credit system? As the Chancellor of the Exchequer has failed to answer a question on the issue in Treasury questions for 896 days, will the Economic Secretary tell us whether the Chancellor has read the recent report from the Institute for Fiscal Studies that indicates that work incentives have become worse under this Government?

I am proud of the fact that we have more than 1 million more single parents in work because of the way in which tax credits, with the new deal, have boosted thier employment prospects. The employment outlook from the Organisation for Economic Co-operation and Development states:

“There is a group of countries”

including the UK

“where the policy-driven improvements in employment and unemployment over the period considered have been the most significant”.

The OECD is referring to what we have done on tax credits. Tax credits and the new deal have improved the employment prospects of single parents in our country.

The economy in Aberdeen is booming. We have very low unemployment. It is well below 2 per cent., which is effectively full employment. However, there is a labour shortage; employers are finding it difficult to find people to go into work. What else can the Government do to encourage more people who are on inactive benefits to get into work?

My hon. Friend is right; we need to do more to help single parents get back into work with our support through the new deal and child care. We are also expanding the pathways to work initiative, which will help more people to move from incapacity benefit into employment. I hope that people in her constituency will be able to benefit from those measures as well.

Is the Minister aware that unemployment in Shropshire has risen by 36 per cent. over the past 12 months and that nationally unemployment is at a six-year high? I invite him, rather than reading tired and outdated ministerial briefs, to join the dole queues that are growing in Shropshire every single day of the week, and to come into the real world for a change.

We have the lowest level of unemployment for 30 years. We have 255,000 more people in work this year than last year. People have long memories; they remember 3 million unemployed and the 1.5 million families in negative equity. They also remember that it was unfunded tax cuts that led not only to public spending cuts but to double-digit interest rates. Nobody wants to go back to those days and, under this Government, that will not happen.

Is my hon. Friend aware that, during the summer recess, Honda in my constituency announced another 700 jobs to manufacture the new Civic? That is due in part to the success of the work force and management in doubling production of the new Civic in six months. Does my hon. Friend agree that Honda’s investment in manufacturing in Swindon demonstrates a world-class company’s confidence in the Labour Government’s world-class economy?

I do agree, and there are similar examples all around the country. The most important thing driving that job creation and new investment has been the stability in our economy since 1997—stability through Bank of England independence and through our fiscal rules. That stability would be put at risk if we were to return to the old days of unfunded and uncosted tax cuts for a few, which would be paid for by higher interest rates and instability, hitting families all around our country.

In 1995, the Chancellor said:

“Our plan is nothing less than to abolish youth unemployment. I will not make promises I cannot keep”.

Will the Minister confirm that the numbers of young people who are neither working nor studying are higher now than they were when the Government came into office? Is not that promise simply an early example of the Chancellor’s tendency to call for aspirations without a commitment to a specific timetable for delivery?

If the hon. Gentleman looks at the figures, he will find that his claim is untrue. Since 1997, we have seen not only falling youth unemployment—down by two thirds—but falling inactivity among 16 to 17-year-olds. The fact is that we have more people going into apprenticeships and going to college—[Interruption.]

I am sure that you are right, Mr. Speaker, although I do not think that the House will be surprised that he is.

We have more people going to college and going into apprenticeships and all those people are included in the figures referred to by the hon. Member for Fareham (Mr. Hoban). There has been falling inactivity among that population group and, at the same time, there has been falling unemployment among young people. We should be proud of the achievements that we have seen since 1997, rather than trying to run them down with inaccurate figures.

Debt Relief

In addition to debt relief of $38 billion to 20 countries, 20 additional countries may qualify for relief of up to $50 billion. As a unilateral act, the UK is offering the equivalent of our share of 100 per cent. debt relief to a total of 80 countries and we call on other countries to follow.

I thank the Chancellor for that answer. Last Friday, I met Dudley borough churches forum to mark the start of One World week. While welcoming the work that the Government have done to tackle the problem and the international leadership of my right hon. Friend, my constituents rightly want further progress in more countries. What is he planning to do to accelerate the debt relief process and move us more quickly towards the millennium goals and justice at last for the world’s poor?

I thank my hon. Friend for the work that she, like many others, has done with churches in her constituency. We should be clear that, as a result of debt relief, Uganda has increased the number of children in education from 2 million to 6 million. In addition, Zambia has just announced the abolition of health charges, which means that health is available to all members of the population, however poor they are. As a result of aid and debt relief taken together, in one week 1 million children turned up for school and were given education free of charge in Kenya. Countries all round the world are able to spend on education, infrastructure and health as a result of what has been achieved by the write-off of debt. However, my hon. Friend is absolutely right that many poor countries are not heavily indebted poor countries. That is why we have made the unilateral gesture of saying to 30 or 40 more countries that we will be prepared to pay our share of 100 per cent. debt relief. We urge other countries to follow so that a higher share of debt relief can be paid as a result of international effort. I hope that we can persuade other countries to do exactly that as part of the international campaign that is being mounted.

May I ask the Chancellor about debt relief and personal indebtedness at home? Is he worried that both secured and unsecured borrowing stand at record levels? At the end of August, a total of £1.247 trillion was owed.

I am happy to answer a question about domestic debt relief, if that is the reading of the question. The biggest guarantee that people will not find it impossible to pay their debts will be maintaining the economic stability on which the British economy has grown over recent years. It is only when interest rates get out of hand—they rose to 15 per cent. under the previous Government—that people are unable to pay their bills. The debt advisory services for people who have personal problems are greater than ever before. When people are up against loan sharks and those who exploit their indebtedness, they need the protection of Government measures to regulate the pensions, mortgage, insurance and loans industries, so the hon. Gentleman had better look at his party’s proposals to abolish that protection.

Debt relief is of course extremely important to developing countries, but it must be accompanied by growth. What does the Chancellor expect must happen to get the Doha round of trade talks back on track?

My hon. Friend takes a big interest in this matter. As she knows, Africa has grown faster in recent years than it did previously, but there are still many people in poverty. One reason for that is that developing countries are unable to trade their products with the richest countries, which is why it is really important that the Doha trade round is resumed. I believe that it will be possible in the next few months to bring together the parties that have been unable to agree so that we can reach an agreement. Europe and America could make concessions on agricultural protectionism—I believe that it is the will of the House that that should happen—and the other major countries, which are Brazil and India, and the developing country bloc could also make the concessions necessary for agreement. We will do whatever we can in the next few weeks to get the trade round going again.

Critical elections are taking place this month in the Democratic Republic of the Congo. As the hon. Member for Dumfries and Galloway (Mr. Brown) and I saw on a recent visit, it is the poorest country in the world and its civic society has all but collapsed. Will the Chancellor outline his plans—I am sure that he will have the support of the whole House—for helping the Democratic Republic of the Congo with debt relief and generally increasing aid and help?

Debt relief is possible when a country has a working Government who are capable of managing its affairs. One reason we have had problems with debt relief has been that even when the will has been there on the part of the richest countries in the world, some countries had such a broken-down system of government and history of conflict that they were unable to manage the transition, so we need to give them extra special help to do so. I can tell the hon. Gentleman that we are prepared to give extra help. We are prepared to put in place measures that will make it possible for the republic to benefit from debt relief. Of course, our other measures to enhance educational and health expenditure in Africa will also be put in place, but that depends on the country having a stable Government who are able to manage their affairs.

As the Chancellor has said, debt relief is not an end in itself, but merely a way of improving the position of the poorest people in the poorest countries. Will he therefore join me in congratulating the children of Burtonwood primary school in my constituency, who recently did a project on the exploitation of child labour and discussed it with me, showing a great deal of knowledge and fluency? Will he explain to those young people what is being done to ensure that we improve the incomes of the poorest families, so that their children are able to take advantage of the education that we hope to offer them?

I am grateful to my hon. Friend. Once again, links are being developed between schools in Britain and schools in Africa, India, Pakistan, Bangladesh and many other of the poorest countries. I know that the Department for International Development is very willing to help expedite those links, whether they are teacher exchanges or schools just maintaining contact with schools in Africa and the rest of the world.

With reference to child labour, next year is the 200th anniversary of the abolition of the slave trade. One of the ways in which we could commemorate that is by making people aware of the extent of child labour around the world and the use of children as slaves. Over the next few months we should attempt to educate the public about the problem and do more to ensure that, instead of being in work during their early years, every child is given the proper chance of education. I want to see the 110 million children who are not in school given that chance of education over the next few years.

Money Laundering

8. When he expects to announce the results of the consultation for new proposals to tackle money laundering carried out to fund terrorist activities. (97063)

12. When he expects to announce the results of the consultation process on new proposals to tackle money laundering for funding terrorism. (97067)

The Government are consulting on how best to safeguard the money services business sector from criminal and terrorist finance, and will publish the results of their consultation on implementing the third money laundering directive when they publish draft regulations for consultation at the turn of the year.

Last year the Chancellor lectured fellow EU Finance Ministers on terrorist financing after the 7/7 bombing. He said that

“it’s important to realise that you’re only as strong as your weakest link. Where there are countries that are not taking action to cut off the sources of terrorist finance, we will clearly have continuing problems”.

Will the Minister ask the Chancellor to apologise to those EU Finance Ministers for failing to freeze the assets of former Hammersmith and Fulham resident Abu Hamza, and will he join the new Conservative council in Hammersmith and Fulham in seeking to evict the Hamza family from their council house?

The hon. Gentleman is quite wrong in his assertions. We have applied our terrorist order in exactly the right way over the past few years in this—[Interruption.]

Order. Once again, let the Minister answer. That is the best thing to do. [Interruption.] Order. I tell the hon. Gentleman that he should not interrupt the Minister, and he should not interrupt me, which is worse.

As I said, we have applied the order in exactly the right way. The assets of that individual have been frozen from the beginning. There has been no transfer of resources to him. The transfer of property, which was discussed between ourselves and the police, was not an illegal act. That transfer has now been frozen in order that we can recover legal costs. We strengthened our position in the case a few weeks ago. I ask the hon. Gentleman to look at the facts in more detail before he makes such accusations. I can tell him that he is quite wrong in all the things that he said.

