Wednesday 29 November 2006
[Mr. Mike Weir in the Chair]
Lebanon and the Middle East
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Alan Campbell.]
I welcome you to the Chair, Mr. Weir. I want to draw attention to my entry in the Register of Members’ Interests and to thank the Council for the Advancement of Arab-British Understanding and Medical Aid for Palestinians for facilitating a recent visit to Lebanon. I also thank the Speaker’s Office and the House authorities for making special arrangements for this debate today. It comes at a critical time, but one or two of my colleagues arrived thinking that we were having a debate on Punjabis so perhaps the publicity for my debate was not ideal, which may be why there are fewer of us here than such an important debate merits at such an important time.
This is an opportunity to debate issues arising from the 33 or 34-day invasion of Lebanon when more than 1,000 people died, 4,500 were injured, around 1 million were displaced, an estimated £4 billion of damage was done and, as we saw on our visit, many villages in the south particularly were almost erased from the ground. Indeed, I understand that only 70 per cent. of the people have been able to return to their villages in the south, which illustrates the damage that was done during that time.
There was also political damage. Lebanon is now more polarised and trust between politicians has evaporated. We hear continually about the possibility of street protests and a ratcheting up of issues that most of us believe are not to the benefit of Lebanon. Recent events have compounded those difficulties. The assassination of Minister Gemayel and the suicide bomb incident at the Lebanese-Syrian border yesterday will do nothing to calm nerves.
My starting point is that strong support for the elected Government of Prime Minister Siniora must be our goal. However, in giving that support, we must recognise the instability in Lebanon, which relates partly to the history of the country and partly to its weak institutions. People often ask me how things happen in that country. The complexities of the confessional system, particularly the Taif agreement, are difficult to understand, especially when there is no estimate of the overall population of the different communities, but a suspicion that the Shi’a community may be increasing rapidly at the expense of the other four or five communities.
In that regard and after the events in the summer, Hezbollah has been agitating for an end to the Government’s pro-western stance, citing its under-representation. The national dialogue that was a feature in that country has ended recently and Ministers who support Hezbollah’s position have recently withdrawn from the Government. There are deep divisions between the 14 March pro-Government supporters and Hezbollah and its supporters. However, we found that attitudes were tempered by the country’s historic experience, particularly the spectre of civil war. On our visit we met the Prime Minister, the President and many political figures, and all expressed some confidence that dialogue would continue with no decline into the sort of activities that took place in the past.
There is also a history of foreign power intervention in Lebanon, most recently by Israel, but for many years Syria was directly involved in Lebanon. That feeds Lebanese suspicions. I was interested that a recent poll suggested that 84 per cent. of Lebanese people thought that Israel’s intervention was premeditated by Israel and the United States. There is a general lack of trust in the international community which is particularly important in relation to the United Nations forces that are based there. The international community has failed in the past because not only were previous forces of the United Nations Interim Force in Lebanon not seen to deliver what had been promised, but the reconstruction aid promised in 2000 was never delivered.
The Lebanese see their country as a surrogate arena for the wider conflicts in the region and that perception was reinforced by the conflict in July. Particularly poignant was the long delay before cessation of the violence and the fact that not everyone in the international community condemned the activities of the Israeli authorities and the disproportionate nature of the invasion.
However, something changed the whole dynamic in the region: during the conflict Hezbollah challenged the invincibility of the Israeli forces. I am not here to say whether that succeeded in reality, but the perception in Lebanon and the wider middle east is that there was some success and I believe that that changed the dynamic, not particularly in Lebanon, interestingly, where polarisation of the two sides did not lead to a significant increase in support for Hezbollah, but undoubtedly in the middle east generally.
Taking all that together, I want to consider today what has happened, what the international community has done during the past three months and what it needs to do to ensure and safeguard peace not only in Lebanon but in the wider middle east.
First, on security there has been some progress in the implementation of UN resolutions 1559 and 1701. I am pleased that there were very few breaches in the cessation of hostilities, but we were constantly asked why there was no ceasefire. It took some time, but Israeli troops have been withdrawn entirely and that must be very welcome. We saw the deployment of Lebanese troops in the border areas and when we travelled there we saw regular contingents, although there is still some concern about the loyalty and quality of some of those troops. Most importantly in the circumstances, UNIFIL is beginning to deploy several European countries and others have been involved in that role. However, when we asked about terms of engagement there still seemed to be confusion or lack of clarity that could prove to be critical in any future difficulties.
The problem of cluster bombs is very much to the fore in Lebanon. It is estimated that there are 1 million unexploded cluster bombs in the south of the country—90 per cent. of them were dropped within the last three days of the conflict—and we were told that because of that two people are killed every day while they are trying to gather in the harvest. My first question to the Minister is: what representations have been made to Israel to help that situation? We must clear those cluster weapons at the earliest opportunity and Israel has an important role to play in that.
There remain significant challenges for the international community to overcome in Lebanon. Although the air and sea blockade has been lifted, Lebanese sovereignty has not been respected, and Israeli air incursions continue regularly. They include mock raids, which are provocative and meant to terrorise the local population. When we were in the country, political leaders from all sides told us that the international community must do more. Have the Government protested publicly about the incursions? Will the Minister take up that issue with the Israeli authorities? There can be no military or security reason for the incursions, and taking up the issue would help enormously to reduce tension between the two countries.
There is little movement on border disputes. I am talking specifically about Shebaa farms. We understand that the United Nations has started mapping, but Prime Minister Olmert on behalf of the Israelis says that no way will they give back the Shebaa farms either to the United Nations or to anyone else. In reality, the farms will remain a flashpoint and a source of friction between the two countries.
In many ways, Hezbollah’s protection of the border, which it believes includes Shebaa farms, is its raison d’être. Again, have representations been made? It would seem eminently sensible, and the Lebanese told us that the land should be handed over to the United Nations. Before anything is done with it, the decision might perhaps be subject to final Israeli approval. Undoubtedly, that issue must be resolved at the earliest opportunity.
I agree with everything that my hon. Friend has said, and I endorse what he says about Shebaa farms. Is it not true that when Prime Minister Siniora was in the United Kingdom in May, before the Israeli incursions last summer, he emphasised that the single biggest thing that the international community could do to relieve tension in Lebanon and promote a peaceful future in the country was to secure movement on the Shebaa farms?
That is absolutely correct. The farms issue predates all recent issues, and it is undoubtedly a source of friction not only in Lebanon, but between those two countries. It seems impossible to imagine long-term peace not only between Lebanon and Israel, but in the wider region, without a resolution to the Shebaa farms issue. It would go a long way to building confidence between the two countries.
Does the hon. Gentleman also agree that a source of tension would be removed if UN resolutions were adhered to and Hezbollah released its Israeli prisoners, the taking of whom started the conflict? Hezbollah has admitted that it was a mistake to capture them in the first place.
I thank the hon. Gentleman for bringing up that point. I was just about to come to it, because it represents the other side of the border dispute issue. As he rightly says, originally, Israel invaded Lebanon on behalf of its two captured soldiers, and the issue remains unresolved. Almost everyone in Lebanon told us that there are secret ongoing negotiations to find a resolution, and that attempts were being made to exchange prisoners. Shebaa farms might form part of an overall agreement that resulted in the release of those prisoners. However, again, I urge the Minister to do whatever he can on behalf of the British Government to secure at the earliest possible opportunity a prisoner exchange or some other final settlement.
Smuggling of arms continues unabated, and we are told that Hezbollah rejects any calls to disarm. If we are to implement UN resolution 1701, we must address those issues. Sadly, inside Lebanon, they are contentious and a stalemate remains. It is therefore critical for the international community to play a more prominent role. Internationally, the key to both issues is dialogue with Syria—with Iran, too, but primarily, with Syria. I welcome the British Government’s overtures to the Syrians, and I hope that the Government draw Syria into a dialogue that leads to improvements in Lebanon and the implementation of resolution 1701.
I have been listening carefully to the hon. Gentleman’s interesting speech, and I apologise for arriving in the Chamber one minute late. On Syria, what is his view about the international tribunal and inquiry into the assassination of Rafik Hariri, which has been followed, as the hon. Gentleman briefly mentioned, by the assassination of Pierre Gemayel?
The inquiry is an important development, which I support 100 per cent. That view is not universally held in Lebanon, and it certainly is not in Syria. However, its consideration is important, and we must clear up those assassinations. The inquiry is an internationally approved mechanism for achieving clarity, and I want the Government to continue to support those moves.
I was with my hon. Friend in Lebanon a couple of weeks ago, and I am sure that he would wish to confirm to the Chamber that the Prime Minister’s initiative to engage with Syria and Iran was welcomed across the political spectrum. They all wish for a practical and concrete initiative that gets under way as soon as possible.
I was pleased that there seemed to be unanimity in Lebanon towards the Prime Minister’s approach. He has been—if I may put it as delicately as possible—a somewhat controversial character in Lebanon and in the region, and it was heartening to see his latest initiatives universally welcomed in that country.
Does not my hon. Friend agree that although discussions with Syria would be beneficial, there are serious concerns about that regime’s alleged involvement in assassinations? The sooner the allegations are cleared up the better, because if the Syrian Government were believed to be engaged in such activity, it would be an impediment to discussions for our Government.
That is why I welcome the UN tribunal. It is primarily intended to clear up the matter and provide evidence that will prove one way or another who was responsible, and whether they were sponsored by one or other states in the region. However, I am concerned by the assumptions that some countries’ major spokesmen have made in different forums. We must await the evidence before we accuse individuals or countries of guilt.
I do not want to conclude without discussing our fact-finding mission to determine the impact of the conflict and what has been done to address it. The good news is that immediately after the conflict, the emergency relief operation was successful. Medicines, food, water and temporary accommodation were all delivered. When we were there, food was available at affordable prices, and the emergency relief operation was running relatively smoothly. However, more than $900 million was promised at the Stockholm conference, and it is critical for the image and the reality of the international community that several things happen in Lebanon. First, those pledges must be met. They were not met in 2000, and they must be met now; otherwise, we will be totally undermined. Secondly, I mentioned bomb clearances, and I am talking primarily about cluster bombs, although there are also land mines. Until we clear those cluster bombs, we will not really get the reconstruction process under way.
Sadly, we found that the resources that had been promised for the south were not getting through. We were unable to find out exactly why that was; it is a source of great political controversy in the south, and accusations are regularly made. We understand the need for transparency and for the international community to be assured that money does not go into the pockets of local bigwigs, but that money needs to get through.
That is an important point, and I wonder whether my hon. Friend could just tease it out a little for us. He has a good instinct for these things and he is very perceptive on this issue, so could he give us some idea of why the money and resources are not getting through as they should?
First, I should affirm that we are talking about reconstruction, rather than the aid process. The answer depends on whom one speaks to. The local elected officials, who are mainly sympathetic to Hezbollah, blame the Government; they say that Prime Minister Siniora is responsible because he has delayed the money that is going to southern towns and villages. When we spoke to those in the Government, they said that there was an internal dispute between Hezbollah and Amal over who got the political glory for delivering the international resources. However, one thing is absolutely clear: the resources are not getting through. Although I understand that the international community wants to set up mechanisms to monitor the funding and introduce a transparent process, it is becoming critical that we deliver some of the funds and get the reconstruction process under way. Currently, the only group that is helping in the south is Hezbollah, which is using its funding from Iran, and that cannot be good in the longer term.
What next? What do we need to do? First, we need to kick-start the regional dialogue. There is no point trying solve Lebanon’s problems in Lebanon; they can be solved only through wider dialogue. I welcome the Prime Minister’s first visit to Lebanon, although it perhaps did not go according to plan. I hope that he will be able to return to the region before the end of the year, because we need a concerted effort to draw Syria and, I hope, Iran into a dialogue, although I understand from recent statements that the Americans continue to resist that. Without such a dialogue, we will be unable to find a way forward in dealing with the wider conflict in the region.
Secondly, I deprecate all the accusations of foreign plots to overthrow the Government of Lebanon and of Syrian complicity in assassinations, which are made without any evidence. We have set up the UN tribunal, so we should let it do its work. We should wait for some evidence before suggesting that the assassination of Minister Gemayel, which was carried out in a Christian area and in an entirely different fashion from previous assassinations, must somehow automatically be Syria’s responsibility. Let us wait and see. The process is sound, and we need to look to the UN tribunal to answer our questions.
Given that the assassination of Pierre Gemayel took place on the day on which the tribunal that will look into the assassination of Rafik Hariri was announced, does the hon. Gentleman agree that nothing should stand in the way either of the pursuit of justice on this issue or of bringing relief to Lebanon’s beleaguered political community?
Yes. It would not seem to be beyond the ability of the international community or the Lebanese authorities to ensure that the tribunal also looks into the assassination of Minister Gemayel. That would be welcome, including, I am sure, in Lebanon. However, we have to await the evidence. All that I am saying is that we have to deprecate those who jump the gun and who have made accusations without any evidence to back them up.
We await the recommendations of the Baker commission. I was watching television last night, and I gather that they will be out next week. I hope that the commission will, if nothing else, resolve the ambivalent attitude of the United States authorities to Syria and Iran. Yesterday, the President of the United States said that the Iranians were beyond the pale, but other spokesmen say different things. If it does nothing else, therefore, the Baker commission could at least resolve the question of whether there will be a dialogue. That would help enormously to resolve some of the problems that exist, particularly in relation to the arming of Hezbollah and the border incursions, which, if yesterday’s events involving a suicide bomber at the border are anything to go by, are still very much under way.
The good news is that Lebanon is beginning to get back on its feet, and the international community can do a great deal to re-establish a better image of itself in Lebanon by helping those involved in that process. However, we need to do that publicly, because the Lebanese are looking for our Government to put pressure on the other states in the region, to stand up for Lebanon and the Lebanese Government and to try to bring peace to their beleaguered country.
I congratulate the hon. Member for Edmonton (Mr. Love) on securing the debate. I am a co-chairman of CAABU along with the hon. Members for Erith and Thamesmead (John Austin) and for South-East Cornwall (Mr. Breed) and I am delighted that CAABU facilitated the visit of the hon. Member for Edmonton.
I went to Lebanon slightly earlier, with the Conservative Middle East Council, and I disagree with almost none of the analysis that the hon. Gentleman has presented. I have to say, however, that it was rather easier going there as a member of the Conservative Middle East Council than as a supporter of the Government. The hon. Gentleman is right to say that the Prime Minister has an enormous amount of ground to make up in Lebanon, where he is seen as significantly responsible for the extension of the Israeli assault on the country.
Like the hon. Gentleman, however, I see some grounds for hope, despite all the awful stories coming out of Lebanon and Gaza and despite the seeming paralysis of the Syrian position. My instinct tells me that the Prime Minister is now investing considerable effort in the issue. Following the disasters of the recent few months, the situation is now potentially much more fluid than it has been for some time, although it could, of course, get much worse, rather than better.
I invite the Minister to comment on two things. One, about which I was concerned during my visit to Lebanon, is the role of UNIFIL. It seems to have a chapter 6½ mandate for its deployment, and it is not clear quite how that will play out in its relations with Hezbollah. More serious, perhaps, is the prediction made to us by Robert Fisk—it comes with all the knowledge and authority that he brings to such matters, although he is not always right—that one potential threat to UNIFIL comes not from Hezbollah, but from Sunni militants. He said that we could expect UNIFIL to be attacked by Sunni militants in Lebanon. UNIFIL, I think, does not have a very clear mandate and that is a particular challenge for it; I should be grateful for the Minister’s view about how he sees things developing.
What is clear, however, is that both Hezbollah in Lebanon and Hamas in Palestine are now necessary players if we are to extricate ourselves in a positive fashion from the challenges faced by the region. Will the Minister ensure that channels are available and open to Hamas and Hezbollah to encourage them to take a statesmanlike and constructive role?
There are some good signs coming out of Gaza. The ceasefire in Gaza is very much to be welcomed. I particularly welcome the attitude of the Israeli Government in making certain allowance for the fact that there will be Palestinian rejectionists, determined, as Israeli rejectionists are, to avoid the possibility of a final settlement in the west bank and Gaza; those people exist in both communities. There appears to be some give by the Olmert Government, and a recognition of the reality that the Palestinian Authority are not in a position to bring all Palestinian violence against Israelis to a complete conclusion or full stop, with no violation of the ceasefire.
If the ceasefire is agreed by Hamas, Fatah and the other major elements of Palestinian representatives, it will not enjoy 100 per cent. support among the Palestinian population. We need to understand how radicalised that population has become. There will continue to be people around who take a fundamentalist position of total rejection of the existence of the state of Israel. When those people turn to violence, they will have to be policed by every responsible representative. The challenge is to police and control them; to expect 100 per cent. control is unreasonable and puts the whole peace process in the hands of rejectionists on both sides. That is not a position that Palestinian or Israeli representatives should be in if they are trying to pursue the interests of their entire communities.
I look forward to hearing the Minister’s comments on Syria. I see the Syrian Government, or regime, or however one wants to describe them, as stuck in a historical position as a nominally secular, socialist party—the Ba’ath party regime. They have faced down Islamic movements in the past 20 or 30 years, sometimes with extreme severity. There is potential, if we can find a way forward for the Government in Syria, for them to play a constructive role in finding a wider solution in the middle east and a way forward in the new politics of the middle east—perhaps as an ally—with liberal, secular, European values on the one hand, against fundamentalist Islamic values on the other. Somehow we need to find a way to extricate the Syrian Government from the necessity of using authoritarian measures to sustain themselves in office, and enable them to find a way of establishing institutions in Syria that will allow the people of Syria to become sovereign and make a choice about their future Governments.
That is extremely difficult, because in all likelihood if there were a popularly chosen Government in Syria, the first one would be formed by the Muslim Brotherhood and would be likely to be an Islamic Government. We must find a way to develop political processes—in Syria, in particular, but it applies to other Arab states as well—without arriving at the situation that came about in Iran, where there was an Islamic revolution that established a position in which people could not be candidates for office unless they supported an Islamic Government. That is not my idea of democracy. We must find a way to enable Syria to have institutions that will allow a change of Government to happen without its being the last election that ever takes place there.
Not at the moment. I think that the Syrian Government feel that they are fixed in position; they see the potential for the entire thing to collapse if they begin to release the controls that have kept them in office, under the President and his father. Of course, there are people in the regime, as there are in many other Governments in the region, including the state of Israel, whose actions in trying to sustain the interests of their Governments do not bear very much examination according to the standards by which we should expect our Government to proceed, and by which we hold them to account through the courts. That is part of the challenge facing us—to extract people from positions in which their record of behaviour does not bear examination. We need a form of truth and reconciliation process for all the different communities; there are many different communities in Lebanon, for example, with a record of the most brutal and violent internecine conflict. Looking back over a century, the record of those communities’ interaction is a tragic and ugly story.
Any attempt to use British influence to make progress means talking to all representative groups that have widespread support in their communities, even if we do not like their present politics and methods. The only way we can begin to pull standards forward is to engage with them. My instinct is that that is the position of the Prime Minister now, and it is a shame that it is happening at the end of his term of office, and that he is focusing on the issue when he is politically at his weakest. Indeed, that rather mirrors what seems to happen with American Administrations; Presidents at the end of their time in office always focus on the middle east as their authority and their ability to deliver wane.