The whole House appreciates that the Chancellor has much on his mind at present, not least his relationship with his at times tiresome neighbour. However, he said in October 2001 that finance was

“the lifeblood of modern terrorism”.

That being the case, can the Minister tell the House why we are still waiting for the report that the Chancellor promised us as long ago as December last year?

We have made repeated reports over the past year. I made a ministerial statement to the House just a few weeks ago. We have acted regularly in recent months to strengthen our terrorism order, to use closed source evidence and to strengthen our benefits regime. As I just said, we are also acting on money laundering and money services business. Across the piece we have been acting, and at the same time we have been freezing assets of individuals regularly and substantially. I say to the hon. Gentleman and to his colleagues on the Front Bench that I accept that we will not have a consensus on the new deal, public spending cuts, tax cuts or the priority that we attach to tackling child poverty, but I would have thought that we could have a consensus on the importance of our acting together on these issues. Frankly, we do not have that consensus because of the absurd claims that have been made by Opposition Members, which only undermine our efforts to take the terrorists to task.

Systems to disrupt money laundering and terrorist financing are most effective when necessary information for the authorities and private sector institutions is shared and acted on. What is being done to encourage the supervisory authorities and the financial intelligence units to develop international information-sharing systems?

On those very issues, we are acting all the time. I have met the US Treasury Under Secretary, Stuart Levey, three times in the past four months to discuss them. Across the piece, we are working very closely with our police and our security services to ensure that we use all the available information. I will publish a report at the end of the year that will set out all the measures that we are taking in order to make sure that we have the best and most comprehensive approach to those issues.

Let me give some more facts. Since 2001, a total of 85 individuals and 58 entities have had their assets frozen in the UK. Of those 85 individuals, 68 were designated by the Treasury and only 17 by the European Union. Of the 58 entities, 51 were designated by the Treasury and seven by the EU. We have been on the front foot on these issues. We have been acting decisively with our international partners. I believe that we are putting in place the best regime that we could have. Instead of undermining Britain’s efforts to tackle the terrorist threat around the world, I wish that the Opposition parties would start to support our efforts.

In 2001, the Chancellor promised that there would be

“no safe haven for terrorists”


“no safe hiding place for their funds.”

Despite all the Economic Secretary’s bluster, can he explain in what possible universe that statement by the Chancellor can be consistent with letting Abu Hamza sit in his prison cell in Belmarsh and splash out £220,000 on a four-bedroom semi in Greenford, two years after the Chancellor proudly claimed to have frozen the man’s assets?

I am happy to have a meeting with the hon. Lady to explain the facts to her, because the accusations that she makes are both completely wrong—completely factually incorrect—and undermine our efforts as a country to deal with these issues. I have to say to Opposition Members that if they want to get involved in a grown-up debate about how we can tackle the terrorist threat in our country, I am happy to have that debate, but if they want to make party political shots that are based on incorrect facts, all they will do is undermine their own standing and—

Millennium Development Goals

9. What progress has been made on achieving the millennium development goal of education for every child; and what financial contribution the UK has made. (97064)

At the request of the United Kingdom Government, 19 African countries have submitted plans so that by 2015 every one of their children would be in primary education. The United Kingdom has committed, over 10 years, £8.5 billion to that effort. It is prepared to enter into 10-year agreements with the countries that have produced plans, and we have called a donor conference in early 2007 for all other countries, to invite them to contribute to the goal of achieving primary education for every child.

All of that is excellent news, but there are 100 million children in conflict-affected fragile states in the world, 43 million of whom have no opportunity at all to go to school. Those are the countries that receive the least financial support—or support of any kind—from the developed world. Is there nothing that we can do to make sure that those children—the most vulnerable children in the world—get the opportunities that we would expect for any child whom we know in our own country?

My hon. Friend makes a good point. Of the 110 million children who are not in education, a very substantial number are in countries where the education system has completely broken down because of conflict. I believe that, as a world, we will have to consider—just as we have done for health care—how we might provide international support in the future in situations where there is conflict and there are difficulties in running a civil education service from within a country. We obviously need to provide more funds for education in the poorest countries: £8.5 billion has been put into that by the British Government over 10 years. That would be enough to get 15 million children educated—and, therefore, a very substantial number of those who are not in school into school—but we need other countries to support us. We need Canada, which has already indicated that it will support, and other countries—Germany, France, Italy, Japan and America, which are all part of the G7—to support the effort. That is why we have called the donor conference, which will be held in Brussels at the beginning of next year, and that is why I hope that all the efforts of the international aid organisations will be directed at persuading other countries to contribute to what is the only way in which we can achieve the millennium development goals.

Given that achieving the millennium development goal of universal access to primary education is vital for individual fulfilment and for a country’s growth, will the right hon. Gentleman, in pursuing his laudable initiative to achieve improvement in this regard, pay particular attention to the problem that I have found in Malawi, Sierra Leone and Sudan—to name but three countries—whereby there is a very powerful cultural and institutional bias against disabled children? They cannot be left till last, because it is just not right.

The hon. Gentleman makes a very good point. Sometimes, girls are forgotten in education programmes, and sometimes disabled children are forgotten when we are developing education programmes in the poorest countries. Of the countries that have used debt relief to abolish user fees, Malawi, Uganda, Tanzania and Kenya have made huge progress in getting all children into education, and I hope that that can be a model for the future. As the hon. Gentleman knows, there are difficulties within Sudan that prevent the development of education, but we are ready to give it debt relief and to provide funds for education when it can sort out its internal affairs. However, I agree with him that we should never forget that the people who have the least chance of advocating their own case are those whom we should support most.

Since 1997, the UK has given crucial international leadership on tackling international poverty, and it would be wonderful if we could build cross-party consensus in the UK on this crucial work. Has my right hon. Friend considered pursuing policies based on an ideology of a small state and big spending cuts, leaving the most vulnerable with less support and relying on charities to step in, as some have advocated?

We could not afford to put £8.5 billion into education if we cut the international development budget. Let us be clear: if the Opposition are serious about supporting the doubling of international development aid and continuing to increase it, they will have to abandon at least some of the policies that they put forward last week.

Does the Chancellor welcome the support of the United Nations co-ordinator of the millennium development goals for reports to Parliament such as the one that we have embraced in legislation, not just because it is helpful on matters such as education, but because it represents the transparency that is essential as we challenge global poverty?

There was all-party support for my right hon. Friend’s International Development (Reporting and Transparency) Bill, which requires the Government to prepare a report annually on the amount of spending and how it is being used. I want to see that happen at an international level, and, as he knows, there is a new Commission for Africa to be chaired by Kofi Annan, which will report back every year on how we are doing in meeting the Gleneagles agreement. That will put pressure on individual countries and international organisations, and again, I hope that there will be all-party support for it.

Flood Defence

10. What recent discussions he has had with the Secretary of State for Environment, Food and Rural Affairs on funding for flood defence works. (97065)

The Government recognise the importance of funding flood defences, as I have made clear to the hon. Gentleman in letters and at a meeting with him in July. We have ensured and put in place big increases in flood defence and flood management funding since 1997, and future funding will be considered in the context of next year’s comprehensive spending review.

I thank the Minister for that meeting and for receiving the thousands of petition signatures from Lewes Flood Action and the National Flood Forum, which expressed concern about funding for flood defence works, but does he not realise that the Department for Environment, Food and Rural Affairs is being squeezed and that, because of the farm payment fiasco, the money for flood defence work is actually being reduced? How can the Government be consistent with their policy to tackle climate change when money for one of the major adaptation measures is being cut, and what has he got to say to my Lewes constituents, who were promised a comprehensive scheme in 2000 and are still waiting for it?

The reality is that this year, compared with 1997, spending on flood defences and coastal erosion is more than a third higher than inflation. Let me be clear: there are no cuts in DEFRA’s spending limits or in the Environment Agency’s capital investment programme for flood risk management. DEFRA Ministers are managing the year-to-year pressures resulting from problems in the Rural Payments Agency and the costs associated with bird flu. It is right that we expect them to do so, although I recognise that that is not the traditional Liberal way, which is to throw money at, and make fresh spending commitments in respect of, any problem and any pressure.

US Economy

As it is our largest export market, trends in the US economy are important for the UK. My right hon. Friend the Chancellor will set out a full account of the UK economy in the pre-Budget report, but I can tell the House that gross domestic product rose by 2.75 per cent. in the year to the third quarter of 2006.

Is the Minister aware that The New York Times describes the US economy as a “financial mess” and that interest payments are the fastest growing component, squeezing out public spending and inducing recession? Bush’s conservative economic policy has been to spend unwisely and borrow heavily; his Administration have not had the sound financial management policies of our Chancellor. Will my right hon. Friend assure me that we have built-in protections in the UK economy against the growing US financial crisis?

I noticed that the Federal Reserve said yesterday that the economy seems

“likely to expand at a moderate pace”.

Whether it or my hon. Friend is right about the future remains to be seen. The key is maintaining our macro-economic stability in the UK—our record as a paradigm of stability, as the Organisation for Economic Co-operation and Development expressed it. For example, during the slow-down at the start of this decade, we were alone in the G7 in avoiding recession. Under the Conservatives’ policies, we were always first into recessions and last out. That is why the vast tax cuts that they are arguing for are such a threat to our continued economic well-being.

Local Government White Paper

With permission, Mr. Speaker, I would like to make a statement on the future of local government.

Local authorities and the services they provide in partnership with others are hugely important to the health and strength of our communities and country. They help to determine the quality of our everyday lives: the schools that our children attend, the cleanliness and safety of our neighbourhoods, the health of families, the ease with which we can travel, and the leisure activities that we enjoy. Many of the biggest social advances in recent generations were led by local government and its leaders. They have served their communities well. But in 1997, this Government inherited public services and institutions that were run down, demoralised and starved of cash and resources. We responded with significant investment to expand capacity and by setting a strong direction nationally. Combined with the hard work and commitment of local councillors, the local government work force and other partners, this has led to real improvements in local public service delivery.

For the next phase of reform, we need to respond to new challenges. The increasing complexity and diversity of these—from climate change to tackling deep-rooted social exclusion—demand more flexibility at local level. Moreover, expectations of citizens are rising fast. They rightly want more choice over the services that they receive, more influence over those who provide them and higher service standards.

The White Paper that I publish today proposes that local authorities and other public service providers have the freedom and powers that they need to meet the needs of their communities and to be more clearly accountable for doing so. Communities must have a bigger say in the issues that matter to them most. We therefore propose a new settlement with local government, communities and citizens. We will give local authorities a stronger role in leading their communities and bringing services together to address local needs and problems. Central Government will play their part in guaranteeing minimum standards and setting overall national goals, but we will step back and allow more freedom and flexibility at local level. In exchange, we expect to see more accountability to local citizens, stronger local leadership, better and more efficient services and a readiness to support tougher intervention when things go wrong. The White Paper sets out how we intend to achieve this re-balancing between central government, local government and local people.

At present, there are as many as 1,200 national targets and indicators for a local area. In future—[Interruption.]

We will cut that figure to 200 indicators with around 35 targets, plus statutory education and child care targets. The targets will be tailored to local needs, agreed between Government and local partners and set out in the local area agreement.

In that way, we will focus on the things that matter to people everywhere, guaranteeing national minimum standards, but encouraging local innovation and local priorities. We will introduce a more proportionate, risk-based inspection regime to cut bureaucracy and more targeted support or intervention when things go wrong.

Our best local authority leaders have made a huge difference to the citizens and communities that they serve. The White Paper sets out measures to ensure that all communities benefit from strong, accountable and visible leadership.

In future, there will be three choices for councils: a directly elected mayor, a directly elected executive of councillors or a leader elected by fellow councillors with a clear four-year mandate. All the executive powers of local authorities will be vested in the leader of the council, with a strong role for the council to scrutinise the leader’s actions and approve the budget and major plans.

The way in which councils choose to govern themselves will be different in different parts of the country. We will make it easier for local authorities to move to a directly elected mayor or executive by resolution of the council, in consultation with local people. When they want to do so, they will also be able to introduce whole-council elections and single-member wards, improving accountability to voters.

We recognise the gains that unitary status can offer in accountable, strategic leadership and improved efficiency. There will be a short window of opportunity for councils in shire areas to seek unitary status. We expect a small number of proposals to meet the value-for-money and other criteria set out in the invitation that we have issued today. In remaining two-tier areas, we will work with local authorities to deliver better value for money and greater efficiency.

Stronger leadership works best if it is balanced by citizens and communities having a bigger say in the quality of the services that they receive and the places where they live. To ensure that services are more accountable, responsive and efficient, local authorities will involve and consult service users more fully and provide better information about standards in their local area. In addition, we will review barriers and incentives to increased community ownership and management of local facilities and other assets.

We will increase and strengthen the powers of local people to demand answers and action through a new community call for action. Councillors should be champions for their local community, able to speak out on all issues affecting their area, including planning and licensing. They should be able to sort out issues on the ground or demand a formal response through scrutiny procedures. Effective scrutiny by councillors is an essential part of robust local democracy. We will strengthen it.

Communities need strategic leadership to help bring local partners, the business sector and the voluntary and community sectors together. Issues such as community safety, public health or community cohesion require all local partners to share the same agenda. Our best local authorities already recognise this—and their citizens and communities benefit as a result. Our proposals will ensure that that happens throughout the country.

Sir Michael Lyons described the “place-shaping” role of local authorities in his report in May. I pay tribute to his work so far. The proposals before the House today provide a clear basis for Sir Michael’s future conclusions on local government funding.

Cities play an increasingly important role as engines of economic growth. In recent years, there has been a renaissance in our towns and cities, thanks to the vision and leadership of local authorities and their partners. However, we need to go further. We must look beyond city and town boundaries to consider the success and prosperity of the surrounding area. Over recent months, we have consulted our towns and cities on the tools and powers that they need for economic development. There is no “one size fits all”. The White Paper provides a response to issues raised by towns and cities on transport, skills, economic development and co-operation between neighbouring local authorities. We will continue to work with them in the coming months. Our clear, overriding principle is that the greater the powers devolved, the greater the premium on clear, visible leadership.

None of our reforms can be carried out without a strong and committed work force. Local government contains many high quality councillors and public servants. It has transformed our towns and cities and, in many areas, it leads public services in partnership working, innovation and efficiency.

Our reforms will give citizens and communities a clearer voice, create stronger and more visible leadership and establish a new settlement with local government and its partners, communities and citizens.

The White Paper is about creating better services and better places. It sets out the tools that will help all local areas tackle the challenges of the 21st century, capture the strength and talents of their citizens and communities and achieve their full potential. I commend it to the House.

I thank the right hon. Lady for letting me have a copy of the White Paper in advance. I have had just enough time to check the number of pages and the price tag, which is £32.50—at least it is two for the price of one.

I shall begin on a note of consensus. I agreed with the right hon. Lady when she said that local government is in much better shape since 1997. The reason for that is that the Conservative party is now the largest party in local government and Labour councillors are an endangered species.

The White Paper prompts many questions, and the logical place to start is on the timing, which is extraordinary. The White Paper comes barely a month before the Lyons review into local government and ahead of the Barker review into planning. How can a local government White Paper mean anything, if it does not deal with finance? Does the Secretary of State agree that the function and finance of local government are two sides of the same coin? If she agrees, will she accept that without the financial dimension, the White Paper is incapable of addressing the real concerns of people outside Westminster? The true test of this White Paper is not whether it delivers enough localist soundbites; the test is whether it will deliver tangible changes for the majority of people, who are not interested in the machinery of local government or its incomprehensible jargon.

I want to ask the Secretary of State about the things that really matter to people who receive services from their councils. What will the White Paper do for those people who are worried about how they will pay for care in old age? What will it do for people who are struggling to pay council tax, which has soared for most people by 84 per cent. under Labour? And what will it do for people who desperately want to have a say about where new housing goes and the character of their neighbourhood? The answer, I fear, is precisely nothing.

The White Paper is toothless, because it is a series of compromises and halfway houses. Does the Secretary of State appreciate that the rhetoric on localism will be treated with scepticism, because of the poisoned chalice that she received from her predecessor’s obsession with regions? Month by month, more power and money is going to regional quangos, bypassing local councils. Until unelected regional assemblies are abolished and powers are returned to elected local councils, those localist pledges are not worth the paper on which they are written.

There are, of course, things in the White Paper with which we agree, because they are harmless. We warmly welcome the decision to cut the number of directives from Whitehall to councils from 1,200 to 200, but we will carefully monitor what that means in practice. It will be good to see power devolved to parish councils to pass byelaws, but where will the resources come from to enforce those byelaws?

What worries me about the White Paper is the level of compromise, which is the symptom of a party that is unsure of its direction. Does the Secretary of State agree that empowering council leaders is a fudge between the Prime Minister’s stated preference for directly elected mayors and the Chancellor’s opposition to them? And will the White Paper delay legislation on new powers for the Mayor of London?

Is not the reduction in the number of performance targets an admission of Government failure? The inspection regimes imposed by the Local Government Acts 1999, 2000 and 2003 were a mistake. Are not city regions just a muddled and ill-defined hybrid between a failing regional agenda and real local autonomy? And how does that fit with the powers enjoyed by the regional development agencies? Is not talk of the business case for unitaries just a strained bridge between the original big idea of the Secretary of State for Environment, Food and Rural Affairs, which is characterised by the headline “Restructure or else”, and the more realistic description by the Secretary of State for Communities and Local Government of restructuring as “a distraction”?

Does the Secretary of State feel embarrassed because the Prime Minister charged her in an open letter with the need for a radical and devolutionary White Paper, which her own Department now describes as

“more evolutionary than shock and awe”?

Restructuring was in, and now it is out. Elected mayors were in, and now they are out. Targets were in, and now they are out. That is not progress or radicalism; it is the politics of the hokey-cokey.

While the Government chop and change, the real opportunity to improve people’s quality of life is being missed. That is the tragedy of the White Paper. It provides not a crumb of comfort to people worrying about how to pay for their mum’s care home costs. Is not it the case that people who are already scrimping and saving to meet their council tax bills will find nothing in the White Paper to help them? Will not those who want to have a say on the scale and shape of new development in their community still find their views ignored?

The White Paper is a wasted opportunity by a Government who have squandered their third term. A few pious platitudes and a bonfire of past Labour mistakes are no substitute for policy. The right hon. Lady must do better. Councils are straining to be set free. She should not be so timid. She should give freedoms back to local government and local people.

For a moment, I thought that the hon. Lady might have welcomed the Government’s proposals to recast the relationship between central and local government. I am disappointed that she did not choose to agree with the Tory chair of the Local Government Association, who, this morning, with his colleagues, described the forthcoming White Paper as

“heralding a historic deal on devolution in England for local people and those who serve them.”

I shall deal with each of the hon. Lady’s comments. It is welcome that she has not chosen to dispute the fact that the Government have significantly increased investment in local public services by almost 40 per cent. in real terms over the past nine years. Nor did she choose to dispute the fact that the quality and delivery of public services has increased over that period, that local government performance has improved, or that two thirds of local councils are now judged by the Audit Commission to be good or excellent. At least she recognises the role that local government can play in the future. In fact, her party’s recognition of the importance of local government is long overdue. Only recently, one of her colleagues confessed that

“it is true to say that the last Conservative government was not always kind to local democracy.”

It is a pleasant change to hear some words of substance from her right hon. Friend the Leader of the Opposition. I could not agree more with his comments.