I believe that there are signs of hope, but hope will come only if we can engage with elements that we see at the moment as radical and rejectionist. Where they enjoy significant support in their populations, we need to guide, coax and encourage them into a much more constructive path. I hope that our Government can play, and are playing, a role in that.
I congratulate my hon. Friend the Member for Edmonton (Mr. Love) on securing the debate. He and I, with my hon. Friends the Members for Dewsbury (Mr. Malik) and for Bristol, East (Kerry McCarthy) and the hon. Member for South-East Cornwall (Mr. Breed) were in the delegation in Lebanon a couple of weeks ago. As chairman of the all-party group on Lebanon, my hon. Friend the Member for Edmonton was the de facto leader of the group, and he led us with good spirits through 15-hour days and the Beirut traffic, keeping our spirits up as far as was possible in the circumstances. I am also pleased to welcome my hon. Friend the Minister for the Middle East. Three times in the past 12 months I have come back from areas of conflict, and three times I have debated with him in this Chamber. It is a good relationship so far.
Like my hon. Friend the Member for Edmonton, I was profoundly moved and distressed by the images that we saw in Beirut and the south of Lebanon. There is no doubt that the killing of the eight Israeli soldiers and the kidnapping of two on the Lebanese border was wholly unnecessary and wrong, and the kidnapping should be remedied as soon as possible. The same applies to what is happening in Gaza as well.
However, the way in which the Israelis responded to that situation, with the desolation and damage that we saw, was wholly disproportionate. We went to the village of Ait al-Chab, where virtually every house had been destroyed. According to Christian Aid, 54,000 homes were damaged or destroyed overall by Israeli attacks over 33 days, with 140 schools damaged. Why target schools? We visited a school for children with learning disabilities that was on a hill above the village. It had been bombed and destroyed, so 93 children from 23 different villages were being educated elsewhere, in just one room. We saw bridges that had been clinically taken out. Every single bridge on the motorway between Beirut and the south of the country had been taken out with precision bombing. We also saw places in Beirut where clinical attacks had removed blocks of flats with such precision as to leave scars like missing teeth in the fabric of the city.
As well as that, 1.2 million cluster bombs were used, as my hon. Friend said. We saw several of them first hand in olive groves, which has made it impossible for the harvest to be taken in this year and for people to get their businesses and livelihoods back together. Every day since the war ended, two people—mostly children—have died because of unexploded bombs. Those bombs have a 40 per cent. failure rate, which makes it inevitable that they will be dangerous and life threatening for a long time to come. Indeed, we were told that some of those munitions were already 30 years old. They were probably ex-Vietnam stock, and were rusted up and looked pretty lethal. The impact on us of what we saw will probably last a lifetime.
Perhaps the most moving moment for me was when my hon. Friend the Member for Dewsbury and I visited the site at Qana where a block of flats had, I think, been taken out on the last day of the war. Some 29 people were killed, 17 of whom were children. Completely fortuitously and unplanned, we met an elderly man who had lost his brother, his son and his daughter-in-law, and three grandsons in the destruction of those flats. As far as we knew, there was no military reason for taking out that building. It was miles from anywhere and was not even particularly close to the border. I do not think that a satisfactory explanation for such wanton and wholly disproportionate destruction can ever be given.
The good news is that there has been a cessation of hostilities since the middle of August—people were anxious that we regarded it as a cessation of hostilities, not as a ceasefire. As my hon. Friend the Member for Edmonton said, there are still factors that bring into question whether a real ceasefire and withdrawal of forces is in operation. Those factors include the Shebaa farms and the over-flying—that is, the threatening use—of military aircraft, not to drop bombs, but simply to remind people of their presence and the nearby Israeli border. All those issues are yet to be resolved.
I agree with the hon. Member for Reigate (Mr. Blunt) on many things to do with the middle east. However, we had to wait 33 days for a ceasefire and, although I was one of those who called for early words from all sorts of sources to try to resolve the conflict, if words had been sufficient, I am sure that they would have been used. But words were never going to be sufficient, and it was always going to be more important to have a sustainable cessation of hostilities. That sustainability was always going to take longer to achieve than simply waving a magic wand. Therefore, although it is wholly regrettable that the war continued for 33 days, and although the Israelis could have stopped it at any time—having got compensation, as they saw it, for the attacks on their land—the fact that British people were at the United Nations, negotiating, talking and relating to other players in the field, and the fact that what has happened subsequently has proved to be 99.99 per cent. sustainable meant that it was worth going that extra mile and waiting those extra few days. Some of the politicians whom we met in Lebanon accepted that. They accepted that a worse solution would have been a ceasefire that broke down every few days.
There are legitimate political arguments taking place in Lebanon. Although I am no expert on it, Lebanon has an interesting constitution, because it maintains that there should be statutory representation at the highest level for the Christian, Sunni and Shi’ite communities. That is under attack now, partly because of the political ascendancy of Hezbollah, partly because of a strong feeling that the one-to-one-to-one relationship in the constitution is 50 years out of date, and partly because of controversies around issues such as the United Nations investigation into the Hariri assassination. Although all parties superficially supported the UN investigation, it is clear that the pro-Syrian ones perhaps did not have their hearts in it. Indeed, the day before we arrived, five members of the Lebanese Cabinet walked out, bringing about a political crisis that was being dealt with as we were there.
There have been other assassinations besides that of Hariri. We met the father of Mr. Tueni, who was killed a year ago, and there has been the killing of Gemayel since then. There has also been a rearrangement of some of the political alliances in Lebanon, with General Aoun’s party occupying a different position on the political spectrum than in the past.
There are 128 members of the Lebanese Parliament, of whom 14 are Hezbollah’s elected representatives. The view that Hezbollah politicians put forward within the democratic context must be acknowledged as a genuinely legitimate part of the Lebanese political spectrum. We met Hezbollah politicians who were committed to democracy and the parliamentary route, but who were nevertheless using the present lack of clarity in Lebanese politics precipitated by the war to push home what they saw as their political ascendancy. That has been caused by the feeling, particularly in the south of the country, that Hezbollah’s military wing successfully resisted the Israeli incursion—that is not my interpretation, but my feeling of what people were thinking in that part of the country. When an organisation such as Hezbollah is not only seen to be actively defending people’s interests and delivering aid to them—by providing cash directly to homeless families, for example—but seen to be a legitimate political force, that organisation will be in the ascendancy.
Putting the war aside for a moment, I am sure that the reason for Hezbollah’s ascendancy is exactly the reason Hamas was so successful in Palestine earlier in the year, as the hon. Member for Reigate said. The reason is to do with the effects on the economy, and therefore the self-confidence of the countries that are directly affected by the way in which Israel has undermined the operation of their economies. The Lebanese economy in the south of the country is non-existent in exactly the same way as the economy of the west bank is made non-functional by the network of roads, settlements, roadblocks and occupation there.
Lebanon is at a historic crossroads, as it has always been in 1,000 years of history. Its democratic tradition is under threat—it is certainly wobbly—and we need to support its democratic institutions such as its Parliament. We need to support its President, its Prime Minister and all those committed to the democratic way. We must ensure that they are not undermined by the threat of war and its effect on the economy, society and civilisation of Lebanon.
At present in Lebanon, there are 1.2 million unexploded cluster bombs, which threaten people’s lives daily, and 500,000 land mines, some of which have been there for more than 20 years. Such a country cannot function as we would hope and expect.
My hon. Friend rightly said that two or three children a day were dying as a result of cluster bombs. Does he agree that it would be helpful if the Israelis gave the grid maps for those bombs? That could save lives; the fact that the Israelis are not yet doing that is nothing short of shameful.
There are many ways in which Israel could help to correct the problems caused by the deliberate and direct military actions taken earlier this year, and it would be in its best political interest to be seen to be doing so. I am not sure how useful some of the information that my hon. Friend mentioned would be. I believe that some of it is available. When one cluster bomb dropped from an aeroplane explodes in the air, the 644 bomblets that come out can cover an area of 200 sq m. That means that specific grid references, although I am sure that they exist, are not necessarily that helpful.
My hon. Friend may recollect that the Mines Advisory Group, which works in Lebanon to deal with cluster bombs and wider mines issues, specifically said that the grids would help it do its very difficult job. The group anticipates that it would take 60 weeks. Given the feeling of the group, with its expertise, and the fact that up to three children a day are dying, our Government should push to save some of the lives that are being lost unnecessarily.
Everything that we can do on a diplomatic front, including trying to obtain such information, should be done. I am sure that my colleagues wish to pay tribute to the people whom we met from the British-led Mines Advisory Group for their incredible bravery and commitment. Indeed, I understand that since we came back, a member of the mines clearance teams has, for the first time, suffered a serious injury from a cluster bomb.
My hon. Friend rather anticipated the end of my speech. I simply reiterate that Lebanon has real issues. We need to play our part in addressing them and do what we can to address the whole middle east situation. I welcome the Prime Minister’s commitment to involving Syria and Iran as we look for that regional solution. I am sure that Lebanon and the democratic forces there would want to participate in that—for the future not only of Lebanon, but of the whole middle east.
Thank you for that reminder, Mr. Weir. I am conscious of that fact and shall keep to the brief few minutes available.
It is a pleasure to rejoin this debate, and I look forward to the contribution from the Front Bench. It is also a pleasure to follow my hon. Friend the Member for High Peak (Tom Levitt). It is right that we should debate the use of cluster bombs. I hope that he accepts that the issue is as hotly debated in Israel as elsewhere; in fact, there is a parliamentary inquiry into the conduct of the conflict in the summer, and we await the outcome of that. The fact that a democracy in the middle east can have such a public, open inquiry when the issues surrounding it are full of such anguish, which has been described this morning, is testament to the quality of that democracy, which we should and must support.
The assassination of Pierre Gemayel on 21 November, only a week ago, has exacerbated the crisis in the region. It followed six resignations from the Lebanese Cabinet last month. If only one more Cabinet member goes, the Government will collapse and a new election will be forced.
I compliment my hon. Friend the Member for Edmonton (Mr. Love) on the timeliness of his debate. He urged us not to jump to conclusions about who was involved in the assassination. Many in Lebanon believe that Syria was involved, although obviously it has denied all involvement. However, it is important to remember that it was the fifth political assassination since the killing of Prime Minister Hariri in February 2005.
The House of Commons Library, helpful as always, has provided a briefing note, which points out with historical accuracy that it was suspicion of Syrian involvement in the assassination of Prime Minister Hariri that increased pressure on Syria and forced it to withdraw from the Lebanon, leading to the recent period, in the months up to the summer, when we were able to have a degree of optimism for the future of Lebanon as tourism and the economy improved. However, we could be genuinely optimistic about the situation only if we ignored two things: first, the stockpiling of weapons by Hezbollah in the south of Lebanon and, secondly, the assassinations of politicians in the country.
The political unrest in the country follows Hezbollah’s demands, which we have been considering this morning, for a third of the Cabinet to be made up of either Hezbollah or Shi’a affiliates, which would give them the power of veto in the Government. The Hezbollah leader, Hassan Nasrallah, has threatened mass protests and efforts to topple the Government if his demands are not met.
Hezbollah continues to gain strength and rearm in southern Lebanon. The UNFIL commander, General Alain Pellegrini, has admitted to being unable to stop Hezbollah smuggling arms from Iran and Syria. UN resolution 1701 demands the disarmament of Hezbollah in southern Lebanon, but the new powers mandated to UNFIL fall short of allowing it to use force to obstruct rearmament. We have the prospect, the potential danger, of conflict between the Israeli defence forces and the international forces of UNFIL if the Israelis attempt to secure their border. Recently, an overflying Israeli intelligence plane caused real concern and the French issued a warning.
My hon. Friend the Member for Edmonton is right: we should not conclude who was involved in the most recent event in Lebanon. However, there are certain truths that we can accept. We know that Hezbollah is funded by and its militia is trained and armed by Iran. If we conclude from the situation in Lebanon that the crisis has been brought about by foreign intervention—the presence of Israeli forces in the past and Syrian involvement—we must equally consider the involvement of Iran, how it is seeking to manipulate the situation and how it is using Hezbollah to attack the northern border of Israel.
I join my hon. Friends in welcoming the Prime Minister’s initiative. I agree that it is vital that we seek to build alliances across what are at present deep and critical divides between countries in the region, and anything that our Government can do to support the initiative is welcome. However, I say to my hon. Friend the Minister that the murderers of Lebanese politicians must be brought to account. All of us who love democracy must not stand by when democratically elected representatives in another country are assassinated.
I pay tribute to the hon. Member for Edmonton (Mr. Love) for securing this debate. I share some history with him. In the 1997 general election, I was an unsuccessful candidate in Enfield, Southgate, a constituency that attracted a great deal of media attention. In the next-door constituency, the hon. Gentleman overturned the majority of his predecessor and was victorious, and I have followed his career closely ever since.
I am delighted that the Minister is in his place. In my experience, he always takes an interest in the debates and in his response tries to engage constructively with members of all parties. I shall speak briefly about the conflict in the summer, which has already been discussed by many hon. Members, and then make three points about the situation in Lebanon in the wake of it.
On behalf of my party, I am unequivocal in my condemnation of the actions of Hezbollah in killing Israeli soldiers in advance of the conflict. As was mentioned earlier, Hezbollah also kidnapped soldiers. It is imperative that it releases them and recognises that that is a grossly inappropriate way to behave.
I also take the view that it was wrong for Hezbollah to launch rocket attacks on Israeli citizens from undercover positions within areas that are occupied by Lebanese civilians. That point has been made in this and previous debates by the right hon. Member for Liverpool, Wavertree (Jane Kennedy). Hezbollah’s approach is particularly cynical, and we ought to recognise it as wholly wrong.
Having said all that, and recognising that, in these debates, there are always caveats—I do not take the view that an entirely black-and-white analysis can be made of the situation in the middle east—I share the view represented by the word “disproportionate”, which is widely used to describe the Israeli response in the summer. Figures have been given in this and previous debates for the number of people who were killed and displaced, but it is particularly telling that so much damage was done by Israeli armed forces to the civilian infrastructure of Lebanon, which, inevitably, will take time to rebuild. The economic ambitions of the Lebanese people have been set back. In many cases—for example, bridges—it is obvious that major construction will be required. Such damage is an impediment to Lebanon’s progressing in the way we would all wish it to.
The use of cluster bombs was unnecessary in the circumstances. It has been mentioned that 90 per cent. of them were used in the last few days of the conflict. My party said recently that cluster bombs should not be used in any conflicts in future. The principle is an extension of the ban on land mines, as, obviously, the effect of cluster bombs on individuals is often as devastating.
I said that I would mention three features of the current situation in Lebanon, and I hope that the Minister will respond to them. First, I hope and believe that the British Government will continue robustly to support democracy, order, the rule of law and due process in Lebanon. That is an important principle for us, and it is an important rule of thumb for anybody who wants to make an objective assessment of how Lebanon can best progress. These issues are not always quite as simple and clear-cut as they may appear on first inspection. I believe that President Bush is meeting today with the King of Jordan, who is a politician for whom I have huge admiration, although he does not occupy his position as the result of any democratic process. In fact, strictly speaking, he is not even a clear-cut hereditary head of state. As I understand it, the King of Jordan is able to appoint or nominate his successor from among his offspring—it does not necessarily have to be the oldest son or child. None the less, he is an admirable figure in many ways. He has a constructive attitude towards engaging with countries in the middle east and also in the western world, although, as I said, he is not an elected politician. The basic principles of democracy that we wish to promote in Lebanon and the civic society that goes with them would be beneficial for the country.
My second point touches on one of the many tragedies of the conflict in the summer. This country and this Government must do everything possible to support ongoing rebuilding, economic restructuring and increased prosperity in Lebanon, as economic prosperity is always extremely helpful in underpinning any civic society. Lebanon had many bleak years when it fell behind where it might otherwise have been. Progress certainly was and is being made, and we do not wish it to be retarded by conflict.
I am aware that there is a great deal of claim and counter-claim in this area, but let me put my third point in these terms: it is not wise or appropriate for the Syrians to meddle in the affairs of the Lebanese. Any such involvement would represent a serious breach of the obligations of Security Council resolution 1701, which requires everyone to respect the territorial integrity and political independence of Lebanon. I hope that all of Lebanon’s neighbours will recognise the spirit of the resolution as well as the literal application.
The whole matter must be seen in the wider context of the middle east. I echo the point made by the hon. Member for Reigate (Mr. Blunt) that the rejectionists on all sides should not, in effect, have a veto on the process. Their views should not be taken to represent mainstream opinion on any side. It is interesting to note that the United States Administration have embarked on some fresh thinking about the middle east. I hope that support for the process in Lebanon and for a new chapter in middle eastern affairs will be advanced by fresh thinking in Washington and by the actions of the British Government in London.
I congratulate the hon. Member for Edmonton (Mr. Love) and other colleagues who participated in the debate. As the hon. Member for Taunton (Mr. Browne) pointed out, it went from a narrow perspective on Lebanon to consider the whole of the middle east.
May I begin by putting down a marker? I shall try to do it in the most non-partisan way, as I believe that the Minister may well agree, although he cannot say so. In the debate on the Queen’s Speech last week, the Foreign Secretary said that there had been many debates over the past year on the middle east. I want to put it on record that the overwhelming majority of debates held on the Floor of the House and in Westminster Hall, almost without exception, have come about as a consequence of hon. Members asking for them or Opposition parties calling for them and giving up their time, or because the Government were forced to come to the House to answer an urgent question. Given the seriousness of the situation in the middle east—I shall move on to that in a second—it is in the Government’s interest to table a debate in their time, without necessarily having a vote, on Government strategy on the middle east across the board.
My former pupil, King Abdullah of Jordan—it is not possible to have a better line than that—is among the many officer cadets who went through my hands. As I have said before, I have at one extreme one who is serving Her Majesty in jail, and at least one who has become a king. King Abdullah––I agree with the hon. Member for Taunton that he is a very shrewd man—said in a speech the other day that he feared that within the next few months we would see three civil wars in the middle east: one in Palestine, one in Lebanon and one in Iraq. I think that all hon. Members are only too conscious that there is a danger that a series of conflicts are about to morph into one major conflict that could break out in the middle east. The seriousness of the situation should not be underestimated and the challenges are enormous.
This is not necessarily an accurate analogy, but at times I despair that Lebanon, which has so much going for it in many respects—natural resources, an innovative population, a sophisticated society and, at its best, a society that is pluralistic, includes many ethnic groups and religions and has shown in periods of its history that it can work—is in danger of turning itself into the Weimar republic of the middle east, if it is not already in that position. I use that example because it shows a democracy that is slowly being destroyed by political groupings that participate in that democracy but have paramilitary forces that resort to violence and assassination and will use parliamentary democracy ultimately to destroy that state.
We know what we are talking about. It is the fear of any secular Muslim in the middle east and elsewhere; there is an undoubted aim to establish an Islamic fundamentalist state in Lebanon, and not only in Lebanon but in Iraq, Egypt and elsewhere. That is not in the interests not only of the millions of Arabs who are domiciled in the middle east but of those of the Islamic faith elsewhere in the world. That is the challenge for us all. I do not have an easy answer for how to cope with political parties that participate in the parliamentary process but, at the same time, have armed militias and are prepared to assassinate. That will be the challenge not only for our Government but for the American Government as well. We should try to work out what we should not do as much as what we should.