The hon. Lady made a point about the timing of the local government White Paper. She argued that we cannot consider giving more powers to local government, giving it more flexibility over the use of its resources, or slashing targets for local areas from 1,200 to 200, without at the same time reopening the debate and considering proposals on local government finance. It is a bit rich for her and her party to lecture us about the council tax. Most people would agree that it is right to think about what local government does before we think about how we raise finance. As the hon. Lady also knows, Sir Michael Lyons will consider local government finance in his independent report and make recommendations later in the year.

To argue that the White Paper is a damp squib that does nothing for local people, however, is completely and utterly wrong. The White Paper slashes targets, and moves to a new inspection regime, away from a rolling programme everywhere to proportionate, targeted, risk-based inspection. It is devolutionary on byelaws, on which the hon. Lady has changed her mind just this morning. It is devolutionary on single- member wards, all-out elections, parish councils and, yes, the standards regime for local councillors. It gives new flexibility over funding—[Interruption.] If the hon. Member for Brentwood and Ongar (Mr. Pickles) will listen for a moment, he will learn that, currently, £520 million flows through the local area agreement. In future, the figure could be up to £4.7 billion.

The hon. Lady asked about city regions and the regional agenda. What matters to us is not trying to scrape together £21 billion of unfunded tax cuts, but securing the right powers at the right levels. That is why we consider these issues seriously. The hon. Lady argues for more devolution in housing. We know what Tory devolution means: it means not building the homes that people need.

The White Paper sets out a Labour view of devolution. It means central and local government working together to set minimum standards, but also to deliver local services, better places, more involved citizens and more prosperous local communities. Our proposals stand in stark contrast to the legacy of neglect and cuts that we inherited from the Conservative party. We now know what Tory devolution means: not fairness for all, but a free-for-all.

The Liberal Democrats welcome the White Paper, and I am pleased that the Secretary of State came to the House to make her statement. Nevertheless, the White Paper represents a significant missed opportunity.

Does the Secretary of State share our view that local communities are too often cut out of decision making—that they are too often forced to accept the standards and prescriptions of central Government, and that their voice is not being heard? Does she agree that public alienation, anger and apathy are all fuelled by a sense of disconnection from local government and from decision making? Despite all her head-scratching, the White Paper does not convince me that she agrees with that analysis.

The White Paper does not propose the fair votes that are essential for democratic renewal. It does not propose abolition of the council tax and the introduction of a fair tax based on ability to pay. It will not return the business rate to the control of local government, which is essential to freedom of decision making. Perhaps above all, it will not return the powers and the billions of pounds that central Government and quangos hold on behalf of local government, which prevents local government from making decisions. Sadly, much of what it does propose has more to do with administrative convenience than with democratic accountability. It has more to do with the fleeting fashions in No. 10 than with community engagement.

Whatever persuaded the Secretary of State to cut out community choice from the executive mayoral system? After 34 referendums and 22 rejections, with only 12 mayors accepted by the public and with four of the 12 who have been voted into office facing recall action by outraged local communities, could it just be that the Prime Minister went to the Secretary of State and said “We do not want local choice on mayoral executives: just get on with it”? Does that not make a complete mockery of the Secretary of State’s mantra about community choice? The only choice that the public did have and the only choice that they were exercising—to say “We do not want mayors”—is to be taken away from them.

In the media this morning, I heard the Secretary of State make much of the new powers for councils, parish and district, to make byelaws. That is good, but I wonder whether she has noted that they already have those powers under the Clean Neighbourhoods and Environment Act 2005.

There are some genuinely good things in the White Paper. The proposal to reform the Standards Board and its code is long overdue. The only point that I would make is that the Secretary of State could have done it without a White Paper, months and months ago. We also welcome the restoration of local councillors’ right to defend their local communities when planning and licensing decisions are made. We agree with the Secretary of State that the current rules are absurd and grossly anti-democratic. Will she undertake to bolt that provision on to some piece of legislation—any piece of legislation—very soon, and to bring back common sense before the new year?

Councils are to be invited to volunteer to convert to unitary status. How will the Secretary of State judge who volunteered and who was bounced? Will the public have a voice in the changes? Does she expect them to cost more money? If she feels the need to cap expenditure and the number of people involved—which I understand is proposed in the White Paper—and if, as I suspect, the local community will not be asked to endorse the changes, what exactly will be her criteria for approving them?

One of the most talked-up parts of the White Paper was the part relating to city regions. My question to the Secretary of State is simple: what happened to it? If the mayors are in because of No 10, city regions seem to be out because of No. 11. What exactly has the city regions project to do with the Treasury, and how has the Secretary of State let the Treasury get its hands on it?

The Liberal Democrats look forward to helping the Government to improve the White Paper drastically and dramatically, and to restore and rebuild local democracy. We await the Secretary of State’s answers with interest.

I am glad that the hon. Gentleman welcomes many of the proposals in the White Paper, even if he too believes that it should really have been a local government White Paper on council tax and property finance reform. We know what his party says about those issues, and I do not think that it has much popular support, but no doubt we shall debate them in the House in due course.

In fact, I largely agree with the hon. Gentleman’s analysis. While local public service standards and their delivery have improved significantly over the past nine years, expectations have also risen, and the former have not kept pace with the latter. Citizens now want a voice when it comes to the delivery of local public services, and expect their views to be taken into account. We need to reconnect them with public service delivery, and many of the proposals in the White Paper are designed to do just that.

For example, the best-value duty on local authorities will be reformed. Information will have to be given to local people. They will have to be consulted about local public service delivery, and will have to be involved in the making of choices. We are reviewing community ownership and the management of assets so that local communities will have the opportunity to take a direct interest in the provision of local public services. For instance, when a town hall is not being used adequately, their views about what should happen to it should be taken properly into consideration.

The White Paper will give communities a right to be heard, which I think is an important step. If the local ward councillor cannot get something sorted out on the ground, overview and scrutiny committees will be reformed to become mini-Select Committees. They will be able to take up local issues and call for evidence, not just from local authorities but from other local service partners. Primary care trusts, Jobcentre Plus and all the other agencies that work to provide services in an area will have to give evidence, respond formally in due course, and take recommendations into account.

Perhaps Labour Members should not be too surprised that the party of the hon. Member for Hazel Grove (Andrew Stunell) has some difficulty in accepting the notion of strong leadership. Of course, in this instance I am talking about strong leadership at local level. The hon. Gentleman argues that local people will no longer have a say. That is not the case at all. When the hon. Gentleman reads the details of the proposals carefully, he will see that local people will have to be consulted if a council decides to adopt a mayoral model. However, we will ensure that council leaders, where they are adopted, also have visible strong leadership.

The hon. Gentleman asked about unitary authorities. I think that we have got the balance right, avoiding any huge distraction of local councils so that they can get on with the job of delivering better public services for their people. But when there is real willingness and local support, and when councils meet the strict criteria set out alongside the White Paper in the invitation to bid for unitary status, we will consider bids properly, and a small number of councils will be given the opportunity to move to unitary status. We will, of course, make our judgment on the basis of value for money. We must decide whether the councils are providing strong leadership and responding to citizen and community concerns. I think all Members would agree that such criteria are important.

The hon. Gentleman also asked about the city region agenda. The White Paper sets out a clear direction for city regions. We want to support strong, voluntary boards of leaders and we want city regions to lead economic development in their areas. My right hon. Friend the Secretary of State for Transport has already set out his plans to devolve greater control over buses. We are consulting on the development of city development companies; we are backing skills and employment boards; we are taking forward discussions on multi-area agreements; and, in the run-up to the comprehensive spending review, we are looking seriously into devolving even more powers to city regions.

I hope that the hon. Gentleman will, on reflection, accept that the White Paper represents a serious step forward, with deregulation, devolution and a reconstitution of the relationship between central and local government.

I warmly welcome my right hon. Friend’s statement, particularly her evident commitment to further empowerment and renewal of local democracy, improved accountability, improved leadership in local communities and the strengthening of the councillor’s role. As we look forward to the Bill to follow, will the Secretary of State look closely into the needs of urban areas—particularly cities—where the boundaries are drawn far too tightly to enable them to address the problems of conurbations and their communities? I suggest that the prospect of voluntary agreements might not be adequate to deal with the real problems in those areas.

I thank my hon. Friend—having previously led Leicester city council, he has considerable experience to draw on—for his comments. He is right that we need to examine how urban areas function economically and provide them with the necessary tools and powers. Sometimes, that might mean cross-boundary working, and multi-area agreements should be supported where appropriate. There might also have to be a boundary review—another option that is always available. Furthermore, looking into economic incentives for development is part of Kate Barker’s current work on reform of the land use planning system.

Frankly, that was rather like watching the spectacle of an elephant giving birth to a mouse. Local government will be very disappointed by the Secretary of State’s statement. My concern relates to funding and whether she can provide any hope to the people of Northamptonshire. The Government recognise that the county is underfunded as a result of the current formula. The former Minister with responsibility for local government acknowledged that, but said that it would take 20 years to put right. Will the Minister comment on that and include a proposal in the Bill to relieve the people of Northamptonshire of their great burden of underfunding?

The hon. Gentleman has clearly not read the comments of his local government colleagues and has failed to recognise the cross-party support within local government for the proposals I have set out today. He mentions Northamptonshire, but he well knows that the county has received above-inflation, real-terms increases in funding over the past nine years. In addition, my hon. Friend the Minister for Local Government has been discussing the position with the council and I am sure that those discussions will continue.

In welcoming today’s statement, may I congratulate my right hon. Friend on the progress made—in the year and a day that has elapsed since she presented the education White Paper—down the devolutionary route for local government? She will appreciate that the detail of the White Paper and the extent to which there is buy-in across the whole of Government are crucial to implementation. I hope that she can assure us that all Government Departments will support greater devolution of powers and exhibit more trust in local government.

I thank my right hon. Friend for his comments. I know how personally committed he is to this agenda and I am well aware of the good work he did as Minister with responsibility for local government. He is right to say that the White Paper will succeed if it has the support of all Whitehall Departments. It does. There is a cross-Government commitment to this agenda. The fact that about 35 targets for local areas must be agreed through local area agreements will impose huge self-discipline on central Government to set down only what they really care about. If local government agrees with the agenda and the targets, it should be allowed to set its own ambitions to lead the area. I think that that is the right way forward. We now have a powerful opportunity to allow local leaders to do precisely what they were elected to do—to lead their towns, cities and local areas into the future.