I want, too, to emphasise the fact that there are no quick fixes. I do not think that any hon. Members have suggested that. The idea that the President of the United States of America, our Prime Minister and others could have come up with a quick fix this summer is from cloud cuckoo land. Also from cloud cuckoo land is the idea that within the next couple of months, as we wait for the Iraq study group to report, it will somehow come up with a single brilliant answer that will resolve the situation in Iraq. Frankly, when this morning’s sitting is over, I would be happy to buy all my colleagues who are in the Chamber a cup of coffee and give them all half an hour and a sheet of paper to come up with some suggestions, and they will more or less mirror whatever the Iraq study group comes up with. I do not say that in a light-hearted way, but we end up building false hope. We are going to be in for the long haul.
In terms of the debate that we have had so far, I agree that much of the problem in Lebanon has been caused by external forces, whether they are Israel, Syria, Iranian support for Hezbollah or the failures of the so-called great powers in one way or another. However, in many respects, part of the solution is in the hands of the people living in Lebanon. There is always the danger when one goes to the middle east and talks to the people that the excuse is that it is somebody else’s fault. That is partly true, and by expecting the international community and individual countries to bail them out they may put off the evil day, but much of the solution is in their hands.
I believe that what our Government do and can do over the next few months will be important. There will be no quick fixes. I think that the Prime Minister is genuine in what he wants to do in the middle east. Like my hon. Friend the Member for Reigate (Mr. Blunt), I suspect, sadly, that, because the Prime Minister has announced that he is going, with the best will in the world his influence will obviously be less than we would hope for a British Prime Minister. The one thought that allows me some optimism—sadly we are about to go through a period of great change—is that realism has broken out in Washington and we are about to see a reversion to a more sophisticated approach not only to the middle east but to the kinds of things that the US Government might do to use something other than fairly blunt instruments.
It is easy to load a lot of the blame for the situation in Lebanon and the Palestinian Authority on the Israeli Government. There is no doubt that the Israeli Government have made serious errors, but I want to conclude by saying two things about Israel. First, despite its many faults, it is a democracy in an area where there are few democracies. It is possible to criticise the Israeli Government and go into opposition. Secondly, it would be unwise to underestimate the ability of the Israeli Government to respond after a recent operational defeat, which Lebanon undoubtedly was. We need Israel to participate fully in any wider middle east peace settlement. Without the Israelis, there will be no peace.
First, I congratulate my hon. Friend the Member for Edmonton (Mr. Love) on giving us the opportunity to discuss this vital and timely subject. I am sure that everybody in the Chamber will agree that my hon. Friend has painted for us a vivid picture of a country that has experienced several recent catastrophes and is staring another right in the eye. His report to this House on his recent visit and the way in which he shared with us his analysis of the continuing political crisis in Lebanon is, I am sure, something that we all value. We value, too, the insights given to us this morning by my hon. Friend the Member for High Peak (Tom Levitt), my right hon. Friend the Member for Liverpool, Wavertree (Jane Kennedy), who knows the territory well, and the hon. Member for Reigate (Mr. Blunt), who gave us the benefit of his insight into the situation and, I was glad to hear, the prospects for the future in Syria. I always assume that an hour and a half will give us lots of time, but my hon. Friends the Members for Birmingham, Northfield (Richard Burden) and for Dewsbury (Mr. Malik) and the hon. Member for Hertsmere (Mr. Clappison), who always brings refreshing insight to these debates, have not had an opportunity to contribute. I hope that they will in the future.
The hon. Member for Mid-Norfolk (Mr. Simpson) gave us the benefit of his insights, and I think that they are wise. I enjoyed his speech very much, although some of it was chilling. His analogy with Weimar Germany is one that we have to think hard about. It is one of those conundrums right at the heart of the principle of democracy that we believe in. I know that he has taken part in discussions in Egypt and many other countries where people have said, “We are in favour of democracy, but what about when the Muslim brotherhood wins its majority?” In Algeria, there were 160,000 deaths during the 1990s as a consequence of one country trying to come to terms with that conundrum.
The international community’s response to the humanitarian crisis in the wake of the July 2006 conflict was rapid, and complete disaster on this occasion was probably averted. But, as we have heard from hon. Members, there were many thousands of personal and communal disasters. Life is still extremely hard for many Lebanese who have been left homeless by the destruction. Reconstruction and economic recovery is a pressing need and the international community’s response to that has been impressive, with pledges from donors totalling $940 million—far exceeding the Government of Lebanon’s initial request for $530 million. As we have heard from my hon. Friend the Member for Edmonton, that is far short of the $4 billion or $5 billion that is probably required to rebuild Lebanon.
The Lebanese will not relish it, but as a measure of the catastrophe that has hit them, statistics show that per capita it is now the most subsidised place on the face of the earth and that it has overtaken Palestine. It says something about the nature of conflicts in the middle east that, despite the huge amount of money pouring in, the catastrophe continues. The need for international involvement also continues and one hopes that, as the hon. Gentleman told us, the Lebanese will be able to take care of their own business.
As my right hon. Friend the Member for Liverpool, Wavertree said, all too often the sovereign territory of Lebanon has been used by others to fight wars by proxy. She made a plea, as did the hon. Gentleman, for people to stop meddling in the affairs of Lebanon, whether that is an appalling sequence of political assassinations or an attempt by some countries, and the blame is shared by all sides, to try to cling to power and influence.
My right hon. Friend the Secretary of State for International Development attended the international conference in Stockholm on 31 August to consider Lebanon's early recovery plan. A further conference is planned in Paris in January. We welcome the Lebanese Government’s initiative in seeking to maintain momentum on Lebanon's longer-term needs, and also welcome President Chirac’s willingness to host that important event.
For reconstruction and economic recovery to proceed effectively, stability is the key requirement. The United Nations Security Council resolution 1701 of 11 August, which established the ceasefire between Israel and Hezbollah, provides a sound basis for stability. I thought the description provided by the hon. Member for Reigate of the mandate as chapter 6½ was a very good one—I could not think of a better description myself.
The ceasefire, at least until this morning, continues to hold, apart from an occupation in part of the Lebanese town of Ghajar through which the blue line runs. As my hon. Friend said, Israeli forces have withdrawn from Lebanon and the Lebanese armed forces are deployed across the country—including the south where they have not ventured for many years. The expansion of UNIFIL has proceeded well and nearly 10,000 military personnel are now deployed on land and sea in support of the Lebanese authorities and Security Council resolution 1701. I am sure that hon. Members will have been as shocked as I was to hear the concerns expressed by my hon. Friend that the money and resources set aside for reconstruction may not have been deployed properly in the south. That is an extremely important observation and is something I will undertake to gather more intelligence on so that I can tell my hon. Friend what we know.
As well as paying our full share of the United Nations operation, the UK committed HMS York in support of initial efforts to secure the maritime borders. HMS York has been re-deployed as the full UN maritime operation, led by Germany, and that came into effect in mid-October. The Lebanese security sector—the armed forces and internal agencies—needs assistance to exert the Government's authority effectively. The UK has been playing its part here too. We have allocated £2.5 million to support the security sector and the provision of vehicles to the armed forces to assist with mobility is under way. We are discussing with the Lebanese authorities what training needs we might be able to meet, and we are also working closely with other donors to try to ensure a co-ordinated and effective response to Lebanese needs.
There is never enough time in these debates to cover everything, but before the Minister finishes, could he perhaps address the point that my hon. Friend the Member for Edmonton (Mr. Love) made about the Shebaa farms? Given the centrality of that issue to a long-term settlement in that part of the world, what are the Government doing to move that issue forward?
I am very glad to respond to that because when I was in Beirut in the middle of the bombardment Prime Minister Siniora stressed to me that the Shebaa farms were, in many ways, the most potent motivation expressed by Hezbollah. He said, “Sort that out and a big weapon will be taken away from them.” I do not know if that is true or the effect that Shebaa farms has on Hezbollah. As the hon. Member for Mid-Norfolk hinted, Hezbollah has a much wider agenda than that, but the problem of the Shebaa farms does not help and there is no question about that. We have pressed the United Nations to ensure that the right resources are allocated to delineate those borders properly in order to prevent an argument between Syria and Lebanon about how the Shebaa farms situation should be resolved.
Clearly the issue of Shebaa farms must be resolved, but in terms of Hezbollah’s armament and continued rearmament, surely it was originally the presence of Israeli troops that was the justification for arming and operating as a militia in the south of Lebanon; now its reason is the Shebaa farms. It could be considered that Hezbollah is looking for more and more reasons to retain its organisation and arms in the south of Lebanon.
I have no doubt whatsoever that there is a much bigger agenda and that Hezbollah will find many reasons to maintain its position in Lebanon. That is a poisonous process because, as long as Hezbollah acts as an alternative Government to the democratically elected Government in Beirut, there will be killing and illegal acts. We cannot accept that—it would be tantamount to us admitting that the IRA ran Northern Ireland and in doing so had a profound effect on the governance of the UK as a whole, which we cannot admit. There may be all kinds of rationalisations and some apologists will say, “Well Hezbollah is defending a community.” The defence of the community in Lebanon, no matter where it is, must be the responsibility of the democratically elected Government of the Lebanon: the Lebanese Government believe that and we believe that. We should defend that position and have no brook with the notion that a terrorist organisation such as Hezbollah has some kind of validity: it has no validity. It may be an expression of popular opinion in the south of Lebanon; so be it. Many terrorist organisations have had those kinds of rationales and support, but that does not mean that we, the international community, should for one moment support that; we cannot support it.
Government Relations with Russia
It is a delight to be able to lead a debate on Government relations with Russia, although I note that this is the first time in many years that there has been such a debate in the House and half an hour is probably far too short a time to be able to deal with all the issues that we should properly consider. It might be opportune in the near future to have a longer debate, perhaps for one and a half hours.
Despite the present circumstances, the UK has had extremely strong relations with Russia, although they have varied in their intensity, over the centuries. It is 453 years since Richard Chancellor first sought the northern sea route to Cathay and found himself at the court of Ivan the Terrible, which led to the first trade links being established with Russia, and Ivan the Terrible and Elizabeth I, who were both nervous about whether they might be removed by their peoples, striking a mutual asylum deal. Britain was the first country, oddly, to recognise the Soviet Union in 1924, when there was briefly a Labour Government.
More recently, the Queen made a state visit to Russia in 1994, which was the first time that a British monarch visited Russia. President Putin made a state visit here in the summer of 2003, which was the first such visit by a Russian leader since 1874. On top of that, he visited the UK last year, during our presidency of the European Union.
We also have very strong trading links with the Russian Federation. Ever since the Muscovy Company was founded in 1555, the UK has had that strong relationship, so much so that last year UK exports to Russia amounted to £1.874 billion and UK imports from Russia were worth about one third of that.
The Russian Federation is also a very important ally in many different debates that we have around the world. The previous discussion in Westminster Hall was on the Lebanon and the middle east peace process. Russia is one member of the Quartet and has to play an important part in any negotiations that we have through the United Nations Security Council. It is also an important player when it comes to trying to tackle organised crime around the world.
However, there are many areas in which Britain should have profound concerns about its relationship with the Russian Federation. I could raise hundreds of issues in this short debate. I could raise Russia’s tacit support for Iran and North Korea when it comes to their nuclear ambitions. I could raise the desperate need for police reform in Russia. In the last survey of Russians, 71 per cent. said that they had no trust whatever in the police; only 4 per cent. said that they had trust in the police. Trust in the police force is a cornerstone of a democracy and the rule of law. If there is not rapid police reform in Russia, we will still not see the significant changes in the establishment of the rule of law in Russia that are needed.
I could raise issues to do with penal reform. Many prisons in Russia belong to the dark ages, not to the 21st century. HIV and AIDS incidence in Russian prisons has quadrupled in the past three years. I could raise the matter of lesbian and gay rights. Earlier this year, the mayor of Moscow, Yuri Luzhkov, banned the gay pride march, and the Russian Federation in effect backed him up by refusing to allow visas for a large number of people, including a British Member of the European Parliament, who wanted to travel to Russia to support that event.
I could also raise the matter of freedom of religion. We like to think that, since the Soviet era, all Russians have the freedom to exercise their religion. That is not true. The Jehovah’s Witnesses—I do not hold a light for them particularly; none the less, I believe they should have the freedom to exercise their religion—are banned in Moscow, although not in the rest of the Russian Federation, and are seeking to overturn that decision in the courts.
However, I do not want to raise those issues in large measure; I want to focus on a few other issues. The first is the number of human rights abuses that are committed regularly across the whole of the Russian Federation. It is not just in the north Caucasus that human rights abuses have been documented. Only last week, Amnesty International produced its latest report on arbitrary detention, torture and conditions of detention across the Russian Federation. It says:
“Beatings, electroshocks and even a ‘rape-room’ equipped with metal table and wrist restraints have been reported to Amnesty International, as means to obtain forced ‘confessions’.”
In 2005, Russian non-governmental organisations documented more than 100 cases, backed up by medical evidence, across 11 regions in the country, not including the north Caucasus. The Foreign and Commonwealth Office’s own report on human rights makes it clear that the issue is much more acute in the north Caucasus than in any other part of the Russian Federation, which is why Amnesty International has not expressly entered into these issues with regard to Chechnya and the north Caucasus. However, Amnesty says that the situation demonstrates the state’s failure fully to implement legislation and to investigate and prosecute perpetrators of torture. Amnesty is particularly concerned about the practice of torture of individuals held incommunicado in unofficial and unacknowledged places of detention in Russia’s north Caucasus region.
We like to think that, since the Soviet era, Russia has been able to make significant strides in its respect for human rights, but the truth is that across a wide range of areas of the Russian Federation, human rights abuses are very much part of the way of doing business in the criminal justice system.
That leads me to the second question, which concerns extradition. One reason why we are unable to extradite people to the Russian Federation is simply that every time an extradition case has come before the British courts, they have adjudicated—in my mind, rightly—that there is no opportunity of ensuring a fair trial for the defendant and no opportunity of ensuring that the person will not be subjected to torture. Nearly all of those cases have been heard before District Judge Timothy Workman. He has presided over several cases, including that of Ahmed Zakayev in 2003. Most extraordinarily in that case the judge said that many of the charges against Mr. Zakayev could not be substantiated and a Russian Orthodox priest whom he was alleged to have murdered gave evidence himself at Bow street during the extradition proceedings. It is fairly clear that the courts here have taken a robust attitude to such cases. Indeed, Mr. Workman said explicitly in the case of Alexander Temerko, who was vice-president of the oil giant YUKOS:
“I am satisfied that the request for the extradition of Mr. Temerko is in fact made for the purpose of prosecuting and punishing him for his political opinions.”
In other words, those are not proper extradition requests, but merely attempts to pursue through a legal means a political avenue.
Some of us are concerned that the British Director of Public Prosecutions, Ken Macdonald, recently entered into a new agreement with his Russian counterpart on how they were going to deal with extradition cases. If that means that we will say clearly to the Russians, “You can’t seek extradition for someone simply because you don’t like their political opinions and you can’t seek extradition for someone when the case is wholly unsubstantiated,” that is fine, but if it means that we will loosen our hold on these issues and encourage more extradition requests, Mr. Macdonald should think again.
I very much hope that my hon. Friend the Minister will have an opportunity to reply on the matter of extradition, not least because over the past few weeks many politicians in Russia, in response to the events of last week, have been saying that now is the time for Britain to allow many of the people for whom Russia has previously requested extradition to be sent back to Russia.
Another issue, which is of great importance to us but on which many people in Russia seem to be mistrustful, is press freedom. It is profoundly disturbing that the Russian police investigation into the death of Anna Politkovskaya seems to be going very slowly. We have heard much of her, but perhaps not much of the 20 other political journalists, all of them critical of the Putin regime, who have been murdered during his presidency. Some 42 have been murdered in the past 10 years. If that number of journalists were to be murdered in the UK, there would be an outcry across the whole civilised society in this country. The fact that in Russia there seems to be a casual disregard for the death of a journalist, even a death in suspicious circumstances of one who has been criticising the regime, is a cause for concern.
A wider cause for concern is the fact that recent surveys of public opinion in the Russian Federation suggests that 90 per cent. of all broadcast news output is supportive of the Government. That is for the simple reason that the Government have a stranglehold on news. If in the elections in 2008 there is the same kind of news presentation that was provided in the last set of elections, it is difficult to see how it could be a fair election. Freedom of the press and the media is a vital element in ensuring human rights and democracy in Russia, and at the moment it does not exist.
On communications and press freedom with Russia, may I urge the BBC World Service and the British Council, through the hon. Gentleman, to do everything that they possibly can in the run-up to those elections to ensure that a western, pro-democracy viewpoint is put across? As he says, the BBC World Service and the internet are being blocked, and those organisations must do everything that they can to get around those blocks.
The hon. Gentleman makes a fair point and gives an important reason why the World Service should retain its strong funding from the Foreign and Commonwealth Office. Russia is not the only country in which that is true, and often we can provide a cornerstone of democracy that countries are unable to provide for themselves.
I wish also to raise the matter of the role of non-governmental organisations in Russia. Earlier this year, President Putin signed off amendments to the law on non-profit organisations. The Council of Europe and the EU have roundly condemned them, because they are so ambiguous that many NGOs, including human rights organisations that have been critical of the regime, are anxious that they might be cracked down on. In fact, organisations such as Open Russia, the PEN Centre, the Union of the Committees of Soldiers' Mothers and the Russian Human Rights Research Centre have all had investigations launched against them by the regime under the new law. We in this country believe that the non-governmental organisations and the voluntary sector play a vital role in maintaining civil society, and we should be making that clear to the Russian Federation.
It is not just in the voluntary sector that there are difficulties. The World Bank puts Russia a long way down its index of corporate governance, which is important for a series of reasons. Not only is Russia on a par with Bangladesh in the rule of law, but, according to the World Bank, it is some way behind Iran and Ethiopia. On the control of corruption, it is a long way behind India, Mexico, Egypt and the Philippines. In the set of measures that the World Bank uses, Russia comes 151st out of all the countries in the world. We like to think of Russia as a big power, and it is one of the largest countries and greatest economies in the world, yet it has significant problems with corporate government. That is important for several reasons, not least because of the Russian energy situation.
As I am sure all hon. Members know, Russia has vast reserves of energy. It is sitting on more than one fifth of the world’s known reserves of natural gas and has at least 75 billion barrels of oil—about 7 per cent. of the total world reserves. Western Europe gets a quarter of its gas from Russia. At the moment, Russia supplies only 2 per cent. of the UK’s gas, but things are set to change rapidly. By 2015, Gazprom, the Russian gas company, expects to supply 20 per cent. of the UK’s gas. Yet many people in the corporate sector in Britain are concerned about property rights in Russia, worrying that, if they make the necessary investments in the Russian infrastructure, their property rights might not be respected. Consequently, investments are not being made that would guarantee the infrastructure for the future. That might mean that gas and oil will simply not flow; it will not be possible to make them flow, because investment will not be sufficient.
On top of that, Russia has been trying to use its petro-confidence as a means of bullying its neighbours. We have known about some of that in the past, such as the bullying of Ukraine. Some of Russia’s neighbours are now members of the EU, and it must be inconceivable for Britain to continue to expect Russia to control 20 per cent. of our energy needs without having a strategy of our own.