Having heard what the Secretary of State said on the “Today” programme and her statement to the House, may I ask her why, if she truly believes in local government and local choice, she is seeking to impose a certain formula for leadership? Is she not aware that many local people have no time at all for the mayoral concept and that many local councils believe that recent changes have emasculated the participation of ordinary councillors in their councils’ deliberations?

I do not agree with the hon. Gentleman. There are local choices about which model to adopt and councils will be able to choose a directly elected mayor only after full consultation with local people. I would like to see strong, visible leadership that can take an overview of the local area, plan for the future with confidence and take the necessary tough decisions. It will be properly accountable to citizens only if there is real citizen and community involvement. As part of the package of proposals that we are setting out today, we aim to ensure that citizens’ and community views are taken into account at every stage of development.

Your power to surprise, Mr. Speaker, never ceases to amaze!

I also welcome the White Paper, which I believe represents the first seeds of a welcome U-turn, particularly in so far as the Secretary of State has made it clear that she wishes to re-empower councillors. Re-empowerment should become the watchword of whatever emerges from this exercise. All too often, our councillors have become no more than ciphers in the exercise of local government. A fuller U-turn would include the re-empowerment of housing committees, education committees and planning committees and I urge the Secretary of State to go the whole hog. Let us have local government that is truly meaningful.

I thank my hon. Friend for his comments and hope that, after he has read the White Paper in full, he will be even more pleasantly surprised than he is now. He is absolutely right to talk about local councils and it is right that non-executive members should have a powerful role in their communities. In future, we want to encourage local authorities to provide small budgets for local councillors so that they can knock different public service providers’ heads together, get issues dealt with on the spot, refer an issue to the overview and scrutiny committee and secure a proper formal response. We want people who deliver public services to appear in person or deliver evidence in writing to committees and we want their recommendations to be taken into account. I believe that all this will revitalise local democracy and re-legitimise the role of the local political party. After publication of the White Paper, we need seriously to look into how to build capacity in local political parties so that the councillors of the future are of the very best calibre.

Having spent 36 years in local government, I welcome any attempt by any Government to give back to local government the role it deserves. The Secretary of State made some interesting points, but will she explain what powers she has to ensure that minimum standards are met, and who will set the criteria? Will she ensure that responsibility is backed up with resources, and will she give a commitment that objectors as well as the promoters of applications will have a right to appeal?

The hon. Gentleman asks a series of questions and I shall try to deal with them. He is right to say that there will be minimum standards. There are key priorities that local authorities want to see achieved everywhere—for example, children in care and care home standards. The important point is that we negotiate with each local area what its targets for improvement should be. If it is failing to achieve minimum standards, that should be one of its targets. If it is meeting minimum standards but has capacity to do more, we can agree with that local area and its local partners what the targets should be—

I am talking about central Government agreeing with local government and its partners what the targets should be—[Interruption.]

Order. It is not the place of the hon. Member for Beckenham (Mrs. Lait) to shout across the Chamber at the Secretary of State. The hon. Lady should be quiet, or she will have to leave the Chamber.

Thank you, Mr. Speaker. We should leave local government the space and flexibility it needs to deal with complex issues of concern to local citizens and communities. The hon. Gentleman is right: we should fund any new burdens and we have a principle in place under which we will give funding to local authorities for any new burden imposed by the Government. He is also right that the inspection regime will change. It will become risk based and proportionate, but on the 35 targets that we expect to be delivered at local level, we will have a tougher under-performance regime, because as part of this package of proposals and the deal with local government, we expect those minimum standards to be delivered.

Will the White Paper extend and strengthen the duties of local authorities and primary care trusts to promote public health in communities? In particular, I am interested in schemes such as the “Eat Well, Do Well” scheme in Hull, which is to be scrapped by the Liberal Democrat council but is doing an enormous amount to promote the health of our children.

I can give my hon. Friend that assurance. All local partners will be asked to work to the same local objectives. That means in practice that where PCTs, social services and schools all have different agendas, they will in future be working to the same output objective. That will mean that an integrated personalised response can be delivered on the ground. We will expect partnerships for health and well-being to be in place up and down the country as a result of the proposals in the White Paper.

It is good to have a White Paper with the subtitle “repentance” that includes, not least, the dismantling to some extent of the new gendarmerie of control and inspection put together by this Government. But the White Paper is still a series of unresolved conflicts, as it is bound to be before we get the Lyons report and in the Blair-Brown interregnum. The White Paper is like a visit to a tapas bar, with a lot of little snacks, all of which are reasonably agreeable, but no decent meal in sight.

If city regions are central to the Government’s thinking—as they should be—are the Government willing to restructure some of the existing regional and sub-regional bodies, such as the learning and skills councils, the regional development agencies and the planning structures so that real levers of influence can be given to the city regions to influence their own fates and improve the lot of their citizens, especially in transport and skills, which are the crucial issues?

Of course what we need is a balanced diet, not indigestion. The White Paper sets out sensible proposals and is not subtitled “repentance”. The story so far is of improved local public service standards and an increased capacity in local government. The reason we have achieved that increase in standards is the central drive from Government, for instance with the literacy and numeracy hours from the Department for Education and Skills and the decent homes programme, which is putting right £19 billion of under-investment and backlog that we inherited in 1997. That is why we are in a position to devolve more and, as I have argued in the past, we have now reached a tipping point at which local government can take on more responsibilities.

The right hon. Gentleman asks specifically about city regions. The White Paper proposes employment and skills boards and city development companies in cities that want them. It will set out the clear principle that the more powers to be devolved, the greater the premium on transparent, visible leadership. The Leitch review is looking at skills and the Eddington review is looking across the board at transport, and we will come back with specific proposals for each city.

I welcome the White Paper’s commitment to extending devolution, but may I draw my right hon. Friend’s attention to two issues? First, I endorse what she said about the need for different governance formulae for different areas. What is right for a city region area such as that including Birmingham will be different from elsewhere. Secondly, we need to keep focused on the need to empower communities, not simply local authorities or agencies. Birmingham is a huge city and it needs the governance arrangements that go with that strategically, but the real test of success will be its willingness unambiguously to devolve further power to local communities such as mine, so that local people can have much more of a real say.

I completely agree with my hon. Friend. He is right to say that we must go with the grain of partnership working in different local city areas. As he knows, my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, when he was in my job, set up a process of city summits, which I was happy to take forward. It is clear to me that there is a huge appetite out there for more powers to be granted at the city region level. The city regions are already working together on a partnership basis, but the extent of their ambition and their capacity differs. The identification of citizens with their local areas also differs from place to place and we must build on what is happening locally. My hon. Friend is right also to suggest that we have to empower communities. A real test of our proposals will be the extent to which citizens and communities feel that they have a greater say in the provision of local public services.

What consequences will the White Paper have for how and when legislation will be introduced to transfer powers to the Mayor of London?

What discussions has my right hon. Friend had with the Local Government Association in anticipation of drawing up the White Paper? Now that it has been launched, does she anticipate the LGA having any major problems with its content?

I have had months of discussion with local government partners through the LGA and the different political groups on it, as well as with different towns, cities and rural areas across the country. The LGA has welcomed the full extent of the proposals, arguing that the White Paper is an essential first step on the road to a new relationship between Government and local government.

In her statement, the Secretary of State said that communities must have a bigger say in the issues that matter to them most—a sentiment with which we would all agree. Will she put some flesh on the bones? For example, one issue on which local communities may feel very strongly is road safety. Will the local highway authority be able to introduce speed limits and install pedestrian crossings without any interference from the Department for Transport?

When the right hon. Gentleman has the chance to read the White Paper, he will see that the Highways Agency is one of the named partners that will have to co-operate with local objectives. That means when a citizen or a community has an objection to a particular proposal, they will have the right, through their ward councillor, to have it considered by the overview and scrutiny committee, so that proposals can be made. The Highways Agency would have to take those into account when considering future measures.

I welcome my right hon. Friend’s recognition of the role of councillors as community champions and the need for ever better strategic leadership in local authority areas. The first of those will mean working more closely with community and voluntary sector representatives in the streets and estates of local authorities in ways that are informative, meaningful and flexible. At a more strategic level, will she look again at the way in which local strategic partnerships operate, in particular those with the good practice of really involving representatives of the community and voluntary sector to ensure that their voices are heard in LSPs?

My hon. Friend is right. The LSP, which brings together local partners, business representatives and the voluntary and community sector, will have a real role to play in deciding the future of a local area. However, the LSP should be chaired, or the chair should be agreed, by the local authority leader. Local authorities will be the bodies that are accountable, that take the decisions and that have the powers and tools they need to work with the voluntary sector to deliver real improvements for local people.

Does the Secretary of State agree that one of the greatest restrictions on local accountability, prioritisation and efficiency is the ring-fencing of funds by central Government, who specify in increasing detail how and on what money is spent? She has set a target to reduce targets, so will she ring-fence the amount of ring-fencing? What does she propose to do to reduce the amount of ring-fencing?

I am glad that I have been able to give the right hon. Gentleman a degree of confidence that we are going down that route. Just over £500 million flows from central Government through the local area agreement, which is the delivery agreement with a local area. Measures in the White Paper will cause that to rise to up to £4.7 billion, with the presumption that, unless there is an exceptional reason to the contrary, all area-based funding will go un-ring-fenced through the LAA. There will also be a single capital pot, so local authorities will have real flexibility as to how they meet their targets.