I wish to give the Minister plenty of time to reply, so I shall end with a point about Russian operatives working in the UK. During the cold war, counter-espionage was a major part of what MI5 devoted its attention to, representing something between a quarter and a third of its budget. We know that MI5 has now devoted its energies elsewhere, and only 6 per cent. of its budget is devoted to counter-espionage, even though it has publicly said that there are probably between 30 and 60 Russian agents working in the UK. Dame Eliza Manningham-Buller, the head of MI5, has said of counter-intelligence:
“There’s not less of it about, we are doing less work on it, we are being more selective about the priority cases.”
Any sovereign state should be concerned by a significant number of operatives working in the country. In recent years, local police caught red-handed a group of Federal Security Bureau agents as they planted a bomb in an apartment in Ryazan, in central Russia; Omar Ibn al Khattab, a Saudi Islamic radical who had joined the Chechen fight against Moscow, died in mysterious circumstances in 2002 after receiving a letter that allegedly poisoned him when he opened it; and in 2004, a car bomb in the Persian gulf sheikdom of Qatar killed the former separatist president of Chechnya. Two Russian agents were convicted of that crime and then deported to Russia, where it seems that President Putin honoured them when they got back. We need to take seriously the issue of Russian operatives working outside the federation.
I thank my fellow member of the all-party group on Russia for giving way. Will he mention briefly some of the security concerns among my constituents who are Russian exiles here in London, regardless of who was responsible for the murder of Mr. Litvinenko? Is Britain doing enough to guarantee the security of exiles and dissidents of Russian origin?
The hon. Gentleman makes a fair point. We need to ensure that those who have come to Britain, many of them seeking asylum, have guaranteed security. I do not make any judgment as to who might have killed Mr. Litvinenko or whether Russian operatives were involved, but it is worrying that agents of some kind who have access to radioactive materials are operating in this country. Without prejudging the process in which the police are engaged, I hope that my hon. Friend the Minister will say something about the matter and ensure not only that Russian émigrés in this country can live their lives in security and peace, without being subjected to extradition requests, but that we do not import into the UK the significant level of criminality that exists in large parts of Russian society.
I congratulate my hon. Friend the Member for Rhondda (Chris Bryant) on securing this debate. I am pleased that he has chosen United Kingdom-Russia relations as the subject, and I apologise on behalf of my right hon. Friend the Minister for Europe. [Hon. Members: “Where is he?”] As the Minister with responsibility for relations with Russia, he is in Riga, trying to persuade a number of countries to give up, among other things, the national caveats for their operations in Afghanistan. Those caveats seem to say that it is all right for British soldiers to die in defence of democracy in the west, but not other soldiers. That is where he is now.
Russia has been on the front pages and on our television screens an awful lot in the past few months, with coverage including global energy security, tensions between Russia and its neighbours to the south—especially Georgia in the Caucasus—and the murder of the journalist Anna Politkovskaya. Last week, saw the death of Alexander Litvinenko, which the police are now treating as suspicious.
I am sure that the House does not expect me to speculate on the last issue given the ongoing police investigation into the case, although I take the point of the hon. Member for Hammersmith and Fulham (Mr. Hands). No matter where people in this country come from, they have the right to expect to walk our streets without fear of being murdered. I reiterate that the Government take a very dim view of anyone murdering citizens on the streets of Britain, regardless of where they come from or indeed where their murderers come from.
The fact that Russia is rarely out of the news reflects its important role and impact on many of the United Kingdom’s international strategic priorities: energy security—as my hon. Friend the Member for Rhondda pointed out—climate change, counter-proliferation, peace and security and the importance of promoting standards in human rights, democracy and the rule of law. A constructive partnership with Russia enhances our ability to achieve those objectives.
I emphasise that the Government maintain close contact with our Russian counterparts at ministerial and official levels. My right hon. Friend the Foreign Secretary has met the Russian Foreign Minister, Sergei Lavrov, on several occasions, my right hon. Friend the Minister for Europe visited Russia in September and I keep in close contact with my Russian counterparts in the areas of my portfolio, including the middle east, counter-narcotics and counter-terrorism.
It is in the context of the international architecture I have described that a constructive partnership with Russia enhances our ability to achieve our objectives, but I stress to my hon. Friend and the House that the Government do not engage with Russia uncritically. We engage critically with Russia on issues to which our approaches differ where we feel that a frank understanding of those differences will produce a better result.
I should like to respond to the issues that my hon. Friend raised about human rights, democracy and the rule of law. The Government regularly discuss the progress of democratic reforms and human rights in Russia with the Russian authorities, including issues of media and religious freedoms. As he reminded us, the annual report on human rights sets out some of our major concerns about human rights, democracy and the rule of law in Russia. It details a number of occasions when Foreign and Commonwealth Office Ministers have raised the issues with the Russian Government during the past 12 months.
My hon. Friend expressed concerns about the ban imposed on a gay parade by the mayor of Moscow in May. In response, the United Kingdom Government took concerted action with its EU partners to present a démarche to the Russian authorities detailing our concerns about the event, at which demonstrators were attacked by extremist groups.
Another example of the Government’s commitment to human rights issues was the meeting between the Minister for Trade, my right hon. Friend the Member for Makerfield (Mr. McCartney), who has responsibility for human rights, and the Russian-Chechen Friendship Society in June. Representatives of that non-governmental organisation have documented alleged human rights violations committed by federal and Chechen military forces during operations in the republic. I am sure that my hon. Friend will agree that the more transparency on that issue, the better for all of us, whether in the United Kingdom or Russia.
More recently, the prominent Russian journalist Anna Politkovskaya was murdered in her Moscow apartment block. My right hon. Friend the Foreign Secretary condemned the murder at the launch of the annual report on human rights on 12 October, and my right hon. Friend the Minister for Europe issued a statement of condemnation on 9 October expressing sympathy to Anna Politkovskaya’s friends and family and calling for the Russian authorities to bring her killers to justice.
Foreign and Commonwealth Office officials raised our concerns about the killing with the chairperson of the Civil Society Institutions and the Human Rights Council under the President of the Russian Federation, Ella Pamfilova, on 18 October. The journalist’s murder and wider concerns about freedom of expression were discussed with the Russian authorities at the EU-Russia human rights consultations in Brussels on 8 November.
In addition to engaging critically on human rights issues, we support projects in co-operation with local and international NGOs and the Russian Government to protect and promote international human rights standards in Russia and to improve access to justice at the European Court of Human Rights. We also promote the Foreign and Commonwealth Office’s objectives on economic governance, climate change and energy through co-operation projects in Russia. This financial year, the FCO has committed £1.8 million to such project work in Russia.
The Council of Europe is another key forum in which it is possible to engage with Russia on human rights, democracy and the rule of law. Russia’s membership of the Council of Europe gives its 140 million citizens access to the European Court of Human Rights in Strasbourg. Russia has held the rotating chairmanship of the Council this year. We also engage Russia regularly in discussions on its human rights and democracy commitments, frozen conflicts and other cross-cutting security issues as part of its participation in the Organisation for Security and Co-operation in Europe.
Could the Minister say something about corporate governance, which the hon. Member for Rhondda (Chris Bryant) mentioned? I had breakfast this morning with the Russian ambassador, although I must say that I had the breakfast here in Parliament. The Russian ambassador was quite adamant that Russia has a very good record on corporate governance. He gave as witness the fact that 90 per cent. of all equity investment in Russia is directed through the London stock exchange, saying that that was evidence of strong corporate governance. Does the Minister agree?
If 90 per cent. goes through the London stock exchange, it comes as a surprise to me, but it may well be correct. I cannot confirm it.
The hon. Gentleman is absolutely correct. As my hon. Friend the Member for Rhondda pointed out, Russia occupies such a strategic position—even in just the one area of world energy supply—that corporate governance must be got right. I am glad to hear that the hon. Gentleman found the discussion satisfactory. I think, however, that some companies—including Shell, which is experiencing great difficulties with the Sakhalin 2 project in eastern Siberia—might have a different analysis.
Next year, Germany will have presidency of the EU. Putin speaks fluent German. Will the British Government do all that it can to co-operate with the German Government to raise human rights issues, particularly the matter of a failing democracy in Russia?
We will certainly continue to do all that we can to raise human rights issues. Germany is in a very particular situation. I hear that Gazprom is providing 60 per cent. of its natural gas at the moment, which means that Germany is very dependent on getting its relationships with Russia right.
Sitting suspended until half-past Two o’clock.
I appreciate the opportunity to discuss this topical subject. My reasons for seeking the debate were partly parochial. My constituency is served by the South West Trains franchise and about 10,000 of my constituents use the railway system daily from eight stations. I have deliberately couched the debate in rather broad terms to give party spokesmen and other hon. Members the opportunity to speak.
I shall focus on the terms of and background to the South West Trains franchise, which was announced on 22 September. It is one of the biggest franchises and has been let again to Stagecoach, which has held the franchise since privatisation. It is fair to say that the company has had a rather mixed experience—initially it was utterly disastrous. The company came from the bus industry and did not have any rail experience. In the mid-90s, it decided to make a quick, cost-cutting attack on the business and laid off large numbers of drivers but then discovered that there were not enough left to drive the trains and we had months of mayhem. That was probably a main contributory factor to my being elected in 1997.
There have been improvements on different levels since then. Punctuality has been improved, partly by lengthening journey times and thus making targets easier to hit. None the less, there has been an improvement and the franchise is now one of the better ones. There has been an increase in the rolling stock and its quality has improved on both long and short-distance routes. There are now 40 per cent. more passengers than in the mid-90s, and there are a variety of reasons for that large increase: congestion on the roads, increased economic activity and the rising population. However, we are undoubtedly now dealing with the problems of success rather than the problems of failure. The system is much bigger and is growing, and the problem is with accommodating that growth.
When the franchise was announced in September, my first reactions were positive. There were some good news stories, there was commitment to improved station facilities, and the Oyster card system was extended to outer London making it easier to interchange between London Transport and the commuter system. Above all, there was the prospect of some easing of the chronic overcrowding that has been the condition of the rail system locally with the promise of a 20 per cent. increase in the number of seats. I asked the Minister about that in Transport questions last week, and he confirmed that there would be an increase in exactly the same terms as the Government initially said and that South West Trains had confirmed that we will have a 20 per cent. increase in seating capacity.
What has happened since has created a major mystery around those assurances. It became clear from a freedom of information request that was published in the Evening Standard that the company does not interpret its franchise in that way. Indeed, it is currently ripping out large numbers of seats from its existing stock—approximately 160 seats per train. I was surprised by that and went to speak to the company in person, and it reiterated the explanation that it gave on the record in the national and regional press. There is no question of the seats not being taken out. The people at the company are perfectly honest, open people. They are hard-nosed businesspeople, but they are straightforward.
The company has stated explicitly that its policy is to
“allow more people to stand in comfort.”
It wants to clear away seats with the specific objective of getting people away from the doors because it is dangerous and time-consuming to have people standing there. It wants to move people down the carriages and get more people in to stand.
Overcrowding is officially defined by the Department for Transport as
“35 standing for every 100 sitting”.
The implication of the company’s decision to take out seats is that overcrowding is being increased as a matter of policy, not as a by-product of growth. Its deliberate policy is to have more people standing relative to those sitting.
One of my main aims in securing this debate was to obtain from the Minister a clear understanding of what is going on. It is clear from his statement in Parliament last week that his understanding is quite different from those of the company and the general public. I do not imply that there is ill will or that anyone is trying to mislead anyone else. There has obviously been a terrible misunderstanding. It may be that when the Minister talks about increasing the number of seats or the stock, he is talking about the improvements of recent years that are now in operation. The company categorically denies that what has been promised will be the end product of its franchise; indeed, there will be less seating and more technical overcrowding. It is important to establish how that misunderstanding arose, so that the general public will no longer be in their current state of alienation and confusion.
Profit-making companies have different ways of making profits. It is fair to say that the franchise is highly constrained, and I am concerned by what those constraints are and how the Government have specified them. I do not think that the private company is trying to go outside of the rules that have been set. The question is whether the rules and parameters were precise enough. That concludes my first set of questions to the Minister. There is an enormous amount of confusion and ill will. Will he clarify what has happened so that we do not perpetuate this story?
My second set of questions is about future investment in the franchise. The company is paying a substantial premium. It was receiving a subsidy but will now put in a premium. One could argue that that is a measure of good performance. Perhaps it opposes the point that the hon. Member for Luton, North (Kelvin Hopkins) made, because here is a company that believes that it can deliver an increasing service, make money out of it and contribute more to the Government. But where is that premium going? Will it be invested? I shall raise several issues that have not so far surfaced in discussions about the franchise.
The franchise is for 10 years, so one would think that there was some prospect of significant investments taking place. One key to improving the number of trains, the provision of services and other requirements of growth is the freeing up of Waterloo International when Eurostar departs in 18 months or 2 years’ time. I asked the Secretary of State about that in October 2005, and he gave a constructive and helpful response that was well received. He said that the Government had grasped the issue and had headed off Network Rail from the initial proposal—a property development project, I believe. The Secretary of State made it absolutely clear, and later reaffirmed, that there would be a rail use for Waterloo International. That was very welcome and creates a great deal of potential.
I subsequently received a helpful letter from the Minister’s predecessor, the hon. Member for Halton (Derek Twigg), in which he sketched out the process. He said that the franchise negotiations would not incorporate the use of Waterloo International but that there would be a separate costing and it could later be added once agreement was reached. I want to press the Minister on that. Will he give us some indication of what kind of time horizon is envisaged? In the short and medium term, this might be the most fruitful way of increasing capacity and improving the number and frequency of trains.
Beyond that, there are other objectives. There is a general acceptance in the railway system that there will have to be longer platforms and more coaches, particularly on the very congested commuter routes. There is no indication in the franchise about how and when that will happen, so it would be useful to have some indication from the Minister as to how he sees this matter evolving in the medium term.
My third set of questions relates to fares, which is a highly topical issue in view of the announcements of the new fare structure in the past 24 hours. The franchise makes a specific commitment, stating:
“Fare structures will change to incentivise travel outside the busiest periods”.
The objective is clearly desirable: to reduce crowding at the peaks and spread the load.
It is fair to say that the company has already announced one positive step in that direction, because the season tickets will make it relatively more attractive to travel off-peak. The problem with the fare structure is a built-in tendency to create exactly the opposite incentives from the ones that are being sought in the franchise. We saw that yesterday in the announcement of the fares for South West Trains—I believe that this applies to all of the other operators—because the regulated fares are increasing by 4.3 per cent. whereas the unregulated fares are increasing by 5.3 per cent. The unregulated fares apply predominantly off-peak, so in a sense the incentive is being created to travel at peak times rather than at off-peak ones.
The finances of the company will come under a great deal of pressure. It might well have made money out of the railways, but most analysts think that it is now operating on a 3 per cent. margin rather than a 10 per cent. one. The one way that it can create breathing space for itself in terms of profits is to jack up its unregulated fares. There will be strong pressures to widen the differential between unregulated and regulated fares, which would create the opposite of what the Government intend. I do not just want to make a political point about fare increases being a bad thing, but I must ask them how they think the pattern of fare increases will reinforce sensible incentives.
My fourth set of questions relates to the broader political points that the party spokesmen will want to make and is on the rather damning comments in the Select Committee on Transport report on passenger rail franchising. I understand that it is a consensus report, and it talks about the “self-contradictory muddle” in the current franchising structures.
One can see some of that self-contradiction in the South West Trains franchise. On the one hand, companies are being insulated from risk. I think this is true of South West Trains, but I know that it is generally the case that the franchise operator does not have to pay the risk of industrial action, even though some of their managers may tend to provoke it.
That is the argument for the direction in which the Government are going, but it raises the question of why the private operators are in place. The whole purpose of having private enterprise is that someone will carry the risk and act in an entrepreneurial way.
Some aspects of risk are clearly not being carried by the franchisee. Industrial disputes are one such aspect, but a more important one is uncertainty over revenue growth. This particular franchise has a formula built into it, under which if revenue growth is exceptionally strong, a large part will go to the Government, but if the revenue growth falls below expectations, the company will be protected from the loss.
I have outlined two aspects in which risk is being removed from the private company, but in other respects it carries considerable risk. It is not clear why some forms of risk are being carried and others are not. Perhaps the Minister will clarify something. One of the main elements of risk relates to open access to the track and competition, upon which I believe the regulator can insist. I am sure the Minister is grappling with the tricky issue of the problems that are being caused for Great North Eastern Railway by the entry of new competitors on to the east coast main line track. I believe that the position is so serious that GNER is thinking of returning its franchise. Will the Minister spell out how he expects that awkward problem to be addressed?
The same problem could arise on the South West Trains franchise, because other operators are keen to use the track. Bubbling away in the background is Airtrack, which is a proposal by BAA plc to run a new fast service between the new terminal 5 and Waterloo, and possibly other major stations. I do not know the details and have no idea whether it is a good or a bad thing. However, it has the potential to cause competition for scarce track and would probably disrupt the services of South West Trains unless additional capacity was provided. It could cause the same kind of difficulties on the South West Trains franchise as are being caused by competition on the east coast main line. If BAA plc was to come forward with a plausible set of proposals, would the regulator be obliged to let it have access to the track and to compete on it at the expense of the existing franchisee? How would the allocation of risk then evolve?
A few years ago, Stagecoach made a set of proposals for a general improvement in the financing of the railways. In a way, it went out ahead of the pack in arguing for vertical integration as a way of cutting costs. We all know that one of the big problems is the way in which the companies that do the maintenance have been greatly inflating the cost structure.
I know that the franchise report deals, albeit rather briefly, with vertical integration. The idea seems to have rather run its course, at least for the time being. Does the Minister still see any scope for it, at least in self-contained parts of the network? It would be hopeless in areas such as Clapham Junction, where different franchisees operate, but do the Government still intend at least to entertain experiments? Since this company has shown an interest in pioneering such work, is it something to which we can look forward? I hope that I have raised a series of questions to trigger both further debate and a response from the Minister.
I am pleased to have an opportunity to speak in this debate, and I congratulate the hon. Member for Twickenham (Dr. Cable) on raising this important issue. I have taken a long and close interest in the railway system, not least because I have been a commuter for 27 years on First Capital Connect, which was Thameslink and, before that, British Rail.
I study the railways with interest and read about the subject, and I have many friends and colleagues in the railway industry who tell me on a daily basis what is actually going on. My comments are based on some background of knowledge and are not just made from a position of prejudice, even though it is probably well known to everyone here that I do not think that privatisation was a good idea and that I strongly believe that the railways should be reintegrated into a publicly owned system.
I have recently heard surprising comments from private enterprise members of the railway industry, who said that they had overheard a Treasury official saying that the reason why we privatised the railway system was “to promote its decline”—those were the words that were used. Before that, apparently, another Treasury official, who was put on the board of BR, said, “I have come on to the board to oversee the decline of the railway industry.”
There was a profound disbelief in the railways among Governments and among politicians in general. We believed collectively—I am not talking about us personally—that the railways were a system of the past and that the future would be the roads. I understand, although this might be apocryphal, that Mrs. Thatcher believed that railways were inherently socialist because they were collective and people travelled together, whereas the true freedom-lover, the individual, would always drive by car.