I congratulate my right hon. Friend on her statement. Continued improvement in performance must be the best way to strengthen local authorities’ leadership and autonomy. That is good news for 95 per cent. of local authorities, but a minority will always be unable to cope well, through either incompetence or extremism. What powers will the Government retain to deal with councils such as the new Tory administration in Hammersmith and Fulham? In the past few weeks it has announced that it will close one of the borough’s three secondary schools to sell the land that it is on. It has also cut the delivery of meals on wheels from once a day to once a week—

My hon. Friend is right that the Government should be able to agree key requirements with a local area, and to expect them to be delivered. Where those requirements are not delivered, the Government should be able to provide support or to intervene. In addition, local people should be able to have their views taken into consideration.

The Secretary of State talked about providing freedoms to local authorities, but what real opportunities will local authorities and communities outside cities have to draw down powers and funds from the plethora of unelected quangos that control so much local spending? For example, are there any plans to change the fact that the only democratically elected person with responsibility for health is the Secretary of State for Health? Is not it true that the White Paper will not give local government the powers it wants?

I am afraid that the hon. Lady is labouring under a misapprehension about the proposals in the White Paper, which mean that locally elected representatives will have a key role in the health and well-being partnerships, and can lead them if they wish to do so. As a result, PCTs and social services will work intimately together, with a local democratic input.

I, too, welcome the White Paper, which amounts to a step change in the relationship between central Government and local government, and between local government and their communities. In particular, I welcome the important leadership role that democratic and accountable local councils will have. How will she ensure that the budget held by agencies that deliver non-local government services will change to reflect the leadership role, and the local partnerships, outlined in the White Paper?

I thank my hon. Friend for his comments. He has huge experience as a local councillor, and as chair of the Special Interest Group of Municipal Authorities. He is right to emphasise the importance of strong local leadership. Local authorities need to have real input into setting and agreeing objectives with their local partners. That means agreeing the objectives that all the local agencies—and that includes the PCTs, in the case of health—should work towards. The White Paper contains a long list of all the partners that must co-operate with the local authority in fulfilling those objectives. As a result, there will be joint commissioning in the future, and different agencies will be working to the same ends. Another consequence is that they will not have conflicting targets, with one agency trying to do one thing and a different agency something else. In future, all agencies will be able to work on an integrated basis.

In her statement, the Secretary of State said that councillors should be able to sort out planning issues. My district council—quite rightly and of its own volition—is building 9,000 houses to meet housing need. However, an outcry has erupted at a proposed development of 6,000 houses on the edge of Leighton Buzzard, as it is in the green belt and on a flood plain. On this issue, will my councillors be able to respond to the needs and wishes of the people whom they represent?

Local authorities already have huge planning powers. For instance, some have managed, through their local development framework, to prevent building in back gardens—a matter about which, I know, the hon. Member for Meriden (Mrs. Spelman) has very strong feelings. By using the powers to their full extent, local authorities can respond to local citizens’ wishes. Many Opposition Members do not want the homes to be built, which is why we have a national framework for agreeing how many homes are needed. I want greater local flexibility in the framework, and the hon. Gentleman should await the forthcoming PPS3 on development.

I too welcome the statement from my right hon. Friend. I hope that she will agree that the investment and support given to local authorities by this Government stand in stark contrast to the cuts and devastation inflicted over years by the Opposition. However, I seek clarification on two points—

Thank you, Mr. Speaker. The one point about which I seek clarification has to do with those county councils that, like Durham, are seeking unitary status. What is expected from a bid in addition to value for money? What time scale will apply, and will councils still have to achieve consensus?

I thank my hon. Friend for her questions, and she will be able to examine the invitation to councils that we are publishing alongside the White Paper. There will be a narrow window of opportunity, and the timetable is set out in the document. Any proposed change to a future unitary government structure must be affordable within a council’s existing resource envelope and must enjoy a broad cross section of support. We also expect strong leadership and local accountability to be part of any such proposal.

The Secretary of State spoke about listening to local people, but I remind her of the result of the north-east referendum. It emphatically rejected regionalism by a staggering seven to one majority on a nearly 50 per cent. turnout. Does she believe that unelected regional assemblies will be more popular than elected ones? Will she include in her proposals provisions for referendums in all the regions of England, so that local people can decide whether they want to keep unelected regional assemblies, or whether they want the powers to be returned to local authorities, where they belong?

I am surprised that the hon. Gentleman focuses on having referendums up and down the country, as regional assemblies are voluntary partnerships composed mainly of local authority representatives. Of course, they will have a key role in determining local housing numbers—so perhaps he too has an ulterior motive.

I draw the House’s attention to my entry in the Register of Members’ Interests. Given that so much of local service delivery is provided by arm’s length companies and trusts, it is right that scrutiny panels have even more control over them. Will my right hon. Friend confirm that, other than in commercially sensitive matters, all the information and background documents from those trusts and arm’s length companies will be made available to councillors? That is not what happens at present.

My hon. Friend makes an incredibly important point. There must be accountability in the provision of local public services. A set of named partners will have the duty to respond formally to the overview and scrutiny committees when they request information. If that mechanism does not apply in his local circumstances, which I should be happy to investigate, I remind him that the freedom of information provisions still apply.

Like my hon. Friend the Member for Northampton, South (Mr. Binley), I suspect that those of us who have been councillors or are recently retired councillors will find today’s statement not only a disappointment but a failure to recognise much of the reality that we face. The Secretary of State talked about councillors being champions for their wards. Most of us have been doing that for years. What in the statement is new and will give extra powers at ward level to councillors? What exactly is the community call for action?

I am surprised that the hon. Gentleman does not agree with fellow councillors up and down the country who are this morning welcoming the proposals set out in the White Paper. Indeed, Lord Bruce-Lockhart, the Tory chairman of the Local Government Association, called the cutting of targets “great news”. The hon. Gentleman asked what specific powers there would be. I would have thought that the opportunity to set byelaws at local level to deal with street nuisance, which people really care about, was a huge devolution of power from the centre. Councils will not have to drag those cautioned for an offence through the magistrates court, but will have the opportunity to issue a fixed penalty notice. He asked what the community call for action was. It is the opportunity, as I have just outlined to my hon. Friends, for a community or individual, through their ward councillor, to have their complaint or issue properly examined, responded to and taken into account at whole-council level.

I welcome the White Paper and its focus on strengthening the role of local councillors and on strong local leadership. I note the proposals for four-year elected terms for leaders, executives and mayors. Has my right hon. Friend given consideration to the thorny issue of the failure of such individuals as a result of abuse or corruption? How do we ensure that public confidence is maintained in the leadership and how will political groups work with a leader who is there for four years if they have lost confidence in him or her?

My hon. Friend raises an important point. The presumption will be that leaders are elected with a four-year mandate so that they are able to draw up a local strategy for the area and see it through, taking decisions as required, but if the leader of the council loses the confidence of the council, he or she will have to go.

Business of the House

I shall be pleased to make a business statement, if I may—[Interruption.] The right hon. Lady says from a sedentary position that she has not asked for the business, but she will be aware that where we have a business statement rather than business questions, I am expected to stand up without being asked. That is how it works.

Monday 30 October—Consideration of Lords amendments to the Violent Crime Reduction Bill, followed by a debate on security of energy supply on a motion for the Adjournment of the House.

Tuesday 31 October—Opposition day [un-allotted half-day]. There will be a debate entitled “Conduct of Government Policy in Relation to the War in Iraq and its Aftermath” on a motion in the name of Plaid Cymru and the Scottish National parties, followed by motions relating to the Crossrail Bill.

Wednesday 1 November—Business of the House motion relating to proceedings on House of Commons business, followed by motions relating to House of Commons business including September sittings, the legislative process, matters sub judice, Select Committee evidence, shorter speeches and European Standing Committees.

Thursday 2 November—Consideration of Lords amendments to the Education and Inspections Bill.

Friday 3 November—The House will not be sitting.

The provisional business for the beginning of the following week will be as follows:

Monday 6 November—Consideration of Lords amendments to the Animal Welfare Bill, followed by proceedings on the National Health Service Bill [Lords], followed by proceedings on the National Health Service (Consequential Provisions) Bill [Lords], followed by proceedings on the National Health Service (Wales) Bill [Lords], followed by consideration of Lords amendments, followed by a debate on a motion for the Adjournment of the House, on a subject yet to be decided.

May I also inform the House that the business in Westminster Hall will be:

Thursday 2 November—A debate on the Fifth report of Session 2005-06 for the Home Affairs Committee on Immigration Control (HC 775) and the Government response.

I thank the Leader of the House for his business statement. He read out a list of those subjects that will be included in the business of the House motion on 1 November. Does he expect anything to be added to that list and, if so, what?

Last week, when pressed for a debate on Iraq, the right hon. Gentleman said in so many words that it was up to the Opposition. For example, in response to my hon. Friend the Member for Billericay (Mr. Baron), he said:

“there will be a five-day debate on the Queen’s Speech. It is a matter for the Opposition, and not for us, but I hope very much that one of those days will be used for foreign policy.”—[Official Report, 19 October 2006; Vol. 450, c. 1022.]

I can confirm to the House that we will indeed be setting aside one whole day of the Queen’s Speech debate for foreign policy and defence matters. So we are playing our part. Can the Leader of the House confirm that the Foreign Secretary will be available for that debate?

I welcome the fact that the Secretary of State for Communities and Local Government was willing to come and make a statement today on her local government White Paper, but inserting that statement into today’s business means that today’s international development debate will be squeezed, possibly to only an hour and a half. I ask the Leader of the House to consider redressing that balance in the future, with a longer debate on international development.

On Tuesday, the Home Secretary issued a written statement about access controls for those coming from Romania and Bulgaria. He did not make an oral statement, which meant that he could not be questioned about the Government’s policy. But then it does seem that the Home Secretary is a little reluctant to answer questions in the House. On Monday, Home Office questions covered prisons, asylum applications, detection of rape, reoffending and police pay. Did the Home Secretary answer any of those questions? No. But he did answer two questions on mini-motorbikes and gopeds. So will the Home Secretary come to the House and make a statement on the operation of the Home Office so that Members of the House can question him on his policies and his running of the Home Office?