That story might not be true, but apparently it was true that there were plans at one point possibly to close Midland Mainline and the line that goes through my constituency. That was at the extreme of the mania for road travel. I think that the world has realised that a terrible mistake was made and that we can never all get on to the roads. They are now incredibly crowded. Setting aside any concerns about carbon dioxide, we need our railways. The fact that millions more people are travelling on the railways every year demonstrates that the population—our constituents—believe in railways, which will be more important in future as we deal with environmental problems and the population density of this country. It is possible that the population of this country will rise to 70 million and we will need more transport, so the narrow, fast corridors that rail provides will be vital.
The franchise that serves my constituents is First Capital Connect, and before that it was Thameslink. One of the features of privatisation was vertical disintegration: the rolling stock is owned by rolling stock leasing companies or ROSCOs—essentially the banks—who lease them to the train operating companies, who buy time on the track owned initially by Railtrack and now by Network Rail. Even Conservative Members realise that that vertical disintegration was a terrible mistake and that vertical integration is the way forward. If we have vertical integration, the franchises will disappear and will be integrated into another sort of railway organisation, be it public or private. Over time, it might even start to look a little like British Rail. At a meeting at Westminster, the former regulator, Tom Winsor, said that British Rail handed over the railway network to Railtrack “in good order” but that the problem was that there was desperate under-investment. The network had been starved of investment for decades.
If one compares the level of investment in railways in Britain with that in railways on the continent, one can see the difference. We are now trying to make up lost ground. Unfortunately, we are doing that in the private sector instead of the public sector and that costs a lot more. My friends in the railway industry suggest that, for example, the cost of laying a mile of railway track is now between four and five times what it was under British Rail when costs were held down by cash limits and work was carried out by directly employed staff who did a superb job and, as Tom Winsor said,
“worked miracles on a pittance.”
Had we had more foresight, we would not be in our present position. We would have a much better, modern railway system with better investment and the work would be done much more cheaply.
The franchises are relatively short term, so there is not much incentive to invest, and we are going to integrate them and make them longer term. If all the risk is held by the Government, who pay the bill and are responsible to the electorate, what is the point of having the system in the private sector if it is inherently subsidised and non-profit-making? The system is not sensible and we shall look back on this as a period of political madness.
I draw attention to my entry in the Register of Members’ Interests and my relationship with the National Union of Rail, Maritime and Transport Workers.
I draw my hon. Friend’s attention to parliamentary questions that I and others put down about the rationality of the process by which the franchises operated, particularly the bidding process. The Government confirmed that more than £60 million was spent on franchising passenger services just in terms of the bidding processes and the assessment of the franchises alone.
The bidding process and all the contracting across the former public sector, now the private sector, are expensive, as I know from managers in my local hospitals. The bidding process and subsequent management costs money. My hon. Friend is absolutely right.
Let us look at how the franchisees operate. First, they must lease their rolling stock from the ROSCOs and the charges have been horrendous. I know that the Government have focused on that and no doubt my hon. Friend the Minister had some influence is bringing down those charges, but they were sometimes of the order of 30 per cent. and more for rolling stock that might last 20 years. It was a rip-off, and the banks were coining public money and pocketing it by charging vast amounts for leasing rolling stock.
Turning to the relationship with Railtrack and now Network Rail, I travel on trains on a daily basis and every now and again there is a rash of what are called “wheel flats”. When wheels skid, particularly at this time of year, they form a flat and bang the rails as they go round. That happens daily at the moment and almost every carriage that I have been in during the past week has had wheel flats. One of the problems with that is that stock must be taken out of action for the wheels to be taken off and the profiles to be reground, but I understand that Network Rail still owns the wheel-grinding machines, so wheels must be taken to another organisation to have that done by the ROSCOs. The ROSCOs are not too bothered because, as long as the rent is paid, they are not concerned about when the wheels are repaired. The problem is that the wheel flats hit the track and damage it. They do not do much good to the trains and certainly make an uncomfortable ride, but there is not much incentive to deal with wheel flats because that is always someone else’s responsibility.
Another problem is that if track is not maintained, trains must operate slowly. That happens frequently and sometimes the cause is not dealt with for weeks. The complexities of the way in which fines are paid between one group and another in the industry does not seem to work because, time and again, there is slow running for several weeks as, for example, near the Elstree tunnel recently. There seems to be nothing in the system to deal with that in the short term.
I am not necessarily blaming Network Rail, but for some reason, especially under Railtrack, drainage was not dealt with, so there was a problem but no incentive to deal with it. In the end, two groups of people pay and they are the same people. First, passengers pay with high fares—they are much higher in Britain than in Italy and other countries that still have an integrated, nationalised system. We pay some of the highest railway fares in the world. The other great payer into the system is the Treasury. God knows why the Treasury is so interested in maintaining a system that soaks up so much of its money every year when it could do things much more cheaply in the public sector, thereby saving public money and making it easier to balance the Chancellor’s Budget.
It is in the Treasury’s interest and that of all rail operators to have more bums on seats—more passengers paying their way on the trains. Is the hon. Gentleman aware that Passenger Focus’s recent research shows that the aspirations of the Cross Country franchise would lead to 2.8 million fewer passenger journeys a year, predominantly because everyone travelling to the south coast or the south-west from north of Crewe—and from Oxenholme in my constituency—would have to change at Birmingham New Street station? Will he acknowledge that research and say whether it is a matter for concern?
I have not seen that research, but I thank the hon. Gentleman for the information. My view is that if the system were integrated, we could have much better integration of cross-country routes. A couple of years ago, I travelled to my party conference from my constituency and used three different train operators to get there. One problem was the fares. I was initially told that the return fare was a vast sum of around £190. I asked the person behind the desk whether they were sure about that and they said that they would make a few phone calls. Apparently, certain phone calls can be made to find out about integration of fares so that they come right down. Instead of paying £190 return, I got it down to £120 after a bit of questioning, but ordinary people, such as pensioners, might not be as assertive as an over-confident MP so they might not have challenged the fare and might have paid the higher amount.
The hon. Gentleman is making a strong case for integration, and rightly said that those on the Conservative Front Bench are very much in favour of integration. However, will he think again about what he just said about the overwhelming merits of the public sector? My constituency did not see a single new train in 40 years under the old system.
I accept entirely what the hon. Gentleman said. Indeed, I made the point earlier that the railway system was under-invested in for decades by successive Governments of both parties. As Tom Winsor said, BR
“worked miracles on a pittance”.
We did not have the investment then, and one has only to go to foreign countries to see what such investment can achieve. I recently went from Cologne to Frankfurt on a fantastic high-speed line, 30 per cent. of which was in tunnels. Those involved had spent a very large sum on it, but we are nervous about spending money. The private sector, however, spends three or four times what we need to spend, because it is so inefficient at building. However, I understand, Mr. Weir, that we are talking about franchises and train operators, rather than the track.
On the principle, however, as my hon. Friend acknowledged, the Government are slowly recreating British Rail—that is what the Network Rail operation is all about. The figures for the past two years show that delays have dropped by 28 per cent. since Network Rail took control of the track. That has to be an indication of the trajectory that the Government must pursue in bringing back rail into public ownership.
Indeed. That is absolutely right. I went to yesterday’s briefing by Network Rail’s chief executive, who said how much improvement there had been. One great advantage of the franchise system, of course, is that when the franchises come to an end, they can simply be handed over to the national railway operator, which might be Network Rail as operators. There is no problem about buying the franchises, because they are just handed over when they come to an end. If we bought them in beforehand, of course, things would be more difficult.
My hon. Friend is right that we are moving progressively towards the reintegration of our rail industry and something like a modern version of British Rail, although it would, I hope, have a lot more investment. It would be easy to move in that direction and it would not be costly: we could just hand the franchises over to John Armitt and his chums and we would be moving back towards a publicly owned railway.
I should add that if the ROSCOs are going to rip off the public purse in the way that they have in the past, we should say, “Right, we are a monopoly buyer. We will pay this amount for your trains. If you don’t like it, sell them to us at a knock-down price, and we’ll buy them back in.” There would be a cost, but it would not be prohibitive. At the same time, we could possibly do a deal to reduce the leasing charges and lease operations until such time as, bit by bit, they all come back into public ownership.
My hon. Friend is right to suggest that we are moving back towards a publicly owned, integrated national railway system. Unfortunately, Front Benchers on both sides do not want to be seen to be allowing something to be recreated in the public sector, because that goes against the zeitgeist—the spirit of the times—which is all for privatisation, and the slightest step back from that might persuade some people that there is a case for public ownership, not just in the railways, but perhaps elsewhere. However, we are talking about how the franchises could be quickly integrated with the rail network operators to recreate a national railway system.
At present, there are too few incentives in the system to provide a good service, keep trains in good order, make rides comfortable and provide enough stock. Another problem that has resulted on my line as a result of the franchise system is that there is a shortage of stock. Those who know the Thameslink network will know that there has to be a dual-voltage operation, because there is AC on the north side and DC on the south side. There have to be special trains with both types of motor, but there is a limited number of them. Some are actually held by another franchisee, but it will not let them be transferred to our franchisee, which needs them.
At peak times, as I have experienced myself, there is four-car operation instead of eight-car operation. We are so short of sets that if one set goes out of operation, it becomes a scrum to get to work. Even I have occasionally had to stand, even though I travel in from as far out as Luton, and people will certainly have to stand by the time that the trains reach St. Albans. That is unacceptable. We need more trains and more stock. Even now, there is stock that could be transferred to Thameslink, but it is not being transferred. The reasons are complicated reasons, and the franchisees cannot agree on the issue. With an integrated national system, however, that stock could simply be transferred, and we could have optimal use of all stock in all regions. That would make for a much better railway and much more comfort for my constituents and for all those who travel on lines such as mine.
I think that I have made my point. I did not expect to have quite this much time and I am surprised that many more Members do not wish to speak on this subject. My speech has therefore been rather longer than I thought that it would be, but my basic point is that the franchise system is nonsense. It should be wound up quickly by integrating the train operating companies with Network Rail and by beginning to recreate a sensible national integrated railway system.
I congratulate the hon. Member for Twickenham (Dr. Cable) on his highly topical choice of subject for debate: we had the Network Rail annual report on Monday and the announcement on regulated fares yesterday. I agree with what he said about pressing the Minister on what happens to the Eurostar platforms at Waterloo when they are released.
The hon. Member for Luton, North (Kelvin Hopkins) will not be surprised to hear that I approach the issue from a different philosophical perspective from him. I should like to disabuse him of his notions about the prevailing culture in the Treasury in the run-up to privatisation. Between 1994 and 1997, I was either at the Treasury or the Department for Transport, and it is a travesty of the truth to portray the policy towards the railways as a sinister conspiracy to run them down. What one wanted to do was to release them from the constraints of public sector funding and the Treasury and to unlock their potential to allow them to expand. In my time at the Department for Transport or the Treasury, I certainly met no officials who held the views that the hon. Gentleman describes.
I do not doubt the right hon. Gentleman’s good intent and his good wishes for the railways, but Treasury officials apparently made those comments to senior executives in the railway industry. Those executives are now in the private sector and repeated those comments to me.
I hope that the hon. Gentleman will accept that the leadership coming from the top of both Departments was heavily tilted the other way and that the policy he describes was certainly not the Government’s policy.
Closer to home—to revert to the speech by the hon. Member for Twickenham—my constituents are also talking about the railways, because work by Network Rail has overrun on two successive weekends, as a result of which my journey from Andover on Monday took two hours instead of one. Network Rail says that it has a grip on the contracts, but the contractor has overrun on two successive weekends, causing considerable disruption on the network. Such problems are not assisted by Network Rail’s reported inability to spend all the money that it has been allocated, because of some byzantine investment processes.
The hon. Member for Twickenham may not know that the first franchise train to run in this country left Twickenham station at about 5 o’clock in the morning one February in, I think, 1996. Somewhere in my archives, I have the first ticket to be sold by a franchised operator, and I was escorted on that historic first journey by Toby Jessell, who was the Member for Twickenham at the time.
As the hon. Member for Luton, North implied, the previous Administration’s policies on the railways was among their more controversial, but I would argue that the concept of franchising was sound and successful. We have created an industry that did not exist before—a train operating industry. Before that, all we had was British Rail, the monopoly that operated the railways. If it did not perform, we could not sack it and we could not get anybody else in—we were stuck with it. Franchising has enabled successful operators of other modes of transport—airways, buses and ferries—to apply their skills to the railways. We would not have been able to take that approach had we not privatised the railways and restructured them in the way that we did.
Franchising has also enabled the taxpayer and the passenger to benefit from the constant re-bidding for the franchises and to capture the extra value, which one simply could not do when British Rail was the provider. Coupled with privatisation, franchising has led to additional investment in the railways, which we would not have had before, when we were wholly dependent on what we could get out of the Treasury. If anybody fails, as has happened, others are willing to take over and to do a better job. We could not have had that before.
The right hon. Gentleman is having his Edith Piaf moment. Does he have any regrets about the management of the railway system and the system that we now have as a result of the policies that he introduced? If not, that would seem to be somewhat contrary to the policy of the new leadership of his party, which is to plead for forgiveness from the electorate.
What I really regret is that, at the time, the Labour party did not say that it would do what it actually did—leave the structure virtually as it found it. It would have been a much easier policy to implement if the Labour party had been realistic and not made threats, including the threat to renationalise Railtrack. As a result of franchising, we now have train operators that look outwards to the market and passengers, whereas previously we had just British Rail, which looked inwards to the Secretary of State, who provided the subsidy to keep it going. Many good people stayed on from British Rail and entered the new companies. To counterbalance what the hon. Gentleman just said, many people who had been in British Rail regarded themselves as liberated, under the new arrangements, to innovate and to use the resources that they simply could not get out of the Treasury to provide a much better service.
It is interesting that the right hon. Gentleman’s experience of former BR employees is different from mine. In many cases some of the companies do not like the old BR employees, because they are too fussy and like to get things right. They do not want to cut corners, as so many of the private companies do.
I think, for example, that Christopher Green, who was at British Rail, has been an outstanding example of a good manager transferring across and making a success of the new regime, so I find myself in respectful disagreement with the hon. Gentleman, but also with the Select Committee on Transport, whose conclusion on franchising was, in paragraph 124:
“Passenger rail franchising, far from being a model capable of delivering quality rail services for the next half century, appears to be a policy muddle.”
I think that the concept—the model—is all right. If the Committee is saying, as I suspect, that the way in which it has been applied is not perfect and is capable of improvement, I would agree.
I agree with what has been said about long franchises. In the previous Parliament we had some two-year extensions, which were a disaster. If we want to maximise investment in the railways, as I hope all those present this afternoon do, the train operators need a long franchise to have the incentive to invest. The Select Committee suggests 15 years; the South West Trains franchise is for 10 years, as the hon. Member for Twickenham said, with the last three dependent on performance. I want to spend a moment on something that the Committee did not touch on—what I call end-of-franchise blight. As the end of a franchise nears, the franchisee becomes reluctant to invest, understandably, because its investment may end up in someone else’s pocket. There is provision in the legislation to get around that, but it does not appear that it is being used. If memory serves, it provides that the regulator—possibly now the Department—can underwrite the investment at the end of the franchise if it believes that to be sensible; that carries through to whoever wins the franchise. I should like more of that, to avoid the cyclical effect that can come with franchising.
For many people in North-West Hampshire the constraint on using the train is not the fares or concern about congestion or safety; it is station car parking. The Government and the operators want people to use trains in the middle of the day, when they are empty, but by the time trains are empty the station car parks are full. I have four South West Trains stations in my constituency—Grateley, Andover, Whitchurch and Overton—and there is a serious problem at all of them. Last week I got to Andover at a quarter to 8 in the morning, and there were only six places left. That puts people off the railways and upsets people who live near the station, who find commuter cars blocking their streets.
The local authorities—the town and parish councils—want progress to be made on that front much faster. The Department’s press release about the South West Trains franchise mentions smart tickets, gated stations and new radio equipment, but says nothing about the major constraint on rail usage in my constituency: parking. I am not sure that I want a taskforce to put that right, but I want a focused effort to expand capacity. Otherwise, people will simply get back in their cars and drive all the way on the M3.
The Select Committee also says with respect to train operators that we need new entrants—a recommendation that may not find favour with the hon. Member for Luton, North. One of the Government’s policies seems to militate against that. They are trying to reduce the number of franchise operators at a number of mainline stations. No one in this country is trying to reduce the number of bus operators or airline operators, and I am not quite sure why the Government are trying to reduce the number of franchises and, thereby, train operators.
I agree with the Select Committee that the specifications in the franchise documents are now far too tight. They leave little incentive to innovate, and the Department virtually dictates the timetable. It may be more difficult for the Department to arbitrate if the bids come in on different levels, but I should prefer the encouragement of innovation and investment, and allowing differential bids, to the straitjacket that we have at the moment. I have seen some comment in the press to the effect that South West Trains may have “overbid” for the franchise. I think that it is unlikely that an experienced company that has been operating in the market for 10 years would have done anything uncommercial. I think that it knew exactly what it was doing when it bid the £1.2 billion premium.
The hon. Member for Twickenham mentioned Airtrack. I hope that the Government will try to make progress with that project. Someone who wants to get to Heathrow by public transport from my part of the country catches a train to Woking, and then catches a bus. It would be much easier if one could go all the way by train from Woking to Heathrow. There are plans. I think, contrary to what the hon. Gentleman said, that South West Trains would get extra business from the south-west if there were a through service to Heathrow through Airtrack, which might counterbalance any possible loss of traffic from the east. If the Minister has time to explain where we are in relation to Airtrack, it will be enormously helpful.
Passengers can if they are on First Great Western, but they cannot if they are on South West Trains, because those do not go to Hayes and Harlington. I should like my constituents to have the facility that the hon. Gentleman’s constituents have to go by train to Heathrow.
The key issue for Network Rail, for the Department for Transport and for those who run the railways is how to get the increased infrastructure that we need to cater for growth. If we consider the South West Trains franchise, there is only one scheme of any significance in the 10-year plan. That is double tracking some eight miles of the west of England line near Axminster. The route utilisation strategies for most Network Rail routes are long on words but short on specific action. The argument is always that there is no business case. The problem with the railways, as we all know, is that quite often there is not a business case for projects, but they are for the benefit of UK plc, and are desperately needed for a balanced and sustainable transport strategy. At the moment, a lot of the key schemes to expand the network simply are not getting carried out. The present arrangements for franchising are freezing out those crucial expansion plans, and that aspect needs revising.
I want to say a final word on fares. Those are regulated by the Government, with no freedom for the train operators to charge what they want. In the first franchise period, regulated fares could go up by only the retail prices index minus 1 per cent. That gave a clear signal that rail fares would fall in real terms, and provided an incentive for people planning their lives and the way they would get to work to use public transport. Now there has been a move to RPI plus 1 per cent. I understand all the pressures that led the Department to do that, but it is absolutely the wrong direction in which to go if we are to have the balanced and sustainable transport strategy that I hope everyone present today wants. The Treasury has won that battle with my old Department, but I hope that the Minister will fight back in future years and get a fares structure that is better balanced and provides the right incentives for people to choose a public sector mode of transport.
I congratulate my hon. Friend the Member for Twickenham (Dr. Cable) on initiating the debate. He has made several points about South West Trains and the new franchise that will be echoed across the country as the new franchises elsewhere are set out. I want to consider some of those and set out what I believe should be the vision for the railway industry in the future. Interesting though the debate was between the hon. Member for Luton, North (Kelvin Hopkins) and the right hon. Member for North-West Hampshire (Sir George Young), it is a debate for the past, and it does not deal with the present and future needs of the railway industry and passenger commuters.
Whatever else we might say, the railways are in a period of unparalleled growth. Passenger numbers and investment are up, and no doubt the Minister will tell us about the £88 million a week that the Government are investing, which is welcome, and the £1.1 billion subsidy that is given to the network each year. My concern is that the management of the railways addresses neither the continued growth of the railway industry nor passenger demand for decent services. As my hon. Friend said, the predicted growth on South West Trains and one person saying that it will introduce new rolling stock, is contradicted by the reality of seat removal and my information from Angel Trains, whereby South West Trains has been told that it cannot purchase new rolling stock or expand the service.
If one considers the Government’s plans for growth in new house building in the south-east and the south-west, one sees an immediate contradiction between the Government’s transport policy and the reality of other policies. Last night I met business representatives from Colchester. They were concerned at the amount of house building planned in their area, and the fact that there are no plans within the franchise to expand the service. There is a contradiction between Government policies on house building and growth, and the letting of franchises.
I thoroughly agree with the hon. Gentleman, but his argument applies not only to transport, but to water supply, to sewerage arrangements, even to the national health service, and to almost every other area. There is no co-ordination with the plans for house building.
I totally agree with the hon. Gentleman. The Transport Committee’s recent report summed up rail franchising as
“a self-contradictory muddle, providing no coherent framework or vision for development of passenger service”.
There is growth, and we have improved the service, but if we look to the future, there are many concerns. I hope that the Minister will address them through the long-term vision in next year’s White Paper. We have reached phase three of the franchise letting process, and we have reduced the number of operating companies from 25 to 19, which may be a good thing; but at the same time, fewer and fewer rail companies are bidding for projects. Part of the reason why is the cost of tendering: franchises are set so tight as to discourage innovation even where it is wanted.
The specification of several lines, such as the Great Western main line earlier this year, has resulted in reduced local services and inconvenienced commuters. At the same time, companies have to bear a much greater risk on the revenues that they are asked to deliver during their contracts. That is fine if the economic trajectory continues upwards, but if there is a downturn, as my hon. Friend said, the Government will have to bear the risk. For example, Great North Eastern Railway will have to provide £1.3 billion over the course of its franchise, and First Great Western will have to provide £1.1 billion. Those are huge sums of money, and my criticism is that although they reduce public expenditure, it is at the expense of service development.
The northern franchise, which I know something about, illustrates the lack of long-term planning. It is the largest franchise in the country in terms of area, covering five passenger transport authorities, and the company running it is an excellent rail operation. The punctuality of its service is a considerable improvement on that of the two franchisees it replaced. However, its franchise does not allow for any innovation, expansion, new lines or rolling stock. New rolling stock will be provided through First Group, but they will be the only new trains that the franchise has. The company wants to innovate, and the passenger transport authorities have plans to improve the service, but under the Railways Act 2005, they no longer have to be statutory co-signatories to the franchise. As a result, we have plans that were made before the Act and a company that wants to innovate and develop, and it will not be allowed to do so.
The rail utilisation strategy for Manchester has just been published. It identifies overcrowding on the network and explains what needs to be done. I should have thought that when creating a franchise, one should conduct the network utilisation strategy first, discuss with the passenger transport authorities their long-term plans, talk to the regional development association about their plans, and then come up with a franchise that reflects those needs. However, in reality, in franchise after franchise, that is not happening. The Department for Transport prescribes the timetable, stifles growth, and does not consider the long-term growth implications. As a result, there will be a saturation point.
The hon. Gentleman makes a valid point about the franchising process, but is not part of the process its pure opacity when trying to find out what the franchise comprises when the bidding starts and whether the factors that he has mentioned have been taken into account in the construction of the franchise document?
I agree. The removal of passenger transport authorities as statutory co-signatories to those franchises breaks an important link. The 2005 Act gives them the right to add services at their own expense or to remove them to make a saving, but it cannot replace genuine partnership. The Government say that they will provide the authorities with that sort of involvement in bus services. Such co-ordination is crucial to the planning of services locally, regionally and nationally, but the link has been broken.
My hon. Friend mentioned Waterloo station, which is the case in point. Waterloo will be saturated by 2012. The Eurostar platforms will be released, but we have not seen any concrete plans. The contract for South West Trains has been let, but when re-franchising took place, would it not have made sense to include in the contract the use and cost of those platforms?
I am most interested in what the hon. Gentleman says, and I agree with much of it, but is not the whole tenor of his speech about the need to plan and integrate, and is not that impossible when the service is privatised and fragmented? Does he not agree that if one could integrate planned train operations with regulated and planned bus and underground services within a coherent and planned transport system not only for London, but for the entire country, the service would work better?
“Regulated” and “planned” does not equal “public owned”. That is an important point. I am a great believer in partnership. Partnerships work between private enterprise and government, and between public services and private enterprise. The Department for Transport’s control of those services is stifling long-term growth and development. If the Government are genuinely serious about wanting to engage the regions and the local authorities and give them more say in and responsibility for their services, a role in transport planning is vital.
The Crossrail franchise is another case in point that illustrates what is happening. We are seeing a break in the cross-country routes of through trains from Glasgow to the south coast. That break will happen at Birmingham New Street. Anybody who knows Birmingham New Street knows that it is the most disabled-unfriendly station one could possibly think of. We know that it has capacity problems, but they will not be addressed. The franchise is being let. It should all be planned. It needs to happen at the same time.
We see the same contradiction in the Government’s response to open-access rail companies, no matter whether whole trains or Grand Central Railway are involved. They have let a contract to GNER, which is told that it must raise so much money—£1.3 billion—yet a contract is let to Grand Central, which is allowed to run up to three trains a day from Sunderland to London. But—this is another example of the contradiction within the Department for Transport—the train services should have started in December. They will not, because Grand Central Railway does not have the railway sets. East Midlands has railway sets that it is happy to return to the rail operating company so that Grand Central Railway can use them to start the services running down to London, but the Department for Transport has seemingly told the train operating companies, “You cannot do that.” That is an example of the micro-management of the rail industry by the Department for Transport that the Select Committee says is stifling innovation and not allowing the service to grow and develop as it needs to.
That is the sort of problem that we face. We have a successful rail industry—there is no doubt about that—but unless we address the fundamental issues of how to plan and develop it, we will not see further growth. We will see stifled growth, further road congestion and people who are very unhappy with the way that the railways are running. We need a clear long-term vision, and that must involve working in partnership, getting the process right for setting the franchise and involving local and regional partners.
I congratulate the hon. Member for Twickenham (Dr. Cable) on securing this debate and introducing it in a characteristically thoughtful way. We have had a high-quality debate, including a particularly good contribution from my right hon. Friend the Member for North-West Hampshire (Sir George Young), who brings a great deal of experience to it from both sides of the discussion—the ministerial side and the Treasury side.
No one who suffered this morning on London’s train and tube network, as did all my staff—I am fortunate in being able to walk to work—can be in any doubt that a considerable increase in capacity is needed and that the role of franchising is a key issue.
Indeed, but we are here to discuss franchising. I shall make a number of points on the relationship between franchisees and the track.
The Opposition transport team has been taking part in a large number of discussions on the future of the railways. My hon. Friend the Member for Wimbledon (Stephen Hammond) has engaged during the past 12 months with the directors of every single franchisee company. It is because he is at a conference that a shadow Minister with responsibility for shipping and aviation rather than he is replying from the Opposition Front Bench.
I make no apologies for privatisation. Not only did it deliver the first new trains to my constituency in 40 years, it resulted in a 30 per cent. growth in passenger numbers during the past decade. The Conservative party is firmly committed to trains, not just because of the collective need to tackle CO2 emissions but because of the reduction in congestion that it offers for road users. The view that we have come to, as has been mentioned several times, is that the current structure of the railway network and franchising system is not fit to meet the capacity challenge.
There are a number of reasons for that. The relationship between franchisees and Network Rail, although it has improved, has tended to be dominated by disputes as each apportions blame for delays to the other. Endless man-hours are wasted deciding who is responsible for lost passenger-minutes and how large a fine one party owes the other. The greatest irony is that because of the huge subsidy that the railways receive, the money passed back and forth comes from the public anyway. That is one of the reasons why ticket prices have just seen a fourth annual inflation-busting rise, as my right hon. Friend said.
My hon. Friend recently visited the new joint control centre at Swindon, where he saw a little cameo of the situation. The centre was supposed to herald a new, constructive relationship between Network Rail and the train operating companies. It should come as no surprise to hear that a significant portion of the building’s floor space has been assigned to—wait for it—the delay attribution team. A similar experience was described to me by a commuter who, after bricks fell off a bridge and as they sat for an hour and a half waiting for the muddle to be cleared, heard a conversation back and forth between the train driver and someone on the other end who was clearly trying to gather data to ensure that Railtrack and not the operator took the blame. That illustrates that the relationship is not working at the moment.
The bidding process has figured in this debate. It is another aspect of franchising that has gone seriously awry. What we have witnessed during the tendering process is the Government’s ever-increasing desire to recoup from train operating companies some of the vast sums that have been spent on the rail networks since the demise of Railtrack. The companies, in turn, have ratcheted up their bids in the knowledge that the overriding point of interest to the Department, or rather the Treasury, is the size of the premium they are willing to pay. Christopher Garnett, former chief executive of GNER, made the well-publicised comment that it was far better to overbid drastically for a new franchise than to underbid and lose it. Yet there is no point in the Department accepting absurdly high bids when it is quite clear that they cannot be met. My hon. Friend alluded to GNER’s particular problems as a result of a court judgment, but the wider point applies. Everyone ends up losing out. Fares go on and on rising to cover the premiums, and the taxpayer ends up forking out when the premiums cannot be delivered.
The Government should be awarding contracts not just to the highest bidder but to the one that shows that it has serious plans for enhancing the service it wants to operate. Unfortunately, recently re-awarded franchises have been tied up with such tight specifications that the operating companies are left with little or no room to innovate. It is clear that the franchising process is going wrong mainly because of too much Government interference at the time of setting and sometimes subsequently. Can it really be right that 12 civil servants are involved in writing timetables? Is it not madness that all procurement decisions lie in the last resort with Government? Is it not altogether crazy that in 2006, the Secretary of State has operational involvement in and control of the railways? It must stop. Politicians should set and agree the railways’ strategic framework with industry and passenger groups—a number of speakers have made it clear that that is not happening—but the railway professionals should run the railways. The Government should not be in the business of micro-managing them, but unfortunately they are.
The Transport Committee report has been referred to several times, but I shall quote it:
“The Government has embraced the notion that private enterprise is best at delivering high-quality, innovative services such as the passenger railways, and yet it does not trust companies to deliver these services without highly detailed and specific contractual requirements which reduce the scope for innovation.”
I entirely agree. The Government need to stop dictating and give the companies that operate the railways the scope to respond to demand.
Undoubtedly the greatest failure of the current franchising system is the fact that it does not allow for capacity increases in line with the rise in passenger numbers. That problem is going to get worse. The Office of Rail Regulation forecasts that although passenger numbers will grow by 28 per cent. by 2014, rail capacity will grow by just 2 per cent.
Perhaps unusually, I want to defend the Government. Pressure is put upon them by the electorate who travel on trains, who say, “Sort the railways out, because they don’t work and I’m standing, having a miserable journey every day”. However, the hon. Gentleman says that the Government should not intervene, so they are caught between a rock and a hard place—they are damned if they do, damned if they do not. The Government are right to intervene and say that things must improve, and right to give some direction, to ensure that passengers have a slightly better time than they have now.
I am afraid that I profoundly disagree. I hope that I am not going beyond the rules of order in saying that there is a direct parallel with the NHS, where more and more Government intervention, targets and rules are not helping. The way to do things is to have a structure that enables the operators to do better, not to sit over their shoulders and micro-manage them on detail. That applies in management of all sorts.
I so am grateful to the hon. Gentleman for giving way, and I shall try to make this my last intervention. There is a difference between the health service, which is still essentially a public service in the public sector, and the railways, which are run by private companies that try to operate like a public service. Would the railways not be better in the public sector, where there would be more accountability, rather than being left to the private sector?
I would try your patience if I gave a long answer to that, Mr. Weir. Briefly, I firmly believe in the delivery of services free at the point of contact in the NHS. However, there is only one part of the health service in my constituency about which I have never received a letter of complaint, and that is the Pilgrims hospice in Canterbury, which is a voluntary organisation and wholly independent from the NHS.
The Government need to stop dictating and allow the companies that operate the railways the scope to respond to demand and to innovate. Undoubtedly the greatest failure of the current franchising system is the fact that it does not allow for capacity increases in line with the rise in passenger numbers. I have made the point that the problem will get worse with the differential rates of growth. Even now, commuter routes are heavily congested. Capacity on trains travelling into London is regularly exceeded by more than 40 per cent. The seating capacity on the Cambridge to Liverpool Street route is exceeded by more than 80 per cent., which is way beyond the official definition of crowding. Put another way, some trains are carrying 200 more people than they have space for.
One might think that the Government might look for increases in capacity when putting new franchises out to tender. Not a bit of it. Two recently awarded franchises demonstrate that fact. First Capital Connect had to remove trains from its routes in order to meet its franchise specifications, and the hon. Member for Twickenham has already taken us through the South West Trains saga of ripping out seats and lavatories to provide more room for people to stand.
In order to achieve greater flexibility for the operating companies, the Government must consider extending the length of franchises, which is something to which my right hon. Friend referred. The central problem with the current seven-year franchises is that they leave a small window of opportunity for train operating companies to invest, if they want to see a return on that investment before the franchise expires. The most important example of that is obviously new rolling stock. From purchase to delivery takes several years, but it makes little sense for a company to spend a lot of money on an asset out of which it might get very little use. If franchises were extended to 15 years, the train companies could expect to enjoy a long period of use. They would also be in a position to invest more in all the station facilities that passengers want. My right hon. Friend gave examples of those, from car parking to platform lengths, as did other hon. Members.
Ultimately, the capacity problem will begin to exert a stranglehold on our economy. Overcrowding is not just bad for people’s quality of life. A buoyant economy requires people to be able to get from place to place in a timely fashion. We need the integration of track and operator, by some means or other. We need less Government micro-management, and above all we need the longer horizons that would come from much longer franchises. Privatisation has delivered some fruits, but we need to think again about its structure.
I welcome you to the Chair, Mr. Weir, and say what a pleasure it is to see you where you rightly belong: at the centre of the British establishment. Long may you remain there.
This has been a useful debate and I congratulate the hon. Member for Twickenham (Dr. Cable) on instigating it. The debate has been extremely well informed, as usual. Most of the colleagues who take part in these debates have long experience of and genuine support for the railways—my hon. Friend the Member for Luton, North (Kelvin Hopkins) is a perfect example of that. That always makes the debates more interesting and worth while. It is also a delight to see the former Secretary of State for Transport, the right hon. Member for North-West Hampshire (Sir George Young).
I am pleased to have the opportunity to explain the present position and future plans for passenger rail franchises. As was pointed out a number of times, we recently announced the award of the new south western franchise, which encompasses the present South West Trains and Island Line franchises. At the end of last month we issued invitations to tender for three new franchises—the new cross-country, east midlands and west midlands franchises. I am of course aware of concerns that arise about service levels and other matters when rail franchises are replaced, and I shall deal with those.
The Transport Committee’s report has been referred to a number of times. The Department for Transport will obviously consider the report, and we shall issue a formal response in January. However, I want to make it clear that my remarks today are not intended in any way as a formal response to that report.
My hon. Friend the Minister has mentioned the range of new franchises. The east London line extension is critical for London. It has been welcomed by all, and was to be transferred to London Underground, but can he clarify—if not today, then in correspondence—whether it was a condition of transfer to the Mayor of London’s responsibilities that the line should be franchised out?
My hon. Friend might anticipate my answer to that. I shall have to write to him once I have checked the details.
The current franchising system is delivering. More than 1 billion passenger journeys were made last year, which was 40 per cent. more than 10 years ago. Performance has continued to improve, with almost 88 per cent. of trains running on time over the past 12 months. People are seeing newer trains and investment in stations. Not only do we have one of the fastest-growing rail networks in Europe, but we have one of the youngest. We are making changes so that more people can use smartcards. Those improvements are being made under the current franchising system. Capacity improvements have been referred to. They are part of current contracts, but future growth will be addressed as part of the high-level output specification, which is the longer-term framework for the railways that we will publish next year.
I shall try to make some progress through my prepared comments, but I want to address some of the comments that hon. Members made first. The hon. Member for Twickenham referred at length to South West Trains and the improvements in the rolling stock. I should like to clarify the points that he raised. The south western franchise commits the franchisee to a 20 per cent. increase in peak-time capacity on suburban lines and a 21 per cent. increase in the number of mainline peak-time seats. The franchisee will be held to those commitments, which will be monitored constantly over the length of the franchise, so those improvements will be delivered.
The hon. Gentleman is right that the Government are dealing with the problems of success. It is useful that the right hon. Member for North-West Hampshire is in his place, because I rather suspect that previous Governments would have given their eye-teeth to be dealing with the problem of increased passenger numbers on the British railways, rather than—as happened in the past, particularly under the previous Conservative Government—what was seen as a terminal decline in passenger numbers on the British railways. The current situation obviously presents serious challenges to any Government, but I would rather deal with exponentially increasing passenger numbers on the railways than, as my hon. Friend the Member for Luton, North suggested, have to deal with the terminal decline of the railways.
Like the Minister, I am a strong supporter of railways and welcome the massive increase in passenger numbers. However, there is a non-sequitur: passenger numbers would have or could have been at least that high—perhaps higher—whether the railways were publicly or privately owned. It was not privatisation or the franchising system that led to the increase in numbers. Indeed, fares have gone up considerably. Had the railways been in the public sector, they might not have gone up so much, and passenger numbers might even have been higher.
My hon. Friend makes a valid point. He may be familiar with an interesting book called “Prime Minister Portillo and other things that never happened”. It would be extremely entertaining, although not particularly useful, to speculate about alternative history—what would have happened if British Rail had not been privatised in the early 1990s.
I am content to state that under the management—the hon. Member for Canterbury (Mr. Brazier) might call it “micro-management”—on this Government’s watch, passenger numbers have increased by a healthy margin and services have improved. We are certainly content with that. I do not want to speculate about whether it would have been different under British Rail.
May I press the Minister to clarify his answer about the 20 per cent. increase in capacity? I am glad to hear that he will monitor that, but will he explain how it will happen? As I understand it, under the franchise there will be only 10 more carriages—less than 1 per cent.—on top of the existing 1,400. That is what the company has announced. Where will the seats come from? If the Minister is monitoring the situation and the company has clearly announced that it is removing seats, at what point will the Department intervene to stop what is clearly a contrary process?