The Joint Committee on Vaccination and Immunisation will soon make a decision on the use of the new cervical cancer vaccine. When that decision is clear, will the Health Secretary make a statement to the House on the Government’s policy on the use of that vaccine?

May we have a debate on nursery provision? Government guidance means that nurseries cannot charge top-up fees, which means that many private nurseries will probably close, cutting the availability of child care. We need a debate so that the Government can explain how they can claim to be interested in increasing child care when their policies will cut provision?

The Prime Minister has frequently spoken about the need to address climate change. Indeed, recently he told his European Union counterparts:

“We have a window of only 10-15 years to take the steps we need to avoid crossing catastrophic tipping points.”

On 17 October, the Environmental Change Institute at Oxford university published “Predict and Decide: Aviation, Climate Change and Policy”. The leader of the project, Dr. Brenda Boardman said:

“Unless the rate of growth in flights is curbed, the UK cannot fulfil its commitments on climate change.”

Yet the very next day the Department for Transport issued a document on railway closures, in which it said:

“Where long distance travel might be affected by a closure proposal, domestic air services may also be a relevant alternative.”

May we therefore have a debate in which the Secretaries of State for Environment, Food and Rural Affairs and for Transport are brought to the House to explain the contradiction that is occurring in Government policy? Or maybe we should simply leave it to the Foreign Secretary, who of course was talking about climate change earlier this week at the very same time as the Deputy Prime Minister was travelling around the far east doing the Foreign Secretary’s job. Today, the Chancellor is doing the Culture Secretary’s job by talking about competitive sport, although, given the drubbing that the Chancellor was given by my hon. Friend the Member for Tatton (Mr. Osborne) in Treasury questions this morning, I suspect that the Chancellor will not be quite so interested in competitive sport in the future. So may we have a statement on ministerial responsibilities?

Let me answer the right hon. Lady’s questions in order. She asked whether anything else was to be added to the list that I read out. Yes, very possibly, although I cannot be certain at the moment. It would be in relation to communications allowances. I shall certainly refer to the proposal of which she is aware from her membership of the House of Commons Commission. We may have a resolution on that, but I cannot be certain at the moment and I will of course keep the Opposition and the Liberal Democrats informed.

On Iraq, the right hon. Lady is being slightly disingenuous in pretending that the Queen’s Speech debates are Opposition days. They are quintessentially Government days. It is just that by convention the allocation of subjects between those days is a matter for the Opposition—a convention that I strongly support. It has always been so. Certainly when we were in opposition—and I attended every day of those debates during the 18 years of Labour opposition—we always allocated one day to foreign policy and defence, and I am glad that the practice is being followed under the right hon. Lady’s shadow leadership of the House.

The right hon. Lady asked whether my right hon. Friend the Foreign Secretary would be available. I know that she will want to be available, and now that we know that there is to be a debate on foreign policy, if we can be told the precise date I shall communicate it to my right hon. Friend.

The right hon. Lady noted that we would have an hour and a half for the international development debate today, but we have had other debates on international development—

I take the right hon. Lady’s point and the comment of the hon. Member for Buckingham (John Bercow). The right hon. Lady will be aware of my concern about the slightly eccentric allocation of scheduled Adjournment debates on the Floor of the House; some subjects often come up, while others— for example, foreign policy and international development—do not have a regular slot. That will be discussed in the Modernisation Committee and I hope that, within the available time, we shall be able to come to a more rational, sensible and agreed balance on those subject debates.

On access controls in respect of Bulgaria and Romania, I think that my right hon. Friend the Home Secretary has been forthcoming in making oral statements. The written ministerial statement was listed on the Order Paper, as it had to be, when my right hon. Friend made the announcement about Bulgaria and Romania earlier this week. We introduced the WMS procedure so that Members have far better notice than the old planted parliamentary questions. That is the whole point of written ministerial statements. If Members spot a WMS that they think should be turned into an urgent question, it is open to them to seek the permission of Mr. Speaker.

I shall pass the concerns of the shadow Leader of the House about the vaccination recommendations to my right hon. Friend the Secretary of State for Health. I am sure that my right hon. Friend will want to make a statement—probably written, unless she has some other opportunity to do so.

The shadow Leader of the House made some points about child care. If I was a Conservative, I should keep extremely quiet about child care because of the Conservatives’ utterly lamentable record on it when they were in office and their current plans to cut £21 billion from public spending, which would hit child care as much as anything else. I remind the right hon. Lady of something that I am surprised she did not celebrate: over the last nine years, we have introduced 1.2 million new child care places and more than 1,100 new neighbourhood nurseries, with free part-time nursery places for every three and four-year-old. My constituency is typical; there has been a revolution in child care based on that increased investment, Sure Start and, above all, the family tax credits that help mothers to go back to work.

The right hon. Lady made a very eccentric point about railway closures, because we have been opening new railway systems. There has been a 44 per cent. increase in the number of individuals travelling by train and a similar increase in the amount of freight. Only this week, my right hon. Friend the Secretary of State for Transport announced that more than £400 million would be invested in the next stage of the tram system in Nottingham, with extensions to Chilwell, Beeston and Clifton.

Last week, I asked the Leader of the House whether we could have a debate on the fiasco of the Rural Payments Agency, so this week I shall ask him whether we can have a debate on the consequences of that fiasco in terms of the £200 million-worth of budget cuts in the Department for Environment, Food and Rural Affairs, which will affect flood management, environmental protection, veterinary laboratories, Natural England, British Waterways—a long list of exactly the issues that the Prime Minister says are a priority for the Government. May we have a debate on how that was allowed to happen?

While we are on environmental issues, I echo the view of the right hon. Member for Maidenhead (Mrs. May) that there should be a debate on transport. During the lifetime of the Government, traffic levels have risen by 11 per cent. Since 1990, carbon dioxide emissions from traffic have gone up by 10 per cent. to 32 million tonnes. When the Deputy Prime Minister was in charge of those things, he had a five-year plan, although of course it did not work. Now, he no longer has a five-year plan about anything, but we should have a strategy for dealing with road transport. It is not very obvious what that strategy is at present, so may we have a debate on it?

I return again to the issue of Iraq. As the Leader of the House knows, I have asked regularly—almost every other week during this Parliament—for Government time to debate what is happening in Iraq. It is not good enough to rely on Opposition days for such debates or, indeed, on the day in the Queen’s Speech debates that is normally reserved for foreign affairs and defence matters across the whole world—that offers a panoramic view of our responsibilities rather than a focused debate about what is happening in Iraq. Given that the world view of events in Iraq is changing rapidly, it is simply not acceptable for British policy and strategy to be based on the short-term requirements of the United States mid-term elections rather than a British assessment of our interests and the interests of our armed forces. May we have that debate in Government time and, if necessary, can we delay Prorogation or have an extra day of debate on the Queen’s Speech so that we have an opportunity to do justice to the matter?

Lastly, may we have a debate on the Department of Health’s useful advice to health service chief executives, displayed on its intranet, that they should

“go in and out of different doors of the building every day for a month”


“say hello to three people each time”?

Can we know whether they should do that before or after issuing the press release about the latest hospital closure?

On the Rural Payments Agency, DEFRA questions will be next Thursday. Furthermore, my noble Friend Lord Rooker, who has direct responsibility for sorting out the difficulties in the agency and has been in very close touch with farming representatives, understands the difficulties that are being faced.

Transport rates are indeed up 11 per cent. It is inevitable that some transport levels will rise given the rapid, and record, rate of economic growth that we have experienced in the last nine years. The hon. Member for Somerton and Frome (Mr. Heath) should be paying tribute to the transport strategy we have adopted, which has ensured that although the rate of overall growth in our economy is about 30 per cent., the increase in transport—according to his figures—has been only about 11 per cent.

I understand the case that the hon. Gentleman makes for a debate on Iraq and, indeed, on wider foreign policy matters. I have already made clear my personal frustration, which I experienced as Foreign Secretary, that quite a lot of days are allocated for subjects that do not command much interest in the House, but there are undertakings to use them, while there has to be a big argument about other days. However, I must push back the hon. Gentleman’s suggestion that the Queen’s Speech is not an appropriate time to debate those matters. First, as we have heard, a full day will be allocated to foreign affairs, as is normal, and it is ludicrous to suggest that Iraq and Afghanistan would not be the major topics. They are the major foreign policy issues, along with peace in the middle east, which is a related matter.

Secondly, it is the nature of the Queen’s Speech debate that Members on both sides of the House can make a speech on any subject relevant to the Queen’s Speech—Iraq and Afghanistan are two such subjects—at any stage during those debates, whether or not the Opposition have identified it as a subject for debate that day. Far from there being only one day for debate, there will be opportunities, if Members can catch Mr. Speaker’s eye, for points to be raised and good speeches made over the whole five days of the Queen’s Speech debates. I hope that Liberal Democrats, Conservatives and my hon. Friends take those opportunities.

Lastly, I am grateful to the hon. Gentleman for drawing attention to the advice on the website that chief executives should use different doors and say hello to three people each time. When I was running the Home Office and then the Foreign Office, it was my common practice to use different doors and to walk down corridors uninvited and pop in to find out how people were getting on. Once they had recovered from the shock, I learned a great deal—even if they did not.

This morning, the all-party group on town centre management met to discuss the “State of the English Cities” report with its lead author, Professor Michael Parkinson. The consensus that emerged was that the case of cities and towns would be much advanced by a system of strategic unitary councils. Will my right hon. Friend give positive consideration to allowing a debate in the House on the local government White Paper, so that we can properly scrutinise those important matters?

I welcome what my hon. Friend says. I greatly support the Association of Town Centre Management, and the report on the state of cities was significant. This is probably not yet fully Government policy—well, it almost is—but I strongly support unitary authorities. There is no question but that they have made a big difference where they have been introduced. One place where the change has been dramatic happens to be my constituency, which is run by Blackburn with Darwen borough council. First, there will be opportunities to discuss the subject in the five days of the Queen’s Speech debate. Secondly, there will, of course, be opportunity for discussion when a Bill is introduced to implement the White Paper. If we can find time—I am making no promises—for a debate in the meantime, I will make sure that it takes place.