The Government have no intention of intervening at this stage; we have every confidence that the targets set in the franchise will be met. New trains and carriages will be introduced and £40 million will be spent on station improvements. That will build on the £70 million investment in new trains already made under the existing franchise, providing an extra 4,500 seats.
Some, but not all, of those trains are already in service. An additional 17 new four-carriage Desiro trains, comprising 68 vehicles, will provide those 4,500 seats for passengers on the busy routes to London Waterloo. The new trains will enable more 12-carriage trains to be run at peak times to increase capacity on busy commuter routes.
I am not sure which figure the hon. Gentleman is citing; his figures on the increase in rolling stock seem rather unambitious. I shall be happy to sit down with him to sort out exactly where he gets his figures from and to clarify the issues for him. The Government are satisfied that the capacity improvements promised by South West Trains will be delivered by the end of the franchise.
The commitment to pay a £1.191 billion premium in the bid for the south western rail franchise was also mentioned. The Government do not specify whether a premium should be paid by any rail franchise company or the level of that premium. It is entirely for bidders to decide whether they wish to pay a premium and how much that will be. However, I am sure that most Members will agree that if a company wants to force £1.191 billion on the Government—that money, incidentally, would go back into the rail budget—they will be wise to consider the offer seriously. The infrastructure changes mentioned by the hon. Gentleman are not matters for the franchises, but undertaken and progressed by Network Rail.
The hon. Gentleman is absolutely right; it is not the only thing that is considered. A great deal of work is done to ensure that any potential premium that may be paid by a future franchisee is deliverable. That is a crucial part of the franchising process.
The hon. Member for Twickenham mentioned the impact of open access on GNER. He was suggesting, I think, that the impact of open access operators on the east coast main line was responsible for some of the problems that GNER is reported to be having. However, no open access operator gets access to the railway unless it can convince the Office of the Rail Regulator that that will have no significant impact on the revenue of existing franchises. They must always be given precedence over any open access operator, for the simple reason that open access operators do not pay track access charges.
Vertical integration was mentioned. I accept what the hon. Member for Canterbury says; a debate can be had, and the Government do not shirk from that. However, as the Transport Committee’s report into rail franchising makes clear, there is not much of a case to be made for vertical integration in respect of the benefits that might be achieved by going for that particular structure. Of course the Government would be willing to look at particular proposals made by particular authorities and operators, but in my experience train operators do not want the responsibility of repairing infrastructure and the infrastructure companies do not want the responsibility of operating trains.
Stagecoach is committed to increasing the passenger performance measure from the present level of 90.1 per cent., as a moving annual average, to 92.5 per cent. by 2009-10 and 93.3 per cent. by the end of the franchise. To put that in perspective, at present the national average of all train companies is 87.6 per cent., so whatever criticism has been levelled at South West Trains during this debate, its performance is well above the average of any of the train operating companies.
The franchise builds on progress already made. Recent timetable changes have brought about high reliability and extra services. All the train companies have been criticised for increasing fares. South West Trains currently runs some of the lowest fares on the network. It runs a low-cost operation called Megatrain—the equivalent, I guess, of the low-cost airlines—on a limited number of services on selected routes, and Stagecoach proposes to continue the scheme.
I turn to the comments made by my hon. Friend the Member for Luton, North. Neither I nor the Government approach the structure of the railways ideologically. We do not look at the privatised railways and conclude that, because they are private, they are good.
When Connex was taken over, it was run by the public sector for two years and was one of the most successful operations in the whole network. It was then privatised again. On what basis was that decision made? If what worked mattered, it would have remained in the public sector.
I disagree. I should point out that since the new franchisee took over that franchise, performance has been at least maintained or, as the hon. Member for Canterbury says, improved.
What would be the point of renationalising the rail industry unless we could show benefits for the travelling passenger? We have the highest safety record in history and performance that, although not at an all-time high, has certainly improved greatly since the Hatfield incident in 2000. Record investment is going into the network. In the context of the more than 1 billion passenger journeys being made—the highest level since 1946, I believe—what would be gained?
I say with all respect to my hon. Friends the Members for Hayes and Harlington (John McDonnell) and for Luton, North that if the only thing to be gained is the ticking of an ideological box to say, “We are on the left; we are a socialist party”, I am not convinced that moving into the public sector would achieve anything except the wearing of our left-wing conscience on our shoulders.
Costs have increased, but standards have also increased. It is clear that, even if British Rail were still in the public domain, the money to be spent on the infrastructure would also be increased, not only because of higher standards but because, as my hon. Friend rightly says, the railway network was deprived and starved of investment for many decades. For the first time, the Government are putting record investment into the railways, which is why—
HM Revenue and Customs (Wales)
I was rather enjoying the previous debate, and it seems a shame to interrupt it with this issue. However, I am grateful to have secured a short debate on the reorganisation of Revenue and Customs offices in Wales. I shall try to be as succinct as I can, as I know that the hon. Member for Llanelli (Nia Griffith) would like to say a few words before the Paymaster General’s reply, and I expect that there will be one or two brief interventions as well. Other Members from Wales, notably the hon. Member for Caernarfon (Hywel Williams) and my hon. Friend the Member for Clwyd, West (Mr. Jones), indicated to me that they would have participated if this had been a longer debate.
There is a great deal of interest in and concern about the issue throughout Wales. The title of the debate does not really capture what is troubling hon. Members from Wales about HMRC plans. The consultation published on 16 November, which outlined a programme of HMRC office closures in Wales, amounts less to a reorganisation than to a fundamental and dramatic cut in the presence of HMRC in Wales and the nearly total destruction of the network of tax offices in rural west, mid and north Wales. Under the review, Cardiff, Swansea and Wrexham will be the principal processing centres while the rest of the network will be radically downsized or closed altogether, with the projected loss of some 1,000 jobs. An enormous swathe of offices from Pembroke Dock in the south-west to Holyhead in the north is being lined up for closure.
The hon. Gentleman mentioned rural mid-Wales, which has a high number of self-employed people and very small businesses. I am sure that he would agree that they depend on an accessible tax office to help them with self-assessment and pay-as-you-earn issues.
The hon. Gentleman makes an excellent point. He highlights just one of the concerns that many Welsh Members have about the proposals. Mid and west Wales will be hit particularly hard by the plans for centralisation. Offices in Aberystwyth, Brecon, Newtown and Welshpool, where more than 200 staff are employed, will be reduced to a mere handful of employees. Carmarthen’s office staff will drop by around two thirds from 127 to 40, and in my area of Pembrokeshire, 72 staff at the offices in Haverfordwest and Pembroke Dock will also be cut down to a handful of employees.
Paul Gray, the acting chairman of HMRC, said on 16 November in a letter that announced the consultation exercise:
“We think it is essential that we take full account of the impact of our plans on communities before final decisions are taken.”
I, too, think that that is essential, and that is why I ask the Paymaster General to ensure that before any changes whatsoever are signed off, a proper economic impact assessment is conducted to investigate the localised effects of the office closures, particularly in Pembrokeshire and the mid and west Wales region. It would be helpful if copies of the impact assessments were placed in the Library.
The Paymaster General must be aware that we are discussing one of the poorest regions, not just in the UK but in the entire EU. It has qualified for objective 1 funding precisely because of its low gross domestic product per capita, low average earnings and the fragility of its economy.
On that point, would the hon. Gentleman agree that there is great inconsistency? The region qualified for convergence funding, yet despite the avowed objective of such funding to get high-skilled, well-paid jobs into west Wales, we now face this situation. In my constituency, not only will we lose 37 jobs, but we have already lost two jobcentres and a social security office. The loss of all those high-skilled jobs has a real impact on small communities such as the ones that he and I represent.
The hon. Gentleman is absolutely right. There is a glaring inconsistency and potential incompatibility between what is proposed and the wider aims of the objective 1 programme.
The economy of west Wales, like that of many peripheral rural areas, is characterised by low-margin activities such as agriculture and tourism, and low levels of manufacturing and business services. The result is that Pembrokeshire’s economy is dominated by micro-businesses: more than 83 per cent. of businesses employ fewer than five people, and a high proportion of workers are self-employed. In many places in the region, the public sector is actually the dominant economic activity, so when the Government take a knife to the public sector in places such as Pembrokeshire and Ceredigion, they risk seriously undermining the local economies. At a time when numerous Government agencies are trying hard to create new sustainable jobs in mid and west Wales, it is perverse that another arm of government should remove excellent skilled jobs from the communities. I would welcome the Paymaster General’s views on the compatibility of the initial HMRC proposals with the objective 1 programme in mid and west Wales.
I would also be grateful if the Paymaster General could comment on how the plans would help deliver on the stated aim of the Welsh Assembly Government to move public sector jobs out of Cardiff and distribute them more equitably in the Welsh regions. It seems that the HMRC proposals would do precisely the opposite. What discussions have there been between her Department and officials at the Assembly about that?
The starting point for the reorganisation was, of course, the merger between Revenue and Customs last year, which has led to the need for some rationalisation in the office estate. Bringing accommodation back in line with operational requirements seems entirely sensible and reasonable, and I believe that most Members would agree wholeheartedly that an efficient public sector is a good thing and that the Government have a duty to maximise value to taxpayers. I would go further than that and say that Ministers should positively seek out opportunities for streamlining operations.
However, what we are discussing in this case is not the streamlining of back-office functions but deep and severe cuts in the front line of a vital public service. I find it hard to square the proposals that were outlined in “Transforming HMRC” with the stated aim of the review to ensure that “service standards are improved”. For example, my local office in Haverfordwest is one of those earmarked for closure. It employs some 65 staff—making it one of the largest employers in the town—in the debt management and banking function. Those people recover money for the Exchequer. Their work involves visits to homes. In fact, visits are a vital part of their operation. How can that be done remotely from a centre in Cardiff?
The compliance function will be affected. All the work carried out by the compliance team in Haverfordwest is location-specific; that is, it must be undertaken in the locality. It includes visits to businesses to examine records. Again, I ask how such work can be done efficiently from a processing super-office in Cardiff.
Then there is the processing function itself, or what is known in rural areas as distributed processing, which is the business of processing self-assessed tax returns. I understand that all that work is to be centralised in Cardiff. Could the Paymaster General offer some clues as to how those functions will be delivered to individuals and businesses in Pembrokeshire and across Wales to the same or a better standard by a centralised contact centre in Cardiff?
The other local office in Pembrokeshire is in Pembroke Dock. It focuses mainly on collection of excise from the two oil refiners. I understand that there is also a VAT team at that office. There is a no longer a permanent Customs presence working on detection at the port; the intelligence side of things is now based in Birmingham. I have been told that the VAT team at Pembroke Dock is comprised entirely of ex-uniform staff. One employee suggested to me that, given the Government’s renewed interest in border security, it would be easy to transfer staff to a new Customs and security team if VAT jobs are to go from Pembroke Dock. Perhaps things will come full circle and we will have a proper uniformed Customs presence once again in Pembrokeshire. I ask the Paymaster General to comment on that idea.
The Federation of Small Businesses in Wales stated that there is genuine concern among businesses about the impact of the proposed cuts on the quality of service from HMRC. Many of the businesses are small businesses or self-employed people who do not have specific expertise in finance, accounting or taxation, so they value local contact with HMRC. The FSB stated that there is a danger that HMRC will increasingly be perceived as
“a faceless agency of enforcement rather than an agency able to afford help and advice”.
I note that, under the terms of the review, HMRC is specifically committed to retaining a face-to-face service in all locations where such a service currently exists. Given the sheer scale of the proposed cuts outlined in the document, it is incumbent on the Paymaster General to spell out just how such face-to-face service can be maintained to a high standard when the offices themselves will disappear. Is not the problem that HMRC simply does not see small businesses and places such as Pembrokeshire and rural west Wales as key customers? I noted the press statement from the Treasury on 20 November that announced the implementation of the recommendations of the Varney review into links with large businesses. The positive approach to providing big business with a high-quality tax service contrasts, I am afraid, with the message being sent out by the proposals that we are discussing this afternoon.
What assessment does the Paymaster General make of the potential for lost revenue as a result of the proposed reorganisation? I understand that her Department will save some £74 million nationally by cutting some 2,500 compliance jobs, but that its own figures identify that it will lose £250 million in yield to the Exchequer. It might be that she considers that the potential loss in yield as a result of the new wave of centralisation will be less than the efficiency margin that can be squeezed out, which would make it worth while, but I would be very sceptical. In any case, such calculations should be in the public domain.
I want to conclude—rather negatively I am afraid—by drawing attention to a letter to me from the Paymaster General dated 28 July this year about the HMRC estate in which she said:
“There are no current plans for closure of Haverfordwest or any other offices in West Wales.”
She signed off the letter cheerily with the comment:
“I hope your constituents will find this letter helpful.”
No, they do not. Just four months down the line, they are staring at a massive programme of office closures and job cuts by HMRC in Pembrokeshire and across Wales. This is not the first time my constituents have been given an assurance in writing or from the Dispatch Box about a threatened local service in Pembrokeshire only for that assurance to appear totally and utterly worthless just a matter of weeks or months later. I refer specifically to an assurance we were given about the future of Withybush hospital last year.
Coming back to these proposals, I hope that the Paymaster General will look hard at what is proposed in the document and at how it impacts on west Wales. I believe that if she considers the evidence, she will see that the proposed closures fly in the face of Westminster and Welsh Assembly Government economic policy towards the objective 1 area, that they will cause real economic damage to a number of sensitive areas, that they will not lead to an improved taxation service for businesses in west Wales and that they risk further undermining the accessibility, reputation and perception of HMRC in the eyes of honest taxpaying individuals, families and companies. I look forward to her reply.
I congratulate the hon. Member for Preseli Pembrokeshire (Mr. Crabb) not only on securing the debate but on covering the points so well and so clearly. I shall make only a couple of small points to add to his excellent explanation of the situation.
I am absolutely horrified at the proposal to close the Llanelli office. In Llanelli, where there are few exciting opportunities to lure staff elsewhere, we have an extremely loyal, experienced and hard-working work force. That contrasts sharply with recruitment difficulties in more prosperous areas. Her Majesty’s Revenue and Customs ought to recognise the high standard of delivery that it gets and the serious risk of detriment to the service if it tries to move the service out of Llanelli.
There are serious environmental concerns about crowding people into the south-east to work, whether from housing or water shortages, congestion or transport difficulties, and the same is now happening in Cardiff and Wrexham. Any attempt to move jobs from more rural areas towards the centres seems utter madness. We took a strong initiative back in the 1970s and moved jobs out of the centres, and that is the way in which we should be moving. It is certainly the way in which the Assembly is moving. For those reasons, I ask for serious reconsideration of the proposals as I think that they will do detriment both to the service and to those using the service, and will not make the savings that they are supposed to.
I congratulate the hon. Member for Preseli Pembrokeshire (Mr. Crabb) on securing the debate, which gives me the opportunity to push aside the myths and to focus on the practicalities.
I want to say to all hon. Members who have made contributions that, as the hon. Gentleman made clear, you cannot have your cake and eat it. One cannot say that one wants a tax administration to be efficient and to use its resources appropriately because it is spending taxpayers’ money and then say, “But not in my constituency.” The challenges that the Department faces are those that he mentioned, and I shall return to them.
I want to point out in the strongest possible way—I know that this may seem counterintuitive to the hon. Gentleman—that the senior management team of Her Majesty’s Revenue and Customs has not announced a decision to close offices in Wales and elsewhere in the United Kingdom. What was announced on 16 November was the decision to undertake consultations to try to explore and come to decisions on exactly the points that the hon. Gentleman raised. How do we ensure that a Department spends taxpayers’ money in the most efficient and reasonable way? How do we ensure that we maintain the type of service that taxpayers have a right to expect in the most efficient way? Are there any other considerations that are relevant to the decisions that a Department should take?
On 16 November, the Department brought forth its plans to bring its office accommodation—using exactly the same words as the hon. Gentleman—back into line with its operational requirements. Final decisions have not been made or announced by the board and there will be a consultation exercise. In Wales, that is scheduled for next summer. It will be up to every Member of Parliament, every community and every organisation that has an interest to make representations, to make the points that have been made this afternoon and to demonstrate their validity. They should not deal in generalities but the specifics. That is what the Department needs to take note of.
All remarks and submissions, including what has been said today, will be taken into account by the Department. All Members of Parliament who represent Wales will be invited to contribute to the consultation exercise. The board of HMRC will make final plans and decisions only when it has taken full account of all the views expressed during each of the consultation exercises.
Let us look at the scale of what needs to be done. Following the merger of the Inland Revenue and Customs and Excise, the Department has significantly more accommodation than it needs. The position varies across the United Kingdom, but in Wales the board believes that it has 40 per cent. more accommodation than it needs to support its operations. To return to the point that the hon. Gentleman so eloquently made, of course he expects the board to use those resources efficiently. The board is consulting in a way that no Department has ever done before about how it should distribute those resources. Indeed, the previous Conservative Government did not do that when they slashed the number of jobs in the Department in Wales in a matter of four or five years under what was then called the future expenditure review.
I am glad that the hon. Gentleman recognises the central point, and I can assure him that this will be done in an open way. He raised the specific point of inquiry centres. The thrust of what he said and of the interventions from other hon. Members was that the public should have access to the advice that they need. Throughout the country that is done through what are called inquiry centres, which are backed up by contact centres and specialist staff elsewhere in the UK if necessary. I want to make it absolutely clear that although the board is looking at its office accommodation and its back office functions, there will not be a reduction in the public inquiry facilities. I have made it absolutely clear that the network of inquiry centres must be maintained as it is the point of access for the taxpayer and the micro-businesses that the hon. Gentleman referred to. There are 18 inquiry centres in Wales and they will remain.
We understand the point about surplus office accommodation, but part of the problem with the proposal, as I understand it, is that it goes beyond a tidying up exercise or a decision about what to do with the excess surplus accommodation as a result of the merger. There is a move towards a quite different business model on the part of Revenue and Customs and the way it delivers advice to customers and that is what is causing a great deal of concern. A whole network of offices are being lost, particularly in the rural north-west mid-Wales region.
The changing nature of how HMRC inter-relates and interacts with the taxpayer is driven by the taxpayer. For instance, they increasingly do not want to write a letter; they want to make a phone call or send an email. Taxpayers want access to interactive sites that give them the basic information that they require. Over and above that, when it is necessary, they want access to a named official who specialises in the area that they are concerned with. The problems are increasingly complex.
People also want access to inquiry centres, which I have already commented on. I am sure that the hon. Gentleman is not suggesting that the Department should stand like King Canute and say to the taxpayer, “We don’t care what you want. You will write to us and communicate with us in this way. We insist on not having electronic systems and we will do everything manually and by paper”. I do not think that the taxpayer would consider that a reasonable response. Processes relating to automation and how we can give a quicker, more timely and accurate service as a Department are vastly different from the opportunities available 10 years’ ago. It is not just the Department saying that it will do its business differently; it is learning from other business practices and, most importantly, learning from the taxpayer about what they want. Increasingly, they do not want to call the Revenue at 10 minutes to 4; they want to call it when they are ready—for example on a Saturday, a Sunday or in the evening. We have to face those prospects in considering how to shape how business is done by the Department in the future.
The hon. Gentleman is right when he says that the merger of Revenue and Customs makes it possible to look rationally at the estate. What is the point of having two offices under-utilised that are very close to each other? Of course, the efficiency programmes have changed how business is done and how quickly we can respond. Increasingly, people send their self-assessment tax returns electronically and that means we do not need hundreds and hundreds of people dealing with paper because we deal with an electronic return.
I agree with the hon. Gentleman that the Department’s operation in Wales must be based on an understanding of what the taxpayers’ needs are and the challenges that we face in terms of efficiencies. The planning assumptions for the board cover all of the UK as announced on 16 November. The impact on Wales is similar to that on other areas in the country with the exception of London and the south-east, where a greater reduction in posts is planned in recognition of the move away from this area to other regions. Other Government Departments have relocated to Wales.
In relation to the next point that the hon. Gentleman raised, it is important, when seeking to understand this process, to recognise that the cornerstone of each consultation exercise will be an assessment impact. It is proposed that that should be undertaken in every location and I absolutely agree with the points that hon. Members have made. There could be a differential impact on the labour market depending on the opportunities in that area or how far it is to travel for work. That is precisely why the assessment impacts will be undertaken and, of course, Members of Parliament can contribute to that.
We must ensure that we end up with an improved service and I am happy to place those impact assessments in the Library for each area. Every Member of Parliament will be able to see precisely what the employment opportunities are locally, whether or not the withdrawal of the office would have a dramatic effect, and whether other employment opportunities in the local area are being strengthened. Those are perfectly reasonable things to do and I am absolutely clear that we need to be transparent in how we approach this debate and to ensure that the information is available.
Will consideration be given to the relative values of properties that are freed up? That should be looked into if we are to obtain value for money. Clearly, in centres such as Cardiff, property and office space is worth a lot more than in parts of rural west Wales.
Indeed. We also need to consider availability in the labour market; there is no point having an HMRC office in a location where we cannot recruit the relevant staff. There are many factors and I am happy—it is not a secret—to write to my hon. Friend and the hon. Gentleman to give examples of the things that should be covered. I have asked the Department to consider a range factors in the impact assessment and if hon. Members think it reasonable that other economic and social factors should be taken into account, I am happy to consider those.
At the heart of this is not just my responsibility as Minister, but our responsibility as Members of Parliament to face reality and to recognise that the Department spends taxpayers’ money and that money should be spent in the most efficient and productive way. A slightly more complex picture emerges in the public sector in relation to where resources are located. If I put all the relevant information on the table, in order to maintain the office he would like to keep, the hon. Gentleman would need to increase HMRC’s budget by £1 billion and state that he would do so in his election manifesto and that of his hon. Friends. Otherwise, he is faced with the same question as me: how do we reorganise efficiently, fairly, effectively, take all matters into consideration and ensure that the process is transparent, so that people understand the real reasons why decisions were taken, and not just have the rumours and worries that often circulate in the absence of accurate information?
I hope on that basis that the hon. Gentleman will embrace the consultation exercise and I look forward to receiving his submission.
I shall first set out the record of Derbyshire police and the improvement in that record under the present Government, because that is an important backdrop to the points that I want to make. First, in sheer numerical terms, Derbyshire’s force is much more substantial than it was in 1997. There were just under 1,800 full-time equivalent officers at the end of 1996, and there are now 2,063. Staff numbers have also increased, by about 500, providing critical support services to front-line officers. The introduction of police community support officers has been one of the major innovations of the present Government. The authority now has 56 of those, and our special constabulary, which is a critical part particularly of neighbourhood and community policing, has also increased in that time, by 70 heads. Overall, the force is much larger than it was 10 years ago. That needs to be recognised and appreciated.
It also needs to be recognised that those people have not just been sitting around, messing about. They have been bringing down crime sharply in the constituencies of all right hon. and hon. Members who are here from Derbyshire. Crime is down by 21 per cent. over the past three years, domestic burglary is down by 52 per cent. in that period and vehicle crime is down by 41 per cent. There have been dramatic changes, particularly in burglary and vehicle crime, which are among the most numerous offences and are the ones that most affect ordinary people.
We also have a tremendous track record across much of the county—at this point, I speak up particularly for what happens in my own area, South Derbyshire—for establishing crime and disorder reduction partnerships. Across Derbyshire, those partnerships spend £1.7 million a year and they are extraordinarily effective in focusing on local initiatives that will both reduce crime and improve detection rates in the communities involved. For example, in South Derbyshire, there has been a huge amount of work on target hardening, employing a joiner service to go round properties that have been broken into and providing much more secure locks and doors to prevent a repetition. Operation Liberal is also supported by the crime and disorder reduction partnerships and, particularly in my area, is a hugely successful initiative. It deals with distraction burglary and focuses mainly on older people, and it has been immensely successful in its objectives.
There have been external reviews of the force’s performance as well. The police performance assessment framework report out last month showed significant improvements in performance in neighbourhood policing, in crime investigation and crime reduction—I have cited statistics—and in reducing antisocial behaviour.
The Audit Commission has examined the financial performance of the authority. I think it is fair to say that, partly for historical reasons—authority members with longer memories of how the force was run during the 1990s will know that this authority has had to exercise rigour in its financial management for some considerable time—the authority is good at managing its resources. That needs to be recognised, too. We are talking about a success story, on which the Government and particularly the force, its authority and the population that works with it deserve congratulations.
What are some of the things that we perhaps ought to be a little concerned about? First, the O’Connor review considered protective services and, rightly, highlighted the fact that Derbyshire, among many forces, was poorly equipped to respond to higher-level threats such as terrorism or very serious organised crime. The force is not resourced to do that. Indeed, most of the east midlands forces had virtually nothing available in those fields either. One reason why I was an opponent of the merger was that merging five forces that had very few resources into one would be a bit like multiplying nought by five—we still get nought. The critical issue of providing appropriate resources for protective services had not been addressed. Therefore, the merger proposal did not do what it said on the tin, which was specifically to address that requirement.
The other context is that, last year, we had a useful review of the funding formulae for police authorities. That involved a great deal of work by police authorities and by the Home Office and it attracted plaudits. My right hon. Friend the Minister without Portfolio, who at the time was the Minister for Policing, Security and Community Safety, said that the new formula was
“the most comprehensive and technically robust option”
and brought the funding mechanism for police authorities
“in line with modern conditions.”—[Official Report, 5 December 2005; Vol. 440, c. 70WS.]
It was recognised as the appropriate way to recognise the needs of police services across the country.
However, the floors applied to protect forces that might lose under the formula in effect mean that the formula was negated entirely last year and will also be this year, given yesterday’s announcement. No progress has been made towards addressing the needs identified in that recalculation, which particularly benefits forces such as Derbyshire. Let me set that out clearly. Last year, the force contributed, as a gaining force, £5.5 million to the floor to protect other authorities that would lose and, in the settlement announced yesterday for consultation, Derbyshire would contribute £5.7 million from the formula that it would otherwise get towards supporting other police authorities. To put that in concrete terms, it is equivalent to 163 police officers or 230 PCSOs. I am not saying that the resources would all be used for those purposes, but we are talking about a very significant contribution towards improving still further the standards of policing activity in Derbyshire.
To maintain existing services and to meet obligations for growth in the number of PCSOs requires the authority to make contributions from reserves. Those of us who have spent time in local government know that reserves can be spent only once and that if people use reserves to support ongoing revenue expenditure, such as paying for staff, they face a major problem when those reserves are used up. The authority needs to have a clear understanding of where it is going in the future if it is to commit reserves for that purpose. It cannot continue to do that, because it will end up in a major financial crisis. It is managing this year and it has done so knowingly. I suspect that it can probably cope in the oncoming year, but there is no doubt that a crisis looms.
We are talking about an outcome that is clearly unfair. Let me give a graphic example. Forces are directly compared to Derbyshire in respect of performance. Quite rightly, to try to measure whether a force is doing a good job, one picks comparable authorities and says, “How are you doing against them?” Let us take West Mercia, which is among the group of most similar authorities. West Mercia should receive under the formula £4 million less in grant than Derbyshire, but it will actually receive £10 million more than Derbyshire.
I do not represent a constituency in West Mercia. No doubt if I did, I might have a slightly different view, but I would not urge a draconian application of the formula in one swipe. I have always endorsed floors and ceilings as a method of smoothing the effect, but one has to say that a floor that is the same as the ceiling means that we get nowhere, and that is what we are dealing with at the moment. The floor applied to police authorities is 3.6 per cent., but for all other authorities covered by yesterday’s announcement it is 2.7 per cent. One must question why the floor has been raised to such a high level for police authorities that the effect of the new formula is entirely negated. That cannot be reasonable. Authorities that contributed their time and effort to developing the formula might justifiably ask why they did so, as it appears to have delivered no outcome.
I shall give some examples of what Derbyshire would like to spend its money on if were funded to the correct formula. I do not like dealing in vague sums of money or numbers of officers; we should try to apply the figures to a real need. First, we have one major crime team in Derbyshire, which is a relatively new innovation. The case used to be that if there were murders in Derbyshire, officers had to be drawn off the front line to resource the investigation. We have one such team, and we would like a second, because although Derbyshire is a relatively low crime county, major incidents do occur concurrently from time to time. A second team would allow the running of a major, complex investigation—or perhaps two or three more predictable major crime investigations in which one knows roughly who the suspects might be—at the same time as other investigations, without the burden of having to take officers away from the front line of any local force.
Secondly, we should do better on serious organised crime. That is obviously substantially a national activity, but local resources are also critical. The O’Connor review highlighted weaknesses on that matter, and it is important that we should be able to target resources at major crime enterprises that are either based in Derbyshire or affect people there.
Thirdly, we need a surveillance team to support those two activities and anti-terrorist activities. Sadly, my constituency has some knowledge of terrorism: a young lad who later drowned himself off Israel after attempting a suicide bomb attack there spent part of his time in South Derbyshire, and the area is not completely immune to knowledge of terrorist activity. It is important for us to devote resources to the critical need to prevent terrorism and to identify its early precursors.
We need to improve forensic computing ability and strengthen our ability to deal with financial investigations. We also need a stronger special branch capacity specifically devoted to counter-terrorism, and extra child protection resources.
As we enter the week of the campaign against violence against women, is my hon. Friend concerned that we might move backwards on the good work that has been done by Derbyshire constabulary on violent offences against women, particularly domestic violence and rape? It is always under-resourced in such cases, and violence against women makes up a huge proportion of violent crimes. Is he concerned that we might move backwards on that due to the funding formula?
I thank my hon. Friend for drawing attention to the matter. As she rightly says, the force has a good record on dealing with domestic violence at the moment, but I agree that if the constraints remain in place, that record could be placed in jeopardy.
Among other aims is the continued extension of neighbourhood policing, which has benefited all our constituencies in the past few years. We must continue the deepening of the level of resources, which is certainly being noticed in my area. Those are the sort of things that we would seek to do.
The hon. Gentleman and the hon. Member for Amber Valley (Judy Mallaber) mentioned violence against women. His constituency borders mine, which was relevant in the tragic case of Tania Moore. Does he accept that the Independent Police Complaints Commission issued a very critical report about the performance of the police in that case? I know that the chief constable is determined to match the challenges in that report and ensure that such an incident does not happen again, but his job is made all the more difficult, as the hon. Gentleman has made clear, if continual financial pressure is applied to him.
It certainly is. Just before Christmas, I will be meeting the chief constable and some of his officers specifically on issues raised by that appalling crime to discuss what we can learn from them. The right hon. Gentleman is right that a lower level of resources makes such issues more likely to arise again.
The Home Office should either reduce the floors so that less money is pumped from Derbyshire to forces such as West Mercia or, if it feels that it cannot do that this year, target resources at other initiatives that are specifically intended to address, for example, some of the weaknesses mentioned by O’Connor. Some of the matters that I have listed are specifically related to that agenda. The Home Office should indicate clearly that the formula is meant seriously and will be applied seriously from next year, so that forces can prepare themselves for their task. I recognise the need for floors to protect authorities that are losing money, but we need the formula to be applied next year so that we can make meaningful progress towards a fair allocation of resources to Derbyshire constabulary for the benefit of us all.
I congratulate my hon. Friend the Member for South Derbyshire (Mr. Todd) on securing this debate and on his timing in having it the day after the announcement of the police funding settlement. That was a brilliant piece of intuition. This is not the first time that he has contributed to a debate on police funding and policing in Derbyshire: he has been a regular contributor to such debates for a number of years. I am sure that his constituents recognise that he has fought assiduously for the best possible police service.
From what my hon. Friend has told me about the good work of the local crime and disorder partnership in south Derbyshire in combating crime and establishing a good partnership, I know that it has led people to feel safer in their communities and made a real contribution to the work that is being done. I hope that he feels that he is making a contribution to everything in his own area. I am glad to see him supported here by my hon. Friend the Member for Amber Valley (Judy Mallaber). We are also joined by the right hon. Member for West Derbyshire (Mr. McLoughlin).
I wish to discuss the announcement of the national funding, and the funding picture in general, before turning to the specifics in Derbyshire. This time last year, we announced the provisional allocations for both 2006-07 and 2007-08. Police forces and police authorities have welcomed the extra certainty brought by the two-year settlements, which is why we will move to a three-year settlement next year. All police authorities and forces have received a 3.6 per cent. increase in the general formula grant, which makes up the great bulk of central Government support to the police. Adding in specific grants, capital support and central spending, the overall increase in Government spending on policing is 3.1 per cent. That represents a generous settlement for the police, as I am sure my hon. Friend the Member for South Derbyshire knows, coming at a time when inflation is at 2.7 per cent. It builds on a series of similarly generous settlements.
To put that into context, funding for the police service as a whole will have increased by £4.2 billion between 2000-01 and 2007-08, an increase of 62 per cent. Such sustained increases are unprecedented and demonstrate the Government’s commitment to law and order and to a well financed police service.
I turn specifically to the Derbyshire police force. Like every other force, it has benefited from the generous funding settlements of the past few years. Following the normal consultation process, to which my hon. Friend will be able to contribute, if the House approves the provisional allocations that were announced yesterday, Derbyshire will next year receive £105.8 million in general grants and £18 million in specific grants. Compared with the total of £92.4 million in 2000-01, that is an increase of well over a third. From 2006-07 to 2007-08, there will be a 3.7 per cent. increase, which is a cash total of £3.8 million.
As my hon. Friend noted, the products of the investment can clearly be seen. On 31 March, Derbyshire had 2,046 police officers, which is 255 more than in March 1997, and 1,084 support staff—an increase of 361 from 1997. There were also 42 community support officers, which were an innovation of the Labour Government. He will remember that the idea of introducing CSOs was controversial, whereas now everyone is trying to get more of them. There are 42 in Derbyshire so far, and 429 special constables.
All that is significant, but as well as looking at resources we must consider what the taxpayer is getting for all the extra investment. Those results are also impressive both nationally and in Derbyshire. In Derbyshire, overall recorded crime has fallen by 21 per cent. in the past three years. That equates to more than 20,000 fewer victims of crime. Vehicle crime fell by 41 per cent. between April 2003 and March 2006, and domestic burglary fell by more than half. In the past year, violent crime has fallen by 4 per cent. and drug offences by 17 per cent.
I take this opportunity to pay tribute to everyone concerned at Derbyshire for their efforts and for the real improvements they have made to the safety of constituents in Derbyshire. I echo the words of Janet Birkin, the chair of Derbyshire police authority, who recently said:
“We are absolutely delighted with the force’s performance which demonstrates that Derbyshire remains a safe place to live, work and visit.”
I know that my hon. Friends the Members for South Derbyshire and for Amber Valley will agree with that.
I give all that information to set the context for the debate, as my hon. Friend the Member for South Derbyshire did. Whatever complaints police authorities and forces may have are set against the background of substantial increases in funding for all forces and significant falls in the volume of crime.
Derbyshire police force and others in the east midlands have suggested that they are relatively underfunded compared with forces in other parts of England and Wales. My hon. Friend also made that point. One argument advanced to support that point is that the funding per head of the population in the east midlands is lower than in other regions, but population has never been the sole measure on which police funding is determined. A moment’s thought reveals that using population alone would be a crude and inaccurate way of determining the relative policing needs of each area and therefore the allocation of resources to individual police forces. We have to take account of the demographic composition of the population, including wealth and employment status, and factors such as population density.
All those elements are factored into the relative needs formula on which is based the distribution of available funds between police authorities in England and Wales. I could not begin to describe the higher mathematics used to operate the formula, but it is set out in full detail in the police grant report. As my hon. Friend said, the draft of the report was sent to all hon. Members in England and Wales yesterday. I do not know whether the right hon. Member for West Derbyshire wants to intervene to explain the formula.
I am aware that the Derbyshire force feels that it has grounds for complaint because the operation of the formula is subject to a damping mechanism and it is a net loser. The damping mechanism is to ensure that no forces suffer a dramatic decrease in funding from one year to the next.
That point is consensual—we need a damping mechanism—but why do police authorities have a floor of 3.6 per cent. while all other local authorities have a floor of 2.7 per cent.? When the floor is set that high, the effect on gaining authorities is much greater, as it is in this instance.
We set the floor for the police grant at that level because it ensures that there is a reasonable grant increase for all forces across the country. This is not about the Government holding back money that should be allocated to forces. We are trying to ensure that there is a reasonable and fair distribution nationally of that fixed pot of money. My hon. Friend is an assiduous constituency Member and is clearly pressing the case for his police force. We would all do that in the circumstances.
I am not pressing the case just for my force. Perhaps unusually, I am pressing the argument for the objective test that the Government established—the formula. I want to ensure that it is applied as rapidly as it reasonably can be while protecting the interests of police authorities. I remain puzzled as to why the level of protection needs to be so much higher for police authorities. Even a minor reduction in the floor from 3.6 per cent. nearer to 3 per cent. would make a big difference in the amount that gaining authorities could retain. At the moment, they are paying entirely for the protection of those who are losing.
I repeat that we have set the floor at a level that is consistent with ensuring that all forces across the country receive reasonable increases.
There are only a couple of minutes left, so I move quickly on. We are committed to rolling out neighbourhood policing and Derbyshire is no exception to that. A great deal of progress has been made on that, particularly with police community support officers. Next year, Derbyshire can expect to have 160 PCSOs, and its specific grant allocation for PCSOs will increase from £2.5 million in this financial year to £3.4 million in the coming year.
My hon. Friend the Member for Amber Valley made an important point about tackling sexual violence. In addition to the money that we give to police and that we have put into neighbourhood and local policing, which she acknowledged makes a real contribution to that work, we have introduced a series of measures to support communities in dealing with domestic and sexual violence, such as introducing the use of domestic violence advisers. That happens alongside neighbourhood policing.
There still needs to be funding directly to the police service. Will there be a movement towards using the police formula in future years, particularly given that Derbyshire had the fourth-highest assessed funding formula increase? Will we be able to move in that direction?
I will answer that in the few seconds left. My hon. Friend will know that this year’s allocation is subject to consultation. No decisions have been made for future years within the comprehensive spending review. That process will be open to representations from hon. Members.
I thank my hon. Friend the Member for South Derbyshire for the contribution that he continues to make to this debate. There have been real increases in funding in Derbyshire and in other parts of the country. No doubt the debate will continue as to what is the fairest way of distributing that increased pot across the country.
It being Five o’clock, the motion for the Adjournment of the sitting lapsed, without Question put.