Was the Leader of the House here earlier for the exchange in Treasury questions between the Chancellor and the shadow Chancellor? If he was, he would support our request for an urgent debate on private pension schemes. Is he aware that thousands of occupational pension fund holders have had their pension schemes wiped out? Can he confirm to the House that the total cost of the Chancellor’s 1998 tax changes to pension funds is now a staggering £100 billion?

I was not present, but I understand that the shadow Chancellor was pulled up by Mr. Speaker for using inappropriate language, and as he was properly educated, that is very bad. I think that his performance will be remembered mostly for that rebuke. I had hoped that he would talk about the new plan, so helpfully set out on the Conservative party’s website, of the economic competitiveness policy group, which includes wholesale deregulation of things such as pensions, so that there will, in future, be opportunities under Conservative policy for people to sign away their rights—including, I assume, their pension rights—when they take out loans or insurance. Under the Conservatives’ new plan, there will be a completely deregulated pensions arrangement.

As for the hon. Gentleman’s particular point, the matter has been the subject of significant discussion in the House by my right hon. Friend the Chancellor and my right hon. Friend the Secretary of State for Work and Pensions. We understand the great concerns of the individuals involved and we are doing our best for them, but for reasons that we have spelled out, we did not think it appropriate to accept the report of the pensions ombudsman.

May we have a debate on the manner and the content of the Department for Transport’s announcement this week that the toll on the Thurrock-Dartford crossing will increase by 50 per cent.? My hon. Friend the Member for Dartford (Dr. Stoate) and I learned about the announcement from the press, not from the Minister. That is not only discourteous and bad politics, but unfair, because my hon. Friend’s constituents and mine will pay disproportionately for the roads of others. I hope not only that the Leader of the House will allow us a debate on the subject, but that he will have a word with his right hon. Friend the Secretary of State for Transport about whether that decision could be reviewed, bearing in mind that this House passed an Act of Parliament saying that tolling would cease once the bridge was paid for—and it was paid for four years ago.

I know my hon. Friend’s constituency well, and of course I understand his concern. My right hon. Friend the Transport Secretary will be concerned to hear that my hon. Friend the Member for Dartford (Dr. Stoate) and my hon. Friend only heard about the matter from the press. I will take that up with the Secretary of State, as well my hon. Friend’s substantive point.

May we have a full-day debate on business attitudes towards the European Union? An ICM poll of 1,000 UK companies reported by Jeff Randall showed that 52 per cent. of chief executives think that the European Union is failing, while 60 per cent. think that the UK should have a free-trade area agreement with the European Union and nothing else, and 54 per cent. think that over-regulation of the EU outweighs any benefits resulting from the single market. Given that huge shift in businesses’ attitudes towards the European Union, and given the view that it is clearly failing British business, may we have a full-day debate so that we can explore how we would be better off out of the European Union?

I think that things became perfectly clear yesterday, when not a single Conservative MEP voted in favour of an amendment in the European Parliament to protect women in the European Union from violence and slavery. Instead, they joined forces with Jean-Marie Le Pen and the UK Independence party. The hon. Gentleman is sitting on the wrong Benches and is taking the wrong Whip. Unless it is now Conservative party policy to withdraw altogether from the European Union—and I see that the right hon. Member for North-West Hampshire (Sir George Young), who is a bit wiser than the hon. Gentleman, shakes his head—the hon. Gentleman ought to stick to the Opposition line.

On Saturday afternoon, I am holding a public meeting in my constituency for people affected by the liquidation of Farepak, which went into receivership a few weeks ago. It ran a Christmas saving scheme, so its liquidation effectively means that, for tens of thousands of hard-working families, Christmas is cancelled. I have invited the chief executive to attend—he certainly deserves this year’s “unacceptable face of capitalism” award. At that public meeting, is there any message of hope that I can give my constituents from the Government?

May I begin by expressing the whole House’s appreciation of my hon. Friend’s work in standing up for the interests of the employees of the company’s call centre in his constituency, as well as, much more widely, the interests of the thousands of people disadvantaged by the liquidation? As my hon. Friend says, they must be greatly worried about what gifts they can give their families at Christmas. The key message that my hon. Friend should give those who attend is how hard the Minister with responsibility for consumer issues and trade, my right hon. Friend the Member for Makerfield (Mr. McCartney), is working with the British Retail Consortium on a rescue package—it is not a compensation package—to ensure that at least some measure of the damage done to those customers is put right.

The point that I wish to raise will, I hope, be of concern to Mr. Speaker as well as every other Member of the House, and particularly the Leader of the House. The East Kent health authority has received a request from the BBC under the Freedom of Information Act 2000 for disclosure of all correspondence between Members of Parliament and the health authority. That is a fishing expedition, but we have now discovered that that correspondence is not covered by parliamentary privilege. It relates, of course, to specific and personal concerns expressed by individual constituents. Every Member of Parliament representing east Kent is most concerned. The reply has to be given by Monday, and the only way to delay it is for the Leader of the House immediately to instigate a review. That would give us time to look into the matter again.

The hon. Gentleman is right to raise the subject, and of course I will give him every assistance, because the matter touches on parliamentary privilege. I should just say that I was the Minister who had the unenviable task of taking the Freedom of Information Bill through its stages in the House, and we were asked by hon. Members on all sides to go further, rather than to provide what I thought were sensible protections, on requests for information, including requests from Parliament. However, the only people who supported those sensible restrictions were my hon. Friend the Member for Nuneaton (Mr. Olner), and myself, on the Treasury Bench. I think that many hon. Members on both sides of the House now rue the day when the House decided—in the end, we had to accept its wish—that extensive privilege should be given to inquiries, without properly balancing the rights of those who held the information. Of course I will follow the matter up, and I will do so in consultation with Mr. Speaker and the Clerk of the House.

If I had had the opportunity I would have given a warm welcome to the local government White Paper. However, given the interest both inside and outside the House in the future of local government, may I echo the request from my hon. Friend the Member for Bedford (Patrick Hall) for an early debate on the issue? We could contrast the Government’s policy of trusting local government with the policy of the Conservative Government of trying to take over local government. Will my right hon. Friend arrange for the Secretary of State for Communities and Local Government to make a statement confirming that she will introduce a properly joined-up policy on city regions with the Secretaries of State for Transport, and for Education and Skills, to provide city regions with a package of measures and powers? Hopefully, the White Paper will not be the last word on the subject.

I note what my hon. Friend said, and I understand the case that he made for city regions. However, it is a subject of intense debate among all parties represented in the House.

Haringey happily provides statutory support for a high number of asylum seekers, as do other local authorities. However, funding support—for example, for the placement of unaccompanied children—does not remotely meet the actual costs, so may we have a debate on the available Government grant for the provision of statutory services to asylum seekers?

I will pass on the hon. Lady’s remarks to my right hon. Friend the Home Secretary. She talks about her constituents in Haringey and concerns about asylum seekers, but it would have been extremely helpful if the Liberal Democrat party had supported our controls on asylum seekers on at least one occasion, rather than giving asylum seekers consistent encouragement.

Will my right hon. Friend find time to provide a debate on the treatment of my constituents, Mr. and Mrs. Webster, who have severe learning and physical difficulties, by G. E. Money, the US company which, in the last quarter, reported a profit of $5 million? The company is trying to evict my constituents from the home in which they have lived for more than 20 years, because they have fallen behind on a loan that they arranged in 1997—of only £10,000—with an astonishing interest rate of 21.9 per cent. G. E. Money has taken advantage of them, and it should act in accordance with its stated intention on its website of

“working with integrity and values”.

May we have a debate about social responsibility, and what integrity means to big business?

I will certainly do everything I can to facilitate an Adjournment or Westminster Hall debate on that important issue, and I will pass on my hon. Friend’s concerns, which are widely shared across the House, to the Secretary of State for Trade and Industry. My hon. Friend may wish to invite the company’s chief executive to the House to explain its policies, because G. E. Money claims to be a company of high status and high standing.

May we have an urgent debate on why seven beds have been cut from ward 4—the acute medicines ward—at the Princess Royal hospital in my constituency? Before the Leader of the House says something about human resources at the hospital, may I give him an up-to-date briefing? Some 200 nurses and doctors are due to be cut as well.

I am sure that the hon. Gentleman will find an opportunity to raise that matter on the Adjournment. However, as he has talked about changes in the budgets for the health trusts in his Shropshire constituency, he will wish to draw to public attention the huge increase in those budgets since 1997.

In the light of successive leaks over the past two weeks of the Opposition’s policies on taxation and now public sector vouchers, I am surprised that the Conservatives have not called for a debate on internet security. However, may I raise the question of the Leicestershire charity, Inter Care, which collects surplus medicines, screens them professionally to check that they are not out of date or damaged, and distributes them on request to rural villages, particularly in central Africa? The Environment Agency alleges that there is a technical breach of EU waste disposal regulations, and its threat to sue has resulted in Inter Care closing down. May we have a statement from a Minister from the Department for Environment, Food and Rural Affairs to explain why that ludicrous and over-zealous interpretation of EU waste regulations has denied vital medical supplies to 94 villages in seven African countries that are among the poorest on the planet? Is it not more important to address the health care needs of thousands of African villages than to feed the self-importance of the bloated ranks of EU bureaucrats?

I think that we would all agree with that, and I am sure that the whole House shares my hon. Friend’s concern. Oral questions to our right hon. Friend the Secretary of State for Environment, Food and Rural Affairs will take place next Thursday. In addition, I will certainly draw my right hon. Friend’s full attention to what my hon. Friend has said about the need for action.

Since last November, the Prime Minister has claimed that no one waits more than six months for an NHS operation. In fact, more than 6,000 people are waiting more than six months for an NHS operation, and that does not include Scotland or Wales. The Prime Minister appears to think that he is above the regulations that apply to other Ministers and Members. Will the Leader of the House investigate the matter, and find a mechanism so that those statements can be corrected in next week’s business?